Stock Market Surges: Parnassus Core Equity Fund Performance Revealed!

New York, NY – The first quarter of 2024 saw a surge in U.S. equities as the economy exceeded expectations. Analysts adjusted their projections for Federal Reserve interest rate cuts, while unemployment estimates lowered and GDP growth and inflation estimates rose. The 10-year U.S. Treasury yield increased, leading to a stock rally with the S&P 500 rising over 10%. Communication Services, Energy, and Information Technology outperformed their sector peers, while Real Estate posted a negative return. The momentum of artificial intelligence (AI) continued to drive market activity, especially in the Semiconductors industry.

The Parnassus Core Equity Fund pursues strong long-term returns by owning a concentrated portfolio of high-quality U.S. large-cap businesses available at attractive prices due to cyclical concerns or underappreciation of earnings potential. In the first quarter, the Fund returned 9.99%, slightly underperforming the S&P 500 Index’s return of 10.56%. Positive stock selection in Information Technology and an underweight in Consumer Discretionary boosted relative performance, while weakness in some holdings in Communication Services, Financials, and Industrials presented challenges.

Top contributors to the Fund’s performance included Apple, Oracle, and Applied Materials, while Charter Communications, Intel, and Roche Holding were among the detractors. Apple struggled due to declining iPhone sales in China and antitrust actions, while Oracle reported strong financial results. Applied Materials benefited from an improved semiconductor chip production environment. Charter Communications faced subscriber growth challenges, Intel’s outlook missed expectations, and Roche Holding dealt with a lackluster forecast for 2024.

In portfolio positioning, the Fund increased exposure to Communication Services by initiating a position in Verizon Communications and adding to its Charter Communications holding. It also added a position in Realty Income in the Real Estate sector. Additionally, the Fund added positions in Micron Technology and Broadcom in Information Technology to capitalize on cyclical recovery and AI trends. The Fund continues to focus on competitively advantaged, attractively priced businesses poised for long-term outperformance.

Looking ahead, the Fund remains balanced in its approach to portfolio positioning, focusing on competitively advantaged businesses while remaining disciplined on valuation. Macroeconomic volatility is expected to continue in the near term, but the Fund remains focused on long-term success. The Fund’s sector weights as of March 31, 2024, show overweights in Financials, Materials, and Information Technology, and underweights in Consumer Discretionary, Health Care, and Energy.

The Fund’s ten largest holdings as of March 31, 2024, include Microsoft Corp., Alphabet Inc., NVIDIA Corp., Salesforce Inc., Bank of America Corp., Deere & Co., Apple Inc., Mastercard Inc., Ball Corp., and Intercontinental Exchange Inc. The Fund evaluates financially material ESG factors in its investment decision-making process and utilizes active ownership strategies to encourage sustainable business practices.

Before investing, investors should carefully consider the Fund’s investment objectives, risks, charges, and expenses. Mutual fund investing involves risk, and the Fund’s share price may fluctuate in response to market conditions. Past performance is not indicative of future results.