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Domini Social Equity Fund ®

Fund Information

$10.72
Daily Price (NAV)
as of 12/19/2014
Symbol DSEPX
Daily NAV Change $0.04 (0.37%)

Key Documents

Overview

Class A Shares Overview

Class A shares are intended for investors who invest through a financial advisor. They carry a front-end sales charge (load) that is paid to the advisor buying the Fund on behalf of the investor. If you do not invest through a financial advisor, please refer to the Investor shares.

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 submanager, seeks to add value using a diversified quantitative stock selection approach, while managing risk through portfolio construction.

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

Class A Shares Performance


Month-End Returns as of 11/30/14
YTD1 Yr3 Yr*5 Yr*10 Yr*Since Inception (6/3/91)*
DSEPX (without load)14.74%16.61%18.97%14.98%7.05%8.85%
DSEPX (with max. load)9.29%11.07%17.06%13.87%6.53%8.62%
S&P 50013.98%16.86%20.93%15.96%8.06%9.57%

Quarter-End Returns as of 9/30/14
YTD1 Yr3 Yr*5 Yr*10 Yr*Since Inception (6/3/91)*
DSEPX (without load)10.34%20.77%21.08%14.83%7.20%8.73%
DSEPX (with max. load)5.10%15.03%19.13%13.71%6.68%8.51%
S&P 5008.34%19.73%22.99%15.70%8.11%9.41%

Calendar Year Returns
DSEPX (without load)S&P 500
201332.93%32.39%
201211.39%16.00%
20110.85%2.11%
201013.80%15.06%
200935.53%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%0.68%

Quarterly Returns
DSEPX (without load)S&P 500
3rd Qtr 20141.49%1.13%
2nd Qtr 20145.72%5.23%
1st Qtr 20142.84%1.81%
4th Qtr 20139.45%10.51%
3rd Qtr 20137.22%5.24%
2nd Qtr 20132.73%2.91%
1st Qtr 201310.26%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. A shares were not offered prior to 11/28/08. All performance information for time periods beginning prior to November 28 is the performance of the Investor shares. This performance has not been adjusted to reflect the lower expenses of the Class A shares, but unless otherwise noted, does reflect an adjustment for the maximum applicable sales charges of 4.75%.

Annual Expense Ratio: Gross: 1.54% / Net: 1.18%. Per current prospectus. Domini has contractually agreed to cap Investor share expenses to not exceed 1.18% until 11/30/15, 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.

The Domini Social Equity Fund Class A shares are subject to a front-end sales charge of up to 4.75%. The quarterly and calendar performance tables above do not reflect the deduction of this sales charge. If the sales charge were reflected, the performance would have been lower.

Holdings

Ten Largest Holdings as of 11/30/14
COMPANY% OF PORTFOLIO
Apple Inc.5.2%
Microsoft Corp.3.2%
Intel Corp.3.1%
Eli Lilly and Company2.9%
The Kroger Co.2.9%
Consolidated Edison Inc.2.7%
Southwest Airlines Co.2.6%
Qualcomm Inc.2.6%
CenturyLink Inc.2.3%
Celgene Corp.2.1%
TOTAL29.5%

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

  DSEPX S&P 500
Price-to-Earnings Ratio (projected) 13.5 14.8
Price-to-Book Ratio 2.1 2.7
Beta (projected) 1.0 --
R-squared (projected) 0.97 --
Market Cap Asset Weighted Avg. (Millions) $66,222 $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

Class A 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 creates an approval list of companies based on its social, environmental and governance analysis, and Wellington then utilizes a systematic and disciplined process to manage the portfolio.Download Commentary as a PDF.

Total Returns as of September 30, 2014

  July
2014
Aug
2014
Sep
2014
3nd Qtr
2014
YTD One
Year
Three
Year*
Five
Year*
Ten
Year*†
Since Inception
(12/27/06)*†
DSEPX
(without load)
-0.43% 4.97% -2.90% 1.49% 10.34% 20.77% 21.08% 14.83% 7.20% 8.73%
DSEPX
(with max. load 1)
-5.16% -0.01% -7.51% -3.33% 5.10% 15.03% 19.13% 13.71% 6.68% 8.51%
S&P 500 -1.38% 4.00% -1.40% 1.13% 8.34% 19.73% 22.99% 15.70% 8.11% 9.41%

For the third quarter of 2014, the Fund’s Class A shares returned 1.49% (without load), outperforming the S&P 500 Index return of 1.13%.

Relative performance was helped the most by strong security selection in the telecommunication services, information technology, health care and consumer discretionary sectors. This was partially offset by weaker security selection in the financials and materials sectors.

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

  • Southwest Airlines, a passenger airline for US and near international markets that returned nearly 26% for the quarter after second quarter earnings, driven by robust domestic demand, stronger revenue and lower fuel prices, rose significantly year-over-year and beat consensus estimates.
  • Kohl's, a US-based department store retailer that returned nearly 17% for the quarter after second quarter earnings, driven by strong expense management and lower tax rates, exceeded consensus estimates.
  • CenturyLink, an integrated communications company that returned more than 14% for the quarter after announcing strong second quarter results highlighted by above-consensus revenue and positive growth in the consumer segment driven by high-speed data and Prism TV.

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

  • Southwestern Energy, a natural gas-focused exploration and production company that declined nearly 23% over the quarter, with cooler summer weather causing lower-than-expected power generation, leading to an oversupply in the Northeast that is expected to further lower already weak gas prices.
  • Domtar Corporation, a Canadian paper company that saw its shares decline nearly 17% for the quarter after weak second quarter results that saw the Personal Care segment hampered by higher raw material costs.
  • AGCO Corporation, an agricultural equipment manufacturer that declined more than 19% for the quarter.

For the 12 months ended September 30, the Fund’s Class A shares returned 20.77% (without load), outperforming the S&P 500 Index return of 19.73%.

US equities, as measured by the S&P 500 Index, rose for seven consecutive quarters, with the Index reaching an all-time high around mid-September, before dropping nearly 2% during the final eight trading days of the month.

After five months of consecutive gains, the third quarter began with a pullback in July, as US equities declined over heightened geopolitical risks, a potential Portuguese banking crisis and worries of Fed tightening. However, with investors emboldened by encouraging US economic data, stocks rebounded in August, with the S&P 500 ending August at an all-time high. As the quarter came to a close, though, worries of Fed tightening again took over, as the prospect of an accelerated interest-rate hike and the imminent end to quantitative easing contributed to increased risk aversion.

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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