1) Parnassus Fixed Income Fund
SM
Fourth Quarter 2015
All information, unless otherwise indicated, is as of 12/31/2015
Objective
Total % Returns
10 Years
Since
Inception
8/31/92
Since
Inception
4/30/15
Gross
Expense
Ratio (a)
Net
Expense
Ratio (a)
4.16
5.23
NA
0.78
0.68
2.33
4.17
NA
-0.35
0.65
0.58
3.25
4.51
5.67
NA
NA
NA
Preservation of capital and current income
As of 12/31/2015
Strategy
3 Months
YTD
1 Year
3 Years
5 Years
Parnassus Fixed Income Fund--Investor Shares
-0.40
0.70
0.70
0.78
2.30
Parnassus Fixed Income Fund--Institutional Shares
-0.29
0.82
0.82
0.82
Barclays U.S. Aggregate Bond Index
-0.57
0.55
0.55
1.44
The Parnassus Fixed Income Fund invests in approximately 95 holdings,
primarily allocated among government, agency- and non-agency mortgages,
and corporate bonds. A top-down view of the economy to assess future interest
rates informs the Fund’s duration target, which remains similar to that of the
benchmark under normal circumstances. The Fund focuses on identifying:
• Securities with superior credit quality that are undervalued
• Bonds issued by companies with improving cash flows and credit metrics
• Security analysis incorporates environmental, social, and governance
factors
All returns greater than one year are annualized.
(a)
As described in the Fund’s current prospectus dated May 1, 2015, Parnassus Investments has contractually agreed to limit total operating expenses to 0.68% of net assets for the Parnassus Fixed Income
Fund—Investor Shares and 0.58 for the Parnassus Fixed Income–Institutional Shares. This agreement will not be terminated prior to May 1, 2016, and may be continued indefinitely by the Adviser on a yearto-year basis. Performance shown prior to April 30, 2015 (the inception of the Institutional Shares), reflects the and includes expenses that are not applicable to and are higher than those of the Institutional
Shares. The performance of the Institutional Shares differs from that shown for the Investor Shares to the extent that the classes do not have the same expenses.
Annual % Returns
Parnassus Fixed Income Fund - Investor Shares
Barclays U.S. Aggregate Bond Index
By investing primarily in investment-grade bonds, the Fund provides investors
an opportunity for an attractive level of current income consistent with safety
and preservation of capital. No derivatives are used in implementing the Fund’s
strategy.
10%
8%
7.45
4.33
5.81
6.97
6%
2.98
5.24
7.48
5.93
6.61
6.54
7.24
7.84
4%
0%
ESG Integration
At Parnassus Investments, the investment team follows a responsible
investment approach to understand the full impact of a security. The
investment team carefully considers a company’s environmental, social
and governance (ESG) factors. By incorporating ESG factors into the
fundamental investment process, the investment team often identifies risks
and opportunities that the market may have ignored and could impact the
performance of investments.
$15,547
15,000
0.70
0.55
-2.71
-2.02
2%
Parnassus Fixed Income Fund - Investor Shares
Barclays U.S. Aggregate Bond Index
17,500
4.49
5.97
2.08
4.22
Annual Growth of $10,0001
-2%
$15,033
12,500
10,000
-4%
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Quality Rating2
7,500
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Portfolio Composition3
U.S. Gov’t /Agency ...........................................................................46.5%
AAA......................................................................................................8.1%
AA........................................................................................................2.8%
A.........................................................................................................19.4%
BBB....................................................................................................19.7%
BB.........................................................................................................3.1%
B...........................................................................................................0.4%
Below B...............................................................................................0.0%
Corporate Bonds (42%)
U.S. Treasury Bonds (22%)
Agency MBS (24%)
Short Term Investments (2%)
Supranational Bonds (4%)
CMBS (4%)
Convertible Bonds (2%)
Not Rated/Unavailable ......................................................................0.0%
The chart shows the growth of a hypothetical $10,000 investment since inception
date and does not reflect the deduction of taxes a shareholder would pay on fund
distributions or the redemption of fund shares.
2
Quality Ratings for all securities except for those labeled “U.S. Gov’t/Agency” are
stated as Standard & Poor’s (“S&P”) ratings for consistency in reporting. S&P is a
Nationally Recognized Statistical Rating Organization (“NRSRO”), as are Moody’s and
Fitch. For securities rated only by an NRSRO other than S&P, the Adviser converts that
rating to the equivalent S&P rating. S&P ratings range from AAA (highest) to D (lowest).
If NRSRO ratings differ, the security will be considered to have received the highest of
those ratings. Securities not rated by an NRSRO appear in the “Not Rated/Unavailable”
1
category. Ratings are subject to change.
Percent of total net assets as of date indicated.
Performance data quoted represents past performance and are no guarantee of
future returns. Current performance may be lower or higher than the performance
data quoted, and most recent month end performance is available on the Parnassus
website (www.parnassus.com). Investment return and principal will fluctuate, so
that an investor’s shares, when redeemed, may be worth more or less than their
original principal cost. The Barclays U.S. Aggregate Bond Index is a widely recognized
index of fixed-income security prices. An individual cannot invest directly in an index.
An index reflects no deductions for fees, expenses or taxes. Returns shown for the
3
fund do not reflect the declaration of taxes a shareholder would pay on the fund
distributions or the redemption of fund shares.
The Parnassus Funds are underwritten and distributed by Parnassus Funds Distributor,
a subsidiary of Parnassus Investments and a FINRA member.
Before investing, an investor should carefully consider the investment
objectives, risks, charges and expenses of the fund and should carefully read
the prospectus or summary prospectus, which contain this information. A
prospectus or summary prospectus can be obtained on the website, www.
parnassus.com, or by calling (800) 999-3505.
PARNASSUS INVESTMENTS®
2) Parnassus Fixed Income Fund
SM
Fourth Quarter 2015
All information, unless otherwise indicated, is as of 12/31/2015
Portfolio Manager
Samantha D. Palm
• Portfolio Manager
• With firm since 2013
• Investment industry since 2006
• Portfolio Manager since 2013
• B.S., Agricultural and Applied Economics, University of Wisconsin
2006
Fund Characteristics
Parnassus Investments is an independent and employee-owned
investment management company based in San Francisco, CA. Founded
in 1984, the firm seeks to invest in businesses that have increasingly
relevant products or services, sustainable competitive advantages, quality
management teams and ethical business practices. We believe the most
attractive opportunities for investments are when companies with good
business fundamentals become temporarily undervalued due to market
sentiment.
Total Assets Under Management: $15.6 billion
PRFIX
PFPLX
CUSIP
701769200
701765703
Minimum Investment
$2,000
$100,000
7.97
Gross Expense Ratio
0.78%
0.65%
4.59
5.68
Net Expense Ratio
0.68%
0.58%
1.97%
-
Inception Date
8/31/1992
4/30/2015
1.83%
-
Distribution Frequency
9,720
35.8%
-
Average Maturity (Years)
5.64
Average Duration (Years)
Portfolio Turnover (2015 Annual)
1
Unsubsidized SEC 30-Day Yield2
®
Ticker
104
SEC 30-Day Yield
Firm Overview
Institutional Shares
Barclays
U.S. Aggregate
Bond Index
Number of Holdings
The 30-Day SEC Yield is computed under an SEC standardized formula based on net income earned
over the past 30 days. It is a “subsidized” yield, which means it includes contractual expense
reimbursements and it would be lower without those reimbursements.
2
The Unsubsidized 30-Day SEC Yield is computed under an SEC standardized formula based on net
income earned over the past 30 days. It excludes contractual expense reimbursements, resulting in
a lower yield.
1
Fund Statistics (5 year)
Fund Facts
Investor Shares
Fund
Investor
Shares
Barclays
U.S. Aggregate
Bond Index
Total Net Assets
Monthly
$189.9MM
E
xpenses based on total net assets, net of reimbursement.
As described in the Fund’s current prospectus dated May 1, 2015, Parnassus Investments
has contractually agreed to limit total operating expenses to 0.68% of net assets for
the Parnassus Fixed Income Fund—Investor Shares and to 0.58% of net assets for
the Parnassus Fixed Income Fund—Institutional Shares. This agreement will not be
terminated prior to May 1, 2016, and may be continued indefinitely by the Adviser on a
year-to-year basis.
Maturity Diversification Fund
Barclays
U.S. Aggregate
Bond Index
Alpha
0-3 years
19.5%
22.1%
0.88
1.00
3-5 years
2.1%
20.6%
R-Squared
0.89
1.00
5-10 years
45.4%
42.2%
Sharpe Ratio
0.84
1.19
over 10 years
33.0%
15.1%
Standard Deviation
2.70%
2.71%
Downside Risk
1.48%
1.43%
Tracking Error
The beta shown for the benchmark is a blended five-year calculation including the Fund’s
prior benchmark, Barclays Capital U.S. Government/Credit Bond Index, prior to May 1, 2013
and the current benchmark, Barclays U.S. Aggregate Bond Index thereafter.
Alpha is a measure of performance on a risk-adjusted basis. Alpha takes the volatility
(price risk) of a mutual fund and compares its risk-adjusted performance to a benchmark
index. The excess return of the fund relative to the return of the benchmark index is a fund’s
alpha. Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in
comparison to the market as a whole. A beta of 1.00 means that the share price moves
exactly in line with the market. A beta over 1.00 suggests that the share price will typically
-
Beta3
3
-0.72%
0.93%
-
be more volatile than the market, and conversely, a beta below 1.00 indicates that the share
price will typically be less volatile than the market. R-Squared is a measurement of how
closely the portfolio’s performance correlates with the performance of a benchmark index
such as the Lehman Aggregate Bond Index. Standard Deviation is a calculation used
to measure variability (risk) of a portfolio’s performance. Sharpe Ratio is a ratio used to
measure risk-adjusted performance. It is calculated by subtracting the risk-free rate from
the rate of return for a portfolio and dividing the result by the standard deviation of the
portfolio returns. Downside Risk is a statistical measurement of a portfolio’s dispersion
below the mean return of a benchmark. Tracking Error is the standard deviation of the
difference between the portfolio return and the desired investment benchmark return.
Risks: Bond fund values fluctuate in response to the financial condition
of individual issuers, general market and economic conditions, and
changes in interest rates. In general, when interest rates rise, bond fund
values fall and investors may lose principal value. Security holdings in
the Fund can vary significantly from broad market indexes.
PARNASSUS INVESTMENTS®
1 Market Street, Suite 1600
San Francisco, CA 94105
www.parnassus.com
(800) 999-3505