Despite recent headwinds, Parnassus Investments is taking sensible steps to evolve its approach to sustainable investing and shore up its investment-driven culture. It earns an Above Average Parent rating.
Performance challenges and lower demand for sustainable funds have contributed to outflows over the past few years, and the firm’s total assets under management dropped to roughly USD 41 billion as of February 2026 from around USD 50 billion at the start of 2024. Its mid-cap equity strategy accounted for much of the decline following a bout of underperformance; that strategy saw manager changes and better performance in 2025, though it will take time to rebuild confidence.
But there’s reason to be optimistic. Under the strategic direction of CEO Ben Allen, Parnassus has refocused its lineup around its core competencies. The firm closed its lone fixed-income offering in 2025 and gradually expanded into areas adjacent to its expertise in large-cap equities. Its compact roster now includes seven US equity strategies and one international-equity strategy, all of which follow sustainable investing mandates. In addition to fine-tuning its focus, Parnassus also expanded its vehicle offerings to include mutual funds, separate accounts, collective investment trusts, UCITS, and active exchange-traded funds. It launched two active ETFs in late 2024 as high-conviction versions of its flagship large-cap equity strategies.
To support these changes and bolster its investment capacity, the firm has thoughtfully grown its team. It now counts nearly 30 investment professionals, up from 18 in 2020. In 2023, the firm hired a managing director of research team strategy, who has strengthened the firm’s capabilities in the onboarding and development of junior talent. Additionally, as the firm expanded to offer different vehicles, like active ETFs, it upgraded its trading expertise by adding more experienced individuals.
Parnassus has also made other changes. In 2024, it removed language from its funds’ statutory documents that described its use of exclusionary screens, as the firm felt it no longer accurately described its more comprehensive sustainable-investing criteria. These are sensible moves for this sustainability-focused firm to stay competitive.
Note: This share class' Parent Pillar rating is analyst-driven, as its Branding Name, Parnassus (Branding Name ID: BN000009OO), is covered by Morningstar Manager Research.
United States