485APOS

Registration Nos. 002-93131
811-04044

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_________________

FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933	|X|
Pre-Effective Amendment No.	[_]
Post-Effective Amendment No. 24	|X|
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940	|X|

Amendment No. 26 |X|
(Check appropriate box or boxes.)

PARNASSUS FUNDS
(formerly know as THE PARNASSUS FUND)
(Exact Name of Registrant as Specified in Charter)

One Market
Steuart Tower - Suite #1600
San Francisco, California	94105
(Address of Principal Executive Offices)	(Zip Code)

(415) 778-0200
(Registrant's Telephone Number, including Area Code)

Jerome L. Dodson	Copy to:
Parnassus Investments	Richard L. Teigen
One Market	Foley & Lardner LLP
Steuart Tower - Suite #1600	777 East Wisconsin Avenue
San Francisco, California 94105	Milwaukee, Wisconsin 53202
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: As soon as practicable after the Registration Statement becomes effective.

It is proposed that this filing become effective (check appropriate box):

[_] immediately upon filing pursuant to paragraph (b)

[_] on (date) pursuant to paragraph (b)

[_] 60 days after filing pursuant to paragraph (a) (1)

|X| on April 29, 2005 pursuant to paragraph (a) (1)

[_] 75 days after filing pursuant to paragraph (a) (2)

[_] on (date)’ pursuant to paragraph (a) (2) of Rule 485

If appropriate, check the following box:

[_] this post-effective amendment designates a new effective date for a previously filed post-effective amendment.

PARNASSUS FUNDS

The Funds that do well by doing good

PROSPECTUS–April 29, 2005

There are four Parnassus Funds: the Parnassus Fund, the Parnassus Mid-Cap Fund, the Parnassus Small-Cap Fund and the Parnassus Workplace Fund (the “Funds”). Parnassus Funds was formerly known as The Parnassus Fund. The Funds are managed by Parnassus Investments (the “Adviser”). Long-term growth of capital is the investment objective of each of the Funds. The Adviser chooses the Funds’ investments using financial as well as social criteria. In general, the Adviser will choose investments that it believes will have a positive social impact.

TABLE OF CONTENTS

Investment Summary	2
Performance Information	4
Fund Expenses	5
The Legend of Mt. Parnassus	6
Investment Objectives and Policies	8
Investment Risks	10
The Adviser	10
Investing with Parnassus	12
Distributions and Taxes	17
Financial Highlights	18
General Information	18
Privacy Policies and Practices	19

Like securities of all mutual funds, these securities have not been approved or disapproved by the Securities and Exchange Commission (SEC), and the SEC has not determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

Investment Summary

Investment Objective and Principal Strategies

The four Parnassus Funds are equity funds (namely, stock funds) whose investment objectives are the long-term growth of capital. The Funds invest mainly in domestic stocks of companies that are financially sound and 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 history, net cash flow and outlook for future earnings. Upon initial investment, stocks must be trading below their intrinsic value as calculated by the Adviser.

The Adviser conducts fundamental research to determine a company’s financial health and its business prospects and also takes into account social factors in making investment decisions. In general, the Funds look 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 Funds will not invest in companies that manufacture alcohol or tobacco products or are involved with gambling. The Funds also screen out weapons contractors and those that generate electricity from nuclear power.

While all four Funds invest in undervalued stocks, the Parnassus Fund requires a greater discount from intrinsic value than the other three Funds. This Fund follows a “contrarian” strategy of seeking to invest in stocks that are currently out of favor with the financial community and are, therefore, deeply undervalued. The Adviser expects that if these undervalued companies are financially strong and have good prospects for the future, they will come back into favor and increase in market value. The Parnassus Fund is an “all cap” fund in that it can invest in companies of any size, from larger, well-established companies to smaller companies with market capitalizations below $1 billion.

The Parnassus Mid-Cap Fund invests primarily in the stock of companies with market capitalizations between $3 billion and $20 billion at the time of initial purchase. These companies must, in the Adviser’s opinion, be undervalued, but they must also have good prospects for long-term growth and also have an identifiable catalyst that could move the stock higher in the succeeding 12 months. These companies must have well established businesses.

The Parnassus Small-Cap Fund invests primarily in the stock of companies with market capitalizations under $3 billion. Like the Parnassus Mid-Cap companies, Parnassus Small-Cap companies must be undervalued, have good prospects for long-term growth and an identifiable catalyst that could move the stock higher in the succeeding 12 months. Small-Cap companies might be less stable and have less established businesses than Mid-Cap companies. Consequently, Small-Cap companies must have the potential for higher growth than Mid-Cap companies to meet the Adviser’s investment criteria.

The Parnassus Workplace Fund invests mainly in companies that the Adviser considers to have a good workplace for its employees. These companies can be of any size, and in the Adviser’s opinion, they should be trading below their intrinsic value.

Principal Risks of Investing in the Funds

Investing in the Funds may result in a loss of money. When you sell your shares, they may be worth more or less than what you paid. The Funds’ share prices change daily based on the value of their holdings. Common stocks represent an ownership interest in a company and occupy the most junior position in a company’s capital structure. Although common stocks have a history of long-term growth in value, their prices fluctuate based on changes in a company’s financial condition and on overall market and economic conditions. Stock markets are volatile, and stock values fluctuate in response to the fortunes of individual companies and in response to general market and economic conditions — both here and abroad. The Funds’ holdings can vary significantly from broad stock-market indices. As a result, the Funds’ performance can deviate from the performance of those indices.

The Adviser may be wrong in its assessment of a company’s value and the stocks the Funds hold may not reach what the Adviser believes are their full values. From time to time, “value” investing falls out of favor with investors. During those periods, the Funds’ relative performance may suffer.

While companies of all sizes are subject to the risk that a negative development may cause a company’s stock price to decline and a company may have difficulty in overcoming the negative development, smaller companies such as those in the Parnassus Small-Cap Fund are generally riskier than larger companies since they don’t have the financial resources or the well established businesses of the larger companies. Generally, the share prices of stocks of smaller capitalization companies are more volatile than those of larger companies. Thus, the Parnassus Small-Cap Fund’s share price may increase or decrease by a greater percentage than the share prices of funds that invest in the stocks of large companies. Also, the returns of stocks of smaller capitalization companies may vary, sometimes significantly, from the returns of the overall market. Smaller capitalization companies tend to perform poorly during times of economic stress. Finally, relative to large company stocks, the stocks of smaller capitalization companies are thinly traded, and purchases and sales may result in higher transaction costs.

For best results, investors should have a long-term perspective and plan to hold their shares for at least three years. (Legally, shareholders may redeem at any time, but the Adviser recommends a minimum three-year holding period.)

Performance Information

The bar chart below provides an indication of the risks of investing in the Parnassus Fund by showing changes in the Fund’s performance from year to year over a ten-year period. The Parnassus Mid-Cap Fund, the Parnassus Small-Cap Fund and the Parnassus Workplace Fund are newly organized and therefore have no performance history as of the date of this prospectus. How the Funds performed in the past (before and after taxes) is not necessarily an indication of how the Funds will perform in the future.

During the ten-year period shown in the bar chart, the highest return for a quarter was 44.6% (quarter ending December 31, 1998), and the lowest return for a quarter was a loss of 25.1% (quarter ending September 30, 2002).

Below is a table comparing the performance of the Parnassus Fund with the S&P 500 Index and the average multi-cap core fund followed by Lipper, Inc. Figures are average annual returns for the one, five and ten-year periods ending December 31, 2004. The table and the bar chart are intended to demonstrate the risk of investing in the Parnassus Fund by showing how the Fund’s average annual total returns, before and after taxes, compare with a stock index and a group of similar mutual funds and also how the Fund’s performance varies from year to year.

Average Annual Total Returns for Parnassus Fund (all periods ending 12/31/04)
	ONE YEAR	FIVE YEARS	TEN YEARS
S&P 500	10.88%	2.29%	12.04%
Lipper Multi-Cap Core Average	11.05%	1.05%	11.63%
The Parnassus Fund
Return before Taxes	3.89%	-0.80%	7.69%
Return after Taxes on Distributions	3.74%	-2.66%	5.67%
Return after Taxes on Distributions and Sale of Fund Shares	2.53%	-1.24%	5.85%

Past performance is no guarantee of future returns. Investment return and principal will fluctuate and an investor’s shares, when redeemed, may be worth more or less than their original cost.

The Lipper Multi-Cap Core Average is the average return of all Multi-Cap Core Funds followed by Lipper (currently 794). Multi-Cap funds invest in companies of all sizes without concentrating on one particular range of market capitalization. Core funds typically have average ratios for price-to-earnings, price-to-book and sales-per-share growth.

The S&P 500 is the Standard & Poor’s 500 Composite Stock Price Index, a widely recognized index of common stock prices. The index reflects no deduction for fees, expenses or taxes. The Lipper Multi-Cap Core Average reflects deductions for fees and expenses, but no deductions for taxes or any sales charges that may apply. The Parnassus Fund return before taxes reflects deductions for fees and expenses. After-tax returns are calculated using the historical highest federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown and after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs). The Fund’s return after taxes on distribution and sale of fund shares may be higher than its returns after taxes on distributions because it may include a tax benefit resulting from a capital loss that would have been incurred. Prior to May 1, 2004, the Parnassus Fund charged a sales load of a maximum of 3.5%, which is not reflected in the total return figures.

Fund Expenses

This table describes the fees and expenses that you may pay if you buy and hold shares of the Funds.

Annual Fund Operating Expenses (deducted from fund assets)
	Parnassus Fund	Parnassus Mid- Cap Fund*	Parnassus Small- Cap Fund*	Parnassus Workplace Fund*
Management Fees	0.65%	0.85%	1.00%	0.85%
Distribution (12b-1) Fees	None	None	None	None
Other Operating Expenses	0.34%	2.49%	2.49%	1.65%
Total Annual Fund Operating Expenses	0.99%	3.34%	3.49%	2.50%
Expense Waivers	None	1.94%	2.09%	1.30%
Net Annual Fund Operating Expenses	0.99%	1.40%	1.40%	1.20%

* Total net expenses for the new funds are based upon maximum contractual expenses. Other operating expenses are based upon estimated expenses for the current fiscal year. Parnassus Investments is contractually obligated until April 30, 2006 to waive fees and/or reimburse expenses that exceed total operating expenses of 1.40%, 1.40% and 1.20% for the Parnassus Mid-Cap Fund, the Parnassus Small-Cap Fund and the Parnassus Workplace Fund, respectively.

The examples in these tables are intended to help you compare the cost of investing in the Funds with the cost of investing in other mutual funds. The examples assume that you invest $10,000 in the Funds 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 Funds’ operating expenses remain the same. The 5% figure is an example that regulations require all mutual funds to use as an illustration. It should not be considered a representation of past or future performance. Actual performance and expenses may be more or less than those shown.

Although your actual costs may be higher or lower, based on the assumptions above, your costs in the Parnassus Fund would be:

One Year	Three Years	Five Years	Ten Years
$ 101	$ 315	$ 547	$1,213

Although your actual costs may be higher or lower, based on the assumptions above, your costs in the Parnassus Mid-Cap Fund, the Parnassus Small-Cap Fund and the Parnassus Workplace Fund would be:

	One Year	Three Years
Parnassus Mid-Cap Fund	$143	$443
Parnassus Small-Cap Fund	$143	$443
Parnassus Workplace Fund	$122	$381

The expenses shown above are the total fees paid throughout the time period—not expenses you pay every year. For example, the figure for ten years is not the annual expense figure, but the total cumulative expenses a shareholder would have paid for the entire ten-year period.

The Legend of Mt. Parnassus

Parnassus is a mountain in central Greece whose twin peaks rise more than 8,000 feet above sea level. A dense forest covers the slopes of Mt. Parnassus, but the summit is rocky and, most of the time, covered with snow. The mountain plays a prominent role in Greek mythology because on its southern slope, overlooking the Gulf of Corinth, lies Delphi, site of the famous oracle.

Originally, the oracle belonged to Gaia, the earth goddess. Later, Mother Earth was worshipped under the name Delphyne, and she controlled the oracle along with her serpent-son, Python, and her priestess—daughters who controlled the rites. Eventually, the Greek god Apollo took over the site, doing away with Python, but keeping the priestesses.

The most “Greek” of the gods, Apollo represented enlightenment and civilization and presided over the establishment of cities. Identified with the development of Greek codes of law, Apollo was also the god of light, a master musician and a skilled archer. Legend has it that Python, an enormous serpent raised in the caves of Mt. Parnassus, controlled the site of Delphi. When Apollo, representing civilization, challenged Python, representing anarchy, there was a heroic struggle, but the god finally killed the dragon by shooting a hundred arrows into its body.

There were many oracles in ancient Greece, but only the one at Delphi achieved a record of reliability. Apollo’s temple at Delphi soon became an enormous storehouse of treasures that were gifts of those who had consulted the oracle.

The oracle communicated through the voice of a priestess who spoke while in a trance. The priests of Delphi, who interpreted the sayings of the priestess, obtained a great deal of knowledge and information from talking to the people who came from all over the Greek world to consult at the shrine of Apollo. Quite often, the oracle went against the prevailing wisdom of the time, and frequently, the proud were humbled and the lowly were justified.

Investment Objectives and Policies

Objective

The investment objective of each of the Funds is to achieve long-term growth of capital. The Funds will attempt to achieve this objective by investing primarily in “equity securities” of companies of various sizes based on the criteria described below. “Equity securities” consist of common stocks or securities that can be converted into common stocks, which include convertible bonds, convertible preferred stock and warrants. There can be no assurance that the Funds will achieve their objectives.

The Parnassus Fund

The Parnassus Fund invests mainly in domestic stocks of any size, from smaller firms to larger, well-established companies. The portfolio manager can change the composition of the portfolio between smaller, medium and larger companies depending on his view of the economic environment and the markets, with the goal of long-term growth of capital. The Parnassus Fund follows a “contrarian” strategy of seeking to invest in stocks that are currently out of favor with the financial community and are, therefore, deeply undervalued. The Adviser expects that if these undervalued companies are financially strong and have good prospects for the future, they will come back into favor and increase in market value.

The Parnassus Mid-Cap Fund

The Parnassus Mid-Cap Fund seeks long-term growth of capital through investing primarily (normally at least 80% of its net assets) in common stocks of companies with market capitalizations between $3 billion and $20 billion at the time of initial purchase. The Adviser looks for companies that have good growth prospects, while also having proven businesses.

The Parnassus Small-Cap Fund

The Parnassus Small-Cap Fund seeks long-term growth of capital through investing primarily (normally at least 80% of its net assets) in common stocks of companies with market capitalizations under $3 billion at the time of initial purchase. Companies with market capitalizations under $3 billion are often developing companies with good growth prospects. Such small-capitalization companies are not followed as closely by large investors as companies with medium or large capitalizations. The Adviser seeks to find smaller companies that have excellent, long-term growth prospects. While smaller capitalization companies can be riskier than larger companies, they can also provide more potential for future growth.

The Parnassus Workplace Fund

The Parnassus Workplace Fund seeks long-term growth of capital through investing primarily (normally at least 80% of its net assets) in common stocks of companies that the Adviser considers to have good workplaces for their employees. The Adviser will make a judgment on which companies have a good workplace based on factors such as respect and fair treatment of employees, good two-way communication, equitable pay and benefits, family-friendly policies and support for voluntarism and charitable contributions in the community. The Adviser will conduct its own research to select companies for inclusion in the Fund, but the Adviser will also rely on outside sources, as the Adviser may deem appropriate from time to time, including, but not limited to, the annual Fortune magazine survey, “The 100 Best Companies to Work For,” and the annual Working Mother magazine survey, “The 100 Best Companies for Working Mothers.” Milton Moskowitz, co-author of the annual Fortune magazine survey and co-originator of the annual Working Mother magazine survey, will be a consultant to the Adviser and assist the portfolio manager in evaluating the workplaces of potential Fund investments. (Fortune magazine and Working Mother magazine are not affiliated with the Funds and have no role in the management of any of the Funds.)

The Adviser will generally select the companies for inclusion in the Parnassus Workplace Fund’s portfolio in late January or early February each year and maintain the same portfolio over the next 12 months unless a company fails to meet the Fund’s financial or social criteria. Until the Parnassus Workplace Fund reaches $10 million in assets, it is the Adviser’s intent to maintain a minimum of 25 companies and a maximum of 50 companies in the Fund’s portfolio. After the Parnassus Workplace Fund reaches $10 million in assets, it is the Adviser’s intent to have a minimum of 50 companies in the Fund’s portfolio and a maximum of 100.

Selection Process

In general, the Adviser uses three basic criteria in identifying equity securities eligible for the Funds’ portfolios:

1) the security is selling at a price below its intrinsic value as calculated by the Adviser;

2) the issuer is financially sound with good prospects for the future; and

3) the company, in the Adviser’s judgment, meets the social criteria described below.

Once a security is purchased, however, the Adviser may continue to hold it even if it is no longer undervalued.

Social Policy

The Adviser looks for certain social policies in the companies in which the Funds invest. These social policies are: (1) treating employees fairly; (2) sound environmental protection policies; (3) a good equal-employment-opportunity program; (4) quality products and services; (5) a record of civic commitment; and (6) ethical business practices. Obviously, no company will be perfect in all categories, but the Adviser makes value judgments in deciding which companies best meet the criteria.

Although the Funds emphasize positive reasons for investing in a company, their operating policies call for excluding companies that manufacture alcohol or tobacco products or are involved with gambling. The Funds also screen out weapons contractors and those that generate electricity from nuclear power.

The social criteria of the Funds limit the availability of investment opportunities. However, the Funds’ Board of Trustees and the Adviser believe that there are sufficient investments available that can meet the Funds’ social criteria and still enable the Funds to provide a competitive rate of return.

Other Policies

Each of the Funds also may invest up to 2% of its assets in community-development loan funds, such as those that provide financing for small business and for low and moderate-income housing. None of the Funds will make loans to a project itself, but rather will invest money in an intermediary community loan fund. Each of the Funds may invest in obligations issued by community loan funds at below-market interest rates if the projects financed have a strong, positive social impact. Generally, there is no secondary market, and thus no liquidity, for these investments. Also, community loan funds do not have the same kind of resources as do large commercial enterprises. In general, each of the Funds seeks to invest in community organizations that have had a successful record in making these kinds of loans and that are deemed creditworthy by the Adviser.

Under normal circumstances, each of the Funds will have virtually all of its assets invested in equity securities. If the Adviser cannot find enough securities that meet its investment criteria, the Funds may invest a substantial portion of their assets in money-market instruments (i.e., “cash” or cash equivalents). The Funds will not be able to achieve their investment objective of long-term capital appreciation to the extent that they invest in money-market instruments since these securities do not appreciate in value.

The statement of additional information (SAI) for the Funds, which is incorporated by reference into this prospectus, contains a description of the Funds’ policies and procedures with respect to the disclosure of their portfolio holdings.

Investment Risks

All investments involve risk and investing in the Funds is no exception. Because the Funds invest primarily in equity securities, there is the risk that individual stocks owned by the Funds could lose value. Also, the equity markets as a whole could go down, resulting in a decline in value of the Funds’ investments. Changes in economic or political conditions, both domestic and international, may result in a decline in value of the Funds’ investments. Investing heavily in money-market instruments limits the Funds’ ability to achieve capital appreciation, but can help preserve the Funds’ assets when the equity markets are unstable.

For risks of investing in community loan funds and money-market instruments, see the caption “Other Policies” above.

The Adviser

Parnassus Investments (the “Adviser”), One Market–Steuart Tower #1600, San Francisco, California 94105, acts as investment adviser to the Fund, subject to the control of the Funds’ Board of Trustees, and as such, supervises and arranges the purchase and sale of securities held in the Funds’ portfolios. The Adviser has been the investment manager of the Funds since 1984 and the Parnassus Income Funds since 1992.

Jerome L. Dodson, 61, is the portfolio manager of the Parnassus Fund and the Parnassus Workplace Fund. He has been the portfolio manager of the Parnassus Fund since its inception in 1984. Mr. Dodson is also the co-portfolio manager of the Parnassus Small-Cap Fund. Mr. Dodson is the President and a Trustee of the Funds, and is also President of Parnassus Investments. From 1975 to 1982, Mr. Dodson served as President and Chief Executive Officer of Continental Savings and Loan Association in San Francisco. From 1982 to 1984, he was President of Working Assets Money Fund. He is a graduate of the University of California at Berkeley and of Harvard University’s Graduate School of Business Administration where he received an MBA. He is also President and a Trustee of Parnassus Income Funds.

Todd Ahlsten is the portfolio manager of the Parnassus Mid-Cap Fund and the co-portfolio manager of the Parnassus Small-Cap Fund. He is also Director of Research at Parnassus Investments where he has worked since 1995. He is Vice President of the Funds, Parnassus Investments and Parnassus Income Funds. Mr. Ahlsten is a graduate of the Haas School of Business at the University of California at Berkeley.

The SAI for the Funds, which is incorporated by reference into this prospectus, provides additional information about the portfolio managers’ compensation, other accounts managed by the portfolio managers and the portfolio managers’ ownership of securities in the Funds.

Each of the Funds, under an Investment Advisory Agreement between the respective Fund and the Adviser, pays the Adviser a fee. The fee is computed and payable at the end of each month. The following annual percentages of the average daily net assets of the Parnassus Fund are used: 1.00% of the first $10 million in assets; 0.75% of the amount above $10 million in assets up to $30 million; 0.70% of the amount above $30 million up to $100 million; 0.65% of the amount above $100 million up to $200 million; and 0.60% of the amount above $200 million. The following annual percentages of the average daily net assets of the Parnassus Mid-Cap Fund are used: 0.85% of the first $100 million in assets; 0.80% of the amount above $100 million in assets up to $200 million; 0.75% of the amount above $200 million up to $500 million and 0.70% of the amount above $500 million. The following annual percentages of the average daily net assets of the Parnassus Small-Cap Fund are used: 1.00% of the first $100 million in assets; 0.90% of the amount above $100 million in assets up to $200 million; 0.85% of the amount above $200 million up to $500 million and 0.80% of the amount above $500 million. The following annual percentages of the average daily net assets of the Parnassus Workplace Fund are used: 0.85% of the first $100 million in assets; 0.80% of the amount above $100 million in assets up to $200 million; 0.75% of the amount above $200 million up to $500 million and 0.70% of the amount above $500 million.

For 2004, the Parnassus Fund paid the Adviser a fee of $2,291,525 or 0.65% of its average daily net assets. The Parnassus Mid-Cap Fund, the Parnassus Small-Cap Fund and the Parnassus Workplace Fund are newly organized and, as of the date of this prospectus, have not paid any fees to the Adviser.

Parnassus Investments has contractually agreed to waive fees and/or reimburse expenses to the extent necessary to limit total operating expenses to 1.40%, 1.40% and 1.20% of net assets for the Parnassus Mid-Cap Fund, the Parnassus Small-Cap Fund and the Parnassus Workplace Fund, respectively. This limitation continues until April 30, 2006.

Investing with Parnassus

How to Purchase Shares

You can open an account directly with the Funds, or you can purchase and sell shares of the Funds through an intermediary, such as a broker-dealer, a financial institution or other service provider. These service providers may charge fees for the services they provide or impose restrictions that may be in addition to, or different from, those applicable to investors purchasing shares directly from the Funds.

Types of Accounts

The Funds offer the following types of accounts:

Individual or Joint Ownership

You can open a regular account that is owned by an individual or by two owners. An initial minimum investment must be at least $2,000.

Custodial Account

You can open a custodial account for a minor. The Funds offer both UGMA (Uniform Gift to Minor’s Act) and UTMA (Uniform Transfer to Minor’s Act) accounts. An initial minimum investment must be at least $500.

Traditional IRA, Roth IRA or SEP IRA Accounts

Through Parnassus Investments, you can open tax-deferred retirement accounts for individuals. An initial investment must be at least $500, and each subsequent investment must be at least $50. For further information regarding plan administration, custodial fees and other details, investors should contact Parnassus Investments.

Trust Account

A legal trust can open an account. The Funds require the front page and signature page of the trust agreement, including title of the trust and names of the trustee(s), with the application. An initial minimum investment must be at least $2,000.

Corporate Account

A partnership or corporation can open an account. An initial minimum investment must be at least $2,000.

Additional investments for all accounts must be at least $50.

Direct Purchase of Shares

You can open an account or purchase additional shares the following ways:

Internet

To open an account online, go to www.parnassus.com and follow the instructions on the website. By accessing your account online, you can purchase shares and have Parnassus debit your bank account.

Mail

To open an account by mail, an investor should complete and mail the application form along with a check payable to the “Parnassus Income Funds.” With additional investments, shareholders should write the name and number of the account on the check. Checks do not need to be certified, but are accepted subject to collection and must be drawn in United States dollars on United States banks. A fee of $15.00 will be assessed if the automatic purchase cannot be made due to insufficient funds, stop payment or for any other reason. The application should be sent to the following address:

Parnassus Investments
One Market–Steuart Tower #1600
San Francisco, CA 94105

Phone

If your account is eligible, you can call the Funds at (800) 999-3505 to make an exchange or purchase additional shares.

Parnassus Automatic Investment Program

After making an initial investment to open an account ($500 minimum), a shareholder may purchase additional shares of the Funds ($50 minimum) via the Parnassus Automatic Investment Program (PAIP). On a monthly or quarterly basis, your money will automatically be transferred from your bank account to your fund account on the day of your choice (3rd or 18th day of the month). You can elect this option by filling out the PAIP section on the new account form. For further information, call the Funds and ask for the free brochure called “Automatic Investing and Dollar-Cost Averaging.”

Parnassus Investments reserves the right to reject any order. If received before 4:00 p.m. Eastern time (1:00 p.m. San Francisco time), investments will be processed at the net asset value calculated on the same business day they are received. If an investment is received after 4:00 p.m. Eastern time, it will be processed on the next business day. A fee of $15.00 will be assessed if a check is returned to the Funds unpaid due to insufficient funds, stop payment or for any other reason.

There is no sales charge for the purchase of shares of the Funds, but investors may be charged a transaction or other fee in connection with purchases or redemptions of shares of the Funds on their behalf by an investment adviser, a brokerage firm or other financial institution.

Purchasing Shares from Broker-Dealers, Financial Institutions and Others

Some broker-dealers may sell shares of the Funds. These broker-dealers may charge investors a fee either at the time of purchase or redemption. The fee, if charged, is retained by the broker-dealer and not remitted to the Funds or the Adviser. Some broker-dealers may purchase and redeem shares on a three-day settlement basis.

The Funds may enter into agreements with broker-dealers, financial institutions or other service providers (“Servicing Agents”) that may include the Funds as an investment alternative in the programs they offer or administer. Servicing agents may:

• Become shareholders of record of the Funds. This means all requests to purchase additional shares and all redemption requests must be sent through the Servicing Agent. This also means that purchases made through Servicing Agents are not subject to the Funds’minimum purchase requirement.

• Use procedures and impose restrictions that may be in addition to, or different from, those applicable to investors purchasing shares directly from the Funds.

• Charge fees to their customers for the services they provide them. Also, the Funds and/or the Adviser may pay fees to Servicing Agents to compensate them for the services they provide their customers.

• Be allowed to purchase shares by telephone with payment to follow the next day. If the telephone purchase is made prior to the close of regular trading on the New York Stock Exchange, it will receive same day pricing.

• Be authorized to accept purchase orders on the Funds’ behalf (and designate other Servicing Agents to accept purchase orders on the Funds’ behalf). If the Funds have entered into an agreement with a Servicing Agent pursuant to which the Servicing Agent (or its designee) has been authorized to accept purchase orders on the Funds’ behalf, then all purchase orders received in good order by the Servicing Agent (or its designee) before 4:00 p.m. Eastern time will receive that day’s net asset value, and all purchase orders received in good order by the Servicing Agent (or its designee) after 4:00 p.m. Eastern time will receive the next day’s net asset value.

If you decide to purchase shares through Servicing Agents, please carefully review the program materials provided to you by the Servicing Agent. When you purchase shares of the Funds through a Servicing Agent, it is the responsibility of the Servicing Agent to place your order with the Funds on a timely basis. If the Servicing Agent does not, or if it does not pay the purchase price to the Funds within the period specified in its agreement with the Funds, it may be held liable for any resulting fees or losses.

How to Redeem Shares

When you redeem your shares, your proceeds are normally made by check and sent via mail. You can pre-designate a bank account to which you would like redemption proceeds electronically deposited within three business days. For a $15 fee, you can have redemption proceeds wired to your account in one business day. Redemption amounts for over $25,000 may be requested only by mail. Your shares will be redeemed at the net asset value (NAV) next determined after receipt by the Funds of your written instructions in proper form. Give your account number and indicate the number of shares or the dollar amount you wish to redeem. All owners of the account must sign the redemption request unless the account application states that only one signature is necessary for redemptions. All redemption checks must be sent to the address of record on the account. The Funds must have a change-of-address on file for 30 days before the Funds redemption or distribution checks to the new address.

The Funds usually require additional documents when shares are registered in the name of a corporation, agent or fiduciary or if you are a surviving joint owner. In the case of a corporation, the Funds usually require a corporate resolution signed by the secretary. In the case of an agent or fiduciary, the Funds usually require an authorizing document. In the case of a surviving joint owner, the Funds usually require a copy of the death certificate. Contact the Funds by phone at (800) 999-3505 if you have any questions about requirements for redeeming your shares.

You can redeem your shares by:

Internet

If your account is eligible, you can redeem your shares by accessing your account online at www.parnassus.com.

Mail

You can mail the Funds your redemption request. Please be sure to include your account number, the amount of your redemption (dollars or shares), and the signatures of all the account holders.

Parnassus Investments
One Market – Steuart Tower #1600
San Francisco, CA 94105

Fax

You can fax the Funds your redemption request to (415) 778-0228. Please be sure to include your account number, the amount of your redemption (dollars or shares), and the signatures of all the account holders.

Phone

For eligible accounts, you can redeem your shares by calling (800) 999-3505. Shareholders who elect to use telephone transfer privileges must so indicate on the account application form. The telephone transfer privilege allows a shareholder to effect exchanges from a fund into an identically registered account in another fund managed by Parnassus Investments. Neither the Funds nor Parnassus Investments will be liable for following instructions communicated by telephone reasonably believed to be genuine; a loss to the shareholder may result due to an unauthorized transaction. The Funds and the transfer agent will employ reasonable procedures to confirm that instructions communicated by telephone are genuine.

Procedures may include one or more of the following: recording all telephone calls requesting telephone exchanges, verifying authorization and requiring some form of personal identification prior to acting upon instructions and sending a statement each time a telephone exchange is made. The Funds and Parnassus Investments may be liable for any losses due to unauthorized or fraudulent instructions only if such reasonable procedures are not followed. Of course, shareholders are not obligated in any way to authorize telephone transfers and may choose to make all exchanges in writing. The telephone exchange privilege may be modified or discontinued by the Funds at any time upon 60 days’ written notice to shareholders.

Systematic Withdraw Program

You can have the Funds automatically redeem, on a periodic basis, a set amount from your account and deposit the proceeds into your bank account.

Redeeming Shares through Servicing Agent

If your shares are held by a Servicing Agent, you must redeem your shares through the Servicing Agent. Contact the Servicing Agent for instructions on how to do so. Servicing Agents may charge you a fee for this service.

If the Funds have entered into an agreement with a Servicing Agent pursuant to which the Servicing Agent (or its designee) has been authorized to accept redemption requests on behalf of the Funds, then all redemption requests received in good order by the Servicing Agent (or its designee) before 4:00 p.m. Eastern time will receive that day’s net asset value, and all redemption requests received in good order by the Servicing Agent (or its designee) after 4:00 p.m. Eastern time will receive the next day’s net asset value.

Other Redemption Information

If the Funds have received payment for the shares you wish to redeem and you have provided the instructions and any other documents needed in correct form, the Funds will promptly send you a check for the proceeds from the sale. Ordinarily, the Funds must send you a check within seven days unless the NYSE is closed for days other than weekends or holidays. However, payment may be delayed for any shares purchased by check for a reasonable time (not to exceed 15 days from the date of such purchase) necessary for the Funds to determine that the purchase check will be honored. The Funds normally send out redemption checks by US mail, but can send a redemption check by overnight delivery for a $15 fee.

Wire

If you wish to have the redemption proceeds sent by wire transfer or by overnight mail, there will be a charge of $15 per transaction. Wiring funds will require a signature guarantee unless wiring instructions were previously filed with the Funds.

Signature Guarantee

Certain types of transactions require a signature guarantee:

• A redemption check sent to an address that is not the address of record or has not been on the Funds’ records for at least 30 days

• Redemption proceeds sent to a bank account that is not the bank account of record

• A redemption check made payable to someone other than the named account owner

• Changing the shareholder of record on an account

A signature guarantee is a way to ensure that a signature is genuine. It protects shareholders and the Funds against fraud. You can typically obtain a signature guarantee from a bank, a credit union, a savings and loan association or a broker-dearer. A notary public cannot provide a signature guarantee.

Redemption of Small Accounts

The Trustees may, in order to reduce the expenses of the Funds, redeem all of the shares of any shareholder whose account is worth less than $500 as a result of a redemption. This will be done at the NAV determined as of the close of business on the business day preceding the sending of such notice of redemption. The Funds will give shareholders whose shares are being redeemed 60 days’ prior written notice in which to purchase sufficient shares to avoid such redemption.

Holds on Redemptions

The Funds may delay a redemption request for shares that were purchased in the past 15 days to allow the Funds to determine if your purchase check cleared.

Online and Telephone Transactions

Depending on the type of account, you may make shareholder transactions online or over the phone. The Funds take steps to confirm your identity to prevent fraud, including confirming your account number and Social Security number. However, the Funds cannot be held liable for executing instructions the Funds reasonably believe to be genuine. If you do not want the ability to conduct transactions online or over the phone, please indicate that on your account application or call the Funds at (800) 999-3505.

Market Timing Policies and Procedures

Frequent purchases and redemptions of shares of the Funds may harm other shareholders by interfering with the efficient management of the Funds’ portfolios, increasing brokerage and administrative costs, and potentially diluting the value of their shares. The Funds’ Board of Trustees has adopted a policy of discouraging frequent purchases and redemption of Fund shares that could disrupt the efficient management of the portfolios. If management of the Funds determines that a shareholder is making rapid trades (defined as a purchase and redemption within five business days) in sufficient volume and with sufficient frequency to disrupt a Fund’s operations, that shareholder will be barred from making future investments in the Funds. The Funds’ Board of Trustees and the Adviser do not encourage frequent trading and will not engage in an agreement with any party to permit frequent trading. The Adviser and the Funds’ Board of Trustees will continue to monitor trading activity and the regulatory environment and may alter the policies at any time without prior notice to shareholders.

The Funds reserve the right to reject any purchase or exchange transaction at any time. In addition, the Adviser reserves the right to impose restrictions on purchases or exchanges at any time on conditions that are more restrictive on disruptive, excessive, or short-term trading than those that are otherwise stated in this prospectus.

Exchange Privilege

The proceeds of a redemption of shares can be used to purchase shares of another of the portfolios of Parnassus Income Funds or of one of the portfolios of Parnassus Funds. There is no limit on the number or dollar amount of exchanges. The Funds reserve the right to modify or eliminate this exchange privilege in the future. The exchange privilege is only available in states where the exchange may be legally made. The exchange of shares is treated as a sale, and an exchanging shareholder may, therefore, realize a taxable gain or loss.

Net Asset Value

The NAV for the Funds will usually be calculated on every day the New York Stock Exchange (NYSE) is open for trading (“business day”) and on any other day there is a sufficient degree of trading in investments held by the Funds to affect the net asset value. The NYSE is closed on national holidays and Good Friday. The NAV of the Funds will usually be calculated as of the close of trading on the NYSE, usually 4:00 p.m. Eastern time. The NAV may not be determined on any day that there are no transactions in shares of the Funds.

The net asset value per share is the value of a Fund’s assets, less its liabilities, divided by the number of outstanding shares of that Fund. In general, the value of the Funds’ portfolio securities is the market value of such securities. However, securities and other assets for which market quotations are not readily available are valued at their fair value as determined in good faith by the Adviser under procedures established by and under the general supervision and responsibility of the Funds’ Board of Trustees. Types of securities that the Funds may hold for which fair value pricing might be required include, but are not limited to: (a) illiquid securities, including “restricted” securities and private placements for which there is no public market; (b) securities of an issuer that has entered into a restructuring; and (c) securities whose trading has been halted or suspended. Valuing securities at fair value involves greater reliance on judgment than securities that have readily available market quotations. The fair value of a security may differ from the last quoted price, and a Fund may not be able to sell a security at the fair value. See the SAI for more details.

Distributions and Taxes

All dividends from net investment income together with distributions of short-term capital gains (collectively, “income dividends”), will be taxable as ordinary income to shareholders (although a portion may be taxed at the lower rate applicable to qualified dividend income) even though paid in additional shares. Any net, long-term capital gains (“capital-gain distributions”) distributed to shareholders are taxable as such. Tax-exempt and tax-deferred shareholders, of course, will not be required to pay taxes on any amount paid to them. Holders of IRAs and other tax-deferred retirement accounts are not required to pay taxes until distribution. (Tax-exempt retirement accounts, of course, never have to pay taxes.)

Income dividends and capital-gain distributions will usually be paid once a year, and they are taxable in the year received. For the convenience of investors, all payments are made in shares of the Funds. Shareholders who prefer to receive payment of income dividends and/or capital-gain distributions in cash should notify the Funds at least five days prior to the payment date. An exchange of the Funds’ shares for shares of another fund will be treated as a sale of the respective Fund’s shares for tax purposes, and any gain on the transaction may be subject to state and federal income tax. Annually, you will receive on IRS Form 1099 the dollar amount and tax status of all distributions you received.

The Funds may be required to impose backup withholding at a rate of 28% from any income dividends and capital-gain distributions. Shareholders can eliminate any backup-withholding requirements by furnishing certification of U.S. taxpayer identification numbers for reporting dividends.

To the extent that income dividends are derived from qualifying dividends paid by domestic corporations whose shares are owned by the Funds, such dividends, in the hands of the Funds’ corporate shareholders, will be eligible for the 70% dividends received deduction. Individuals do not qualify for this deduction — only corporations.

The capital gain distribution is usually made in November of each year and the income dividend in December. If an investor purchases shares just before the distribution date, he or she will be taxed on the distribution even though it’s a return of capital to the investor.

Financial Highlights

This section provides further details about the Parnassus Fund’s financial history. The Parnassus Mid-Cap Fund, the Parnassus Small-Cap Fund and the Parnassus Workplace Fund are newly organized and, as of the date of this prospectus, have no financial performance history. “Total return” shows the percentage that an investor would have earned or lost during a given period, assuming all dividends were reinvested. The financial performance data presented below is a part of 2004 financial statements which are included in the Parnassus Fund’s Annual Report, which is available upon request. The 2004 financial statements were audited by Deloitte & Touche LLP, an independent registered public accounting firm. With respect to the Parnassus Fund, selected data for each share of capital stock outstanding, total return and ratios/supplemental data for each of the five years in the year ended December 31 are as follows:

Parnassus Fund	2004	2003	2002	2001	2000
Net asset value at beginning of year	$ 30.05	$ 25.79	$ 36.99	$ 39.22	$ 50.67
Income (loss) from investment operations:
Net investment income (loss)	0.12	0.02	0.14	0.68	0.07
Net realized and unrealized gain (loss) on securities	1.05	4.32	(10.51)	2.39	0.68
Total income (loss) from investment operations	1.17	4.34	(10.37)	3.07	0.75
Distributions:
Dividends from net investment income	(0.13)	(0.08)	--	(0.56)	(0.08)
Distributions from net realized gain on securities	--	--	(0.83)	(4.74)	(12.12)
Total distributions	(0.13)	(0.08)	(0.83)	(5.30)	(12.20)
Net asset value at end of period	$ 31.09	$ 30.05	$ 25.79	$ 36.99	$ 39.22
Total overall return *	3.89%	16.83%	(28.05%)	7.84%	1.98%
Ratios/supplemental data:
Ratio of gross expenses to average net assets	0.99%	1.03%	1.06%	1.00%	0.92%
Ratio of expenses to average net assets	0.99%	0.99%	1.00%	1.00%	0.92%
Ratio of net investment income (loss) to	0.40%	0.07%	0.45%	1.73%	0.12%
average net assets
Portfolio turnover rate	119.80%	61.33%	142.04%	127.43%	120.58%
Net assets, end of year (000's)	$ 339,893	$ 369,555	$ 303,207	$ 405,536	$ 360,809

Net investment income per share is based on average daily shares outstanding.

*Prior to May 1, 2004, the Parnassus Fund charged a sales load of a maximum of 3.5%, which is not reflected in the total overall return figures.

General Information

Deloitte & Touche LLP, 50 Fremont Street, San Francisco, California 94105, has been selected as the Funds’ independent registered public accountants.

State Street Bank & Trust Company, 801 Pennsylvania Avenue, Kansas City, Missouri 64105, has been selected as the custodian of the Funds’ assets.

Parnassus Investments, One Market–Steuart Tower #1600, San Francisco, California 94105, is the Funds’ transfer agent and accounting agent. Jerome L. Dodson, the Funds’ President, is the majority stockholder of Parnassus Investments.

Privacy Policies and Practices

(not part of the prospectus)

Parnassus is committed to maintaining the confidentiality, integrity and security of personal information entrusted to us by current and potential financial service customers. We have always treated personal information as confidential and want you to be aware of our privacy policies.

We obtain non-public personal information about you from the following sources: Information we receive from you on applications or other forms and information about your transactions with us, our affiliates or others.

We restrict access to non-public personal information about you to those employees who need to know that information to provide products or services to you. Parnassus employees are subject to a strict employment policy regarding confidentiality.

We do not disclose any non-public personal information about our customers or former customers to anyone except as required by law. However, we may provide such information to third parties in the course of servicing your account, such as identity-verification service providers. Relationships with these parties shall be pursuant to a non-disclosure agreement, protecting the release of shareholder information. We may disclose information to non-affiliated parties if compelled by law, such as responding to a subpoena, preventing fraud or complying with an inquiry by a government agency or regulator. Parnassus may use personal information for the purpose of offering or furnishing products and services. Third parties may be used to help prepare notices of these offerings. However, names and addresses are never given or sold to third parties for any outside use.

We maintain physical, electronic and procedural safeguards that comply with federal standards to guard your non-public personal information. Under strict confidence, a backup database of Parnassus customers and accounts is maintained at an outside facility.

Please call us if you have any questions regarding our privacy policy.

Parnassus Funds

One Market–Steuart Tower #1600
San Francisco, California 94105
415-778-0200
800-999-3505
www.parnassus.com

Investment Adviser
Parnassus Investments
One Market–Steuart Tower Suite #1600
San Francisco, California 94105

Legal Counsel
Foley & Lardner LLP
777 E. Wisconsin Avenue
Milwaukee, WI 53202

Independent Registered Public Accounting Firm
Deloitte & Touche LLP
50 Fremont Street
San Francisco, California 94105

Distributor
Parnassus Investments
One Market–Steuart Tower Suite #1600
San Francisco, California 94105

You can obtain additional information about each of the Funds. A statement of additional information (SAI) dated April 29, 2005 has been filed with the SEC and is incorporated in this prospectus by reference (namely, legally forms a part of the prospectus). The Funds also publish an annual, a semiannual and two quarterly reports each year that discuss the Funds’ holdings and how recent market conditions as well as the Funds’ investment strategies affected performance. For a free copy of any of these documents or to ask questions about the Funds, call Parnassus Investments at (800) 999-3505.

The Funds make available the SAI and the annual and semiannual reports, free of charge, on their Internet website (http://www.parnassus.com). The SAI, the Fund’s annual, semiannual and quarterly reports and other related materials are also available on the SEC’s Internet website (http://www.sec.gov). You can also obtain copies of this information upon paying a duplicating fee, by writing the Public Reference Section of the SEC, Washington, D.C. 20549-0102. You can also review and copy information about the Fund, including the SAI, at the SEC’s Public Reference Room in Washington, D.C. or make an electronic request at publicinfo@sec.gov. Call (202) 942-8090 for information on the operation of the SEC’s Public Reference Room. The Investment Company Act of 1940 File Number for Parnassus Funds is 811-4044.

STATEMENT OF ADDITIONAL INFORMATION FOR April 29, 2005   

Parnassus Fund
Parnassus Mid-Cap Fund
Parnassus Small-Cap Fund
Parnassus Workplace Fund

Parnassus Funds
One Market Steuart Tower, Suite 1600
San Francisco, CA 94105
(800) 999-3505

Parnassus Funds (the “Trust”), formerly known as The Parnassus Fund, is a diversified, open-end management investment company, with four portfolios (each a “Fund,” and, collectively, the “Funds”): (1) the Parnassus Fund (the “Parnassus Fund”); (2) the Parnassus Mid-Cap Fund (the “Mid-Cap Fund”); (3) the Parnassus Small-Cap Fund (the “Small-Cap Fund”); and (4) the Parnassus Workplace Fund (the “Workplace Fund”). Parnassus Investments is the Funds’ adviser (the “Adviser”).

This Statement of Additional Information is not a prospectus. It should be read in conjunction with the Funds’ Prospectus dated April 29, 2005. The Mid-Cap Fund, the Small-Cap Fund and the Workplace Fund are newly organized and as of the date of this Statement of Information they have not issued any shares. The Parnassus Fund’s audited financial statements for the fiscal year ended December 31, 2004, are incorporated by reference to the Parnassus Fund’s Annual Report to shareholders dated December 31, 2004. You may obtain a free copy of the Prospectus or the Annual Report by calling the Funds at (800) 999-3505.

TABLE OF CONTENTS

	Page
Investment Objective and Policies	B-2
Management	B-5
Control Persons and Principal Holders of Securities	B-8
Standing Audit Committee	B-9
The Adviser	B-9
Portfolio Managers	B-12
Net Asset Value	B-13
Distributions and Taxes	B-14
General	B-14
Financial Statements	B-16
Annex A	A-1

INVESTMENT OBJECTIVES AND POLICIES

The investment objective of the Funds is to realize long-term growth of capital. The Funds’ principal strategies with respect to the composition of their portfolios are described in the prospectus.

Investment Restrictions

        The Funds have adopted the following restrictions (in addition to those indicated in the prospectus) as fundamental policies which may not be changed without the approval of the holders of a “majority” (as defined in the Investment Company Act of 1940 (the “1940 Act”)) of the applicable Fund’s outstanding shares. A vote of the holders of a “majority” (as so defined) of a Fund’s outstanding shares means a vote of the holders of the lesser of (i) 67% of the shares represented at a meeting at which more than 50% of the outstanding shares are represented or (ii) more than 50% of the outstanding shares.

The Funds may not:

(1) With respect to 75% of a Fund’s total net assets, purchase any security, other than obligations of the U.S. Government, its agencies or instrumentalities, if as a result: (i) more than 5% of a Fund’s total net assets (taken at current value) would then be invested in securities of a single issuer or (ii) a Fund would hold more than 10% of the outstanding voting securities of any one issuer.

(2) Purchase any security, if as a result, any Fund would have 25% or more of its net assets (at current value) invested in a single industry.

(3) Purchase securities on margin (but the Funds may obtain such short-term credits as may be necessary for the clearance of transactions).

(4) Make short sales of securities, purchase on margin or purchase puts, calls, straddles or spreads.

(5) Issue senior securities, borrow money or pledge its assets except that each Fund may borrow from a bank for temporary or emergency purposes in amounts not exceeding 10% (taken at the lower of cost or current value) of its net assets (not including the amount borrowed) and pledge its assets to secure such borrowings. A Fund will not make additional purchases while any borrowings are outstanding.

(6) Buy or sell commodities or commodity contracts including futures contracts or real estate, real-estate limited partnerships or other interests in real estate although it may purchase and sell securities which are secured by real estate and securities of companies which invest or deal in real estate.

(7) Act as underwriter, except to the extent that in connection with the disposition of portfolio securities it may be deemed to be an underwriter under certain federal securities laws.

(8) Participate on a joint (or joint and several) basis in any trading account in securities.

(9) Invest in securities of other registered investment companies, except that each Fund may invest up to 10% of its assets in money-market funds, but no more than 5% of its assets in any one fund and no Fund may own more than 3% of the outstanding voting shares of any one fund. This restriction, however, does not apply to a transaction that is a part of a merger, consolidation or other acquisition.

(10) Invest in interests in oil, gas or other mineral exploration or development programs or in oil, gas or other mineral leases, although it may invest in the common stocks of companies which invest in or sponsor such programs.

B-2

(11) Make loans, except through repurchase agreements; however, the Funds may engage in securities lending and may also acquire debt securities and other obligations consistent with the applicable Fund’s investment objective(s) and its other investment policies and restrictions. Investing in a debt instrument that is convertible into equity or investing in a community loan fund is not considered the making of a loan.

        Further, with respect to the Mid-Cap Fund, the Small-Cap Fund and the Workplace Fund only, in accordance with the requirements of Rule 35d-1 under the Act, it is a fundamental policy of each of the Mid-Cap Fund, the Small-Cap Fund and the Workplace Fund to normally invest at least 80% of its net assets, plus borrowings for investment purposes, in the particular type of investments suggested by its name. The Mid-Cap Fund invests in companies with market capitalizations between $3 billion and $20 billion. The Small-Cap Fund invests in companies with market capitalizations under $3 billion. The Workplace Fund invests mainly in companies that the Adviser considers to have a great workplace for its employees. Thus, these policies may not be changed without the approval of the holders of a “majority” of the applicable Fund’s outstanding shares.

Portfolio Turnover

        For 2004, the portfolio turnover rate for the Parnassus Fund was 119.80% compared to 61.33% in 2003. At the beginning of 2004, the Parnassus Fund had a substantial amount of its assets invested in money-market instruments and subsequently invested a lot of those assets in equity securities, making the portfolio turnover rate higher than the previous year.

Operating Policies

        Each of the Funds has adopted the following operating policies which may be changed by a vote of the majority of the Fund’s Trustees:

(1) The Fund may purchase warrants up to a maximum of 5% of the value of its total net assets.

(2) The Fund may not hold or purchase foreign currency, except as may be necessary in the settlement of foreign securities transactions.

(3) It is the position of the Securities and Exchange Commission (“SEC”) (and an operating although not a fundamental policy of the Fund) that the Fund may not make certain illiquid investments if thereafter more than 15% of the value of its net assets would be so invested. Investments included in this 15% limit are: (i) those which are restricted (namely, those which cannot freely be sold for legal reasons); (ii) fixed time deposits subject to withdrawal penalties (other than overnight deposits); (iii) repurchase agreements having a maturity of more than seven days; and (iv) investments for which market quotations are not readily available. However, the 15% limit does not include obligations which are payable at principal amount plus accrued interest within seven days after purchase or commercial paper issued under section 4 (2) of the Securities Act of 1933, as amended (“1933 Act”), or securities eligible for resale under Rule 144A of the 1933 Act that have been determined to be liquid pursuant to procedures adopted by the Board of Trustees.

Foreign Securities

As an operating policy, the Equity Income Fund may purchase foreign securities and American Depositary Receipts of foreign companies up to a maximum of 15% of the value of its total net assets, but the Fixed-Income and California Tax-Exempt Funds may not purchase foreign securities. Such investments increase a portfolio’s diversification and may enhance return, but they also involve some special risks such as exposure to potentially adverse local political and economic developments; nationalization and exchange controls; potentially lower liquidity and higher volatility; possible problems arising from accounting, disclosure, settlement, and regulatory practices that differ from U.S. standards; and the chance that fluctuations in foreign exchange rates will decrease the investment’s value (favorable change can increase its value).

B-3

Limited Partnerships

        Each of the Funds may also invest up to 5% of its total net assets in venture-capital limited partnerships. These investments will not be liquid and will likely involve a higher degree of risk than most portfolio securities.

Repurchase Agreements

        Each of the Funds may purchase the following securities subject to repurchase agreements: certificates of deposit, certain bankers’ acceptances and securities which are direct obligations of, or that are fully guaranteed as to principal, by the United States or any agency or instrumentality of the United States. A repurchase transaction occurs when at the time a Fund purchases a security, the Fund also resells it to the vendor (normally a commercial bank or a broker-dealer) and must deliver the security (and/or securities substituted for them under the repurchase agreement) to the vendor on an agreed-upon date in the future. Such securities, including any securities so substituted, are referred to as the “Resold Securities.” The Adviser will consider the creditworthiness of any vendor of repurchase agreements and continuously monitor the collateral so that it never falls below the resale price. The resale price is in excess of the purchase price in that it reflects an agreed-upon market interest rate effective for the period of time during which a Fund’s money is invested in the Resold Securities. The majority of these transactions run from day to day and the delivery pursuant to the resale typically will occur within one to five days of the purchase. A Fund is subject to the risk that the vendor may not pay the agreed-upon sum upon the delivery date.

        If there is a default, the Resold Securities constitute collateral for the repurchase obligation and will be promptly sold by the Fund in question. However, there may be delays and costs in establishing a Fund’s rights to the collateral and the value of the collateral may decline. A Fund will bear the risk of loss in the event that the other party to the transaction defaults on its obligation and the Fund is delayed or prevented from exercising its right to dispose of the underlying securities, including the risk of a possible decline in the value of the underlying securities during the period in which the Fund seeks to assert its rights.

        Repurchase agreements can be considered as loans “collateralized” by the Resold Securities (such agreements being defined as “loans” in the 1940 Act). The return on such “collateral” may be more or less than that from the repurchase agreement. The Resold Securities will be marked to market every business day so that the value of the “collateral” is at least equal to the value of the loan including the accrued interest earned thereon. All Resold Securities will be held by the Funds’ custodian either directly or through a securities depository.

Lending Portfolio Securities

        To generate additional income, each of the Funds may lend its portfolio securities to broker-dealers, banks or other institutional borrowers of securities. A Fund must receive 102% collateral in the form of cash or U.S. Government securities. This collateral will be valued daily. Should the market value of the loaned securities increase, the borrower must furnish additional collateral to the Fund in question. During the time portfolio securities are on loan, the borrower pays the Funds any dividends or interest received on such securities. Although the borrower must pledge collateral in the form of cash or U.S. Government securities, a Fund may invest the collateral in U.S. government securities or short-term, high-quality money-market instruments with maturities of 397 days or less. The Funds’ social investing criteria may not be applied to investments made with the collateral. While a Fund does not have the right to vote securities that are on loan, each of the Funds intends to terminate the loan and regain the right to vote if that is considered important with respect to the investment. The borrower can repay the loan at any time and a Fund can demand repayment at any time.

Disclosure of Portfolio Holdings

        The Funds maintain written policies and procedures regarding the disclosure of their portfolios holdings to ensure that disclosure of information about portfolio securities is in the best interests of the Funds’ shareholders. The Funds may not receive any compensation for providing this information. The Funds’ Chief Compliance Officer will report periodically to the Board of Trustees with respect to compliance with the Funds’ portfolio holdings disclosure procedures.

B-4

Service Providers

        The Funds have entered into arrangements with certain third-party service providers for services that require these groups to have access to the Funds’ portfolios on a daily basis. As a result, such third-party service providers may receive portfolio holdings information prior to and more frequently than the public disclosure of such information. In each case, the Funds’ Board of Trustees has determined that such advanced disclosure is supported by a legitimate business purpose and that the recipient is subject to a duty to keep the information confidential. These third-party service providers include the Funds’ independent registered public accounting firm and custodian.

Rating and Ranking Organizations

        The Funds’ Board of Trustees has determined that the Funds may provide their entire portfolios to the following rating and ranking organizations:

Morningstar, Inc.
Lipper, Inc.
Standard & Poor’s Ratings Group
Bloomberg L.P.

        The Funds’ management has determined that these organizations provide investors with a valuable service and, therefore, are willing to provide them with portfolio information. The Funds may not pay these organizations or receive any compensation from them for providing this information. This information is not provided on the condition that it be kept confidential or that such organizations not trade on such information.

Website Disclosure

        The Funds publish their top ten positions at the end of each month on its website (www.parnassus.com). This information is updated approximately 5 to 10 business days following the end of each month. It is available to anyone that visits the website.

MANAGEMENT

        The Trust’s Board of Trustees decides matters of general policy and supervises the activities of the Adviser and the Distributor. All Trustees serve indefinite terms and they all oversee seven portfolios (funds) in the Parnassus complex, which is comprised of the Funds and the portfolios of Parnassus Income Funds (formerly known as The Parnassus Income Trust). The Trust’s Officers conduct and supervise the daily business operations of the Funds. The Trustees and Officers of the Trust are as follows:

B-5

INDEPENDENT TRUSTEES

Name, Address and Age	Position with Funds	Term of Office and Length of Time Served	Principal Occupation During Past Five Years	Current Directorships Outside the Parnassus Complex	Number of Portfolios in Parnassus Complex Overseen by Trustee
Herbert A. Houston, 61	Trustee	Indefinite	Health-care consultant	None	7
Parnassus Investments			and owner of several
One Market		Since 1992 for	small businesses; Chief
Steuart Tower #1600		Parnassus	Executive Officer of the
San Francisco, CA 94105		Income Funds	Haight Ashbury Free
			Clinics, Inc. 1987-1998.
		Since 1998 for
		the Trust
Jeanie S. Joe, 57	Trustee	Indefinite	President of Geo/Resource	None	7
Parnassus Investments			Consultants, a
One Market		Since October	geotechnical and
Steuart Tower #1600		2004	environmental consulting
San Francisco, CA 94105			firm, since 1995;
			director and secretary of
			Telecommunication
			Consumer Protection Fund
			Corporation.
Donald V. Potter, 59	Trustee	Indefinite	President and owner of	None	7
Parnassus Investments			Windermere Associates, a
One Market		Since 2002	consulting firm
Steuart Tower #1600			specializing in business
San Francisco, CA 94105			strategy, since 1984.

“Independent” Trustees are Trustees who are not deemed to be “interested persons” of the Funds as defined in the 1940 Act.

B-6

INTERESTED TRUSTEE

Name, Address and Age	Position with Funds	Term of Office and Length of Time Served	Principal Occupation During Past Five Years	Current Directorships Outside the Parnassus Complex	Number of Portfolios in Parnassus Complex Overseen by Trustee
Jerome L. Dodson, 61 *	President and	Indefinite	President and Trustee of	None	7
Parnassus Investments	Trustee		the Trust and Parnassus
One Market		Since 1992	Income Funds since their
Steuart Tower #1600		for Parnassus	inceptions; President and
San Francisco, CA 94105		Income Funds	a Trustee of Parnassus
			Investments since June of
		Since 1984	1984.
		for the Trust

OFFICERS

Name, Address and Age	Positions with Funds	Term of Office and Length of Time Served	Principal Occupation During Past Five Years
Todd C. Ahlsten, 33	Vice President	Indefinite	Financial Analyst and Director of Research at Parnassus
One Market			Investments since 1995.
Steuart Tower #1600		Since 2001
San Francisco, CA 94105
Stephen J. Dodson, 27 *	Chief	Indefinite	Financial Analyst with Morgan Stanley 1999-2001. Associate
One Market	Compliance		with Advent International, a venture capital firm
Steuart Tower #1600	Officer and	Since 2002	2001-2002. Executive Vice President and Chief Operating
San Francisco, CA 94105	Assistant		Officer with Parnassus Investments 2002-Present.
	Secretary
Debra A. Early, 40	Vice President	Indefinite	Vice President, Chief Financial Officer and Treasurer of
One Market	and Treasurer		Parnassus Investments since 2004. Formerly, Senior Manager
Steuart Tower #1600		Since	at PricewaterhouseCoopers LLP October 1992 to
San Francisco, CA 94105		December 2004	November 2004.
Richard D. Silberman, 67	Secretary	Indefinite	Attorney specializing in business law. Private practice.
1431 Grant Street
Berkeley, CA 94703		Since 1986

* Jerome L. Dodson is an “interested” Trustee as defined in the 1940 Act because of his ownership in Parnassus Investments, the Adviser. Jerome L. Dodson is the father of Stephen J. Dodson, the Chief Compliance Officer and Assistant Secretary of the Funds.

The Trust pays each of its Independent Trustees annual fees in addition to reimbursement for certain out-of-pocket expenses. The Trust has no retirement or pension plan for its Trustees.

The following table sets forth the aggregate compensation paid by the Trust and the Board of any other investment companies managed by Parnassus Investments (the Fund Complex) for the calendar year ended December 31, 2004.

B-7

Compensation Table

Name and Position(1)	Aggregate Compensation From Fund	Pension or Retirement Benefits Accrued as Part of Fund Expenses	Total Compensation from Fund and Fund Complex Paid to Trustees
Herbert A. Houston	$ 6,151	None	$14,000
Donald V. Potter	$ 6,151	None	$14,000
Jeanie S. Joe(2)	$ 6,151	None	$14,000

⁽¹⁾ Trustees who are interested do not receive compensation from the Trust.

⁽²⁾ Includes consulting compensation paid to Ms. Joe prior to becoming a Trustee.

The Trust pays each of its Trustees who is not affiliated with the Adviser or the Distributor annual fees of $8,000 in addition to reimbursement for certain out-of-pocket expenses. The Funds and the portfolios of Parnassus Income Funds comprise a “family of investment companies.” The Mid-Cap Fund, the Small-Cap Fund and the Workplace Fund are newly organized and as of the date of this Statement of Information they have issued no shares. The following table sets forth the dollar range of shares of the Parnassus Fund and the portfolios of Parnassus Income Funds beneficially owned by each Trustee as of December 31, 2004, which is also the valuation date:

Name	Parnassus Fund	Equity Income	Fixed-Income	California Tax-Exempt	Total in Family of Investment Companies
Interested Trustee
J. Dodson	Over $100,000	Over $100,000	$1-$10,000	$1-$10,000	Over $100,000
Independent Trustees
H. Houston	$10,001-$50,000	$10,001-$50,000	None	None	$10,001-$50,000
J. Joe	$10,001-$50,000	None	None	None	$10,001-$50,000
D. Potter	$10,001-$50,000	None	None	None	$10,001-$50,000

Code of Ethics

        Both the Trust and Parnassus Income Funds have a code of ethics under rule 17j-1 of the Investment Company Act. Parnassus Investments is also subject to this code. The code allows personnel subject to it to invest in securities with preclearance subject to certain restrictions. They may also invest in securities held by the Funds or the portfolios of Parnassus Income Funds, but they cannot trade in those securities during the blackout period, which is five days before and five days after any of the Funds or the portfolios of Parnassus Income Funds trades in that security or considers a trade in that security.

Proxy Voting

        Proxy voting policies and procedures for the Funds and the Parnassus Equity Income Fund, a portfolio of Parnassus Income Funds are included as Annex A attached to this Statement of Additional Information. The actual voting records for the Funds and the Parnassus Equity Income Fund are available on the Parnassus website (www.parnassus.com) and on the website of the Securities and Exchange Commission (SEC) at www.sec.gov. The SEC website contains information regarding how the Funds and the Parnassus Equity Income Fund voted portfolio securities during the most recent 12-month period ended June 30, while the Parnassus website gives the votes in real time (namely, immediately after a vote has been cast).

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

        As of March 31, 2005, National Financial Services Corporation, 200 Liberty Street, New York, NY 10281 owned ______% of the outstanding securities of the Parnassus Fund of record, but beneficial interest belonged to others. Trustees and Officers of the Trust owned ___% of the outstanding shares. The Mid-Cap Fund, the Small-Cap Fund and the Workplace Fund are newly organized and as of the date of this Statement of Information they have issued no shares.

B-8

STANDING AUDIT COMMITTEE

        The Audit Committee currently consists of Herbert A. Houston, Jeanie S. Joe and Donald V. Potter. The responsibilities of the Audit Committee are to assist the Board of Trustees in overseeing the Trust’s independent registered public accounting firm, accounting policies and procedures, and other areas relating to the Funds’ auditing process. The function of the Audit Committee and the Board of Trustees is oversight. It is management’s responsibility to maintain appropriate systems for accounting and internal control and the registered independent public accounting firm’s responsibility to plan and carry out a proper audit. The independent public accountants are responsible to the Board of Trustees and the Audit Committee. The Audit Committee met three times during the fiscal year ended December 31, 2004.

THE ADVISER

        Parnassus Investments acts as the Funds’ investment adviser. Under an Investment Advisory Agreement (each an “Agreement,” and, collectively, the “Agreements”) with each of the Funds, the Adviser acts as investment adviser and, subject to the supervision of the Board of Trustees, directs the investments of each Fund in accordance with its investment objective, policies and limitations. The Adviser also provides the Funds with all necessary office facilities and personnel for servicing the Funds’ investments and pays the salaries and fees of all Officers and all Trustees of the Trust who are “interested persons” under the 1940 Act. Parnassus Investments also provides the management and administrative services necessary for the operation of the Funds, including coordinating relations with the custodian, transfer agent, independent registered public accounting firm and attorneys. The Adviser also prepares all shareholder communication, maintains the Funds’ records, registers the Funds’ shares under state and federal laws and does the staff work for the Board of Trustees.

        Each of the Agreements provides that the Adviser shall not be liable to the applicable Fund for any loss to the Fund except by reason of the Adviser’s willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of its reckless disregard of its obligations and duties under the Agreement.

        Jerome L. Dodson, President of the Trust, owns the majority of the stock of the Adviser and, thus, can be considered the “control person” of the Adviser.

        The Parnassus Fund pays the Adviser a fee for services performed at the annual rate of 1% of the Fund’s average daily net assets up to $10 million, then declining to 0.75% of assets above $10 million up to $30 million, 0.70% above $30 million up to $100 million, 0.65% above $100 million to $200 million and 0.60% of the amount above $200 million. During 2002, 2003 and 2004, the Parnassus Fund paid to Parnassus Investments under the Agreement the sums of $2,300,711, $2,236,904 and $2,291,525, respectively.

        The Mid-Cap Fund pays the Adviser a fee for services performed at the annual rate of 0.85% of the Fund’s average daily net assets up to $100 million, then declining to 0.80% of the amount above $100 million in assets up to $200 million, 0.75% of the amount above $200 million up to $500 million, and 0.70% of the amount above $500 million. The Adviser has contractually agreed, through April 30, 2006, to limit total operating expenses to 1.40% by waiving fees and/or reimbursing expenses. The Mid-Cap Fund is newly organized and as of the date of this Statement of Information has not paid any advisory fees to the Adviser.

        The Small-Cap Fund pays the Adviser a fee for services performed at the annual rate of 1.00% of the Fund’s average daily net assets up to $100 million, then declining to 0.90% of the amount above $100 million in assets up to $200 million, 0.85% of the amount above $200 million up to $500 million, and 0.80% of the amount above $500 million. The Adviser has contractually agreed, through April 30, 2006, to limit total operating expenses to 1.40% by waiving fees and/or reimbursing expenses. The Small-Cap Fund is newly organized and as of the date of this Statement of Information has not paid any advisory fees to the Adviser.

B-9

        The Workplace Fund pays the Adviser a fee for services performed at the annual rate of 0.85% of the Fund’s average daily net assets up to $100 million, then declining to 0.80% of the amount above $100 million in assets up to $200 million, 0.75% of the amount above $200 million up to $500 million, and 0.70% of the amount above $500 million. The Adviser has contractually agreed, through April 30, 2006, to limit total operating expenses to 1.20% by waiving fees and/or reimbursing expenses. The Workplace Fund is newly organized and as of the date of this Statement of Information has not paid any advisory fees to the Adviser.

        As the Funds’ underwriter (or Distributor), Parnassus Investments makes a continuous offering of the Funds’ shares and, prior to May 1, 2004, received fees and commissions for distributing the Parnassus Fund’s shares (the Mid-Cap Fund, the Small-Cap Fund and the Workplace Fund were not in existence prior to May 1, 2004). For 2002, 2003 and 2004 (through May 1, 2004), Parnassus Investments received $405,892, $218,013 and $83,668, respectively, of which amounts the following was paid to other broker/dealers: $90,255 in 2002; $54,193 in 2003; and $29,130 in 2004.

        Pursuant to a Shareholder Servicing Plan and Agreement with each of the Funds, Parnassus Investments may arrange for third parties to provide certain services including account maintenance, record keeping and other personal services to their clients who invest in the Funds. For these services, each of the Funds may pay service providers an aggregate service fee at a rate not to exceed 0.25% per annum of the applicable Fund’s average daily net assets. Parnassus Investments may elect to pay such service providers an additional amount from its own funds. For 2002, 2003 and 2004, respectively, the Parnassus Fund paid service providers the following amounts: $300,123, $267,174 and $104,453. The Mid-Cap Fund, the Small-Cap Fund and the Workplace Fund are newly organized and as of the date of this Statement of Information no such amounts have been paid by or on behalf of these Funds.

        In addition to the Adviser’s fee, the Funds are responsible for their operating expenses, including: (i) interest and taxes; (ii) brokerage commissions; (iii) insurance premiums; (iv) compensation and expenses of the Trustees other than those affiliated with the Adviser; (v) legal and audit expenses; (vi) fees and expenses of the Funds’ custodian, transfer agent and accounting services agent; (vii) expenses incident to the issuance of their shares, including issuance on the payment of, or reinvestment of, dividends; (viii) fees and expenses incident to the registration under Federal or state securities laws of the Funds or their shares; (ix) expenses of preparing, printing and mailing reports and notices and proxy material to shareholders of the Funds; (x) all other expenses incidental to holding meetings of the Funds’ shareholders; (xi) security pricing services of third-party vendors; (xii) the cost of providing the record of proxy votes on the website; (xiii) dues or assessments of or contributions to the Investment Company Institute and the Social Investment Forum; and (xiv) such non-recurring expenses as may arise, including litigation affecting the Funds and the legal obligations for which the Funds may have to indemnify the Trust’s Officers and Trustees with respect thereto. In allocating brokerage transactions, the Agreements state that the Adviser may, subject to its obligation to obtain best execution, consider research provided by brokerage firms.

        Parnassus Investments is the fund accountant and in this capacity handles all fund accounting services, including calculating the daily net asset values. Parnassus Investments, as fund accountant and fund administrator, received the following amounts from the Parnassus Fund for 2002, 2003 and 2004, respectively: $80,000, $130,384 and $202,281. The Mid-Cap Fund, the Small-Cap Fund and the Workplace Fund are newly organized and as of the date of this Statement of Information have not paid any fees to the administrator.

Matters Considered by the Board

        The Agreement for the Parnassus Fund was last approved by the Trustees, including all of the Independent Trustees on March ___, 2005 at a meeting called for that purpose. In approving the Agreements the Board primarily considered the nature and quality of the services provided under the Agreements and the overall fairness of the Agreements to the Funds. The Board requested and evaluated reports from the Adviser that addressed specific factors designed to inform the Board’s consideration of these and other issues.

        With respect to the nature and quality of the services provided, the Board considered the performance of the Parnassus Fund in comparison to relevant market indices, the performance of a peer group of investment companies pursuing broadly similar strategies, and the degree of risk undertaken by the portfolio manager. The Board reviewed the Adviser’s use of brokers or dealers in Fund transactions that provided research and other services to them, and the benefits derived by the Parnassus Fund from such services.

        With respect to the overall fairness of the Agreements, the Board primarily considered the fee structure of the Agreements and the profitability of the Adviser from its association with the Funds. The Board reviewed information from an independent data service about the rates of compensation paid to investment advisers, and overall expense ratios, for funds comparable in size, character and investment strategy to the Funds. In concluding that the benefits accruing to the Adviser by virtue of its relationship to the Funds were reasonable in comparison with the costs of the provision of investment advisory services and the benefits accruing to the Funds, the Board reviewed specific data as to the Adviser’s profit or loss on the Parnassus Fund for the recent period. These matters were also considered by the Independent Trustees meeting separately.

Portfolio Transactions and Brokerage

        The Agreements state that in connection with its duties to arrange for the purchase and the sale of securities held in the portfolios of the Funds by placing purchase and sale orders for the Funds, the Adviser shall select such broker-dealers (“brokers”) as shall, in the Adviser’s judgment, implement the policy of the Funds to achieve “best execution” (namely, prompt and efficient execution at the most favorable securities price). In making such selection, the Adviser is authorized in the Agreements to consider the reliability, integrity and financial condition of the broker. The Adviser is also authorized to consider whether the broker provides brokerage and/or research services to the Funds and/or other accounts of the Adviser. The Agreements state that the commissions paid to such brokers may be higher than another broker would have charged if a good faith determination is made by the Adviser that the commission is reasonable in relation to the services provided, viewed in terms of either that particular transaction or the Adviser’s overall responsibilities as to the accounts for which it exercises investment discretion. The Agreements also state that the Adviser shall use its judgment in determining that the amount of commissions paid are reasonable in relation to the value of brokerage and research services provided and need not place or attempt to place a specific dollar value on such services or on the portion of commission rates reflecting such services. The Funds recognize in the Agreements that, on any particular transaction, a higher than usual commission may be paid due to the difficulty of the transaction in question.

        The research services discussed above may be in written form or through direct contact with individuals and may include information as to particular companies and securities as well as market, economic or institutional areas and information assisting the Funds in the valuation of its investments. The research which the Adviser receives for the Funds’ brokerage commissions, whether or not useful to the Funds, may be useful to the Adviser in managing the accounts of the Adviser’s other advisory clients. Similarly, the research received for the commissions of such accounts may be useful to the Funds. To the extent that electronic or other products provided by brokers are used by the Adviser for research purposes, the Adviser will use its best judgment to make a reasonable allocation of the cost of the product attributable to non-research use.

        Research services provided through brokerage will be those providing information and analyses that assist the portfolio manager(s) making investment decisions. Examples of such research services include Bloomberg information and research, KLD social research, publications containing investment information and recommendations and individual reports written on specific companies.

        During 2004, the Parnassus Fund paid $31,276 to Prudential Securities, $22,135 to Citigroup Global Markets and $8,930 to SEI Investments in brokerage commissions under “soft dollar” agreements, whereby these firms would provide research services to the Parnassus Fund. The Mid-Cap Fund, the Small-Cap Fund and the Workplace Fund are newly organized and as of the date of this Statement of Information have not paid any brokerage commissions.

        In early 2004, the Adviser used brokerage commissions of the Parnassus Fund totaling $8,619 to reduce certain expenses of the Parnassus Fund subject to “best execution.” However, as of May 1, 2004, brokerage commissions are no longer used to reduce expenses of the Funds.

        In the over-the-counter market, securities may trade on a “net” basis with dealers acting as principal for their own accounts without a stated commission, although the price of the security usually includes a profit to the dealer. Money-market instruments usually trade on a “net” basis as well. On occasion, certain money-market instruments may be purchased directly from an issuer, in which case, no commissions or discounts are paid. In underwritten offerings, securities are purchased at a fixed price, which includes an amount of compensation to the underwriter, generally referred to as the underwriter’s concession or discount.

B-11

        During 2002, 2003 and 2004, the Parnassus Fund paid $2,605,646, $1,450,188 and $873,782, respectively, in brokerage commissions. Brokerage commissions in 2002 were higher than 2003 and 2004 because portfolio turnover was higher. Of those amounts, the following was paid in conjunction with research services: $1,984,357 in 2002; $962,488 in 2003; and $561,231 in 2004. The Mid-Cap Fund, the Small-Cap Fund and the Workplace Fund are newly organized and as of the date of this Statement of Information have not paid any brokerage commissions.

        Parnassus Investments may have clients other than the Funds that have objectives similar to the Funds. Normally, orders for securities trades are placed separately for each client. However, some recommendations may result in simultaneous buying or selling of securities along with the Funds. As a result, the demand for securities being purchased or the supply of securities being sold may increase, and this could have an adverse effect on the price of those securities. Parnassus Investments does not favor one client over another in making recommendations or placing orders, and in some situations, orders for different clients may be grouped together. In certain cases where the aggregate order is executed in a series of transactions at various prices on a given day, each participating client’s proportionate share of such order reflects the average price paid or received with respect to the total order. Also, should only a partial order be filled, each client would ordinarily receive a pro rata share of the total order.

        As of December 31, 2004, the Parnassus Fund held securities of its regular brokers including $1,950,000 in common stock of J.P. Morgan Chase & Co.

PORTFOLIO MANAGERS

        The sole investment adviser to the Funds is Parnassus Investments. The portfolio managers to the Funds may have responsibility for the day-to-day management of accounts other than the Funds. Information regarding these other accounts is set forth below. The number of accounts and assets is shown as of December 31, 2004.

	Number of Other Accounts Managed and Total Assets by Account Type			Number of Accounts and Total Assets for Which Advisory Fee is Performance-Based
Name of Portfolio Managers	Registered Investment Companies	Other Pooled Investment Vehicles	Other Accounts	Registered Investment Companies	Other Pooled Investment Vehicles	Other Accounts
Jerome L. Dodson	--	--	--	--	--	--
Todd Ahlsten	2	--	--	--	--	--
	$932,619,435	--	--	--	--	--

        The portfolio managers of the Adviser are often responsible for managing other accounts. The Adviser typically assigns accounts with similar investment strategies to the portfolio managers to mitigate the potentially conflicting investment strategies of accounts. Other than potential conflicts between investment strategies, the side-by-side management of both the Funds and other accounts may raise potential conflicts of interest due to the interest held by the Adviser or one of its affiliates in an account and certain trading practices used by the portfolio managers (for example, cross trades between a Fund and another account and allocation of aggregated trades). The Adviser has developed policies and procedures reasonably designed to mitigate those conflicts. In particular, the Adviser has adopted policies limiting the ability of portfolio managers to cross securities between Funds and policies designed to ensure the fair allocation of securities purchased on an aggregated basis.

B-12

        The portfolio managers are compensated in various forms. The following table outlines the forms of compensation paid to each portfolio manager as of December 31, 2004.

Name of Portfolio Managers	Form of Compensation	Source of Compensation	Method Used to Determine Compensation (Including Any Differences in Method Between Account Types)
Jerome L. Dodson	Salary	Parnassus	The board of directors of Parnassus
		Investments	Investments, which includes Jerome L. Dodson,
			determines his salary on an annual basis, and
			it is a fixed amount throughout the year. It
			is not based on the performance of the Funds
			or on the value of the assets held in the
			Funds' portfolios.
Todd Ahlsten	Salary	Parnassus	The board of directors of Parnassus
		Investments	Investments determines Todd Ahlsten's salary
			on an annual basis, and it is a fixed amount
			throughout the year. It is not based on the
			performance of the Funds or on the value of
			the assets held in the Funds' portfolios.
	Performance	Parnassus	As part of Todd Ahlsten's
	Bonus	Investments	compensation, he may receive a bonus based on
			the pre-tax performance of the Mid-Cap Fund
			and the Small-Cap Fund over multiple years
			versus the Russell Midcap Index and the
			Russell 2000 Index, respectively.
	Director of	Parnassus	In Todd Ahlsten's role as the
	Research Bonus	Investments	director of research for Parnassus
			Investments, he is eligible to receive a
			bonus based on his management of the research
			department, including developing and
			recruiting the research staff, managing the
			intern program and conducting investment
			research. The management of Parnassus
			Investments determines the amount, which is
			variable.
	Profit Sharing	Parnassus	Parnassus Investments allocates a
	Bonus	Investments	certain percentage of its pre-tax earnings to
			all full-time employees. As an eligible
			employee, Todd Ahlsten receives a bonus based
			on a percentage of his salary.

The dollar range of shares of the Parnassus Fund beneficially owned by its sole portfolio manager, Jerome L. Dodson, is over $1,000,000. The Mid-Cap Fund, the Small-Cap Fund and the Workplace Fund are newly organized and as of the date of this Statement of Information they have not issued any shares.

NET ASSET VALUE

        The net asset values of the Funds’ shares are ordinarily computed once each day as of the close of trading on the New York Stock Exchange (“NYSE”), usually 4:00 p.m., New York time, on each day that the NYSE is open for trading and on any other day that there is a sufficient degree of trading in investments held by the Funds to affect its net asset value. The NYSE is generally closed on the following holidays: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

B-13

        In determining the net asset value of the Funds’ shares, the Trustees have adopted a set of policies and procedures to value the securities held in the Funds’ portfolios. Short-term securities are generally money-market instruments and are valued at amortized cost, which approximates market value. A market-value adjustment is applied to certain short-term securities to reflect penalties for early withdrawal and early call. Equity securities that are listed or traded on a national securities exchange are stated at market value based on recorded closing sales on the exchange or on the Nasdaq’s National Market System official closing price. In the absence of a recorded sale, and for over-the-counter securities, equity securities are stated at the mean between the last recorded bid and asked prices. Long-term, fixed-income securities are valued each business day using prices based on procedures established by independent pricing services and approved by the Trustees. Fixed-income securities with an active market are valued at the “bid” price where such quotes are readily available from brokers and dealers and are representative of the actual market for such securities. Other fixed-income securities experiencing a less active market are valued by the pricing services based on methods which include consideration of trading in securities of comparable yield, quality, coupon, maturity and type, as well as indications as to values from dealers and other market data without exclusive reliance upon quoted prices or over-the-counter prices, since such valuations are believed to reflect more accurately the value of such securities.

        Equity and fixed-income securities where market quotations are not readily available are priced at their fair value, in accordance with procedures established by the Trustees. In determining fair value, the Trustees may consider a variety of information including, but not limited to, the following: price based upon a multiple of earnings or sales, a discount from the market value of a similar security, fundamental analytical data, and an evaluation of market conditions. Types of securities that the Funds may hold for which fair-value pricing might be required include, but are not limited to: (a) illiquid securities, including “restricted” securities and private placements for which there is no public market; (b) securities of an issuer that has entered into a restructuring; and (c) securities whose trading has been halted or suspended. The fair value of a security is the amount which the Funds might reasonably expect to receive upon a current sale. The fair value of a security may differ from the last quoted price, and the Funds may not be able to sell a security at the fair value determined, as valuing securities at fair value involves greater reliance on judgment than securities that have readily available market quotations.

DISTRIBUTIONS AND TAXES

        By paying out substantially all of its net investment income (among other things), the Trust has qualified as a regulated investment company under Subchapter M of the Internal Revenue Code. The Trust intends to continue to qualify and, if so, it will not pay federal income tax on either its net investment income or on its net capital gains. Instead, each shareholder will be responsible for his or her own taxes.

        If the Trust fails to qualify as a regulated investment company under Subchapter M in any fiscal year, it will be treated as a corporation for federal income tax purposes. As such the Funds would be required to pay income taxes on their net investment income and net realized capital gains, if any, at the rates generally applicable to corporations. Shareholders of the Funds would not be liable for income tax on the Funds’ net investment income or net realized gains in their individual capacities. Distributions to shareholders, whether from the Funds’ net investment income or net realized capital gains, would be treated as taxable dividends to the extent of current or accumulated earnings and profits of the Funds.

        As of December 31, 2004, the Parnassus Fund had available for federal income tax purposes unused capital losses (capital loss carryforwards) of $27,133,176 expiring in 2010 and $20,875,253 expiring in 2011.

GENERAL

        The Trust was organized as a Massachusetts business trust on April 4, 1984. Prior to February 11, 2005, the Trust was known as The Parnassus Fund. Its Declaration of Trust permits the Trust to issue an unlimited number of full and fractional shares of beneficial interest and to divide or combine the shares to a greater or lesser number of shares without thereby changing the proportionate beneficial interest in a Fund. Each share represents an interest in a Fund proportionately equal to the interest of each other share. Certificates representing shares will not be issued. Upon a Fund’s liquidation, all shareholders would share pro rata in its net assets available for distribution to shareholders. If they deem it advisable and in the best interests of shareholders, the Board of Trustees may create additional series of shares or classes thereof which may have separate assets and liabilities and which may differ from each other as to dividends and other features. Shares of each series or class thereof would be entitled to vote as a series or class only to the extent required by the 1940 Act or as permitted by the Trustees.

B-14

        The Declaration of Trust contains an express disclaimer of shareholder liability for its acts or obligations and requires that notice of such disclaimer be given in each agreement, obligation or instrument entered into or executed by the Trust or its Trustees. The Declaration of Trust provides for indemnification and reimbursement of expenses out of the Trust’s property for any shareholder held personally liable for its obligations. The Declaration of Trust also provides that the Trust shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the Trust and satisfy any judgment thereon. Thus, while Massachusetts law permits a shareholder of a trust such as this to be held personally liable as a partner under certain circumstances, the risk of a shareholder incurring financial loss on account of shareholder liability is highly unlikely and is limited to the relatively remote circumstances in which the Trust would be unable to meets its obligations.

        The Declaration of Trust further provides that the Trustees will not be liable for errors of judgment or mistakes of fact or law, but nothing in the Declaration of Trust protects a Trustee against any liability to which he or she would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.

        Shareholders are entitled to one vote for each full share held (and fractional votes for fractional shares) and may vote in the election of Trustees and on other matters submitted to meetings of shareholders. It is not contemplated that regular annual meetings of shareholders will be held. The Declaration of Trust and Restated By-Laws provide that the Funds’ shareholders have the right to remove a Trustee, with or without cause, upon the affirmative vote of the holders of a majority of its outstanding shares represented at a meeting with respect thereto (assuming a quorum is present, which is one-third of the outstanding shares). The Funds are required to call a meeting of shareholders to vote on the removal of a Trustee (as well as on any other proper matter) upon the written request of shareholders holding not less than one-third of its outstanding shares entitled to vote at such meeting. In addition, ten shareholders holding the lesser of $25,000 worth or one percent of shares of the Funds may advise the Trustees in writing that they wish to communicate with other shareholders for the purpose of requesting a meeting to remove a Trustee. The Trustees will then, if requested by the applicants, mail at the applicants’ expense the applicants’ communication to all other shareholders. The holders of shares have no preemptive or conversion rights. Shares when issued are fully paid and nonassessable. A Fund may be terminated upon the sale of its assets to another issuer, if such sale is approved by the vote of the holders of more than 50% of its outstanding shares, or upon liquidation and distribution of its assets, if approved by the vote of the holders of more than 50% of its outstanding shares. If not so terminated, a Fund will continue indefinitely. No amendment that would have a material adverse impact upon the rights of the shareholders may be made to the Declaration of Trust without the affirmative vote of the holders of more than 50% of the Trust’s outstanding shares.

        Deloitte & Touche LLP, 50 Fremont Street, San Francisco, California 94105, has been selected as the Fund’s independent registered public accounting firm.

        State Street Bank & Trust Company, 801 Pennsylvania Avenue, Kansas City, Missouri 64105, has been selected as the custodian of the Funds’ assets. Shareholder inquiries should be directed to the Funds.

        Parnassus Investments, One Market-Steuart Tower #1600, San Francisco, California 94105, is the Funds’ transfer agent and administrator. Jerome L. Dodson, the Trust’s President, is the majority stockholder of Parnassus Investments.

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FINANCIAL STATEMENTS

        The Parnassus Fund’s audited financial statements for the fiscal year ended December 31, 2004 are expressly incorporated by reference and made a part of this Statement of Additional Information by reference to the Parnassus Fund’s Annual Report to shareholders dated December 31, 2004. A copy of the Annual Report, which contains the Parnassus Fund’s audited financial statements for the year ending December 31, 2004, may be obtained free of charge by writing or calling the Funds.

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ANNEX A

Parnassus Investments Proxy Voting Policies and Procedures

Parnassus Investments manages the portfolios of Parnassus Funds and the Parnassus Equity-Income Fund, a portfolio of Parnassus Income Funds (collectively, “the Funds”). The Funds take social as well as financial factors into account in making investment decisions. While we do fundamental research to determine a company’s financial health and its business prospects, we also look at a firm’s social and environmental record. We seek to invest in companies that respect their employees, have sound environmental protection policies, maintain an effective equal employment opportunity program, provide quality products and services, display a record of civic commitment and follow ethical business practices. Obviously, no company will be perfect in all categories, but Parnassus Investments will make value judgments in deciding which companies best meet the criteria. One of the Funds’ essential policies is to invest in companies that have a positive impact on society. Most of the time, we try to maintain portfolios diversified across industries, but we do not invest in companies that manufacture alcohol or tobacco products, that are involved with gambling, that are weapons contractors or that generate electricity from nuclear power.

The following guidelines indicate our positions on proxy ballot issues and how we plan to vote shares held by the Funds. We do not delegate our proxy voting authority or rely on third-party recommendations to vote our shares. We will consider the views of the management of portfolio companies, but we will vote in a manner we feel is in the best interest of shareholders of the Funds. These guidelines may not include all potential voting issues, and in rare cases, the Funds may deviate somewhat from these guidelines.

Social and Corporate Responsibility

Environment

• We will vote for shareholder resolutions that reduce a company’s negative impact on the environment and that call for the elimination or substitution of toxic compounds used in their products. We will vote for resolutions asking for a report of current environmental practices and policies, and for adoption of Coalition for Environmentally Responsible Economics (CERES) Principles.

Labor Issues

• We will vote for proposals that show respect for a company’s workers.

• We will vote for proposals requesting companies to adopt and report on appropriate codes of conduct regarding global labor practices within their own company and with vendors or suppliers, including concerns with respect to the use of forced labor, fair wages, safe working conditions and the right to organize and bargain collectively.

Charitable Giving

• We will vote for resolutions to report on and to increase charitable giving.

Diversity

• We will vote for resolutions to improve the representation of women and ethnic minorities in the workforce, particularly at the executive level. We will also vote for proposals to issue reports on a company’s efforts to increase diversity and to assure that all women and ethnic minorities are paid comparably with their counterparts.

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Animal Welfare

• We will generally vote for resolutions seeking information on a company’s animal testing, resolutions that request management to develop viable alternatives to animal testing and resolutions calling for consumer products companies to reduce their use of animals in testing.

Community Relations

• We will vote for resolutions that make the company a good corporate citizen and show sensitivity to the communities where it operates.

Ethical Business Practices

• In general, we will vote forresolutions that ensure that a company follows ethical business practices.

Corporate Governance

Election of Directors

We support Boards of Directors that reflect independence, concern for shareholders’ interests and diversity.

• We will vote for resolutions that require Board slates to consist of a majority of Directors who are independent from management. We will also vote for resolutions to separate Chief Executive Officer and Chairman of the Board positions. Our votes are intended to reduce conflicts of interests between management and shareholders.

• We will vote against Directors who have attended less than 75% of the Board meetings or who have ignored a shareholder proposal that has gained a majority of the votes outstanding.

• We will vote for the establishment of a reasonable retirement age for Directors.

• We will vote for resolutions that require Directors to own a minimum number of shares in the company to encourage them to have the same interest as shareholders.

• We will vote for increased diversity, including qualified women and ethnic minorities, on Boards.

• We will vote case-by-case on proposals that seek to change the size or range of the Board.

Independent Accountants

• Significant fees from services other than auditing can diminish the independence of the audit. We will vote for the ratification of the company’s auditor unless we have reason to believe that the independence of the audit may be compromised. We will vote against ratification of the auditors when consulting fees exceed audit fees.

Reincorporation

• We will consider changes in the state of incorporation on a case-by-case basis and evaluate the economic benefits of and business reasons for reincorporation.

• We will vote againstresolutions to allow U.S.-based corporations to reincorporate overseas.

Shareholder Rights

Cumulative Voting

• We will vote for bylaws requiring cumulative voting so that minority opinions can be represented on the Board.

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Confidential Voting

• We will vote for confidential voting to prevent management from identifying dissenting shareholders before the final vote count in an attempt to convince them to change their votes.

Dual Classes of Stock

• To maintain corporate control in the hands of a certain group of shareholders, companies may seek to create multiple classes of stock with different voting rights. The Funds will vote against dual classes of stock.

Ability to Call Meetings

• We will vote against proposals that limit a shareholder’s right to call special meetings because matters may arise between annual meetings.

Equal Access to Proxies

• The Funds will vote for proposals to allow shareholders space in proxy statements to state their views on contested issues.

• We will vote for proposals to allow shareholders to nominate Director candidates on the company proxy as long as nominators own a substantial amount of stock and the nomination is not a frivolous one.

Compensation

Executive Compensation

• We will vote on limits to executive compensation on a case-by-case basis.

• We will vote for shareholder resolutions requesting companies to review and report on executive compensation. We will also vote for resolutions to review executive compensation as it relates to non-financial performance such as diversity, labor and human rights, environment, community relations, predatory lending, improvements in healthcare quality and other social issues.

Severance Packages

• We will vote againstseverance that exceeds 2.5 times annual salary and bonus.

• We will vote for shareholder proposals to take a shareholder vote on severance packages. We support the right of shareholders to vote on golden parachutes which we believe go above and beyond ordinary compensation practices. We take into account total management compensation, the employees covered by the plan and the quality of management.

Stock Options

• We will vote on stock option plans on a case-by-case basis and consider voting and earnings dilution. We will vote for Employee Stock Ownership Plans (ESOPs) to promote employee ownership unless they cause excessive dilution or are heavily weighted toward top management.

• We will vote against the repricing of out-of-the-money stock options and stock options with exercise prices set below the stock’s market price on the day of the grant.

• We will vote for the use of performance-based stock options which tie executive compensation more closely to company performance.

• We will vote for expensing stock options as a cost in determining operating income because we believe that not expensing stock options overstates earnings.

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Changes in Capital Structure

Increase Authorized Common Stock

• We will vote for the authorization of additional common stock necessary to facilitate a stock split.

• We will consider all other proposals for the authorization of additional common stock on a case-by-case basis.

Reverse Stock Split

• We will consider management proposals to implement a reverse stock split on a case-by-case basis.

Share Repurchase

• •We will vote formanagement proposals to institute open-market share repurchase plans.

Issuance of Preferred Stock

• We will consider the issuance of preferred stock on a case-by-case basis. We will examine the purpose and terms such as voting, dividend and conversion rights of the stock. In the event of proposals seeking to create blank check preferred stock to be used as a takeover defense or carrying superior voting rights, we will vote against these proposals.

Pre-emptive Rights

• We will consider on a case-by-case basis proposals to create or abolish pre-emptive rights which allow shareholders to participate proportionately in any new issues of stock of the same class. We will take into account the size of a company and the characteristics of its shareholder base.

Mergers, Acquisitions and Other Corporate Restructurings

• We consider mergers and acquisitions on a case-by-case basis and evaluate the terms of each proposal, the potential long-term value of the investment and the financial, strategic and operational benefits. Likewise, we will vote on a case-by-case basis on corporate restructuring proposals, such as leveraged buyouts, spin-offs, liquidations and asset sales.

Anti-takeover Provisions

• We will vote against staggered boards which deter unwanted takeovers because a potential acquirer would have to wait at least two years to gain a majority of Board seats.

• We will vote against poison pills and authorization to issue stock in an effort to avoid a takeover.

• We will vote against supermajority provisions which generally require at least a two-thirds affirmative vote for passage of issues.

Conflict of Interest

• Parnassus Investments is the investment adviser only for mutual funds – not any other entities – so there would normally be no conflicts of interest between the Funds’ shareholders and Parnassus Investments. However, should such a conflict arise, the vote on that proxy issue will be cast by the Funds’ independent Trustees.

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PART C
OTHER INFORMATION

Item 23. Exhibits.

(a) Declaration of Trust – filed 4/14/00; and Supplemental Declaration of Trust – filed herewith.

(b) By-laws – filed 4/22/03.

(c) Rights of Shareholders – filed 4/16/02.

(d) Investment Advisory Agreement – filed 4/28/04; and Investment Advisory Agreement (relating to new funds) – filed herewith.

(e) Distribution Agreement and Dealer Agreement – filed 4/14/00.

(g) Custodian Agreement – filed 4/14/00.

(h)(1) Agreement for Transfer Agent Services and Accounting and Administrative Services — filed 4/28/04; and Amendment No. 1 to Transfer Agent Services and Accounting and Administrative Services – filed herewith.

(h)(2) Shareholder Servicing Plan and Agreement – filed herewith.

(h)(3) Amendment to Agreement for Transfer Agent and Pricing Services – filed 4/16/02.

(i) Opinion of Foley & Lardner LLP – filed herewith.

(j) Consent of Deloitte & Touche LLP — filed herewith.

(p) Code of Ethics — filed herewith.

Item 24. Persons Controlled by or under Common Control with Registrant.

Registrant is not controlled by or under common control with any other person, except to the extent Registrant may be deemed to be under common control with Parnassus Income Funds (f/k/a The Parnasssus Income Trust) by virtue of having the same individuals as Trustees.

Item 25. Indemnification.

Under the provisions of the Registrant’s Declaration of Trust, the Registrant will indemnify its present or former Trustees, officers, employees and certain other agents against liability incurred in such capacity except that no such person may be indemnified if there has been an adjudication of liability against that person based on a finding of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.

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Item 26. Business and Other Connections of the Investment Adviser.

The Registrant’s investment adviser, Parnassus Investments, is the investment adviser to Parnassus Income Funds.

Item 27. Principal Underwriters.

(a) Parnassus Investments serves as underwriter and investment adviser for both Parnassus Income Funds and the Registrant.

(b) The officers are directors of Parnassus Investments are as follows:

Name and Principal
Business Address	Position with Distributor	Position with Registrant
Jerome L. Dodson	President and Director	President and Trustee
One Market
Steuart Tower #1600
San Francisco, CA 94105
Debra A. Early	Vice President and Treasurer	Vice President and Treasurer
One Market
Steuart Tower #1600
San Francisco, CA 94105
Todd Ahlsten	Vice President	Vice President
One Market
Steuart Tower #1600
San Francisco, CA 94105

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Stephen Dodson	Vice President and	Chief Compliance Officer and
One Market	Director	Assistant Secretary
Steuart Tower #1600
San Francisco, CA 94105
Thao N. Dodson	Director	None
One Market
Steuart Tower #1600
San Francisco, CA 94105

(c) None

Item 28. Location of Accounts and Records.

All accounts, books and records are in the physical possession of Jerome L. Dodson at Registrant’s headquarters at One Market, Steuart Tower #1600, San Francisco, CA 94105.

Item 29. Management Services.

Discussed in Part A and Part B.

Item 30. Undertakings.

Not applicable

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SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this Amended Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City and County of San Francisco and the State of California on the 11th day of February 2005.

PARNASSUS FUNDS

(Registrant)

By:  /s/ Jerome L. Dodson

        Jerome L. Dodson, President

        Pursuant to the requirements of the Securities Act of 1933, this Amended Registration Statement has been signed by the following persons in the capacities and on the date indicated.

Signature	Title	Date
	Principal Executive Officer
/s/ Jerome L. Dodson	And Trustee
___________________________		February 11, 2005
Jerome L. Dodson
	Principal Financial and
/s/ Debra A. Early	Accounting Officer
___________________________		February 11, 2005
Debra A. Early
/s/ Donald V. Potter	Trustee
___________________________		February 11, 2005
Donald V. Potter
/s/ Herbert A. Houston	Trustee
___________________________		February 11, 2005
Herbert A. Houston
	Trustee
___________________________		February ___, 2005
Jeanie S. Joe

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EXHIBIT INDEX

Exhibit No. Description

(a) Declaration of Trust* and Supplemental Declaration of Trust

(b) Bylaws*

(c) Rights of Shareholders*

(d) Investment Advisory Agreement* and Investment Advisory Agreement (respecting new funds)

(e) Distribution Agreement and Dealer Agreement*

(f) None

(g) Custodian Agreement *

(h)(1) Agreement for Transfer Agent Services and Accounting and Administrative Services* and Amendment No. 1 to Transfer Agent Services and Accounting and Administrative Services

(h)(2) Shareholder Servicing Plan and Agreement

(h)(3) Amendment to Agreement for Transfer Agent and Pricing Services*

(i) Opinion of Foley & Lardner LLP

(j) Consent of Deloitte & Touche LLP

(k) None

(l) None

(m) None

(n) None

(p) Code of Ethics

*Incorporated by reference.

EX-99.(A)

Exhibit (a)

THE PARNASSUS FUND

SUPPLEMENTAL DECLARATION OF TRUST

        SUPPLEMENTAL DECLARATION OF TRUST made February 10, 2005 to the AMENDED AND RESTATED DECLARATION OF TRUST made April 2, 1984, as amended, and as restated effective March 24, 2000 (the “Declaration of Trust”) of The Parnassus Fund (the “Trust”);

        WHEREAS, paragraph 12 of Article EIGHTH of the Declaration of Trust permits the Trustees of the Trust to amend the Declaration of Trust to effect a change in the name of the Trust by making a Supplemental Declaration of Trust, if authorized by vote of the Trustees; and

        WHEREAS, the making of this Supplemental Declaration of Trust was duly authorized by the Trustees on January 27, 2005; and

        WHEREAS, paragraph 12 of Article EIGHTH of the Declaration of Trust permits any Supplemental Declaration of Trust to be executed by and on behalf of the Trust and the Trustees by any officer or officers of the Trust; and

        WHEREAS, the officer of the Trust executing this Supplemental Declaration of Trust has been authorized and directed to do so by the Trustees of the Trust on behalf of the Trustees and the Trust;

        NOW, THEREFORE, the Declaration of Trust is amended as set forth below, effective as of 11:59 p.m., Eastern Standard Time, February 11, 2005.

1. Article FIRST is amended to read in its entirety as follows:

FIRST: This Trust shall be known as PARNASSUS FUNDS.

2. Paragraph 2 of Article SECOND is amended to read in its entirety as follows:

2. The “Trust” refers to PARNASSUS FUNDS.

        IN WITNESS WHEREOF, the undersigned has executed this Supplemental Declaration of Trust on behalf of the Trust and the Trustees on the 10th day of February, 2005.

THE PARNASSUS FUND

AND THE TRUSTEES THEREOF

/s/ Stephen J. Dodson

Stephen J. Dodson

Assistant Secretary

        THE UNDERSIGNED, Assistant Secretary of The Parnassus Fund who executed on behalf of said Trust and its Trustees the foregoing Supplemental Declaration of Trust, hereby acknowledges, in the name and on behalf of the said Trust and its Trustees, the foregoing Supplemental Declaration of Trust to be the act of said Trust and its Trustees and further certifies that to the best of her information, knowledge and belief, the matters and facts set forth therein with respect to the approval thereof are true in all material respects, under the penalties of perjury.

/s/ Stephen J. Dodson

Stephen J. Dodson

STATE OF CALIFORNIA	)
	) ss.
COUNTY OF SAN FRANCISCO	)

        On this 10^th day of February, 2005, before me personally appeared Stephen J. Dodson, proven to me to be the person described in and who executed the foregoing instrument, and acknowledged that he executed the same as his free act and deed.

/s/ Notary Public Signature

Notary Public

EX-99.(D)

Exhibit (d)

PARNASSUS FUNDS
INVESTMENT ADVISORY AGREEMENT

        AGREEMENT made this ____ day of March, 2005, by and between the PARNASSUS FUNDS (the “Trust”), a Massachusetts business trust, and PARNASSUS INVESTMENTS (the “Adviser”).

W I T N E S S E T H :

        In consideration of the mutual promises and agreements herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, it is hereby agreed by and between the parties hereto as follows:

1. In General

The Adviser agrees, all as more fully set forth herein, to act as managerial investment adviser to the Trust with respect to the investment of its assets and to supervise and arrange the purchase and sale of securities held in the portfolio of the Trust and generally administer the affairs of the Trust.

2. Duties and Obligation of the Adviser with respect to Management of the Trust

(a) Subject to the succeeding provisions of this section and subject to the direction and control of the Board of Trustees of the Trust, the Adviser shall:

(i) Decide what securities shall be purchased or sold by the Trust and when;

(ii) Arrange for the purchase and the sale of securities held in the portfolio of the Trust by placing purchase and sale orders for the Trust; and

(iii) Maintain oversight and ultimate authority over invested collateral in connection with the Fund’s securities lending program.

(b) Any investment purchases or sales made by the Adviser shall at all times conform to, and be in accordance with, any requirements imposed by: (1) the provisions of the Investment Company Act of 1940 (the “Act”) and of any rules or regulations in force thereunder; (2) any other applicable provisions of law; (3) the provisions of the Declaration of Trust and By-Laws of the Trust as amended from time to time; (5) any policies and fundamental policies of the Trust, as reflected in its registration statement under the Act, or as amended by the shareholders of the Trust.

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(c) The Adviser shall also administer the affairs of the Trust and, in connection therewith, shall be responsible for (i) maintaining the Trust’s books and records (other than financial or accounting books and records or those being maintained by the Trust’s custodian, transfer agent or accounting services agent); (ii) overseeing the Trust’s insurance relationships;

The Adviser shall give the Trust the benefit of its best judgement and effort in rendering services thereunder, but the Adviser shall not be liable for any loss sustained by reason of the purchase, sale or retention of any security, whether or not such purchase, sale or retention shall have been based upon its own investigation and research or upon investigation and research made by any other individual, firm or corporation, if such purchase, sale or retention shall have been made and such other individual, firm or corporation shall have been selected in good faith. Nothing contained therein shall, however, be construed to protect the Adviser against any liability to the Trust or its security holders by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of its reckless disregard of its obligations and duties under this Agreement.

The Trust agrees that the word “Parnassus” in its name is derived from the name of the Adviser and is the property of the Adviser for copyright and all other purposes and that, therefore, such word may be freely used by the Adviser as to other investment companies or other investment products. The Trust further agrees that, in the event that the Adviser ceases to be the Trust’s investment adviser for any reason, the Trust will (unless the Adviser otherwise consents in writing) promptly take all necessary steps to change its name to a name not including the word “Parnassus”.

It is agreed that the Adviser shall have no responsibility or liability for the accuracy or completeness of the Trust’s Registration Statement under the 1940 Act or the Securities Act of 1933 except for information supplied by the Adviser for inclusion therein. The Trust agrees to indemnify the Adviser to the full extent permitted by the Trust’s Declaration of Trust.

3. Broker-Dealer Relationships

        In connection with its duties set forth in Section 2(a)(ii) of this Agreement to arrange for the purchase and the sale of securities held in the portfolio of the Trust by placing purchase and sale orders for the Trust, the Adviser shall select such broker-dealers (“brokers”) as shall, in the Adviser’s judgment, implement the policy of the Trust to achieve “best execution”, i.e. prompt and efficient execution at the most favorable securities price. In making such selection, the Adviser is authorized to consider the reliability, integrity and financial condition of the broker.

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        The Adviser is also authorized to consider whether the broker provides brokerage and/or research services to the Trust and/or other accounts of the Adviser. The commissions paid to such brokers may be higher than another broker would have charged if a good faith determination is made by the Adviser that the commission is reasonable in relation to the services provided, viewed in terms of either that particular transaction or the Adviser’s overall discretion. The Adviser shall use its judgment in determining that the amount of commissions paid are reasonable in relation to the value of brokerage and research services provided and need not place or attempt to place a specific dollar value on such services or on the portion of commission rates reflecting such services. To demonstrate that such determinations were in good faith and to show the overall reasonableness of commissions paid, the Adviser shall be prepared to show that commissions paid (i) were for purposes contemplated by this Agreement; (ii) were not allocated or paid for products or services which were readily and customarily available and offered to the public on a commercial basis; and (iii) were within a reasonable range as compared to the rates charged by qualified brokers to other institutional investors as such rates may become known from available information. The Trust recognizes that, on any particular transaction, a higher than usual commission may be paid due to the difficulty of the transaction in question.

4. Allocation of Expenses

        The Adviser agrees that it will furnish the Trust, at the Adviser’s expense, with all office space and facilities, and equipment and clerical personnel necessary for carrying out its duties under this Agreement. The Adviser will also pay all compensation of all Trustees, officers and employees of the Trust who are affiliated persons of the Adviser. All costs and expenses not expressly assumed by the Adviser under this Agreement shall be paid by the Trust, including, but not limited to (i) interest and taxes; (ii) brokerage commissions; (iii) insurance premiums; (iv) compensation and expenses of its Trustees other than those affiliated with the Adviser; (v) legal and audit expenses; (vi) fees and expenses of the Trust’s custodian, shareholder servicing or transfer agent and accounting services agent; (vii) expenses incident to the issuance of its shares, including stock certificates and issuance of shares on the payment of, or reinvestment of, dividends; (viii) fees and expenses incident to the registration under Federal or state securities laws of the Trust or its shares; (ix) expenses of preparing, printing and mailing reports and notices and proxy material to shareholders of the Trust; (x) all other expenses incidental to holding meetings of the Trust’s shareholders; (xi) dues or assessments of or contributions to the Investment Company Institute and the Social Investment Forum or any successor; and (xii) such non-recurring expenses as may arise, including litigation affecting the Trust and the legal obligations which the Trust may have to indemnify its officers and Trustees with respect thereto.

5. Compensation of the Adviser

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(a) The Trust agrees to pay the Adviser and the Adviser agrees to accept as full compensation for all services rendered by the Adviser hereunder, an annual management fee payable monthly and computed at the following annual percentages of each Fund’s average daily net assets: the Parnassus Fund, 1.00% of the first $10 million in assets; 0.75% of the amount above $10 million in assets up to $30 million; 0.70% of the amount above $30 million up to $100 million; 0.65% of the amount above $100 million up to $200 million; 0.60% of the amount above $200 million. For the Parnassus Mid-Cap Fund, the fee is 0.85% of the first $100 million in assets; 0.80% of the amount above $100 million in assets up to $200 million; 0.75% of the amount above $200 million up to $500 million and 0.70% of the amount above $500 million. For the Parnassus Small-Cap Fund, the fee is 1.00% of the first $100 million in assets; 0.90% of the amount above $100 million in assets up to $200 million; 0.85% of the amount above $200 million up to $500 million and 0.80% of the amount above $500 million. For the Parnassus Workplace Fund, the fee is 0.85% of the first $100 million in assets; 0.80% of the amount above $100 million in assets up to $200 million; 0.75% of the amount above $200 million up to $500 million and 0.70% of the amount above $500 million.

(b) In the event the expenses of the Trust (including the fees of the Adviser and amortization of organization expenses but excluding interest, taxes, brokerage commissions, extraordinary expenses and sales charges and distribution fees) for any fiscal year exceed the limits set by applicable regulations of state securities commissions, the Adviser will reduce its fee by the amount of such excess. Any such reductions are subject to readjustment during the year. The payment of the management fee at the end of any month will be reduced or postponed or, if necessary, a refund will be made to the Trust so that at no time will there be any accrued but unpaid liability under this expense limitation.

6. Duration and Termination

(a) This Agreement shall go into effect on the date set forth above and shall, unless terminated as hereinafter provided, continue in effect until April 30, 2006, and thereafter from year to year, but only so long as such continuance is specifically approved at least annually by the Trust’s Board of Trustees, including the vote of a majority of the Trustees who are not parties to this Agreement or “interested persons” (as defined in the Act) of any such party cast in person at a meeting called for the purpose of voting on such approval, or by the vote of the holders of a “majority” (as so defined) of the outstanding voting securities of the Trust and by such a vote of the Trustees.

(b) This Agreement may be terminated by the Adviser at any time without penalty upon giving the Trust sixty (60) days’ written notice (which notice may be waived by the Trust) and may be terminated by the Trust at any time without penalty upon giving the Adviser sixty (60) days’ written notice (which notice may be waived by the Adviser), provided that such termination by the Trust shall be directed or approved by the vote of a majority of all its Trustees in office at the time or by the vote of the holders of a majority (as defined in the Act) of the voting securities of the Trust at the time outstanding and entitled to vote. This Agreement shall automatically terminate in the event of its assignment (as so defined).

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7. No Shareholder Liability.

The Adviser understands that the obligations of this Agreement are not binding upon any shareholder of the Trust personally, but bind only the Trust’s property. The Adviser represents that it has notice of the provisions of the Trust’s Declaration of Trust disclaiming shareholder liability for acts or obligations of the Trust.

        IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument to be executed by duly authorized persons and their seals to be hereunto affixed, all as of the day and year first above written.

	PARNASSUS FUNDS
Date: March __, 2005	By___________________________
	Richard Silberman, Secretary
	PARNASSUS INVESTMENTS
Date: March __, 2005	By___________________________
	Jerome L. Dodson, President

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PARNASSUS FUNDS
EXPENSE CAP AGREEMENT

        Agreement made this ___ day of March 2005, between Parnassus Investments, as investment adviser (the “Adviser”), and the Parnassus Funds (the “Trust”).

        WHEREAS, the Trust is comprised of the following four funds: the Parnassus Fund, the Parnassus Mid-Cap Fund, the Parnassus Small-Cap Fund, the Parnassus Workplace Fund; and

        WHEREAS, the Adviser intends to reimburse the Funds for expenses that exceed certain expense limits and to commit to those limits for a period of time; and

        WHEREAS, shareholders of the Funds benefit from any expense limits agreed to by the Adviser.

        NOW, THEREFORE, the Trust and the Adviser agree to expense limits on the annual operating expenses of the Funds, as follows:

	Expense Limit Effective 4/29/05 (as a
Fund	percentage of average net assets)
Parnassus Fund	No limit
Mid-Cap Fund	1.40%
Small-Cap Fund	1.40%
Workplace Fund	1.20%

The Adviser agrees to continue the foregoing expense limits through April 30, 2006.

        IN WITNESS WHEREOF, the parties have signed this agreement as of the day and year first above written.

PARNASSUS INVESTMENTS
By:
Name:	Jerome L. Dodson
Title:	President
Date:
PARNASUSS FUNDS
By:
Name:	Richard B. Silberman
Title:	Secretary
Date:

EX-99.(H)(1)

Exhibit (h)(1)

Amendment #1

To Agreement for Transfer Agent Services
and
Accounting and Administration Services

Parnassus Investments (“PI”) amends the fees payable for Accounting and Administration, Item #5, under the Agreement for Transfer Agent Services and Accounting and Administration Services between PI and Parnassus Investment Trust (“Trust”), dated March 25, 2004, to be as follows:

For accounting and administration services, the Trust has entered into a joint agreement with the Parnassus Fund (the “Fund”) for PI to provide accounting and administration services. For the period August 1, 2004 to April 30, 2005, the Trust and the Fund agree to pay PI as follows:

Complex Wide Net Assets	Annual Fees
First $500 Million	8.0 basis points
Next $500 Million	7.0 basis points
Over $1 billion	5.0 basis points
Minimum Annual Complex Fee	$ 500,000.00

The fees are to be divided between the Trust and the Fund based on their respective net assets, determined at each month-end. The Trust also agrees to reimburse PI for all out-of-pocket expenses including but not limited to portfolio-pricing services. PI agrees to waive that portion of its fee that would cause the Trust to exceed its legal expense limitations.

For The Parnassus Income Trust:	For Parnassus Investments:
/s/ Richard D. Silberman	/s/ Jerome L. Dodson
Richard D. Silberman, Secretary	Jerome L. Dodson, President
Date:  August 1, 2004	Date:  August 1, 2004

EX-99.(H)(2)

Exhibit (h)(2)

SHAREHOLDER SERVICING PLAN AND AGREEMENT

        THIS SHAREHOLDER SERVICING PLAN AND AGREEMENT (“Agreement”) is made as of the 27th day of July, 2004 by and between THE PARNASSUS FUND and the PARNASSUS INCOME TRUST, Massachusetts business trusts (the “Funds”), and PARNASSUS INVESTMENTS, a California corporation (“Parnassus”).

WITNESSETH

        WHEREAS, each Fund is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (“1940 Act”); and

        WHEREAS, the Funds wish to retain Parnassus to appoint, oversee the activities of and make payment to entities that have entered into agreements with Parnassus to provide servicing to persons holding shares of the Funds, including personal services and/or account maintenance for shareholders of the Funds and/or transfer agency or sub-transfer agency services (“Service Providers”), and Parnassus is willing to furnish such services.

        NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed between the parties hereto as follows:

        1.       Appointment. The Funds hereby authorize Parnassus to obtain for the Funds some or all of the shareholder services specified in Section 2 of this Agreement for clients of the Service Providers that hold shares of the Funds (“clients”). Parnassus agrees to obtain for the Funds from the Service Providers such shareholder services for the compensation set forth in Section 6 of this Agreement. Parnassus and not the Funds will be responsible for the remittal of such compensation to the respective Service Providers.

        2.       Services and Responsibilities on a Continuing Basis. The shareholder services provided pursuant to this Agreement shall be provided on a regular basis, which shall be daily, weekly or as otherwise appropriate, unless otherwise specified by the Funds. These services may include the following:

(a) Keeping clients’ shares of the Funds in a single aggregated account or in a single network;

(b) Opening and maintaining accounts;

(c) Performing accounting and tax reporting functions;

(d) Processing dividends and other distributions;

(e) Forwarding shareholder communications from the Funds;

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(f) Responding to client inquiries;

(g) Assisting clients in changing dividend and/or distribution options;

(h) Providing assistance and information in connection with proxy statements, annual reports, prospectuses and other correspondence from the Funds to shareholders (including, upon request, copies, but not originals, of regular correspondence, confirmations or regular statements of account); and

(i) Providing such other information and assistance to shareholders as may be reasonably requested by such clients.

Parnassus and the Funds acknowledge that, to the extent any of the foregoing services are provided by Parnassus, Parnassus is compensated for such services under the Agreement for Transfer Agent Services and Accounting and Pricing Services. No Payment shall be made pursuant to this Agreement for any services that are primarily intended to result in the sale or distribution of shares of the Funds.

        3.       Standard of Care. In the performance of the duties hereunder, Parnassus and the Service Providers shall be obligated to exercise due care and diligence and to act in good faith and to use their best efforts. Without limiting the generality of the foregoing or of any other provision of this Agreement, neither Parnassus nor any Service Provider shall be liable for delays or errors or loss of data occurring by reason of circumstances beyond Parnassus’ or the Service Provider’s control.

        4.       Confidentiality. Parnassus agrees, on behalf of itself and its employees, to treat confidentially all records and other information relative to the Funds, and all prior, present or potential shareholders of the Funds, except after prior notification to, and approval of release of information in writing by, the Funds, which approval shall not be unreasonably withheld, and may not be withheld where Parnassus or a Service Provider may be exposed to civil or criminal contempt proceedings for failure to comply, when requested to divulge such information by duly constituted authorities, or when so requested by the Funds.

        5.       Independent Contractor. Parnassus shall, for all purposes herein, be deemed to be an independent contractor, and the Service Providers shall at all times be deemed to be independent contractors retained by Parnassus and not the Funds, and Parnassus and the Service Providers shall, unless otherwise expressly provided and authorized to do so, have no authority to act for or represent the Funds in any way, or in any way be deemed an agent for the Funds. It is expressly understood and agreed that the services to be rendered by Parnassus under the provisions of this Agreement are not to be deemed exclusive, and Parnassus shall be free to render similar or different services to others so long as its ability to render the services provided for in this Agreement shall not materially be impaired thereby.

        6.       Compensation. As compensation for the services rendered by, and responsibilities assumed by, Parnassus during the term of this Agreement, each Fund will pay to Parnassus for payment to Service Providers service fee not to exceed 0.25% (25 basis points) per annum of the average monthly net asset value of such Fund’s shares held by clients of the Service Provider, such fee to be paid at such times as may be necessary to facilitate the payments of Parnassus to the Service Providers.

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        7.       Fund Information. No person is authorized to make any representations concerning the Funds, shares of the Funds or shareholder services except in accordance with the terms of this Agreement. Neither Parnassus or any Service Provider, nor any of their respective agents will use or distribute, or authorize the use or distribution of, any statements relating to the Funds other than those contained in the Funds’ current Prospectuses or Statements of Additional Information or in such supplemental literature as may be authorized by the Funds.

        8.       Reports to the Funds. Parnassus shall provide to the Board of Trustees of the Funds, and the Board shall review, at each meeting, a written report of the amounts expended pursuant to this Agreement.

        9.       Duration. This Agreement shall continue in full force and effect for so long as such continuance is approved at least annually by vote or written consent of a majority of the Trustees of the Funds, including a majority of the Trustees of the Funds who are not “interested persons” (“Independent Trustees”).

        10.       Termination. This Agreement may be terminated without penalty by either party upon at least 60 days’ prior written notice to the other; provided, that in the case of termination by the Funds, the Trustees, including a majority of the Independent Trustees, shall have authorized such action.

        11.       Amendments. This Agreement or any part hereof may be changed or waived only by an instrument in writing signed by the party against which enforcement of such change or waiver is sought. All amendments to this Agreement must be approved by vote of the Board of Trustees of the Funds, including a majority of the Independent Trustees.

        12.       Records. All records required to be maintained and preserved by the Funds pursuant to the provisions of rules or regulations of the Securities and Exchange Commission under Section 3l(a) of the 1940 Act and maintained and preserved by Parnassus on behalf of the Funds, including any such records maintained by Parnassus in connection with the performance of its obligations under this Agreement, are the property of the Funds and shall be provided by Parnassus promptly on request by the Funds.

        13.        Miscellaneous.

(a) This agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof.

(b) The captions in this Agreement are included for convenience of reference only and in no way define or limit any of the provisions hereof or otherwise affect their construction or effect.

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(c) This Agreement shall be governed by and construed in accordance with the laws of the State of California as applicable to contracts between California residents entered into and to be performed entirely within California.

(d) If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.

(e) Parnassus acknowledges that it has received notice of and accepts the limitations of the Funds’ liability set forth in the Funds’ Agreement and the Declaration of Trust. Parnassus agrees that the Funds’ obligations under this Agreement shall be limited to the Funds and to their assets, and that neither Parnassus nor any Service Provider shall seek satisfaction of any such obligation from the shareholders of the Funds or from any Trustee, officer, employee or agent of the Funds.

(f) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors.

(g) This Agreement may not be assigned without the written consent of the parties.

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below on the day and year first above written

	THE PARNASSUS FUND
	THE PARNASSUS INCOME TRUST
Date: July 27, 2004	By:  /s/ Richard Silberman
	Richard Silberman, Secretary
	PARNASSUS INVESTMENTS
Date: July 27, 2004	By:  /s/ Jerome L. Dodson
	Jerome L. Dodson, President

4

EXHIBIT 1

SHAREHOLDER SERVICING PLAN AND AGREEMENT by and between THE PARNASSUS
FUND and THE PARNASSUS INCOME TRUST and PARNASSUS INVESTMENTS

LIST OF FUNDS COVERED UNDER THE AGREEMENT

Name of Fund	Basis Points Paid Per Annum
The Parnassus Fund	25
The Parnassus Equity Income Fund	25
The Parnassus Fixed-Income Fund	25
The Parnassus California Tax-Exempt Fund	25

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EX-99.(I)

Exhibit (i)

	FOLEY & LARDNER LLP ATTORNEYS AT LAW
	777 EAST WISCONSIN AVENUE MILWAUKEE, WISCONSIN 53202-5306 414.271.2400 TEL 414.297.4900 FAX www.foley.com
February 11, 2005
	CLIENT/MATTER NUMBER 035194-0102

Parnassus Funds
One Market
Steuart Tower –Suite #1600
San Francisco, California 94105

Ladies and Gentlemen:

        We have acted as counsel for you in connection with the preparation of an Amended Registration Statement on Form N-1A relating to the sale by you of an indefinite amount of Parnassus Funds units of beneficial interest (such units of beneficial interest being hereinafter referred to as the “Shares”) in the manner set forth in the Amended Registration Statement to which reference is made. In this connection we have examined: (a) the Amended Registration Statement on Form N-1A; (b) your Declaration of Trust and By-laws, as amended to date; (c) Trust proceedings relative to the authorization for issuance of the Shares; and (d) such other proceedings, documents and records as we have deemed necessary to enable us to render this opinion.

        Based upon the foregoing, we are of the opinion that the Shares when sold as contemplated in the Amended Registration Statement will be legally issued, fully paid and nonassessable.

        We hereby consent to the use of this opinion as an exhibit to the Amended Registration Statement on Form N-1A. In giving this consent, we do not admit that we are experts within the meaning of Section 11 of the Securities Act of 1933, as amended, or within the category of persons whose consent is required by Section 7 of said Act.

Very truly yours,

/s/ Foley & Lardner LLP

FOLEY & LARDNER LLP

BRUSSELS
CHICAGO
DETROIT
JACKSONVILLE LOS ANGELES
MADISON
MILWAUKEE
NEW YORK ORLANDO
SACRAMENTO
SAN DIEGO
SAN DIEGO/DEL MAR SAN FRANCISCO
SILICON VALLEY
TALLAHASSEE
TAMPA TOKYO
WASHINGTON, D.C.
WEST PALM BEACH

EX-99.(J)

Exhibit (j)

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to (a) the incorporation by reference in this Post-Effective Amendment No. 24 to Registration Statement No. 2-93131 of the Parnassus Funds (formerly known as “the Parnassus Fund”) on Form N-1A of our report dated February 4, 2005 appearing in the Annual Report of The Parnassus Fund for the year ended December 31, 2004, and incorporated by reference in the Statement of Additional Information which is part of this Registration Statement, (b) the reference to us under the headings “Financial Highlights” and “General Information” appearing in the Registration Statement, and (c) the reference to us under the heading “General” appearing in the Statement of Additional Information, which is also part of such Registration Statement.

San Francisco, California
February 11, 2005

EX-99.(P)

Exhibit (p)

Code of Ethics
of
THE PARNASSUS FUND
THE PARNASSUS INCOME TRUST
and
PARNASSUS INVESTMENTS

        Adoption of this Code. This Code of Ethics (this “Code”) has been adopted by The Parnassus Fund and The Parnassus Income Trust (each of which is referred to as the “Fund”) and Parnassus Investments (the “Adviser”) in compliance with Rule 17j-1 (the “Rule”) under the Investment Company Act of 1940 (the “1940 Act”) and Rule 204a-1 under the Investment Advisers Act of 1940 (the “IAA”). The Chief Compliance Officer (the “Compliance Officer”) shall be responsible for the administration of this code.

        General Principles. In their personal investment activities, all Trustees and officers of the Fund and all officers, directors and staff of Parnassus Investments should at all times place the interests of Fund shareholders and clients before their own personal interests. All personal securities transactions should be conducted consistent with this Code and in such a manner as to avoid any actual or potential conflict of interest or any abuse of an individual’s position of trust or responsibility. No one affiliated with the Fund or Parnassus Investments should take inappropriate advantage of his or her position. All persons abiding by this Code must seek to comply with federal securities laws to the best of their ability.

        Activities covered by this Code. This Code applies to all activities by which a Covered Account (see below) acquires or disposes of any direct or indirect beneficial interest in a Covered Security. (See Appendix A to this Code for a discussion of what constitutes such a beneficial interest.) Covered Securities do not, however, include transactions which are not voluntary, such as the receipt or disposition of Covered Securities in a reorganization in which all holders are bound by a vote of holders.

        Accounts covered by this Code. This Code covers all Covered Securities accounts (“Covered Accounts”) in which any “access person,” as defined by the Rule, has any direct or indirect beneficial interest. See Appendix B to this Code for the definition of “access person.” The Compliance Officer shall be responsible, as required by the Rule, for the identification and notification of access persons and the maintenance of records relating thereto.

        Note: Due to the beneficial ownership provisions of the Rule (see Appendix A), Covered Accounts may include accounts not only in the names of access persons, but other accounts not registered in their names, including accounts held for their benefit, certain family accounts and certain accounts of trusts, estates, partnerships and corporations. Access persons may exclude accounts which would otherwise be Covered Accounts in certain cases as discussed in Appendix A. A Covered Account related to a particular access person is referred to as a “Covered Account of that access person” or in similar terms.

        Covered Security. A “Covered Security” as used in this Code means any Security, as defined in Section 2(a)(36) of the 1940 Act except:

    (a)        securities issued by the Government of the United States, bankers’ acceptances, bank certificates of deposit, commercial paper, and shares of registered open-end investment companies; and

    (b)        securities issued by an entity that is not registered under Section 12 of the Securities Exchange Act of 1934 of which an access person holds, directly or indirectly, the right to thirty percent (30%) or more of the voting power (“private business”), provided that such access person has previously given written notice of that fact to the Compliance Officer.

        Covered Transactions. A “Covered Transaction” as used in this Code means any Covered Activity in a Covered Account involving Covered Securities. Because of the complexity of these definitions, an example is provided below to illustrate the application of these definitions. This example is not meant to cover all cases, but only to show how the definition works in a particular fact situation.

        Example: The wife of an access person has a custodial account for a minor child. Because of the beneficial ownership provision of the Rule, this is a Covered Account. The Account holds Covered Securities. The Covered Securities are sold. This is a Covered Activity, because it is voluntary. Thus, the transaction is a Covered Transaction.

        Prohibited Activities. For purposes of this Code, “access persons” are all Trustees and officers of the Fund and all officers, directors and staff of Parnassus Investments who have access to information about the Fund’s investment activities before they become part of the public record. However, independent Trustees who have no knowledge of the Fund’s investment activities before those activities become part of the public record may obtain exemption from the prohibitions of paragraphs (3) and (4) upon certifying those facts to the Compliance Officer. Similarly, an access person, even one who has nonpublic knowledge of the Fund’s investment activities, may obtain exemption for an account over which such person has no direct or indirect influence or control.

        The following are substantive restrictions on personal investing activities of all access persons:

(1) Initial Public Offerings. No access person may invest in an initial public offering unless the Compliance Officer gives prior written approval and certifies that the investment need not be reserved for the Fund and that the opportunity is not being offered to such access person by virtue of his or her position with the Fund. Any decisions by the Fund to purchase securities of that issuer within the following two (2) years shall be subject to an independent review by the Compliance Officer and shall be reported to the Trustees of the Fund at their next meeting.

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(2) Private Placements. No access person may invest in a private placement unless the Compliance Officer gives prior approval and certifies that the investment need not be reserved for the Fund and its shareholders and that the opportunity is not being offered to the access person by virtue of his or her position with the Fund. Any decisions by the Fund to purchase securities of that issuer within the following two (2) years shall be subject to an independent review by the Compliance Officer and shall be reported to the Trustees of the Fund at their next meeting.

(3) Blackout Periods. No access person may buy or sell a security within five (5) business days before or after the Fund or any other account managed by Parnassus Investments trades in that same security or is considering a trade in that security. Any profits realized on trades within the proscribed period must be disgorged.

(4) Ban on Short-Term Trading Profits. No access person may profit from the purchase and sale or sale and purchase of the same (or equivalent) security within 60 calendar days. Any profits realized on such short-term trades must be disgorged. Independent Trustees and other access persons who have no knowledge of the Fund’s investment activities before those activities become part of the public record are not subject to this prohibition.

(5) Gifts. No access person may receive a gift or other thing of value worth more than $100 from any person or entity that does business with or on behalf of the Fund. Any gift from any person or entity that does business with or on behalf of the Fund in excess of $10 shall be entered in the Gift Log which is maintained by the Compliance Officer.

(6) Service as a Director. No person with decision-making authority over the investment process at the Fund shall serve on the board of directors of a publicly-traded company unless the Trustees determine that such service would be consistent with the interest of the Fund and its shareholders.

(7) Ban on Rapid Trading of Fund Shares. To prevent the use of nonpublic information by access persons to take advantage of potential short-term discrepancies in the pricing of Fund shares, no access person shall buy and then sell Fund shares more than three times in a calendar quarter and no more than five times in a year. Access persons are prohibited from owning Parnassus Fund and Parnassus Income Trust shares through another broker-dealer or other entity outside of Parnassus Investments.

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(8) Protection of Material Nonpublic Information. Section 204A of the Advisers Act requires every investment adviser to establish, maintain, and enforce written policies and procedures reasonably designed to prevent the misue of material, nonpublic information. In accordance with Section 204A, access to material, nonpublic Fund and client information, including portfolio holdings information, shall be restricted to only those individuals who need such information to perform their duties. No person shall release detailed Fund or client portfolio information before it is available to the general public. However, this does not preclude the staff in the normal course of business to provide necessary information to third parties. These parties shall include, but are not limited to, ratings agencies, brokers, custodians and accountants. Release of material nonpublic information must be pre-approved by the Compliance Officer and kept in a log.

        Personal Trading Compliance Procedures. The term “Compliance Officer” shall include that Officer or any person under his supervision to whom any functions hereunder have been delegated. For personal trading by the President of the Fund and the Compliance Officer, the Board of Trustees shall designate one of its members to assume the role of Compliance Officer and another of its members to be an alternate. The Trustees so designated shall consult with the Director of Research to determine the status of the Funds’ trading. Both the Director of Research and the designated Trustee shall keep a record of approvals for the President’s and the Compliance Officer’s personal trading. For personal trading by any member of the President’s or Compliance Officer’s family residing with him, the Director of Research shall approve those trades before they are made, and the designated Trustee will review those trades at least once every quarter. The following are the compliance procedures:

(1) Notification of Outside Account. All employees shall provide written notification to the Compliance Officer of their intent to open a Covered Account prior to opening such an account. If the account was opened prior to the employee’s hire date, the employee shall notify the Compliance Officer promptly after the hire date.

(2) Preclearance. All access persons must “preclear” all personal Covered Transactions with the Compliance Officer. The President and Compliance Officer must preclear their trades with the Board of Trustees. Independent Trustees who have no nonpublic knowledge of the Fund’s investment activities are exempt from this requirement. Preclearance of personal trades of Covered Securities not owned by the Funds shall remain in effect for a period of five days, though the five-day, blackout-period restriction still applies. Preclearance of trades of Covered Securities owned by the Funds shall remain in effect until the end of the day in which preclearance was issued.

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(3) Records of Securities Transactions. All access persons must send duplicate copies of brokerage statements to the Compliance Officer for any Covered Account. These records must be promptly reviewed by the Compliance Officer. This requirement of duplicate copies of brokerage statements shall not apply to independent Trustees who have no knowledge of the Fund’s investment activities before those activities become part of the public record and so certify to the Compliance Officer.

(4) Disclosure of Personal Holdings.

(a)       All access persons (other than independent Trustees of a Fund) must disclose all Covered Securities holdings within 10 days of becoming access persons and thereafter must file an annual report containing personal Covered Securities holdings information that is current as of a date not more than 45 days before the report is submitted. Both the initial holdings report and the annual report must contain the following information:

• the title, number of shares and principal amount of each Covered Security in which the access person had, for the period covered, any direct or indirect beneficial ownership,

• the name of any broker, dealer or bank with whom the access person maintains an account in which any securities are held for the direct or indirect benefit of the access person,

• the date on which the access person submits the report.

(b)        Within 30 days of each fiscal quarter end, each access person of a Fund must file with the Fund and each access person of the Adviser must file with the Adviser a quarterly transaction report. Each independent Trustee of a Fund is exempt from providing the quarterly report, unless such Trustee knew or, in the ordinary course of fulfilling his or her duties as Trustee, should have known that during the 15-day period immediately before or after the Trustee’s transaction in a Covered Security, the Fund purchased or sold the Covered Security, or the Fund or the Adviser considered purchasing or selling the Covered Security.

The quarterly report should disclose the following information with respect to any Covered Transaction during the quarter in which the access person had any direct or indirect beneficial ownership:

• the date of the transaction, title, interest rate and maturity (if applicable), number of shares and principal amount of each Covered Security involved,

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• the nature of the transaction (purchase, sale or any other type of acquisition or disposition),

• the price of the Covered Security at which the transaction was affected,

• the name of the broker, dealer or bank with or through which the transaction was affected, and

• the date on which the access person submits the quarterly report.

The quarterly report should disclose the following with respect to any Covered Account established by the access person in which any Covered Securities were held during the quarter for the direct or indirect benefit of the access person:

• the name of the broker, dealer or bank with whom the access person established the account,

• the date the access person established the account, and

• the date on which the access person submits the report.

(c)        A person need not submit any of the reports listed in paragraphs (a) and (b) above with respect to transactions effected for, and Covered Securities held in, any account over which the person has no direct or indirect influence or control. A person need not submit any of the reports if Parnassus Investments is already receiving duplicate statements directly from the broker-dealer which contains all of the information listed in paragraphs (a) and (b).

(5) Certification of Compliance. At least annually and after every revision, all access persons shall receive a copy of this Code. All access persons must certify annually that they have received, read and understood this Code and recognize that they are subject thereto. They must certify annually that they have complied with this Code and they have complied with its requirements including reporting all personal securities transactions required to be disclosed or reported and that they do not own Fund shares outside of Parnassus Investments. All access persons that are not currently submitting copies of any brokerage activity to the Compliance Officer must provide written certification annually that there has been no reportable Covered Securities activity during the previous year.

(6) Review by the Board of Trustees. Each year the Fund’s management shall prepare a report to the Trustees that summarizes existing procedures concerning personal investment and any changes made to procedures during the preceding year. The report will also identify any violations requiring significant remedial action during the past year, will make suggestions for any changes deemed necessary and will certify that the Fund and the Adviser have adopted procedures reasonably necessary to prevent access persons from violating this Code.

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(7) Review of Trading of Fund Shares. On a quarterly basis, the Compliance Officer will review the trades and holdings of Fund shares by access persons to ensure compliance with the ban on rapid trading of Fund shares. All access persons must provide the Compliance Officer a list of accounts that hold Fund shares. For Fund shares held by the President and the Compliance Officer, the designated Trustee will review the Fund transactions on a quarterly basis.

(8) Violations of the Code. All access persons bound by this Code must promptly report violations of this Code to the Compliance Officer.

(9) Review by the Compliance Officer. All records required by this Code shall be promptly reviewed by the Compliance Officer.

Entity	Adopted	Amended
The Parnassus Fund	12/7/94	3/17/97, 7/17/97, 12/11/98, 3/12/99, 7/12/99, 3/24/00,
		3/23/01, 3/25/04, 7/27/04, 12/7/04
Parnassus Income Trust	12/2/94	3/17/97, 7/17/97, 12/11/98, 3/12/99, 7/12/99, 3/24/00,
		3/23/01, 3/25/04, 7/27/04, 12/7/04
Parnassus Investments	1/12/95	3/17/97, 7/17/97, 12/11/98, 3/12/99, 7/12/99, 3/24/00,
		3/23/01, 3/25/04, 7/27/04, 12/7/04

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APPENDIX A

        The purpose of this Appendix is to discuss the circumstances in which an access person may have a “direct or indirect beneficial interest” in a securities account. Under the Rule, this question is to be “interpreted in the same manner as it would be in determining whether a person is subject to the provisions of Section 16 of the Securities Exchange Act of 1934.”

        There is no comprehensive rule under that Section as to what constitutes beneficial ownership. Therefore, the only guidance is provided by SEC Releases and decided court cases so there can be changes from time to time. This Appendix is not designed to be a complete or comprehensive discussion, but only a summary of important areas.

        Under the Rule, an access person need not report “with respect to transactions effected for any account over which such person does not have any direct or indirect influence or control.” Thus, even if an access person has a beneficial interest in an account, as discussed herein, such account may not be a Covered Account as defined in the Code. For the purposes of the Code, an access person may remove an account which would otherwise be a Covered Account from that category by filing with the Compliance Officer a statement indicating lack of influence and control as stated above together with such other documents as the Compliance Officer may require to demonstrate such lack of influence or control

        The general categories of types of beneficial ownership may be summarized as follows: (i) direct ownership; (ii) securities held by others for the benefit of an access person; (iii) securities held by certain family members; and (iv) securities held by certain estates, trusts, corporations or partnerships.

        Direct Ownership. This includes securities registered in the name of an access person and bearer securities of which the access person is the bearer.

        Securities held by others for the benefit of an access person. This involves, in general, any agreement, arrangement or understanding under which an access person derives benefits substantially equivalent to those of ownership. This category would include, but not be limited to, securities held by pledgees, custodians and brokers.

        Securities held by certain family members. The SEC has indicated that the “beneficial ownership” of an access person extends to securities owned (see below) by a wife or husband of that access person, by a minor child or by other relatives (i) sharing the same household, or (ii) not sharing the same household but whose investments the access person directs or controls. That ownership by relatives may be direct (i.e., in their own name) or in one or more of the indirect ways described in this Appendix. This beneficial ownership position of the SEC is not affected by whether or not the assets being invested are the separate property of the relative. However, an access person may, as described in the Code, disclaim beneficial ownership of any particular securities and also may, as described in this Appendix, remove from the category of Covered Accounts any accounts over which the access person has no direct or indirect influence or control.

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        Securities held by estates etc. An access person may also have a beneficial interest in securities held by estates, trusts, partnerships or corporations. Access persons who are (i) settlers (i.e., creators), trustees or beneficiaries of a trust, (ii) executors or administrators of, or beneficiaries or legatees of, an estate; (iii) partners of a partnership, or (iv) directors, officers or substantial shareholders of a corporation, which, in each case, invests in Covered Securities, are required to obtain a determination from the Compliance Officer as to whether the accounts in question are Covered Accounts. In making any such determination, the Compliance Officer may rely on an opinion of counsel.

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APPENDIX B

1. “Access person” means:

    (i)      With respect to the Fund, any Trustee, officer or advisory person, as defined below, of the Fund;

    (ii)      With respect to the Adviser:

    (a)      any director, officer or advisory person of the Adviser; or

    (b)      any supervised person who has access to nonpublic information regarding any clients’ purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any Fund; or

    (c)      any supervised person who is involved in making securities recommendation to clients, or who has access to such recommendations that are nonpublic.

2. “Advisory person” of the Fund and the Adviser means:

    (i)      Any employee of any of them (or any company in a control relationship to any) who, in connection with his or her regular functions or duties, makes, participates in, or obtains information regarding the purchase or sale of a security by the Fund, or whose functions relate to the making of any recommendations with respect to such purchases or sales; and

    (ii)      Any natural person in a control relationship to any of them who obtains information concerning recommendations made to the Fund with regard to the purchase or sale of a covered security by the Fund.

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