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Domini International Social Equity Fund sm

Fund Information

$8.44
Daily Price (NAV)
as of 07/25/2014
Symbol DOMOX
Daily NAV Change $-0.03 (-0.35%)

Overview

Institutional Shares Overview

Institutional shares are available to qualified endowments, foundations, religious organizations, nonprofit entities, individuals and certain corporate or similar institutions that meet the minimum investment requirements.

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:

  • The Institutional share class of the Domini International Social Equity Fund is available to investors that meet the minimum investment requirements, have been approved by the distributor, and fall within the following categories: endowments, foundations, religious organizations and other nonprofit entities, individuals, retirement plan sponsors, family office clients, private trusts, certain corporate or similar institutions, or omnibus accounts maintained by financial intermediaries.**
  • 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

Institutional Shares Performance

Month-End Returns as of 6/30/14
YTD1 Yr3 Yr5 Yr10 YrSince Inception (12/27/06)
DOMOX3.18%22.20%8.40%12.65%NA0.93%
MSCI EAFE5.14%24.09%8.59%12.27%NA2.92%
Quarter-End Returns as of 6/30/14
YTD1 Yr3 Yr*5 Yr*10 Yr*Since Inception (12/27/06)*
DOMOX3.18%22.20%8.40%12.65%NA0.93%
MSCI EAFE5.14%24.09%8.59%12.27%NA2.92%
Calendar Year Returns
DOMOXMSCI EAFE
201326.35%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
DOMOXMSCI EAFE
2nd Qtr 20142.80%4.34%
1st Qtr 20140.37%0.77%
4th Qtr 20136.40%5.75%
3rd Qtr 201311.31%11.61%
2nd Qtr 2013-0.69% -0.73%
1st Qtr 20137.42%5.23%

*Average annual total returns.

Institutional shares were not offered prior to 11/30/12. All performance information for time periods beginning prior to 11/30 is the performance of the Investor shares, which has not been adjusted to reflect the lower expenses of the Institutional shares.

Annual Expense Ratio: Gross: 1.25% / Net: 1.25%. Per current prospectus. Domini has contractually agreed to cap Investor share expenses to not exceed 1.27% 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 6/30/14
COMPANY% OF PORTFOLIO
Shire plc2.5%
Associated British Foods plc2.3%
BT Group plc2.1%
Merck KGaA1.9%
Next plc1.8%
Dai Nippon Printing Co. Ltd.1.7%
Red Eléctrica Corporación S.A.1.7%
Otsuka Holdings Co. Ltd.1.7%
TeliaSonera AB 1.6%
Deutsche Post AG1.6%
TOTAL19.1%

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.

Formerly the Domini European PacAsia Social Equity Fund.

Characteristics

Portfolio Overview

Socially screened, mid- to large-capitalization international equity fund.

 

Investment Style:

Blend

Weighted Average Market Capitalization:

Large

Portfolio Statistics

  DOMOX 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

Institutional 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 March 31, 2014

  Jan.
2014
Feb.
2014
Mar.
2014
1st Qtr
2014
YTD One
Year
Three
Year*
Five
Year*
Since Inception (12/27/06)*
DOMOX -3.92% 5.99% -1.44% 0.37% 0.37% 18.05% 8.49% 17.65% 0.59%
MSCI EAFE -4.02% 5.59% -0.57% 0.77% 0.77% 18.06% 7.72% 16.56% 2.43%

For the first quarter of 2014, the Fund’s Institutional shares returned 0.37%, underperforming the MSCI EAFE Index return of 0.77%.

Strong security selection in the consumer discretionary and financials sectors was offset by weaker security selection in the materials, health care and industrials sectors.

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

  • Nexy, a British clothing, footwear, accessories and home products retailer that returned nearly 23% for the quarter after lower tax charges and boosts from share buybacks drove 24% earnings per share growth in 2013.
  • REA Group, an Australian online real estate advertising company that returned nearly 33% for the quarter after earnings results, highlighted by impressive top-line and margin growth, greatly surpassed consensus expectations. 
  • Sacyr, a Spanish construction company that grew nearly 47% during the period held by the Fund.

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

  • VimpelCom, a Russia-based telecommunications operator that fell more than 30% during the quarter following disappointing fourth quarter results and an announced investigation regarding operations in Uzbekistan. 
  • Wm Morrison Supermarkets, a British supermarket chain that dropped almost 18% for the quarter after management announced a profit warning for the 2014 and 2015 fiscal years. In response to deteriorating sales and strong competition from hard discounters, the company is pursuing a strong shift in strategy that includes streamlined assortment, a stronger focus on low prices, and the development of a new loyalty program.
  • Toyo Seikan, a Japanese packaging company whose shares declined nearly 24% during the quarter.

For the 12 months ended March 31, the Fund’s Institutional shares returned 18.05%, slightly underperforming the MSCI EAFE Index, which returned 18.06%.

Despite ongoing geopolitical tensions surrounding the crisis in Ukraine, worries about a slowdown in China and general angst surrounding emerging markets, the five-year-old stock rally marched on, as global equities rose for the seventh consecutive quarter. Investors took solace in indications from the European Central Bank and Chinese government that stimulus measures may be ramped up, while continued evidence of Eurozone recovery, solid U.S. corporate earnings, and robust merger and acquisition activity also aided bullish sentiment.

Throughout 2013, developed-market equities remained in a procyclical bull market, with riskier, more cyclically-sensitive stocks 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 shaped the 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.

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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