Domini Social Equity Fund Reaches $1 Billion In AssetsDomini Social Investments Becomes the 9th Fastest Growing Mutual Fund Family
New York, NY – While the rate of growth for the mutual fund industry as a whole has slowed by half (from 6.22% to 2.97% for the six months ended June 30, 1998 and 1999, respectively), the Domini Social Equity Fund's assets have grown at a rate of 37.74% for the same period this year, reflecting the strong past performance of the Fund, as well as an increasing awareness and interest in socially responsible investing. Domini Social Investments has become the 9th fastest growing mutual fund family in the country, among fund families with over $1 billion in assets (excluding money market fund assets). Rate of growth is measured as net flows as a percentage of beginning total assets under management. *
Amy Domini, Founder and Managing Principal of Domini Social Investments, the manager of the Domini Social Equity Fund (Ticker: DSEFX), announced today that the Fund has reached $1 billion in assets, making it the nation's second largest socially responsible mutual fund. Launched in June 1991, the Domini Social Equity Fund, a no-load mutual fund investing in the stocks of the socially screened Domini 400 Social Index (DSI 400), is the nation's oldest socially and environmentally screened index fund.
Recently, the largest source of new assets for the Domini Social Equity Fund has been retirement plans, which represent approximately 30% of the Fund's asset flows over the past year. "The Department of Labor has made it clear that socially responsible funds, once thought to be off limits by ERISA-plan sponsors, are appropriate as long as they provide an equal or superior rate of return relative to their unscreened peers. Fiduciaries are now free to serve the increasing demand from plan participants for socially responsible options," said Ms. Domini. The Domini Social Equity Fund is available through some of the largest retirement plan distributors in the country, including Fidelity Investments, Charles Schwab, American Express, Manulife Financial, Putnam Investments and a host of other third parties.
The DSI 400 was launched in 1990 to serve as a benchmark for socially responsible investors. The Index excludes the areas traditionally avoided by social investors, namely, the manufacture of military weapons, alcohol, tobacco, gambling, nuclear power and, at that time, South Africa. The Index includes companies that show respect for the environment, their workforce, communities and customers. The DSI 400 was created by Peter Kinder, Steve Lydenberg and Amy Domini of the social research firm of Kinder, Lydenberg, Domini & Co. ("KLD"). KLD acts as an adviser on social screening to Domini Social Investments and maintains the DSI 400.
"We had two basic goals in mind when we created the DSI 400. First, we wanted to demonstrate that socially responsible investing was a legitimate movement, with widely accepted principles. The DSI 400's screens were chosen to reflect the criteria that most socially responsible investors used to evaluate their investments. Our second goal was to determine what effect social screening has on performance," recalled Peter Kinder, President of KLD.
As of June 30, 1999, the DSEF has outperformed the S&P 500 for the 1-year, 5-year and since inception (6/91) periods, returning 25.28%, 28.14% and 19.73%, respectively. The S&P 500 returned 22.76%, 27.85% and 19.65% for the same periods. The Fund's performance has earned it Morningstar's highest overall rating of five stars (among 3,043 and 1,878 domestic equity funds for the 3-year and 5-year periods ended 6/30/99, respectively).
"Before the emergence of socially screened funds there were no systematic, ongoing surveys of corporate impact on society and the environment. By investing in a socially screened mutual fund, individuals send a message to corporations that information relating to such things as environmental compliance and minority representation is vital to their investment decisions," Ms. Domini continued. "In fact, over the years, as socially responsible investing has grown, corporate social responsibility reports have become both more comprehensive and a matter of common practice. Socially responsible investors have changed the landscape by creating the demand for corporate social and environmental responsibility. Funds like the Domini Social Equity Fund enable people to be part of positive social change."
Domini Social Investments is also an active shareholder, working with corporations in its portfolio to improve their social and environmental records. This year the firm co-filed eight shareholder resolutions on a range of issues and engaged corporations in dialogue on issues such as board diversity, environmental reporting and sweatshops. Earlier this year, the firm launched an important effort to educate investors about the voting power of mutual funds when it became the first mutual fund company to disclose its proxy voting record on the Internet.
New York-based Domini Social Investments manages more than $1.3 billion dollars in assets for individual and institutional investors who are working to create positive change in society by using social and environmental criteria in their investment decisions. The firm is the 9th fastest growing mutual fund firm in the country, among firms with over $1 billion in assets. The firm's flagship product, the Domini Social Equity Fund, is the nation's first socially and environmentally screened no-load index fund. Domini also offers an FDIC-insured community development money market account through its partnership with South Shore Bank of Chicago.