(PRBLX holds WFC as its #1 position, added there during the last quarter.)
Src: https://www.parnassus.com/our-firm/highlight/184
Due Diligence on Wells Fargo
SAN FRANCISCO, CA, September 27, 2016
You may have seen recent news that Wells Fargo (WF) is facing scrutiny over its cross-selling programs that resulted in employees opening accounts and credit cards for customers without permission. As a significant shareholder and a responsible investment firm, Parnassus Investments is deeply concerned about this information.
We are conducting a thorough due diligence process. We have initiated conversations directly with executive leadership at Wells Fargo, and are currently evaluating and monitoring the various remedies the firm has applied. As additional information becomes available, we will further engage directly with Wells Fargo leadership.
At this time, the Parnassus investment team does not believe there exists a deterioration in WF’s company fundamentals. Wells Fargo management is still working through revisions to their cross-selling policies to remove incentives for practices that could harm customers, employees and the firm’s reputation. Although these new incentive and compensation policies are still in development, WF management has assured Parnassus that the firm and its team members will continue to emphasize deep client relationships.
However, given the circumstances, Parnassus strongly recommends that the Wells Fargo Board of Directors consider pay packages for WF executives who were responsible for the cross-selling programs in accordance with the WF’s claw back policies.
While WF’s responsible investing profile has been temporarily weakened by the firm’s cross-selling practices, it is important to note that the firm has many positive social aspects. Wells Fargo remains one of the largest corporate charitable donors in the U.S., has a strong reputation for promoting diversity and inclusion, and in general is regarded as a positive workplace.
It is our current belief that Wells Fargo has the capacity to recover from the damage that has occurred to its brand, including its relationships with customers, employees and regulators. As more information is made publicly available, we will of course update our evaluation and communicate to our shareholders.
Mutual fund investing involves risk, and loss of principal is possible.

I've waffled about reducing PRBLX for general portfolio allocations this year but not pulled the trigger yet.
This situation inclines me to do that just on principle since WFC is their #1 position, at least until this thing blows over -- granted, a 5% allocation won't move the needle much on the fund's performance, but still. I like the rest of the fund's holdings/positioning, so not doing anything out of haste, obviously. I thought PRBLX and PRWCX would be a nice combination, but maybe I'll just fold some/all of PRBLX into PRWCX and call it a day. *shrug*

The more I read about the history and etiology of the WF churning,
http://blogs.wsj.com/moneybeat/2016/09/16/from-gr-eight-to-gaming-a-short-history-of-wells-fargo-and-cross-selling/
the more I am thinking I am going to bail completely out of PRBLX, 100%. I expect such a fund, that makes such whoop over its DD in the SR space, to at least read the financial press and raise a fuss as warranted. Must think about this and sleep on it. Jeez louise.

Isn't WFC on of Warren Buffet's largest holdings? I haven't seen any comments about Warren.

This was a rather strange sentence:
"Buying Scottrade could enable TD Ameritrade to reduce costs by eliminating redundant back-office systems, while bringing in new customers, he said."
The simplest interpretation is that what was meant was that the combined entity could save costs by settling on one of the legacy systems and tossing the other. But that wouldn't be eliminating redundant systems at TDAmeritrade, which is how the quote literally reads.
Another possibility, while similar, would have TDAmeritrade elimintating its own redundancy. I don't know how fully ThinkOrSwim has been integrated into TDAmeritrade, but TDA could eliminate that redundancy by tossing its system and taking Scottrade's.
Whatever they do (assuming this acquisition happens), watch out for glitches. Barron's wrote in 2011 about TDA's 2009 acquisition of ThinkOrSwim in Hiccups in TD's Latest Acquisition: "We've covered quite a few consolidations among online brokerages. Some went extremely well, some were disasters. "
http://www.barrons.com/articles/SB50001424052702303545104576524570860463438
Not to beat a dead horse, but one of the most notorious integrations of financial institutions was Wells Fargo's acquisition of First Interstate (can't WF do anything right?):
"In its haste to eliminate redundancies in the two organizations' branch networks, back-office systems and staffing, Wells Fargo had touched off a chain reaction of operational glitches and customer-service embarrassments. These caused cost overruns, serious damage to the bank's historically strong reputation and brand name and, worst of all, market share declines, which are very difficult to reverse."
http://www.institutionalinvestor.com/article.aspx?articleID=1027771

I've waffled about reducing PRBLX for general portfolio allocations this year but not pulled the trigger yet.
This situation inclines me to do that just on principle since WFC is their #1 position, at least until this thing blows over -- granted, a 5% allocation won't move the needle much on the fund's performance, but still. I like the rest of the fund's holdings/positioning, so not doing anything out of haste, obviously. I thought PRBLX and PRWCX would be a nice combination, but maybe I'll just fold some/all of PRBLX into PRWCX and call it a day. *shrug*

The more I read about the history and etiology of the WF churning,
http://blogs.wsj.com/moneybeat/2016/09/16/from-gr-eight-to-gaming-a-short-history-of-wells-fargo-and-cross-selling/
the more I am thinking I am going to bail completely out of PRBLX, 100%. I expect such a fund, that makes such whoop over its DD in the SR space, to at least read the financial press and raise a fuss as warranted. Must think about this and sleep on it. Jeez louise.

The more I read about the history and etiology of the WF churning,
http://blogs.wsj.com/moneybeat/2016/09/16/from-gr-eight-to-gaming-a-short-history-of-wells-fargo-and-cross-selling/
the more I am thinking I am going to bail completely out of PRBLX, 100%. I expect such a fund, that makes such whoop over its DD in the SR space, to at least read the financial press and raise a fuss as warranted. Must think about this and sleep on it. Jeez louise.

https://www.sec.gov/Archives/edgar/data/1376720/000139834416018968/fp0021776_497.htm
497 1 fp0021776_497.htm
STEWART CAPITAL MID CAP FUND
(a series of Stewart Capital Mutual Funds)
Supplement dated September 27, 2016 to
the Prospectus and Statement of Additional Information dated May 1, 2016
The Board of Trustees of Stewart Capital Mutual Funds has concluded that it is in the best interests of Stewart Capital Mid Cap Fund (the “Fund”) and the Fund’s shareholders that the Fund cease operations. The Board has determined to close the Fund and redeem all outstanding shares on or before December 31, 2016. You will be notified in writing of the date selected (the “Redemption Date”).
Effective immediately, the Fund will not accept any new investments and will no longer pursue its stated investment objective. The Fund will liquidate its portfolio and will invest in cash equivalents such as money market funds until all shares have been redeemed. Any required distributions of income and capital gains will be distributed as soon as practicable to shareholders and reinvested in additional shares, unless you have previously requested payment in cash. Shares of the Fund are otherwise not available for purchase.
Prior to or on the Redemption Date, you may redeem your shares, including reinvested distributions, in accordance with the “How to Redeem Fund Shares” section in the Prospectus. Unless your investment in the Fund is through a tax-deferred retirement account, a redemption is subject to tax on any taxable gains. Please refer to the “Dividends, Distributions and Taxes” section in the Prospectus for general information. You may wish to consult your tax advisor about your particular situation.
ANY SHAREHOLDERS WHO HAVE NOT REDEEMED THEIR SHARES OF THE FUND PRIOR TO THE REDEMPTION DATE WILL HAVE THEIR SHARES AUTOMATICALLY REDEEMED AS OF THE REDEMPTION DATE AND PROCEEDS WILL BE SENT TO THE ADDRESS OF RECORD. If you have questions or need assistance, please contact your financial advisor directly or the Fund at (877) 420-4440.
This Supplement and the existing Prospectus dated May 1, 2016, provide relevant information for all shareholders and should be retained for future reference. Both the Prospectus and the Statement of Additional Information dated May 1, 2016, have been filed with the Securities and Exchange Commission, are incorporated by reference and can be obtained without charge by visiting www.stewartcap.com or calling the Fund at (877) 420-4440.

FYI: Municipal bond funds have been on a tear, witnessing 51 consecutive weeks of net inflows as of the third week in September (the second-longest run since Lipper began tracking weekly flows in 1992). With equities hitting new highs and related dividend yields on the decline, nervous investors — many of whom may believe the recent equity rally has gotten a little long in the tooth — have been flocking to the relative safety and high tax-equivalent yields provided lately by municipal debt.
The question is, will the rally in the asset class continue, or are its winning ways nearing an end?
Regards,
Ted
http://lipperalpha.financial.thomsonreuters.com/2016/09/is-it-too-late-to-get-on-the-municipal-bandwagon/?elq=69da1c233003412d853fc08ad6c3f126&elqCampaignId=166&elqTrackId=AA3443C01D888AA41AF69EC70CDC4DFB&elqaid=2024&elqat=1&utm_campaign=Newsletter_LipperAlphaInsight_FundInsightsWeeklyUpdate&utm_content=Newsletter_FundsWeekly_September27&utm_medium=email&utm_source=Eloqua

Hi Mark,
A lot of folks have been asking the same question: Given their documented performance successes, why not more females in the financial industry?
Many studies have addressed this issue, and some easy answers have been proposed. Some elements of those answers can be found in the Morningstar paper that I referenced. Here is a Link to yet another article proposing a simple answer:
https://www.bloomberg.com/view/articles/2016-02-24/why-don-t-more-women-hold-top-jobs-in-finance
Basically, women choose other fields. Their educational achievements and other glittering attributes surely qualify them. Biases quickly give ground to performance in the financial world. So the quick answer is that it is a simple matter of choice. Women choose other occupations. More power to them and the freedom of choice.
Best Wshes.

The paper does not express concepts clearly, giving the writers the benefit of the doubt that there are well-defined underlying concepts.
For example, is human capital "the net present value of his or her future earnings" (p. 6, pdf p.8)? That's how I would have defined it.
But in the spreadsheet (Figure 12, p. 17, pdf p. 19), human capital is shown to be the present value of future savings. Put a savings rate of 0% into column D, and your human capital comes out as 0. So I guess if you're not going to save anything, you might as well not work, even if you could bring in a half million bucks a year, as in the spreadsheet example?
Getting back to bee's question about reading the chart. First, remember that it is illustrative. The only thing it's designed to show is that as you get older, your human capital declines (as you, well, decline). Consequently, even if your financial assets don't grow, they grow as a percentage of your total. That's all you can read into this chart.
Second, the value of human capital (as muddled through above) is not your annual salary, but your lifetime future earnings reduced to present value. Take your hypothetical person earning $25K at age 25, with salary expected to grow to $100K at age 60. Suppose that this is the last year he plans to work.
At age 25, the human capital (using 3% discount rate) is worth somewhere around $1.2M. (With 0% discount, you'd get a bit over $2M.) At age 60, the human capital is worth around $100K (one final year's earnings). The youngster has a lot more, not less, human capital than the senior about to retire.
I agree with the paper's idea of reducing future income (e.g. future wages) to NPV and increasing equity allocation accordingly. Beyond that, I'd look closely at every assumption and calculation (and figure label, e.g. there are two Figure 10s) in the paper.
I would apply the same idea to Social Security - another income stream that one can reduce to present value and use to increase equity allocations.

Hi Bee,
I likely am greatly overconfident in my contribution here since I'm running naked now. I did not and do not intend to read the referenced article.
Just as DanHardy implies, the Human Capital chart that you culled from the article is just too, too simplistic. Perhaps it is representative as a gross average, but there must be a host of significant exceptions. So many exceptions that the curve itself is a distortion of reality.
For example, as I aged, I collected human capital through study and experience without really increasing my wealth. Life is not a smooth function of time. Successes and failures happen abruptly. Even represented as a percentage, financial assets and human capital are not necessarily a well behaved trade off. Learning benefits often exceed financial rewards. Life is a very non-linear, uncertain process.
I don't plan to research any such perceived relationship. Life is too short.
Best Wishes.

Why stop at human capital? Why not include:
Legal capital
Social capital
Infrastructure capital
Environmental capital
Health care capital
Educational capital
Nutritional capital
Financial Markets & systems capital

Check out this article:

Thanks for the article. If I am reading this chart correctly.

The chart illustrates that a 25 year old has 9x as much human capital as financial assets. A 40 year old has an equal amount of human capital as financial assets and at 60 year old should have financial assets equal about 9X their human capital. This chart seems like a pretty good way to gauge where a worker needs to be in the process of using human capital to accumulate financial assets which I assume is the intent of this chart.
I'll assume we're equating human capital (income producing activities moment by moment) to accumulated financial wealth.
As a simple example, if human capital at 25 years old is say, "$50K", then by 40 years old financial assets should equal "$50K". A 25 year old has 15 years to save some of his/her human capital each year to reach this goal at age 40. This amounts to investing about $2100 / yr with an average return of 4%. Seems very achievable.
If at age 60 your human capital is say "$100K", your financial assets should equal "$900K". A 40 year old has 20 years to invest some of his/her human capital each year to reach this goal at age 60. This would amount to investing about $25,500 / yr with an average return of 4%. This seems a bitt more challenging especially when things like college tuition, weddings, and elderly parents (or unemployed kids) are siphoning off some of your human capital.

@MSF, Agreed BlackRock still has a long way to go, but is somewhat ahead of the curve relative to Vanguard in acknowledging that climate change is a material financial risk. This is why of the three big indexers I say State Street is now the best choice for both the environmentally conscious and the cost conscious. For those who are primarily concerned about ESG factors, smaller boutique shops like Pax World and Parnassus are light years ahead of any of these big firms. Perhaps Deutsche Bank's funds might represent an interesting compromise between concern for ESG and cost.

Hi Guys,
What a disaster! The chart tells a story of cumulative failure. It is an outright disgrace.
The failure that I perceive is not a national failure. It is the failure of the individual and/or the individual family unit. The USA is a prosperous nation with almost unlimited potential wealth for its citizens. Yet the wealth depicted in the accompanying chart is truly dismal for individual folks.
The opportunities exist, but our financial discipline fails us as individuals. We want and demand the storybook good life before we can afford it. Delaying gratification would go a long way to resolving this problem. The small numbers shown in the chart as a function of age demonstrate the issue. The problem would quickly desolve if we just practiced the saving discipline that many of us displayed until roughly the early 1980s. We seemed to toss frugality to the wind in that era and have never recovered from that reckless joyride.
Here is a Link to a nice PBS presentation that highlights some of the significant conflicting issues:
http://www.pbs.org/newshour/bb/why-so-many-americans-in-the-middle-class-have-no-savings/
My wife and I never succumbed to the temptation to overspend. We always saved about 15% of our gross income and invested wisely. I suppose that it was a wise decision to study the investment process. We did and we prospered. As a result, it is no exaggeration to claim we are chart busters. Some luck, some skill, but above all a disciplined saving and spending behavior.
I truly feel sorry for the median and below folks that are depicted by the chart. Those folks are in constant danger of being decimated by an unexpected negative happening that a few hundred dollars could easily cure.
Best Wishes.

Great article. Many of the investments in the endowment are quite complex and very difficult for smaller investors to own (assuming they would want them). Minimums tend to be high and there's lots of legal restrictions imposed by IRS or SEC which impede liquidity and add tax liabilities for small investors.
If (for the above reasons) these investments are not in a financial assets manager's basket of offerings to begin with, it's difficult for the manager to add them to a target date fund.
Article suggests that a target fund dated 30 years in the future is comperable to a college endowment in investment horizon. I'm not sure that's true. However, assuming it is ... what percentage of small investors in that age group (say 20-35 years of age) actually elect to invest through target date funds? Is there a sizable market there to make such a diversified offering profitable for the financial services provider?
---
More thoughts after sleeping on this one: A big difference (which I think the M* article largely ignores) is that humans age - and that this life-long transition must be taken into account over one's ever changing investment horizon. That's where target date glide-slopes come into play. Most rational advisors wouldn't allocate an individual's money as aggressively at age 60 as the would at age 30-40. However, with a university endowment there would seem to be no need for such a glide-slope. Assuming the university continues to grow and prosper, it's endowment investment horizon should remain constant - allowing an aggressive broadly diversified approach for many decades - even centuries. Do I have it right? Or am I missing something in highlighting this difference?

FYI: Burton Malkiel has been saying the same thing about investing for more than 40 years. What’s new is that a big chunk of the financial industry now admits he was right all along.
In 1973, Malkiel, a Princeton professor, published the first version of his investment guide, A Random Walk Down Wall Street. He wrote that “a blindfolded monkey throwing darts at the stock listings could select a portfolio that would do just as well as one selected by the experts.” Since most investors can’t beat the market average over time, he argued, they’d be better off in some kind of low-fee fund that simply held all of the stocks on a widely followed index. Problem was, no such retail fund existed.
Regards,
Ted
http://www.bloomberg.com/news/articles/2016-09-22/the-professor-who-was-right-about-index-funds-all-along

FYI: The importance of actively managed mutual funds in the financial sector has led to substantial research focused on their performance. The overwhelming evidence is that it’s very difficult, if not impossible, to identify ahead of time the shrinking percentage of active managers who will outperform in the future. Among the reasons for the difficult nature of this task is that so few managers succeed, and that it’s difficult to separate skill from luck.
Regards,
Ted
http://mutualfunds.com/expert-analysis/do-upside-downside-ratios-predict-mutual-fund-performance/

FYI: As markets have grown steadily more efficient in recent decades, it has become more difficult – and expensive – for fund managers to deliver excess returns relative to benchmarks, or “alpha”.
Even though investment fund flows into passive strategies have accelerated steadily in recent years, active strategies still account for fully 70% of the $15 trillion in U.S. mutual funds. But active and passive are not the only choices. We are also seeing a booming trade in “smart beta” – an imprecisely defined cluster of rules-based strategies that avoid traditional cap-weighted index construction and seek profits amid market factors and inefficiencies
Regards,
Ted
http://lipperalpha.financial.thomsonreuters.com/2016/09/active-passive-and-smart-beta-whos-winning/?elq=6a3fe31c696445ed923814b3e87dbf10&elqCampaignId=166&elqTrackId=CAAB29B325AC713511E713F32E02F308&elqaid=1815&elqat=1&utm_campaign=Newsletter_LipperAlphaInsight_FundInsightsWeeklyUpdate&utm_content=Newsletter_FundsWeekly_September20&utm_medium=email&utm_source=Eloqua

FYI: Exchange officials on Monday morning busted more than 1,000 trades tied to hundreds of thousands of shares of the $148 million Guggenheim S&P Equal Weight Financial ETF (RYF) after ruling execution prices were “clearly erroneous.” Many other unusual-looking trades were allowed to stand.
Regards,
Ted
http://blogs.barrons.com/focusonfunds/2016/09/19/hundreds-of-thousands-of-trades-were-busted-in-a-financial-etf-this-morning/tab/print/

@PressmUP
The prospectus link covers Seafarer, GP, Emerald, Aspen Partners and other mutual funds. The prospectus is all-encompassing of the funds issued by Financial Investors Trust. GP is down the page.

Derf, I think so. Financial advisor told me in person 3 months ago and msf's chart shows 3% also.