Parnassus - Fixed-Income Fund

Parnassus Fixed-Income Fund

Objective:

High level of current income consistent with safety and preservation of capital.

Strategy

The Parnassus Fixed-Income Fund invests principally in investment-grade debt securities including U.S. government obligations, corporate bonds and convertible bonds. Under normal circumstances, we expect to maintain an overall dollar-weighted average effective duration comparable to the benchmark. We actively invest at least 65% of the Fund’s total net assets in fixed-income securities that are rated “A” or better by Moody’s Investor Services, Inc. or Standard & Poor’s Rating Group, and at least 80% in fixed-income securities with investment-grade ratings (i.e., rated at least BBB- or Baa3 or better). The Fund also takes environmental, social and governance factors into account in making investment decisions.

Risks

The Fund’s share price may change daily based on the value of its security holdings. Bond prices are inversely related to interest rates. As interest rates drop, bond prices will increase, and as interest rates go up, the value of bonds will decrease. A security’s value may also be affected by the possibility that issuers of debt obligations will not pay the Fund interest or principal, or that their credit rating may be downgraded by a ratings agency. In addition, up to 20% of the Fund’s total net assets may be invested in convertible securities, which may not have an investment-grade rating. This would make them riskier than securities with an investment-grade rating.

Ticker	PRFIX
CUSIP	701769200
Minimum Investment	$2,000
Gross Expense Ratio	0.81 %
Net Expense Ratio*	0.75 %
Inception Date	8/31/1992
Fund Manager, Since May 2008	Minh T. Bui
Fund Strategy	Intermediate Government/Credit
Lipper Category	Corporate Debt A-Rated
Distribution Frequency	Monthly
Total Net Assets	$213MM

* Expenses based on total net assets, net of reimbursement.

Fund Characteristics as of 3/31/12	Fund	Barclays Capital U.S. Govt/Credit Bond Index
Number of Holdings	54	5,782
Portfolio Turnover (2011 Annual)	29.5 %	NA
Average Maturity (Years)	7.26	8.07
Average Duration (Years)	5.62	5.82
SEC 30-Day Yield¹ as of 4/30/12	0.79 %	NA
Unsubsidized SEC 30-day Yield² as of 4/30/12	0.76 %	NA

Fund Statistics (5 Year) as of 3/31/12	Fund	Barclays Capital U.S. Govt/Credit Bond Index
Alpha Alpha A coefficient measuring risk-adjusted performance, considering the risk due to the specific security, rather than the overall market. A large alpha indicates that the stock or mutual fund has performed better than would be predicted, given its beta. Info	1.13 %	0.00 %
Beta Beta A measurement of a fund's trailing 36-month returns in relation with the market as a whole. A beta of 1 means that the share price moves exactly inline with the market. A beta over 1 suggests that the share price will typically be more volatile than the market, and conversely, a beta below 1 indicates that the share price will typically be less volatile than the market. Info	0.72	1.00
R-Squared R-Squared A measurement of how closely the portfolio's performance correlates with the performance of a benchmark index such as the S&P 500. Info	0.86	1.00
Sharpe Ratio Sharpe Ratio 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. Info	1.31	1.15
Standard Deviation Standard Deviation A calculation used to measure variability (risk) of a portfolio's performance. Info	3.52 %	4.50 %
Downside Risk Downside Risk A statistical measurement of a portfolio’s dispersion below the mean return of a benchmark. Info	1.75 %	2.23 %
Tracking Error Tracking Error The standard deviation of the difference between the portfolio return and the desired investment benchmark return. Info	1.83 %	NA

¹ 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.

As described in the Fund's current prospectus dated May 1, 2012, Parnassus Investments has contractually agreed to limit the total operating expenses (exclusive of acquired fund fees and expenses) to 0.75% of the net assets of the Parnassus Fixed-Income Fund, respectively. This limitation continues until May 1, 2013, and may be continued indefinitely by the Adviser on a year-to-year basis. Without these fee waivers and/or expense reimbursements, the Fund's returns would have been lower.

The Barclays Capital U.S. Government Credit Bond Index a widely recognized index of common stock prices. An individual cannot invest directly in an index. An index reflects no deductions for fees, expenses or taxes, but mutual fund returns do.

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