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Domini Social Equity Fund ®

Fund Information

$46.04
Daily Price (NAV)
as of 10/20/2014
Symbol DSEFX
Daily NAV Change $0.55 (1.21%)

Key Documents

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 9/30/14
YTD1Yr3 Yr*5 Yr*10 Yr*Since Inception (6/3/91)*
DSEFX10.36%20.81%21.02%14.77%7.20%8.73%
S&P 5008.34%19.73%22.99%15.70%8.11%9.41%

Quarter-End Returns as of 9/30/14
YTD1Yr3 Yr*5 Yr*10 Yr*Since Inception (6/3/91)*
DSEFX10.36%20.81%21.02%14.77%7.20%8.73%
S&P 5008.34%19.73%22.99%15.70%8.11%9.41%

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
3rd Qtr 20141.52%1.13%
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 9/30/14
COMPANY% OF PORTFOLIO
Apple Inc.4.4%
Microsoft Corp.3.6%
Intel Corp.3.0%
Eli Lilly and Company2.9%
Apache Corp.2.9%
Qualcomm Inc. 2.6%
The Kroger Co. 2.6%
Consolidated Edison Inc.2.5%
Southwest Airlines Co.2.4%
CenturyLink Inc.2.3%
TOTAL29.2%

Sector Weightings as of 9/30/14
SECTOR% OF PORTFOLIO
Information Technology21.9%
Financials17.9%
Consumer Discretionary13.2%
Health Care12.4%
Consumer Staples8.8%
Industrials8.3%
Energy8.2%
Telecommunication Services5.8%
Utilities2.5%
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) 13.5 14.8
Price-to-Book Ratio 2.1 2.7
Beta (projected) 1.04 --
R-squared (projected) 0.97 --
Market Cap Asset Weighted Avg. (Millions) $82,204 $130,467
Total Number of Holdings 157 500

All data as of 9/30/14 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 June 30, 2014

  April
2014
May
2014
June
2014
2nd Qtr
2014
YTD One
Year
Three
Year*
Five
Year*
Ten
Year*
Since Inception
(6/3/91)*
DSEFX 0.43% 2.38% 2.79% 5.69% 8.71% 27.57% 14.35% 18.16% 6.63% 8.76%
S&P 500 0.74% 2.35% 2.07% 5.23% 7.14% 24.61% 16.58% 18.83% 7.78% 9.46%

For the second quarter of 2014, the Fund’s Investor shares returned 5.69%, outperforming the S&P 500 Index return of 5.23%.

Relative performance was helped the most by strong security selection in the health care, industrials and consumer staples sectors. This was partially offset by weaker security selection in the consumer discretionary and materials sectors.

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

  • Shire plc, an Irish specialty biopharmaceutical company whose stock soared more than 58% during the quarter in response to a proposed acquisition by AbbVie in a cash and stock deal valuing the company at a large premium to the pre-announcement market price. During the first quarter, strong product sales and strict cost discipline led to solid earnings growth and a lift to fiscal year guidance. 
  • Apache Corporation, an independent oil and gas exploration company that returned nearly 22% for the quarter after first quarter earnings beat consensus expectations. 
  • National Oilwell Varco, an energy equipment and services company that returned more than 19% over the quarter.

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

  • Coach, Inc., an international accessory retailer whose shares dropped nearly 31% following a first quarter marked by accelerated market share declines and margin compression in the North American handbag segment. The decline in North America was led by decreased traffic and harsh weather. 
  • Domtar Corporation, a Canadian paper company that saw its shares decline nearly 23% following an underwhelming first quarter, with an earnings miss caused by high costs and weak volumes, largely related to harsh weather conditions. 
  • Bed Bath & Beyond Inc., a merchandise retailer that declined nearly 17% over the quarter.

For the 12 months ended June 30, the Fund’s Investor shares returned 27.57%, outperforming the S&P 500 Index return of 24.61%.

U.S. equities, as measured by the S&P 500, rose for the sixth consecutive quarter, ending June near an all-time high. The S&P 500 is now up 224.4% from its closing low on March 9, 2009.

Throughout 2013, developed-market equities remained in a bull market fueled by economic growth, with riskier stocks that are more sensitive to market movements 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 price spread between higher and lower risk stocks largely abated, lower-risk value stocks that are less dependent on a market rally led the way in the more cautious market.

The second quarter began on a positive note in April, as earnings season provided a varied yet encouraging picture, with companies generally reporting healthy earnings despite more subdued revenues. The rally continued in May, as strong manufacturing activity and continued positive momentum in housing and employment data helped to offset a large negative revision to first quarter economic growth. In June, the Fed announced an expected further reduction in its asset purchase program. While the Fed acknowledged the rebound in economic activity over recent months, it lowered its current 2014 growth forecast from its March forecast.

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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