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Domini International Social Equity Fund SM

Fund Information

$8.20
Daily Price (NAV)
as of 09/17/2014
Symbol DOMIX
Daily NAV Change $0.04 (0.49%)

Overview

Investor Shares Overview

The Domini International Social Equity Fund helps you access a world of investment opportunity, while using your investment dollars to encourage corporate responsibility. Investments in companies across Europe, the Asia-Pacific region, and throughout the rest of the world let you take advantage of broad international diversification with the convenience of one mutual fund.

Investment Objective

The Fund seeks to provide its shareholders with long-term total return.

Investment Strategy

The Fund invests primarily in stocks of companies in Europe, the Asia-Pacific region, and throughout the rest of the world 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.  

Management

Investment Advisor and Sponsor: Domini Social Investments LLC.

Subadvisor: Wellington Management Company, LLP.

Shareholder Activism

The Fund seeks to use its position as a shareholder to raise issues of social and environmental performance with corporate management.

Social and Environmental Standards

Domini evaluates the Fund’s 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 8/31/14
YTD1 Yr3 Yr*5 Yr*10 Yr*Since Inception (12/27/06)*
DOMIX2.57%16.79%13.09%9.55%NA0.85%
MSCI EAFE2.93%16.92%11.87%8.69%NA2.57%
Quarter-End Returns as of 6/30/14
YTD1 Yr3 Yr*5 Yr*10 Yr*Since Inception (12/27/06)*
DOMIX3.06%21.71%8.40%12.65%NA0.93%
MSCI EAFE5.14%24.09%8.59%12.27%NA2.92%

Calendar Year Returns
DOMIXMSCI EAFE
201325.77%23.29%
201222.53%17.90%
2011-13.45%-11.73%
201011.25%8.21%
200928.68%32.45%
2008-46.65%-43.06%
20072.22%11.62%

Quarterly Returns
DOMIXMSCI EAFE
2nd Qtr 20142.69%4.34%
1st Qtr 20140.37%0.77%
4th Qtr 20136.11%5.75%
3rd Qtr 201311.29% 11.61%
2nd Qtr 2013-0.86% -0.73%
1st Qtr 20137.42%5.23%

*Average annual total returns.

Annual Expense Ratio: Gross: 1.68% / Net: 1.60%. Per current prospectus. Domini has contractually agreed to cap Investor share expenses to not exceed 1.60% 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 8/31/14
COMPANY% OF PORTFOLIO
Novartis AG3.3%
Associated British Foods plc2.0%
BT Group plc2.0%
Otsuka Holdings Co. Ltd.1.9%
Next plc1.9%
Merck KGaA1.8%
Continental AG1.7%
Dai Nippon Printing Co. Ltd.1.7%
InterContinental Hotels Group PLC 1.6%
Red Eléctrica Corporación S.A. 1.5%
TOTAL19.5%

Sector Weightings as of 6/30/14
SECTOR% OF PORTFOLIO
Financials28.5%
Industrials13.5%
Consumer Discretionary10.7%
Health Care9.6%
Telecommunication Services8.7%
Consumer Staples8.2%
Information Technology7.8%
Materials5.7%
Energy4.2%
Utilities3.2%
Total100.0%
Country Diversification as of 6/30/14
COUNTRY% OF PORTFOLIO
Japan18.8%
United Kingdom15.8%
France9.5%
Germany9.0%
Switzerland6.2%
Sweden5.7%
Australia5.4%
Hong Kong3.7%
Netherlands3.2%
Denmark2.9%
United States2.8%
South Korea2.8%
Brazil2.7%
Spain2.4%
Austria1.5%
Other7.7%
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 international equity fund.

 

Investment Style:

Blend

Weighted Average Market Capitalization:

Large

Portfolio Statistics

  DOMIX MSCI EAFE*
Price-to-Earnings Ratio (projected) 12.4 13.0
Price-to-Book Ratio 1.1 1.7
Beta (projected) 1.02 --
R-squared (projected) 0.98 --
Total Number of Holdings 146 --

All data as of 6/30/14.

*The Morgan Stanley Capital International Europe, Australia, and Far East Index (MSCI EAFE) is an unmanaged index of common stocks. Investors cannot invest directly in an index.

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*
Since Inception
(12/27/06)*†
DOMIX 0.24% 0.97% 1.45% 2.69% 3.06% 21.71% 8.40% 12.65% 0.93%
MSCI EAFE 1.53% 1.76% 0.99% 4.34% 5.14% 24.09% 8.59% 12.27% 2.92%

For the second quarter of 2014, the Fund’s Investor shares returned 2.69%, underperforming the MSCI EAFE Index return of 4.34%.

Relative performance was helped the most by strong security selection in the health care and information technology sectors. However, this was not enough to offset weaker security selection in the consumer discretionary, energy, materials, and financials 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 nearly 59% 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.
  • SK Hynix Inc., a South Korean semiconductor manufacturer that returned nearly 42% for the quarter after first quarter earnings beat consensus estimates, and investors began to appreciate that pricing is more resilient than originally expected and that demand remains strong. 
  • Nisshin Steel Co., Ltd., a Japanese steel manufacturer that saw its shares rise more than 52% for the quarter.

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

  • Arrium Limited, an Australian mining and materials company whose shares fell nearly 40% over the quarter, as the company experienced an adverse Australian-to-U.S. dollar exchange rate, weak prices and delays in demand from infrastructure projects. 
  • OC Oerlikon Corporation AG, a Swiss industrial company that declined more than 12% over the quarter, after first quarter below-consensus results marked by a year-over-year decline in order intake and flat sales.
  • Flight Centre Travel Group, an Australian travel company that dropped nearly 14% over the quarter.

For the 12 months ended June 30, the Fund’s Investor shares returned 21.71%, underperforming the MSCI EAFE Index return of 24.09%.

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. Europe generally led markets higher, while emerging markets and Japan continued to lag. As the first quarter of 2014 came to a close, many of the trends that had shaped the previous 12-month period reversed, with emerging markets rebounding and higher-risk biotech and smaller-cap stocks declining. With the valuation spread between high and low beta stocks largely abated, lower-risk value stocks that are less dependent on a pro-cyclical rally led the way in the more defensive market.

Global equities continued to rally during the second quarter, amid robust merger and acquisition activity along with continued accommodative monetary policy from central banks around the globe. The European Central Bank introduced a set of unconventional monetary policy measures to fight disinflationary forces and rekindle growth in the Eurozone. Meanwhile, the People’s Bank of China announced a cut in the reserve requirement ratio for major banks to stimulate lending and support growth. Despite geopolitical risks stemming from Ukraine and Iraq, tepid economic data out of Europe, and a negative GDP report in the U.S., markets remained upbeat.

Making a Difference

Domini engages in direct dialogue with corporations in our portfolios 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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