The Parnassus Fund Profile
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March 1, 1999
This Profile summarizes key information about the Fund that is included in the
prospectus. The prospectus contains additional information including a more
detailed description of the risks associated with investing in the Fund that you
may want to consider before you invest. You may obtain the prospectus and other
information about the Fund at no cost by calling 800-999-3505.
Fund Objectives/Goals
The Parnassus Fund is a stock fund whose goal is to achieve long-term growth of
capital.
Principal Investment Strategies of the Fund
The Fund invests mainly in domestic stocks and subscribes to the "contrarian"
strategy of investing. This means that the Fund's Adviser seeks stocks that are
currently out of favor with the investment community, but are believed to be
financially sound and to have good prospects for the future. To determine a
company's prospects, the Adviser reviews the company's profit and loss
statement, sales and earnings histories, net cash flow and outlook for future
earnings.
The Fund takes social as well as financial factors into account in making
investment decisions. In general, The Parnassus Fund looks for companies that
respect the environment, treat their employees well, have effective equal
employment opportunity policies and good community relations as well as ethical
business dealings. The Fund will not invest in companies that are involved with
gambling or manufacture alcohol or tobacco products. The Fund also screens out
weapons contractors and those that generate electricity from nuclear power.
Additional information about the Fund's investments is available in the Fund's
annual and quarterly reports to shareholders. In these reports you will find a
discussion of the market conditions and investment strategy that significantly
affected the Fund's performance during the last fiscal year. You may obtain
either or both of these reports at no cost by calling 800-999-3505.
Principal Risks of Investing in the Fund
Investing in the Fund may result in a loss of money when you sell your
shares. The Fund's share price changes daily based on the value of its holdings.
Stock values fluctuate in response to activities of individual companies and
general market and economic conditions both here and abroad. When you sell your
shares of the Fund, they may be worth more or less than what you paid for them.
The bar chart and table below give some indication of the risks of investing in
the Fund by showing changes in the Fund's performance from year to year and by
showing how the Fund's average annual returns for 1, 5, and 10 years compare
with those of the Standard & Poor's 500 Index (a broad unmanaged measure of
market performance) and the Lipper Growth Fund Average. How the Fund has
performed in the past is not necessarily an indication of how the Fund will
perform in the future.
[Bar chart here]
The Fund's highest and lowest returns for a quarter during the ten years shown
in the bar chart were a loss of 26.9% for the 3rd quarter of 1990 and a gain of
44.6% for the last quarter of 1998.
Average annual total returns for
periods ended December 31, 1998
Past 1 Past 5 Past 10
Year Years Years
---- ----- -----
Parnassus Fund -2.15% 9.81% 12.23%
Standard&Poor's 500 Index 28.38% 24.01% 19.18%
Lipper Growth Fund Average 22.86% 19.03% 17.18%
Investment Adviser and Portfolio Manager
The Fund's investment adviser is Parnassus Investments. Jerome L. Dodson, the
adviser's president, is the person primarily responsible for the day-to-day
management of the Fund's portfolio. He has served in that capacity since the
Fund's inception in 1985.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund. Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) Imposed
on Purchases. . . . . . . . . . . . . . . . . . . . . . . 3.50
Maximum Deferred Sales Charge (Load) . . . . . . . . . . . . . None
Maximum Sales Charge (Load) Imposed
on Reinvested dividends and other
Distributions . . . . . . . . . . . . . . . . . . . . . . None
Redemption Fee (as a percentage of
amount redeemed) . . . . . . . . . . . . . . . . . . . . . None
Exchange Fee . . . . . . . . . . . . . . . . . . . . . . . . . . None
Maximum Account Fee . . . . . . . . . . . . . . . . . . . . . None
Annual Fund Operating Expenses (expenses that are deducted from Fund assets):
Management Fees . . . . . . . . . . . . . . . . . . . . . . . . . 0.66%
Distribution&Service (12b-1) Fees . . . . . . . . . . . . . . . None
Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 0.44%
Total Annual Fund Operating Expenses . . . . . . . . . . . . . . 1.10%
The chart below is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. This example assumes that
you invest $10,000 in the Fund for the time periods indicated and then redeem
all of your shares at the end of those periods. The Example also assumes that
your investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$458 $687 $934 $1,643
Purchase of Fund Shares
The Fund has a minimum initial investment of $2,000 and a minimum subsequent
investment of $50. Retirement and Uniform Gift to Minor accounts and
participants in the automatic investment plan have an initial minimum investment
of $500. There is a sales charge assessed on fund purchases based on the
following table:
Account size Sales Load Account Size Sales Load
Less than $15,000 3.5% $100,000-249,999 1.5%
$15,000-24,999 3.0% $250,000-499,999 1.0%
$25,000-49,000 2.5% $500,000-999,999 0.5%
$50,000-99,999 2.0% Over $1 million None
Certain familial accounts may be added together for purposes of determining the
load. Also, the load is waived for Parnassus employees, representatives
registered with the NASD, certain qualified retirement plans and discretionary
accounts of bank trust departments and registered investment advisers.
Sale of Fund Shares
The Fund's shares are redeemable. Your shares may be redeemed in total or in
part on any business day by written request. There is no redemption charge.
Fund Distributions and Tax Information
The Fund intends to make distribution once a year, usually in December. You
may choose to receive distributions in cash or reinvest them in additional
shares of the Fund without a sales charge. The Fund intends to make
distributions that may be taxed as ordinary income or capital gains (which may
be taxable at different rates) depending on the length of time that the Fund
holds its assets.
Other Available Services
The Fund maintains a toll-free 24-hour telephone system (800-999-3505) to
provide shareholders with current the share price and other information. Between
8:30 am and 5 pm San Francisco time, you may obtain your account balance.
Automated purchase and distribution plans are available. Shareholders receive
annual and quarterly reports, an annual account statement and a confirmation
each time shares are purchased or redeemed.
