Questions?

1-800-582-6757

Monday - Friday
9 a.m. - 6 p.m. EST

Send us an email

Domini Social Equity Fund ®

Fund Information

$35.68
Daily Price (NAV)
as of 2/12/2016
Symbol DSEFX
Daily NAV Change $0.73 (2.09%)

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 1/31/16
YTD1Yr3 Yr*5 Yr*10 Yr*Since Inception (6/3/91)*
DSEFX-6.48%-10.91%7.96%7.70%4.66%7.76%
S&P 500-4.96%-0.67%11.30%10.91%6.48%8.92%

Quarter-End Returns as of 12/31/15
YTD1Yr3 Yr*5 Yr*10 Yr*Since Inception (6/3/91)*
DSEFX-7.27%-7.27%11.98%9.51%5.59%8.08%
S&P 5001.38%1.38%15.13%12.57%7.31%9.18%

Calendar Year Returns
DSEFXS&P 500
2015-7.27%1.38%
201413.97%13.69%
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
4th Qtr 20152.30%7.04%
3rd Qtr 2015-8.33%-6.44%
2nd Qtr 2015-2.20%0.28%
1st Qtr 20151.11%0.95%
4th Qtr 20143.27%4.93%
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: 1.16% / Net: 1.16%. Per current prospectus. Domini has contractually agreed to cap Investor share expenses to not exceed 1.25% until 11/30/16, 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 12/31/15
COMPANY% OF PORTFOLIO
Apple Inc.5.8%
Microsoft Corp.4.9%
Alphabet Inc. Class A3.4%
Merck & Co. Inc.3.3%
Amazon.com Inc.3.2%
Gilead Sciences Inc.3.1%
Consolidated Edison Inc.2.8%
MetLife Inc.2.7%
AT&T Inc.2.7%
Kroger Co.2.7%
TOTAL34.6%

Sector Weightings as of 12/31/15
SECTOR% OF PORTFOLIO
Information Technology22.9%
Financials18.4%
Health Care13.3%
Consumer Discretionary12.2%
Industrials9.1%
Consumer Staples8.5%
Materials4.7%
Telecommunication Services4.5%
Energy3.5%
Utilities2.8%
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) 13.2 15.7
Price-to-Book Ratio 2.2 2.8
Beta (projected) 1.02 --
R-squared (projected) 0.97 --
Market Cap Asset Weighted Avg. (Millions) $122,788 $138,994
Total Number of Holdings 86 500

All data as of 12/31/15 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 invests primarily in mid- and large-cap U.S. equities. It is managed through a two-step process designed to capitalize on the strengths of Domini Social Investments and Wellington Management Company, the Fund’s subadvisor. Domini creates an approved list of companies based on its social, environmental and governance analysis, and Wellington seeks to add value and manage risk through a systematic and disciplined portfolio construction process. Download Commentary as a PDF.

Total Returns as of December 31, 2015

  Oct
2015
Nov
2015
Dec
2015
4th Qtr
2015
YTD One
Year
Three
Year*
Five
Year*
Ten
Year*
Since Inception
(6/3/91)*
DSEFX 6.40% 0.02% -3.88% 2.30% -7.27% -7.27% 11.98% 9.51% 5.59% 8.08%
S&P 500 8.44% 0.30% -1.58% 7.04% 1.38% 1.38% 15.13% 12.57% 7.31% 9.18%

Market Overview

U.S. stocks rallied in October, as corporations reported better-than-expected earnings. Meanwhile, data releases continued to suggest that the U.S. economy remained on firm footing, including an upward revision to third-quarter GDP, multiyear lows for unemployment, and continued positive trends for the housing market. In light of this encouraging data, the Federal Reserve Bank finally moved forward with its much-anticipated interest-rate hike in December, the first in nearly a decade. It noted that considerable improvements in the labor market have provided reasonable confidence that inflation should reach its 2% target over the medium term.

Fund Performance

For the quarter, the Fund’s Investor shares returned 2.30%, underperforming the S&P 500 Index return of 7.04%. The primary driver of underperformance was security selection, particularly within the industrials, consumer discretionary, information technology, and financials sectors.

An underweight to energy stocks made a modest positive contribution to relative performance, as energy stocks lagged within the S&P 500 amid a continued slide in oil prices. The Fund benefitted from not holding such stocks as Kinder Morgan, North America’s largest energy-infrastructure company and operator of extensive oil and natural-gas pipelines, which sank more than 45% this quarter. Kinder Morgan is not approved for the Domini Funds due to concerns regarding its oil sands pipeline and history of oil spills.

The top contributors to relative performance this quarter were Microsoft and Amazon.com, which gained 26% and 32%, respectively. Microsoft reported above-consensus earnings, driven by strong performance in cloud services and cost-control measures to cut operating expenses. Amazon likewise delivered a strong earnings report, announcing record breaking results for its Prime, Original Series, and Devices businesses during the holiday season. Amazon Web Services and Prime memberships, in particular, have been key growth drivers. The company announced that it now has “tens of millions” of Prime members, with more than three million joining in the third week of December alone.

Unfortunately, these positive contributions were more than offset by poor performance from a number of other holdings. The largest detractor from performance this quarter was fast-food chain Chipotle Mexican Grill, which fell more than 33% amid a string of reports of E. coli, salmonella, and norovirus outbreaks at Chipotle restaurants across the country. These included an E. coli outbreak that resulted in the closing of 43 stores in Washington and Oregon in November, and a norovirus that infected at least 80 Boston College students in December. These outbreaks have challenged Chipotle’s reputation for offering high-quality, ethically sourced food, and could damage the company’s loyal customer base. The company is now facing a federal grand jury subpoena over the first norovirus outbreak that sickened 115 patrons in California in August. Domini continues to pursue a shareholder proposal at Chipotle, asking the company to produce a sustainability report, including information about the management of Chipotle’s supply chain.

Other significant detractors from relative performance this quarter included Cummins and F5 Networks, which declined 18% and 16%, respectively. Cummins, manufacturer of engines and power-generation systems, reported disappointing earnings results marked by a year-over-year decline in revenues, as increased sales in distribution were not able to offset declines in its power-generation, engine, and components segments. The company also announced job cuts in response to weaker global demand, led by Brazil, Europe, and China. F5 Networks, developer and provider of application delivery services, reported fiscal fourth-quarter results at the low end of estimates due to macro weakness stemming from China, decreased service-provider spending, and maturing of the product refresh cycle. In December, F5 also announced the departure of its CEO due to “personal conduct” issues, coming at an unfortunate time of slowing core growth and in the middle of a critical switch from on-site solutions to cloud-based and hybrid solutions. Apple, the Fund’s largest holding, was also a significant detractor this quarter, dipping 4%.

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.

United Nations Includes Corporate Sustainability Reporting in its Sustainable Development Goals

In September 2015, the United Nations’ General Assembly adopted its 2030 Agenda for Sustainable Development. In meetings with UN delegates in 2012 and 2013, we explained that the private sector and, in particular, multinational corporations, will need to play an important role if these ambitious “Sustainable Development Goals” are to be realized.

Domini Reaches Agreement with Four Companies

In addition to using social, environmental and governance standards to select our investments, each year the Domini Social Equity Fund submits shareholder proposals to corporations in its portfolio, addressing a broad range of social and environmental issues.  Since 1994, the Fund has submitted more than 250 proposals to more than 95 major corporations.

Policy on Firearms Manufacturers

Domini has a longstanding policy to avoid investment in the manufacturers of weapons, including military weapons and civilian firearms. This policy extends to firms that derive a significant percentage of revenues from the sale of firearms. We believe this industry is inherently damaging to society, due to the intersection between a particularly dangerous product and the extraordinary pressures to maximize profits and increase market share—pressures which are exponentially heightened for publicly traded companies. 

Our Position on Fossil Fuel Owners and Producers

For many years, Domini has incorporated concerns about the environmental risks of companies owning and producing fossil fuels into our investment standards. Over time, we have gradually eliminated an increasing number of these firms from our holdings as our concerns about a variety of environmental and safety issues, including climate change, have increased.