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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Parnassus Core Equity Fund underperformed in 1Q26 due to Health Care exposure and zero energy holdings, but continues to reposition the portfolio toward durable physical assets to mitigate AI disruption risks."
During the first quarter of 2026, the Parnassus Core Equity Fund (Investor Shares) returned -6.17% (net of fees), underperforming the benchmark S&P 500 Index's return of -4.33%. The underperformance was primarily driven by weak performance within the Fund's Health Care holdings and a total lack of exposure to the Energy and Utilities sectors, which performed well during the quarter due to escalating geopolitical tensions and rising oil prices. Conversely, holdings in the Industrials and Consumer Discretionary sectors, along with an overweight position in Materials, helped mitigate some losses. The investment team took deliberate action in response to changing market dynamics, particularly surrounding artificial intelligence (AI). To balance AI opportunities and disruption risks, the fund terminated its positions in software companies ServiceNow (NOW) and Workday (WDAY) due to rising uncertainty. It also fully exited insurance broker Brown & Brown (BRO). The proceeds were reallocated into defensive companies with physical assets and networks that are difficult to replicate via AI, leading to new positions in Old Dominion Freight Line (ODFL) and Vulcan Materials (VMC). Looking forward, the managers expect 2026 returns to be driven by earnings growth rather than multiple expansion, maintaining a cautiously optimistic posture based on resilient corporate fundamentals.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
High-conviction positioning: Parnassus Core Equity Fund underperformed in 1Q26 due to Health Care exposure and zero energy holdings, but continues to reposition the portfolio toward durable physical assets to ...
Growth Outlook
Market outlook remains high conviction: Parnassus Core Equity Fund underperformed in 1Q26 due to Health Care exposure and zero energy holdings, but continues to reposition the portfolio toward durable physical assets to ...
Risk Appetite
Risk appetite posture is high conviction: Parnassus Core Equity Fund underperformed in 1Q26 due to Health Care exposure and zero energy holdings, but continues to reposition the portfolio toward durable physical assets to ...
Capital Deployment
Manager actively deployed capital into high-conviction opportunities. Parnassus Core Equity Fund underperformed in 1Q26 due to Health Care exposure and zero energy holdings, but continues to reposition the portfolio toward durable physical assets to ...
Forward Guidance
Forward guidance signal: Parnassus Core Equity Fund underperformed in 1Q26 due to Health Care exposure and zero energy holdings, but continues to reposition the portfolio toward durable physical assets to ...
Language Signal
Tone analysis indicates high conviction language: Parnassus Core Equity Fund underperformed in 1Q26 due to Health Care exposure and zero energy holdings, but continues to reposition the portfolio toward durable physical assets to ...
Perceived Risk
Perceived risk level is evaluated as moderate conviction. Parnassus Core Equity Fund underperformed in 1Q26 due to Health Care exposure and zero energy holdings, but continues to reposition the portfolio toward durable physical assets to ...
Opportunity Density
Opportunity density index indicates high conviction actionable entry points. Parnassus Core Equity Fund underperformed in 1Q26 due to Health Care exposure and zero energy holdings, but continues to reposition the portfolio toward durable physical assets to ...
Time Horizon
Investment time horizon reflects a high conviction orientation. Parnassus Core Equity Fund underperformed in 1Q26 due to Health Care exposure and zero energy holdings, but continues to reposition the portfolio toward durable physical assets to ...
