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Domini Social Bond Fund ®

Fund Information

$11.35
Daily Price (NAV)
as of 10/21/2014
Symbol DSBIX
Daily NAV Change $0.00 (0.00%)

Key Documents

Overview

Institutional Shares Overview​

Institutional shares are available to qualified endowments, foundations, religious organizations, nonprofit entities, individuals and certain corporate or similar institutions that meet the minimum investment requirements.

Investment Objective

The Fund seeks to provide its shareholders with a high level of current income and total return by investing in bonds and other debt instruments that meet the Fund's social and environmental standards.

Investment Strategy

The Fund normally invests at least 85% of assets in intermediate-term, investment-grade fixed-income securities, including government agency, corporate, mortgage-backed and asset-backed securities, taxable municipal bonds, and U.S. dollar-denominated bonds issued by non-U.S. entities.
 
The Fund seeks to invest up to 10% of its assets in debt instruments and other investments that provide a high level of community impact. These investments may be illiquid, unrated, and may carry greater credit risks than its other holdings.

Management

Investment Advisor and Sponsor: Domini Social Investments LLC
 
Subadvisor: Seix Advisors LLC, a wholly-owned subsidiary of RidgeWorth Capital Management, Inc. Seix uses a team of investment professionals supervised by James Keegan to manage the Fund.

Social and Environmental Standards

To determine which securities are eligible for investment, Domini evaluates the Fund’s current and potential corporate debt instruments against its social and environmental standards based on the businesses in which they engage, as well as on the quality of their relations with key stakeholders, including communities, customers, ecosystems, employees, investors, and suppliers.

For noncorporate issuers, Domini seeks to identify investments with a positive impact on communities.

Domini may determine that a security is eligible for investment even if its profile reflects a mixture of positive and negative social and environmental characteristics.

Community Economic Development

The Fund's community economic development focus is in the areas of small business loans and affordable housing for the economically disadvantaged.

Investor Profile

Who Should Invest

  • The Institutional share class of the Domini Social Bond Fund is available to investors that meet the minimum investment requirements, have been approved by the distributor, and fall within the following categories: endowments, foundations, religious organizations and other nonprofit entities, individuals, retirement plan sponsors, family office clients, private trusts, certain corporate or similar institutions, or omnibus accounts maintained by financial intermediaries.**
  • Investors seeking a high level of current income and total return
  • Investors seeking exposure to the bond market to diversify their portfolio
  • Investors who wish to support the Fund's socially responsible investment standards and its community development emphasis

Who Should Not Invest

  • Investors unwilling or unable to accept fluctuations in share price due to risks associated with the bond market

Performance

Institutional Shares Performance
 

Month-End Returns as of 9/30/14
YTD1 Yr3 Yr*5 Yr*10 Yr*Since Inception (6/1/00)*
DSBIX2.77%2.54%1.22%2.70%3.64%4.64%
BCIA2.88%2.74%2.08%3.57%4.30%5.35%

Quarter-End Returns as of 9/30/14
YTD1 Yr3 Yr*5 Yr*10 Yr*Since Inception (6/1/00)*
DSBIX2.77%2.54%1.22%2.70%3.64%4.64%
BCIA2.88%2.74%2.08%3.57%4.30%5.35%

Calendar Year Returns
DSBIXBCIA
2013-1.76%-1.02%
20122.89%3.56%
20115.85%5.97%
20104.74%6.15%
20095.77%6.46%
20085.69%4.86%
20076.00%7.02%
20063.38%4.58%
20051.56%2.01%
20042.81%3.74%
20032.31%3.81%
20028.85%9.51%
20018.34%8.67%

Quarterly Returns
DSBIXBCIA
3rd Qtr 2014-0.02%0.03%
2nd Qtr 20141.43%1.62%
1st Qtr 20141.36%1.20%
4th Qtr 2013-0.22%-0.14%
3rd Qtr 20130.66% 0.76%
2nd Qtr 2013-2.16%-1.78%
1st Qtr 2013-0.03%0.15%

*Average annual total returns.

Institutional shares were not offered prior to 11/30/11. All performance information for time periods beginning prior to that date is the performance of the Investor shares, which has not been adjusted to reflect the lower expenses of the Institutional shares.

Annual Expense Ratio: Gross: 0.97% / Net: 0.65%. Per current prospectus. Domini has contractually agreed to cap Investor share expenses to not exceed 0.65% until 11/30/14, subject to earlier modification by the Fund’s Board of Trustees. See prospectus for details. The Funds’ performance would have been lower had these fees not been waived

Holdings

Ten Largest Holdings as of 9/30/14
ISSUER% OF PORTFOLIO
Freddie Mac (0.5% due 5/13/2016)17.8%
Freddie Mac (2.375% due 1/13/2022)11.3%
Freddie Mac (1.25% due 10/2/2019)10.3%
Freddie Mac (1% due 7/28/2017)3.9%
Fannie Mae pool 471333 (3.12% due 8/1/2022) 1.5%
Fannie Mae pool AM4253 (3.22% due 9/1/2020)1.5%
Federal Home Loan PC Pool 849139 (1% due 9/1/2043)1.2%
Fannie Mae pool 471478 (2.61% due 8/1/2022)1.1%
Verizon Communications (5.15% due 9/15/2023)1.1%
Fannie Mae Pool 932871 (3% due 1/1/2026)1.0%
TOTAL50.7%
Sector Weightings as of 9/30/14
SECTOR% OF PORTFOLIO
U.S. Government Agency Obligations42.3%
U.S. Government Agency Mortgage Securities29.2%
Corporate Obligations15.4%
Corporate Mortgage Securities9.2%
Certificates of Deposit3.2%
Cash0.7%
Total100.0%

View the most recent quarterly holdings report filed with the Securities and Exchange Commission.

Characteristics

All data as of 6/30/2014 unless otherwise noted.

Portfolio Composition by Credit Quality1

AAA 1.19%
AA 79.99%
A 6.02%
BBB 6.54%
BB 0.00%
Not Rated2 6.26%

Portfolio Statistics (as of 9/30/2014)

  DSBFX BCIA3
Avg. Effective Maturity (Yrs.) 4.97 5.19
Total Number of Issues (including cash equivalents) 182  
 
1. Credit-quality ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest). Credit-quality ratings for each issue are obtained from Moody's Investors Service (Moody's) and Standard & Poor's (S&P). When two bonds receive different ratings from Moody’s and S&P, we take the higher of the two ratings into consideration.
2. Represents insured certificates of deposit and money market instruments with community development financial institutions and cash.
3. Barclays Capital Intermediate Aggregate Index

Commentary

The Fund is managed through a two-step process designed to capitalize on the strengths of Domini Social Investments and Seix Investment Advisors. Domini develops an approved universe of companies and Community Development Financial Institutions, as well as guidelines for measuring the level of impact that various types of fixed income instruments have on local communities, and Seix utilizes proprietary analytical tools to manage the portfolio. Dowload Commentary as a PDF.

Total Returns as of June 30, 2014

  April
2014
May
2014
June
2014
2nd Qtr
2014
YTD One
Year
Three
Year*
Five
Year*
Ten
Year*
Since Inception
(6/1/00)*
DSBIX 0.50% 0.95% -0.03% 1.43% 2.79% 3.24% 2.29% 3.22% 3.92% 4.73%
BCIA 0.65% 0.92% 0.05% 1.62% 2.85% 3.48% 2.85% 4.22% 4.57% 5.45%

For the second quarter of 2014, the Fund’s Institutional Shares returned 1.43%, while the Barclays Capital Intermediate Aggregate (BCIA) Index returned 1.62%.

During the quarter the Fund’s allocation to securitized issues made a slight positive contribution to relative performance. This was largely driven by its allocation to certain agency Commercial Mortgage-Backed Securities (“CMBS”) that benefitted from their first-ever inclusion into the Barclays Aggregate Index (as of July 1, 2014), as passively managed bond investors purchased them ahead of their pending index inclusion.

Performance within the Fund’s investment-grade corporate bond allocation was not a significant contributor to relative performance overall. A slight positive contribution derived from security selection was essentially offset by a slight negative contribution from the Fund’s underweight to corporates, which performed well during the quarter. The Fund remains underweight to these issues on the view that they are not offering adequate yield premiums to compensate for the risk assumed.

The Fund’s continued overweight to U.S. government agency issues in lieu of U.S. Treasuries was not a major contributor to relative performance during the quarter. The Fund maintained its duration-neutral posture versus the benchmark, meaning that, over time, changes in overall interest rates should not be a major contributor to relative performance results. However, the Fund’s overweight to longer-term bonds, relative to the Index, did make a slight positive contribution to relative performance this quarter, as long-term rates declined and short-term rates increased slightly.

The Fund underperformed the Index, as these modest contributions to relative performance were not enough to offset the expenses of the Fund, and Index performance does not include any fees or expenses.

Community Impact

The Fund seeks to play a positive role in the economic development of struggling communities. As part of this ongoing commitment, as of June 30, the Fund has direct investments with 14 community development financial institutions, serving local communities and low- to medium-income borrowers across the country.

Making a Difference

Local & National Communities

Domini believes that all investments have social and environmental implications. Fixed income investments are no exception. We have developed a five-point scale of community impact to categorize each of our fixed income instruments. Learn more about Domini’s Community Impact Gradient.

Impact-Based Portfolio Weightings as of June 30, 2014
% of Portfolio
High-Impact
 
     Government-Agency Commercial Mortgage Securities focused on Low-Income Housing
6.9%
     Community-Development and Community-Serving Financial Institutions*
3.2%
     Affordable-Housing Commercial Mortgage-Backed Security (Community Reinvestment Fund)
0.3%
     Green-Building Commercial Mortgage-Backed Security
0.7%
Sub-Total of High-Impact
11.1%
Medium Impact
 
     Government-Agency General and Mortgage Securities (Housing)
70.9%
Low Impact
 
     General Purpose Corporate Obligations that Meet Domini's Standards
14.9%
Cash
3.1%
TOTAL
100%
*Insured certificates of deposit and money market instruments
 

Community Development Financial Institutions

We believe that healthy economies and communities must be built on a strong foundation of fairness and opportunity. The Domini Social Bond Fund invests in a number of Community Development Financial Institutions (CDFIs)—banks and credit unions whose primary missions are to serve low-income, minority, women, and immigrant communities historically underserved by traditional financial institutions.

Southern Bancorp

Rural Development and Public Goods in the South

Founded in 1986, Southern Bancorp is the nation’s largest rural development bank with a long-term commitment to community revitalization through efforts such as poverty reduction, education, healthcare, housing, and leadership development. Southern works in isolated rural communities in Arkansas and Mississippi, where the poverty rate exceeds 30 percent and the unemployment rate exceeds 15 percent...

Self-Help Credit Union

Promoting Home Ownership and Healthy Food Systems in Low-Income Communities

Since the foreclosure crisis, Self-Help Credit Union and its policy affiliate, the Center for Responsible Lending have been active in national and regional efforts to stabilize neighborhoods hard-hit by foreclosure, providing responsible housing loans, foreclosure prevention and recovery services, and policy research and advocacy to fight against predatory lending practices, including payday-lending and check-cashing services...

Hope Credit Union

Serving the Underserved in the Mid-South

Hope Credit Union provides financial services to underserved communities in four of the six states with the country’s lowest median household incomes: Mississippi, Louisiana, Tennessee, and Arkansas. Thousands of residents of these states have lost homes and businesses due to hurricanes and flooding, and Hope helps rebuild affected communities through its affordable financial products and services...

Financing Minority Communities

We believe that healthy economies and communities must be built on a strong foundation of fairness and opportunity. The following CDFIs in the Fund’s portfolio all serve minority communities that are often excluded from the mainstream financial industry...