Fund Fact Sheet
Parnassus Workplace Fund
Parnassus Funds Quarterly Report: March 31, 2012
Ticker: PARWX
As of March 31, 2012, the NAV of the Parnassus Workplace Fund was $22.64, so the total return for the quarter was 15.28%.
This compares to a gain of 12.58% for the S&P 500 Index ("S&P 500") and 12.43% for the Lipper Large-Cap Core Average,
which represents the average large-cap core fund followed by Lipper ("Lipper average"). The Workplace Fund had a very good
quarter, beating both of its benchmarks by a substantial margin.
Below is a table comparing the Parnassus Workplace Fund with the S&P 500 and the Lipper average for the past one-, threeand
five-year periods, as well as for the period since inception. You can see from the table that the Workplace Fund beat the
Lipper average for all time periods and it also beat the S&P 500 for all time periods except for the one-year return. The Fund
has a remarkable track record. For the past five years, the Workplace Fund has the third best record of the 820 large-cap core
funds followed by Lipper.1 The Workplace Fund is also the best-performing of all the Parnassus Funds for the period since
inception almost seven years ago.
1For the one- and three-year periods and the period since inception, the Parnassus
Workplace Fund finished respectively #423 of 1046 funds, #30 of 938 funds and
#8 of 697 funds.
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. As described in the Fund's current prospectus dated May 1,
2012, Parnassus Investments has contractually agreed to limit the total operating expenses to
1.20% of net assets, exclusive of acquired fund fees, until May 1, 2013. This limitation may be
continued indefinitely by the Adviser on a year-to-year basis.
The philosophy behind the Parnassus Workplace Fund is that good workplaces make for good businesses and good
businesses will ultimately give shareholders good returns. For the past seven years, the Parnassus Workplace Fund has shown
this to be true. We think that good workplaces attract the best employees and that the best employees are able to infuse
businesses with creativity and innovation, enabling them to prosper and grow.
Company Analysis
Four companies made the most significant
contributions to the Fund's strong quarter, with
each of them adding 21¢ or more to the value of
each fund share. The biggest winner was Seagate
Technology, a maker of hard-disk drives, whose
stock soared an amazing 64.3% from $16.40 to
$26.95, while contributing 23¢ to each fund
share. Despite some component shortages due to
the floods in Thailand, Seagate was able to ship
more disk drives than expected during the quarter,
since most of its operations were unaffected by the
flooding. Strong demand and robust pricing for
disk drives boosted the company's profits.
Shares of San Francisco-based Wells Fargo climbed
23.9% from $27.56 to $34.14, adding 23¢ to the
Fund's NAV. The bank is reaping the rewards of
prudent lending decisions made during the boom
years, as it uses its healthy balance sheet to take
market share from weakened competitors who are
saddled with bad loans. Wells Fargo now
originates 30% of all mortgages in America and
will benefit enormously as the housing market
recovers.
First Horizon, a Tennessee-based bank, added 22¢
to the NAV, as its stock came roaring back from a
depressed level during a difficult period, climbing
29.8% from $8.00 to $10.38. The bank faced
problems in the 2007-through-late 2011 time
frame because of a poorly-timed expansion
outside of Tennessee with construction loans,
mortgages and home-equity lending; a high percentage of these loans went bad. It appears that the losses from these
loans have been contained and the bank has strengthened its balance
sheet. The Fund was able to acquire its shares at bargain-basement
prices, so our shareholders have benefited. We think the bank has
strong earnings power, and the current management team has learned a
lesson from its predecessors' disastrous out-of-state forays, and is
committed to building shareholder value.
Qualcomm, a provider of software and semiconductors used in cellular
telephones, soared 24.4% during the quarter from $54.70 to $68.02
while contributing 21¢ to each fund share. The company is hitting on
all cylinders, as it beat earnings expectations last quarter. Its licensing
division is benefiting from the growth in smart phones and tablets,
while its semiconductor division won a contract for the baseband chip
for the Apple iPhone 4S.
Yours truly,
Jerome L. Dodson
Portfolio Manager
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.