The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
As of Oct 14, 2026
The Parnassus Core Equity Fund (Investor Shares) returned -0.51% net of fees in the third quarter of 2026, underperforming the S&P 500 Index's return of 2.30%. Year-to-date, the strategy has gained 9.07% net of fees compared to 12.75% for the benchmark. Relative performance was hindered by holdings in Information Technology—notably semiconductor capital equipment—and Materials, as well as an underweight stance in Energy. Conversely, holdings across Financials and Health Care, together with zero exposure to Utilities, contributed positively. Cash and other equivalents stood at 0.9% of total net assets at quarter-end. Management highlighted that narrative-driven momentum in artificial intelligence dominated quarterly price action over corporate fundamentals. Persistent macro crosscurrents—including elevated interest rates, persistent inflation, shifting tariff policies, and heightened geopolitical strife in the Middle East—have widened the distribution of economic outcomes. In response, the portfolio maintains a bifurcated structure: roughly 45% is allocated toward direct AI infrastructure (cloud hyperscalers, power, and semiconductor enablers), while 55% is held in second-order AI beneficiaries and defensive ballast insulated from technological obsolescence. During the quarter, the fund actively redeployed capital from rallying positions into lagger franchises trading at reasonable valuations. Managers trimmed semiconductor equipment leaders Applied Materials and KLA alongside Advanced Micro Devices, and exited Oracle, Procter & Gamble, Marsh & McLennan, and Realty Income. The team reallocated proceeds to establish new positions in Meta Platforms, Taiwan Semiconductor Manufacturing Company (TSMC), AstraZeneca, Cintas, and The TJX Companies, while doubling active exposure to hyperscalers through additions to Microsoft and Amazon.
The strategy pursues long-term outperformance by owning a concentrated portfolio of wide-moat, high-quality U.S. large cap businesses purchased at attractive valuations due to cyclical concerns or market underappreciation of earnings power.
Management maintains cautious optimism, preparing for a wide range of market outcomes as macroeconomic and monetary crosscurrents intensify. The team anticipates that continued enterprise adoption of compute and generative AI infrastructure will provide powerful underlying earnings momentum, but warns that valuation discipline is paramount as momentum-driven trading decouples from fundamentals. Looking ahead, prospective policy normalization, moderating energy prices, and easing tariff pressures are viewed as key potential catalysts capable of unlocking substantial value across the fund's cyclical and industrial holdings.
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