PARNASSUS CORE EQUITY FUND
Portfolio of Investments as of March 31, 2020 (unaudited)
Equities | Shares | Market Value ($) | ||||||
Air Freight & Logistics (2.9%) | ||||||||
FedEx Corp. | 3,595,783 | 436,024,647 | ||||||
|
| |||||||
Airlines (1.1%) | ||||||||
Southwest Airlines Co. | 4,691,093 | 167,049,822 | ||||||
|
| |||||||
Apparel & Luxury Goods (2.4%) | ||||||||
VF Corp. | 6,710,232 | 362,889,347 | ||||||
|
| |||||||
Banks (2.6%) | ||||||||
Bank of America Corp. | 18,481,466 | 392,361,523 | ||||||
|
| |||||||
Biotechnology (1.5%) | ||||||||
Gilead Sciences Inc. | 3,132,905 | 234,215,978 | ||||||
|
| |||||||
Capital Markets (5.8%) | ||||||||
Charles Schwab Corp. | 9,152,609 | 307,710,715 | ||||||
CME Group Inc. | 3,350,930 | 579,409,305 | ||||||
|
| |||||||
887,120,020 | ||||||||
Chemicals (3.2%) | ||||||||
Linde plc | 2,785,817 | 481,946,341 | ||||||
|
| |||||||
Commercial Services & Supplies (2.8%) | ||||||||
Waste Management Inc. | 4,551,076 | 421,247,595 | ||||||
|
| |||||||
Communications Equipment (2.1%) | ||||||||
Cisco Systems Inc. | 7,920,928 | 311,371,680 | ||||||
|
| |||||||
Consumer Finance (1.9%) | ||||||||
American Express Co. | 3,440,913 | 294,576,562 | ||||||
|
| |||||||
Diversified Telecom Services (3.8%) | ||||||||
Verizon Communications Inc. | 10,600,349 | 569,556,752 | ||||||
|
| |||||||
Equity Real Estate Investment Trusts (3.7%) | ||||||||
AvalonBay Communities Inc. | 830,678 | 122,250,881 | ||||||
Digital Realty Trust Inc. | 2,323,321 | 322,732,520 | ||||||
Iron Mountain Inc. | 5,307,077 | 126,308,433 | ||||||
|
| |||||||
571,291,834 | ||||||||
Food & Staples Retailing (3.7%) | ||||||||
Costco Wholesale Corp. | 1,977,545 | 563,857,406 | ||||||
|
| |||||||
Food Products (2.8%) | ||||||||
Mondelez International Inc., Class A | 8,591,542 | 430,264,423 | ||||||
|
|
Health Care Equipment (7.3%) | ||||||||
Becton Dickinson and Company | 2,176,163 | 500,016,973 | ||||||
Danaher Corp. | 4,346,150 | 601,550,621 | ||||||
|
| |||||||
1,101,567,594 | ||||||||
Health Care Technology (2.1%) | ||||||||
Cerner Corp. | 5,076,065 | 319,741,334 | ||||||
|
| |||||||
Household Products (3.6%) | ||||||||
The Clorox Company | 1,766,488 | 306,044,046 | ||||||
The Procter & Gamble Co. | 2,273,613 | 250,097,430 | ||||||
|
| |||||||
556,141,476 | ||||||||
Interactive Media & Services (4.0%) | ||||||||
Alphabet Inc., Class Aq | 524,081 | 608,955,917 | ||||||
|
| |||||||
Internet (3.8%) | ||||||||
Amazon.com Inc.q | 291,663 | 568,661,184 | ||||||
|
| |||||||
IT Services (3.3%) | ||||||||
Mastercard Inc., Class A | 2,086,752 | 504,075,814 | ||||||
|
| |||||||
Machinery (5.9%) | ||||||||
Deere & Co. | 3,272,173 | 452,083,422 | ||||||
Pentair plc | 6,253,311 | 186,098,535 | ||||||
Xylem Inc. | 3,938,366 | 256,505,778 | ||||||
|
| |||||||
894,687,735 | ||||||||
Media (5.4%) | ||||||||
Comcast Corp., Class A | 18,894,554 | 649,594,766 | ||||||
The Walt Disney Co. | 1,684,292 | 162,702,607 | ||||||
|
| |||||||
812,297,373 | ||||||||
Professional Services (3.3%) | ||||||||
Verisk Analytics Inc. | 3,573,873 | 498,126,419 | ||||||
|
| |||||||
Semiconductor Equipment (5.3%) | ||||||||
Applied Materials Inc. | 7,461,857 | 341,902,288 | ||||||
NVIDIA Corp. | 1,739,403 | 458,506,631 | ||||||
|
| |||||||
800,408,919 | ||||||||
Software (13.0%) | ||||||||
Adobe Inc.q | 488,032 | 155,311,304 | ||||||
Cadence Design Systems Inc.q | 6,251,344 | 412,838,758 | ||||||
Microsoft Corp. | 6,687,981 | 1,054,761,483 | ||||||
Synopsys Inc.q | 2,647,431 | 340,962,638 | ||||||
|
| |||||||
1,963,874,183 | ||||||||
Technology Hardware (1.0%) | ||||||||
Apple Inc. | 604,378 | 153,687,282 | ||||||
|
| |||||||
Total investment in equities (98.3%) (cost $13,315,958,549) | 14,905,999,159 | |||||||
|
|
Short-Term Securities | Interest Rate | Maturity Date | Principal Amount ($) | Market Value ($) | ||||||||||||
Certificates of Deposit (0.0%)α | ||||||||||||||||
Providence Bank & Trust | 0.50 | % | 09/24/2020 | 250,000 | 245,191 | |||||||||||
Self-Help Federal Credit Union | 2.12 | % | 10/16/2020 | 250,000 | 244,605 | |||||||||||
|
| |||||||||||||||
489,796 | ||||||||||||||||
Certificates of Deposit Account Registry Service (0.0%) α | ||||||||||||||||
CDARS agreement with Beneficial State Bank, dated 03/12/2020 Participating depository institutions: Androscoggin Savings Bank, par 238,500; Bank of Weston, par 238,500; Catskill Hudson Bank, par 92,000; Industrial Bank, par 238,500; Primary Bank, par 238,500; Prime Alliance Bank, par 238,500; Regent Bank, par 238,500; The State Bank and Trust Company, par 238,500; United Bank, par 238,500 (cost $1,924,395) | 1.20 | % | 03/11/2021 | 2,000,000 | 1,924,395 | |||||||||||
|
| |||||||||||||||
Community Development Loans (0.0%) α | ||||||||||||||||
BlueHub Loan Fund | 1.00 | % | 04/15/2020 | 100,000 | 99,770 | |||||||||||
New Hampshire Community Loan Fund | 1.00 | % | 07/31/2020 | 500,000 | 490,055 | |||||||||||
Root Capital Loan Fund | 1.25 | % | 02/01/2021 | 200,000 | 189,934 | |||||||||||
TMC Development Working Solutions | 1.00 | % | 05/25/2020 | 100,000 | 99,114 | |||||||||||
Vermont Community Loan Fund | 1.00 | % | 04/15/2020 | 100,000 | 99,770 | |||||||||||
|
| |||||||||||||||
978,643 | ||||||||||||||||
Time Deposits (0.7%) | ||||||||||||||||
BBH Cash Management Service | ||||||||||||||||
BBVA, Madrid | 0.15 | % | 04/01/2020 | 106,213,851 | 106,213,851 | |||||||||||
|
| |||||||||||||||
Total short-term securities (0.7%) (cost $109,606,685) | 109,606,685 | |||||||||||||||
|
| |||||||||||||||
Total securities (99.1%) (cost $13,425,565,234) | 15,015,605,844 | |||||||||||||||
|
| |||||||||||||||
Other assets and liabilities (1.0%) | 142,393,508 | |||||||||||||||
|
| |||||||||||||||
Total net assets (100.0%) | 15,157,999,352 | |||||||||||||||
|
|
q | This security is non-income producing. | |
a | Market value adjustments have been applied to these securities to reflect potential early withdrawal. | |
plc | Public Limited Company |
The portfolio of investments as of March 31, 2020 has not been audited. This report is provided for the general information of the Fund’s shareholders. For more information regarding the Fund, portfolio holdings and other significant accounting policies, please see the Fund’s most recent prospectus and annual report.
Income Taxes:
At March 31, 2020, the net unrealized appreciation (depreciation) based on the cost of long-term investments of securities for income tax purposes was as follows:
Parnassus Core Equity Fund | ||||
Cost of long-term investments | $ | 13,316,879,473 | ||
|
| |||
Unrealized appreciation | $ | 2,820,796,733 | ||
Unrealized depreciation | (1,230,756,123 | ) | ||
|
| |||
Net unrealized appreciation | $ | 1,590,040,610 | ||
|
|
The Parnassus Core Equity Fund follows Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosure, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Various inputs are used in determining the value of the Fund’s portfolio of investments. These inputs are summarized in three levels: Level 1 - unadjusted quoted prices in active markets for identical investments, Level 2 – other significant observable inputs (including quoted prices for similar investments) and Level 3 - significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).
The following table summarizes the portfolio’s financial assets as of March 31, 2020, that is valued at fair value on a recurring basis:
Investment Securities Equities: | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Equities: | ||||||||||||||||
Communication Services | $ | 1,990,810,044 | $ | — | $ | — | $ | 1,990,810,044 | ||||||||
Consumer Discretionary | 931,550,531 | — | — | 931,550,531 | ||||||||||||
Consumer Staples | 1,550,263,305 | — | — | 1,550,263,305 | ||||||||||||
Financials | 1,574,058,106 | — | — | 1,574,058,106 | ||||||||||||
Health Care | 1,655,524,906 | — | — | 1,655,524,906 | ||||||||||||
Industrials | 2,417,136,216 | — | — | 2,417,136,216 | ||||||||||||
Information Technology | 3,733,417,876 | — | — | 3,733,417,876 | ||||||||||||
Materials | 481,946,341 | — | — | 481,946,341 | ||||||||||||
Real Estate | 571,291,834 | — | — | 571,291,834 | ||||||||||||
Short-Term Investments | 106,213,851 | — | 3,392,834 | 109,606,685 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 15,012,213,010 | $ | — | $ | 3,392,834 | $ | 15,015,605,844 | ||||||||
|
|
|
|
|
|
|
|
The following table reconciles the valuations of the Fund’s Level 3 investment securities and related transactions as of March 31, 2020:
Certificates of Deposit & Community Development Loans | ||||
Balance as of December 31, 2019 | $ | 3,444,929 | ||
Discounts/premiums amortization | (52,095 | ) | ||
Purchases | 2,200,000 | |||
Sales | (2,200,000 | ) | ||
|
| |||
Balance as of March 31, 2020 | $ | 3,392,834 | ||
|
|
Quantitative information about Level 3 fair value measurements:
Fair Value at | Range | |||||||||||
March 31, 2020 | Valuation Technique | Unobservable Input | (Weighted Average) | |||||||||
Certificates of Deposit | $ | 2,414,191 | Liquidity Discount | Discount for Lack of Marketability | 4 | % | ||||||
Community Development Loans | $ | 978,643 | Liquidity Discount | Discount for Lack of Marketability and Probability of Default | 6 | % |
The significant unobservable inputs used in fair value measurement of the Fund’s Certificates of Deposit are a discount for lack of marketability. The significant unobservable inputs used in the fair value measurement of the Fund’s Community Development Loans are a discount for lack of marketability and a discount for the probability of default. Significant increases in any of these inputs in isolation would result in a lower fair value measurement. Generally, a change in the assumption used for probability of default should be accompanied by a directionally-similar change in the assumption used for the lack of marketability.
In accordance with procedures established by the Fund’s Trustees, all fair value securities as submitted by the Fund’s treasurer, are reviewed and approved by the Trustees. The Fund’s valuation committee is comprised of Independent Trustees who also comprise the Fund’s audit committee. The committee reviews the methodologies used by the Fund when securities have been identified as being fair valued and include the percentages used when determining liquidity discounts or discounts to be taken for lack of marketability. The Trustees review the changes in fair value measurement and methods used to substantiate the unobservable inputs on a quarterly basis.