Parnassus Core Equity Fund NCSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF

REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: Parnassus Funds (811-04044) and Parnassus Income Funds (811-06673)

Parnassus Funds

Parnassus Income Funds

(Exact name of registrant as specified in charter)

1 Market Street, Suite 1600, San Francisco, California 94105

(Address of principal executive offices) (Zip code)

Marc C. Mahon

Parnassus Funds

Parnassus Income Funds

1 Market Street, Suite 1600, San Francisco, California 94105

(Name and address of agent for service)

Registrant’s telephone number, including area code: (415) 778-0200

Date of fiscal year end: December 31

Date of reporting period: June 30, 2017

Item 1: Report to Shareholders

PARNASSUS FUNDS^®

SEMIANNUAL REPORT ◾ JUNE 30, 2017

PARNASSUS FUNDS



Parnassus Fund^SM
Investor Shares		PARNX
Institutional Shares		PFPRX

Parnassus Core Equity Fund^SM
Investor Shares		PRBLX
Institutional Shares		PRILX

Parnassus Endeavor Fund^SM
Investor Shares		PARWX
Institutional Shares		PFPWX

Parnassus Mid Cap Fund^SM
Investor Shares		PARMX
Institutional Shares		PFPMX

Parnassus Asia Fund^SM
Investor Shares		PAFSX
Institutional Shares		PFPSX

Parnassus Fixed Income Fund^SM
Investor Shares		PRFIX
Institutional Shares		PFPLX

Table of Contents



Letter from Parnassus Investments			4

Fund Performance and Commentary

Parnassus Fund			7

Parnassus Core Equity Fund			10

Parnassus Endeavor Fund			13

Parnassus Mid Cap Fund			16

Parnassus Asia Fund			19

Parnassus Fixed Income Fund			23

Responsible Investing Notes			25

Fund Expenses			26

Portfolios of Investments

Parnassus Fund			28

Parnassus Core Equity Fund			30

Parnassus Endeavor Fund			33

Parnassus Mid Cap Fund			35

Parnassus Asia Fund			37

Parnassus Fixed Income Fund			39

Financial Statements			44

Notes to Financial Statements			51

Financial Highlights			62

Additional Information			68



PARNASSUS FUNDS				Semiannual Report • 2017

August 4, 2017

Dear Shareholder,

Stocks continued to climb this quarter, with the S&P 500 adding 3.1% to a year-to-date gain that ended June at 9.3%. Technology stocks have been especially strong, as evidenced by the tech-heavy Nasdaq, which closed the first half up 14.8%. New economy giants, including Parnassus holdings Apple and Alphabet (Google’s corporate parent), have been the clear market leaders this year. You’ll read more about these winners, as well as the stocks that detracted from our Funds’ performance, in the reports that follow. You’ll also learn about our portfolio managers’ latest investment outlooks. I hope you’ll find these reports to be informative and interesting.

All but one of our equity funds beat their indexes for the quarter. The only laggard was the Parnassus Core Equity Fund, which came up just short. This Fund did manage to outpace its Lipper peer group for the quarter, and still boasts an excellent long-term track record versus the S&P 500. The Fund with the best quarterly return was the Parnassus Endeavor Fund, which is managed by Jerome Dodson, the founder and longtime leader of Parnassus Investments.*

As part of a deliberate succession plan, I became president of Parnassus Investments this past January. Jerry retained the title of chairman and CEO. In this role, Jerry serves as mentor to me for general management matters. I’ve learned so much from Jerry in the 12 years I’ve worked for him, and I’m eager to learn more in the years to come. In addition to being chairman and CEO, Jerry will continue to manage portfolios for the foreseeable future. Given his incredible track record, I’m grateful for Jerry’s continued service on our investment team.

New Employees

Two new employees joined the firm last quarter. Kelly Brush has also joined our sales and marketing team. In his role as Manager of Advisor Relations, Kelly is the firm’s point person for financial advisors, RIAs and family offices that use our mutual funds. Kelly has prior work experience with SKBA Capital Management and Allianz Global Advisors. He has a B.S. in Finance from Arizona State University.

Julia McCotter, a marketing assistant, helps with a variety of projects within the sales and marketing team. In May, Julia became the youngest person to graduate with an M.B.A. from Mills College. She also earned her B.A. from Mills, with a major in economics and a minor in Studio Art.

Interns

We are enjoying a bumper crop of summer interns this year. We have seven interns helping us on the investment team. Andrew Choi is an M.B.A. candidate at Harvard Business School. His prior experience includes management consulting at Deloitte and serving as Director of Strategy at HUBweek, a Boston-based civic organization focused on innovation and technology. Andrew graduated from Princeton University with an AB in Chemistry. Originally from South Jersey, he enjoys weightlifting, being outdoors and great coffee.

Andrew Chang is an M.B.A. candidate at the University of Pennsylvania’s Wharton School. Previously, he worked at two investment firms: Darlington Partners in the Bay Area and Goldman Sachs Investment Partners in New York. Andrew graduated from Stanford University, where he majored in Management Science & Engineering. In his free time, he enjoys playing tennis, traveling and rooting for the St. Louis Cardinals.

Suniti Sundaram is an M.B.A. candidate at Harvard Business School. She has five years of work experience in the health care industry, most recently as a product manager at Abbott Diabetes Care, where she helped launch the company’s first continuous glucose monitoring device in the U.S. Suniti earned her B.S. in Applied Mathematics and Economics from MIT. In her free time, she enjoys singing and playing volleyball.

Ying Tu will be a senior this fall at the Wharton School, studying Statistics, Finance and Accounting. Previously, she worked as an investment banking summer analyst at China Merchants Securities in Shanghai. Originally from Nanjing, China, Ying loves Chinese calligraphy, literature and table tennis.



Semiannual Report • 2017				PARNASSUS FUNDS

Isaac Macieira-Kaufmann is entering his third year at McGill University, where he’s majoring in finance and minoring in accounting. Previously, he interned at Acttao, a technology startup in Beijing, China. Prior to that, he was an intern at Kendo Holdings in San Francisco. Isaac enjoys sailing, photography and hiking.

Marisa Lin will be a senior at Stanford University this fall, majoring in Economics and International Relations. Her previous experience includes interning at the City of Palo Alto and being a member of the Cardinal Fund, a student-run investment fund at Stanford. In addition, she is an economics tutor at Stanford and a mentor for local high school students.

Rounding out our research interns is Shelby Fabianac, a rising senior at the University of San Francisco (USF). She earned her associate degree in Music Industry Studies at Diablo Valley College. Her work experience includes stints at a recording studio and a hip-hop management company. She is a member of the USF Finance Committee and enjoys cooking and early morning runs.

Brad Alman is an intern on our accounting team. He is pursuing a bachelor’s degree in Economics at California Polytechnic State University in San Luis Obispo (Cal Poly). Before Cal Poly, Brad earned his associate’s degree in Business Administration from Diablo Valley College, with honors. In his free time, Brad enjoys playing soccer and golf.

Marielle Isla is a software engineering intern at Parnassus. She will be a junior next year at the University of California, Berkeley, where she intends to major in Cognitive Science. She serves as the web editor for Sigma Psi Zeta sorority and enjoys dancing and music.

Lindsay Chan is also working this summer as a software engineering intern. She is a Computer Science major at the University of California, Davis. She is involved in a women’s business organization and is on the planning team for an annual hackathon at Davis.

Thank you all for investing with the Parnassus Funds.

Sincerely,

LOGO

Benjamin E. Allen

President

* Please see the following pages for more detailed information regarding each Fund’s performance and the risks associated with investing in the Funds.



PARNASSUS FUNDS				Semiannual Report • 2017

Intern Reunion

Below is a photograph of the people attending the Parnassus Intern Reunion in June.

LOGO

Front row (left to right): Shelby Fabianac, Lana Ariue, Lillian Zhao, Sonya Gupta, Jerome Dodson, Jeanie Cotter, Lori Keith, Angela Du and Suniti Sundaram.

Back row (left to right): Robert McHenry, Andrew Chang, Andrew Choi, Kareem Hammoud, Viki Jan, Ying Tu, Robert Klaber, Todd Ahlsten, Ben Allen, Matt Gershuny, Minh Bui, Billy Hwan, Lee Tsao, Michael Fernandez and Marie Lee.



Semiannual Report • 2017				PARNASSUS FUNDS

PARNASSUS FUND

Ticker: Investor Shares - PARNX

Ticker: Institutional Shares - PFPRX

As of June 30, 2017, the net asset value (“NAV”) of the Parnassus Fund – Investor Shares was $49.23, resulting in a gain of 4.19% for the second quarter. This compares to a gain of 3.09% for the S&P 500 Index (“S&P 500”) and a gain of 2.76% for the Lipper Multi-Cap Core Average, which represents the average return of the multi-cap core funds followed by Lipper (“Lipper average”). For the year-to-date, the Parnassus Fund – Investor Shares is up 9.47%, compared to a gain of 9.33% for the S&P 500 and 8.31% for the Lipper average.

Below is a table comparing the Parnassus Fund with the S&P 500 and the Lipper average over the past one-, three-, five- and ten-year periods. The Fund is ahead of both benchmarks for all time periods. Most striking is the ten-year average return. At 9.66% per year, the Fund’s annualized gain is 2.49% ahead of the S&P 500 and 3.76% ahead of the Lipper average.


Parnassus Fund
Average Annual Total Returns (%)	One Year		Three Years		Five Years		Ten Years		Gross Expense Ratio		Net Expense Ratio
for period ended June 30, 2017	One Year		Three Years		Five Years		Ten Years		Gross Expense Ratio		Net Expense Ratio

Parnassus Fund Investor Shares		26.26		9.73		16.66		9.66		0.86		0.86

Parnassus Fund Institutional Shares		26.46		9.85		16.73		9.69		0.71		0.71

S&P 500 Index		17.87		9.59		14.59		7.17		NA		NA

Lipper Multi-Cap Core Average		17.55		6.51		13.13		5.90		NA		NA

The average annual total return for the Parnassus Fund-Institutional Shares from commencement (April 30, 2015) was 9.41%. Performance shown prior to the inception of the Institutional Shares reflects the performance of the Parnassus Fund-Investor Shares and includes expenses that are not applicable to and are higher than those of the Institutional Shares. The performance of Institutional Shares differs from that shown for the Investor Shares to the extent that the classes do not have the same expenses. Performance data quoted represent past performance and are no guarantee of future returns. Current performance may be lower or higher than the performance data quoted. Current performance information to the most recent month-end is available on the Parnassus website (www.parnassus.com). Investment return and principal value will fluctuate, so an investor’s shares, when redeemed, may be worth more or less than their original principal cost. Returns shown in the table do not reflect the deduction of taxes a shareholder may pay on fund distributions or redemption of shares. The S&P 500 is an unmanaged index of common stocks, and it is not possible to invest directly in an index. Index figures do not take any expenses, fees or taxes into account, but mutual fund returns do.

Second Quarter Review

The Parnassus Fund posted a strong gain for the second quarter, beating both of our benchmarks and pulling ahead for the year. Sector allocations helped performance, led by our overweight position in health care, the S&P 500’s best performing sector, and our underweight positions in telecom services and energy, the two worst performing sectors. As a fossil-fuel free fund, we do not invest in energy stocks.

Stock selection added to our performance as well, as our three biggest winners contributed a total of 139 basis points to the Fund’s return, overcoming the 76 basis point drag caused by our three biggest losers. (One basis point is 1/100^th of one percent.)

Our worst performer was International Business Machines (IBM), one of the world’s largest providers of information-technology solutions and services. The stock fell 11.7% from $174.14 to $153.83, reducing the Fund’s return by 49 basis points. Investors were disappointed by IBM’s weak quarterly operating margins, and questioned whether the company will be able to meet its annual earnings guidance. The stock fell again when famed investor Warren Buffett sold a third of his shares. While we recognize the near-term challenges, we believe IBM’s transition to a software- and analytics-oriented business will create a lot of value, so we’re holding onto our position.

Semiconductor giant Intel trimmed 14 basis points from the Fund’s return, as the stock dropped 6.5% from $36.07 to $33.74. The stock fell after Intel’s data center business reported lower than expected growth and margins. We expect the second half of 2017 will be better for the data center business, driven by new product



PARNASSUS FUNDS				Semiannual Report • 2017

launches, healthy demand and cost control. Longer term, the outlook for Intel’s chips is fantastic thanks to a myriad of technological advancements, including cloud computing, artificial intelligence, machine learning, driverless cars and the internet-of-things (IOT).

Credit card issuer Capital One Financial dropped 4.7% from $86.66 to $82.62, reducing the Fund’s return by 13 basis points. The stock fell in April after the company increased its guidance for credit losses. This issue hurt the stock again in June, when Capital One was the only bank required to resubmit its capital plan under the Federal Reserve’s Comprehensive Capital Analysis and Review. We’re disappointed by management’s inaccurate credit loss forecast, but we’re holding onto our position. We believe investors have over-reacted, as Capital One still expects its recent credit card vintages will be among its most profitable ever. Furthermore, the stock is trading at a bargain valuation of less than 10x expected 2018 earnings.

Our best performer was Whole Foods, a leading retailer of organic and natural foods, whose stock soared 41.7% from $29.72 to $42.11, adding 51 basis points to the Fund’s return. The stock jumped in April after activist investor Jana Partners took a nearly 9% stake in the company. Jana demanded management accelerate its turnaround or sell the company. The latter occurred in June, when Amazon announced it would acquire Whole Foods for $42 per share, or $13.7 billion.

Industrial gas supplier Praxair added 45 basis points to the Fund’s return as the stock jumped 11.8% from $118.60 to $132.55. During the quarter, Praxair announced a merger of equals with Linde, a German competitor. The merger will create the world’s largest industrial gas supplier, combining Praxair’s leading position in the Americas with Linde’s strong presence in Europe and Asia. The combination of Praxair’s operational excellence and Linde’s engineering and technology leadership should accelerate earnings growth.

Auto insurer Progressive added 43 basis points to the Fund’s return, as its shares rose 12.5% from $39.18 to $44.09. Progressive’s stock climbed higher as its nascent home insurance product accelerated the company’s revenue growth. As the company predicted, customers are bundling their home and auto policies together to save money and time.

Outlook and Strategy

The U.S. economy continued to chug along during the second quarter, helping the S&P 500 reach record highs. The unemployment rate dropped to 4.3%, its lowest level since 2001, while the Federal Reserve increased its projected 2017 GDP growth rate to 2.2%. As the economy has picked up steam, corporate earnings have also improved. Earnings from S&P 500 companies are expected to have grown an impressive 10% in the second quarter.

We’re now in the ninth year of a bull market, and we believe many of these positives are already reflected in valuations. The S&P 500 has climbed to 17.5 times forward earnings estimates, which is near a 15-year high.

Although the market continues to move higher, we were able to find several undervalued stocks during the quarter. The first new holding is Public Storage, the largest owner of self-storage facilities. While the

Parnassus Fund
as of June 30, 2017
(percentage of net assets)

LOGO

* For purposes of categorizing securities for diversification requirements under the Investment Company Act, the Fund uses industry classifications that are more specific than those used for the chart.

Top 10 Holdings

(percentage of net assets)



Gilead Sciences Inc.			4.4%

Allergan plc			4.3%

Motorola Solutions Inc.			4.2%

Charles Schwab Corp.			3.7%

Praxair Inc.			3.6%

Progressive Corp.			3.6%

Patterson Companies Inc.			3.5%

International Business Machines Corp.			3.5%

Pentair plc			3.0%

Thomson Reuters Corp.			2.9%

Portfolio characteristics and holdings are subject to change periodically.



Semiannual Report • 2017				PARNASSUS FUNDS

short-term outlook isn’t pretty, as new supply is pressuring occupancy and rental rates in several markets, the long-term opportunities are as great as they’ve ever been. Tenants will continue to be attracted to Public Storage’s convenient locations and ubiquitous brand, while its concentration in fast-growing, supply-constrained markets like Los Angeles, San Francisco and Seattle should protect it from the worst of the downturn. The company’s balance sheet is also the gold-standard in the real estate industry, providing Public Storage with the flexibility to opportunistically acquire smaller competitors.

Our second new addition is toy manufacturer Mattel, best known for its iconic brands including Barbie, Hot Wheels and Fisher-Price. Sales declined in each of the past three years, as the company was run by executives who focused on operating margins instead of growth and innovation. In February, new CEO Margaret (Margo) Georgiadis joined from Google, and we believe her new perspective will reinvigorate growth. With the stock trading close to its three-year low, we believe additional downside is limited, while the upside is significant if Georgiadis’ strategy proves successful.

We also invested in PPG Industries, a global paint company with well-known brands such as Glidden and Olympic. We like PPG’s dominant scale, as it ranks #1 or #2 in virtually all of its end markets. The management team also has a strong track record of effectively allocating capital. We’re hopeful that the company’s long-standing focus on innovation will help accelerate organic growth and lead to strong shareholder returns in the future.

The last newcomer to the Parnassus Fund is Hannon Armstrong, a real estate investment trust (REIT) that invests in renewable energy and energy efficiency projects. Every investment the company makes is evaluated on its financial return and the amount of carbon emissions it reduces, a unique focus that reminds us of our own “principles and performance” directive. Hannon Armstrong is investing on the right side of climate change, a generational tailwind that should support earnings and dividend growth for many years to come.

We sold one stock during the quarter, primarily for valuation reasons. After owning the stock for more than a decade, we said goodbye to Ciena, a leading manufacturer of optical equipment used in telecommunications networks. The company recently posted better than expected earnings, causing the stock to jump 16%. The shares had a great run over the past year, so they no longer looked undervalued to us.

At quarter-end, the Parnassus Fund has a nice balance of offense and defense. The portfolio is overweight the financial and technology sectors, which tend to outperform when the economy is humming along. On a combined basis, the Parnassus Fund is 48% invested in these sectors compared to 37% for the S&P 500. Offsetting this, the portfolio is significantly underweight two cyclical sectors: consumer discretionary and energy. These two sectors represent 4% of the Fund compared to 18% for the benchmark. Additionally, the portfolio is overweight health care, a more defensive sector. Given these weightings, we believe the Parnassus Fund is well-positioned for any market environment.

Yours truly,

LOGO

Jerome L. Dodson

Lead Portfolio Manager

Robert J. Klaber

Portfolio Manager

Ian E. Sexsmith

Portfolio Manager



PARNASSUS FUNDS				Semiannual Report • 2017

PARNASSUS CORE EQUITY FUND

Ticker: Investor Shares - PRBLX

Ticker: Institutional Shares - PRILX

As of June 30, 2017, the NAV of the Parnassus Core Equity Fund – Investor Shares was $41.78. After taking dividends into account, the total return for the second quarter was 2.42%. This compares to an increase of 3.09% for the S&P 500 Index (“S&P 500”) and a gain of 1.77% for the Lipper Equity Income Fund Average, which represents the average equity income funds followed by Lipper (“Lipper average”). For the first half of 2017, the Fund posted a return of 6.91%, which compares to gains of 9.33% for the S&P 500 and 5.70% for the Lipper average.

Below is a table that compares the performance of the Fund with that of the S&P 500 and the Lipper average. Average annual total returns are for the one-, three-, five- and ten-year periods ending June 30, 2017.


Parnassus Core Equity Fund
Average Annual Total Returns (%)	One Year		Three Years		Five Years		Ten Years		Gross Expense Ratio		Net Expense Ratio
for period ended June 30, 2017	One Year		Three Years		Five Years		Ten Years		Gross Expense Ratio		Net Expense Ratio

Parnassus Core Equity Fund Investor Shares		14.22		7.46		14.29		9.08		0.87		0.87

Parnassus Core Equity Fund Institutional Shares		14.47		7.68		14.50		9.30		0.66		0.66

S&P 500 Index		17.87		9.59		14.59		7.17		NA		NA

Lipper Equity Income Fund Average		13.19		6.11		11.43		5.79		NA		NA

The average annual total return for the Parnassus Core Equity Fund-Institutional Shares from commencement (April 28, 2006) was 10.00%. Performance shown prior to the inception of the Institutional Shares reflects the performance of the Parnassus Core Equity Fund – Investor Shares and includes expenses that are not applicable to and are higher than those of the Institutional Shares. The performance of the Institutional Shares differs from that shown for the Investor Shares to the extent that the classes do not have the same expenses. Performance data quoted represent past performance and are no guarantee of future returns. Current performance may be lower or higher than the performance data quoted, and current performance information to the most recent month-end is available on the Parnassus website (www.parnassus.com). Investment return and principal value will fluctuate, so an investor’s shares, when redeemed, may be worth more or less than their original principal cost. Returns shown in the table do not reflect the deduction of taxes a shareholder may pay on fund distributions or redemption of shares. The S&P 500 is an unmanaged index of common stocks, and it is not possible to invest directly in an index. Index figures do not take any expenses, fees or taxes into account, but mutual fund returns do.

Second Quarter Review

The Parnassus Core Equity Fund – Investor Shares gained 2.42% for the quarter, but trailed the S&P 500 by 67 basis points (one basis point is 1/100^th of one percent). Sector allocation helped our relative performance, with the most beneficial effects coming from our underweight positions in the index’s two worst performing sectors, telecom services and energy. There were no meaningfully negative sector allocation effects.

Unfortunately, the negative impact of our stock selection overwhelmed the positive impact from our sector weightings. The Fund’s worst performer was National Oilwell Varco (NOV), which sells equipment that enables energy companies to drill wells safely and efficiently. The stock fell 17.8% from $40.09 to $32.94, and trimmed 33 basis points off the Fund’s return. Oil prices fell about 10% during the second quarter, and this was the main reason for NOV’s stock drop.

Disney, a global media enterprise, reduced the Fund’s return by 25 basis points, as its stock slipped 6.3% from $113.39 to $106.25. The two main issues dampened investor sentiment for Disney shares. One was a decline in cable television subscribers and the other was weak advertising sales. While we acknowledge these challenges, we think Disney still has several powerful long-term earnings growth drivers. We expect to see better cost control at Disney’s ESPN division, especially as sports rights costs normalize in the coming years. We also think the network’s investments in innovation, including its mobile strategy, will resonate with viewers. We’re also excited about Disney’s upcoming film slate, highlighted by a new Star Wars movie coming out in time for the holidays.



Semiannual Report • 2017				PARNASSUS FUNDS

Intel fell 6.5% during the quarter from $36.07 to $33.74, trimming 25 basis points off the Fund’s return. Over the past few years, Intel has shed its image as a PC-related company, emphasizing its leadership in data centers and cloud computing. Unfortunately, during the quarter, Intel’s data center (DCG) business reported disappointing growth and margins. We expect DCG’s performance to improve soon, due to product innovation, cost control and robust demand. The key drivers for long-term demand are cloud computing, artificial intelligence, machine learning, driverless cars, 5G-wireless and the internet of things (IOT).

The Fund’s biggest winner was digital payments company PayPal, which rose 24.8% from $43.02 to $53.67, increasing the Fund’s return by 56 basis points. PayPal’s business continues to grow at a rapid clip. Active customers surpassed 200 million in the quarter and payment volumes jumped 23%. While we still think highly of PayPal’s fundamentals, we sold about half our position during the quarter due to valuation.

Praxair, one of the largest industrial gas companies in the world, announced a merger of equals with Linde, a leading German industrial gas company. In response, its stock climbed 11.8% to $132.55 from $118.60, boosting our Fund’s return by 50 basis points. The merger will create the world’s largest industrial gas company, with a combined market value of over $70 billion and revenue of approximately $30 billion. The new company will have more diverse and balanced end-markets, as it combines Praxair’s leading position in the Americas and Linde’s strong presence in Europe and Asia. Additionally, each company brings complementary strengths, highlighted by Praxair’s operational excellence and Linde’s engineering and technology leadership. The deal is expected to close in the second half of 2018.

Novartis, the Swiss pharmaceutical giant, boosted the Fund’s return by 31 basis points, as its stock rose 12.4% from $74.27 to $83.47. The stock popped after the company reported strong results from Entresto, an exciting new heart failure drug. Shares continued to move higher after Novartis announced excellent phase III results for RTH258, a novel eye drug that treats vision loss with fewer injections than rival drugs already on the market.

Outlook and Strategy

The Fund enters the second half more defensively positioned than it started the year. We trimmed several technology holdings, due to valuation, and are now slightly underweight the benchmark in this sector. This move follows our decision to reduce our exposure to financial stocks during the first quarter. We also have significant underweights in the consumer discretionary and energy sectors. Given our relatively low exposure to these cyclical industries, we consider the Fund to be defensively positioned. This means that if the stock market declines sharply, the Fund should offer good downside protection.

We currently see a lot of opportunities in health care, which is our largest overweight position. The Fund has significant holdings in biotechnology, pharma and drug distribution. Some of these stocks have detracted from our performance over the last couple of years, but we expect them to move into the winner’s column very soon.

We are also overweight consumer staples stocks. We think our companies in this sector have resilient business models that can withstand economic cycles and ward off new threats, including those

Parnassus Core Equity Fund

as of June 30, 2017

(percentage of net assets)

LOGO

Top 10 Holdings

(percentage of net assets)



Danaher Corp.			4.9%

Gilead Sciences Inc.			4.8%

Praxair Inc.			4.4%

Intel Corp.			4.1%

Wells Fargo & Co.			3.8%

The Walt Disney Co.			3.7%

Allergan plc			3.5%

CVS Health Corp.			3.5%

VF Corp.			3.1%

Alphabet Inc., Class C			3.0%

Portfolio characteristics and holdings are subject to change periodically.



PARNASSUS FUNDS				Semiannual Report • 2017

represented by the seemingly ubiquitous Amazon. Our only other significant overweight is in industrial stocks. We think global infrastructure spending is a generational investment theme, and we own several high quality industrial businesses that should benefit from this trend.

Even with the S&P 500 hitting all-time highs last quarter, we found three new stocks to add to the Fund. The first was Sempra Energy, a diversified energy holding company that owns both regulated utilities and unregulated infrastructure businesses. The San Diego-based company serves a diverse set of customers across Southern California, Mexico, Chile and Peru. We like Sempra’s leadership in renewable energy, as it was the first utility to meet California’s goal of delivering 33% energy from renewable resources. We are also attracted to Sempra’s industry leading growth profile. Sempra leverages a stable base of cash flows from its regulated business to fund higher return projects. One such project is the Cameron liquid natural gas (LNG) export terminal near the Gulf of Mexico.

Public Storage is the country’s largest owner of self-storage facilities. While the industry isn’t glamorous, self-storage properties generate attractive returns on capital and resilient cash flows. After hitting an all-time high of $276 in April 2016, the stock fell below $215 during the quarter. This is when we established our position. The stock dropped because new supply in several markets caused occupancy rates to fall and rent increases to slow. Despite this short-term weakness, the company’s long-term prospects are still bright. Public Storage has significant exposure to fast-growing and supply-constrained markets like Los Angeles, San Francisco and Seattle. And very importantly from a risk perspective, the company employs much less debt than other real estate companies.

The final new stock is PPG Industries, a global paint and performance coatings business. We’ve admired this company for a long time. When we finally decided to buy it, the stock was trading at a discount to its historical valuation and the overall stock market. We like the fact that PPG has dominant scale, as it ranks #1 or #2 in virtually all its end markets. We’re optimistic that the company’s long-standing focus on innovation will accelerate organic growth and propel the stock to new highs in the years to come.

Despite our slight underperformance this past quarter, we’re confident that our investment process will lead to strong, risk-adjusted returns over the long-run. Our portfolio holdings have great business prospects and attractive risk-reward profiles based on our long-term investment horizon. Thank you for the trust you’ve put in us and your investment in the Parnassus Core Equity Fund.

Sincerely,

LOGO

Todd C. Ahlsten

Lead Portfolio Manager

Benjamin E. Allen

Portfolio Manager



Semiannual Report • 2017				PARNASSUS FUNDS

PARNASSUS ENDEAVOR FUND

Ticker: Investor Shares - PARWX

Ticker: Institutional Shares - PFPWX

As of June 30, 2017, the NAV of the Parnassus Endeavor Fund – Investor Shares was $36.30, so the total return for the quarter was 5.68%. This compares to 3.09% for the S&P 500 Index (“S&P 500”) and 2.76% for the Lipper Multi-Cap Core Average, which represents the average return of the multi-cap core funds followed by Lipper (“Lipper average”). For the year-to-date, the Parnassus Endeavor Fund – Investor Shares is up 10.03% compared to 9.33% for the S&P 500 and 8.31% for the Lipper average. Although we trailed both the S&P 500 and the Lipper average in the first quarter, we had great performance this quarter, so we’re now ahead of both benchmarks for the year-to-date.


Parnassus Endeavor Fund
Average Annual Total Returns (%)	One Year		Three Years		Five Years		Ten Years		Gross Expense Ratio		Net Expense Ratio
for period ended June 30, 2017	One Year		Three Years		Five Years		Ten Years		Gross Expense Ratio		Net Expense Ratio

Parnassus Endeavor Fund Investor Shares		31.03		14.50		19.08		12.58		0.97		0.95

Parnassus Endeavor Fund Institutional Shares		31.24		14.66		19.17		12.63		0.74		0.74

S&P 500 Index		17.87		9.59		14.59		7.17		NA		NA

Lipper Multi-Cap Core Average		17.55		6.51		13.13		5.90		NA		NA

The average annual total return for the Parnassus Endeavor Fund-Institutional Shares from commencement (April 30, 2015) was 14.34%. Performance shown prior to the inception of the Institutional Shares reflects the performance of the Parnassus Endeavor Fund-Investor Shares and includes expenses that are not applicable to and are higher than those of the Institutional Shares. The performance of the Institutional Shares differs from that shown for the Investor Shares to the extent that the classes do not have the same expenses. Performance data quoted represent past performance and are no guarantee of future returns. Current performance may be lower or higher than the performance data quoted. Current performance information to the most recent month-end is available on the Parnassus website (www.parnassus.com). Investment return and principal value will fluctuate, so an investor’s shares, when redeemed, may be worth more or less than their original principal cost. Returns shown in the table do not reflect the deduction of taxes a shareholder may pay on fund distributions or redemption of shares. The S&P 500 is an unmanaged index of common stocks, and it is not possible to invest directly in an index. Index figures do not take any expenses, fees or taxes into account, but mutual fund returns do.

Before investing, an investor should carefully consider the investment objectives, risks, charges and expenses of the Fund and should carefully read the prospectus or summary prospectus, which contain this and other information. The prospectus or summary prospectus can be obtained on the Parnassus website or by calling (800) 999-3505. As described in the Fund’s current prospectus dated May 1, 2017, Parnassus Investments has contractually agreed to limit total operating expenses to 0.95% of net assets for the Parnassus Endeavor Fund-Investor Shares and to 0.83% of net assets for the Parnassus Endeavor Fund-Institutional Shares. This agreement will not be terminated prior to May 1, 2018, and may be continued indefinitely by the Adviser on a year-to-year basis.

Longer-term, we’re also well ahead of both the S&P 500 and Lipper average. To the left is a table, comparing the Parnassus Endeavor Fund with the S&P 500 and the Lipper average for the one-, three-, five- and ten-year periods. As you can see, we’re well ahead of both averages for all time periods. Of special note is the fact that the Parnassus Endeavor Fund is the best-performing of all multi-cap core funds for the three- and ten-year periods: #1 of 651 funds for three years and #1 of 376 funds for ten years.* Over the past ten years, the Parnassus Endeavor Fund has beaten the S&P 500 by an average of over five percentage points per year. This is remarkable, when one considers that most mutual funds underperform the S&P 500. The average multi-cap core funds averaged a gain of 5.90% over the decade, while the Parnassus Endeavor Fund – Investor Shares averaged 12.58% – well over twice what the average fund earned.

(*The Fund is #8 of 760 funds for one year and #6 of 567 funds for five years.)

Company Analysis

The advance in our holdings this quarter was broad-based with seven stocks each contributing 40 basis points or more to the Fund’s return. (One basis point is 1/100^th of one percent.) Only one company had a negative impact on the Fund of as much as 40 basis points. IBM reduced the Fund’s return by 52 basis points, as its stock fell 11.7% from $174.14 to $153.83. It dropped quite a bit in April after reporting disappointing earnings driven by weak margins. The stock moved even lower in May when Warren Buffet’s Berkshire Hathaway sold a third of its shares. While we recognize the near-term challenges and weak performance of the company, we believe in the longer-term plan of IBM’s transition to a software-and-services business.



PARNASSUS FUNDS				Semiannual Report • 2017

Fortunately, the winners overwhelmed the few losers we had in the portfolio. The Fund’s best performer was Whole Foods, a leading retailer of organic and natural foods, as its stock soared 41.7% from $29.72 to $42.11, adding an amazing 127 basis

points to the Fund’s return. In June, Amazon made an offer to purchase the company for $42 a share. It’s now trading over that level in the hope that Amazon will increase its offer or another company will make a bid.

Gilead Sciences, the big biotechnology firm that makes therapies for hepatitis C and HIV, contributed 63 basis points to the Fund’s return, as its stock climbed 4.2% from $67.92 to $70.78. The stock dropped 4.5% during the first two months of the quarter, but moved higher late in the quarter amid speculation that the pending health care bill in the Senate would not have a big negative impact on the pharmaceutical industry.

San Francisco-based McKesson, the nation’s largest drug distributor, increased the Fund’s return by 57 basis points, as the stock rose 11.0% from $148.26 to $164.54. The stock moved higher on a good earnings report and management’s optimism for improved earnings for FY 2018. Even after the move, the company is still undervalued, and we expect its strong cash flow to move it even higher.

Perrigo, the leading producer of store-brand generic drugs, added 56 basis points to the Fund’s return, as the stock climbed 13.8% from $66.39 to $75.52. The company announced the sale of its Tysabri royalty stream for $2.9 billion, and used the proceeds to pay down debt. CEO John Hendrickson will be leaving, and the company is looking for a new leader. Once new leadership is in place, Perrigo’s stock should move higher.

Autodesk, the leading software-provider for architects, engineers and designers, soared 16.6% from $86.47 to $100.82, adding 54 basis points to the Fund’s return. Robust demand for its products drove better-than-expected earnings. Investors also gained greater confidence in the company’s ability to execute its product transition, after industry veteran Andrew Anagnost was named chief executive officer. We believe that Autodesk can deliver higher earnings from further adoption of its subscription offerings, market share gains and better operating leverage.

Novartis, the Swiss pharmaceutical giant, boosted the Fund’s return by 44 basis points, as its stock rose 12.4% from $74.27 to $83.47. The stock climbed after the company reported higher earnings and strong results from Entresto, a new drug that prevents heart failure. Shares continued to move higher, after Novartis announced excellent Phase III results for RTH258, a new eye therapy that treats vision loss with fewer injections than rival drugs now on the market.

Alphabet, the parent of Google, added 42 basis points to the Fund’s return, as its stock increased 9.7% from $847.80 to $929.68. In late April, the company announced a 22% increase in quarterly revenue from the previous year. Mobile search, YouTube and digital advertising were the key growth drivers.

Outlook and Strategy

As I indicated in last quarter’s report, I was surprised when the market moved higher after Donald Trump was elected President. It’s a good thing that I didn’t play my hunch, because the Parnassus Endeavor Fund – Investor Shares went up 10.03% since the first of the year and it climbed another 7.34% in the fourth quarter of last year. On a compounded basis, that’s a gain of over 18% that we would have missed.

Parnassus Endeavor Fund

as of June 30, 2017

(percentage of net assets)

LOGO

Top 10 Holdings

(percentage of net assets)



Gilead Sciences Inc.			12.0%

QUALCOMM Inc.			6.1%

McKesson Corp.			5.3%

VF Corp.			5.0%

International Business Machines Corp.			4.9%

United Parcel Service Inc., Class B			4.8%

Allergan plc			4.6%

American Express Co.			4.4%

Novartis AG (ADR)			4.2%

Micron Technology			3.7%

Portfolio characteristics and holdings are subject to change periodically.



Semiannual Report • 2017				PARNASSUS FUNDS

Earlier in my career, I tried to time the market, increasing cash and reducing the stock percentage in the portfolio, whenever I thought the market was overvalued. Although this worked for me once, most of the time, it did not. Usually, the market kept moving higher while we held a lot of cash, so we underperformed. After these experiences, I learned my lesson, so now we just stay as fully invested as possible. That has worked much better for us.

The problem is that an overvalued market can keep moving higher and become even more overvalued. Right now, the price/earnings (P/E) ratio of the S&P 500 is 21.5, which means that stocks are selling for 21.5 times earnings. Historically, the P/E ratio of the market has been in the 15-16 range, so by this measure, the market is overvalued.

We can take some comfort in the fact that the P/E ratio of the Parnassus Endeavor Fund is only 13.9, so that should give us a margin of safety in the event of a downturn. However, when the market corrects and stocks move down sharply, our Fund will move lower as well. Hopefully, we won’t go down as much as the market, but the value of our shares will drop. The only sound strategy is to ride out the ups and downs of the market and hope for the best.

Unfortunately, too many investors don’t follow this strategy. They try to time the market, moving in and out, depending on their guess as to the market’s future direction. Lipper and other analytical services have done studies that show that investors in general perform less well than the market as a whole, because they tend to move in and out of the market at the wrong time. Investors can improve their performance by just buying and holding.

The current situation leads to the question of how long can the current high P/E ratios last? If history is any guide, the P/E ratios will ultimately come down to a range of 15-16. There are only two ways that can happen. Either earnings (the “E”) must go up or stock prices (the ”P”) must go down. I hope it’s the former and not the latter. The economy looks reasonably strong right now, so earnings should move higher, and this would correct the high P/E problem. The alternative is a big drop in the market.

In terms of strategy for the Parnassus Endeavor Fund, we don’t focus on these macro issues, since I don’t think it’s productive. What we can do, though, is focus on individual stocks, and buy the good ones when they’re out-of-favor. The reason why the Parnassus Endeavor Fund has done so well over the years, is because we’re able to determine the intrinsic value of a company. Since we have no way of knowing the exact value, this is only an estimate. An estimate is good enough, though, since we only buy a stock when it’s selling for one-third off its intrinsic value, or 67% of its worth. We don’t have to be exact, since we have that 33% margin of safety.

The next question, of course, is why don’t all investors follow this strategy? If they did, the Parnassus Endeavor Fund wouldn’t be able to outperform as it has. The reason everyone doesn’t do this is that when a stock falls one-third below its value, something bad has happened. There has been an earnings miss, there’s more competition, raw material prices have moved much higher, a marketing strategy is no longer working, a key executive has left or any one of dozens of possible reasons. Our job is to determine whether the difficult situation is permanent or temporary. If we think it’s temporary, we buy the stock. One needs to have an even temperament to do this, because it’s emotionally very difficult to buy a stock after it has dropped by a significant amount. Most investors are not able to do this.

Because we invest in stocks with good management, this means that they will usually find a way to bounce back. ESG factors also help (environmental, social and governance). A company with a good environmental policy will be less likely to be fined or sued, and conservation of resources will reduce costs. A company that treats its employees well will have a more productive team. Parnassus has been using ESG factors in its investing policy since its founding 33 years ago. This has definitely helped our performance.

The regulators make us say that past performance is no guarantee of future returns, and this maxim is certainly true. However, we pledge that we will continue to use the strategies that have made us successful over the past 33 years.

Yours truly,

LOGO

Jerome L. Dodson

Portfolio Manager



PARNASSUS FUNDS				Semiannual Report • 2017

PARNASSUS MID CAP FUND

Ticker: Investor Shares - PARMX

Ticker: Institutional Shares - PFPMX

As of June 30, 2017, the net asset value (“NAV”) of the Parnassus Mid Cap Fund – Investor Shares was $31.38, so the total return for the quarter was a gain of 3.19%. This compares to a gain of 2.70% for the Russell Midcap Index (“Russell”) and a gain of 1.70% for the Lipper Mid-Cap Core Average, which represents the average mid-cap core funds followed by Lipper (“Lipper average”). For the first half of 2017, the Parnassus Mid Cap Fund – Investor Shares is also ahead of its benchmarks, posting a gain of 8.69% compared to a return of 7.99% for the Russell and 5.97% for the Lipper average.

Below is a table comparing the Parnassus Mid Cap Fund with the Russell and the Lipper average for the one-, three-, five- and ten-year periods. We are pleased that the Fund beat its benchmarks in almost all of these periods. The Fund is also ahead of its benchmarks since we began managing the strategy on October 1, 2008.


Parnassus Mid Cap Fund
Average Annual Total Returns (%)	One Year		Three Years		Five Years		Ten Years		Gross Expense Ratio		Net Expense Ratio
for period ended June 30, 2017	One Year		Three Years		Five Years		Ten Years		Gross Expense Ratio		Net Expense Ratio

Parnassus Mid Cap Fund Investor Shares		16.29		9.21		13.90		8.99		1.01		0.99

Parnassus Mid Cap Fund Institutional Shares		16.56		9.40		14.01		9.04		0.80		0.80

Russell Midcap Index		16.48		7.69		14.72		7.67		NA		NA

Lipper Mid-Cap Core Average		16.97		5.94		13.04		6.20		NA		NA

The average annual total return for the Parnassus Mid Cap Fund-Institutional Shares from commencement (April 30, 2015) was 10.81%. Performance shown prior to the inception of the Institutional Shares reflects the performance of the Parnassus Mid Cap Fund-Investor Shares and includes expenses that are not applicable to and are higher than those of the Institutional Shares. The performance of the Institutional Shares differs from that shown for the Investor Shares to the extent that the classes do not have the same expenses. Performance data quoted represent past performance and are no guarantee of future returns. Current performance may be lower or higher than the performance data quoted. Current performance information to the most recent month-end is available on the Parnassus website (www.parnassus.com). Investment return and principal value will fluctuate, so an investor’s shares, when redeemed, may be worth more or less than their original principal cost. Returns shown in the table do not reflect the deduction of taxes a shareholder may pay on fund distributions or redemption of shares. The Russell Midcap Index is an unmanaged index of common stocks, and it is not possible to invest directly in an index. Index figures do not take any expenses, fees or taxes into account, but mutual fund returns do. Mid-cap companies can be more sensitive to changing economic conditions and have fewer financial resources than large-cap companies.

Before investing, an investor should carefully consider the investment objectives, risks, charges and expenses of the Fund and should carefully read the prospectus or summary prospectus, which contain this and other information. The prospectus or summary prospectus can be obtained on the Parnassus website or by calling (800) 999-3505. As described in the Fund’s current prospectus dated May 1, 2017, Parnassus Investments has contractually agreed to limit total operating expenses to 0.99% of net assets for the Parnassus Mid Cap Fund-Investor Shares and to 0.85% of net assets for the Parnassus Mid Cap Fund-Institutional Shares. This agreement will not be terminated prior to May 1, 2018, and may be continued indefinitely by the Adviser on a year-to-year basis.

Second Quarter Review

Mid-cap stocks gained steadily throughout the quarter as corporate earnings grew at a double-digit rate, and the U.S. economy remained relatively healthy. The economic picture is rosy enough that investors largely ignored it when the Federal Reserve raised rates and announced that it will likely start reducing the size of its balance sheet. Investors also overlooked volatile political headlines, including the debate over Obamacare, choosing instead to focus on the possibility of tax reform and significant infrastructure spending.

The Parnassus Mid Cap Fund – Investor Shares did even better than its benchmarks, beating the Russell by 49 basis points and the Lipper average by 149 basis points (one basis point is 1/100^th of one percent). From an allocation perspective, the Parnassus Mid Cap Fund benefited from having an underweight position in energy stocks, the worst performing sector in the benchmark. The Parnassus Mid Cap Fund also benefited from having an overweight position in the health care sector, the best-performing sector in the benchmark.

Three stocks took more than ten basis points from the Fund’s return. The worst performer was National Oilwell Varco, a global supplier of equipment and technology that helps companies drill wells safely and efficiently. The stock fell 17.8% from $40.09 to $32.94, reducing the Fund’s return by 47 basis points, as oil prices declined due to oversupply concerns. We remain optimistic about National Oilwell Varco’s long-term prospects, since the company continues to develop new technologies and safety products that enable its customers to operate more cost-effectively and efficiently. We believe the stock will rebound as oil prices recover and the company gains traction with its innovation solutions.



Semiannual Report • 2017				PARNASSUS FUNDS

First Horizon National, a Tennessee-based regional bank, dropped 5.8% from $18.50 to $17.42, reducing the Fund’s return by 19 basis points. The stock fell after First Horizon announced the acquisition of Capital Bank for $2.2 billion, as investors were disappointed by the high purchase price of 2.0x tangible book value. We’re holding onto our shares, because the deal provides an attractive platform for growth in North Carolina, and extends First Horizon’s market leadership in Tennessee with

significant cost synergies. While we wish First Horizon had our bargain-hunter mentality, we believe the stock will rise over time as Capital Bank is integrated and its return on equity increases.

MDU Resources, a diversified conglomerate with operations in electric and gas utilities, pipelines and construction materials and services, fell 4.3% from $27.37 to $26.20, decreasing the Fund’s return by 11 basis points. The stock dropped after the company delivered weaker than expected earnings, driven by a decline in bookings in the construction materials segment due to weather delays and weak pipeline volumes. Despite these issues, we believe MDU has strong long-term growth prospects, supported by a solid pipeline of high-return investment opportunities at its core utility and construction businesses.

Three stocks added more than 35 basis points to the Fund’s return this quarter. The best performer was Whole Foods, a leading retailer of organic and natural foods, as its stock soared 41.7% from $29.72 to $42.11, adding 66 basis points to the Fund’s return. The stock jumped in April after activist investor Jana Partners took a nearly 9% stake in the company. Jana demanded management accelerate its turnaround or sell the company. The latter occurred in June, when Amazon announced it would acquire Whole Foods for $42 per share, or $13.7 billion. We’re happy with that price, because we believe it represents fair value, especially given the increasingly competitive supermarket environment.

Praxair, one of the largest industrial gas companies in the world, jumped 11.8% from $118.60 to $132.55, contributing 42 basis points to the Fund’s return. The stock rose after the company announced a merger with Linde, a leading German industrial gas company. The merger will create the world’s largest industrial gas company, with a combined market value of over $70 billion and revenue of about $30 billion. The new company will have more diverse end-markets, combining Praxair’s leading position in the Americas with Linde’s strong presence in Europe and Asia. Additionally, each company brings complementary strengths, specifically Praxair’s operational excellence and Linde’s engineering and technology leadership. The deal is expected to close in the second half of 2018.

Xylem, a leading pure-play water infrastructure provider, added 37 basis points to the Fund’s return as the stock rose 10.4% from $50.22 to $55.43. The stock climbed after the company surpassed earnings expectations, as demand for its water infrastructure products grew in both the U.S. and in emerging markets. With margin expansion opportunities; synergies from its acquisition of Sensus, a provider of smart meters and data analytics; and increasing demand for its highly innovative products, we remain excited about Xylem’s long-term earnings prospects.

Parnassus Mid Cap Fund

as of June 30, 2017

(percentage of net assets)

LOGO

Top 10 Holdings

(percentage of net assets)



Motorola Solutions Inc.			4.1%

Cardinal Health Inc.			3.7%

Patterson Companies			3.7%

Verisk Analytics Inc.			3.6%

Shaw Communications Inc., Class B			3.4%

Xylem Inc.			3.4%

Iron Mountain Inc.			3.4%

Praxair Inc.			3.4%

Dentsply Sirona Inc.			3.4%

Pentair plc			3.4%

Portfolio characteristics and holdings are subject to change periodically.



PARNASSUS FUNDS				Semiannual Report • 2017

Outlook and Strategy

The Russell reached another all-time high during the quarter and is now up an astounding 324% since the March 2009 low. As we continue in the ninth year of the bull market, the biggest threat to the market appears to be its high valuation. Mid-cap stocks are trading at 18 times forward earnings estimates. This is close to the ten-year high and well above the 15 times multiple at which the Russell was trading in 2009.

Our largest concentration of stocks at the quarter-end remains in the industrial sector. While the overweight allocation is less than it has been in previous quarters, we are still seeing good risk-reward scenarios in this area. Within this sector, we own a lot of business services companies, which should have less downside than many of their industrial peers in the event of a market correction. We continue to own fewer real estate and financial stocks than the benchmarks, because our research shows that the range of outcomes in these sectors is unusually wide and favors the downside. The Fund also has fewer energy stocks than the Russell, which tend to be more volatile than the rest of the index.

Our consumer discretionary exposure went up materially during the quarter, though we still have a much smaller position in this sector than the Russell. We took advantage of consumer sector weakness, initiating a position in Mattel, the largest toy company in the world. The company’s earnings dropped from $2.49 in 2013 to $1.06 in 2016, primarily due to poor execution. Nonetheless, Mattel owns enduring brands like Fisher-Price, Barbie, Hot Wheels and American Girl. We believe that CEO Margaret Georgidas, who recently joined from Google, will be able to lead a turnaround of the business over the next few years. Specifically, we think the company’s renewed focus on brand reinvigoration, product innovation and strategic partnerships will create significant earnings upside over time.

We also increased our exposure to the utilities sector this past quarter, as we initiated a position in Sempra Energy, a San Diego-based diversified energy services holding company. The company has operations in electric and gas utilities, pipelines, renewable projects and LNG facilities that serve a diverse set of customers across Southern California, Mexico, Chile and Peru. We believe Sempra has a fantastic collection of difficult-to-replicate, wide-moat businesses, which are supported by long-term contracts and stable regulated utilities. Furthermore, we think Sempra’s businesses will be increasingly relevant as demand for renewables and low-cost natural gas continues to grow, and the use of electric vehicles picks up over the next decade. We especially like the company’s leadership in renewable energy, as it currently generates over 43% of its electricity from renewable sources such as wind and solar. We believe Sempra is well positioned for sustained earnings growth with limited downside.

We’re pleased that our strategy is providing good results to shareholders. The Fund seeks to own high-quality businesses at good prices that can grow intrinsic value faster than our benchmarks over the long-term. We are confident that this strategy will enable the Fund to outperform the market over the long-term, by participating in up markets, providing downside protection in bear markets and avoiding permanent capital losses in severe market corrections.

Thank you for your investment in the Parnassus Mid Cap Fund.

Yours truly,



Matthew D. Gershuny		Lori A. Keith
Lead Portfolio Manager		Portfolio Manager



Semiannual Report • 2017				PARNASSUS FUNDS

PARNASSUS ASIA FUND

Ticker: Investor Shares - PAFSX

Ticker: Institutional Shares - PFPSX

As of June 30, 2017, the net asset value (“NAV”) of the Parnassus Asia Fund – Investor Shares was $19.08, so the Fund gained 7.01% in the second quarter. This compares to a gain of 5.87% for the MSCI AC Asia Pacific Index (“MSCI Index”) and a gain of 6.61% for the Lipper Asia Pacific Region Average, which represents the average return of the Asia Pacific Region funds followed by Lipper (“Lipper average”). We’re pleased that the Parnassus Asia Fund generated both strong absolute and relative returns for our shareholders this quarter, but our work is far from done. For the first half of 2017, the Parnassus Asia Fund – Investor Shares has gained 13.57%, compared to 15.91% for the MSCI Index and 17.21% for the Lipper average.

Below is a table comparing the Parnassus Asia Fund with the MSCI Index and the Lipper average over the past one- and three-year periods, and since inception. The Parnassus Asia Fund – Investor Shares is trailing on a three-year basis, but we


Parnassus Asia Fund
Average Annual Total Returns (%)	One Year		Three Years		Since Inception on 4/30/13		Gross Expense Ratio		Net Expense Ratio
for period ended June 30, 2017	One Year		Three Years		Since Inception on 4/30/13		Gross Expense Ratio		Net Expense Ratio

Parnassus Asia Fund Investor Shares		27.20		3.60		6.21		3.13		1.25

Parnassus Asia Fund Institutional Shares		27.42		3.80		NA		1.10		0.96

MSCI AC Asia Pacific Index		23.00		4.76		4.86		NA		NA

Lipper Asia Pacific Region Average		18.61		4.51		4.21		NA		NA

The average annual total return for the Parnassus Asia Fund-Institutional Shares from commencement (April 30, 2015) was 3.24%. Performance shown prior to the inception of the Institutional Shares reflects the performance of the Parnassus Asia Fund-Investor Shares and includes expenses that are not applicable to and are higher than those of the Institutional Shares. The performance of the Institutional Shares differs from that shown for the Investor Shares to the extent that the classes do not have the same expenses. Performance data quoted represent past performance and are no guarantee of future returns. Current performance may be lower or higher than the performance data quoted. Current performance information to the most recent month-end is available on the Parnassus website (www.parnassus.com). Investment return and principal value will fluctuate, so an investor’s shares, when redeemed, may be worth more or less than their original principal cost. Returns shown in the table do not reflect the deduction of taxes a shareholder may pay on fund distributions or redemption of shares. The MSCI AC Asia Pacific Index is an unmanaged index of Asian stock markets, and it is not possible to invest directly in an index. Index figures do not take any expenses, fees or taxes into account, but mutual fund returns do.

The Fund invests primarily in non-U.S. securities. Foreign markets can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market or economic developments and can perform differently from the U.S. market.

Before investing, an investor should carefully consider the investment objectives, risks, charges and expenses of the Fund and should carefully read the prospectus or summary prospectus, which contain this and other information. The prospectus or summary prospectus can be obtained on the Parnassus website or by calling (800) 999-3505. As described in the Fund’s current prospectus dated May 1, 2017, Parnassus Investments has contractually agreed to limit the total operating expenses to 1.25% of net assets for the Parnassus Asia Fund-Investor Shares and to 1.22% of net assets for the Parnassus Asia Fund-Institutional Shares. This agreement will not be terminated prior to May 1, 2018, and may be continued indefinitely by the Adviser on a year-to-year basis.

made a strong comeback last year, up 27.20%, soundly beating 23.00% for the MSCI Index and the 18.61% for the Lipper average. The Parnassus Asia Fund - Investor Shares is also outperforming over longer time periods. We have gained an average of 6.21% per year since inception, which is 135 basis points per year ahead of the MSCI Index and 200 basis points per year ahead of the Lipper average. (One basis point is 1/100^th of one percent.)

Company Analysis

Our investments in Chinese companies and certain technology stocks contributed the most to the Asia Fund’s outperformance. Six companies contributed 49 basis points or more to the Fund’s return this quarter, while three subtracted 11 basis points or more from the Fund’s return.

The Fund’s worst performer was National Oilwell Varco, which sells equipment that enables energy companies to drill wells safely and efficiently. The stock fell 17.8% from $40.09 to $32.94, reducing the Fund’s return by 51 basis points, as oil prices sunk given over-supply concerns. Rising U.S. production and persistently high stockpiles are undermining investor confidence that cuts from other producers will correct the supply-demand imbalance. Despite the uncertain outlook for the oil industry, the company continues to develop new technologies that customers demand, and we believe that the stock will rebound as oil prices recover.

KLA-Tencor, the leading supplier of inspection equipment to semiconductor manufacturers, subtracted 11 basis points from the Fund’s return, as its stock declined 3.7% from $95.07 to $91.51. The stock initially rose, after delivering better than expected earnings from strong demand for its wafer inspection tools by foundry and logic



PARNASSUS FUNDS				Semiannual Report • 2017

customers. However, investors became concerned that the company’s order growth could slow down as foundry customers temporarily curtail spending before they move to the development of 7-nanometer semiconductor chips. We continue to believe that KLA is poised to benefit with its innovative products, market share gains and margin expansion opportunities.

The stock of Television Broadcast fell 6.7% from $4.04 to $3.77, reducing the Fund’s return by 11 basis points. The Hong Kong-based company is one of the largest producers and distributors of Chinese-language programming content in the world.

Earlier in 2017, TVB received an unsolicited takeover offer from TLG Movie & Entertainment Group to buy 27% of its shares for a premium of approximately HK$35 per share. The price of TVB’s stock initially surged on the offer, but it subsequently sagged in the second quarter, as regulations restricting foreign ownership of media companies in Hong Kong threatened to derail the transaction. The outcome of the share repurchase offer remains unknown, but a definitive resolution should be forthcoming, and a positive for the stock.

While our worst performers included two companies based in the U.S., international stocks, particularly those from China, dominated our winners list.

The Parnassus Asia Fund’s best performer was Alibaba Group, which added 95 basis points to the Fund’s return, as its stock price surged 30.7% from $107.83 to $140.90. Based in China, Alibaba is the world’s largest online and mobile commerce company by sales volume. Its major marketplaces – Taobao, Tmall and Juhuasuan – together generated gross merchandise volume of over half a trillion dollars last year, more than Amazon and eBay combined. In a presentation to investors, Alibaba upgraded its guidance for 2018 sales growth to nearly 50%, smashing consensus expectations and literally drawing gasps from the crowd. The stock soared 13% in a single day as various metrics demonstrated higher user engagement and personalization in the company’s core ecommerce business. Growing momentum in its cloud business, global expansion, ad targeting tools, mobile platforms, and monetization rates also extended the rally.

The stock price of Rakuten advanced 17.4% from $10.05 to $11.80, adding 85 basis points to the Fund’s return. Based in Japan, Rakuten is an international online shopping mall with tens of thousands of merchants; it is also a major player in online financial services, including securities brokerage and credit cards. Domestic gross merchandise sales registered solid double-digit growth, allaying persistent fears that competition was stiffening. Profits also came in higher than expected, helped by gains from Rakuten’s investments in ridesharing company Lyft. Following several quarters of slowing growth and falling margins at the company, the stock jumped on the belief that the company’s earnings may have finally bottomed out.

Parnassus Asia Fund

as of June 30, 2017

(percentage of net assets)

LOGO

Portfolio characteristics and holdings are subject to change periodically.

SITC International Holdings increased the Fund’s return by 68 basis points, as its stock climbed 14.5% from 69¢ to 79¢. The Hong Kong-based integrated shipping-and-logistics company has operations that span Mainland China, Japan, Southeast Asia and the rest of the world, making it the tenth largest container shipping operator in Asia. Both shipping and freight forwarding volumes maintained strong growth momentum and progress toward full-year estimates, driven by a gradual recovery in external demand across the region. Higher liquidity also provided a valuation boost to the stock, following its inclusion in the Shanghai-Hong Kong Stock Connect program.

Perrigo, the leading producer of store-brand generic drugs, added 56 basis points to the Fund’s return as the stock climbed 13.8% from $66.39 to $75.52. The business showed signs of stabilization as the company got back on track with its SEC filings and delivered an in-line earnings report. In addition, the company showed progress with portfolio rationalization –



Semiannual Report • 2017				PARNASSUS FUNDS

announcing the sale of its Tysabri royalty stream for $2.9 billion and using proceeds to pay down debt. While the news this month of CEO John Hendrickson’s departure came as a surprise, we believe his successor will continue to execute on the strategy to position Perrigo for growth.

The stock of Greatview Aseptic Packaging jumped 24.0% from 50¢ to 62¢, increasing the Fund’s return by 49 basis points. Headquartered in Beijing, Greatview is the second-largest aseptic packaging manufacturer in China. It sells packaging

materials for dairy and noncarbonated soft drink producers globally, with the majority of its customers in China and a production factory in Europe. On June 2, Jardine Strategic Holdings, a company listed on the London Stock Exchange, announced that it had purchased 22% of the issued share capital of Greatview at an average price of HK$5.00 a share, or a 15% premium to Greatview’s stock price on June 1. We liked the company’s steadfast business, debt-free balance sheet, and 5% dividend yield, and weren’t surprised that Jardine sealed the deal.

Samsung Electronics contributed 49 basis points to the Fund’s return, as its stock surged 13.0%, from $1,842.82 to $2,081.57. The South Korean consumer electronics giant ranks number-one in sales of mobile phones and displays worldwide and in June eclipsed Intel for the top spot in semiconductors. Samsung’s semiconductor business again delivered record profits, driven mainly by strong memory prices and robust enterprise and data center demand. Management also indicated that it could return excess cash to shareholders, a move that further powered the stock’s rise ahead of the company’s Galaxy 8 smartphone launch this fall.

Outlook and Strategy

The Parnassus Asia Fund – Investor Shares edged out both of its benchmarks in the second quarter with a gain of 7.01%. The sharp rally in Asian stocks that began in January continued through the first half of the year, building on the back of unusually placid global markets. Remarkably, stocks in Asia lost no more than 1.25% on any single day over the prior quarter, and indeed, in any day in 2017 so far (This compares to 22 such instances in 2016 and 17 in 2015). Stocks effectively had nowhere to go but up this year on rising expectations for a global economic recovery, renewed investor interest in emerging markets, and strengthening foreign currencies, while a reprieve from last year’s geopolitical shocks sent volatility to record lows. Investors in the Parnassus Asia Fund profited from these trends, which lifted our investments in global internet and technology stocks.

China, Korea and Taiwan were the best performing Asian markets in the quarter, while the three major markets of Japan, India and Australia – all countries where the Parnassus Asia Fund is underweight – lagged behind. Chinese stocks soared 10.7% ahead of the Communist Party’s twice-a-decade leadership reshuffle this autumn, despite a regulatory crackdown against leverage in Asia’s largest economy. The deleveraging didn’t impede Parnassus Asia Fund holding Alibaba, nor the other self-funding internet stocks that now make up half of China’s ten biggest companies. Japan’s economy slowly returned to growth, but could not shake persistently weak inflation expectations. Consequently, the country’s stocks sat out the regional risk rally, but still rose a respectable 5.2%.

Investors should note that MSCI recently made two changes, one immediate and one announced, to the benchmark against which the

Parnassus Asia Fund

as of June 30, 2017

(percentage of net assets)

LOGO

Parnassus considers companies that do a substantial amount of business in Asia to be Asian companies.

Top 10 Holdings

(percentage of net assets)



Rakuten Inc.			5.1%

Gilead Sciences Inc.			4.7%

SITC International Holdings Co., Ltd.			4.1%

Brambles Ltd.			4.0%

Kakaku.com Inc.			3.9%

Perrigo Co. plc			3.5%

Samsung Electronics Co., Ltd.			3.5%

QUALCOMM Inc.			3.3%

M1 Ltd.			3.2%

Asics Corp.			3.1%

Portfolio characteristics and holdings are subject to change periodically.



PARNASSUS FUNDS				Semiannual Report • 2017

Parnassus Asia Fund is measured. First, Pakistan was upgraded from a frontier to emerging market and is now a small component of the MSCI Index. With land mass about the size of France and the U.K. combined, Pakistan contains an enormous and fast-growing population of approximately 190 million people, the world’s sixth-largest. Pakistan’s problems are many, but so is its potential. Secondly, MSCI will add stocks traded in China’s mainland, commonly referred to as China A-shares, to the index starting in June 2018. The Parnassus Asia Fund already derives exposure to the Chinese markets through stocks listed in Hong Kong and the U.S., but the addition gives us an expanded universe of companies to evaluate.

The addition of a new country or market to an index is significant, akin to inserting an inch to a trusted yardstick. Thankfully, it is also rare. No matter the changes, one thing that remains constant is our commitment to Parnassus’s time-tested investment process and philosophy. With the Parnassus Asia Fund, we search the world for high-quality companies selling at temporarily depressed prices, and invest in them for the long-term. We believe this is the foundation for long-run investment success whether in China, Karachi or California.

Yours truly,

LOGO

Billy J. Hwan

Portfolio Manager



Semiannual Report • 2017				PARNASSUS FUNDS

PARNASSUS FIXED INCOME FUND

Ticker: Investor Shares - PRFIX

Ticker: Institutional Shares - PFPLX

As of June 30, 2017, the NAV of the Parnassus Fixed Income Fund – Investor Shares was $16.62, producing a gain for the quarter of 1.31% (including dividends). This compares to a gain of 1.45% for the Bloomberg Barclays U.S. Aggregate Bond Index (“Barclays Aggregate Index”) and a gain of 1.43% for the Lipper Core Bond Fund Average, which represents the average return of the funds followed by Lipper that invest at least 85% of assets in domestic investment-grade bonds (“Lipper average”). For the first half of 2017, the Parnassus Fixed Income Fund – Investor Shares posted a gain of 2.38%, as compared to a gain of 2.27% for the Barclays Aggregate Index and a gain of 2.40% for the Lipper average.

Below is a table comparing the performance of the Fund with that of the Barclays Aggregate Index and the Lipper average. Average annual total returns are for the one-, three-, five- and ten-year periods. For June 30, the 30-day subsidized SEC yield was 1.97%, and the unsubsidized SEC yield was 1.89%.


Parnassus Fixed Income Fund
Average Annual Total Returns (%)	One Year		Three Years		Five Years		Ten Years		Gross Expense Ratio		Net Expense Ratio
for period ended June 30, 2017	One Year		Three Years		Five Years		Ten Years		Gross Expense Ratio		Net Expense Ratio

Parnassus Fixed Income Fund Investor Shares		0.50		2.18		1.49		3.79		0.80		0.68

Parnassus Fixed Income Fund Institutional Shares		0.69		2.30		1.56		3.82		0.50		0.49

Bloomberg Barclays U.S. Aggregate Bond Index		-0.31		2.48		2.21		4.47		NA		NA

Lipper Core Bond Fund Average		0.46		2.14		2.28		4.14		NA		NA

The average annual total return for the Parnassus Fixed Income Fund-Institutional Shares from commencement (April 30, 2015) was 2.16%. Performance shown prior to the inception of the Institutional Shares reflects the performance of the Parnassus Fixed Income Fund-Investor Shares and includes expenses that are not applicable to and are higher than those of the Institutional Shares. The performance of the Institutional Shares differs from that shown for the Investor Shares to the extent that the classes do not have the same expenses. Performance data quoted represent past performance and are no guarantee of future returns. Current performance may be lower or higher than the performance data quoted. Current performance information to the most recent month-end is available on the Parnassus website (www.parnassus.com). Investment return and principal value will fluctuate, so an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns shown in the table do not reflect the deduction of taxes a shareholder would pay in fund distributions or redemption of shares. The Bloomberg Barclays U.S. Aggregate Bond Index (formerly known as the Barclays U.S. Aggregate Bond Index) is an unmanaged index of bonds, and it is not possible to invest directly in an index. Index figures do not take any expenses, fees or taxes into account, but mutual fund returns do.

Before investing, an investor should carefully consider the investment objectives, risks, charges and expenses of the Fund and should carefully read the prospectus or summary prospectus, which contain this and other information. The prospectus or summary prospectus can be obtained on the Parnassus website or by calling (800) 999-3505. As described in the Fund’s current prospectus dated May 1, 2017, Parnassus Investments has contractually agreed to limit total operating expenses to 0.68% of net assets for the Parnassus Fixed Income Fund-Investor Shares and to 0.58% of net assets for the Parnassus Fixed Income Fund-Institutional Shares. This agreement will not be terminated prior to May 1, 2018, and may be continued indefinitely by the Adviser on a year-to-year basis.

Second Quarter Review

While the Parnassus Fixed Income Fund – Investor Shares slightly underperformed in the quarter, it’s 2.38% year-to-date gain is still better than the Barclays Aggregate Index’s 2.27% return. During the quarter, 30-year bonds drove returns for the Index. The Fund holds relatively few of these securities, due to their volatility, so it didn’t benefit as much from their gains. However, the corporate bond portfolio, which is the largest component of the Fund, performed well and had several winners.

Bonds issued by Whole Foods Market shot higher in the quarter, boosted by news that Amazon.com would purchase the specialty grocery chain. The bonds gained 8.74% and added 14 basis points to the total return. (One basis point is 1/100^th of one percent.) Whole Foods’ bonds are rated BBB- by S&P, which is the bottom of the investment grade range, and pay a high coupon compared to most investment grade bonds. By contrast, S&P rates Amazon very highly at AA-, and investors demand less yield for such an excellent credit. As investors now expect Whole Foods’s bonds to be supported by Amazon’s credit rating, the bonds’ yield collapsed and the price moved higher.

Autodesk’s bonds also boosted the total return, adding 5 basis points, on a gain of 2.37%. The bonds were weighed down over the last few years by the company’s business model transition from selling software packages to selling subscriptions, and by the presence of activist shareholders. Bond investors are usually wary of activist investors because they often advocate for higher leverage to boost equity returns. With the company’s business model transition nearly complete and the activists reducing their position, the bonds were freed from those concerns and performed well in the quarter.



PARNASSUS FUNDS				Semiannual Report • 2017

Finally, bonds issued by Apple gained 5.53% in the quarter and added 4 basis points to the total return. The bonds were boosted by anticipation of strong iPhone 10 sales this fall and by the features of the bonds themselves. These bonds are one of the Fund’s few positions with a 30-year maturity, and they rallied along with other long-term issues.

Convertible bonds issued by Intel were the largest losers in the quarter. The bonds declined by 3.99% and shaved 1 basis point from the total return. The value of a convertible bond is tied to both interest rates and the issuing company’s stock price. In this case, the bonds lost value because Intel’s share price fell. The company announced disappointing results for its

Data Center Group (DCG), a key part of Intel’s growth strategy, sending the stock lower. We’re confident that the company will overcome these short-term issues, so we held onto the bonds.

Outlook and Strategy

The Parnassus Fixed Income Fund’s allocation to corporate securities increased again in the quarter. Including convertible bonds and preferred stock, the Fund’s exposure to corporations is now at 64.8% of total assets. This is substantially above the Index, which allocates 25.3% of assets to corporate bonds. A heavy allocation to corporate bonds enables us to benefit from the investment team’s deep company knowledge, while improving the Fund’s yield.

We initiated positions in four companies in the quarter by purchasing bonds issued by Danaher, Sealed Air, Hilton Worldwide and Hologic. Additionally, we increased several positions, including Cardinal Health and National Oilwell Varco. Danaher, Cardinal Health and National Oilwell Varco are currently held in Parnassus’s equity funds, and we think each company’s bonds are also an excellent investment for the Parnassus Fixed Income Fund.

The Parnassus Fixed Income Fund also has a new position in preferred stock issued by Public Storage. Preferred stock pays a fixed dividend and so, in many ways, mimics a bond. The company’s preferred stock has an A3 rating from Moody’s (the equivalent of A- on S&P’s scale) and yields over 5%, making it a terrific opportunity in this low interest rate environment. We will continue to look for similar bargains.

Thank you for your investment in the Parnassus Fixed Income Fund.

Yours truly,

LOGO

Samantha D. Palm

Portfolio Manager

Parnassus Fixed Income Fund

as of June 30, 2017

(percentage of net assets)

LOGO

Portfolio characteristics and holdings are subject to change periodically.



Semiannual Report • 2017				PARNASSUS FUNDS

Responsible Investing Notes

By Milton Moskowitz

Sports as a metaphor for life is all around us these days, hence the wave of emotion that swept through the Bay Area this summer after the Golden State Warriors defeated the Cleveland Cavaliers for the NBA basketball championship. It’s fitting that the Warriors should be featured in this column, because the team has set a new standard for corporate citizenship. They have spent time and money in Oakland schools, urging students to apply to college. Beyond that, the outpouring of love in a five-hour, post-season parade was fueled by the team’s unselfish play. Sportswriter Ann Killion noted that coach Steve Kerr “created a culture of collective accountability, a safety net in which no one person was more important than another.”

In the rest of the social responsibility scene, it was a mixed bag. President Donald Trump won praise from his usual detractors by coming out in favor of paid leave for new mothers, a benefit in place for many years in most European countries. The President likes to assemble CEOs around a table in the White House and browbeat them for an hour or two. In his first four months in office, he hosted 307 CEOs of American companies. That didn’t work out so well with his decision to yank the United States out of the Paris accord in which 195 nations had agreed to cut greenhouse gases. His rationale: “I was elected to represent the citizens of Pittsburgh, not Paris.” New York Times columnist David Brooks called it an action by people who see life as “a struggle for money and dominance.” Environmentalist Bill McKibben called it “reckless.” Nobel prizewinner Paul Krugman blasted it as an “act of gratuitous destruction.” And then there were CEOs who risked the displeasure of Trump by publicly lamenting the decision. This group included CEOs of the following companies: Tesla, Walt Disney, General Electric, Facebook (Mark Zuckerberg said, “it puts our children’s future at risk”), Twitter, Google, Amazon.com, Microsoft, Apple, IBM, Shell, and Goldman Sachs (Lloyd Blankfein said, “Today’s decision is a setback for the environment and for the U.S’s leadership position in the world”).

One company on this list, Amazon.com, made a bit of news in 2017. First, it heralded its entry into the brick-and-mortar bookstore field, opening a bunch of them across the country (Seattle, New York, San Jose, Paramus (New Jersey), Bellevue (Washington) – and more are coming. This is a neat strategy. First you undermine the retail bookstore by selling books at a steep discount. Then, after a mass exit (think Borders), you take their places. Amazon guarantees that you will never pay more than the online price. According to insiders, Amazon now accounts for nearly one-half of all the books sold in the country.

The other big move by Amazon was an offer to buy Whole Foods Market for $13.8 billion in cash. This bid came out of the blue and appeared to have no other contenders. I remember reading every year the Whole Foods application to the Fortune roster of the 100 Best Companies to Work For. It was always a heart-warming collection of testimonials by employees who were delighted to be working for a company that stood for what Whole Foods stood for. They never failed to make the list, a tribute to John Mackey, who founded the grocery chain in 1980.

Still, the largest U.S. toy maker, Mattel joins the Parnassus Funds roster with a woman at the helm. She is Margo Georgiadis, who formerly worked at Google, McDonalds and Groupon. She is poised to lead a rebound from slumping sales. Mattel is that rarity, a company that owns its manufacturing plants, 14 of them in China and Southeast Asia. They are inspected regularly. Every employee, worldwide, gets to work a half-day on Fridays. Working mothers enjoy paid leave of ten weeks. Two percent of profits go to charities.

Discount broker Charles Schwab organized more than 6,000 employees during the third week in May to participate in its 14^th annual Volunteer Week. They did everything from cleaning and landscaping to light construction, donating 23,000 volunteer hours to 500 service projects at the sites of charities. The Charles Schwab Foundation kicked in $144,000.

Finally, a word about United Parcel Service, package deliverer who, believe it or not, employs nearly 400,000 people. UPS has been recognized as a benevolent employer by Forbes and the Human Rights campaign, but celebrations were muted by the events of June 14 when an employee with 18 years of service entered the UPS Distribution Center in San Francisco with a gun and began shooting. Three drivers were killed – and the attack reverberated throughout the UPS global system.

Milton Moskowitz, a West Coast journalist, co-founded the Fortune magazine list, “The 100 Best Companies to Work for,” and the Working Mother magazine list, “The 100 Best Companies for Working Mothers.” Mr. Moskowitz serves as a consultant to Parnassus Investments in evaluating companies for workplace issues and responsible investing. Neither Fortune magazine, nor Working Mother magazine has any role in the management of the Parnassus Funds, and there is no affiliation between Parnassus Investments and either publication.



PARNASSUS FUNDS				Semiannual Report • 2017

Fund Expenses (unaudited)

As a shareholder of the Funds, you incur ongoing costs, which include portfolio management fees, administrative fees, shareholder reports, and other fund expenses. The Funds do not charge transaction fees, so you do not incur transaction costs such as sales charges (loads) on purchase payments, reinvested dividends, or other distributions, redemption fees, and exchange fees. The information on this page is intended to help you understand your ongoing costs of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.

The following example is based on an investment of $1,000 invested at the beginning of the most recent six-month period and held for the period of January 1, 2017 through June 30, 2017.

Actual Expenses

In the example below, the first line for each Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of each Fund provides information about hypothetical account values and hypothetical expenses based on the Fund’s expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. You may compare the ongoing costs of investing in the Fund with other mutual funds by comparing this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.

Please note that the expenses shown in the table are meant to highlight only your ongoing costs in these Funds. Therefore, the second line of each Fund is useful in comparing only ongoing costs and will not help you determine the relative total costs of owning other mutual funds, which may include transactional costs such as loads.


	Fund Expense Ratio		Beginning Account Value January 1, 2017		Ending Account Value June 30, 2017		Expenses Paid During Period
Parnassus Fund – Investor Shares: Actual*		0.86%		$1,000.00		$1,094.70		$4.47
Hypothetical (5% before expenses)		0.86%		$1,000.00		$1,020.53		$4.31
Parnassus Fund – Institutional Shares: Actual*		0.71%		$1,000.00		$1,095.70		$3.69
Hypothetical (5% before expenses)		0.71%		$1,000.00		$1,021.27		$3.56
Parnassus Core Equity Fund – Investor Shares: Actual*		0.87%		$1,000.00		$1,069.10		$4.46
Hypothetical (5% before expenses)		0.87%		$1,000.00		$1,020.48		$4.36
Parnassus Core Equity Fund – Institutional Shares: Actual*		0.66%		$1,000.00		$1,070.40		$3.39
Hypothetical (5% before expenses)		0.66%		$1,000.00		$1,021.52		$3.31
Parnassus Endeavor Fund – Investor Shares: Actual*		0.95%		$1,000.00		$1,100.30		$4.95
Hypothetical (5% before expenses)		0.95%		$1,000.00		$1,020.08		$4.76
Parnassus Endeavor Fund – Institutional Shares: Actual*		0.74%		$1,000.00		$1,101.20		$3.86
Hypothetical (5% before expenses)		0.74%		$1,000.00		$1,021.12		$3.71
Parnassus Mid Cap Fund – Investor Shares: Actual*		0.99%		$1,000.00		$1,086.90		$5.12
Hypothetical (5% before expenses)		0.99%		$1,000.00		$1,019.89		$4.96
Parnassus Mid Cap Fund – Institutional Shares: Actual*		0.80%		$1,000.00		$1,088.20		$4.14
Hypothetical (5% before expenses)		0.80%		$1,000.00		$1,020.83		$4.01
Parnassus Asia Fund – Investor Shares: Actual*		1.25%		$1,000.00		$1,135.70		$6.62
Hypothetical (5% before expenses)		1.25%		$1,000.00		$1,018.60		$6.26



Semiannual Report • 2017				PARNASSUS FUNDS

Fund Expenses (unaudited) (continued)


	Fund Expense Ratio		Beginning Account Value January 1, 2017		Ending Account Value June 30, 2017		Expenses Paid During Period
Parnassus Asia Fund – Institutional Shares: Actual*		0.96%		$1,000.00		$1,136.90		$5.09
Hypothetical (5% before expenses)		0.96%		$1,000.00		$1,020.03		$4.81
Parnassus Fixed Income Fund – Investor Shares: Actual*		0.68%		$1,000.00		$1,023.80		$3.41
Hypothetical (5% before expenses)		0.68%		$1,000.00		$1,021.42		$3.41
Parnassus Fixed Income Fund – Institutional Shares: Actual*		0.49%		$1,000.00		$1,024.80		$2.46
Hypothetical (5% before expenses)		0.49%		$1,000.00		$1,022.36		$2.46

* Expenses are calculated using the Funds’ annualized expense ratios, which represent ongoing expense as a percentage of net assets for the six months ended June 30, 2017. Expenses are calculated by multiplying the annualized expense ratio by the average account value of the period; then multiplying the result by the number of days in the most recent one-half year period (181); and then dividing that result by the number of days in the current fiscal year (365). Expense ratios for the most recent half year may differ from expense ratios based on one-year data in the financial highlights.



PARNASSUS FUNDS				Semiannual Report • 2017

PARNASSUS FUND

Portfolio of Investments as of June 30, 2017 (unaudited)


Equities	Shares		Market Value ($)

Chemicals (9.7%)
Axalta Coating Systems Ltd. ^q		800,000		25,632,000
Potash Corporation of Saskatchewan Inc. ^l		1,700,000		27,710,000
PPG Industries Inc.		89,674		9,860,553
Praxair Inc.		285,000		37,776,750

				100,979,303


Computers (3.5%)
International Business Machines Corp.		235,000		36,150,050


Consulting Services (2.6%)
Cognizant Technology Solutions Corp.		400,000		26,560,000


Electronics (1.9%)
Trimble Inc. ^q		550,000		19,618,500


Equipment Leasing (1.7%)
Air Lease Corp.		460,000		17,185,600


Financial Services (12.9%)
Capital One Financial Corp.		300,000		24,786,000
Charles Schwab Corp.		900,000		38,664,000
Essent Group Ltd. ^q		430,000		15,970,200
First Horizon National Corp.		800,000		13,936,000
PayPal Holdings Inc. ^q		240,000		12,880,800
Wells Fargo & Co.		500,000		27,705,000

				133,942,000


Food Products (2.7%)
Mondelez International Inc., Class A		660,000		28,505,400


Health Care Services (2.6%)
McKesson Corp.		168,000		27,642,720


Industrial Manufacturing (3.0%)
Pentair plc		460,000		30,608,400


Insurance (3.6%)
Progressive Corp. ^q		850,000		37,476,500


Internet (4.4%)
Alphabet Inc., Class A ^q		30,000		27,890,400
eBay Inc. ^q		505,000		17,634,600

				45,525,000


Lodging (1.3%)
Belmond Ltd. ^q		1,000,000		13,300,000


Machinery (1.5%)
Deere & Co.		128,000		15,819,520


Equities	Shares		Market Value ($)

Medical Equipment (3.5%)
Patterson Companies Inc.		777,000		36,480,150


Pharmaceuticals (11.0%)
Allergan plc		183,000		44,485,470
Gilead Sciences Inc.		646,000		45,723,880
Novartis AG (ADR)		285,000		23,788,950

				113,998,300


Real Estate Investment Trusts (4.8%)
Hannon Armstrong Sustainable Infrastructure Capital Inc.		455,000		10,405,850
Public Storage		100,000		20,853,000
Redwood Trust Inc.		1,100,000		18,744,000

				50,002,850


Retail (1.6%)
CVS Health Corp.		106,000		8,528,760
Whole Foods Market Inc.		190,000		8,000,900

				16,529,660


Semiconductors (7.0%)
Intel Corp.		745,000		25,136,300
KLA-Tencor Corp.		290,000		26,537,900
Micron Technology Inc.^q		700,000		20,902,000

				72,576,200


Services (5.4%)
Alliance Data Systems Corp.		100,000		25,669,000
Thomson Reuters Corp.		660,000		30,551,400

				56,220,400


Telecommunications Equipment (4.2%)
Motorola Solutions Inc.		500,000		43,370,000


Toy & Games (2.5%)
Mattel Inc.		1,200,000		25,836,000


Transportation (4.3%)
Expeditors International of Washington Inc.		300,000		16,944,000
FedEx Corp.		125,000		27,166,250

				44,110,250


Total investment in equities (95.7%) (cost $858,745,998)				992,436,803

The accompanying notes are an integral part of these financial statements.



Semiannual Report • 2017				PARNASSUS FUNDS

PARNASSUS FUND

Portfolio of Investments as of June 30, 2017 (unaudited) (continued)



Short-Term Securities	Interest Rate			Maturity Date		Principal Amount ($)		Market Value ($)

Certificates of Deposit (0.1%) a
Albina Community Bank		0.20	%		01/15/2018		250,000		244,575
New Resource Bank		0.15	%		03/01/2018		250,000		243,343

									487,918


Certificates of Deposit Account Registry Service (0.1%) a
CDARS agreement with Beneficial State Bank, dated 03/16/2017 Participating depository institutions: Bank of America, N.A., par 243,500; Independent Bank, par 13,000; Parke Bank, par 243,500; (cost $485,879)		0.95	%		03/15/2018		500,000		485,879


Community Development Loans (0.0%) a
Boston Community Loan Fund		1.00	%		04/15/2018		100,000		95,266
Boston Community Loan Fund		1.00	%		04/15/2018		100,000		95,266
Root Capital Loan Fund		1.25	%		02/01/2018		100,000		96,466
TMC Development Working Solutions		1.00	%		05/25/2018		100,000		94,608
Vermont Community Loan Fund		0.85	%		10/15/2017		100,000		98,258

									479,864


Time Deposits (4.0%)
BBH Cash Management Service
Standard Chartered Bank, London		0.58	%		07/03/2017		41,935,302		41,935,302


Securities Purchased with Cash Collateral from Securities Lending

Registered Investment Companies (1.6%)
Invesco Aim Government & Agency Portfolio
Short-Term Investments Trust, Institutional Class		0.13	%				16,750,000		16,750,000


Total short-term securities (5.8%) (cost $60,138,963)									60,138,963


Total securities (101.5%) (cost $918,884,961)									1,052,575,766


Payable upon return of securities loaned (-1.6%)									(16,750,000	)

Other assets and liabilities (0.1%)									1,121,659


Total net assets (100.0%)									1,036,947,425



q This security is non-income producing.
l This security, or partial position of this security, was on loan at June 30, 2017. The total value of the securities on loan at June 30, 2017 was $16,260,000.
a Market value adjustments have been applied to these securities to reflect potential early withdrawal.

*plc* Public Limited Company
*ADR* American Depository Receipt

The accompanying notes are an integral part of these financial statements.



PARNASSUS FUNDS				Semiannual Report • 2017

PARNASSUS CORE EQUITY FUND

Portfolio of Investments as of June 30, 2017 (unaudited)


Equities	Shares		Market Value ($)

Apparel (3.1%)
VF Corp.		8,368,196		482,008,090


Chemicals (6.8%)
Compass Minerals International Inc. ^W^{^{^l}}		2,224,303		145,246,986
PPG Industries Inc.		2,118,141		232,910,784
Praxair Inc.		5,118,476		678,453,994

				1,056,611,764


Computers (3.0%)
Apple Inc.		3,223,696		464,276,698


Cosmetics & Personal Care (1.9%)
The Procter & Gamble Co.		3,423,000		298,314,450


Entertainment (3.7%)
The Walt Disney Co.		5,415,101		575,354,481


Financial Services (10.1%)
Charles Schwab Corp.		9,005,055		386,857,163
Mastercard Inc., Class A		2,969,000		360,585,050
PayPal Holdings Inc. ^q		4,528,781		243,059,676
Wells Fargo & Co.		10,594,806		587,058,200

				1,577,560,089


Food Products (5.6%)
McCormick & Co.		1,723,500		168,058,485
Mondelez International Inc., Class A		10,146,956		438,247,030
Sysco Corp.		5,379,409		270,745,655

				877,051,170


Health Care Products (4.9%)
Danaher Corp.		9,128,657		770,367,364


Health Care Services (2.8%)
McKesson Corp.		2,677,568		440,567,039


Home Products (3.9%)
The Clorox Company		3,494,014		465,542,425
WD-40 Co.^W		1,220,000		134,627,000

				600,169,425


Industrial Manufacturing (4.6%)
Pentair plc		7,019,000		467,044,260
Xylem Inc.		4,414,308		244,685,092

				711,729,352


Insurance (2.7%)
Verisk Analytics Inc. ^q		4,922,040		415,272,515


Equities	Shares		Market Value ($)

Internet (4.9%)
Alphabet Inc., Class A ^q		314,000		291,919,520
Alphabet Inc., Class C ^q		517,572		470,333,204

				762,252,724


Medical Equipment (1.7%)
Patterson Companies Inc.^W		5,690,689		267,177,849


Natural Gas (1.9%)
MDU Resources Group Inc.^W		11,324,166		296,693,149


Oil & Gas (1.0%)
National Oilwell Varco Inc.		4,553,090		149,978,785


Pharmaceuticals (11.1%)
Allergan plc		2,254,956		548,157,254
Gilead Sciences Inc.		10,663,184		754,740,164
Novartis AG (ADR)		5,134,288		428,559,019

				1,731,456,437


Real Estate Investment Trusts (3.9%)
Iron Mountain Inc.		9,208,919		316,418,457
Public Storage		1,425,776		297,317,069

				613,735,526


Retail (3.5%)
CVS Health Corp.		6,709,530		539,848,784


Semiconductors (5.5%)
Intel Corp.		18,990,154		640,727,796
KLA-Tencor Corp.		2,293,287		209,858,693

				850,586,489


Services (1.9%)
Thomson Reuters Corp.		6,528,265		302,193,387


Telecommunications Equipment (2.0%)
Motorola Solutions Inc.		3,649,423		316,550,951


Transportation (3.0%)
United Parcel Service Inc., Class B		4,233,270		468,157,329


Utility & Power Distribution (2.0%)
Sempra Energy		2,702,798		304,740,474


Waste Management (2.2%)
Waste Management Inc.		4,741,000		347,752,350


Total investment in equities (97.7%) (cost $12,355,815,093)				15,220,406,671

The accompanying notes are an integral part of these financial statements.



Semiannual Report • 2017				PARNASSUS FUNDS

PARNASSUS CORE EQUITY FUND

Portfolio of Investments as of June 30, 2017 (unaudited) (continued)



Short-Term Securities	Interest Rate			Maturity Date		Principal Amount ($)		Market Value ($)

Certificates of Deposit (0.0%)a
Community Trust Credit Union		0.80	%		10/15/2017		250,000		247,096
Urban Partnership Bank		0.30	%		09/24/2017		250,000		247,644

									494,740


Certificates of Deposit Account Registry Service (0.0%) a
CDARS agreement with Beneficial State Bank, dated 03/16/2017 Participating depository institutions: Amarillo National Bank, par 175,657; Bank of America, N.A., par 243,500; Ever Bank, par 119,843; First United Bank & Trust Company, par 243,500; Independent Bank, par 243,500; Parke Bank, par 243,500; Portage Community Bank, par 243,500; South State Bank, par 243,500; United Bank, par 243,500; (cost $1,943,516)		0.95	%		03/15/2018		2,000,000		1,943,516


Community Development Loans (0.1%) a
Boston Community Loan Fund		1.00	%		04/15/2018		100,000		95,266
MicroVest Plus, LP Note		2.25	%		04/15/2018		7,500,000		7,144,932
New Hampshire Community Loan Fund		1.00	%		07/31/2017		500,000		497,534
Root Capital Loan Fund		1.25	%		02/01/2018		200,000		192,932
TMC Development Working Solutions		1.00	%		05/25/2018		100,000		94,608
Vermont Community Loan Fund		0.85	%		04/15/2018		100,000		95,266

									8,120,538


Time Deposits (2.2%)
BBH Cash Management Service
BNP Paribas, Paris		0.58	%		07/03/2017		8,717,761		8,717,761
Citibank, New York		0.58	%		07/03/2017		59,623,693		59,623,693
Standard Chartered Bank, London		0.58	%		07/03/2017		195,797,789		195,797,789
Wells Fargo Bank, San Francisco		0.58	%		07/03/2017		71,554,762		71,554,762

									335,694,005


Securities Purchased with Cash Collateral from Securities Lending

Registered Investment Companies (0.2%)
Invesco Aim Government & Agency Portfolio
Short-Term Investments Trust, Institutional Class		0.13	%				39,613,743		39,613,743


Total short-term securities (2.5%) (cost $385,866,542)									385,866,542


Total securities (100.2%) (cost $12,741,681,635)									15,606,273,213


Payable upon return of securities loaned (-0.2%)									(39,613,743	)

Other assets and liabilities (0.0%)									4,491,676


Total net assets (100.0%)									15,571,151,146

The accompanying notes are an integral part of these financial statements.



PARNASSUS FUNDS				Semiannual Report • 2017

PARNASSUS CORE EQUITY FUND

Portfolio of Investments as of June 30, 2017 (unaudited) (continued)

W Fund ownership consists of 5% or more of the shares outstanding of the Affiliated Issuer, as defined under the Investment Securities Act of 1940.

l This security, or partial position of this security, was on loan at June 30, 2017. The total value of the securities on loan at June 30, 2017 was $38,799,054.

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

ADR American Depository Receipt

The accompanying notes are an integral part of these financial statements.



Semiannual Report • 2017				PARNASSUS FUNDS

PARNASSUS ENDEAVOR FUND

Portfolio of Investments as of June 30, 2017 (unaudited)


Equities	Shares		Market Value ($)

Apparel (5.0%)
VF Corp.		3,800,000		218,880,000


Communications Equipment (6.1%)
QUALCOMM Inc.		4,800,000		265,056,000


Computers (5.3%)
Apple Inc.		150,000		21,603,000
International Business Machines Corp.		1,375,000		211,516,250

				233,119,250


Financial Services (12.1%)
American Express Co.		2,300,000		193,752,000
Capital One Financial Corp.		600,000		49,572,000
Charles Schwab Corp.		3,200,000		137,472,000
Wells Fargo & Co.		2,600,000		144,066,000

				524,862,000


Health Care Products (3.6%)
Perrigo Co. plc		2,100,000		158,592,000


Health Care Services (8.0%)
Anthem Inc.		600,000		112,878,000
McKesson Corp.		1,400,000		230,356,000

				343,234,000


Internet (3.2%)
Alphabet Inc., Class A ^q		150,000		139,452,000


Machinery (2.0%)
Cummins Inc.		350,000		56,777,000
Deere & Co.		250,000		30,897,500

				87,674,500


Pharmaceuticals (20.9%)
Allergan plc		825,000		200,549,250
Gilead Sciences Inc.		7,400,000		523,772,000
Novartis AG (ADR)		2,200,000		183,634,000

				907,955,250


Equities	Shares		Market Value ($)

Retail (2.0%)
Whole Foods Market Inc.		2,100,000		88,431,000


Semiconductor Capital Equipment (0.4%)
Applied Materials Inc.		200,000		8,262,000
Lam Research Corp.		50,000		7,071,500

				15,333,500


Semiconductors (7.1%)
Intel Corp.		4,400,000		148,456,000
Micron Technology Inc. ^q		5,400,000		161,244,000

				309,700,000


Services (3.5%)
Alliance Data Systems Corp.		600,000		154,014,000


Software (3.1%)
Autodesk Inc. ^q		1,350,000		136,107,000


Telecommunications Equipment (1.5%)
Ciena Corp. ^q		2,700,000		67,554,000


Toys and Games (2.3%)
Mattel Inc.		4,675,000		100,652,750


Transportation (6.5%)
Expeditors International of Washington Inc.		1,300,000		73,424,000
United Parcel Service Inc., Class B		1,900,000		210,121,000

				283,545,000


Total investment in equities (92.6%) (cost $3,518,956,054)				4,034,162,250

The accompanying notes are an integral part of these financial statements.



PARNASSUS FUNDS				Semiannual Report • 2017

PARNASSUS ENDEAVOR FUND

Portfolio of Investments as of June 30, 2017 (unaudited) (continued)



Short-Term Securities	Interest Rate			Maturity Date		Principal Amount ($)		Market Value ($)

Certificates of Deposit (0.0%) a
Urban Partnership Bank		0.30	%		02/03/2018		250,000		244,055


Certificates of Deposit Account Registry Service (0.0%) a
CDARS agreement with Community Bank of the Bay, dated 03/16/2017 Participating depository institutions: Bank of America, N.A., par 243,500; First United Bank & Trust Co., par 111,355; Independent Bank, par 145,145; (cost $485,879)		0.95	%		03/15/2018		500,000		485,879


Community Development Loans (0.0%) a
Root Capital Loan Fund		1.25	%		02/01/2018		100,000		96,466
TMC Development Working Solutions		1.00	%		05/25/2018		100,000		94,608

									191,074


Time Deposits (7.7%)
BBH Cash Management Service
Banco Santander, Madrid		0.58	%		07/03/2017		122,241,351		122,241,351
Banco Santander, Madrid		0.58	%		07/03/2017		177,758,648		177,758,648
Sumitomo, Tokyo		0.58	%		07/03/2017		36,791,017		36,791,017

									336,791,016


Total short-term securities (7.7%) (cost $337,712,024)									337,712,024


Total securities (100.3%) (cost $3,856,668,078)									4,371,874,274


Other assets and liabilities (-0.3%)									(13,481,317	)


Total net assets (100.0%)									4,358,392,957



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
*ADR* American Depository Receipt

The accompanying notes are an integral part of these financial statements.



Semiannual Report • 2017				PARNASSUS FUNDS

PARNASSUS MID CAP FUND

Portfolio of Investments as of June 30, 2017 (unaudited)


Equities	Shares		Market Value ($)

Apparel (5.9%)
Hanesbrands Inc.		3,296,544		76,347,960
VF Corp.		1,229,803		70,836,653

				147,184,613


Chemicals (6.8%)
Axalta Coating Systems Ltd. ^q		1,125,000		36,045,000
Compass Minerals International Inc.		760,000		49,628,000
Praxair Inc.		640,000		84,832,000

				170,505,000


Data Processing (5.6%)
Equifax Inc.		447,500		61,495,450
Fiserv Inc. ^q		650,000		79,521,000

				141,016,450


Financial Services (7.4%)
Charles Schwab Corp.		600,000		25,776,000
First American Financial Corp.		470,000		21,004,300
First Horizon National Corp.		4,408,394		76,794,223
SEI Investments Co.		1,152,153		61,962,788

				185,537,311


Food Products (3.5%)
McCormick & Co.		700,000		68,257,000
Sysco Corp.		395,000		19,880,350

				88,137,350


Health Care Products (3.4%)
Dentsply Sirona Inc.		1,300,000		84,292,000


Health Care Services (3.7%)
Cardinal Health Inc.		1,175,000		91,556,000


Home Products (3.3%)
The Clorox Company		625,000		83,275,000


Industrial Manufacturing (9.4%)
Fortive Corp.		1,010,000		63,983,500
Pentair plc		1,263,489		84,072,558
Xylem Inc.		1,550,000		85,916,500

				233,972,558


Insurance (3.6%)
Verisk Analytics Inc. ^q		1,058,689		89,321,591


Internet (3.2%)
eBay Inc. ^q		2,275,000		79,443,000


Medical Equipment (6.8%)
Patterson Companies Inc.		1,950,000		91,552,500
Teleflex Inc.		380,000		78,948,800

				170,501,300


Equities	Shares		Market Value ($)

Natural Gas (4.3%)
MDU Resources Group Inc.		3,200,000		83,840,000
Northwest Natural Gas Co.		397,500		23,790,375

				107,630,375


Oil & Gas (1.8%)
National Oilwell Varco Inc.		1,400,000		46,116,000


Real Estate Investment Trusts (3.4%)
Iron Mountain Inc.		2,485,000		85,384,600


Retail (1.0%)
Whole Foods Market Inc.		600,000		25,266,000


Semiconductors (3.4%)
KLA-Tencor Corp.		700,000		64,057,000
Micron Technology Inc. ^q		675,000		20,155,500

				84,212,500


Services (3.0%)
Ecolab Inc.		410,000		54,427,500
Thomson Reuters Corp.		450,000		20,830,500

				75,258,000


Software (0.8%)
Autodesk Inc. ^q		189,100		19,065,062


Telecommunications Equipment (4.2%)
Motorola Solutions Inc.		1,190,000		103,220,600


Telecommunications Provider (3.4%)
Shaw Communications Inc., Class B ^l		3,950,000		86,070,500


Toys & Games (2.1%)
Mattel Inc.		2,455,000		52,856,150


Transportation (1.3%)
Expeditors International of Washington Inc.		580,000		32,758,400


Utility & Power Distribution (2.0%)
Sempra Energy		435,000		49,046,250


Waste Management (0.9%)
Waste Management Inc.		321,500		23,582,025


Total investment in equities (94.2%) (cost $2,100,534,493)				2,355,208,635

The accompanying notes are an integral part of these financial statements.



PARNASSUS FUNDS				Semiannual Report • 2017

PARNASSUS MID CAP FUND

Portfolio of Investments as of June 30, 2017 (unaudited) (continued)



Short-Term Securities	Interest Rate			Maturity Date		Principal Amount ($)		Market Value ($)

Certificates of Deposit (0.0%) a
Albina Community Bank		0.45	%		04/25/2018		250,000		241,836
Beneficial State		0.50	%		03/27/2018		250,000		242,630
New Resource Bank		0.50	%		03/27/2018		250,000		242,795
Urban Partnership Bank		0.30	%		03/22/2018		250,000		242,768

									970,029


Time Deposits (5.4%)
BBH Cash Management Service
Banco Santander, Mardrid		0.58	%		07/03/2017		100,000,000		100,000,000
Sumitomo, Tokyo		0.58	%		07/03/2017		33,913,185		33,913,185

									133,913,185


Registered Investment Companies (0.5%)
Invesco Aim Government & Agency Portfolio
Short-Term Investments Trust, Institutional Class		0.13	%				12,546,909		12,546,909


Total short-term securities (5.9%) (cost $147,430,123)									147,430,123


Total securities (100.1%) (cost $2,247,964,616)									2,502,638,758


Payable upon return of securities loaned (-0.5%)									(12,546,909	)


Other assets and liabilities (0.4%)									10,759,127


Total net assets (100.0%)									2,500,850,976



q This security is non-income producing.
l This security, or partial position of this security, was on loan at June 30, 2017. The total value of the securities on loan at June 30, 2017 was $12,274,614.

*plc* Public Limited Company

The accompanying notes are an integral part of these financial statements.



Semiannual Report • 2017				PARNASSUS FUNDS

PARNASSUS ASIA FUND

Portfolio of Investments as of June 30, 2017 (unaudited)


Equities	Shares		Market Value ($)

Australia (4.0%)
Brambles Ltd.		80,000		598,188


China (12.8%)
Air Lease Corp.		8,000		298,880
Alibaba Group Holding Ltd. (ADR) ^q		2,500		352,250
Apple Inc.		1,500		216,030
Expeditors International of Washington Inc.		4,000		225,920
Mattel Inc.		15,000		322,950
QUALCOMM Inc.		9,000		496,980

				1,913,010


Hong Kong (13.3%)
China Minsheng Banking Corp., Ltd.		170,000		169,558
Greatview Aseptic Packaging Co., Ltd.		500,000		311,867
Hang Lung Properties Ltd.		150,000		374,868
Lenovo Group Ltd.		400,000		252,450
SITC International Holdings Co., Ltd.		780,000		613,011
Television Broadcasts Ltd.		70,000		263,593

				1,985,347


India (1.8%)
Cognizant Technology Solutions Corp.		4,000		265,600


Indonesia (2.0%)
PT Asuransi Multi Artha Guna		3,741,500		121,788
PT Bank Rakyat Indonesia (Persero)		150,000		171,136

				292,924


Japan (29.9%)
Asics Corp.		25,000		464,635
Kakaku.com Inc.		40,000		575,023
KDDI Corp.		15,000		396,732
Lifull Co., Ltd.		25,000		219,703
M3 Inc.		12,000		331,051
OMRON Corp.		10,000		435,313
Rakuten Inc.		65,000		767,093
Shizuoka Bank Ltd.		40,000		362,790
SoftBank Group Corp.		5,000		406,469
USS Co., Ltd.		16,000		318,912
W-Scope Corp.		11,000		193,235

				4,470,956


Equities	Shares		Market Value ($)

Philippines (1.4%)
Manila Water Co.		340,000		209,378


Singapore (3.2%)
M1 Ltd.		300,000		474,884


South Korea (3.5%)
Samsung Electronics Co., Ltd.		250		520,392


Taiwan (6.2%)
Giant Manufacturing Co., Ltd.		60,000		343,150
KLA-Tencor Corp.		3,500		320,285
Taiwan Semiconductor Manufacturing Co., Ltd. (ADR)		7,500		262,200

				925,635


Thailand (1.4%)
Advanced Info Service Public Co., Ltd.		40,000		209,170


United States (14.5%)
Gilead Sciences Inc.		10,000		707,800
IBM Corp.		2,000		307,660
Keysight Technologies Inc. ^q		8,000		311,440
National Oilwell Varco Inc.		9,500		312,930
Perrigo Co. plc		7,000		528,640

				2,168,470


Total investment in equities (94.0%) (cost $12,844,031)				14,033,954

The accompanying notes are an integral part of these financial statements.



PARNASSUS FUNDS				Semiannual Report • 2017

PARNASSUS ASIA FUND

Portfolio of Investments as of June 30, 2017 (unaudited) (continued)

Short-Term Securities

Interest
Rate

Maturity
Date

Principal
Amount
($)

Market Value
($)

Time Deposits (5.9%)

BBH Cash Management Service

JPMorgan Chase, New York

0.58

07/03/2017

878,565

Total short-term securities (5.9%)
(cost $878,565)

878,565

Total securities (99.9%)
(cost $13,722,596)

14,912,519

Other assets and liabilities (0.1%)

17,846

Total net assets (100.0%)

14,930,365

q This security is non-income producing.

ADR American Depository Receipt

PT Perseroan Terbatas

plc Public Limited Company

The accompanying notes are an integral part of these financial statements.



Semiannual Report • 2017				PARNASSUS FUNDS

PARNASSUS FIXED INCOME FUND

Portfolio of Investments as of June 30, 2017 (unaudited)



Preferred Stock	Interest Rate			Maturity Date		Shares		Market Value ($)

Real Estate Investment Trusts (1.3%)
Public Storage		5.15	%		06/02/2022		120,000		3,004,800


Pharmaceuticals (1.0%)
Allergan plc		5.50	%		03/01/2018		2,900		2,517,432


Total investment in preferred stock (2.3%) (cost $5,063,780)									5,522,232



Commercial Mortgage-Backed Securities	Interest Rate			Maturity Date		Principal Amount ($)		Market Value ($)
FHLMC Multifamily Structured Pass Through Certificates K-029, Class A1		2.84	%		10/25/2022		716,091		732,365
JP Morgan Mortgage Trust Series 2011-C4, Class A3		4.11	%		07/15/2046		1,412,330		1,436,489
JP Morgan Mortgage Trust Series 2011-C4, Class A4		4.39	%		07/15/2046		1,000,000		1,066,218
JP Morgan Mortgage Trust Series 2013-C13, Class A2		2.67	%		01/15/2046		998,837		1,009,016
UBS-Barclays Mortgage Trust Series 2012-C2, Class A3		3.06	%		05/10/2063		1,000,000		1,019,695


Total investment in commercial mortgage-backed securities (2.2%) (cost $5,296,266)									5,263,783



Convertible Bonds	Interest Rate			Maturity Date		Principal Amount ($)		Market Value ($)

Semiconductors (0.4%)
Intel Corp.		2.95	%		12/15/2035		750,000		980,156


Total investment in convertible bonds (0.4%) (cost $875,478)									980,156



Corporate Bonds	Interest Rate			Maturity Date		Principal Amount ($)		Market Value ($)

Air Transportation (0.6%)
Southwest Air 07-1 Trust		6.15	%		08/01/2022		1,273,533		1,407,254


Apparel (3.9%)
Hanesbrands Inc.		4.63	%		05/15/2024		2,500,000		2,537,500
Levi Strauss & Co.		5.00	%		05/01/2025		2,500,000		2,612,500
VF Corp.		3.50	%		09/01/2021		4,000,000		4,171,764

									9,321,764


Chemical (1.7%)
Praxair Inc.		3.20	%		01/30/2026		3,977,000		4,063,388

The accompanying notes are an integral part of these financial statements.



PARNASSUS FUNDS				Semiannual Report • 2017

PARNASSUS FIXED INCOME FUND

Portfolio of Investments as of June 30, 2017 (unaudited) (continued)



Corporate Bonds	Interest Rate			Maturity Date		Principal Amount ($)		Market Value ($)

Computers (2.4%)
Apple Inc.		2.85	%		02/23/2023		4,000,000		4,069,356
Apple Inc.		4.38	%		05/13/2045		1,500,000		1,621,742

									5,691,098


Cosmetics & Personal Care (0.9%)
The Procter & Gamble Co.		2.30	%		02/06/2022		2,000,000		2,023,684


Entertainment (3.0%)
Comcast Corp.		3.38	%		02/15/2025		3,000,000		3,087,618
The Walt Disney Co.		2.30	%		02/12/2021		4,000,000		4,034,792

									7,122,410


Financial Services (5.2%)
Charles Schwab Corp.		3.45	%		02/13/2026		4,000,000		4,098,556
Mastercard Inc.		2.00	%		11/21/2021		2,000,000		1,987,022
Mastercard Inc.		3.38	%		04/01/2024		2,000,000		2,085,910
Wells Fargo & Co.		2.55	%		12/07/2020		2,000,000		2,022,936
Wells Fargo & Co.		4.10	%		06/03/2026		2,000,000		2,070,940

									12,265,364


Health Care Products (1.6%)
Danaher Corp.		3.35	%		09/15/2025		3,750,000		3,907,230


Health Care Services (2.8%)
Cardinal Health Inc.		3.08	%		06/15/2024		2,000,000		2,004,824
Cardinal Health Inc.		3.50	%		11/15/2024		2,000,000		2,043,158
Hologic Inc.		5.25	%		07/15/2022		2,500,000		2,625,000

									6,672,982


Home Products (1.5%)
The Clorox Company		3.50	%		12/15/2024		3,500,000		3,620,439


Industrial Manufacturing (3.1%)
Pentair Finance SA		3.15	%		09/15/2022		4,050,000		4,036,797
Sealed Air Corp.		5.25	%		04/01/2023		3,000,000		3,217,500

									7,254,297


Insurance (1.4%)
Verisk Analytics Inc.		5.50	%		06/15/2045		3,000,000		3,332,994


Internet (1.4%)
Alphabet Inc.		2.00	%		08/15/2026		3,500,000		3,274,705


Machinery (0.3%)
Cummins Inc.		3.65	%		10/01/2023		600,000		633,961


Medical Equipment (1.3%)
Agilent Technologies Inc.		3.20	%		10/01/2022		2,000,000		2,035,548
Agilent Technologies Inc.		3.05	%		09/22/2026		1,000,000		965,418

									3,000,966

The accompanying notes are an integral part of these financial statements.



Semiannual Report • 2017				PARNASSUS FUNDS

PARNASSUS FIXED INCOME FUND

Portfolio of Investments as of June 30, 2017 (unaudited) (continued)



Corporate Bonds	Interest Rate			Maturity Date		Principal Amount ($)		Market Value ($)

Oil & Gas (1.4%)
National Oilwell Varco Inc.		2.60	%		12/01/2022		3,500,000		3,384,140


Pharmaceuticals (3.7%)
Actavis Funding Scs.		3.45	%		03/15/2022		2,000,000		2,061,634
Gilead Sciences Inc.		3.70	%		04/01/2024		2,000,000		2,079,174
Novartis Capital Corp.		3.00	%		11/20/2025		4,500,000		4,546,373

									8,687,181


Real Estate Investment Trusts (2.2%)
Iron Mountain Inc.		6.00	%		08/15/2023		2,900,000		3,081,250
Regency Centers LP		3.75	%		06/15/2024		2,000,000		2,041,394

									5,122,644


Retail (10.0%)
Costco Wholesale		2.25	%		02/15/2022		3,000,000		3,004,914
CVS Health Corp.		2.80	%		07/20/2020		2,000,000		2,036,196
CVS Health Corp.		3.38	%		08/12/2024		2,000,000		2,033,056
Masco Corp.		3.50	%		04/01/2021		4,000,000		4,107,880
Nordstrom Inc.		4.00	%		10/15/2021		1,500,000		1,532,145
Nordstrom Inc.		4.00	%		03/15/2027		2,000,000		1,957,100
Starbucks Corp.		3.85	%		10/01/2023		3,500,000		3,768,754
Starbucks Corp.		2.45	%		06/15/2026		2,000,000		1,928,916
Whole Foods Market Inc.		5.20	%		12/03/2025		3,000,000		3,467,094

									23,836,055


Semiconductor Capital Equipment (1.3%)
Applied Materials Inc.		2.63	%		10/01/2020		3,000,000		3,051,666


Semiconductors (3.0%)
Altera Corp.		4.10	%		11/15/2023		3,000,000		3,231,909
KLA-Tencor Corp.		4.65	%		11/01/2024		3,500,000		3,779,871

									7,011,780


Service (1.5%)
Hilton Worldwide		4.63	%		04/01/2025		3,500,000		3,609,375


Software (3.0%)
Autodesk Inc.		4.38	%		06/15/2025		3,200,000		3,375,779
Microsoft Corp.		2.40	%		08/08/2026		4,000,000		3,849,508

									7,225,287


Telecommunications Equipment (1.3%)
Juniper Networks Inc.		4.50	%		03/15/2024		3,000,000		3,186,561


Transportation (4.1%)
Burlington Northern Santa Fe Corp.		3.85	%		09/01/2023		3,500,000		3,752,290
FedEx Corp.		2.70	%		04/15/2023		3,000,000		2,981,859
United Parcel Services Inc.		2.45	%		10/01/2022		3,000,000		3,030,459

									9,764,608

The accompanying notes are an integral part of these financial statements.



PARNASSUS FUNDS				Semiannual Report • 2017

PARNASSUS FIXED INCOME FUND

Portfolio of Investments as of June 30, 2017 (unaudited) (continued)



Corporate Bonds	Interest Rate			Maturity Date		Principal Amount ($)		Market Value ($)

Waste Management (2.2%)
Waste Management Inc.		2.90	%		09/15/2022		2,500,000		2,558,492
Waste Management Inc.		3.50	%		05/15/2024		2,500,000		2,604,112

									5,162,604


Total investment in corporate bonds (64.8%) (cost $152,754,036)									153,634,437



Federal Agency Mortgage-Backed Securities	Interest Rate			Maturity Date		Principal Amount ($)		Market Value ($)
Fannie Mae Pool 890430		3.50	%		07/01/2027		863,294		900,506
Fannie Mae Pool AB4432		3.50	%		02/01/2042		3,229,043		3,332,437
Fannie Mae Pool AB5163		2.50	%		05/01/2027		2,611,688		2,642,701
Fannie Mae Pool AH7196		4.50	%		03/01/2041		880,231		951,566
Fannie Mae Pool AK2413		4.00	%		02/01/2042		3,038,539		3,217,813
Fannie Mae Pool AQ2925		3.50	%		01/01/2043		1,126,581		1,162,521
Fannie Mae Pool AR3302		3.50	%		01/01/2043		3,523,233		3,635,624
Fannie Mae Pool AS2502		4.00	%		05/01/2044		1,087,038		1,153,348
Fannie Mae Pool AS7492		4.00	%		07/01/2046		1,854,401		1,951,820
Fannie Mae Pool AV0971		3.50	%		08/01/2026		860,232		895,603
Fannie Mae Pool BC5482		3.50	%		03/01/2046		1,782,007		1,831,367
Freddie Mac Pool C91754		4.50	%		02/01/2034		1,118,748		1,208,954
Freddie Mac Pool G18521		3.50	%		08/01/2029		875,867		914,258
Freddie Mac Pool Q36308		4.00	%		09/01/2045		1,267,845		1,342,457
Freddie Mac Pool V82155		4.00	%		12/01/2045		1,078,138		1,139,793
Ginnie Mae I Pool 778793		3.50	%		01/15/2042		1,004,941		1,044,112


Total investment in federal agency mortgage-backed securities (11.5%) (cost $27,855,111)									27,324,880



Supranational Bonds	Interest Rate			Maturity Date		Principal Amount ($)		Market Value ($)
European Bank for Reconstruction & Development		1.63	%		04/10/2018		4,000,000		3,995,072


Total investment in supranational bonds (1.7%) (cost $4,015,069)									3,995,072

The accompanying notes are an integral part of these financial statements.



Semiannual Report • 2017				PARNASSUS FUNDS

PARNASSUS FIXED INCOME FUND

Portfolio of Investments as of June 30, 2017 (unaudited) (continued)



U.S. Government Treasury Bonds	Interest Rate			Maturity Date		Principal Amount ($)		Market Value ($)
U.S. Treasury		0.88	%		11/15/2017		3,000,000		2,997,300
U.S. Treasury		0.88	%		11/30/2017		2,000,000		1,997,912
U.S. Treasury		1.75	%		01/31/2023		3,000,000		2,962,851
U.S. Treasury		2.75	%		11/15/2023		4,000,000		4,163,752
U.S. Treasury		2.75	%		02/15/2024		2,000,000		2,080,938
U.S. Treasury		2.50	%		05/15/2024		2,000,000		2,049,140
U.S. Treasury		2.25	%		11/15/2024		4,000,000		4,022,032
U.S. Treasury		2.13	%		05/15/2025		2,000,000		1,987,422
U.S. Treasury		1.63	%		05/15/2026		2,000,000		1,896,094
U.S. Treasury (TIPS)		0.63	%		07/15/2021		1,084,820		1,111,780
U.S. Treasury (TIPS)		0.13	%		01/15/2022		1,080,260		1,078,644
U.S. Treasury (TIPS)		0.38	%		07/15/2025		1,031,020		1,023,274
U.S. Treasury (TIPS)		1.75	%		01/15/2028		1,167,080		1,300,842


Total investment in U.S. government treasury bonds (12.1%) (cost $28,421,302)									28,671,981


Total investment in long-term securities (95.0%) (cost $224,281,042)									225,392,541



Short-Term Securities	Interest Rate			Maturity Date		Principal Amount ($)		Market Value ($)

Community Development Loans (1.0%) a
MicroVest Plus, LP Note		2.25	%		10/15/2017		2,500,000		2,456,439


Time Deposits (3.8%)
BBH Cash Management Service
JPMorgan Chase, New York		0.58	%		07/03/2017		8,042,087		8,042,087
Wells Fargo Bank, San Francisco		0.58	%		07/03/2017		1,013,196		1,013,196

									9,055,283


Total short-term securities (4.8%) (cost $11,511,722)									11,511,722


Total securities (99.8%) (cost $235,792,764)									236,904,263


Other assets and liabilities (0.2%)									602,292


Total net assets (100.0%)									237,506,555



a Market value adjustments have been applied to these securities to reflect potential early withdrawal.

*plc* Public Limited Company
LP Limited Partnership
*TIPS* Treasury Inflation Protected Security

The accompanying notes are an integral part of these financial statements.



PARNASSUS FUNDS				Semiannual Report • 2017

STATEMENT OF ASSETS AND LIABILITIES

June 30, 2017 (unaudited)


	Parnassus Fund		Parnassus Core Equity Fund			Parnassus Endeavor Fund
Assets

Investments in stocks and bonds, at market value – Unaffliliated

(cost $858,745,998, $11,684,086,996, $3,518,956,054, $2,100,534,493, $12,844,031, $224,281,042)	$	992,436,803	$	14,376,661,687		$	4,034,162,250

Investments in stocks, at market value – Affliliated

(cost of $0, $671,728,097, $0, $0, $0, $0)		-		843,744,984			-

Investments in short-term securities

(at cost which approximates market value)		60,138,963		385,866,542			337,712,024

Cash		16,670		185,898			154,210

Receivables

Investment securities sold		-		44,532,958			31,381,550

Dividends and interest		960,068		14,854,005			1,344,429

Capital shares sold		451,489		9,092,219			8,408,417

Other assets		62,260		291,383			165,153

Total assets	$	1,054,066,253	$	15,675,229,676		$	4,413,328,033
Liabilities

Payable upon return of loaned securities		16,750,000		39,613,743			-

Payable for investment securities purchased		-		16,111,657			50,753,700

Capital shares redeemed		182,356		43,453,767			4,064,374

Fees payable to Parnassus Investments		-		-			-

Distributions payable		-		3,857,805			-

Accounts payable and accrued expenses		186,472		1,041,558			117,002

Total liabilities	$	17,118,828	$	104,078,530		$	54,935,076

Net assets	$	1,036,947,425	$	15,571,151,146		$	4,358,392,957
Net assets consist of

Undistributed net investment income (loss)		7,676,961		(13,001,303	)		20,901,052

Unrealized appreciation on securities and foreign currency		133,690,805		2,864,591,578			515,206,196

Accumulated net realized gain on securities and foreign currency		39,873,463		892,875,647			134,767,459

Capital paid-in		855,706,196		11,826,685,224			3,687,518,250

Total net assets	$	1,036,947,425	$	15,571,151,146		$	4,358,392,957
Net asset value and offering per share

Net assets investor shares	$	911,412,293	$	10,333,867,540		$	3,541,687,102

Net assets institutional shares	$	125,535,132	$	5,237,283,606		$	816,705,855

Shares outstanding investor shares		18,512,111		247,310,987			97,568,097

Shares outstanding institutional shares		2,549,109		125,152,109			22,465,449

Net asset values and redemption price per share

(Net asset value divided by shares outstanding)

Investor shares	$	49.23	$	41.78		$	36.30

Institutional shares		49.25		41.85			36.35

The accompanying notes are an integral part of these financial statements.



Semiannual Report • 2017				PARNASSUS FUNDS


Parnassus Mid Cap Fund		Parnassus Asia Fund		Parnassus Fixed Income Fund




$	2,355,208,635	$	14,033,954	$	225,392,541



	-		-		-



	147,430,123		878,565		11,511,722

	56,757		214		4,862



	23,574,699		283,074		-

	3,803,649		17,570		1,514,270

	4,702,234		11,644		278,149

	116,091		33,555		23,792

$	2,534,892,188	$	15,258,576	$	238,725,336


	12,546,909		-		-

	20,268,300		312,996		960,600

	1,123,412		-		187,627

	12,000		-		600

	-		-		22,294

	90,591		15,215		47,660

$	34,041,212	$	328,211	$	1,218,781

$	2,500,850,976	$	14,930,365	$	237,506,555


	9,053,133		73,624		38,393

	254,674,142		1,189,476		1,111,499

	68,222,418		772,198		332,102

	2,168,901,283		12,895,067		236,024,561

$	2,500,850,976	$	14,930,365	$	237,506,555


$	1,884,957,611	$	9,330,366	$	203,856,712

$	615,893,365	$	5,599,999	$	33,649,843

	60,063,138		488,901		12,268,011

	19,583,098		291,787		2,025,497





$	31.38	$	19.08	$	16.62

	31.45		19.19		16.61

The accompanying notes are an integral part of these financial statements.



PARNASSUS FUNDS				Semiannual Report • 2017

STATEMENT OF OPERATIONS

Six Months Ended June 30, 2017 (unaudited)


	Parnassus Fund			Parnassus Core Equity Fund			Parnassus Endeavor Fund
Investment income

Dividends – Unaffiliated	$	9,058,756		$	137,946,184		$	36,244,896

Dividends – Affiliated		-			11,603,745			-

Interest		129,550			1,269,678			847,195

Securities lending		16,261			214,492			2,350

Other income		512			-			-

Foreign witholding tax		(215,601	)		(2,883,298	)		(937,627	)

Total investment income	$	8,989,478		$	148,150,801		$	36,156,814
Expenses

Investment advisory fees		2,919,799			44,482,530			12,448,645

Transfer agent fees

Investor shares		137,298			255,841			169,423

Institutional shares		3,558			214,102			2,638

Fund administration		151,757			2,434,970			596,901

Service provider fees		508,615			11,648,409			3,060,309

Reports to shareholders		63,073			872,952			151,163

Registration fees and expenses		34,504			107,557			58,671

Custody fees		17,138			224,914			62,558

Overdraft charges		1,538			38,507			17,250

Professional fees		25,986			114,942			65,223

Trustee fees and expenses		7,806			135,510			25,549

Proxy voting fees		755			1,704			1,731

Pricing service fees		2,246			2,246			2,246

Other expenses		8,107			130,478			17,946

Total expenses	$	3,882,180		$	60,664,662		$	16,680,253

Fees waived by Parnassus Investments		-			-			-

Net expenses	$	3,882,180		$	60,664,662		$	16,680,253

Net investment gain	$	5,107,298		$	87,486,139		$	19,476,561
Realized and unrealized gain on investments and foreign currency related transactions

Net realized gain from securities transactions – Unaffiliated		37,582,608			843,547,183			127,398,930

Net realized gain from securities transactions – Affiliated		-			-			-

Net realized gain from foreign currency related transactions		-			-			-

Net change in unrealized appreciation of securities		43,067,584			95,654,288			215,301,797

Net change in unrealized appreciation on foreign currency related transactions		-			-			-

Net realized and unrealized gain on securities and foreign currency related transactions	$	80,650,192		$	939,201,471		$	342,700,727

Net increase in net assets resulting from operations	$	85,757,490		$	1,026,687,610		$	362,177,288

The accompanying notes are an integral part of these financial statements.



Semiannual Report • 2017				PARNASSUS FUNDS


Parnassus Mid Cap Fund			Parnassus Asia Fund			Parnassus Fixed Income Fund


$	19,545,351		$	152,462		$	79,750

	-			-			-

	237,956			1,396			3,274,158

	50,458			-			329

	-			-			-

	(265,819	)		(6,918	)		-

$	19,567,946		$	146,940		$	3,354,237


	7,789,998			77,053			550,634



	120,525			7,045			36,801

	1,133			118			1,102

	347,013			2,242			35,632

	1,837,138			6,327			160,686

	133,034			4,282			17,917

	38,469			18,295			16,164

	38,224			5,191			5,958

	-			263			-

	22,279			17,316			4,918

	16,226			112			1,963

	755			8			1

	2,246			8,009			4,342

	10,885			1,489			2,680

$	10,357,925		$	147,750		$	838,798

	(75,937	)		(67,184	)		(109,878	)

$	10,281,988		$	80,566		$	728,920

$	9,285,958		$	66,374		$	2,625,317


	70,158,159			848,175			537,800

	-			-			-

	-			43,525			-

	97,989,890			634,131			2,090,408

	-			178,142			-

$	168,148,049		$	1,703,973		$	2,628,208

$	177,434,007		$	1,770,347		$	5,253,525

The accompanying notes are an integral part of these financial statements.



PARNASSUS FUNDS				Semiannual Report • 2017

STATEMENT OF CHANGES IN NET ASSETS

June 30, 2017


	Parnassus Fund						Parnassus Core Equity Fund
	Six Months Ended June 30, 2017 (unaudited)			Year Ended December 31, 2016			Six Months Ended June 30, 2017 (unaudited)			Year Ended December 31, 2016

Investment income from operations
Net investment income	$	5,107,298		$	6,865,739		$	87,486,139		$	144,185,839
Net realized gain from securities transactions		37,582,608			9,527,328			843,547,183			422,253,124
Net realized gain (loss) on foreign currency related transactions		-			-			-			-
Net change in unrealized appreciation of securities		43,067,584			81,714,358			95,654,288			779,202,269
Net change in unrealized appreciation on foreign currency related transactions		-			-			-			-
Increase in net assets resulting from operations	$	85,757,490		$	98,107,425		$	1,026,687,610		$	1,345,641,232
Distributions
From net investment income
Investor shares		-			(6,211,673	)		(55,295,049	)		(97,502,432	)
Institutional shares		-			(711,028	)		(32,510,744	)		(51,800,559	)
From realized capital gains
Investor shares		-			(9,253,785	)		-			(276,161,758	)
Institutional shares		-			(846,206	)		-			(120,825,175	)
Distributions to shareholders	$	-		$	(17,022,692	)	$	(87,805,793	)	$	(546,289,924	)
Capital share transactions
Investor shares
Proceeds from sale of shares		155,371,201			133,547,771			953,328,666			2,824,169,780
Reinvestment of dividends		-			15,082,411			54,776,311			370,823,490
Shares repurchased		(96,313,415	)		(155,939,489	)		(1,516,004,505	)		(1,907,325,036	)
Institutional shares
Proceeds from sale of shares		47,131,432			27,356,665			1,138,892,550			1,578,075,919
Reinvestment of dividends		-			1,482,346			24,632,214			127,194,744
Shares repurchased		(9,129,955	)		(3,368,830	)		(821,283,332	)		(916,763,596	)
Increase (decrease) in net assets from capital share transactions		97,059,263			18,160,874			(165,658,096	)		2,076,175,301
Increase in net assets	$	182,816,753		$	99,245,607		$	773,223,721		$	2,875,526,609
Net Assets
Beginning of year		854,130,672			754,885,065			14,797,927,425			11,922,400,816
End of period	$	1,036,947,425		$	854,130,672		$	15,571,151,146		$	14,797,927,425
Undistributed net investment income (loss)	$	7,676,961		$	2,569,663		$	(13,001,303	)	$	(12,681,649	)
Shares issued and redeemed
Investor shares
Shares sold		3,300,684			3,258,316			23,377,800			74,015,714
Shares issued through dividend reinvestment		-			339,229			1,326,776			9,568,183
Shares repurchased		(2,041,244	)		(3,864,923	)		(37,026,073	)		(50,307,927	)
Institutional shares
Shares sold		999,852			655,245			27,764,932			41,647,250
Shares issued through dividend reinvestment		-			33,278			595,166			3,274,865
Shares repurchased		(193,070	)		(82,079	)		(20,026,745	)		(24,076,020	)
Net increase (decrease) in shares outstanding
Investor shares		1,259,440			(267,378	)		(12,321,497	)		33,275,970
Institutional shares		806,782			606,444			8,333,353			20,846,095

The accompanying notes are an integral part of these financial statements.



Semiannual Report • 2017				PARNASSUS FUNDS


Parnassus Endeavor Fund						Parnassus Mid Cap Fund
Six Months Ended June 30, 2017 (unaudited)			Year Ended December 31, 2016			Six Months Ended June 30, 2017 (unaudited)			Year Ended December 31, 2016


$	19,476,561		$	10,775,651		$	9,285,958		$	7,146,323
	127,398,930			70,374,664			70,158,159			27,352,382
	-			-			-			-
	215,301,797			267,871,746			97,989,890			97,182,171
	-			-			-			-
$	362,177,288		$	349,022,061		$	177,434,007		$	131,680,876


	-			(23,947,281	)		-			(5,600,780	)
	-			(3,125,215	)		-			(1,386,266	)

	-			(46,028,697	)		-			(31,066,331	)
	-			(5,071,320	)		-			(2,532,130	)
$	-		$	(78,172,513	)	$	-		$	(40,585,507	)


	1,503,470,731			1,362,577,892			633,895,226			1,045,852,674
	-			67,388,328			-			35,390,738
	(776,667,051	)		(496,407,694	)		(381,660,422	)		(220,152,125	)

	547,874,033			238,492,750			346,116,922			285,047,685
	-			7,722,344			-			3,500,569
	(81,294,156	)		(20,362,286	)		(50,703,001	)		(19,614,391	)
	1,193,383,557			1,159,411,334			547,648,725			1,130,025,150
$	1,555,560,845		$	1,430,260,882		$	725,082,732		$	1,221,120,519

	2,802,832,112			1,372,571,230			1,775,768,244			554,647,725
$	4,358,392,957		$	2,802,832,112		$	2,500,850,976		$	1,775,768,244
$	20,901,052		$	1,424,490		$	9,053,133		$	(232,825	)


	43,950,122			43,762,135			21,020,517			37,166,642
	-			2,053,728			-			1,223,175
	(22,381,429	)		(17,054,240	)		(12,589,866	)		(8,011,474	)

	15,861,170			7,701,176			11,383,526			9,989,778
	-			234,921			-			120,706
	(2,340,826	)		(658,964	)		(1,667,392	)		(689,213	)

	21,568,693			28,761,623			8,430,651			30,378,343
	13,520,344			7,277,133			9,716,134			9,421,271

The accompanying notes are an integral part of these financial statements.



PARNASSUS FUNDS				Semiannual Report • 2017

STATEMENT OF CHANGES IN NET ASSETS

June 30, 2017 (continued)


	Parnassus Asia Fund						Parnassus Fixed Income Fund
	Six Months Ended June 30, 2017 (unaudited)			Year Ended December 31, 2016			Six Months Ended June 30, 2017 (unaudited)			Year Ended December 31, 2016

Investment income from operations
Net investment income	$	66,374		$	135,899		$	2,625,317		$	4,306,111
Net realized gain from securities transactions		848,175			13,754			537,800			946,156
Net realized gain (loss) on foreign currency related transactions		43,525			(117,876	)		-			-
Net change in unrealized appreciation (depreciation) of securities		634,131			1,401,524			2,090,408			(831,242	)
Net change in unrealized appreciation on foreign currency related transactions		178,142			68,212			-			-
Increase in net assets resulting from operations	$	1,770,347		$	1,501,513		$	5,253,525		$	4,421,025
Distributions
From net investment income
Investor shares		-			-			(2,243,320	)		(4,185,576	)
Institutional shares		-			-			(373,466	)		(319,136	)
From realized capital gains
Investor shares		-			-			-			(781,796	)
Institutional shares		-			-			-			(67,763	)
Distributions to shareholders	$	-		$	-		$	(2,616,786	)	$	(5,354,271	)
Capital share transactions
Investor shares
Proceeds from sale of shares		2,497,300			1,645,710			46,541,488			65,063,171
Reinvestment of dividends		-			-			2,126,912			4,515,951
Shares repurchased		(2,295,214	)		(1,250,370	)		(40,560,913	)		(57,568,779	)
Institutional shares
Proceeds from sale of shares		891,205			143,099			15,733,170			16,464,877
Reinvestment of dividends		-			-			312,352			341,666
Shares repurchased		(157,980	)		(105,832	)		(3,455,767	)		(3,572,291	)
Increase in net assets from capital share transactions		935,311			432,607			20,697,242			25,244,595
Increase in net assets	$	2,705,658		$	1,934,120		$	23,333,981		$	24,311,349
Net Assets
Beginning of year		12,224,707			10,290,587			214,172,574			189,861,225
End of period	$	14,930,365		$	12,224,707		$	237,506,555		$	214,172,574
Undistributed net investment income	$	73,624		$	7,253		$	38,393		$	29,862
Shares issued and redeemed
Investor shares
Shares sold		138,672			106,700			2,807,602			3,882,920
Shares issued through dividend reinvestment		-			-			128,366			269,913
Shares repurchased		(125,156	)		(80,121	)		(2,449,097	)		(3,449,146	)
Institutional shares
Shares sold		49,206			10,372			952,308			987,913
Shares issued through dividend reinvestment		-			-			18,847			20,444
Shares repurchased		(8,595	)		(7,883	)		(208,705	)		(215,698	)
Net increase in shares outstanding
Investor shares		13,516			26,579			486,871			703,687
Institutional shares		40,611			2,489			762,450			792,659

The accompanying notes are an integral part of these financial statements.



Semiannual Report • 2017				PARNASSUS FUNDS

Notes to Financial Statements

1. Organization

The Parnassus Funds are comprised of two Trusts, the Parnassus Funds trust and the Parnassus Income Funds trust (collectively the “Trusts”), organized as Massachusetts Business Trusts registered under the Investment Company Act of 1940 as diversified, open-end investment management companies, and are comprised of six separate funds (collectively the “Funds”). The Parnassus Funds trust includes the Parnassus Fund, which commenced operations on December 27, 1984, the Parnassus Endeavor Fund and the Parnassus Mid Cap Fund, both of which commenced operations on April 29, 2005, and the Parnassus Asia Fund, which commenced operations on April 30, 2013. The Parnassus Income Funds trust includes the Parnassus Core Equity Fund and the Parnassus Fixed Income Fund, both of which commenced operations on August 31, 1992. Each Fund has distinct investment objectives. In general, each of the Funds seeks long-term capital appreciation. Prior to May 1, 2014, the Parnassus Core Equity Fund was known as the Parnassus Equity Income Fund, and the Parnassus Endeavor Fund was known as the Parnassus Workplace Fund.

On April 24, 2015, the Parnassus Small Cap Fund merged into the Parnassus Mid Cap Fund.

The Parnassus Funds trust includes the Parnassus Fund – Institutional Shares, the Parnassus Endeavor Fund –Institutional Shares, the Parnassus Mid Cap Fund – Institutional Shares and the Parnassus Asia Fund – Institutional Shares, which commenced operations on April 30, 2015. The Parnassus Income Funds trust includes the Parnassus Fixed Income Fund – Institutional Shares which commenced operations on April 30, 2015.

The Parnassus Fund, the Parnassus Endeavor Fund, the Parnassus Mid Cap Fund, the Parnassus Asia Fund and the Parnassus Fixed Income Fund were renamed to the Parnassus Fund – Investor Shares, the Parnassus Endeavor Fund – Investor Shares, the Parnassus Mid Cap Fund – Investor Shares, the Parnassus Asia Fund – Investor Shares and the Parnassus Fixed Income Fund – Investor Shares, respectively, on May 1, 2015.

2. Significant Accounting Policies

The Funds are investment companies that apply the accounting and reporting guidance issued in Topic 946 by the U.S. Financial Accounting Standards Board. The presentation of the financial statements is made using specialized accounting principles applicable to investment companies.

Short-Term Securities

Short-term securities represent investments of excess cash and consist of time deposits, community development loans, certificates of deposit and money market funds.

Security Transactions and Related Investment Income and Expenses

Securities transactions are recorded on the date the securities are purchased or sold (trade date). Realized gains and losses on securities transactions are determined on the basis of first-in, first-out for both financial statement and federal income tax purposes. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities using the constant yield method, which approximates the interest method. Expenses are recorded on an accrual basis.

Class Allocations

Income, fees and expenses (other than class-specific fees and expenses) and realized and unrealized gains and losses are allocated daily among the various shares classes based on their relative net assets. Class-specific fees and expenses, such as broker service fees, administrative and shareholder services, are charged directly to the respective share class.

Dividends and Distributions to Shareholders

Dividends and distributions to shareholders are recorded on the ex-dividend date to shareholders of record on the record date. The Parnassus Core Equity Fund pays income dividends quarterly and capital-gain dividends annually. The Parnassus Fixed Income Fund pays income dividends monthly and capital-gain dividends annually. The other Funds pay income and capital-gain dividends annually.



PARNASSUS FUNDS				Semiannual Report • 2017

Notes to Financial Statements (continued)

Currency Translation

Assets and liabilities, including investment securities, denominated in currencies other than U.S. dollars are translated into U.S. dollars at the exchange rates supplied by the Funds’ pricing vendor on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. On the accompanying financial statements, the effects of changes in exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in currencies other than U.S. dollars are disclosed separately.

3. Securities Valuations

Methods and Inputs

Equity securities that are listed or traded on a national securities exchange are stated at market value, based on recorded closing sales on the exchange or on the NASDAQ’s National Market official closing price. In the absence of a recorded sale, and for over-the-counter securities, equity securities are stated at the mean between the last recorded bid and asked prices. Long-term, fixed-income securities are valued each business day using prices based on procedures established by independent pricing services and approved by the Board of Trustees (the “Trustees”). Fixed-income securities with an active market are valued at the “bid” price where such quotes are readily available from brokers and dealers and are representative of the actual market for such securities. Other fixed-income securities experiencing a less active market are valued as determined by the pricing services based on methods which include consideration of trading in securities of comparable yield, quality, coupon, maturity and type, as well as indications as to values from dealers and other market data without exclusive reliance upon quoted prices or over-the-counter prices, since such valuations are believed to reflect more accurately the value of such securities. Investments in registered investment companies are valued at their net asset value.

Investments where market quotations are not readily available are priced at their fair value, in accordance with procedures established by the Trustees. These investments include certificates of deposit and community development loans. These investments carry interest rates ranging from 0.15% to 2.25% with maturities of one year or less. In determining fair value, the Trustees may consider a variety of information including, but not limited to, the following: price based upon a multiple of earnings or sales, fundamental analytical data and an evaluation of market conditions. A valuation adjustment is applied to certificates of deposit, community development loans and other community development investments as an estimate of potential penalties for early withdrawal.

The Funds follow 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 Funds’ portfolio 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).

Securities Lending

The Parnassus Funds, with the exception of the Parnassus Asia Fund, have entered into an agreement with Brown Brothers Harriman & Co., dated July 29, 2009 (“Agreement”), to provide securities lending services to the Funds. Under this program, the proceeds (cash collateral) received from borrowers are used to invest in money market funds.

Under the Agreement, the borrowers pay the Funds negotiated lenders’ fees and the Funds receive cash collateral in an amount equal to 102% of the market value of loaned securities. The borrower of securities is at all times required to post cash collateral to the portfolio in an amount equal to 100% of the market value of the securities loaned based on the previous day’s market value of the securities loaned, marked-to-market daily. Any collateral shortfalls are adjusted the next business day. If the borrower defaults on its obligations to return the securities loaned because of insolvency or other reasons, the portfolio could experience delays and costs in recovering the securities loaned.



Semiannual Report • 2017				PARNASSUS FUNDS

Notes to Financial Statements (continued)

The agreement provides the right in the event of default for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of a counterparty’s bankruptcy or insolvency. Under the agreement, the borrower can resell or re-pledge the loaned securities, and the Funds can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.

The Funds retained beneficial ownership and all economic benefits in the securities they have loaned and continues to receive interest paid by the securities and payments equivalent to dividends, and to participate in any changes in their market value, but does not have the proxy voting rights with respect to loaned securities. Each portfolio manager of the Funds has the responsibility to request that the securities lending agent call back securities which are out on loan to vote on material matters and it is the Funds’ policy that the portfolio managers vote on all material matters. However, the ability to timely recall shares for proxy voting purposes typically is not entirely within the control of the portfolio manager, the Funds or their securities lending agent. Under certain circumstances, the recall of shares in time for such shares to be voted may not be possible due to applicable proxy voting record dates and administrative considerations.

Income generated from securities lending is presented in the Statement of Operations. Cash collateral received by the Funds is reflected as an asset (securities purchased with cash collateral from securities lending) and the related liability (payable upon return of securities loaned) is presented in the Statement of Assets and Liabilities.

At June 30, 2017, the following tables are a summary of the Funds’ securities lending agreements by counterparty, which are subject to offset under the agreement:


Parnassus Fund

Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
SG Americas Securities, LLC		16,260,000		(16,260,000	)		-
Total		16,260,000		(16,260,000	)		-


Parnassus Core Equity Fund

Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
Citigroup Global Markets Inc.		17,501,883		(17,501,883	)		-
Credit Suisse Securities USA		3,280,000		(3,280,000	)		-
JP Morgan Clearing Corp.		478,880		(478,880	)		-
Merrill, Lynch, Pierce, Fenner		17,538,291		(17,538,291	)		-
Total		38,799,054		(38,799,054	)		-


Parnassus Mid Cap Fund

Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
The Goldman Sachs Group, Inc.		12,274,614		(12,274,614	)		-
Total		12,274,614		(12,274,614	)		-

Collateral value of $16,750,000, $39,613,743 and $12,546,909 has been received in connection with securities lending agreements for Parnassus Fund, Parnassus Core Equity Fund and Parnassus Mid Cap Fund, respectively. Collateral received in excess of the value of the securities loaned from the individual counterparty is shown for financial reporting purposes in the fund financial statements.



PARNASSUS FUNDS				Semiannual Report • 2017

Notes to Financial Statements (continued)

Community Development Investment Programs

The Parnassus Funds may each invest up to 2% of their assets in community investments and community-development loan funds. Each of the Funds may invest in obligations issued by community loan funds at below-market interest rates if the projects financed have a positive social impact. Generally, there is no secondary market on loan funds and thus these are considered illiquid.

As part of our community development investment program, the Parnassus Fund, Parnassus Core Equity Fund and Parnassus Endeavor Fund has entered into an agreement for fund investments through the Certificate of Deposit Account Registry Service (“CDARS”) network. The CDARS network allows members to place funds in time deposits with depository institutions whose accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”). Provisions stipulate that participating institutions are FDIC insured, however, in the event of default or bankruptcy by any party to the agreement, the proceeds of the investment may be delayed or subject to legal proceedings and are subject to FDIC limits. While certain investments of the Funds may be bank deposits and may be covered by FDIC insurance, the Funds are themselves not covered by FDIC insurance.

The Parnassus Core Equity Fund and the Parnassus Fixed Income Fund holds debt instruments issued by MicroVest Plus, LP, a microfinance limited partnership specializing in providing capital to international microfinance institutions (“MFI’s”) that extend credit to developing countries and the entrepreneurial poor. This instrument may be subject to political and foreign currency exchange risk not normally associated with domestic debt instruments. MicroVest Plus, LP’s investment in MFI’s can be affected by, among other factors, commodity prices, inflation, interest rates, taxation, social instability, and other political, economic or diplomatic developments in or affecting the various countries where MFI’s operate.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Subsequent Events

Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were issued and has determined that there were no subsequent events requiring adjustment to or additional disclosure in the financial statements.

4. Risk Factors

Investing in the Parnassus Funds may involve certain risks including, but not limited to the following:

Market Conditions

The prices of, and the income generated by, the common stocks and other securities held by the Funds may decline in response to certain events taking place around the world, including those directly involving the companies whose securities are owned by the Funds; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency, interest rate and commodity price fluctuations. Additionally, the values of, and the income generated by, most debt securities held by the Fund may be affected by changing interest rates and by changes in the effective maturities and credit ratings of these debt securities. The Funds’ investment adviser attempts to reduce these risks through diversification of the portfolio and ongoing credit analysis as well as by monitoring economic and legislative developments, but there can be no assurance that it will be successful at doing so. Investments in securities issued by entities based outside the U.S. may also be affected by currency controls; different accounting, auditing, financial reporting, and legal standards and practices; expropriation; changes in tax policy; greater market volatility; different securities market structures and higher transaction costs.



Semiannual Report • 2017				PARNASSUS FUNDS

Notes to Financial Statements (continued)

Investing Outside the U.S.

Securities of issuers domiciled outside the U.S., or with significant operations outside the U.S., may lose value because of political, social, economic or market developments or instability in the countries or regions in which the issuer operates. These securities may also lose value due to changes in foreign currency exchange rates against the U.S. dollar and/or currencies of other countries. Securities markets in certain countries may be more volatile and/or less liquid than those in the U.S. Investment outside the U.S. may also be subject to different settlement and accounting practices and different regulatory, legal and reporting standards, and may be more difficult to value, than those in the U.S. The risks of investing outside the U.S. may be heightened in connection with investments in emerging and developing countries.

Contractual Obligations

Under the Trusts’ organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Trusts. Additionally, the Trusts have a variety of indemnification obligations under contracts with its service providers. The Trusts’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trusts that have not yet occurred.

5. Taxation and Distributions

Federal Income Taxes

The Trusts intend to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all taxable income to shareholders. Therefore, no federal income tax provision is required. Income distributions and capital-gain distributions are determined in accordance with income tax regulations, which may differ from U.S. Generally Accepted Accounting Principles (“GAAP”).

The Funds follow ASC 740, Income Taxes, relating to uncertainty in income taxes and disclosures. ASC 740 establishes a minimum threshold for income tax benefits to be recognized in the financial statements. These tax benefits must meet a “more likely than not” threshold, which means that based on technical merits, they have a more than 50% likelihood of being sustained upon examination by the tax authority. Tax benefits meeting this threshold are measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the tax authority. As of and during the year ended December 31, 2016, the Funds did not have a liability for any unrecognized tax benefits. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the year, the Funds did not incur interest or penalties. The Funds are not subject to examination by U.S. federal taxing authorities before 2013 or state taxing authorities before 2012.

Tax Matters and Distributions

At June 30, 2017, the cost of investments in securities and net unrealized appreciation/depreciation for income tax purposes were as follows:


	Parnassus Fund		Parnassus Core Equity Fund		Parnassus Endeavor Fund		Parnassus Mid Cap Fund		Parnassus Asia Fund		Parnassus Fixed Income Fund
Cost of investment	$	858,745,998	$	12,355,815,093	$	3,518,956,054	$	2,100,534,493	$	12,844,031	$	224,281,042
Gross unrealized appreciation	$	159,470,613	$	2,956,362,387	$	564,102,592	$	265,399,214	$	1,781,878	$	3,166,972
Gross unrealized depreciation	$	25,779,808	$	91,770,809	$	48,896,396	$	10,725,072	$	591,955	$	2,055,473
Net unrealized appreciation	$	133,690,805	$	2,864,591,578	$	515,206,196	$	254,674,142	$	1,189,923	$	1,111,499



PARNASSUS FUNDS				Semiannual Report • 2017

Notes to Financial Statements (continued)

At December 31, 2016, net capital loss carry forwards, were:


Fund	Deferred Post-Effective Short-Term Capital Loss Carry Forwards
Parnassus Asia Fund	$	115,184

These losses will be carried forward indefinitely to offset future realized capital gains. To the extent the Funds’ realize future net capital gains, taxable capital gain distributions to their shareholders will be offset by any unused capital loss carryovers.

Late year ordinary and capital losses as of December 31 , 2016, which are deferred until 2017 for income tax purposes were as follows:


Fund	Ordinary		Capital
Parnassus Fund	$	-	$	248,349
Parnassus Asia Fund		16,660		-
Parnassus Fixed Income Fund		-		205,700

Net realized gains differ for financial statement and income tax purposes primarily due to differing treatments of wash sales. Reclassifications as shown in the following table have been made in each Fund’s capital accounts to report these balances on a tax basis, excluding certain temporary differences, as of December 31, 2016. Additional permanent book to tax adjustments may be required in subsequent reporting periods. These reclassifications, which have no impact on the net asset value of the Funds, are primarily attributable to the reclassification of dividend income and certain differences in the computation of distributable income and capital gains under Federal tax rules versus GAAP.

6. Fair Value Measurements

The following table summarizes the portfolios’ financial assets as of June 30, 2017, that is valued at fair value on a recurring basis:


Parnassus Fund
Investment Securities	Level 1		Level 2		Level 3		Total
Equities:

Consumer Discretionary	$	39,136,000	$	-	$	-	$	39,136,000

Consumer Staples		45,035,060		-		-		45,035,060

Financials		218,238,950		-		-		218,238,950

Health Care		178,121,170		-		-		178,121,170

Industrials		107,723,770		-		-		107,723,770

Information Technology		282,349,550		-		-		282,349,550

Materials		100,979,303		-		-		100,979,303

Real Estate		20,853,000		-		-		20,853,000

Short-Term Investments		58,685,302		-		1,453,661		60,138,963
Total	$	1,051,122,105	$	-	$	1,453,661	$	1,052,575,766



Semiannual Report • 2017				PARNASSUS FUNDS

Notes to Financial Statements (continued)


Parnassus Core Equity Fund
Investment Securities	Level 1		Level 2		Level 3		Total
Equities:

Consumer Discretionary	$	1,057,362,571	$	-	$	-	$	1,057,362,571

Consumer Staples		2,315,383,829		-		-		2,315,383,829

Energy		149,978,785		-		-		149,978,785

Financials		1,276,108,750		-		-		1,276,108,750

Health Care		3,209,568,687		-		-		3,209,568,687

Industrials		1,942,911,547		-		-		1,942,911,547

Information Technology		2,997,311,588		-		-		2,997,311,588

Materials		1,056,611,764		-		-		1,056,611,764

Real Estate		613,735,526		-		-		613,735,526

Utilities		601,433,624		-		-		601,433,624

Short-Term Investments		375,307,748		-		10,558,794		385,866,542
Total	$	15,595,714,419	$	-	$	10,558,794	$	15,606,273,213


Parnassus Endeavor Fund
Investment Securities	Level 1		Level 2		Level 3		Total
Equities:

Consumer Discretionary	$	319,532,750	$	-	$	-	$	319,532,750

Consumer Staples		88,431,000		-		-		88,431,000

Financials		524,862,000		-		-		524,862,000

Health Care		1,409,781,250		-		-		1,409,781,250

Industrials		371,219,500		-		-		371,219,500

Information Technology		1,320,335,750		-		-		1,320,335,750

Short-Term Investments		336,791,016		-		921,008		337,712,024
Total	$	4,370,953,266	$	-	$	921,008	$	4,371,874,274


Parnassus Mid Cap Fund
Investment securities	Level 1		Level 2		Level 3		Total
Equities:

Consumer Discretionary	$	286,111,262	$	-	$	-	$	286,111,262

Consumer Staples		196,678,350		-		-		196,678,350

Energy		46,116,000		-		-		46,116,000

Financials		206,367,812		-		-		206,367,812

Health Care		346,349,300		-		-		346,349,300

Industrials		441,130,024		-		-		441,130,024

Information Technology		365,462,162		-		-		365,462,162

Materials		224,932,500		-		-		224,932,500

Real Estate		85,384,600		-		-		85,384,600

Utilities		156,676,625		-		-		156,676,625

Short-Term Investments		146,460,094		-		970,029		147,430,123
Total	$	2,501,668,729	$	-	$	970,029	$	2,502,638,758



PARNASSUS FUNDS				Semiannual Report • 2017

Notes to Financial Statements (continued)


Parnassus Asia Fund
Investment Securities	Level 1		Level 2			Level 3		Total

Australia	$	-	$	598,188		$	-	$	598,188

China		1,913,010		-			-		1,913,010

Hong Kong		263,593		1,721,754			-		1,985,347

India		265,600		-	��		-		265,600

Indonesia		-		292,924			-		292,924

Japan		-		4,470,956			-		4,470,956

Philippines		-		209,378			-		209,378

Singapore		-		474,884			-		474,884

South Korea		-		520,392			-		520,392

Taiwan		582,485		343,150			-		925,635

Thailand		-		209,170			-		209,170

United States		2,168,470		-			-		2,168,470

Short-Term Investments		878,565		-			-		878,565
Total	$	6,071,723	$	8,840,796		$	-	$	14,912,519


Parnassus Fixed Income Fund
Investment Securities	Level 1		Level 2		Level 3		Total

Preferred Stock	$	5,522,232	$	-	$	-	$	5,522,232

Commercial Mortgage-Backed Securities		-		5,263,783		-		5,263,783

Convertible Bonds		-		980,156		-		980,156

Corporate Bonds		-		153,634,437		-		153,634,437

Federal Agency Mortgage-Backed Securities		-		27,324,880		-		27,324,880

Supranational Bonds		-		3,995,072		-		3,995,072

U.S. Government Treasury Bonds		-		28,671,981		-		28,671,981

Short-Term Investments		9,055,283		-		2,456,439		11,511,722
Total	$	14,577,515	$	219,870,309	$	2,456,439	$	236,904,263



Semiannual Report • 2017				PARNASSUS FUNDS

Notes to Financial Statements (continued)

The following table reconciles the valuation of the Funds’ Level 3 investment securities and related transactions as of June 30, 2017:


	Parnassus Fund			Parnassus Core Equity Fund			Parnassus Endeavor Fund			Parnassus Mid Cap Fund			Parnassus Fixed Income Fund
	Certificates of Deposit			Certificates of Deposit			Certificates of Deposit
	Community Development Loans			Community Development Loans			Community Development Loans			Certificates of Deposit			Community Development Loans
Balance as of December 31, 2016	$	2,330,141		$	10,210,292		$	-		$	-		$	2,382,055
Discounts/premiums amortization		(26,480	)		(251,498	)		(28,992	)		(29,971	)		74,384
Purchases		1,400,000			10,000,000			950,000			1,000,000			-
Sales		(2,250,000	)		(9,400,000	)		-			-			-
Balance as of June 30, 2017	$	1,453,661		$	10,558,794		$	921,008		$	970,029		$	2,456,439

There were no significant transfers between Level 1, Level 2 and Level 3.

Quantitative information about Level 3 fair value measurement:


	Fair Value at June 30, 2017		Valuation Technique	Unobservable Input	Range (Weighted Average)

Parnassus Fund
Certificates of Deposit	$	973,797	Liquidity Discount	Discount for Lack of Marketability	4%
Community Development Loans	$	479,864	Liquidity Discount	Discount for Lack of Marketability	6%
Parnassus Core Equity Fund
Certificates of Deposit	$	2,438,256	Liquidity Discount	Discount for Lack of Marketability	4%
Community Development Loans	$	8,120,538	Liquidity Discount	Discount for Lack of Marketability	6%
Parnassus Endeavor Fund
Certificates of Deposit	$	729,934	Liquidity Discount	Discount for Lack of Marketability	4%
Community Development Loans	$	191,074	Liquidity Discount	Discount for Lack of Marketability	6%
Parnassus Mid Cap Fund
Certificates of Deposit	$	970,029	Liquidity Discount	Discount for Lack of Marketability	4%
Parnassus Fixed Income Fund
Community Development Loans	$	2,456,439	Liquidity Discount	Discount for Lack of Marketability	6%

The significant unobservable inputs used in fair value measurement of the Fund’s Certificates of Deposits 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.



PARNASSUS FUNDS				Semiannual Report • 2017

Notes to Financial Statements (continued)

Certain foreign securities may be fair valued by independent pricing services if events occur between the time at which the market quotations are determined on the primary exchange and the close of trading on the NYSE. These events may affect the value of these securities and render market quotations unreliable. Such fair valuations are categorized as Level 2 investments. Foreign securities that are valued based on market quotations are categorized as Level 1 investments.

In accordance with procedures established by the Funds’ Trustees, all fair value securities as submitted by the Funds’ treasurer, are reviewed and approved by the Trustees. The Funds’ valuation committee is comprised of Independent Trustees who also comprise the Funds’ audit committee. The committee reviews the methodologies used by the Funds 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.

7. Capital Stock

Capital stock consists of an unlimited number of authorized shares of capital stock with no par value.

8. Purchases and Sales of Securities

Purchases and proceeds from sales of securities, excluding short-term securities, for the six-month period ended June 30, 2017 were as follows:


Fund	Affiliated Purchases		Unaffiliated Purchases		Affiliated Sales		Unaffiliated Sales
Parnassus Fund	$	-	$	240,191,942	$	-	$	138,164,221
Parnassus Core Equity Fund		-		2,574,762,053		-		2,654,357,286
Parnassus Endeavor Fund		-		1,915,851,735		-		563,648,262
Parnassus Mid Cap Fund		-		816,320,054		-		303,848,744
Parnassus Asia Fund		-		4,044,153		-		3,165,697
Parnassus Fixed Income Fund		-		54,716,824		-		34,148,414

The above includes purchases and sales of U.S. Government securities in the amount of $0 and $6,955,391, respectively, within the Parnassus Fixed Income Fund.

9. Investment Advisory Agreement and Transactions with Affiliates

Under terms of an agreement which provides for furnishing investment management and advice to the Funds, Parnassus Investments is entitled to receive fees payable monthly, based on each Fund’s average daily net assets for the month, at the following annual rates:

Parnassus Fund: 0.70% of the first $100,000,000, 0.65% of the next $100,000,000 and 0.60% of the amount above $200,000,000. Parnassus Endeavor Fund: 0.85% of the first $100,000,000, 0.80% of the next $100,000,000, 0.75% of the next $300,000,000 and 0.65% of the amount above $500,000,000. Parnassus Mid Cap Fund: 0.85% of the first $100,000,000, 0.80% of the next $100,000,000, 0.75% of the next $300,000,000 and 0.70% of the amount above $500,000,000. Parnassus Asia Fund: 1.10% of the first $100,000,000, 1.05% of the next $400,000,000 and 1.00% of the amount above $500,000,000. For the six-month period ended June 30, 2017, Parnassus Investments has contractually agreed to limit total operating expenses to 0.99% of the net assets of the Parnassus Fund – Investor Shares and to 0.94% of the net assets of the Parnassus Fund – Institutional Shares, 0.95% of net assets for the Parnassus Endeavor Fund – Investor Shares and to 0.83% of net assets for the Parnassus Endeavor Fund – Institutional Shares, 0.99% of net assets for the Parnassus Mid Cap Fund – Investor Shares and to 0.85% of net assets for the Parnassus Mid Cap Fund – Institutional Shares and 1.25% of net assets for the Parnassus Asia Fund-Investor Shares and to 1.22% of net assets for the Parnassus Asia Fund-Institutional Shares.

Parnassus Core Equity Fund: 0.75% of the first $30,000,000, 0.70% of the next $70,000,000, 0.65% of the next $400,000,000, 0.60% of the next $9,500,000,000 and 0.55% of the amount above $10,000,000,000. Parnassus Fixed Income



Semiannual Report • 2017				PARNASSUS FUNDS

Notes to Financial Statements (continued)

Fund: 0.50% of the first $200,000,000, 0.45% of the next $200,000,000 and 0.40% of the amount above $400,000,000. For the six-month period ended June 30, 2017, Parnassus Investments has contractually agreed to limit total operating expenses to 0.87% of net assets of the Parnassus Core Equity Fund – Investor Shares and to 0.78% of net assets for the Parnassus Core Equity Fund – Institutional Shares and 0.68% of net assets for the Parnassus Fixed Income Fund – Investor Shares and to 0.58% of net assets for the Parnassus Fixed Income Fund-Institutional Shares.

Parnassus Investments receives fees under terms of a separate agreement which provides for furnishing transfer agent and fund administration services to the Funds. The transfer agent fee was $2.50 per month per account plus any out-of-pocket expenses for the Parnassus Fund, Parnassus Endeavor Fund, Parnassus Mid Cap Fund and Parnassus Asia Fund. The transfer agent fee was $2.70 per month per account plus any out-of-pocket expenses for the Parnassus Core Equity Fund and Parnassus Fixed Income Fund. The Funds pay the monthly fee based on the number of accounts on record at each month-end. The fund administration reflects annual rates based on net assets for all Funds managed by Parnassus Investments and was allocated based on respective Fund net assets. The fund administration services fee was 0.02% of average net assets under this new agreement for the six-month period ended June 30, 2017.

Parnassus Investments may also arrange for third parties to provide certain services, including account maintenance, recordkeeping and other personal services to their clients who invest in the Funds. For these services, the Parnassus Funds –Investor Shares may pay service providers an aggregate service fee on investment accounts at a rate not to exceed 0.25% per annum of average daily net assets. The Parnassus Funds – Institutional Share Classes do not incur service provider fees.

10. Investments in affiliates

The 1940 Act defines “affiliated companies” to include investments in portfolio companies in which a Fund owns 5% or more of the outstanding voting shares. During the six-month period ended June 30, 2017, the Funds below held 5% or more of the outstanding voting shares of the noted portfolio companies. During this period, other Funds in the Trust may also have held voting shares of the issuers at a level below 5%.

A summary of transactions in securities of issuers affiliated with a Fund for the six-month period ended June 30, 2017 is set forth below.


	Beginning shares as of January 1, 2017		Shares purchased		Shares sold		Ending shares as of June 30, 2017		Market Value of affiliates at June 30, 2017		Dividend Income at June 30, 2017

Parnassus Core Equity Fund
Name of Company:
Compass Minerals International Inc.		2,224,303		-		-		2,224,303	$	145,246,986	$	3,202,996
MDU Resources Group Inc.		11,324,166		-		-		11,324,166		296,693,149		4,359,804
Patterson Companies Inc.		5,690,689		-		-		5,690,689		267,177,849		2,845,345
WD-40 Co.		1,220,000		-		-		1,220,000		134,627,000		1,195,600
Total Affiliates									$	843,744,984	$	11,603,745



PARNASSUS FUNDS				Semiannual Report • 2017

Financial Highlights

Selected data for each share of capital stock outstanding, total return and ratios/supplement data for the six-month period ended June 30, 2017 and each of the five years ended December 31 are as follows:


For a Share Outstanding for the Period Ended	Net Asset Value Beginning of Year		Net Investment Income (Loss)^(a)		Net Realized and Unrealized Gain (Loss) on Securities^(a)			Total from Investment Operations^(a)			Dividends from Net Investment Income			Distributions from Net Realized Gains on Securities			Distributions from Return of Capital		Total Dividends and Distributions

Parnassus Fund – Investor Shares
Six-Month Period Ended June 30, 2017 (unaudited)		$44.97		$0.44		$3.82			$4.26			$-			$-			$-		$-
2016		40.46		0.37		5.06			5.43			(0.36	)		(0.56	)		-		(0.92	)
2015		48.09		0.32		(0.01	)		0.31			(1.78	)		(6.16	)		-		(7.94	)
2014		45.86		0.22		6.47			6.69			(1.62	)		(2.84	)		-		(4.46	)
2013		40.62		0.25		13.34			13.59			(1.94	)		(6.41	)		-		(8.35	)
2012		35.23		0.28		8.64			8.92			(0.80	)		(2.73	)		-		(3.53	)
Parnassus Fund – Institutional Shares
Six-Month Period Ended June 30, 2017 (unaudited)		44.95		0.44		3.86			4.30			-			-			-		-
2016		40.45		0.43		5.06			5.49			(0.43	)		(0.56	)		-		(0.99	)
For the period ended December 31, 2015^(d)		49.44		0.28		(1.27	)		(0.99	)		(1.84	)		(6.16	)		-		(8.00	)
Parnassus Core Equity Fund – Investor Shares
Six-Month Period Ended June 30, 2017 (unaudited)		39.29		0.39		2.32			2.71			(0.22	)		-			-		(0.22	)
2016		36.97		0.39		3.42			3.81			(0.40	)		(1.09	)		-		(1.49	)
2015		40.69		0.40		(0.56	)		(0.16	)		(0.80	)		(2.76	)		-		(3.56	)
2014		36.68		0.43		4.84			5.27			(0.59	)		(0.67	)		-		(1.26	)
2013		29.20		0.44		9.39			9.83			(0.48	)		(1.87	)		-		(2.35	)
2012		26.35		0.39		3.64			4.03			(0.74	)		(0.44	)		-		(1.18	)
Parnassus Core Equity Fund – Institutional Shares
Six-Month Period Ended June 30, 2017 (unaudited)		39.35		0.40		2.37			2.77			(0.27	)		-			-		(0.27	)
2016		37.03		0.48		3.41			3.89			(0.48	)		(1.09	)		-		(1.57	)
2015		40.75		0.50		(0.58	)		(0.08	)		(0.89	)		(2.75	)		-		(3.64	)
2014		36.73		0.45		4.91			5.36			(0.67	)		(0.67	)		-		(1.34	)
2013		29.26		0.49		9.39			9.88			(0.54	)		(1.87	)		-		(2.41	)
2012		26.41		0.45		3.64			4.09			(0.80	)		(0.44	)		-		(1.24	)
Parnassus Endeavor Fund – Investor Shares
Six-Month Period Ended June 30, 2017 (unaudited)		32.99		0.33		2.98			3.31			-			-			-		-
2016		28.07		0.19		5.80			5.99			(0.32	)		(0.75	)		-		(1.07	)
2015		29.95		0.17		0.83			1.00			(0.87	)		(2.01	)		-		(2.88	)
2014		26.99		0.18		4.79			4.97			(0.51	)		(1.50	)		-		(2.01	)
2013		22.17		0.14		6.71			6.85			(0.50	)		(1.53	)		-		(2.03	)
2012		19.64		0.12		4.13			4.25			(0.50	)		(1.22	)		-		(1.72	)



Semiannual Report • 2017				PARNASSUS FUNDS


Net Asset Value End of Period		Total Overall Return			Net Assets End of Period (000s)		Ratio of Gross Expenses to Average Net Assets			Ratio of Net Expenses to Average Net Assets (Net of Waiver and Expense Offset Arrangements)^(b,c)			Ratio of Net Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate

	Parnassus Fund – Investor Shares
	$49.23		9.47	%		$911,412		0.83	%		0.83	%		1.89	%		15.41	%
	44.97		13.46			775,818		0.86			0.86			0.90			41.70
	40.46		0.26			708,944		0.84			0.84			0.64			68.52
	48.09		14.68			679,130		0.84			0.84			0.47			60.44
	45.86		34.22			572,301		0.86			0.86			0.54			64.87
	40.62		26.04			470,136		0.90			0.90			0.70			52.72
	Parnassus Fund – Institutional Shares
	49.25		9.57			125,535		0.69			0.69			1.89			15.41
	44.95		13.59			78,313		0.71			0.71			1.04			41.70
	40.45		(2.37	)^(e)		45,941		0.70	^(f)		0.70	^(f)		0.90	^(f)		42.95	^(e)
	Parnassus Core Equity Fund – Investor Shares
	41.78		6.91			10,333,868		0.87			0.87			1.95			17.61
	39.29		10.41			10,200,768		0.87			0.87			1.03			22.89
	36.97		(0.55	)		8,368,394		0.88			0.88			1.03			26.90
	40.69		14.48			8,558,905		0.87			0.87			1.11			14.32
	36.68		34.01			6,282,235		0.87			0.87			1.28			16.93
	29.20		15.43			4,023,309		0.90			0.90			1.38			24.34
	Parnassus Core Equity Fund – Institutional Shares
	41.85		7.04			5,237,284		0.65			0.65			1.95			17.61
	39.35		10.61			4,597,160		0.66			0.66			1.25			22.89
	37.03		(0.34	)		3,554,007		0.67			0.67			1.25			26.90
	40.75		14.71			3,024,069		0.67			0.67			1.17			14.32
	36.73		34.13			1,809,054		0.69			0.69			1.44			16.93
	29.26		15.64			1,006,980		0.68			0.68			1.59			24.34
	Parnassus Endeavor Fund – Investor Shares
	36.30		10.03			3,541,687		0.92			0.92			1.94			17.07
	32.99		21.42			2,507,515		0.97			0.95			0.64			34.08
	28.07		3.25			1,325,765		0.98			0.95			0.56			63.23
	29.95		18.51			770,332		1.02			0.95			0.62			39.51
	26.99		31.15			475,940		1.07			1.07			0.53			41.20
	22.17		22.03			281,029		1.14			1.14			0.54			69.25



PARNASSUS FUNDS				Semiannual Report • 2017

Financial Highlights (continued)


For a Share Outstanding for the Period Ended	Net Asset Value Beginning of Year		Net Investment Income (Loss)^(a)			Net Realized and Unrealized Gain (Loss) on Securities^(a)			Total from Investment Operations^(a)			Dividends from Net Investment Income			Distributions from Net Realized Gains on Securities			Distributions from Return of Capital			Total Dividends and Distributions

Parnassus Endeavor Fund – Institutional Shares
Six-Month Period Ended June 30, 2017 (unaudited)		$33.01		$0.33			$3.01			$3.34			$-			$-			$-			$-
2016		28.06		0.24			5.83			6.07			(0.37	)		(0.75	)		-			(1.12	)
For the period ended December 31, 2015^(d)		31.03		0.16			(0.20	)		(0.04	)		(0.92	)		(2.01	)		-			(2.93	)
Parnassus Mid Cap Fund – Investor Shares
Six-Month Period Ended June 30, 2017 (unaudited)		28.87		0.27			2.24			2.51			-			-			-			-
2016		25.56		0.21			3.90			4.11			(0.11	)		(0.69	)		-			(0.80	)
2015		27.40		0.21			(0.41	)		(0.20	)		(0.18	)		(1.46	)		-			(1.64	)
2014		25.10		0.22			2.60			2.82			(0.20	)		(0.32	)		-			(0.52	)
2013		20.27		0.13			5.58			5.71			(0.26	)		(0.62	)		-			(0.88	)
2012		17.69		0.16			3.10			3.26			(0.30	)		(0.38	)		-			(0.68	)
Parnassus Mid Cap Fund – Institutional Shares
Six-Month Period Ended June 30, 2017 (unaudited)		28.87		0.28			2.30			2.58			-			-			-			-
2016		25.57		0.27			3.89			4.16			(0.14	)		(0.69	)		-			(0.83	)
For the period ended December 31, 2015^(d)		27.58		0.20			(0.52	)		(0.32	)		(0.23	)		(1.46	)		-			(1.69	)
Parnassus Asia Fund – Investor Shares
Six-Month Period Ended June 30, 2017 (unaudited)		16.80		0.19			2.09			2.28			-			-			-			-
2016		14.74		0.17			1.89			2.06			-			-			-			-
2015		16.72		0.24			(2.22	)		(1.98	)		-			-			-			-
2014		15.67		0.19			1.04			1.23			(0.18	)		-			-			(0.18	)
For the period ended December 31, 2013^(g)		15.00		(0.07	)		0.74			0.67			-			-			-			-
Parnassus Asia Fund – Institutional Shares
Six-Month Period Ended June 30, 2017 (unaudited)		16.80		0.19			2.20			2.39			-			-			-			-
2016		14.78		0.22			1.88			2.10			-			-			-			-
For the period ended December 31, 2015^(d)		17.91		0.23			(3.36	)		(3.13	)		-			-			-			-
Parnassus Fixed Income Fund – Investor Shares
Six-Month Period Ended June 30, 2017 (unaudited)		16.42		0.25			0.14			0.39			(0.19	)		-			-			(0.19	)
2016		16.44		0.34			0.06			0.40			(0.36	)		(0.06	)		-			(0.42	)
2015		16.66		0.33			(0.21	)		0.12			(0.33	)		(0.01	)		-			(0.34	)
2014		16.43		0.31			0.43			0.74			(0.37	)		(0.14	)		-			(0.51	)
2013		17.56		0.29			(0.76	)		(0.47	)		(0.29	)		(0.31	)		(0.06	)		(0.66	)
2012		17.53		0.31			0.05			0.36			(0.33	)		-	^(h)		-			(0.33	)



Semiannual Report • 2017				PARNASSUS FUNDS


Net Asset Value End of Period		Total Overall Return			Net Assets End of Period (000s)		Ratio of Gross Expenses to Average Net Assets			Ratio of Net Expenses to Average Net Assets (Net of Waiver and Expense Offset Arrangements)^(b,c)			Ratio of Net Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate

	Parnassus Endeavor Fund – Institutional Shares
	$36.35		10.12	%		$816,706		0.72	%		0.72	%		1.90	%		17.07	%
	33.01		21.68			295,317		0.74			0.74			0.80			34.08
	28.06		(0.22	)^(e)		46,806		0.75	^(f)		0.75	^(f)		0.80	^(f)		42.60	^(e)
	Parnassus Mid Cap Fund – Investor Shares
	31.38		8.69			1,884,958		1.00			0.99			1.79			14.75
	28.87		16.07			1,490,587		1.01			0.99			0.75			18.81
	25.56		(0.87	)		543,251		1.07			0.99			0.77			58.01
	27.40		11.24			305,297		1.09			1.09			0.84			21.62
	25.10		28.27			241,162		1.14			1.14			0.55			20.70
	20.27		18.58			128,964		1.23			1.20			0.79			22.82
	Parnassus Mid Cap Fund – Institutional Shares
	31.45		8.82			615,893		0.76			0.76			1.85			14.75
	28.90		16.28			285,182		0.80			0.80			0.95			18.81
	25.57		(1.30	)^(e)		11,397		0.77	^(f)		0.77	^(f)		1.12	^(f)		34.04	^(e)
	Parnassus Asia Fund – Investor Shares
	19.08		13.57			9,330		2.73			1.25			2.10			24.08
	16.80		13.98			7,985		3.13			1.25			1.14			46.04
	14.74		(11.84	)		6,616		2.50			1.25			1.50			59.89
	16.72		7.84			7,457		3.53			1.25			1.11			24.41
	15.67		4.47	^(e)		3,376		5.08	^(f)		1.45	^(f)		(0.71	)^(f)		3.00	^(e)
	Parnassus Asia Fund – Institutional Shares
	19.19		13.69			5,600		0.96			0.96			2.09			24.08
	16.88		14.21			4,240		0.96			0.96			1.42			46.04
	14.78		(17.48	)^(e)		3,675		0.94	^(f)		0.94	^(f)		2.24	^(f)		49.07	^(e)
	Parnassus Fixed Income Fund – Investor Shares
	16.62		2.38			203,857		0.79			0.68			3.01			16.03
	16.42		2.42			193,440		0.80			0.68			2.04			39.47
	16.44		0.70			182,130		0.79			0.68			1.98			35.80
	16.66		4.49			192,614		0.78			0.68			1.84			52.57
	16.43		(2.71	)		175,790		0.78			0.68			1.70			35.15
	17.56		2.08			225,723		0.79			0.75			1.78			5.45



PARNASSUS FUNDS				Semiannual Report • 2017

Financial Highlights (continued)


For a Share Outstanding for the Period Ended	Net Asset Value Beginning of Year		Net Investment Income (Loss)^(a)		Net Realized and Unrealized Gain (Loss) on Securities^(a)			Total from Investment Operations^(a)			Dividends from Net Investment Income			Distributions from Net Realized Gains on Securities			Distributions from Return of Capital		Total Dividends and Distributions

Parnassus Fixed Income Fund – Institutional Shares
Six-Month Period Ended June 30, 2017 (unaudited)		$16.41		$0.25		$0.16			$0.41			$(0.21	)		$-			$-		$(0.21	)
2016		16.44		0.38		0.04			0.42			(0.39	)		(0.06	)		-		(0.45	)
For the period ended December 31, 2015^(d)		16.75		0.24		(0.30	)		(0.06	)		(0.24	)		(0.01	)		-		(0.25	)

(a) Income (loss) from operations per share is based on average daily shares outstanding.

(b) Parnassus Investments has contractually limited expenses to an annualized rate of 0.95% for the Parnassus Endeavor Fund – Investor Shares, 0.99% for the Parnassus Mid Cap Fund – Investor Shares, 1.25% for the Parnassus Asia Fund – Investor Shares and 0.68% for the Parnassus Fixed Income Fund – Investor Shares.

(c) Parnassus Investments has contractually limited expenses to an annualized rate of 0.83% for the Parnassus Endeavor Fund – Institutional Shares, 0.85% for the Parnassus Mid Cap Fund – Institutional Shares, 1.22% for the Parnassus Asia Fund – Institutional Shares and 0.58% for the Parnassus Fixed Income Fund – Institutional Shares.

(d) The Parnassus Fund – Institutional Shares, the Parnassus Endeavor Fund – Institutional Shares, the Parnassus Mid Cap Fund – Institutional Shares, the Parnassus Asia Fund –Institutional Shares and the Parnassus Fixed Income Fund – Institutional Shares commenced operations on April 30, 2015, and the period shown is from April 30, 2015 through December 31, 2015.

(e) Not annualized for periods less than one year.

(f) Annualized.

(g) The Parnassus Asia Fund – Investor Shares commenced operations on April 30, 2013, and the period shown is from April 30, 2013 through December 31, 2013.

(h) Amount less than $0.01.



Semiannual Report • 2017				PARNASSUS FUNDS


Net Asset Value End of Period		Total Overall Return			Net Assets End of Period (000s)		Ratio of Gross Expenses to Average Net Assets			Ratio of Net Expenses to Average Net Assets (Net of Waiver and Expense Offset Arrangements)^(b,c)			Ratio of Net Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate

	Parnassus Fixed Income Fund – Institutional Shares
	$16.61		2.48	%		$33,650		0.48	%		0.48	%		3.02	%		16.03	%
	16.41		2.55			20,733		0.49			0.49			2.22			39.47
	16.44		(0.35	)^(e)		7,731		0.49	^(f)		0.49	^(f)		2.14	^(f)		24.24	^(e)



PARNASSUS FUNDS				Semiannual Report • 2017

ADDITIONAL INFORMATION (unaudited)

Board of Trustees Consideration of Investment Advisory Agreements

Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”) requires that the Board of Trustees (the “Trustees”) of the Parnassus Funds trust and the Parnassus Income Funds trust (the “Trusts”) which collectively are known as the Parnassus Funds (the “Funds”), meet in person to review and consider the continuation of any investment advisory agreement. In this regard, the Trustees who are not “interested persons” of the Trusts, as defined in the 1940 Act, (the “Independent Trustees”) met in person on March 21, 2017 and reviewed and re-approved the Trusts’ investment advisory agreements with Parnassus Investments. The Independent Trustees were provided with relevant information by Parnassus Investments, as described below, and were assisted in their evaluation of the investment advisory agreements by independent legal counsel, from whom they received assistance and advice, including a written memorandum, regarding the legal standards applicable to the consideration of advisory arrangements and with whom they met separately from Parnassus Investments’ management. In addition, the Trustees consider matters bearing on the management of the Funds and other arrangements at regular meetings throughout the year, including reviews of investment results and performance data at each regular meeting and periodic presentations from Parnassus Investments. Prior to approving the continuation of the investment advisory agreements, the Independent Trustees considered:

•

the nature, extent and quality of the services provided by Parnassus Investments;

•

the degree to which the Parnassus Fund, the Parnassus Core Equity Fund, the Parnassus Endeavor Fund, the Parnassus Mid Cap Fund, the Parnassus Asia Fund and the Parnassus Fixed Income Fund are being managed in accordance with each Fund’s stated investment objective;

•

the investment performance of the each of the Funds;

•

the cost of the services to be provided and profits to be realized by Parnassus Investments from its relationship with each of the Funds;

•

the extent to which economies of scale would be realized as each of the Funds grew and whether fee levels reflect these economies of scale;

•

the expense ratio of each of the Funds; and

•

the manner in which portfolio transactions for the Funds are conducted, including the use of soft dollars.

In considering the nature, extent and quality of the services provided by Parnassus Investments, the Independent Trustees reviewed written and oral reports prepared by Parnassus Investments describing the portfolio management, shareholder communication and servicing, prospective shareholder assistance and regulatory compliance services provided by Parnassus Investments to the Funds. The Independent Trustees also considered a written report prepared by Broadridge, an independent provider of investment company data, comparing aspects of the portfolio management services provided by Parnassus Investments to similar services provided to a universe of comparable mutual funds (“Universe”). The Independent Trustees considered the experience of senior management and the qualifications, tenure, background and responsibilities of the portfolio managers primarily responsible for the day-to-day portfolio management of the Funds. The Independent Trustees evaluated the ability of Parnassus Investments, based on its financial condition, resources, reputation and other attributes to attract and retain qualified investment professionals, including research, advisory and supervisory personnel. The Independent Trustees further considered the compliance programs and compliance records of Parnassus Investments. In addition, the Independent Trustees took into account the administrative services provided to the Funds by Parnassus Investments. The Independent Trustees concluded that Parnassus Investments was providing essential services to the Funds.

The Independent Trustees compared the performance of each of the Funds to benchmark indices over various periods of time ending December 31, 2016 and to the Universe of comparable mutual funds as determined by Broadridge. The Independent Trustees noted that the performance for the Parnassus Fund, Parnassus Endeavor Fund and the Parnassus Mid Cap Fund was above the median of the Universe for all time periods under review. The Parnassus Core Income Fund’s performance was above the median performance of the Universe for the three-, four-, five- and ten-year periods, and was below the median for the one and two- year periods. The Parnassus Asia Fund was above the median of the Universe for all time periods under review with the exception for the two-year period. The Independent Trustees further noted that the performance of the Parnassus Fixed Income Fund was below the median performance of the Universe for the one-, three-, four-, five and ten- year periods and was above the median for the two-year period under review. The Independent Trustees concluded that the overall performance of the Funds warranted the continuation of the investment advisory agreements.

In concluding that the advisory fees payable by each of the Funds were reasonable, the Independent Trustees reviewed a report of the costs of services provided, and the profits realized, by Parnassus Investments from its relationship with each



Semiannual Report • 2017				PARNASSUS FUNDS

ADDITIONAL INFORMATION (unaudited) (continued)

Board of Trustees Consideration of Investment Advisory Agreements (continued)

Fund, and concluded that such profits were reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases. The Independent Trustees also reviewed reports comparing each Fund’s expense ratio and the advisory fees paid by each Fund to that of the applicable Universe and concluded that the advisory fee paid by each Fund and each Fund’s expense ratio was within the range of its respective Universe. The Independent Trustees noted that the Funds’ advisory fees were below the median for each Fund’s respective Universe except for the Parnassus Core Equity Fund and the Parnassus Fixed Income Fund. The Independent Trustees noted that the investment advisory fee for each Fund contained a number of breakpoints in an effort to reflect economies of scale that might be realized as each Fund grew. The Independent Trustees also noted that actual or potential economies of scale will be reasonably shared with the Fund shareholders through these breakpoints, fee waivers and expense reimbursement arrangements applicable to the Funds.

The Independent Trustees reviewed reports discussing the manner in which portfolio transactions for the Funds were conducted, including the use of soft dollars. Based on these reports, the Independent Trustees concluded that the research obtained by Parnassus Investments was beneficial to the Funds and that Parnassus Investments was executing each Fund’s portfolio transactions in a manner designed to obtain best execution for the Funds.

Based on their careful consideration of the information and factors described above, the Independent Trustees concluded that the approval of the continuation of the investment advisory agreements for the Trusts was in the best interest of the Funds and their shareholders. The Independent Trustees unanimously approved the continuation of the investment advisory agreements for an additional one-year period.

Proxy Disclosures

Parnassus proxy voting policies and procedures are available, without charge, on our website (www.parnassus.com), on the Securities and Exchange Commission’s website (www.sec.gov) and by calling us at (800) 999-3505. The Funds file a proxy voting record with the Securities and Exchange Commission for the 12 months ended June 30. The most recent report is available by calling Parnassus or it may be obtained from the Securities and Exchange Commission’s website or the Parnassus website.

Quarterly Portfolio Schedule

The Funds file their complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The quarterly portfolio holdings are available on the Securities and Exchange Commission’s website (www.sec.gov). The Funds’ Form N-Q may also be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330.



PARNASSUS FUNDS				Semiannual Report • 2017

THIS PAGE LEFT INTENTIONALLY BLANK

Go Paperless with E-Delivery

and account statements at www.parnassus.com/gopaperless

If you do not hold your account directly with Parnassus, please contact

the firm that holds your account to inquire about electronic delivery.

PARNASSUS FUNDS

1 Market Street, Suite 1600

San Francisco, CA 94105

(800) 999-3505

www.parnassus.com

This report must be preceded or accompanied by a current prospectus.

Investment Adviser

Parnassus Investments

1 Market Street, Suite 1600

San Francisco, CA 94105

Legal Counsel

Foley and Lardner LLP

777 E. Wisconsin Ave.

Milwaukee, WI 53202

Independent Registered Public Accounting Firm

Deloitte and Touche LLP

555 Mission Street

San Francisco, CA 94105

Distributor

Parnassus Funds Distributor

1 Market Street, Suite 1600

San Francisco, CA 94105

LOGO

Item 2: Code of Ethics

Not applicable for semi-annual reports. The information required by this Item is only required in an annual report on Form N-CSR.

Item 3: Audit Committee Financial Expert

Not applicable for semi-annual reports. The information required by this Item is only required in an annual report on Form N-CSR.

Item 4: Principal Accountant Fees and Services

Not applicable for semi-annual reports. The information required by this Item is only required in an annual report on Form N-CSR.

Item 5: Not applicable.

Item 6: Included as part of the report to shareholders filed under Item 1 of this form.

Item 7: Not applicable.

Item 8: Not applicable.

Item 9: Not applicable.

Item 10: For the purposes of this Item, there have not been any material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees.

Item 11: Controls and Procedures.

(a) The registrant’s certifying officers have reasonably designed such disclosure controls and procedures to ensure material information relating to the registrant is made known to them by others, particularly during the period in which this report is being prepared. The registrant’s certifying officers have determined that the registrant’s disclosure controls and procedures are effective based on their evaluation of these controls and procedures as of a date within 90 days prior to the filing date of this report.

(b) There were no significant changes in the registrant’s internal controls over financial reporting, or in other factors that could significantly affect these controls, that occurred during the registrant’s fiscal half-year, including any corrective actions with regard to significant deficiencies and material weaknesses.

Item 12: Exhibits attached hereto.

(a)(1) Code of Ethics – Not applicable for semi-annual reports.

(a)(2) Certification for each principal executive and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2(a)) – Filed as an attachment to this filing.

(b) Certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350). A certification furnished pursuant to this paragraph will not be deemed “filed” for purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference – Filed as an attachment to this filing.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date: August 4, 2017				By: /s/ Jerome L. Dodson
				Jerome L. Dodson
				President

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Date: August 4, 2017

				By: /s/ Jerome L. Dodson
				Jerome L. Dodson
				President

Date: August 4, 2017

				By: /s/ Marc C. Mahon
				Marc C. Mahon
				Treasurer

Parnassus Core Equity Fund (PRBLX) N-CSRSCertified semi-annual shareholder report (management investment company)