Domini Social Equity Fund Beats S&P 500 For Third Consecutive YearDomini Social Investments manages nation’s 15TH fastest growing family of no-load mutual funds Socially Responsible Investment Industry Enters Mainstream as Major Financial Firms Launch New SRI Products
New York, NY – The Domini Social Equity Fund (ticker symbol: DSEFX), the nation’s oldest and largest socially and environmentally screened index fund, today announced a 1999 calendar year return of 22.63%. For the third consecutive year, the Fund outperformed its benchmark, the S&P 500 Index, which returned 21.04% during the same period1. According to Strategic Insight, the Fund is now the largest no-load socially responsible mutual fund in the country, and Domini Social Investments manages the nation’s 15th fastest growing mutual fund family.* Rate of growth is measured as net flows as a percentage of beginning total assets under management. Morningstar awarded the Fund a five-star overall rating as of 12/31/99 among 3,469 and 2,180 domestic equity funds for the 3- and 5-year periods ended 12/31/99, respectively.**
"In 1991, we launched the Domini Social Equity Fund, the first socially and environmentally screened index fund. The Fund's continued success, nearly ten years later, has helped pave the way for other socially responsible funds, by demonstrating that social screening can produce competitive returns," said Amy Domini, Founder and Managing Principal of Domini Social Investments. "The past twelve months alone proved to be a watershed period for the social investment industry. Some of the largest asset managers in the world have introduced funds designed to meet the needs of the socially responsible investor. Domestically, TIAA/CREF and the Vanguard Group each announced their entrance to the field. In Europe, Dow Jones & Co. launched the Dow Jones Sustainability Group Index in partnership with Sustainability Asset Management of Zurich. In Japan, Nikko Securities entered the field with an environmentally oriented fund and in Singapore UOB Asset Management and Unifem Singapore, the local chapter of the United Nations Development Fund for Women, recently launched the region’s first ethical fund."
"By screening their investments, social funds help to build a corporate accountability structure -- a framework investors can use to evaluate and address corporate social and environmental performance. As social investing goes mainstream, it will become more commonplace to see corporations publicly report on their social and environmental performance. Why? Because social investors require this information to make their investment decisions."
"We welcome our new peers to the industry and will continue to urge them to go beyond social screening and to embrace the other important hallmarks of social investing: shareholder activism and community development investing," Ms. Domini continued. "For example, we encourage all mutual fund managers to publish the thousands of proxy votes they cast every year on corporate governance issues such as environmental disclosure and sweatshop conditions. Last year we became the first mutual fund in America to publish our voting record and we invite all mutual fund managers to join us in taking up this important responsibility."
Domini Social Investments’ Net Sales Outpace Mutual Fund Industry
Domini Social Investments ended the year with $1.7 billion in assets under management, a 93% increase from the prior year. The firm’s growth was largely due to strong net sales of $539 million for the year, a 60% increase over 1998. By contrast, according to Strategic Insight, net sales to the mutual fund industry as a whole were down 23% for the same period.
An important part of Domini’s growth can be attributed to the increased demand from 401k plan sponsors. Over the past year, the Domini Social Equity Fund was added as an investment option to many 401k plans. The Fund is available through some of the largest retirement plan distributors in the country, including American Express, Charles Schwab, Fidelity Investments, Manulife Financial, Putnam Investments and a host of other third parties.
Increasing Investor Awareness for Socially Responsible Investing
According to a recent national investor survey conducted on behalf of Domini Social Investments by Audits and Surveys Worldwide, a national research firm, 26% of adults surveyed had heard of socially responsible investing and of those, 42% stated that they considered whether the company or mutual fund they were investing in was socially responsible.*** "Socially responsible investing (SRI) is an investment strategy that considers more than just a corporation’s financial statements. SRI factors in other vital issues such as how the corporation treats its employees and the environment. Our survey suggests to us that when people become aware of social investing and what it is working to achieve, a significant proportion of them will screen their investments. This conclusion is also reflected in our experience with 401k plans – when the Domini Social Equity Fund is available as an option, a significant percentage of employees choose to invest. We expect to see these numbers continue to grow as more and more people awaken to the wider consequences of their investments," said Ms. Domini.
The First Mutual Fund Company to Publicly Disclose its Proxy Voting Record
Domini Social Investments set an example of responsible investing during the 1999 proxy season by becoming the first mutual fund manager in the country to publish its proxy voting record. Domini’s votes can be viewed at www.domini.com. The firm has also remained an active shareholder, filing 10 shareholder resolutions for the 2000 proxy season with companies in its portfolio on a range of issues. In addition, the firm has engaged many companies in dialogue on social and environmental issues. These pending resolutions and discussions concern board diversity, sweatshop conditions, environmental stewardship and pay equity.
The Domini Social Equity Fund is a no-load, large-capitalization domestic equity index fund based on the Domini 400 Social Index, a widely recognized benchmark for measuring the impact of social screening on financial performance. It is composed of 400 corporations that pass multiple, broad-based social screens designed to meet the needs of the socially responsible investor. The Fund seeks to invest in companies with positive records in community involvement, the environment, employee relations, and hiring practices. It strives to avoid companies with meaningful revenues from alcohol, tobacco, gambling, nuclear power and weapons contracting.