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Domini Social Equity Fund ®

Fund Information

$47.54
Daily Price (NAV)
as of 07/28/2014
Symbol DSEFX
Daily NAV Change $0.06 (0.13%)

Overview

Investor Shares Overview

Socially and environmentally concerned investors have social, as well as financial, objectives. The Domini Social Equity Fund seeks to meet these objectives by offering a diversified stock portfolio for long-term capital appreciation that is consistent with social and environmental priorities.

Investment Objective

The Fund seeks to provide its shareholders with long-term total return.

Investment Strategy

The Fund invests primarily in stocks of U.S. companies that meet Domini Social Investments’ social and environmental standards.

Subject to these standards, Wellington Management Company, LLP, the Fund’s subadvisor, seeks to add value using a diversified quantitative stock selection approach, while managing risk through portfolio construction.

Shareholder Activism

The Fund also advances its social and environmental objectives through proxy voting, dialogue with corporations, and the filing of shareholder resolutions

Social and Environmental Standards

Domini evaluates the Fund’s current and potential investments 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.

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

Investor Profile

Who Should Invest:

  • Investors seeking long-term growth of capital.
  • Investors committed to the Fund's socially responsible investment standards.

Who Should Not Invest:

  • Investors unwilling or unable to accept moderate to significant fluctuations in share price.

Performance

Investor Shares Performance


Month-End Returns as of 6/30/14
YTD1Yr3 Yr*5 Yr*10 Yr*Since Inception (6/3/91)*
DSEFX8.71%27.57%14.35%18.16%6.63%8.76%
S&P 5007.14%24.61%16.58%18.83%7.78%9.46%

Quarter-End Returns as of 6/30/14
YTD1 Yr3 Yr*5 Yr*10 Yr*Since Inception (6/3/91)*
DSEFX8.71%27.57%14.35%18.16%6.63%8.76%
S&P 5007.14%24.61%16.58%18.83%7.78%9.46%

Calendar Year Returns
DSEFXS&P 500
201332.85%32.39%
201211.33%16.00%
20110.74%2.11%
201013.69%15.06%
200935.56%26.46%
2008-37.88%-37.00%
20071.46%5.50%
200612.58%15.79%
20052.03%4.91%
20049.26%10.88%
200327.13%28.69%
2002-20.69%-22.10%
2001-12.76%-11.88%
2000-15.05%-9.11%
199922.63%21.04%
199832.99%28.58%
199736.02%33.36%
199621.84%23.07%
199535.17%37.50%
1994-0.36%1.26%
19936.54%10.08%
199212.10%7.68%

Quarterly Returns
DSEFXS&P 500
2nd Qtr 20145.69%5.23%
1st Qtr 20142.86%1.81%
4th Qtr 20139.47%10.51%
3rd Qtr 20137.20%5.24%
2nd Qtr 20132.75%2.91%
1st Qtr 201310.19%10.61%

*Average annual total returns.

On 11/30/06, the Fund changed to an active management strategy. Past performance through 11/29/06 represents the former passive investment strategy, and is not indicative of future results.

Annual Expense Ratio: Gross: 1.24% / Net: 1.24%. Per current prospectus. Domini has contractually agreed to cap Investor share expenses to not exceed 1.25% 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 6/30/14
COMPANY% OF PORTFOLIO
Microsoft Corporation4.1%
Eli Lilly and Company3.2%
Apache Corporation3.1%
Apple Inc.2.9%
The Kroger Co.2.7%
National Oilwell Varco2.7%
Celgene Corp.2.5%
Consolidated Edison Inc.2.5%
Oracle Corporation2.4%
Southwest Airlines Co.2.3%
TOTAL28.5%

Sector Weightings as of 6/30/14
SECTOR% OF PORTFOLIO
Information Technology20.9%
Financials18.0%
Consumer Discretionary13.3%
Health Care11.5%
Consumer Staples9.1%
Energy8.9%
Industrials8.8%
Telecommunication Services5.1%
Utilities2.8%
Materials1.6%
Total100.0%

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

Characteristics

Portfolio Overview

Socially screened, mid- to large-capitalization domestic equity fund.

 

Investment Style:

Blend

Weighted Average Market Capitalization:

Large

Portfolio Statistics

  DSEFX S&P 500
Price-to-Earnings Ratio (projected) 13.3 14.8
Price-to-Book Ratio 2.1 2.8
Beta (projected) 1.05 --
R-squared (projected) 0.97 --
Market Cap Asset Weighted Avg. (Millions) $66,222 $125,275
Total Number of Holdings 151 500

All data as of 6/30/14 unless otherwise noted.

Definitions:

The Price/Earnings Ratio is a stock’s current price divided by the company’s trailing 12-month earnings per share. The Price/Book Ratio is used to compare a stock's market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share. The P/E and P/B ratio of a fund is the weighted average of the price/earnings and price/book ratios of the underlying stocks in a fund’s portfolio. 

R-squared measures how a fund’s performance correlates with a benchmark index’s performance and shows what portion of it can be explained by the performance of the overall market/index. R-squared ranges from  0, meaning no correlation, to 1, meaning perfect correlation.

Beta is a measure of the volatility of a fund relative to its benchmark index. A beta greater (less) than 1 is more (less) volatile than the index.

Commentary

Investor Shares Performance Commentary

The Fund is managed through a two-step process designed to capitalize on the strengths of Domini Social Investments and Wellington Management. Domini performs social, environmental and governance analysis, and Wellington then utilizes quantitative modeling techniques to manage the portfolio. Download Commentary as a PDF.

Total Returns as of March 31, 2014

  Jan.
2014
Feb.
2014
Mar.
2014
1st Qtr
2014
YTD One
Year
Three
Year*
Five
Year*
Ten
Year*
Since Inception
(6/3/91)*
DSEFX -3.24% 5.78% 0.51% 2.86% 2.86% 24.02% 12.85% 21.31% 6.26% 8.60%
S&P 500 -3.46% 4.57% 0.84% 1.81% 1.81% 21.86% 14.66% 21.16% 7.42% 9.32%

For the first quarter of 2014, the Fund’s Investor shares returned 2.86%, outperforming the S&P 500 Index return of 1.81%.

Relative performance was helped the most by strong security selection in the consumer discretionary, consumer staples, energy and financial sectors. This was partially offset by weaker security selection in the health care sector and an underweight to utilities.

The following portfolio holdings were the top positive contributors to the Fund’s relative performance:

  • Southwest Airlines, which returned nearly 26% for the quarter after reporting impressive fourth quarter results. Higher unit revenue, lower unit costs and expanded capacity drove improved margins despite more than 6,500 flight cancellations due to winter storms. 
  • Eli Lilly and Company, the Fund’s second largest holding, which returned more than 16% for the quarter after announcing encouraging Phase III study results for its lung cancer drug Ramucirumab. The company currently has several promising oncology and diabetes products in Phase III clinical trials. 
  • Kroger, the national supermarket chain and the Fund’s fifth largest holding, which returned nearly 11% for the quarter.

The following portfolio holdings were the largest detractors to the Fund’s relative performance:  

  • Celgene, a biopharmaceutical company that fell more than 17% over the quarter, despite solid fourth quarter results, as the stock was affected by market volatility and long-term sector outlook. 
  • Dun & Bradstreet, a business information licenser whose shares dropped nearly 19% for the quarter. Market penetration appears to be stifling growth, as subscriptions are declining. Increased spending is planned to create and distribute new content for marketing initiatives. 
  • Scripps Networks Interactive, a lifestyle media company whose shares declined more than 11% for the quarter.

For the 12 months ended March 31, the Fund’s Investor shares returned 24.02%, outperforming the S&P 500, which returned 21.86%.

U.S. equity markets rose for the fifth consecutive quarter and reached another all-time high in March. After finishing their best year since 1997, U.S. stocks began 2014 with their worst month in nearly two years, as worries about a slowdown in China and general angst surrounding emerging markets overshadowed a fairly benign domestic environment. Stocks rebounded in February, despite adversely weather-influenced economic data, as robust merger and acquisition activity and an increase in the debt ceiling stoked investors’ risk appetites. In March, however, momentum stocks came under heightened scrutiny, causing some to question the staying power of the 5-year-old bull market. Fed Chairman Janet Yellen also spooked some investors by indicating that the Fed may begin to raise interest rates at a more aggressive pace than anticipated.

Throughout 2013, developed-market equities remained in a pro-cyclical bull market, with riskier, more cyclically-sensitive stocks outperforming their less volatile counterparts. The Fund benefitted from this, as the discount on these cheaper stocks contracted amid the market’s upbeat sentiment. As the first quarter of 2014 came to a close, many of the trends that shaped the 12-month period reversed, and higher-risk biotech and smaller-cap stocks declined. With the valuation spread between high and low beta stocks largely abated, lower-risk value stocks that are less dependent on a pro-cyclical rally led the way in the more defensive market.

Making a Difference

Domini engages in direct dialogue with corporations in our portfolios and files shareholder proposals on a broad range of social, environmental, and corporate governance issues. Shareholder activism — the practice of active ownership — lies at the heart of what we believe responsible investing is all about. Here are a few ways your investment in the Domini Funds has made a difference. For more stories, click here.

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