Is Parnassus Endeavor Investor (PARWX) a Strong Mutual Fund Pick Right Now?

If investors are looking at the Large Cap Growth fund category, make sure to pass over Parnassus Endeavor Investor (PARWX). PARWX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.

Objective

PARWX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.

History of Fund/Manager

Parnassus is responsible for PARWX, and the company is based out of San Francisco, CA. Since Parnassus Endeavor Investor made its debut in April of 2005, PARWX has garnered more than $3.15 billion in assets. Krishna Chintalapalli is the fund's current manager and has held that role since December of 2022.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 11.94%, and it sits in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 13.72%, which places it in the top third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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. The standard deviation of PARWX over the past three years is 13.7% compared to the category average of 11.87%. The fund's standard deviation over the past 5 years is 16.25% compared to the category average of 13.58%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.97, which means it is hypothetically as volatile as the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. PARWX's 5-year performance has produced a negative alpha of -2.14, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

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, PARWX is a no load fund and it has an expense ratio of 0.88%.

Investors need to be aware that with this product, the minimum initial investment is $2,000; each subsequent investment needs to be at least $50.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

As a mutual fund with a 'sell' rank, PARWX is in the bottom 40% of all funds we cover and it may be one to avoid putting on your short list of possible picks in Large Cap Growth. This fund from Parnassus needs to turn around some of its key fundamental metrics such as the Zacks Ranks of its holdings, alpha, and performance in order for investors to consider Parnassus Endeavor Investor in the future.

Don't stop here for your research on Large Cap Growth funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare PARWX to its peers as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.

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