Fund Fact Sheet
Parnassus Workplace Fund
As of September 30, 2013, the NAV of the Parnassus Workplace Fund was $26.67, so the total return for the quarter was
6.04%. This compares to a gain of 5.24% for the S&P 500 Index ("S&P 500") and a gain of 6.88% for the Lipper Multi-Cap
Core Average, which represents the average return of the multi-cap core funds followed by Lipper ("Lipper average"). After
getting off to a slow start in the first quarter of the year, the Workplace Fund has made up for lost time by putting in strong
performances for the past two quarters. For the year-to-date, the Fund is up 20.30%, compared to 19.79% for the S&P 500
and 21.28% for the Lipper average.
Below is a table comparing the Fund with the S&P 500 and the Lipper average over the past one-, three- and five-year periods
and the period since inception. The Workplace Fund has a remarkable performance record, beating all the benchmarks for all
periods. Since inception, the Fund has outperformed the S&P 500 by almost four percentage points per year.
Performance data quoted represent past performance and are no guarantee of future returns.
Current performance may be lower or higher than the performance data quoted. Current
performance information to the most recent month-end is available on the Parnassus website
(www.parnassus.com). Investment return and principal value will fluctuate so that an
investor’s shares, when redeemed, may be worth more or less than their original principal cost.
Returns shown in the table do not reflect the deduction of taxes a shareholder may pay on fund
distributions or redemption of shares. The S&P 500 Index is an unmanaged index of common
stocks, and it is not possible to invest directly in an index. Index figures do not take any
expenses, fees or taxes into account, but mutual fund returns do.
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 and other information. The prospectus or summary prospectus can be
obtained on the Parnassus website, or by calling (800) 999-3505.
For the quarter, five companies each contributed 10¢ or more to the NAV, and no company had a significant negative impact
on the value of the Parnassus Workplace Fund. Three of the top-performers were technology companies, one was a logistics
company and one was a bank.
Applied Materials, the biggest maker of equipment
used in semiconductor manufacturing, saw its
stock climb 17.6% from $14.91 to $17.54,
boosting the value of each fund share by 22¢. In
September, the company agreed to buy Tokyo
Electron, a rival Japanese equipment producer.
The deal will combine two of the industry's three
biggest players, resulting in a new company with a
market capitalization of about $29 billion. We
believe the combined company will benefit from
an expanded customer base, greater market
opportunities and higher earnings potential
because of lower costs.
Autodesk, the leading software-provider for
architects, engineers and designers, added 21¢ to
each fund share, as its stock jumped from $33.94
to $41.17 for a gain of 21.3%. Strong demand for
its design software by engineering and
construction firms drove better-than-expected
earnings. Investor sentiment moved higher after
the company announced plans to shift to a more
predictable subscription-based business model.
We think Autodesk has a bright future, as
manufacturing and construction firms adopt the
company's innovative 3D design software.
Expeditors International, a freight-forwarder that
serves shippers for air and ocean deliveries,
contributed 18¢ to the NAV, as its stock rose
15.9% from $38.01 to $44.06. We bought our
shares in late 2012 and early 2013, when demand
for air freight was weak, hoping that earnings
would move higher when the cycle turned up. The company has been gaining market share, and the stock moved higher last quarter on better earnings, when demand for air
freight increased for the first time since the first quarter of 2011.
Altera makes semiconductor chips that can be programmed for use in devices such as cell phone base stations. The company's
shares rose 12.6% during the quarter from $32.99 to $37.16, contributing 11¢ to the NAV. The stock advanced after China
Mobile announced it is rolling out its 4G network, which will result in 200,000 new base stations. The company also added
30 million shares to its buyback authorization and raised its dividend by 50%. We see further upside as telecommunications
companies continue to invest in network upgrades.
Shares of credit card issuer Capital One increased 9.4% from $62.81 to
$68.74, adding 11¢ to each fund share. The recent acquisition of online
bank ING Direct and HSBC's private label credit card portfolio are
generating strong earnings, and the shares rose after the company
reported earnings that exceeded expectations for the second consecutive
Jerome L. Dodson
The information above represents the Letter from Parnassus Investments, management's
discussion and analysis of fund performance, and Responsible Investing Notes as
excerpted from the Report. Please click on the "Full Report" link above to
view the Report in its entirety.