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Domini Social Bond Fund ®

Fund Information

$11.18
Daily Price (NAV)
as of 04/22/2014
Symbol DSBFX
Daily NAV Change $-0.01 (-0.09%)

Key Documents

Overview

Investor Shares Overview​

Investment Objective

The Fund seeks to provide its shareholders with a high level of current income and total return by investing in bonds and other debt instruments that meet the Fund's social and environmental standards.

Investment Strategy

The Fund normally invests at least 85% of assets in intermediate-term, investment-grade fixed-income securities, including government agency, corporate, mortgage-backed and asset-backed securities, taxable municipal bonds, and U.S. dollar-denominated bonds issued by non-U.S. entities.
 
The Fund seeks to invest up to 10% of its assets in debt instruments and other investments that provide a high level of community impact. These investments may be illiquid, unrated, and may carry greater credit risks than its other holdings.

Management

Investment Advisor and Sponsor: Domini Social Investments LLC
 
Subadvisor: Seix Advisors LLC, a wholly-owned subsidiary of RidgeWorth Capital Management, Inc. Seix uses a team of investment professionals supervised by James Keegan to manage the Fund.

Social and Environmental Standards

To determine which securities are eligible for investment, Domini evaluates the Fund’s current and potential corporate debt instruments 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.

For noncorporate issuers, Domini seeks to identify investments with a positive impact on communities.

Domini may determine that a security is eligible for investment even if its profile reflects a mixture of positive and negative social and environmental characteristics.

Community Economic Development

The Fund's community economic development focus is in the areas of small business loans and affordable housing for the economically disadvantaged.

Investor Profile

Who Should Invest

  • Investors seeking a high level of current income and total return
  • Investors seeking exposure to the bond market to diversify their portfolio
  • Investors who wish to support the Fund's socially responsible investment standards and its community development emphasis

Who Should Not Invest

  • Investors unwilling or unable to accept fluctuations in share price due to risks associated with the bond market

Performance

Investor Shares Performance

Month-End Returns as of 3/31/14
YTD1 Yr3 Yr*5 Yr*10 Yr*Since Inception (6/1/00)*
DSBFX1.36%-0.62%2.48%3.25%3.50%4.72%
BCIA1.20%0.01%3.03%4.23%4.19%5.43%

Quarter-End Returns as of 3/31/14
YTD1 Yr3 Yr*5 Yr*10 Yr*Since Inception (6/1/00)*
DSBFX1.36%-0.62%2.48%3.25%3.50%4.72%
BCIA1.20%0.01%3.03%4.23%4.19%5.43%
Calendar Year Returns
DSBFXBCIA
2013-1.97%-1.02%
20122.50%3.56%
20115.85%5.97%
20104.74%6.15%
20095.77%6.46%
20085.69%4.86%
20076.00%7.02%
20063.38%4.58%
20051.56%2.01%
20042.81%3.74%
20032.31%3.81%
20028.85%9.51%
20018.34%8.67%

Quarterly Returns
DSBFXBCIA
1st Qtr 20141.36%1.20%
4th Qtr 2013-0.39%-0.14%
3rd Qtr 20130.68%0.76%
2nd Qtr 2013-2.24%-1.78%
1st Qtr 2013-0.02% 0.15%

*Average annual total returns.

Annual Expense Ratio: Gross: 1.24% / Net: 0.95%. Per current prospectus. Domini has contractually agreed to cap Investor share expenses to not exceed 0.95% 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 3/31/14
ISSUER% OF PORTFOLIO
Freddie Mac (2.375% due 1/13/2022)14.5%
Freddie Mac (0.5% due 5/13/2016)11.5%
Freddie Mac (0.875% due 3/7/2018)8.1%
Freddie Mac (1.75% due 9/10/2015)6.4%
Fannie Mae pool 471333 (3.12% due 8/1/2022) 1.5%
Fannie Mae pool AM4253 (3.22% due 9/1/2020)1.5%
Fannie Mae pool AB7795 (2.5% due 2/1/2028)1.4%
Ensco plc (4.7% due 3/15/2021)1.3%
Fannie Mae pool 932871 (3% due 1/1/2026)1.3%
Verizon Communications (5.15% due 9/15/2023)1.1%
TOTAL48.5%
Sector Weightings as of 3/31/14
SECTOR% OF PORTFOLIO
U.S. Government Agency Obligations40.9%
U.S. Government Agency Mortgage Securities32.3%
Corporate Obligations14.5%
Corporate Mortgage Securities8.3%
Certificates of Deposit3.3%
Cash0.7%
Total100.0%

View the most recent quarterly holdings report filed with the Securities and Exchange Commission.

 

Characteristics

Portfolio Overview

 

The Domini Social Bond Fund's ("DSBF") average credit quality is high (investment grade) and its average effective maturity is intermediate

Portfolio Statistics

  DSBFX BCIA*
SEC 30-day Yield (%) 1.13 NA
Avg. Effective Maturity (Yrs.) 5.01 5.32
Avg. Credit Rating Aa1/AA Aa1/Aa2
Total Number of Issues (excluding cash equivalents) 176  

*Barclays Capital Intermediate Aggregate Index

All data as of 3/31/2014 unless otherwise noted.

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 Seix Investment Advisors. Domini develops an approved universe of companies and Community Development Financial Institutions, as well as guidelines for measuring the level of impact that various types of fixed income instruments have on local communities, and Seix utilizes proprietary analytical tools to manage the portfolio. Dowload Commentary as a PDF.

Total Returns as of December 31, 2013

  Oct
2013
Nov
2013
Dec
2013
4th Qtr
2013
YTD One
Year
Three
Year*
Five
Year*
Ten
Year*
Since Inception
(6/1/00)*
DSBFX 0.56% -0.33% -0.62% -0.39% -1.97% -1.97% 2.07% 3.34% 3.60% 4.70%
BCIA 0.64% -0.21% -0.57% -0.14% -1.02% -1.02% 2.78% 4.18% 4.30% 5.43%

For the 2013 calendar year, the Fund’s Investor Shares declined 1.97%, underperforming the Barclays Capital Intermediate Aggregate (BCIA) Index, which declined 1.02%.

In 2013, for the second consecutive year, fixed income investors who assumed a more aggressive posture were rewarded. By contrast, throughout the year, the Fund’s defensive portfolio strategies within all primary investment-grade spread sectors proved to be a hindrance to returns versus the benchmark. Similarly, while the Fund’s macro strategies called for a neutral yield-curve stance, portfolio construction led to moderately more duration exposure in the heart of the yield curve, which detracted from performance amidst a considerable amount of yield-curve steepening. This yield- curve steepening was ultimately the largest drag on performance during the year, particularly during the fourth quarter. This negative yield-curve impact was offset somewhat by outperformance from securitized asset classes.

For the fourth quarter of 2013, the Fund’s Investor Shares declined 0.39%, underperforming the Barclays Capital Intermediate Aggregate (BCIA) Index, which declined 0.14%.

After volatile second and third quarters, during which the Fund’s Investor shares posted respective returns of -2.24% and 0.68%, the fourth quarter saw things level out some. As was the case in the third quarter, the Fund’s allocation to securitized securities made the largest positive contribution to performance. Specifically, the Fund’s residential mortgage-backed securities (“RMBS”) strategy once again modestly outperformed due to an ongoing overweight to 15-year issues. As indicated in previous quarters, the Fund favors these 15-year issues because they are less exposed to mortgage- prepayment risk than are 30-year issues, which are more directly affected by the ongoing marketplace interventions of the Fed. The Fund’s commercial mortgage-backed securities (“CMBS”) exposure also managed to keep pace with the benchmark during the quarter due to positive security selection.

The Fund’s exposure in the investment-grade corporate-bond sector made essentially no contribution to relative performance this quarter, but it did benefit from its previously-cited overweight to industrials, as well as a modestly increased, albeit still underweight, exposure to financial issues. The Fund’s continued overweight to government agency issues in lieu of Treasuries also contributed to relative performance, as the fourth quarter saw agencies enjoy their best excess returns of the year. The Fund maintained a “duration neutral” posture versus the benchmark—meaning that, over time, changes in overall interest rates should not be a major contributor to relative performance results. However, the quarter’s steeper yield curve resulted in a negative impact on the Fund’s relative performance this quarter.

Community Impact

The Fund seeks to play a positive role in the economic development of struggling communities. As of December 31, the Fund placed assets with 14 community development financial institutions, serving local communities and low- to medium-income borrowers across the country.

Making a Difference

Local & National CommunitiesWe believe that healthy economies and communities must be built on a strong foundation of fairness and opportunity. The Domini Social Bond Fund invests in a number of Community Development Financial Institutions (CDFIs)—banks and credit unions whose primary missions are to serve low-income, minority, women, and immigrant communities historically underserved by traditional financial institutions.

Southern Bancorp: Rural Development and Public Goods in the South

Founded in 1986, Southern Bancorp is the nation’s largest rural development bank with a long-term commitment to community revitalization through efforts such as poverty reduction, education, healthcare, housing, and leadership development. Southern works in isolated rural communities in Arkansas and Mississippi, where the poverty rate exceeds 30 percent and the unemployment rate exceeds 15 percent...

Self-Help Credit Union: Promoting Home Ownership and Healthy Food Systems in Low-Income Communities

Since the foreclosure crisis, Self-Help Credit Union and its policy affiliate, the Center for Responsible Lending have been active in national and regional efforts to stabilize neighborhoods hard-hit by foreclosure, providing responsible housing loans, foreclosure prevention and recovery services, and policy research and advocacy to fight against predatory lending practices, including payday-lending and check-cashing services...

Hope Credit Union: Serving the Underserved in the Mid-South

Hope Credit Union provides financial services to underserved communities in four of the six states with the country’s lowest median household incomes: Mississippi, Louisiana, Tennessee, and Arkansas. Thousands of residents of these states have lost homes and businesses due to hurricanes and flooding, and Hope helps rebuild affected communities through its affordable financial products and services...

Financing Minority Communities

We believe that healthy economies and communities must be built on a strong foundation of fairness and opportunity. The following CDFIs in the Fund’s portfolio all serve minority communities that are often excluded from the mainstream financial industry...