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Domini Social Bond Fund ®

Fund Information

$11.26
Daily Price (NAV)
as of 07/24/2014
Symbol DSBFX
Daily NAV Change $-0.02 (-0.18%)

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 6/30/14
YTD1 Yr3 Yr*5 Yr*10 Yr*Since Inception (6/1/00)*
DSBFX2.73%3.03%2.29%3.22%3.92%4.73%
BCIA2.85%3.48%2.85%4.22%4.57%5.45%

Quarter-End Returns as of 6/30/14
YTD1 Yr3 Yr*5 Yr*10 Yr*Since Inception (6/1/00)*
DSBFX2.73%3.03%2.29%3.22%3.92%4.73%
BCIA2.85%3.48%2.85%4.22%4.57%5.45%
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
2nd Qtr 20141.35%1.62%
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 6/30/14
ISSUER% OF PORTFOLIO
Freddie Mac (0.5% due 5/13/2016)17.8%
Freddie Mac (2.375% due 1/13/2022)12.6%
Freddie Mac (1.25% due 10/2/2019)9.4%
Freddie Mac (1.75% due 9/10/2015)3.8%
Fannie Mae pool 471333 (3.12% due 8/1/2022) 1.6%
Fannie Mae pool AM4253 (3.22% due 9/1/2020)1.5%
Ensco plc (4.7% due 3/15/2021)1.4%
Fannie Mae pool AM5696 (3.37% due 5/1/2024)1.2%
Fannie Mae pool 471478 (2.61% due 8/1/2022)1.1%
Verizon Communications (5.15% due 9/15/2023)1.1%
TOTAL51.4%
Sector Weightings as of 6/30/14
SECTOR% OF PORTFOLIO
U.S. Government Agency Obligations43.4%
U.S. Government Agency Mortgage Securities29.4%
Corporate Obligations15.4%
Corporate Mortgage Securities8.1%
Certificates of Deposit3.3%
Cash0.4%
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 (%) 1.12 NA
Avg. Effective Maturity (Yrs.) 4.94 5.20
Avg. Credit Rating Aa1/AA Aa1/Aa2
Total Number of Issues (excluding cash equivalents) 184  

*Barclays Capital Intermediate Aggregate Index

All data as of 6/30/2014 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 March 31, 2014

  Jan.
2014
Feb.
2014
Mar.
2014
1st Qtr
2014
YTD One
Year
Three
Year*
Five
Year*
Ten
Year*
Since Inception
(6/1/00)*
DSBFX 1.20% 0.39% -0.24% 1.36% 1.36% -0.62% 2.48% 3.25% 3.50% 4.72%
BCIA 1.13% 0.37% -0.30% 1.20% 1.20% 0.01% 3.03% 4.23% 4.19% 5.43%

For the first quarter of 2014, the Fund’s Investor Shares returned 1.36%, outperforming the Barclays Capital Intermediate Aggregate (BCIA) Index, which returned 1.20%.

The performance of the overall U.S. bond market surprised many observers during the quarter, as investors reacted positively to a decline in the overall level of interest rates. As was the case in the previous two quarters, the first quarter saw the Fund’s allocation to securitized securities make the single largest contribution to relative outperformance. Specifically, the Fund’s residential mortgage-backed securities (“RMBS”) strategy once again 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 mortgageprepayment 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 and asset-backed securities exposure made negligible contributions to relative performance, while its modest underweight to investment-grade corporate bonds detracted slightly. The continued overweight to government agency issues in lieu of Treasuries once again contributed positively to performance.

Community Impact

The Fund seeks to play a positive role in the economic development of struggling communities. As of March 31, the Fund placed assets with 15 community development financial institutions, serving local communities and low- to mediumincome borrowers across the country. This quarter, the Fund added the Ithaca-based Alternatives Federal Credit Union to its CDFI portfolio.

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...