Skip to Content

Parnassus Mid Cap Institutional PFPMX Fund Analysis

| Medalist Rating as of | See Parnassus Investment Hub

Morningstar’s Analysis PFPMX

Will PFPMX outperform in future?

Get our overall rating based on a fundamental assessment of the pillars below.

Parnassus Removes Exclusionary Language From Prospectuses; Ratings Unchanged

null Stephen Welch

Stephen Welch

Analyst Note

Parnassus has removed language from its funds’ statutory documents pertaining to the use of exclusionary screens. The funds have used such screens for a long time, but doing away with them won’t materially impact how they are run. As the firm’s environmental, social, and governance tools have evolved, Parnassus feels exclusionary screens no longer encapsulate its entire analysis of firms’ sustainability. The exclusions weren’t too restrictive anyway. They affected roughly 80 companies that will now be on a cautionary list, which means a manager may dig deeper into one of them for a potential investment. This does not mean the firm will suddenly invest, for example, in tobacco companies, but it could invest in a company that potentially derives more than 10% of revenue from a previously excluded industry as long as it’s not a core risk for the business (10% was the previous threshold for exclusion). For example, this could include an investment in an oil-services company that is actively working to decarbonize and/or working on measurement and diagnostics. The firm will still scrutinize reputational and material ESG risks for all potential investments. As such, the removal of exclusionary screens is a relatively minor adjustment and does not change the Parnassus funds’ Morningstar Medalist Ratings.

Published on

Unlock our full analysis with Morningstar Investor