On the lookout for a Large Cap Growth fund? Starting with Parnassus Endeavor Fund PARWX should not be a possibility at this time. PARWX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify PARWX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.

History of Fund/Manager

Parnassus is responsible for PARWX, and the company is based out of San Francisco, CA. Parnassus Endeavor Fund made its debut in April of 2005, and since then, PARWX has accumulated about $4.31 billion in assets, per the most up-to-date date available. The fund’s current manager, Jerome L. Dodson, has been in charge of the fund since April of 2005.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 14.72%, and is 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 12.46%, 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 10.29%, the standard deviation of PARWX over the past three years is 12.41%. Looking at the past 5 years, the fund’s standard deviation is 11.21% compared to the category average of 10.00%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In the most recent bear market, PARWX lost 43.15% and outperformed its peer group by 5.87%. This makes the fund a possibly better choice than its peers during a sliding market environment.

Nevertheless, with a 5-year beta of 0.97, the fund is likely to be as volatile as the market average. 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. With a positive alpha of 1.76, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Holdings

Exploring 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.

Currently, this mutual fund is holding 86.5% stock in stocks, and these companies have an average market capitalization of $109.52 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology
  2. Finance
  3. Health

Turnover is 43.21%, which means this fund makes fewer trades than comparable funds.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, PARWX is a no load fund. It has an expense ratio of 0.92% compared to the category average of 1.11%. From a cost perspective, PARWX is actually cheaper than its peers.

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.

Bottom Line

Overall, Parnassus Endeavor Fund has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Parnassus Endeavor Fund looks like a somewhat weak choice for investors right now.

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. And don’t forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.

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