Domini Impact International Equity Fund ℠ - Investor Shares

Quick Facts

Manager:

Domini Impact Investments LLC

Submanager:

Wellington Management Company LLP

Symbol:

DOMIX

CUSIP:

257132704

Fund Type:

Diversified mid- to large-cap international stocks, socially screened

Inception Date:

12/27/06

Net Assets:

Fund: $1,376.6 Million

Investor shares: $726.7 Million

as of 3/29/18

Annual Expense Ratio:

Gross and Net: 1.43%

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:

Semi-annually

Capital Gains:

Annually

Investor Shares Overview

The Domini Impact International Equity Fund helps you access a world of investment opportunity, while using your investment dollars to encourage corporate responsibility. Investments in companies across Europe, the Asia-Pacific region, and throughout the rest of the world let you take advantage of broad international diversification with the convenience of one mutual fund.

Investment Objective

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

Investment Strategy

The Fund invests primarily in stocks of companies in Europe, the Asia-Pacific region, and throughout the rest of the world 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.  

Management

Investment Advisor and Sponsor: Domini Impact Investments LLC.

Subadvisor: Wellington Management Company LLP.

Shareholder Activism

The Fund seeks to use its position as a shareholder to raise issues of social and environmental performance with corporate management.

Social and Environmental Standards

Domini evaluates the Fund’s 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 International 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, foreign investing, and style risks. 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.

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.

Although the Domini Impact International 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 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.


Performance

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
(12/27/06)*
DOMIX -0.67% 13.14% 7.04% 8.01% 3.46% 2.40%
MSCI EAFE (gross) -1.41% 15.32% 6.05% 6.98% 3.23% 3.11%
MSCI EAFE (net) -1.53% 14.80% 5.55% 6.50% 2.74% 2.82%

*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
(12/27/06)*
DOMIX -0.67% 13.14% 7.04% 8.01% 3.46% 2.40%
MSCI EAFE (gross) -1.41% 15.32% 6.05% 6.98% 3.23% 3.11%
MSCI EAFE (net) -1.53% 14.80% 5.55% 6.50% 2.74% 2.82%

*Average annual total returns.

Calendar Year Returns
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DOMIX MSCI EAFE (GROSS) MSCI EAFE (NET)
2016 3.05% 1.51% 1.01%
2015 1.76% -0.39% -0.82%
2014 -3.27% -4.48% -4.90%
2013 25.77% 23.29% 22.79%
2012 22.53% 17.90% 17.32%
2011 -13.45% -11.73% -12.13%
2010 11.25% 8.21% 7.74%
2009 28.68% 32.45% 31.79%
2008 -46.65% -43.06% -43.39%
2007 2.22% 11.62% 11.18%
Quarterly Returns
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DOMIX MSCI EAFE (GROSS) MSCI EAFE (NET)
3rd Qtr 2017 4.47% 5.47% 5.40%
2nd Qtr 2017 6.01% 6.37% 6.12%
1st Qtr 2017 9.39% 7.39% 7.25%
4th Qtr 2016 -0.96% -0.68%
3rd Qtr 2016 6.52% 6.50%
2nd Qtr 2016 -3.51% -1.19%
1st Qtr 2016 1.24% -2.88%
4th Qtr 2015 2.33% 4.75%
3rd Qtr 2015 -7.59% -10.19%
2nd Qtr 2015 1.68% 0.84%
1st Qtr 2015 5.83% 5.00%
4th Qtr 2014 -1.46% -3.53%
3rd Qtr 2014 -4.76% -5.83%
2nd Qtr 2014 2.69% 4.34%
1st Qtr 2014 0.37% 0.77%
4th Qtr 2013 6.11% 5.75%
3rd Qtr 2013 11.29% 11.61%
2nd Qtr 2013 -0.86% -0.73%
1st Qtr 2013 7.42% 5.23%

*Average annual total returns.

Annual Expense Ratio: 1.43%. 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 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. 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 International Equity Fund Investor shares are no-load, certain fees and expenses apply to a continued investment and are described in the prospectus.

The Morgan Stanley Capital International Europe Australasia Far East (MSCI EAFE) index is an unmanaged index of common stocks. It is not available for direct investment. MSCI EAFE (gross) includes the reinvestment of dividends but reflects no deduction for fees, expenses or taxes. MSCI EAFE (net) includes the reinvestment of dividends net of withholding tax, but does not reflect other fees, expenses or taxes.

Holdings

Ten Largest Holdings as of 2/28/2018
Company % of Portfolio
Nissan Motor Co. Ltd. 2.40%
Allianz SE-Reg 2.30%
Vodafone Group plc 2.20%
Sanofi 2.20%
Swisscom AG-REG 2.10%
Kering 2.00%
Central Japan Railway Co. 1.90%
Sandvik AB 1.80%
DBS Group Holdings Ltd. 1.80%
Aena SME S.A. 1.40%
TOTAL 20.10%
Sector Weightings as of 12/31/2017
Sector % of Portfolio
Financials 24.00%
Industrials 16.20%
Consumer Discretionary 14.90%
Information Technology 9.20%
Consumer Staples 8.30%
Materials 7.50%
Health Care 7.40%
Real Estate 6.40%
Telecommunication Services 4.10%
Energy 1.40%
Utilities 0.60%
Total 100.00%
Country Diversification as of 12/31/2017
Country % of Portfolio
Japan 22.40%
France 13.40%
United Kingdom 12.20%
Switzerland 7.60%
Germany 7.20%
Sweden 4.80%
Australia 4.40%
Netherlands 4.30%
Singapore 3.00%
Hong Kong 2.70%
Denmark 2.20%
Spain 2.20%
Turkey 1.90%
Belgium 1.80%
Other 9.90%
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. View the most current list of the Domini Impact International 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.

Characteristics

Portfolio Overview

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

Investment Style:

Blend

Weighted Average Market Capitalization:

Large
Portfolio Statistics as of 9/29/2017
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DOMIX MSCI EAFE*
Price-to-Earnings Ratio (projected) 12.4x 14.5x
Price-to-Book Ratio 1.4x 1.7x
Beta (projected) 1.03 --
R-squared (projected) 0.97 --
Total Number of Holdings 174 913

*The Morgan Stanley Capital International Europe, Australasia and Far East Index (MSCI EAFE) is an unmanaged index of common stocks. Investors cannot invest directly in an index.

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 International 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.

The Morgan Stanley Capital International Europe, Australasia, and Far East Index (MSCI EAFE) is an unmanaged index of common stocks. It is not available for direct investment. MSCI EAFE (gross) includes the reinvestment of dividends but reflects no deduction for fees, expenses or taxes. MSCI EAFE (net) includes the reinvestment of dividends net of witholding tax, but does not reflect other fees, expenses or taxes. The composition of the Fund’s portfolio is subject to change.

Commentary

Investor Shares Performance Commentary

The Fund invests primarily in mid- to large-cap equities across Europe, the Asia-Pacific region, and throughout the rest of the world. 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 using a diversified stock selection approach, while managing risk through a systematic and disciplined portfolio construction process. Download Commentary as a PDF.

Total Returns as of 3/31/2018
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YTD 1 YR 3 YR* 5 YR* 10 YR* SINCE INCEPTION (12/27/06)*
DOMIX -0.67% 13.14% 7.04% 8.01% 3.46% 2.40%
MSCI EAFE (gross) -1.41% 15.32% 6.05% 6.98% 3.23% 3.11%
MSCI EAFE (net) -1.53% 14.80% 5.55% 6.50% 2.74% 2.82%

*Average annual total returns.

Market Overview

Driven by broad-based expansion of economic growth and supportive monetary policy, global equities continued to rally, with the MSCI EAFE index returning 5.40%2 to mark its third straight quarter of gains. Despite heightening geopolitical risks around the global and escalating sociopolitical tensions throughout Europe, European equities advanced thanks to continued economic improvement, with eurozone GDP advancing 2.2% year-over-year. Economic confidence reached a decade-high in September amid an eight-year low in unemployment, strong manufacturing data and a reacceleration in the services sector. With a stronger euro weighing on its ability to achieve higher inflation, however, the European Central Bank remained dovish, leaving rates unchanged in July and suggesting the need for further stimulus to maintain price growth. The euro reached its highest level against the U.S. dollar since January 2015, until finally easing in the buildup to the German election. Chancellor Angela Merkel was reelected for a fourth term, but she is expected to face difficult negotiations in forming a new governing coalition, as Eurosceptic the Alternative for Germany (AfD) become the first far-right party in over half a century to win seats in the Bundestag. A fractured parliament in Europe’s largest economy could place further pressure on the euro and will likely complicate efforts led by Merkel and French President Emmanuel Macron to deepen eurozone integration.

Equity returns were more subdued in the United Kingdom, which saw GDP growth fall to its lowest level in more than four years. Partly due to eurozone strength and continued concerns over Brexit, the British pound fell to an eight-year low against the euro, and inflation rose to an five-year high. Household spending dropped and the trade deficit widened unexpectedly, as the weaker pound failed to boost exports.

The Asia-Pacific region continued to advance, led by Hong Kong, which saw continued recovery in its manufacturing sector, solid year-over-year export growth, and accelerating retail sales. While GPD growth of 3.8% in the second quarter marked a deceleration from the first quarter, it remains substantially better than a year ago. Japan was also strong, lifted by an accelerating manufacturing sector and the most significant improvement in exports since 2013. While inflation remains well shy of the Bank of Japan’s 2% target, it improved throughout the quarter, and the BOJ’s Tankan Survey reached a ten-year high, indicating that activity for Japan’s largest manufacturers has been strong. Australia lagged the region amid slumping retail sales, but real GDP growth accelerated and the job market continued to improve.

Emerging markets were very strong during the third quarter, helped by improving fundamentals, higher commodity prices, and upbeat corporate earnings. Latin America was particularly strong, including Brazil, which saw a favorable mix of lower interest rates, higher commodity prices and a weakening U.S. dollar. China led gains in Asia amid a strong corporate earnings season, a solid real estate market and MSCI’s decision to add China A-shares to its indexes.

Fund Performance

For the quarter, the Fund’s Investor shares returned 4.47%, underperforming the MSCI EAFE Index net return of 5.40%2. Security selection was the largest driver of underperformance, with strong selection in the consumer discretionary sectors more than offset by weaker selection in industrials and information technology. Sector allocation also detracted from relative performance; the Fund benefitted from its underweight to health care, but that benefit was more than offset by its underweight to energy. Geographically, security selection was strong in Europe--especially in France—but this was offset by weaker security selection in Japan.

Geographically, security selection was very strong in Europe, with strong selection in the Netherlands and United Kingdom slightly offset by weaker selection in Norway. Selection was also strong in Japan, but was more than offset by weaker selection in Hong Kong. Relative performance benefitted from the Fund’s out-of-benchmark emerging-market positions—with strong contributions from South Korea, China, and Turkey—but this benefit was mostly offset by weakness from its out-of-benchmark positions in Brazil.

Top Relative Contributors as of 9/29/2017
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COMPANY SECTOR STOCK RETURN*
Nine Dragons Paper Holdings Limited Materials 48.49%
Kering Consumer Discretionary 17.14%
Nestlé S.A.** Consumer Staples -3.82%
STMicroelectronics N.V. Information Technology 35.40%
Peugeot S.A. Consumer Discretionary 19.65%

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

**Not held in the Portfolio.

Top Relative Detractors as of 9/29/2017
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COMPANY SECTOR STOCK RETURN*
Asahi Glass Co., Ltd. Industrials -11.90%
Merck KGaA Health Care -7.71%
Aena SME, S.A. Industrials -7.32%
Royal Dutch Shell plc** Energy 16.37%
mixi, Inc. Information Technology -12.39%

The top individual contributor to relative performance was non-benchmark holding Nine Dragons Paper, which manufactures and sells packaging paper, recycled printing and writing paper, and high-value specialty paper products in China. The company rose more than 48% on the back of strong fiscal 2017 results, with strong year-over-year revenue and net profit growth driven by rising average selling prices and margin expansion. The Chinese government’s increased environmental inspection and enforcement led to a demand-supply dynamic change that helped paper makers like Nine Dragons regain pricing power.

French luxury goods company Kering and car manufacturer Peugeot were also among the top contributors, returning more than 17% and 19%, respectively. Kering reported better-than-expected earnings for the first half of the year, driven by resurgent sales for its Gucci brand. Peugeot, aka Groupe PSA, which owns automobile brands Peugeot, Citroën and DS, completed its acquisition of the Opel and Vauxhall brands from GM, now making it the second largest car manufacturer in Europe.

European chipmaker STMicroelectronics—which designs, develops, manufactures and markets a range of semiconductor solutions, including discrete and standard commodity components and application-specific integrated circuits for analog, digital and mixed-signal applications—was another top contributor, gaining more than 35%. The company posted solid second-quarter results driven by widespread strength across its portfolio, and expects all segments to grow in the second half of 2017. ST has begun to ramp up its new facial-recognition image sensor for Apple’s iPhone X ahead of its upcoming launch, which is expected to provide a boost in the fourth quarter.

The largest detractor from performance this quarter was Japanese glass manufacturer Asahi Glass, which dropped almost 12%. The company reported mixed results for the first half of 2017, with positive operating profit surpassing market expectations. Sharp declines in the glass and electronics segments were offset by sharp growth in the chemicals segment, benefits from the consolidation of an acquisition, and higher shipment volume across multiple segments. The glass segment suffered from the sluggish production of automotive glass in Europe and higher fuel costs, while weakness in electronics was attributed to lower prices for LCD substrate glass.

German pharmaceutical company Merck was another large detractor, declining almost 8%. Merck’s second-quarter results disappointed, with earnings down despite sales being up. Growth in its life science segments was offset by decline in healthcare and performance materials. Merck also announced a strategic review of its consumer health division as it faces increased competition.

Spain’s Aena, which is primarily engaged in the operation of airports, and Japanese social media networking company mixi also detracted from relative results with respective declines of more than 7% and 12%. Aena reported solid results for the second quarter that were broadly in-line with expectations, but uncertainty mounted due to a sharp quarter-to-quarter decline in revenues per passenger in its commercial subdivision.

Benchmark holdings that are not approved for investment by the Domini Funds also affected relative results. The Fund benefitted from not owning Swiss food and beverage company Nestlé, which declined almost 4%, but this benefit was mostly offset by not owning British-Dutch oil and gas company Royal Dutch Shell, which gained more than 16%.

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:1.43%. Per current prospectus

An investment in the Domini Impact International 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, foreign investing, and style 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 Morgan Stanley Capital International Europe, Australasia, and Far East Index (MSCI EAFE) is an unmanaged index of common stocks. It is not available for direct investment. MSCI EAFE (gross) includes the reinvestment of dividends but reflects no deduction for fees, expenses or taxes. MSCI EAFE (net) includes the reinvestment of dividends net of witholding tax, but does not reflect other fees, expenses or taxes. The composition of the Fund’s portfolio is subject to change. 

The composition of the Fund’s portfolio is subject to change. View the most current list of the Domini Impact International 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.

Prospectus & Key Documents

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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