Parnassus Investments, an investment management company, released the "Parnassus Core Equity Fund" second quarter of 2026 investor letter. A copy of the letter can be downloaded here. The fund returned 16.83% in the second quarter of 2026, outperforming the S&P 500's 15.20% gain. Performance was supported by holdings in Information Technology and Communication Services, as well as the fund's lack of Energy exposure, while Financials and Health Care detracted. The fund is positioning for long-term growth through AI infrastructure, semiconductors, electrification and industrial automation, while maintaining defensive positions in quality compounders. Looking ahead, the manager remains constructively bullish on U.S. equities but cautious about narrow market leadership, trade tensions, inflation, and geopolitical risks. The fund continues to favor high-quality, competitively advantaged businesses at attractive valuations, with a balanced approach to capturing AI-driven opportunities while limiting downside risk. In addition, please check the Fund's top five holdings to know its best picks in 2026.
In its second-quarter 2026 investor letter, Parnassus Core Equity Fund highlighted stocks like Realty Income Corporation (NYSE:O). Realty Income Corporation (NYSE:O) is a real estate investment trust that owns income-generating commercial properties leased to tenants under long-term agreements. The one-month return of Realty Income Corporation (NYSE:O) was -4.20% while its shares traded between $55.86 and $67.94 over the last 52 weeks. On August 13, 2026, Realty Income Corporation (NYSE:O) stock closed at approximately $62.59 per share, with a market capitalization of about $59.56 billion.
Parnassus Core Equity Fund stated the following regarding Realty Income Corporation (NYSE:O) in its Q2 2026 investor letter:
Realty Income (NYSE:O) posted a positive return for the quarter but lagged the broader market amid uncertainty around Fed interest rate policy and investor rotation out of defensive stocks such as REITS and into higher-growth areas.
Realty Income Corporation (NYSE:O) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 32 hedge fund portfolios held Realty Income Corporation (NYSE:O) at the end of the first quarter, which was 31 in the previous quarter. While we acknowledge the risk and potential of Realty Income Corporation (NYSE:O) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
In another article, we covered Realty Income Corporation (NYSE:O) and shared our outlook on the stock. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.