If you've been stuck searching for Large Cap Value funds, you might want to consider passing on by Parnassus Core Equity Fund PRBLX as a possibility. PRBLX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
Parnassus is based in San Francisco, CA, and is the manager of PRBLX. Parnassus Core Equity Fund debuted in September of 1992. Since then, PRBLX has accumulated assets of about $9.75 billion, according to the most recently available information. The fund's current manager, Todd C. Ahlsten, has been in charge of the fund since May of 2001.
Of course, investors look for strong performance in funds. PRBLX has a 5-year annualized total return of 14.16% and it sits in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 8.3%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 9.6%, the standard deviation of PRBLX over the past three years is 8.63%. The fund's standard deviation over the past 5 years is 8.99% compared to the category average of 9.89%. This makes the fund less volatile than its peers over the past half-decade.
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. PRBLX lost 35.61% in the most recent bear market and outperformed its peer group by 14.51%. This could mean that the fund is a better choice than comparable funds during a bear market.
Even still, the fund has a 5-year beta of 0.9, so investors should note that it is hypothetically less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a positive alpha of 0.5, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Examining the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is principally on equities that are traded in the United States.
This fund is currently holding about 96.89% stock in stocks, with an average market capitalization of $119.62 billion. The fund has the heaviest exposure to the following market sectors:
- Industrial Cyclical
- Retail Trade
This fund's turnover is about 35.22%, so the fund managers are making fewer trades than the average comparable fund.
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, PRBLX is a no load fund. It has an expense ratio of 0.87% compared to the category average of 1.05%. So, PRBLX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $2,000, investors should also note that each subsequent investment needs to be at least $50.
Overall, Parnassus Core Equity Fund has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
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