Parnassus Mid Cap Growth Fund's Q2 2025 Performance and CoStar Group Analysis
Parnassus Investments recently released its "Parnassus Mid Cap Growth Fund" second quarter 2025 investor letter. The fund reported a return of 13.29% (net of fees), underperforming the Russell Midcap Growth Index which returned 18.20%. The letter discusses factors affecting performance and highlights key holdings like CoStar Group, Inc. (NASDAQ:CSGP).
Fund Performance Overview
The Parnassus Mid Cap Growth Fund's second-quarter performance was impacted by stock selection in the Industrials and Information Technology sectors. However, holdings in the Financials sector contributed positively to the fund's overall returns. Investors are encouraged to review the fund’s top five holdings for further insight into its investment strategy.
CoStar Group, Inc. (NASDAQ:CSGP) Spotlight
The investor letter specifically mentions CoStar Group, Inc. (NASDAQ:CSGP), a provider of information, analytics, and online marketplace services for commercial and residential property markets. While CoStar Group's one-month return was -6.95%, its shares have gained 12.47% over the past 52 weeks. On September 24, 2025, CoStar Group's stock closed at $84.05 per share, with a market capitalization of $35.608 billion.
Parnassus Investments' Commentary on CoStar Group
Parnassus Mid Cap Growth Fund offered the following insights regarding CoStar Group, Inc. (NASDAQ:CSGP) in its second-quarter 2025 investor letter:
"CoStar Group, Inc. (NASDAQ:CSGP), a leading provider of information, analytics and online marketplaces for the real estate industry. As management refocuses on its core businesses, we expect CoStar’s return on capital to improve dramatically, and we believe the stock will follow suit. We reinitiated a position in CoStar, whose proprietary information and analytics platform has durable competitive advantages in the commercial real estate industry. We believe the range of outcomes is favorable as its core business compounds earnings at a double-digit clip and the profitability of its home-buying marketplace Homes.com improves."
Hedge Fund Interest and Alternative Investment Opportunities
Interestingly, CoStar Group, Inc. (NASDAQ:CSGP) is not among the 30 Most Popular Stocks Among Hedge Funds. However, the number of hedge fund portfolios holding CoStar Group, Inc. (NASDAQ:CSGP) increased from 51 to 59 during the second quarter. While recognizing CoStar Group's potential, the report suggests that certain AI stocks may offer greater upside potential with less downside risk, particularly those benefiting from onshoring trends and potential tariffs.
