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Domini Funds Outperform in Second Quarter

After one of the most painful periods in stock market history, the U.S. stock market rebounded strongly in the second quarter — and the Domini Funds rebounded even more strongly. All four of Domini's stock funds outperformed their benchmarks for the quarter, and the Domini Social Equity Fund was significantly ahead of its benchmark for the six months ending June 30.

Our flagship fund, the Domini Social Equity Fund (Investor shares)(Ticker DSEFX), rose 20.58% for the quarter, almost five percentage points more than the S&P 500, which returned 15.93%. For the first six months of 2009, the Fund rose 8.41% versus 3.16% for the index.

The Domini European Social Equity Fund (Investor shares)(Ticker DEUFX) rose 26.80% compared to the MSCI Europe index return of 25.89% for the second quarter of 2009.

The Domini PacAsia Fund (Investor shares)(Ticker DPAFX) rose 30.11% compared to the MSCI All Country Asia Pacific index, which returned 28.20% for the second quarter of 2009.

And the Domini European PacAsia Social Equity Fund (Investor shares)(Ticker DUPFX) rose 27.64% compared to the MSCI EAFE return of 25.85%. The Fund also outperformed its benchmark for the first six months of 2009, rising 8.46%versus 8.42% for the index.

Investors are not out of the woods yet. The worldwide financial crisis that has unfolded over the last two years has left portfolios in the red, even after the second quarter's exceptional returns. These returns are short-term and cannot be relied on to predict future results, but can certainly be encouraging.

Visit www.domini.com to read each Fund's Performance Commentary for the second quarter, including a quarterly overview of Domini's shareholder activism and proxy voting.

Domini Social Equity Fund Investor Shares

Average Annual Total Returns as of 6/30/2009

 

2nd
Quarter

Year to
Quarter

1 Yr

3 Yr

5 Yr

10 Yr

Since Inception
6/3/1991

DSEFX

20.58%

8.41%

–24.39%

–8.28%

–3.77%

–3.44%

6.30%

S&P 500

15.93%

3.16%

–26.21%

–8.22%

–2.24%

–2.22%

7.00%

On November 30, 2006, the Domini Social Equity Fund, formerly a passively managed index fund, transitioned to an active management strategy. Past performance through November 29, 2006, and statistics derived from that performance, represent the former passive investment strategy, and are not indicative of future results.

For the period reported in its current prospectus, during which net operating expenses were capped by the Fund's Manager, the Fund's gross annual operating expenses totaled 1.24% of net assets. Until November 30, 2009, the Fund's Manager has contractually agreed to waive certain fees and/or reimburse certain expenses, including management fees, so that expenses paid by the Fund will not exceed, on a per annum basis, 1.20% of its average daily net assets representing Investor shares, absent an earlier modification by the Board of Trustees, which oversees the Funds.

Domini European Social Equity Fund Investor Shares

Average Annual Total Returns as of 6/30/2009

 

2nd
Quarter

Year to
Quarter

1 Yr

3 Yr

5 Yr

10 Yr

Since Inception
10/3/2005

DEUFX

26.80%

7.63%

–36.96%

–12.36%

NA

NA

–4.82%

MSCI Europe

25.89%

7.69%

–34.05%

–7.84%

NA

NA

–2.37%

For the period reported in its current prospectus, during which net operating expenses were capped by the Fund's Manager, the Fund's gross annual operating expenses totaled 1.80% of net assets. Until November 30, 2009, the Fund's Manager has contractually agreed to waive certain fees and/or reimburse certain expenses, including management fees, so that expenses paid by the Fund will not exceed, on a per annum basis, 1.60% of its average daily net assets representing Investor shares, absent an earlier modification by the Board of Trustees, which oversees the Funds.

Domini PacAsia Social Equity Fund Investor Shares

Average Annual Total Returns as of 6/30/2009

 

2nd
Quarter

Year to
Quarter

1 Yr

3 Yr

5 Yr

10 Yr

Since Inception
12/27/2006

DPAFX

30.11%

15.22%

–23.99%

NA

NA

NA

–12.80%

MSCI AC
Asia Pacific

28.20%

16.83%

–22.33%

NA

NA

NA

–8.91%

As stated in its current prospectus, the Fund's gross annual operating expenses totaled 2.48% of net assets. Until November 30, 2009, the Fund's Manager has contractually agreed to waive certain fees and/or reimburse certain expenses, including management fees, so that expenses paid by the Fund will not exceed, on a per annum basis, 1.60% of its average daily net assets representing Investor shares, absent an earlier modification by the Board of Trustees, which oversees the Funds.

Domini European PacAsia Social Equity Fund Investor Shares

Average Annual Total Returns as of 6/30/2009

 

 

2nd
Quarter

Year to
Quarter

1 Yr

3 Yr

5 Yr

10 Yr

Since Inception
6/1/2000

DUPFX

27.64%

8.46%

–33.77%

NA

NA

NA

–18.91%

MSCI
EAFE

25.85%

8.42%

–30.96%

NA

NA

NA

–13.43%

As stated in its current prospectus, the Fund's gross annual operating expenses total 3.19% of net assets. Until November 30, 2009, the Fund's Manager has contractually agreed to waive certain fees and/or reimburse certain expenses, including management fees, so that expenses paid by the Fund will not exceed, on a per annum basis, 1.60% of its average daily net assets representing Investor shares, absent an earlier modification by the Board of Trustees, which oversees the Funds.

Past performance is no guarantee of future results. Each Fund's returns quoted above represent past performance after all expenses. Investment return, principal value, and yield will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For performance information current to the most recent month-end, visitwww.domini.com or call 1-800-582-6757. Each Domini Fund charges a 2.00% redemption fee on sales or exchanges of shares made less than 30 days after the settlement of purchase or acquisition through exchange, with certain exceptions. See the applicable prospectus for further information.

The tables above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Total return is based on each Fund's net asset values and assumes all dividends and capital gains were reinvested. An investment in each Fund is not a bank deposit and is not insured. You may lose money. Certain fees payable by each Fund were waived during the period, and each Fund's average annual total returns would have been lower had these not been waived.

The Standard & Poor's 500 Index (S&P 500), the Morgan Stanley Capital International Europe Index (MSCI Europe), the Morgan Stanley Capital International All Country Asia Pacific Index (MSCI AC Asia Pacific), and the Morgan Stanley Capital International Europe, Australia, and Far East Index (MSCI EAFE) are unmanaged indexes of common stocks.

Although the Domini Social Equity Fund Investor shares, Domini European Social Equity Fund Investor shares, Domini PacAsia Social Equity Fund Investor shares, and Domini European PacAsia Social Equity Fund Investor shares are no-load, certain fees and expenses apply to a continued investment and are described in the prospectus. The composition of the Funds' portfolios are subject to change.

Investing internationally involves special risks, such as currency fluctuations, social and economic instability, differing securities regulations and accounting standards, limited public information, possible changes in taxation, and periods of illiquidity. These risks are magnified in emerging markets.

You should consider the Domini Funds' investment objectives, risks, charges, and expenses carefully before investing. View or order a copy of the Funds' current prospectus for more complete information on these and other topics. Please read the prospectus carefully before investing or sending money.

DSIL Investment Services LLC, Distributor. 07/09