Semi-Annual Report 2017
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Semi-Annual Letter from the President

Dear Fellow Shareholders:

The six months ending January 31, 2017 saw the election of President Donald Trump and with him, a shift in national priorities. As a general statement, the stock market does not like uncertainty. It would have been understandable, therefore, if the markets had fallen off with this election. But they did not. Most likely, investors were attracted by the tremendous stimulative effect that a trillion dollars spent on infrastructure could have. Secondarily, a lower tax rate would put more money in corporate pockets, making companies worth more, at least in the short term. Setting aside what one thinks about these ideas from a policy perspective, the market reaction to them is somewhat predictable.

Small investors often do best when they do little. Setting an allocation and sticking with it, adding when possible, spending when necessary, but generally setting a direction and staying the course, is a tried and true means to save. But there are very large investors, primarily in the form of hedge funds, that follow a different philosophy. These investment pools frequently move in and out of market sectors based on a bet. The big money today seems firmly set on a bet that the infrastructure plan will become reality and that American companies will continue to grow.

Impact investors seek to make a difference, in any stock market environment. We at Domini Impact Investments feel strongly that our work to seek better outcomes for people and the planet cannot be relegated to the back seat while we attempt to analyze Washington’s next move. We have a job to do and it continues. 

Migrant and temporary workers are a particularly vulnerable segment of the global economy. Although in many industries the use of temporary workers is extremely entrenched – think of the need for extra hands during the Christmas holidays – a national dialogue over what it means to be a temporary worker and what corporations who depend upon them ought to consider, is overdue. Whether the issue is access to company sponsored health care, or longer hours than longer-term workers, the areas for discussion are ripe. A discussion is needed, because when the temporary worker is from another country, either as a documented worker or not, the worker may be unable to express his or her own needs. 

The PEW Charitable Trusts have published a state-by-state, industry-by-industry analysis on immigrant employment. In it, we learn that there are some sectors of our economy where an immigrant is more likely to hold a position than a citizen by birth. For instance, the economic sector called administrative services, which includes cleaning services, is a field in which an immigrant is 1.7 times more likely to hold a job than a U.S.-born worker. In agriculture and construction the figure is 1.5 times. In leisure, that figure drops to 1.4 times. Does it matter? The same report tells us that these industries generate 13 percent of America’s GDP.

When 13 percent of a nation’s economic well-being is heavily dependent on immigrants, a broad and constructive dialogue over immigration policy becomes an economic one.  And economic policy is core to the health of investment returns. Once again, as socially responsible investors, we find ourselves at the pivot point where what is best for ordinary people and what is best for investors comes together. 

We have, for decades now, addressed a variety of worker concerns with the companies we invest in. We have had highly successful results in many cases. We hope that our successes will lead corporations to encourage their peers to take a greater interest in what their purchasing of supplies or services means to each individual in its supply chain.

This report takes a look at some of the most severe risks workers face when they leave their home country for work elsewhere, and our responses to these concerns. As your representatives, we have continued to do what we can to be a useful link between the corporate world and Main Street, and to focus our attention on the most vulnerable among us.

Thank you for your investment, and for your decision to be a more responsible investor.  The way we invest matters.

Very truly yours,

Amy Domini