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Post by roi2020 on Jul 5, 2021 4:50:22 GMT
Hi All, New member here. Barron's published an article today (link below) regarding the pending sale of Parnassus. Being a PRILX shareholder, I'm glad that Todd Ahlsten and Ben Allen will remain with the firm. Jerome Dodson retired from active management at the end of 2020 and the sale of Parnassus allows him to cash out. Since ESG funds are currently popular, this may have been an an opportune time to sell the firm. I've heard that AMG provides support services to acquired mutual fund companies but otherwise allows them to operate with great autonomy. Link(try Firefox private window if you have trouble viewing) |
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Post by anitya on Jul 5, 2021 5:15:10 GMT
AMG is like Berkshire Hathaway in that acquired companies run their own show. I do not expect the change in ownership to have any impact on acquired funds.
BTW, Artisan partners’ funds while have a common branding are very decentralized and I think are run from separate locations.
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Post by chang on Jul 5, 2021 6:29:09 GMT
BTW, Artisan partners’ funds while have a common branding are very decentralized and I think are run from separate locations. Interesting catch, I wasn't aware of this: www.artisanpartners.com/individual-investors/about-us/business-model.htmlWe have a strong philosophical belief in team autonomy. Our teams all have their own unique investment process and each one maintains its own research capabilities. We have no central research function and do not have a Chief Investment Officer. We believe autonomy promotes original research and positions each of our teams to capitalize on market anomalies. |
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Post by yogibearbull on Jul 5, 2021 10:37:05 GMT
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Post by paulr888 on Jul 5, 2021 12:43:08 GMT
Being from Calif, I've been aware of PRILX for a very long time. It is a very good fund but I never found a position for it in my portfolio when I looked under the hood at its holdings compared to other funds I held at the time. Even today, it is a LB but has a LG tilt and I would have a hard time making room in my portfolio. It has a good chuck of Microsoft and Google which I currently get in ALZFX. I think it scores well as a LB, but its LG kicker helps.
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Post by yogibearbull on Jul 5, 2021 13:07:55 GMT
Long-time holder of PRBLX in Schwab DAF. It is LC-blend with ESG overlay.
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Post by anitya on Jul 5, 2021 17:00:57 GMT
Artisan is a public company. Ticker APAM. |
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Post by roi2020 on Jul 5, 2021 18:22:20 GMT
Upon further investigation, AMG is not as hands-off as I once thought. The company replaced third-party subadvisors on thirteen mutual funds earlier this year as part of a broad strategy change. AMG's affiliates will now manage $5B in assets previously subadvised by these third parties. "'Over the past two years, we have evolved our global distribution resources and clarified our strategy for the benefit of our affiliates,’ said AMG president and chief executive Jay Horgen. ‘Focusing our US wealth platform exclusively on in-demand strategies from our affiliates will ensure that clients are choosing from highly differentiated products.'"
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Post by anitya on Jul 5, 2021 18:54:14 GMT
In the past month I sold PARWX (US value) and in an unrelated transaction bought MMCFX (AMG Veritas China) that had a change in sub-adviser at the end of May. MMCFX has been around for 27 years but has not gained much AUM, with steady outflows over the past 10 years and currently at $160M. As with all owners, AMG is active in protecting and growing its business.
P.S.: my purchase of MMCFX is just a starter position (by reducing FHKCX) as part of my attempt at understanding China.
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Post by jongaltiii on Jul 6, 2021 22:55:40 GMT
anitya ... read that you sold PARWX just recently. I'm considering adding this fund to my portfolio by reducing (just a little) MSEGX to add some Value vs. Growth. Is there any reason you sold PARWX - notwithstanding the AMG news.
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Post by anitya on Jul 6, 2021 23:45:12 GMT
anitya ... read that you sold PARWX just recently. I'm considering adding this fund to my portfolio by reducing (just a little) MSEGX to add some Value vs. Growth. Is there any reason you sold PARWX - notwithstanding the AMG news. Sorry, I did not mean to attribute any red flags to PARWX or AMG. Just acknowledging that I know how AMG is structured and familiar with the Parnassus shop. PARWX is a very good fund in its category - please read M* analyst report or otherwise make sure the fund fits your objectives and not just rely on prior fund performance - my standard disclaimer. I see myself owning PARWX again in the future. |
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Post by paulr888 on Jul 7, 2021 3:43:08 GMT
As a LC Value, PARWX has certainly hit it out of the park. I was curious to see why? While lately classified as LC Value, in '17 and '18 it was a LC Blend. Its Morningstar style box has 17% in growth box. It has 20% or > in 3 sectors. Collectively, that may explain its outperformance relative to a historically pure, more diversified LC Value fund. My analysis is not intended to denigrate PARWX. It is a highly performing fund.
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Post by yogibearbull on Jul 10, 2021 19:38:51 GMT
From Barron's Part 2 this week,
"FUNDS. ESG is hot! AMG (AUM $738 billion) bought a controlling stake for $600 million in the last big independent ESG firm PARNASSUS Investments (AUM $47 billion) founded by Jerome DODSON (78) in 1984. AMG’s ESG assets are now $80 billion (with Boston Common). AMG is a collection of boutique fund firms, and it lets its stronger firms alone but may restructure its weaker firms. It is expected to let Parnassus operate as-is except that it may now become more activist like Boston Common. Most big ESG firms are now part of much bigger firms: Calvert (MS that acquired Eaton Vance that had acquired Calvert), Pax (IPXAF-UK), Trillium (Perpetual-Australia). However, newer ESG firms will keep popping up, e.g., Engine No 1 out of the blue that has been in the news related to Exxon/XOM board room drama. Morningstar’s HALE is cited extensively (M* owns the ESG rating firm Sustainalytics)."
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Post by jongaltiii on Aug 7, 2021 1:29:50 GMT
I will admit that I don’t follow or concern myself with ESG funds. It’s not a criteria I remotely consider when choosing an investment. This article, however, mentions PARWX in the ESG context so I thought I would post it for anyone interested. www.marketwatch.com/articles/esg-growth-value-stocks-51628282488“ One active value ESG mutual fund is Parnassus Endeavor (PARWX), which launched in 2005. Manager Billy Hwan achieves his goals by whittling down the universe of stocks to just a handful that are both cheap and have high ESG scores. “There are about a thousand stocks in the [large-cap] universe,” Hwan says. “If I’m focused on large-cap value, it’ll narrow to about 600 stocks. Then, when I think about the ESG overlay, we’re not buying oil majors, drug distributors, some financials, some tech, aerospace and defense, gambling, etc. That limits it to about 90 stocks.” From that 90, he picks 40 he likes. With that high hurdle, Endeavor has crushed its peers with a 21.7% three-year annualized return versus 10.8% for the average large-cap value fund—all while the fund maintains a low average P/E of 15.” |
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Post by anitya on Aug 10, 2021 22:20:30 GMT
I dug a little deeper into Parnassus to see if I should take a plunge into PRBLX and PARWX.
Parnassus used to have two additional equity funds: Asia fund and Multi Cap fund. Asia fund, which was co-managed and then sole managed by the current sole manager of PARWX for 4 years, did not do well and was liquidated in 2018. Does anybody know what happened to the Multi Cap equity fund?
According to M*, Parnassus has a 13-person investment team including seven portfolio managers with research responsibilities, four analysts, and an equity trader. That is not a well staffed firm for a $35-50B AUM firm. That is $350+M in fees. If we do not hold the survivor bias against them, their two main strategies PARBL and PARWX have worked out really well.
P.S.: The current manager of PARWX has been a sole manager for only 0.5 yrs. The previous (founding) manager was Dodson who retired in Dec 2020 and soon after Parnassus was sold to AMG. Dodson has been described in investing forums in endearing terms. Strangely, of the fund's current $5.0B AUM, ~ $1+B came as net inflows in 2021 while the fund had steady net outflows throughout the previous three years.
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Post by yogibearbull on Aug 10, 2021 23:14:54 GMT
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Post by Karen on Aug 11, 2021 0:19:44 GMT
I dug a little deeper into Parnassus to see if I should take a plunge into PRBLX and PARWX. Parnassus used to have two additional equity funds: Asia fund and Multi Cap fund. Asia fund, which was co-managed and then sole managed by the current sole manager of PARWX for 4 years, did not do well and was liquidated in 2018. Does anybody know what happened to the Multi Cap equity fund? According to M*, Parnassus has a 13-person investment team including seven portfolio managers with research responsibilities, four analysts, and an equity trader. That is not a well staffed firm for a $35-50B AUM firm. That is $350+M in fees. If we do not hold the survivor bias against them, their two main strategies PARBL and PARWX have worked out really well. P.S.: The current manager of PARWX has been a sole manager for only 0.5 yrs. The previous (founding) manager was Dodson who retired in Dec 2020 and soon after Parnassus was sold to AMG. Dodson has been described in investing forums in endearing terms. Strangely, of the fund's current $5.0B AUM, ~ $1+B came as net inflows in 2021 while the fund had steady net outflows throughout the previous three years. On your last statement... Nothing strange about that. PARWX is their LV offering. PRBLX is categorized as LB but its (to our memory) usually/always been heavier LG. Value underperformed Growth for years. The early money moves to Value were in 4Q 2020 but large sums also rolled into Value in 2021. So the flows seem reasonable to us. FWIW, PARWX is the better performing fund over the standard prior periods in large part due to its big run over the past year. Disclaimer: We owned PRBLX several years ago but staked a large position in PARWX late 2020/early 2021. We are considering paring some of our position due to its run-up and keeping a close eye on its performance after the sale. |
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Post by anitya on Aug 11, 2021 0:54:03 GMT
Thanks, Yogi. That explains.
PARNX has $1.2B AUM though it has been around since 1984.
PARNX - now Mid Cap Growth - M* in stock style shows that the fund used to be a large cap blend fund (formerly, Multi-cap strategy) through 2019 and from 2020 it has been mid cap growth. It changed its strategy at that time. When compared from 1996 thru 2019 with PRBLX, another of Parnassus large blend style fund, PARNX has clearly underperformed in total return and also on a risk adjusted basis. PARNX was managed by Dodson from inception until it changed to a Mid Cap Growth fund.
I do not like funds changing their strategies so drastically when the prior strategy was not successful (for 35 years?). A disservice to the shareholders, IMO. They should have just liquidated the fund or merged it tax-free into the much larger PRBLX. Before the change, Parnassus had three large cap funds and one mid cap fund and after the change, they have two large cap and one mid cap funds. The Q&A for the change has this -
"Why is Parnassus making this change [effective May 1, 2020]?
We are making this change because we see compelling investment opportunities for our clients in mid
cap growth companies. We believe mid cap growth companies are rapidly growing, and they have
ample runways for continued growth. Our strategy is to invest in higher-quality companies within this
segment by applying Parnassus’s quality-driven investment process and striving to avoid unprofitable
and highly leveraged firms.
What if I prefer to own a large-cap stock fund?
If you prefer to retain some or all of your assets in large cap stocks, we offer two large cap funds, the
Parnassus Core Equity Fund and the Parnassus Endeavor Fund, for your consideration. Please contact
Shareholder Services or your Client Services team to learn more about the available options at
Parnassus."
Seems Dodson's business skills are superior to his famed portfolio management skills!
Per M*, the fund has captured 102% of the benchmark’s losses and 100% of the upside since the change.
Seems like I should divert some of my time in this Forum to MFO!
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Post by yogibearbull on Sept 15, 2021 0:08:24 GMT
M* upgrade of PRBLX is noteworthy, www.morningstar.com/articles/1057102/process-concerns-drive-the-downgrades-of-these-funds-from-eaton-vance-and-vanguardParnassus Core Equity (PRILX) already had High Process and Above Average People ratings. A small decline in fees in recent years has resulted in an Analyst Rating upgrade to Gold from Silver for both share classes. Managers Todd Ahlsten and Ben Allen employ a time-tested approach, avoiding companies that derive significant revenue from alcohol, tobacco, weapons, fossil fuels, nuclear power, or gambling, and then employing additional environmental, social, and governance, quality, and valuation screens to narrow their investment universe. From there, the managers look for companies with sustainable competitive advantages, increasingly relevant products or services, exemplary management, and ethical practices. Downside protection has been a strength for this fund. The resulting compact portfolio has outperformed the S&P 500 in every market correction over the past 20 years. |
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Post by roi2020 on Sept 15, 2021 1:35:52 GMT
M* recently updated the Analyst Ratings for two mutual funds that I hold.
They upgraded Parnassus Core Equity (PRILX) from Silver to Gold in August and downgraded Vanguard Intl. Growth (VWILX) from Gold to Silver in July.
My view of these funds has not changed...
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