On Thursday, Parnassus Investments made its debut in the world of ETFs with the launch of two equity funds. The actively managed ETFs aim to offer capital appreciation.
The Parnassus Core Select ETF (PRCS) provides investors with access to an active core equity strategy. This fund has a net expense ratio of 0.58%.
PRCS opts to invest in a mix of value and growth stocks. These investment selections will generally be focused toward large-cap companies. The fund mostly invests in U.S. stocks, but may opt to invest in foreign securities as well.
Meanwhile, the Parnassus Value Select ETF (PRVS) focuses on the Parnassus value strategy. It has a slightly higher net expense ratio of 59 basis points.
Much like PRCS, the Parnassus Value ETF primarily looks for large-cap companies within the United States. However, PRVS instead opts to seek out companies the fund managers deem to be undervalued at the time. As such, the ETF offers deep potential for building long-term capital appreciation, especially with an active portfolio team.
The Portfolio Construction Process
For both of these new funds, Parnassus evaluates eligible stocks to find companies with truly sustainable business practices. These practices include relevancy, strong management, competitive advantages, management of human capital, climate-related risk, and corporate government.
By screening for companies with sustainable business practices, the Parnassus team hopes to cultivate portfolios with high quality. Companies with sustainable business practices can be better positioned to deliver shareholder value for the long term.
“Over our 40-year history, Parnassus has earned a reputation for high-conviction stock picking. These new ETFs comprise our best ideas in pursuit of outperformance. They will be portfolios of about 25 stocks, as compared to our typical 40-stock portfolios,” said Benjamin Allen, CEO of Parnassus Investments. “With the launch of PRCS and PRVS, our investment process and expertise will be accessible to a new audience of ETF investors.”
Even though PRCS and PRVS are its first ETFs, Parnassus Investments has 40 years of experience in navigating the markets. The firm has extensive expertise in core equity mutual funds too, with the Parnassus Core Equity Fund {PRBLX) having over $30 billion in assets under management.
For more information, please visit VettaFi.com | ETF Trends.
