Domini Impact Equity Fund ℠ - Investor Shares

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Quick Facts

Manager

Domini Impact Investments LLC

Submanager

Wellington Management Company LLP

Symbol

DSEFX

CUSIP

257132100

Fund Type

Diversified large-cap equity, socially screened.

Inception Date

6/3/91

Net Assets

Fund: $834.2 Million
Investor shares: $666.3 Million
as of 3/29/18

Annual Expense Ratio

Gross and Net: 1.09%

Per current prospectus.

Initial Sales Fee

None (no-load)

Minimum Initial Investment

$2,500 for non-retirement accounts
$1,500 for IRAs, custodial accounts and accounts opened with an automatic investment plan.

Fund Distributions

Dividends

Quarterly

Capital Gains

Annually

Newspaper Listings

Investor shares: Domini Soc Inv-Soc Eq

Investor Shares Overview

Socially and environmentally concerned investors have social, as well as financial, objectives. The Domini Impact Equity Fund seeks to meet these objectives by offering a diversified stock portfolio for long-term capital appreciation that is consistent with social and environmental priorities.

Investment Objective

The Fund seeks to provide its shareholders with long-term total return.

Investment Strategy

The Fund invests primarily in stocks of U.S. companies that meet Domini Impact 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.

Shareholder Activism

The Fund also advances its social and environmental objectives through proxy voting, dialogue with corporations, and the filing of shareholder resolutions.

Social and Environmental Standards

Domini evaluates the Fund’s current and 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:

  • 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.

Risks

An investment in the Domini Impact Equity Fund is not a bank deposit and is not insured. You may lose money. An investment in the Fund is also subject to market, sector concentration, style, and foreign investing risks. Investing internationally involves special risks, such as currency fluctuations, social and economic instability, differing security regulations and accounting standards, limited public information, possible changes in taxation, and periods of illiquidity. 

The reduction or withdrawal of historical financial market support activities by the U.S. Government and Federal Reserve, or other governments/central banks could negatively impact financial markets generally, and increase market risk which could adversely affect the Fund’s returns.

The Fund may change any of the policies described above at any time.

Note: On 11/30/06, the Fund, formerly an index fund, transitioned to an active management strategy.

Although the Domini Impact Equity Fund Investor shares are no-load, certain fees and expenses apply to a continued investment and are described in the prospectus

The Fund's returns, quoted above, represent past performance after all expenses, which is no guarantee of future results. 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. Each 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 performance quoted above does 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 the Fund’s net asset values and assumes all dividends and capital gains were reinvested. An investment in the Domini Impact International Equity Fund is not a bank deposit and is not insured. You may lose money. An investment in the Fund is subject to market, sector concentration, style, and foreign investing risks.

Investor Shares Performance

Month-End Returns as of 3/31/2018
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YTD 1YR 3 YR* 5 YR* 10 YR* SINCE INCEPTION
(6/3/91)*
DSEFX -0.70% 9.03% 5.35% 10.19% 7.81% 8.36%
S&P 500 -0.76% 13.99% 10.78% 13.31% 9.49% 9.61%

*Average annual total returns.

Quarter-End Returns as of 3/31/2018
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YTD 1YR 3 YR* 5 YR* 10 YR* SINCE INCEPTION
(6/3/91)*
DSEFX -0.70% 9.03% 5.35% 10.19% 7.81% 8.36%
S&P 500 -0.76% 13.99% 10.78% 13.31% 9.49% 9.61%

*Average annual total returns.

Calendar Year Returns
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DSEFX S&P 500
2017 15.42% 21.83%
2016 11.24% 11.96%
2015 -7.27% 1.38%
2014 13.97% 13.69%
2013 32.85% 32.39%
2012 11.33% 16.00%
2011 0.74% 2.11%
2010 13.69% 15.06%
2009 35.56% 26.46%
2008 -37.88% -37.00%
2007 1.46% 5.50%
2006 12.58% 15.79%
2005 2.03% 4.91%
2004 9.26% 10.88%
2003 27.13% 28.69%
2002 -20.69% -22.10%
2001 -12.76% -11.88%
2000 -15.05% -9.11%
1999 22.63% 21.04%
1998 32.99% 28.58%
1997 36.02% 33.36%
1996 21.84% 23.07%
1995 35.17% 37.50%
1994 -0.36% 1.26%
1993 6.54% 10.08%
1992 12.10% 7.68%
Quarterly Returns
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DSEFX S&P 500
1st Qtr 2018 -0.70% -0.76%
4th Qtr 2017 4.81% 6.64%
3rd Qtr 2017 4.48% 4.48%
2nd Qtr 2017 0.27% 3.09%
1st Qtr 2017 5.12% 6.07%
4th Qtr 2016 3.95% 3.82%
3rd Qtr 2016 7.58% 3.85%
2nd Qtr 2016 -1.90% 2.46%
1st Qtr 2016 1.39% 1.35%
4th Qtr 2015 2.30% 7.04%
3rd Qtr 2015 -8.33% -6.44%
2nd Qtr 2015 -2.20% 0.28%
1st Qtr 2015 1.11% 0.95%
4th Qtr 2014 3.27% 4.93%
3rd Qtr 2014 1.52% 1.13%
2nd Qtr 2014 5.69% 5.23%
1st Qtr 2014 2.86% 1.81%
4th Qtr 2013 9.47% 10.51%
3rd Qtr 2013 7.20% 5.24
2nd Qtr 2013 2.75% 2.91%
1st Qtr 2013 10.19% 10.61%

* Average annual total returns – below the performance tables as presented for the other share classes. 

The Standard & Poor’s 500 Index (S&P 500) is an unmanaged index of common stocks. Investors cannot invest directly in the S&P 500.

Although the Domini Impact 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 Fund's portfolio is subject to change.

Annual Expense Ratio1.09%. Per current prospectus.

Past performance is no guarantee of future results. The Fund’s returns quoted above represent past performance after all expenses. The returns reflect any applicable expense waivers in effect during the periods shown. Without such waivers, Fund performance would be lower. Investment return, principal value, and yield will fluctuate.  Your shares, when redeemed, may be worth more or less than their original cost. Select the Performance Tab above for more complete performance information, including returns current to the most recent month-end, which may be lower or higher than the performance data quoted. A 2.00% redemption fee applies 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 prospectus for further information. 

An investment in the Domini Impact Equity Fund is not a bank deposit and is not insured. You may lose money. An investment in the Fund is subject to market, sector concentration, style, and foreign investing risks. Select the Overview tab above or see the prospectus for more information on risk.

The performance above does not reflect the deduction of fees and taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Total return is based on the Fund’s net asset values and assumes all dividends and capital gains were reinvested.

Although the Domini Impact Equity Fund Investor shares are no-load, certain fees and expenses apply to a continued investment and are described in the prospectus

Ten Largest Holdings as of 2/28/2018
Company % of Portfolio
Alphabet Inc. Class A 3.60%
Mastercard Inc. A 3.20%
Intel Corp. 2.80%
IBM Corp. 2.70%
Walgreens Boots Alliance Inc. 2.60%
Prudential Financial Inc. 2.60%
Gilead Sciences Inc. 2.50%
Cummins Inc. 2.40%
PepsiCo Inc. 2.40%
Bank of America Corp. 2.30%
TOTAL 27.10%
Sector Weightings as of 12/31/2017
Sector % of Portfolio
Information Technology 26.10%
Financials 15.90%
Health Care 14.30%
Consumer Discretionary 11.00%
Consumer Staples 8.80%
Industrials 8.20%
Telecommunication Services 4.30%
Real Estate 4.00%
Materials 3.70%
Utilities 3.20%
Energy 0.40%
Total 100.00%

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

View Complete Portfolio Holdings

The composition of the Fund’s portfolio is subject to change. The Domini Funds maintain portfolio holdings disclosure policies that govern the timing and circumstances of disclosure to shareholders and third parties of information regarding the portfolio investments held by the Funds.

The Global Industry Classification Standard (“GICS”) was developed by and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“S&P”) and is licensed for use by Domini Impact Investments.  Neither MSCI, S&P nor any third party involved in making or compiling the GICS or any GICS classifications makes any express or implied warranties or representations with respect to such standard or classification nor shall any such party have any liability therefrom.

Portfolio Overview

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

Investment Style:

Blend

Weighted Average Market Capitalization:

Large
Portfolio Statistics as of 9/29/2017
Swipe to view table
DSEFX S&P 500
Price-to-Earnings Ratio (projected) 15.2x 17.2x
Price-to-Book Ratio 2.9x 3.3x
Beta (projected) 1 --
R-squared (projected) 0.97 --
Market Cap Asset Weighted Avg. (Millions) $121,007 $178,608
Total Number of Holdings 98 500

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.

The composition of the Fund’s portfolio is subject to change. View the most current list of the Domini Impact Bond Fund's holdings. The Domini Funds maintain portfolio holdings disclosure policies that govern the timing and circumstances of disclosure to shareholders and third parties of information regarding the portfolio investments held by the Funds.

The Standard & Poor’s 500 Index (S&P 500) is an unmanaged index of common stocks. You cannot invest directly in an index.

Investor Shares Performance Commentary

The Fund invests primarily in mid- and large-cap U.S. equities. It is managed through a two-step process designed to capitalize on the strengths of Domini Impact Investments and Wellington Management Company, the Fund’s subadvisor. Domini creates an approved list of companies based on its social, environmental and governance analysis, and Wellington seeks to add value and manage risk through a systematic and disciplined portfolio construction process. Download Commentary as a PDF.

Total Returns as of 3/31/2018
Swipe to view table
YTD 1YR 3 YR* 5 YR* 10 YR* SINCE INCEPTION (6/3/91)*
DSEFX -0.70% 9.03% 5.35% 10.19% 7.81% 8.36%
S&P 500 -0.76% 13.99% 10.78% 13.31% 9.49% 9.61%

* Average annual total returns.

On 11/30/06, the Fund, formerly a passively managed index fund, transitioned to an active management strategy. Past performance before 11/30/06 represents the former investment strategy, and is not indicative of future results.

Market Overview

U.S. equities continued to rally for the eighth straight quarter, with the S&P 500 returning 4.48%. Ongoing controversies surrounding the White House and escalating geopolitical tensions with Russia, North Korea and Iran were not enough to derail momentum, as strong corporate earnings and generally encouraging economic data, including a solid labor market, helped li the index to another series of record highs. Second-quarter GDP growth of 3.1% represented the strongest year-over-year growth since the third quarter of 2015, and an August rise in the Institute of Supply Management’s Non-Manufacturing Index suggested that the acceleration in growth during the rst six months of the year could continue during the second half.

Despite the economy’s upward trajectory, persistently disappointing inflation has been a concern of the Federal Reserve. However, signs of firming inflation in August provided some relief and increased investor expectations for further interest rate increases and the end of this year and in 2018. In a well-telegraphed move, the Fed announced that it would begin its balance-sheet normalization program in October, stating that the process would be gradual and predictable. Meanwhile, a er several failed attempts at repealing the Affordable Care Act, Congressional Republicans pivoted their efforts to tax reform, unveiling a long-awaited blueprint in September for a plan that would slash corporate taxes and reduce the number of tax brackets for individuals. 

Fund Performance

The Fund’s Investor shares returned 4.48% for the quarter, matching the S&P 500 Index return. Security selection made a positive contribution to relative performance, with particularly strong selection in the consumer discretionary, consumer staples and industrials sectors partially o set by weaker selection in health care. Sector allocation made a negative contribution, with an underweight to energy and an overweight to consumer staples detracting from relative results.

The top contributor to relative performance this quarter was Lam Research Corporation, a supplier of wafer fabrication equipment and services to the semiconductor industry, which returned more than 31%. The company posted impressive results for its fiscal fourth quarter and marked its h consecutive year of double-digit revenue growth, driven by strong demand from customers like Samsung, Micron, SK Hynix and Intel. Another semiconductor equipment and services provider, Applied Materials, was also among the top contributors, rising more than 26%. The company, which provides manufacturing equipment, services and so ware to the global semiconductor, display and related industries, posted solid results for its fiscal third quarter, highlighted by record revenues that surpassed expectations. Outperformance was driven by record sales of wafer fabrication equipment for circuits used to produce LEDs, optical computer equipment and CPUs. 

Lifestyle-oriented content developer Scripps Networks Interactive, which primarily produces home, food, travel and related programming for television, internet and digital platforms, was another top contributor, returning more than 26%. The stock gained on news of its long-awaited purchase by Discovery Networks, for which approval from the Department of Justice seems likely given the relatively small scale of the combined entity compared to some of its competitors.

Other top contributors this quarter included biopharmaceutical research company Gilead Sciences and discount home and apparel retailer Ross Stores, which gained more than 15% and 12%, respectively. Gilead posted better-than-expected results for the second quarter and surprised investors by increasing its full-year sales forecast for its declining HCV drug franchise thanks to marketing efforts that it says have helped the company reach new patients. The company realized strong gains a er announcing a long-awaited deal to purchase clinical-stage oncology company Kite Pharma for a record $11.9 billion. Gilead believes cellular therapies like those being developed by Kite have the potential to become a cornerstone of cancer treatment, and sees the acquisition as the start of a long-term strategy to build a leading oncology platform. Meanwhile, Ross Stores bucked the trend in retail, with strong customer traffic and solid margins driving better better-than-expected second-quarter results, and raised third-quarter forecasts.

The largest detractor from relative performance this quarter was diagnostic information services company Quest Diagnostics, which declined more than 15% a er the Centers for Medicare and Medicaid Services released 2018 preliminary rates for the new Clinical Laboratory Fee Schedule under the Protecting Access to Medicare Act, cutting rates to the worst-case scenario.

Chipotle Mexican Grill dropped more than 26%, as it continues to wage an uphill battle to regain its prior sales, profits and valuation levels. The company posted mixed results for the second quarter, with slightly underwhelming revenues but better-than-expected margins, while the third quarter started with a sharp drop in demand due to a new norovirus outbreak in late July.

Other significant detractors included technology companies IBM and F5 Networks, which both declined around 5%. IBM reported its 21st straight quarter of year-over-year revenue declines, as it continues to struggle to make progress on a five-year-old plan to steer the company away from legacy products like computers and operating systems, which have been a drag on growth, and toward newer technologies in services and so ware. Despite management stating in April that it expected key contracts in the technology services and cloud platforms segment to come through during the second quarter, segment revenues were down 5.1% year-over-year, marking the second consecutive quarter of declines for the key business unit. Enterprise application services company F5 Networks reported slowing product growth and disappointing guidance, with the weak near-term outlook prompting Wall Street analysts to cut forecasts. 

The largest contributor to the Fund’s performance relative to the S&P 500 was Applied Materials, which provides manufacturing equipment, services, and software to the global semiconductor, display, and related industries. The stock rose almost 21% for the quarter, after reporting solid results for the fiscal first quarter, driven by record orders across all categories. Lam Research, which also provides equipment and services to semiconductor manufacturers, returned nearly 22% after fiscal-second-quarter results and third-quarter guidance exceeded expectations on both the top and bottom lines.

Global automotive supplier Visteon Corporation, a non-benchmark holding, was another top contributor, gaining more than 22% after reporting strong results fourth quarter, led by positive currency movements and strength in China, where growth in “infotainment” drove year-over-year growth of 26%.

Online shopping company eBay rose almost 13% after reporting fourth-quarter profit that beat estimates and providing a better-than-expected forecast for 2017, giving investors confidence that its rebranding campaign and data initiative are helping to lead a successful turnaround.

The Fund also benefitted from not owning benchmark holding Exxon Mobil, which is not approved for investment by the Domini Funds. The oil and gas company dropped more than 8% for the quarter.

Strong performance by these stocks was offset by weaker performers, including several conventional retailers. Department store chain Kohl’s declined more than 18% after reporting weak fourth quarter results, with a deterioration in store traffic during the holiday season driving sales lower. Fashion retailer Nordstrom was another large detractor, declining 2.5% after reporting mixed fourth-quarter results, which saw sales miss expectations due to a lower mix of promotional items, while profits were higher due to efficient inventory management.

Other significant detractors included Verizon Communications, which declined almost 8%. Verizon’s fourth-quarter profit estimates fell below analysts’ expectations, as holiday promotions and discounts to combat competitors led to diminished margins. Sysco, which distributes food products to restaurants, hospitals, schools, hotels, and other foodservice businesses, declined almost 6%.

Relative performance was also hampered by the Fund not owning benchmark-holding Facebook, which rose more than 23%.

Top Relative Contributors as of 9/29/2017
Swipe to view table
Company Sector Stock Return*
Lam Research Corporation Information Technology 31.18%
Applied Materials, Inc. Information Technology 26.39%
Scripps Networks Inter., Inc. Consumer Discretionary 26.13%
Gilead Sciences, Inc. Health Care 15.16%
Ross Stores, Inc. Consumer Discretionary 12.06%
Top Relative Detractors as of 9/29/2017
Swipe to view table
Company Sector Stock Return*
Quest Diagnostics Inc. Health Care -15.42%
Chipotle Mexican Grill, Inc. Consumer Discretionary -26.15%
IBM Corp. Information Technology -4.69%
F5 Networks, Inc. Information Technology -5.18%
PepsiCo, Inc. Consumer Staples -2.86%

*Represents return for period in the Fund’s Portfolio or return for the entire period if not held.

**Not held in the Portfolio.

Past performance is no guarantee of future results. The Fund’s returns quoted above represent past performance after all expenses. The returns reflect any applicable expense waivers in effect during the periods shown. Without such waivers, Fund performance would be lower. Investment return, principal value, and yield will fluctuate.  Your shares, when redeemed, may be worth more or less than their original cost. Select the Performance Tab above for more complete performance information, including returns current to the most recent month-end, which may be lower or higher than the performance data quoted. A 2.00% redemption fee applies 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 prospectus for further information.

Annual Expense Ratio: 1.09%. Per current prospectus.

An investment in the Domini Impact Equity Fund is not a bank deposit and is not insured. You may lose money. An investment in the Fund is subject to market, sector concentration, style, and foreign investing risks. Select the Overview tab above or see the prospectus for more information on risk.

The performance information above does not reflect the deduction of fees and taxes that a shareholder would pay on distributions or the redemption of Fund shares. Certain fees and expenses also apply to a continued investment and are described in each Fund's prospectus. Total return is based on the Fund’s net asset values and assumes all dividends and capital gains were reinvested. 

The Standard & Poor’s 500 Index (S&P 500) is an unmanaged index of common stocks. You cannot invest directly in an index.

The composition of the Fund’s portfolio is subject to change. View the most current list of the Domini Impact Equity Fund’s holdings. The Domini Funds maintain portfolio holdings disclosure policies that govern the timing and circumstances of disclosure to shareholders and third parties of information regarding the portfolio investments held by the Funds.

This Commentary is provided for informational purposes only. Nothing herein is to be considered a recommendation concerning the merits of any noted company, or an offer of sale or a solicitation of an offer to buy shares of any Fund or company referenced herein. Such offering is only made by prospectus, which includes details as to the offering price and other material information. Please read the prospectus carefully before investing.

The Global Industry Classification Standard (“GICS”) was developed by and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“S&P”) and is licensed for use by Domini Social Investments.  Neither MSCI, S&P nor any third party involved in making or compiling the GICS or any GICS classifications makes any express or implied warranties or representations with respect to such standard or classification nor shall any such party have any liability therefrom.

 


View or download the Domini Funds’ prospectus and other documents below. If you would like any of these documents mailed to you, free of charge, call 1-800-762-6814 (Monday to Friday, 9 a.m. - 6 p.m. EST) or fill out our online Request Information form.

Many of the documents listed below are in PDF format. To view these documents, you will need Adobe Reader software, version 4.0 or higher. If you don’t have Adobe Reader, you can download it for free at Adobe’s website.


Check the background of DSIL Investment Services LLC and its investment professionals on FINRA's BrokerCheck.

Before investing, consider the Domini Funds’ investment objectives, risks, charges, and expenses. View or order a prospectus. Read it carefully.

The Domini Funds are distributed by DSIL Investment Services LLC (DSILD), Member FINRA. Domini Impact Investments LLC (Domini) is the Funds’ investment manager. The Funds are subadvised by Wellington Management Company LLP. DSILD and Domini are not affiliated with Wellington Management Company LLP.

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