April 2, 2004 — The Parnassus Fund (PARNX) will drop its sales charge next month.
The fund is eliminating the 3.5% sales charge, or “load,” that it has carried since its inception in 1984. Jerome Dodson, the fund’s portfolio manager, said in a regulatory filing Friday that he believes the move will benefit shareholders by increasing the fund’s returns. Dodson could not immediately be reached for comment.
The $374-million fund has lagged its peers and the Standard & Poor’s 500-index recently. The fund returned 0.1% in the first quarter, versus 2.5% for the average large-cap value fund, and 1.6% for the index.
The Parnassus fund gained 16.8% last year, while similar funds, and the S&P 500 both rose 28.7%. For the three years ended in February, the Parnassus fund lost an average annualized 2.7%, versus a gain of 1.4% by its peers, and a loss of 0.5% by the index.
A so-called socially responsible fund, the Parnassus fund does not invest in alcohol, tobacco, and gaming stocks and arms makers, but seeks environmentally friendly companies. Dodson hunts for cheap stocks that he thinks will increase in value.