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| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
The Parnassus Value Equity Fund returned 17.86% net of fees in Q2 2026, outperforming the Russell 1000 Value Index's 13.87%, driven primarily by Information Technology holdings benefiting from AI infrastructure demand and lack of Energy exposure. Semiconductor positions including AMD, Applied Materials, Western Digital, Intel and TSMC were top contributors as hyperscalers boosted AI spending. The managers maintain a balanced, quality-anchored portfolio with highest convictions in undervalued companies having financial strength to withstand headwinds. This quarter they opportunistically reallocated capital, trimming semiconductors after strong returns while adding to hyperscaler cloud platforms like Amazon, Microsoft and Oracle where they see underappreciated AI infrastructure demand. They selectively reduced Financials exposure to lower macro sensitivity and rebalanced Health Care toward medical devices. A new Coca-Cola position enhances defensive exposure. The managers remain cautiously optimistic, supported by lower energy prices driving reduced inflation, potential accommodative fiscal policy, and continued AI investment, while staying vigilant about risks through their disciplined quality-focused approach emphasizing margin of safety.
The Parnassus Value Equity Fund pursues strong risk-adjusted returns by owning a concentrated portfolio of undervalued, high-quality U.S. large cap stocks with financial strength to withstand economic headwinds and positioned to benefit from long-term thematic tailwinds, particularly AI infrastructure buildout, while maintaining balanced exposure across cyclical and defensive sectors.
The managers remain cautiously optimistic for the rest of the year, supported by prospects for lower energy prices driving lower inflation, potential for accommodative fiscal policy in an election year, and continued investment in AI infrastructure. They believe their balanced portfolio positioning, coupled with holdings' strong earnings growth potential and reasonable valuations, positions them well in the current environment. However, they remain vigilant about a broad range of risks and emphasize their quality orientation and focus on margin of safety as essential to delivering attractive risk-adjusted returns.
As of Jul 17, 2026
Krishna Chintalapalli serves as the current portfolio manager of the Parnassus Value Equity Fund, working under Chief Investment Officer Todd Ahlsten and Chief Executive Officer Benjamin Allen. The management team signed 10-year employment agreements to ensure leadership continuity following AMG's partnership acquisition in July 2021. However, a notable management transition occurred in April 2025 when veteran portfolio manager Billy Hwan left the firm, which Morningstar noted 'warrants caution.' The firm operates independently under majority ownership by Affiliated Managers Group, Inc., which holds no role in day-to-day management, ensuring operational autonomy while benefiting from AMG's resources and distribution capabilities.
The Parnassus Value Equity Fund invests selectively in about 40-45 U.S. large-cap stocks trading at a discount with durable competitive advantages and sustainable business practices. The fund pursues companies with increasingly relevant products and services, durable competitive advantages, strong management teams and sustainable business practices that are likely to thrive in a healthy economy and be resilient in an economic downturn. The investment approach emphasizes quality bias, investing in companies with sustainable business policies and practices while utilizing active ownership to encourage more sustainable business policies and greater ESG transparency. The firm applies a Sustainability Lens to identify companies that may operate inconsistently with their principles, excluding those materially involved in weapons, tobacco, and fossil fuel extraction industries.
Lead Portfolio Manager
Billy Hwan, Krishna Chintalapalli
Managing Partner
Moderate Conviction Bullish
Market Conviction
The portfolio is concentrated with 10 largest holdings representing approximately 33% of assets and clear position sizing evident (Amazon 5.1%, Alphabet 4.4%, Microsoft 3.6%). The managers name specific positions, explain their theses, and use strong language about maintaining highest convictions in quality businesses. They explicitly state they trimmed positions and redeployed into specific names like Amazon, Microsoft, Oracle where they believe the market underappreciates demand. However, the portfolio holds 20+ positions across multiple sectors with balanced exposure, and hedging language like cautiously optimistic and remain vigilant tempers the conviction. This is high-moderate conviction with clear theses but diversified positioning, scoring 0.68.
Growth Outlook
Market outlook remains above average conviction: The Parnassus Value Equity Fund strongly outperformed its benchmark in Q4 and FY 2025, leveraging AI-driven gains in Industrials and Tech while pivoting toward defensive quality in...
Risk Appetite
Risk appetite posture is moderate conviction: The Parnassus Value Equity Fund strongly outperformed its benchmark in Q4 and FY 2025, leveraging AI-driven gains in Industrials and Tech while pivoting toward defensive quality in...
Capital Deployment
The managers describe opportunistically reallocating capital by trimming positions that had appreciated and redeploying into other holdings. They exited Bio-Rad, trimmed semiconductors, reduced Financials, and added to cloud platforms, medical devices, and Coca-Cola. This is capital rotation rather than net deployment or de-risking. Cash remained stable at 1.2% with no indication of meaningful change. Rotation with stable cash scores near 0.00 to +0.10, assigned 0.05.
Forward Guidance
Forward guidance signal: The Parnassus Value Equity Fund strongly outperformed its benchmark in Q4 and FY 2025, leveraging AI-driven gains in Industrials and Tech while pivoting toward defensive quality in...
Language Signal
The letter contains substantial bullish language around AI opportunities, secular tailwinds, attractive risk/reward, strong earnings growth potential, and reasonable valuations. However, it is balanced with risk language including vigilant, headwinds, uncertainty, elevated market uncertainty, and cautious. The net balance leans more bullish than bearish but is clearly balanced, scoring +0.45.
Perceived Risk
Perceived risk level is evaluated as moderate conviction. The Parnassus Value Equity Fund strongly outperformed its benchmark in Q4 and FY 2025, leveraging AI-driven gains in Industrials and Tech while pivoting toward defensive quality in...
Opportunity Density
The managers describe finding attractive risk/reward opportunities to redeploy capital into, including hyperscaler cloud platforms where they believe the market underappreciates demand, medical devices offering greater upside, and Coca-Cola at reasonable valuation. They characterize the environment as offering selective opportunities across sectors with exposure to secular tailwinds. This is selective opportunities in defined areas rather than a rich, broad set, scoring 0.65.
Time Horizon
The managers emphasize long-term thematic tailwinds, secular growth in AI, demographic-driven demand, and multi-year support from AI data center storage demands. They explicitly state that fundamental factors often far outweigh short-term macro issues when one invests with a long-term time horizon. However, they also discuss quarterly results, near-term catalysts, and election year fiscal policy. This is a multi-year thesis with some near-term catalyst awareness, scoring 0.70.
Top Conviction Themes
Key Catalysts
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