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Domini Social Bond Fund ®

Fund Information

$11.08
Daily Price (NAV)
as of 06/30/2015
Symbol DSBIX
Daily NAV Change $0.00 (0.00%)

Key Documents

Overview

Institutional Shares Overview​

Institutional shares are available to qualified endowments, foundations, religious organizations, nonprofit entities, individuals and certain corporate or similar institutions that meet the minimum investment requirements.

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:  Wellington Management Company LLP. Campe Goodman, CFA, is primarily responsible for the day-to-day management of the Fund, assisted by other members of Wellington Management's US broad market team.

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

  • The Institutional share class of the Domini Social Bond Fund is available to investors that meet the minimum investment requirements, have been approved by the distributor, and fall within the following categories: endowments, foundations, religious organizations and other nonprofit entities, individuals, retirement plan sponsors, family office clients, private trusts, certain corporate or similar institutions, or omnibus accounts maintained by financial intermediaries.**
  • 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

Institutional Shares Performance
 

Month-End Returns as of 5/31/15
YTD1 Yr3 Yr*5 Yr*10 Yr*Since Inception (6/1/00)*
DSBIX0.60%1.62%1.27%2.45%3.60%4.54%
BIA1.31%2.61%2.00%3.29%4.33%5.29%
Barclays U.S. Aggregate1.00%3.03%2.22%3.91%4.61%5.64%

Quarter-End Returns as of 3/31/15
YTD1 Yr3 Yr*5 Yr*10 Yr*Since Inception (6/1/00)*
DSBIX1.08%3.60%1.83%2.92%3.85%4.63%
BIA1.32%4.24%2.41%3.62%4.54%5.35%
Barclays U.S. Aggregate1.61%5.72%3.10%4.42%4.93%5.75%

Calendar Year Returns
DSBIXBIA
20143.87%4.12%
2013-1.76%-1.02%
20122.89%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
DSBIXBIABUSA
1st Qtr 20151.08%1.32%1.61%
4th Qtr 20141.06%1.20%
3rd Qtr 2014-0.02%0.03%
2nd Qtr 20141.43%1.62%
1st Qtr 20141.36%1.20%
4th Qtr 2013-0.22%-0.14%
3rd Qtr 20130.66% 0.76%
2nd Qtr 2013-2.16%-1.78%
1st Qtr 2013-0.03%0.15%

*Average annual total returns.

Institutional shares were not offered prior to 11/30/11. All performance information for time periods beginning prior to that date is the performance of the Investor shares, which has not been adjusted to reflect the lower expenses of the Institutional shares.

Annual Expense Ratio: Gross: 1.02% / Net: 0.65%. Per current prospectus. Domini has contractually agreed to cap Investor share expenses to not exceed 0.65% until 11/30/15, 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 5/31/15
ISSUER% OF PORTFOLIO
Fannie Mae TBA 30 YR (3.5% due 6/11/2045)11.7%
Freddie Mac (0.5% due 5/13/2016)6.0%
Federal Home Loan Mortgage Cor (3.5% due 6/11/2045)2.6%
Fannie Mae (5.63% due 7/15/2037)2.2%
Fannie Mae (2.63% due 9/6/2024)1.8%
Fannie Mae pool AM7067 (3.11% due 1/1/2021)1.6%
Fannie Mae pool 471333 (3.12% due 8/1/2022)1.5%
Fannie Mae pool AM4253 (3.22% due 9/1/2020)1.4%
Fannie Mae TBA 30 YR (3.0% due 6/11/2045)1.3%
Fannie Mae pool AM7598 (3.07% due 12/1/2024)1.1%
TOTAL31.2%
Sector Weightings as of 3/31/15
SECTOR% OF PORTFOLIO
Mortgage Backed Securities53.9%
Investment Grade Credit Obligations29.5%
U.S. Govt Agencies12.3%
High Yield6.8%
Commercial Mortgage Backed Sec.'s5.5%
Developed Non U.S. Dollar Denom.1.6%
Asset Backed Securities0.8%
Cash Offsets-4.1%
Cash & Cash Equivalents-6.3%
Total100%

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

Characteristics

All data as of 9/30/2014 unless otherwise noted.

Portfolio Composition by Credit Quality1

AAA 1.19%
AA 79.99%
A 6.02%
BBB 6.54%
BB 0.00%
Not Rated2 6.26%

Portfolio Statistics (as of 9/30/2014)

  DSBFX BCIA3
Avg. Effective Maturity (Yrs.) 4.97 5.19
Total Number of Issues (including cash equivalents) 182  
 
1. Credit-quality ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest). Credit-quality ratings for each issue are obtained from Moody's Investors Service (Moody's) and Standard & Poor's (S&P). When two bonds receive different ratings from Moody’s and S&P, we take the higher of the two ratings into consideration.
2. Represents insured certificates of deposit and money market instruments with community development financial institutions and cash.
3. Barclays Capital Intermediate Aggregate Index

Commentary

Institutional Shares Performance Commentary

The Fund is managed through a two-step process designed to capitalize on the strengths of Domini Social Investments and Wellington Management. Domini develops an approved universe of companies and sets the overall social, environmental and governance standards for the Fund, and Wellington utilizes proprietary analytical tools to manage the portfolio. Wellington Management Company has been serving as submanager of the Fund since January 7, 2015.

Dowload Commentary as a PDF.

Total Returns as of March 31, 2015

  Jan
2015
Feb
2015
Mar
2015
1st Qtr
2015
YTD One
Year
Three
Year*
Five
Year*
Ten
Year*
Since Inception
(6/1/00)*
DSBIX 1.92% -1.16% 0.35% 1.08% 1.08% 3.60% 1.83% 2.92% 3.85% 4.63%
BIA 1.39% -0.52% 0.45% 1.32% 1.32% 4.24% 2.41% 3.62% 4.54% 5.35%
BUSA 2.10% -0.94% 0.46% 1.61% 1.61% 5.72% 3.10% 4.42% 4.93% 5.75%

The Fund’s Institutional shares underperformed the Barclays U.S. Aggregate Bond Index for the first quarter, returning 1.08% vs. the benchmark’s 1.61% performance.

Global government bond returns continued to decline from the previous quarter as central banks took measures to stimulate growth and keep deflation at bay. Nevertheless, market volatility was high due to uncertainty over when the US Federal Reserve would begin to hike rates, the extended decline in oil prices, and resurfaced worries about a potential Greek exit from the Eurozone. During the quarter, Wellington focused primarily on establishing general risk exposures in the Fund’s portfolio as well as selecting attractive bonds to fill it.

Wellington positioned the Fund’s portfolio for an expected increase in long-term inflation, which detracted from its performance relative to the benchmark. The Fund’s interest rate positioning as well as its investment grade corporate positioning, driven by security selection within both financials and industrials, both modestly contributed to Fund performance relative to its benchmark. The Fund’s underweight positioning to agency mortgage backed securities pass-throughs on average was slightly additive to performance during the period, as well as the portfolio’s allocation to agency collateralized mortgage obligations (CMOs). Wellington also initiated an overweight to attractive commercial mortgage-backed securities (CMBS), which outperformed duration-equivalent Treasuries for the quarter, thus adding to relative performance. The Fund’s overweight to high yield bonds, including bank loans, benefited performance as these securities rebounded in February. 

Community Impact

The Fund seeks to play a positive role in the economic development of communities, and to finance certain needed public goods, such as affordable housing, education and climate mitigation.

Municipal Bonds: When identifying appropriate municipal bonds for the Fund, we are seeking to make investments that address unmet needs, and are particularly interested in bonds designed to improve healthcare in underserved areas. One such investment is a revenue bond issued by New York- Presbyterian Hospital, based in New York City, one of the nation’s largest not-for-profit, non-sectarian hospitals. The Fund also purchased a bond issued by the State of California to improve school and recreation facilities and a water utility, and a bond issued by Puerto Rico designed to fund a pension plan for government employees.

Affordable Housing: The Fund has a long-term commitment to affordable housing, primarily through the purchase of securities backed by pools of mortgages. The Fund also holds a security issued by Community Reinvestment Fund USA (CRF). CRF purchases existing multifamily affordable housing mortgages in order to recapitalize local affordable housing loan funds. The security held by the Fund helped to finance a family oriented, affordable housing community for farm-worker families.

Green Buildings: The Fund is also seeking to help reduce greenhouse gas emissions through energy efficiency improvements that are low cost and that create value within underlying real estate assets. For example, the Fund holds a bond issued by the Massachusetts Institute of Technology to finance five buildings with strong environmental credentials.

Making a Difference

Local & National Communities

Domini believes that all investments have social and environmental implications. Fixed income investments are no exception. Below, we highlight a few current holdings with a direct impact on communities and the environment. Learn more about how we select investments for the Domini Social Bond Fund’s portfolio.

 

Municipal Bonds

When identifying appropriate municipal bonds for the Fund, we are seeking to make investments that address unmet needs, and are particularly interested in bonds designed to improve healthcare in underserved areas.

One such investment held in the Fund is a hospital revenue bond issued by New York-Presbyterian Hospital, based in New York City, one of the nation's largest not-for-profit, non-sectarian hospitals, with nearly two million inpatient and outpatient visits each year. In 2013, 32% of the hospital’s patients received Medicare. In 2011 and 2012, provision of healthcare to the Medicare patient population generated annual shortfalls of more than $100 million. Among other important programs to increase access to healthcare for the communities it serves, the hospital operates an Ambulatory Care Network, a community-centered model consisting of thirteen primary care sites and seven school-based health centers providing a wide variety of medical services.

The Fund also purchased a bond issued by the State of California to improve school and recreation facilities, and a water utility, and a bond issued by Puerto Rico designed to fund the Commonwealth Government Employees Retirement System’s pension plan. 

Affordable Housing

The Domini Social Bond Fund has maintained a long-term commitment to affordable housing, which the Fund supports primarily through the purchase of securities backed by pools of mortgages.

The Fund also holds a security issued by Community Reinvestment Fund USA (CRF). CRF purchases existing multifamily affordable housing mortgages in order to recapitalize local affordable housing loan funds. CRF requires that the local lending partner reinvest those new funds in affordable housing.

The security held by the Fund includes loans purchased from Neighborhood Lending Partners (NLP), a Florida nonprofit affordable housing lender. NLP reinvested a portion of the funds from this bond in an 84 unit, family oriented, affordable housing community for farm-worker families. The greatest shortage in affordable housing is affordable housing units for large families. This NLP-funded project features three and four bedroom units, each with two bathrooms. It also includes family-oriented amenities like tot lots, a swimming pool, volleyball courts and classrooms.

Green Buildings

We believe that the real estate industry is in a unique position to reduce greenhouse gas emissions through energy efficiency improvements that are low cost and that create value within the underlying asset. We have therefore purchased several bonds designed to finance green buildings. In particular, we are looking for the U.S. Green Building Council’s LEED (Leadership in Energy and Environmental Design) certification, a comprehensive green building certification program that recognizes best-in-class building strategies and practices.

For example, the Fund holds a bond issued by the Massachusetts Institute of Technology to finance five buildings with strong environmental credentials; four have received LEED Gold certification and one received LEED Silver certification. Another bond, issued by Regency Centers LP, a firm that develops and manages community retail shopping centers throughout the United States, has been used to finance existing properties and properties under development where the company is seeking or has already been awarded LEED certification.