domini social investments presentation... · © 2016 domini social investments llc 3 for investment...

© 2016 Domini Social Investments LLC

FOR INVESTMENT PROFESSIONAL USE ONLY - CONFIDENTIAL

Ariel Slaton

Institutional Client Relationships Associate

212-217-1075

[email protected]

Domini Social Investments

As of 31 December 2015

Carole Laible, CPA

President

212-217-1058

[email protected]

2© 2016 Domini Social Investments LLC


1991

Launch of

Domini Social

Equity Fund to

replicate

Domini 400

2005

European Social

Equity Fund

launched

Relationship w/

Wellington

Management

Company (WMC)

begins

2000

Launch of

Domini Social

Bond Fund

2006

PacAsia Social

Equity Fund &

Intl Social Equity

Fund* launched

Expansion of

WMC

relationship

2010

Domini

European &

PacAsia Funds

merged into

Intl Social

Equity Fund

2006

US Equity Fund

converted to

active mgmt

w/ WMC as

submanager

1997

Domini Social

Investments

LLC forms in

New York City

1990

Launch of

Domini 400

Social Index

1984

Amy Domini

writes her first

book “Ethical

Investing”

1980

Amy Domini

begins work as

a stock broker

Jan 2015

WMC replaces

Seix Advisors as

submanager for

the Domini

Social Bond

Fund

Domini Social Investments

1980 1984 1990 1991 1997 2000 2005 2006 2010 2015

*Domini European PacAsia Social Equity Fund prior to 11/27/09

$1.6 Billion assets under management as of 12/31/2015

• $933.4 Million Domini Social Equity Fund

• $499.7 Million Domini International Social Equity Fund

• $129.6 Million Domini Social Bond Fund



Investment Process Overview

• Risk allocation

• Security

selection

• Portfolio

construction

• Asset class

eligibility

• Issuer eligibility

• Security

eligibility

Broad-based

universePortfolio

Investment

Universe

Environmental,

Social & Governance

Standards

Portfolio

Construction

Domini Social Investments process

Wellington Management process



ESG Committee Structure

• Amy Domini

• Steve Lydenberg

• Carole Laible

• Shin Furuya

• Tessie Petion

• Eri Yamaguchi

• Conan Magee

• Lionella Pezza

• Hillary Marshall

• Bridget Realmuto

• Jeannie Cho

ESG Review

CommitteeStandards

Committee

Research

Department

• Amy Domini

• Steve Lydenberg

• Carole Laible

• Shin Furuya

• Tessie PetionEquit

y F

unds

• Amy Domini

• Steve Lydenberg

• Carole Laible

• Eri YamaguchiBond F

und



Domini Investment Goals

Ecological

Sustainability

Universal

Human Dignity

Confront basic issues of fairness and justice

in dealings with employees, customers,

suppliers and communities

Promote long-term environmental

sustainability, particularly climate change

mitigation and adaptation

Global Investment Standards

• Produce high-quality, safe and useful products

• Enrich the ecosystems on which they depend

• Treat their investors and lenders openly and transparently

• Invest in the health and development of their employees

• Strengthen the capabilities of their suppliers

• Contribute to communities

We believe that companies will succeed and prosper in the

long run when they do the following:



Implementing Standards: Framework

Business Alignment: Identify businesses that

promote sustainability and human dignity

Stakeholder Relations: Include companies with

quality management and long-term vision

• Externalize costs

to people & the

planet

• Produce harmful,

addictive

products

• Develop solutions

for people and

the planet

• Provide access

and

empowerment

PositiveNegative Key Stakeholders

• Investors

• Employees

• Suppliers

• Customers

• Ecosystems

• Community – Local & National

• Community – Global


• Alcoholic beverages

• Tobacco products

• Gambling goods and services

• Nuclear power plants

• Weapons or firearms

• Fossil fuel owners & producers

• Coal mining companies

Fundamentally misaligned industries

whose core business model is

inconsistent with Domini’s goals

Harmful & Addictive

Products



Integrating Business Alignment and Stakeholder Relations

Business Alignment

Sta

kehold

er

Rela

tions

Pattern of

strong5 3-2 2-1 1

Occasionally

strong5 4-2 3-2 2-1

Mixed or

neutral5 4-3 4-2 2-1

Occasionally

weak5 5-4 4-3 3-2

Pattern of

weak5 5 5-4 4-3

Fundamental

misalignment

Partial

misalignment

Partial

alignment

Fundamental

alignment

+

- +

Eligible

May or may not be eligible

Ineligible

Domini Rating Scale:

1 – Eligible: Exceptional

2 – Eligible: Outstanding

3 – Eligible: Satisfactory

4 – Ineligible: Weak

5 – Ineligible: Misaligned



Key Performance Indicators (KPIs)/Pharma

Industry (GICS) Domini Subindustry KPIs

Pharmaceuticals, Biotech

& Life Sciences

Preventative Health Care

Products

Generic Drugs

• % of sales from WHO priority and

neglected diseases

• Product Safety & Efficacy

• Access to Medicine programs

• Marketing Controversies

• Pricing Practices

• % of sales from vaccines,

contraceptives & diagnostics

• Marketing Controversies

• Product Safety

• % of sales from generics

• % of sales from WHO priority and

neglected diseases

• Bribery/Kickbacks

• Product Quality

• Overcharging

Patent-Protected Drugs



Pharma in Practice: Novo Nordisk A/S

Domini Sub Industry Patent-Protected Drugs

Domini KPIs WHO Priority Diseases, Safety and Efficacy, Access to Medicine, Marketing and Pricing Practices

Evaluation

Result Approved for investment: Partially aligned business with mixed stakeholder relations

Positives

• Global leader in treatments for diabetes

• Offers treatments for hemophilia, a rare bleeding disorder

• Provides insulin at cost to the 49 poorest countries in the world

• Prevention, outreach and educational programs

• Strong efficacy record

• Controlling ownership held by a foundation that makes grants for medical and

scientific projects

Negatives• Pricing disputes in Europe

• Product recalls and manufacturing issues



Pharma in Practice: Valeant Pharmaceuticals

Domini Sub Industry Patent-Protected Drugs

Domini KPIs WHO Priority Diseases, Safety and Efficacy, Access to Medicine, Marketing and Pricing Practices

Evaluation

Result Not approved for investment: Partially aligned business with occasionally weak stakeholder relations

Positives

• Approximately 25% of revenues from generics

• Approximately 26% of revenues from emerging markets

• Preventative health products including contraceptives

Negatives

• Focus on acquiring existing drugs and increasing prices rather than developing new drugs

o Acquired over 100 companies between 2008 and 2015

o Average R&D spending at 3% of revenues, compared to industry average of 15%

o In 2015, increased average price of its drugs by 66%, five times as much as its peers

• Tax avoidance strategies

• Hostile takeover bid for Allergan included coordination with Bill Ackman appearing to

evade insider trading laws



• Regulatory filings

• Press searches

• Bloomberg

• CSR reports

• Non-governmental orgs

• Company websites

• Issue-specific research

Proprietary research process overviewD

ata

sourc

es

Research &

analysis

Company

profile updated

& rating

approved by

Investment

CommitteeOngoing

monitoring of

press & corporate

actions of

portfolio

companies

Engagement with

portfolio

companies

Portfolio

Approved

list

generated

& sent to

submanager


Domini KPIs (Business Alignment & Stakeholder Relations)

Submanager

stock

selection and

portfolio

construction



Corporate engagement

• Build cooperative, trusted

environment to address

difficult issues

• Multi-stakeholder coalition

approach

• Commitment to long-term

dialogue and collaborative

relationships with companies

and investors (i.e. Global

Network Initiative,

Bangladesh Accord)

Proxy voting

• Submit proposals for inclusion

on corporate proxy statements

to encourage dialogue and/or

increase specific issue

awareness

• Domini has filed more than 250

proposals at 95 different

corporations since 1994

• Many successes including

Apple, Nucor, Lowe’s and Avon,

among others

Shareholder proposalsDialogue

Objectives:

• Improve corporate management of ESG risks

• Address system-level risks

• Domini Social Equity Fund was

first U.S. mutual fund to

publicly disclose its votes

(1999)

• Domini successfully petitioned

SEC for rule requiring all

mutual funds to disclose proxy

votes



Sector constraints

• ±3% versus the benchmark

Asset constraints

• ±1.5% versus the benchmark

• If position < 1%, then lesser of 1% active or 5x benchmark weight

• Only positions in public benchmark included in OCB

Quarterly rebalance turnover < 30%

Projected tracking error for OCB versus benchmark below 2%

Select guidelines displayed. Not all encompassing. Sector constraints may vary over time.

The OCB is used by Wellington Management as the formal benchmark to which Domini manages tracking risk, factor risk, and sector and country

weights for the Domini International Social Equity Fund. Using the OCB process seeks to enable stock selection to be the primary driver of performance

results while minimizing the impact of sector weights on performance of the portfolio.

Domini Equity FundsOptimized custom benchmark

Constructing the OCB

Benchmark

OCB

Optimized to

Benchmark

(WMC)

Domini

Benchmark

Eligible List

(Domini)

Benchmark



Investment

universe

Social,

Environmental &

Governance

Standards

Quantitative

recommendations

Portfolio

construction

Value-added through three steps:

• Domini’s social and environmental standards

(Domini)

• Optimization of universe (Wellington

Management)

• Stock selection and portfolio construction

(Wellington Management)

Emphasis on:

Stock selection

Risk constraints

Use of

transactions

costs model

Q/E model

forecast alpha

Domini

analysis

Within market

cap range

of index

Fund

Domini Equity FundsInvestment process

Positions and risk managed relative to OCB

Stock selection expected to drive returns

Sector constraints

• ±3% versus OCB

Asset constraints

• ±2% versus OCB

• Maximum of ±3.5% versus benchmark

Constructing the Portfolio



Wellington Management Quantitative Equity (QE) Model

Contextual

WeightingQE Model

Forecasts

Fair Value

Pure Value

Management Behavior

Long-Term Momentum

Short-Term Momentum

Situations & Events

Short-Term

Model

Value

Timing

Earnings Quality



Investment Universe

Number of Names*

Domini Social Equity Fund

1255

1146

740

128

65

Screened Universe**

Initial Universe

Potential Buy List

Fund

Engagement Sub-

Portfolio

*Figures provided are as of December 31, 2015. Exact number of names may vary over time.

**Excludes alcoholic beverages, tobacco products, gambling goods and services, nuclear power plants, weapons or firearms, fossil fuel owners and producers, and coal mining companies.



Fund* OCB S&P 500

Size

Asset-weighted Market Cap $122.8 bil $116.7 bil $139.0 bil

Large Cap (>$10 billion) 70% 94% 95%

Mid Cap ($2 - 10 billion) 27% 6% 5%

Small Cap (<$2 billion) 3% 0% 0%

Valuation

EPS Growth (next 5 yrs) 10.2% 10.4% 10.0%

P/E (current) 13.6x 16.6x 17.2x

Price/Book 2.2x 2.8x 2.8x

Risk

Tracking risk (vs. OCB) 2.6%

Tracking risk (vs. S&P 500) 2.8%

*Fund statistics shown exclude the Engagement Sub-portfolio holdings.

Portfolio Characteristics (as of December 31, 2015)

Data are gross of fees and expenses. These portfolio statistics were calculated using Wellington Management's internal systems, which use the proprietary QRM Risk

Model for certain data. For projected risk statistics, certain assumptions were made within the proprietary QRM Risk Model with respect to model type, benchmark,

security classification and risk assignment, and timing to calculate results. Differing assumptions can cause projected risk statistics to vary and may cause the figures to

deviate significantly from those obtained with another risk model.

Domini Social Equity Fund



0

10

20

30

40

% of Equity Domini Social Equity Fund OCB S&P 500

Overweight Underweight

Domini Social Equity Fund Sector weights as of 31 December 2015

Sorted by over/underweight to Optimized Custom Benchmark.



Annualized

3 mos 1 yr 3 yrs 5 yrs Since Inception1

Domini Social Equity Fund 2.6 -6.2 13.3 10.9 6.3

Optimized Custom Benchmark (OCB) 6.8 0.9 15.1 12.3 6.8

S&P 500 Index 7.0 1.4 15.1 12.6 6.5

Domini Social Equity FundGross investment returns (US$) as of 31 December 2015

1Wellington’s inception date as subadviser to the Domini Social Equity Fund is November 30, 2006.

This information is intended to provide insight into the investment process and is not intended to be precise calculations. Attribution should be considered a tool that can

help explain sources of alpha in terms of direction and magnitude. See “Average annual total return” slides provided for total return (net of fees) calculated from funds’

official books and records. Performance shown is gross of fees and expenses of an actual Fund share class. Gross performance results include the reinvestment of all

dividends and capital gains and trading costs, but do not reflect the deduction of investment advisory fees, custody and other fund expenses. These expenses will reduce

actual return. On November 30, 2006, the Domini Social Equity Fund, formerly a passively managed index fund, transitioned to an active management strategy.

Wellington Management Company LLP systems are designed to support the management of portfolios and are not meant to be used as an accounting system. The

attribution provided is from Wellington’s proprietary attribution system, which is not based on the official books and records of the Fund. Certain factors, which may

affect performance, are not included, such as withholding taxes, fair value pricing when implemented by the Fund, accounting agent T+1 differences, market value

discrepancies due to different pricing sources, methodology differences for large cash flows and NAV rounding.

PAST RESULTS ARE NEITHER A GUARANTEE NOR INDICATIVE OF FUTURE RESULTS AND AN INVESTMENT CAN LOSE VALUE. Periods of

less than one year are not annualized.

2015 2014 2013 2012 2011

Domini Social Equity Fund -6.2 15.3 34.5 12.8 2.0


S&P 500 Index 1.4 13.7 32.4 16.0 2.1

2010 2009 2008 2007

Domini Social Equity Fund 15.2 37.7 -37.3 2.6

Optimized Custom Benchmark (OCB) 15.2 30.5 -36.2 4.6

S&P 500 Index 15.1 26.5 -37.0 5.5



0

10

20

30Average sector weights (percent) Domini Social Equity Fund OCB

Domini Social Equity FundPerformance attribution1: 1 January 2015 to 31 December 2015

1Attribution based on gross of fee performance as calculated by Wellington Management internal systems. Please see important disclosures above.

-50-40-30-20-10

0102030

Sector returns (percent) Domini Social Equity Fund OCB

-350-300-250-200-150-100-50

050

100

Impact of active decisions (basis points) Allocation Selection



0

10

20

30

Average sector weights (percent) Domini Social Equity Fund S&P 500

1Attribution based on gross of fee performance as calculated by Wellington Management internal systems.

-50-40-30-20-10

0102030

Sector returns (percent) Domini Social Equity Fund S&P 500

-375-275-175-7525

125

Allocation Selection

Domini Social Equity FundPerformance attribution1: 1 January 2015 to 31 December 2015

Impact of active decisions (basis points)



Average annual total return (DSEFX)

Past performance is no guarantee of future results. The 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. Contact us for performance information current to the most recent month-end. A 2.00% fee applies

on sales/exchanges made less than 30 days after purchase/exchanges, with certain exceptions.

For the period reported in the Fund’s current prospectus, the Fund's gross annual operating expenses totaled 1.16% of net assets. Until 11/30/16, the Fund's

Manager has contractually agreed to limit certain ordinary investor share expenses to 1.25% of its average daily net assets per annum, absent an earlier

modification by the Fund’s Board. The Fund's total return may have been lower without this limit. The Standard & Poor's 500 Index is an unmanaged index

of common stocks. You cannot invest directly in an index.

On November 30, 2006, the Domini Social Equity Fund, formerly an index fund, transitioned to an active management strategy. Past performance before

November 30, 2006, and statistics derived from that performance, represent the former passive investment strategy, and are not indicative of future results.

-10%-5%0%5%

10%15%20%

1 Year 3 Year 5 Year 10 Year

Since

Inception

(6/3/91)

DSEFX -7.27% 11.98% 9.51% 5.59% 8.08%

S&P 500 1.38% 15.13% 12.57% 7.31% 9.18%

Average Annual Total

Return as of

December 31, 2015



Average annual total return (DIEQX)






Manager has contractually agreed to limit certain ordinary Institutional share expenses to 0.80% of its average daily net assets per annum, absent an earlier

modification by the Fund’s Board. The Fund's total return would have been lower without this limit. The Standard & Poor's 500 Index is an unmanaged

index of common stocks. You cannot invest directly in an index.

*Institutional shares were not offered prior to November 28, 2008. All performance information for time periods beginning prior to November 28, 2008 is the performance of the Investor

shares. This performance has not been adjusted to reflect the lower expenses of the Institutional shares.

On November 30, 2006, the Domini Social Equity Fund, formerly an index fund, transitioned to an active management strategy.

Average Annual Total

Return as of

December 31, 2015

-10%

-5%

0%

5%

10%

15%

20%

1 Year 3 Year 5 Year* 10 Year*Since Inception

(6/3/91)*

DIEQX -6.97% 12.41% 9.94% 5.59% 8.08%

S&P 500 1.38% 15.13% 12.57% 7.31% 9.18%



Investment Universe

Number of Names*

Domini International Social Equity Fund

1554

1351

829

140

5

Screened Universe**

Initial Universe

Potential Buy List

Fund

Engagement Sub-

Portfolio

*Figures provided are as of December 31, 2015. Exact number of names may vary over time.

**Excludes alcoholic beverages, tobacco products, gambling goods and services, nuclear power plants, weapons or firearms, fossil fuel owners and producers, and coal mining companies.



Fund OCB MSCI EAFE

Size

Asset-weighted Market Cap $27.0 bil $40.4 bil $57.1 bil

Large Cap (>$10 billion) 54% 77% 83%

Mid Cap ($2 - 10 billion) 45% 23% 17%

Small Cap (<$2 billion) 1% 0% 0%

Valuation

EPS Growth (next 5 yrs) 10.2% 9.9% 8.7%

P/E (current) 14.9x 15.9x 15.4x

Price/Book 1.4x 1.7x 1.6x

Risk

Tracking risk (vs. OCB) 2.5%

Tracking risk (vs. MSCI EAFE) 2.7%

*Fund statistics shown exclude the Engagement Sub-portfolio holdings.

Portfolio Characteristics (as of December 31, 2015)

Data are gross of fees and expenses. These portfolio statistics were calculated using Wellington Management's internal systems, which use the proprietary

QRM Risk Model for certain data. For projected risk statistics, certain assumptions were made within the proprietary QRM Risk Model with respect to model

type, benchmark, security classification and risk assignment, and timing to calculate results. Differing assumptions can cause projected risk statistics to vary

and may cause the figures to deviate significantly from those obtained with another risk model.

Domini International Social Equity Fund



0

10

20

30

40

% of Equity Domini International Social Equity Fund OCB MSCI EAFE

Overweight Underweight

Sorted by over/underweight to Optimized Custom Benchmark.

Domini International Social Equity FundSector weights as of 31 December 2015

The information above is calculated using Wellington Management’s internal systems and does not constitute the official books and records of the Fund.



0

5

10

15

20

25

% of Equity Domini International Social Equity Fund OCB MSCI EAFE

*Other includes Norway, Italy, United States, New Zealand, Spain, Belgium, Russia, Austria, Ireland, Israel, Portugal, and Singapore.

**Emerging Markets includes South Korea, South Africa, Taiwan, Brazil, Hungary, Indonesia, Mexico, Philippines, Thailand, China, and India.

The information above is calculated using Wellington Management’s internal systems and does not constitute the official books and records of the Fund.

Domini International Social Equity FundCountry weights as of 31 December 2015



Domini International Social Equity FundGross investment returns (US$) as of 31 December 2015

1Wellington’s inception date as subadviser to the Domini International Social Equity Fund is December 26, 2006.

This information is intended to provide insight into the investment process and is not intended to be precise calculations. Attribution should be considered a tool that can

help explain sources of alpha in terms of direction and magnitude. See “Average annual total return” slides provided for total return (net of fees) calculated from funds’

official books and records. Performance shown is gross of fees and expenses of an actual Fund share class. Gross performance results include the reinvestment of all

dividends and capital gains and trading costs, but do not reflect the deduction of investment advisory fees, custody and other fund expenses. These expenses will reduce

actual return.

Wellington Management Company LLP systems are designed to support the management of portfolios and are not meant to be used as an accounting system. The

attribution provided is from Wellington’s proprietary attribution system, which is not based on the official books and records of the Fund. Certain factors, which may

affect performance, are not included, such as withholding taxes, fair value pricing when implemented by the Fund, accounting agent T+1 differences, market value

discrepancies due to different pricing sources, methodology differences for large cash flows and NAV rounding.

PAST RESULTS ARE NEITHER A GUARANTEE NOR INDICATIVE OF FUTURE RESULTS AND AN INVESTMENT CAN LOSE VALUE. Periods of less

than one year are not annualized.

Annualized

3 mos 1 yr 3 yrs 5 yrs Since Inception1

Domini International Social Equity Fund 3.8 3.7 10.1 7.8 2.4


MSCI EAFE Index 4.7 -0.4 5.5 4.1 1.3

2015 2014 2013 2012 2011

Domini International Social Equity Fund 3.7 -0.8 29.5 23.8 -11.7

Optimized Custom Benchmark (OCB) 0.6 -2.6 26.1 19.6 -12.4

MSCI EAFE Index -0.4 -4.5 23.3 17.9 -11.7

2010 2009 2008 2007

Domini International Social Equity Fund 13.1 34.3 -46.4 4.5

Optimized Custom Benchmark (OCB) 8.7 34.7 -44.0 8.8

MSCI EAFE Index 8.2 32.5 -43.1 11.6



0

10

20

30

Average sector weights (percent) Domini International Social Equity Fund OCB


-30

-20

-10

0

10

20

30

Sector returns (percent) Domini International Social Equity Fund OCB

-100-50

050

100150200

Allocation Selection

Domini International Social Equity FundPerformance attribution1: 1 January 2015 to 31 December 2015




0

10

20

30

Average sector weights (percent) Domini International Social Equity Fund MSCI EAFE


-30

-20

-10

0

10

20

30

Sector returns (percent) Domini International Social Equity Fund MSCI EAFE

-100-50

050

100150200 Allocation Selection

Domini International Social Equity FundPerformance attribution1: 1 January 2015 to 31 December 2015




Average annual total return (DOMIX)







modification by the Fund’s Board. The Fund's total return would have been lower without this limit. The Morgan Stanley Capital International Europe,

Australasia, and Far East Index (MSCI EAFE) is an unmanaged index of common stocks. You cannot invest directly in an index.

Average Annual

Total Return as of

December 31, 2015

-2%

0%

2%

4%

6%

8%

1 Year 3 Year 5 YearSince Inception

(12/27/06)

DOMIX 1.76% 7.38% 5.60% 0.26%

MSCI EAFE -0.39% 5.46% 4.07% 1.30%



Average annual total return (DOMOX)







modification by the Fund’s Board. The Fund's total return would have been lower without this limit. The Morgan Stanley Capital International Europe,

Australasia, and Far East Index (MSCI EAFE) is an unmanaged index of common stocks. You cannot invest directly in an index.

Average Annual

Total Return as of

December 31, 2015

-2%

0%

2%

4%

6%

8%

10%

1 Year 3 Year 5 YearSince Inception

(12/27/06)

DOMOX 2.28% 7.82% 5.60% 0.26%

MSCI EAFE -0.39% 5.46% 4.07% 1.30%

*Institutional shares were not offered prior to November 30, 2012. All performance information for time periods beginning prior to November 30, 2012 is the performance of the Investor

shares. This performance has not been adjusted to reflect the lower expenses of the Institutional shares.



Key Investment Themes – Fixed Income

Fill capital

gaps in areas

historically

underfunded

Create public

goods for those

most in need Increase access

to capital for

those historically

underserved

Healthy,

sustainable

societies



Fixed Income Research Approach

Agency Bonds

Governments –

Sovereigns and

Municipals

Corporates ABS Green Bonds

Key

Performance

Indicators (KPIs)

• Affordable housing

• Low-income housing

• Foreclosure prevention

• Green buildings

• Public goods

• Addressing unmet

needs

• Corruption

• Tax haven

• Health and education

• Environmental, Social,

Governance Issues

identified for Domini’s

sub-industries

• Environmental, Social,

Governance Issues

identified for Domini’s

sub-industries

• Address climate change

• Mitigate impact of

fossil fuel

• Promote energy

efficiency

• Stakeholder relations

Examples

• Inclusion of General

Obligations and MBS of

Fannie Mae, Freddie

Mac, Ginnie Mae

• Inclusion of muni bonds

for schools or sewer

treatment facilities

• Exclusion of US and

Russia

• Exclusion of revenue

bonds for nuclear

power plants or casinos

• Inclusion of Keycorp and

Gilead Sciences

• Exclusion of Lockheed

and Altria

• Inclusion of credit

cards and auto loans

• Exclusion of student

loans

• Inclusion of issues such

as renewable energy,

pollution control

• Exclusion of first-

generation biofuels,

waste-to-energy plants

using toxic substances,

refurbishment of coal

power plants

Framework: Issuer and Security Selections by Business Alignment and Stakeholder Relations Analysis



Asset Class Eligibility

Generally approved

Generally ineligible

Case by case

• Green bonds

• Credit card ABS

• Special purpose ABS

• Auto loan ABS

• Municipal securities

• Ineligible sovereigns,

including US Treasuries

• Student loan ABS

• Ineligible corporates

• Agency securities

• CMBS

• Eligible sovereigns

• Eligible issuer MBS

• Eligible corporates

• Eligible issuer bank loans

• Alcoholic beverages

• Tobacco products

• Gambling goods and services

• Nuclear power plants

• Weapons or firearms

• Fossil fuel owners & producers

• Coal mining companies

Fundamentally misaligned industries

whose core business model is

inconsistent with Domini’s goals

Harmful &

Addictive

Products



Wellington Management Fixed Income

Fixed Income at Wellington Management as of 12/31/2015

• 229 dedicated fixed income investment professionals

• 12 independent portfolio management teams

• 650+ clients in 44 countries

• US$434 billion of client assets under management

• Proprietary portfolio construction and risk management platform

The Broad Market Investment Team, which began managing the Domini Social Bond

Fund on 7 January, 2015, comprises the following individuals:

Name Role Years Prof Exp Years with Firm

Campe Goodman, CFA Lead Portfolio Manager 15 15

Joseph F. Marvan, CFA Portfolio Manager 28 12

Lucius T. Hill, III Portfolio Manager 30 22



Objective: Income and total return

Benchmark: Barclays US Aggregate Index

Principal strategy:

• Typically, at least 80% in investment-grade securities

• Effective duration within ±2 years of BCIA Aggregate

• Typically, at least 80% invested in govt bonds (excluding US treasuries), corporate bonds, MBS, CMBS, ABS, US dollar denominated bonds

Additional strategies may include, but not be limited to:

Domini Social Bond Fund Strategy

• Bank loans

• Municipal obligations

• Project loans

• Sovereigns and supranationals

• Non-US corporates

• Non-US sovereigns

• High yield fixed income securities

• Foreign exchange

• Repurchase agreements

• Options

• Futures

• Interest rate derivatives

• CDS and CDX

• CPI swaps

The Domini Social Bond Fund was launched in 2000 and was submanaged by Seix Investment Advisors LLC (“Seix Advisors” or “Seix”) from February 28, 2005 to January

7, 2015. Wellington Management Company LLP (“Wellington Management”) replaced Seix Advisors as the Subadviser for the Domini Social Bond Fund (the “Fund”) on

January 7, 2015.

The above are select guidelines for the Domini Social Bond Fund portfolio. Please refer to the Prospectus and SAI for additional information on the investment strategy

that the Fund employs.



Risk management

Broad risk allocationRates

Sectors

Specialist risk allocationTracking risk

Drawdown

Risk oversight

Ex-ante active risk

Ex-post attribution

Wellington Management Fixed Income Investment Process

Broad strategyBroad market team

Security selectionSector specialists

Portfolio constructionPortfolio manager

Risk

allocation

Sector

Duration

MBS

CMBS

Inv Grade

Corporate

High Yield

Emerging Mkt Debt

US rates and US

inflation

Governments

Non US rates and

non US inflation

Portfolio



Domini Social Bond Fund

Portfolio Characteristics as of 12/31/2015

Sector Allocations as of 12/31/2015 (% of market value2)

1. Barclays US Aggregate Bond Index 2. Exposures may not add to 100% due to derivative positions in the portfolio.

Fund Benchmark

Mortgage backed securities 58.3 28.5

Investment grade credit 26.7 29.6

US Agencies and TIPS 9.5 39.0

Bank loans 7.0 0.0

Commercial mortgage backed 5.0 1.8

Tax exempt municipal 0.3 0.0

High yield credit 0.1 0.2

Asset backed securities 0.0 0.6

Emerging market debt 0.0 0.0

Developed non-US dollar denominated -2.1 0.0

Cash and cash offsets -4.7 0.2

Total 100.0% 100.0%

Fund Benchmark1

Effective Duration 5.4 years 5.4 years

Yield to Worst 3.4% 2.5%



Past performance is no guarantee of future results. The 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. Contact us for performance information current to the most recent month-end. A 2.00% fee applies on sales/exchanges made

less than 30 days after purchase/exchanges, with certain exceptions.

For the period reported in the Fund’s current prospectus, the Fund's gross annual operating expenses totaled 1.24% of net assets. Until 11/30/16, the Fund's Manager

has contractually agreed to limit certain ordinary investor share expenses to 0.95% of its average daily net assets per annum, absent an earlier modification by the

Fund’s Board. The Fund's total return would have been lower without this limit. The Barclays Capital Intermediate Aggregate Index (BCIA) is an unmanaged index

of intermediate investment-grade fixed-income securities. You cannot invest directly in an index.

Average Annual

Total Return as of

December 31, 2015

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

1 Year 3 Year 5 Year 10 YearSince

Inception(6/1/00)

DSBFX -0.46% 0.41% 1.89% 3.49% 4.30%

BCIA Intermediate 1.21% 1.41% 2.74% 4.26% 5.08%

BCIA Aggregate 0.55% 1.44% 3.25% 4.52% 5.39%

Average Annual Total Return (DSBFX)

The Domini Social Bond Fund was launched in 2000 and was submanaged by Seix Advisors from February 28, 2005 to January 7, 2015. Wellington

Management replaced Seix Advisors as the Subadviser for the Domini Social Bond Fund on January 7, 2015. Any references to the portfolio or

performance prior to January 7, 2015 relate to Seix Advisors.



Past performance is no guarantee of future results. The 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. Contact us for performance information current to the most recent month-end. A 2.00% fee applies on sales/exchanges

made less than 30 days after purchase/exchanges, with certain exceptions.


Manager has contractually agreed to limit certain ordinary institutional share expenses to 0.65% of its average daily net assets per annum, absent an earlier

modification by the Fund’s Board. The Fund's total return would have been lower without this limit. The Barclays Capital Intermediate Aggregate Index (BCIA) is

an unmanaged index of intermediate investment-grade fixed-income securities. You cannot invest directly in an index.

Average Annual

Total Return as of

December 31, 2015

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

1 Year 3 Year 5 Year 10 YearSince

Inception(6/1/00)

DSBIX -0.17% 0.62% 1.89% 3.49% 4.30%

BCIA Intermediate 1.21% 1.41% 2.74% 4.26% 5.08%

BCIA Aggregate 0.55% 1.44% 3.25% 4.52% 5.39%

The Domini Social Bond Fund was launched in 2000 and was submanaged by Seix Advisors from February 28, 2005 to January 7, 2015. Wellington

Management replaced Seix Advisors as the Subadviser for the Domini Social Bond Fund on January 7, 2015. Any references to the portfolio or

performance prior to January 7, 2015 relate to Seix Advisors.

Average Annual Total Return (DSBIX)



Appendix



Domini’s Competitive Advantages

ESG Industry Leadership


In-House Research Team

with Multilingual Capabilities

Robust Shareholder Engagement

Combination of ESG expertise with strong

fundamentals



StrategySocial & Environmental

Investment DecisionsPortfolio Management

U.S. Large Cap Equity Domini Wellington Management

International Large and Mid Cap

EquityDomini Wellington Management

U.S. Fixed Income DominiWellington Management

Domini

Global Multi Cap High Impact

Public EquityDomini Domini

Strategies



Available share classes

Ticker Symbols and Annual Expense Ratio

Share class/

Investment min.

Domini Social Equity

Fund

Domini International

Social Equity Fund

Domini Social

Bond Fund

Investor (no-load)/

$2500

DSEFX

1.16%

DOMIX

1.59%*

DSBFX

0.95%*

A shares

(front-end load)/

$2500

DSEPX

1.18%*

DOMAX

1.57%*n/a

Retirement/

None

DSFRX

0.85%*n/a n/a

Institutional/

$500 K

DIEQX

0.80%*

DOMOX

1.15%

DSBIX

0.65%*

*Until 11/30/16, Domini has contractually agreed to waive certain fees and/or reimburse certain expenses, including management fees, so that expenses paid by each

Fund will not exceed, on a per annum basis, the percentage of average daily net assets representing each share class listed above, as outlined on pages 2, 8 and 15 of

the Domini Funds prospectus. Subject to earlier modification by the Funds’ Board of Trustees. See the prospectus for gross expenses.

Class A shares are subject to a front-end sales charge of up to 4.75%.



Domini’s Founders

Background & Experience Achievements

Amy Domini, CFA

Founder & CEO

41 years of industry experience

18 years with Domini Social Investments

B.A., Boston University

Ms. Domini has been a leader and innovator in the development of socially

responsible investing for over 30 years. She is widely regarded as one of the

world’s eminent authorities in the field and was named in 2005 to Time

Magazine’s list of the world’s 100 most influential people and in 2009 to

Time’s list of 25 “Responsibility Pioneers” who are changing the world. She is

a co-founder of KLD Research & Analytics, co-creator of the Domini 400 Social

Index* and co-creator of the Domini Social Equity Fund. She is Founder of

Domini Social Investments and serves as a voting member of the Domini

Funds’ Investment Committee and the Domini Funds’ Standards Committee.

Steve Lydenberg, CFA

Partner, Strategic Vision



B.A., Columbia College

M.F.A., Cornell University

Mr. Lydenberg has been active in corporate social accountability research

since 1975, and is considered one of a handful of thought leaders in the field.

He is a founding director of the Initiative for Responsible Investment at

Harvard University and is a member of the Boston Security Analysts Society.

Mr. Lydenberg is one of the primary architects of Domini’s Global Investment

Standards, which guide our investments in the stocks and fixed-income

securities for our mutual funds. He is a co-founder of KLD Research &

Analytics, co-creator of the Domini 400 Social Index* and co-creator of the

Domini Social Equity Fund. He serves as a voting Member of the Domini Funds’

Investment Committee and the Domini Funds’ Standards Committee.

*Now known as the MSCI KLD 400 Social Index, owned by MSCI, Inc. MSCI and Domini Social Investments LLC are not affiliated.



Executive and Relationship Teams

Background & Experience Responsibility

Carole Laible, CPA

President



B.S., St. John’s University

Ms. Laible plans, organizes, and is responsible for the implementation

of the day-to-day activities of Domini, and collaborates with the CEO

in strategic planning. She also leads institutional investor sales and

marketing initiatives. She serves as a member of the Domini Funds’

Standards Committee and voting member of the Domini Funds’

Investment Committee.

Maurizio Tallini, CPA

Chief Compliance Officer and

Chief Operations Officer

21 years of professional experience


B.B.A., Hofstra University

Mr. Tallini develops and administers Domini’s and the Domini Funds’

compliance policies and procedures and is responsible for all aspects

of operations within the firm.

Megan Dunphy, Esq.

General Counsel



B.A., University of Rochester

J.D., Catholic University of America

Ms. Dunphy is General Counsel of Domini Social Investments. In this

role, she attends to regulatory and legal matters for the Domini Funds

and the Adviser.

Christina Povall, CPA

Chief Financial Officer



B.B.A., Pace University

Ms. Povall is responsible for the financial reporting and financial

administration of Domini Social Investments and the Domini Funds.

She also oversees the financial operations of the firm.

Ariel Slaton

Institutional Client Relationships

Associate



B.A., University of California, Los Angeles

Ms. Slaton provides support to the Funds’ institutional investors,

serving as primary contact for meeting logistics, due diligence

coordination and information requests.



Research and Shareholder Advocacy Team


Adam Kanzer, Esq.

Managing Director & Director of

Corporate Engagement & Public

Policy



B.A., University of Pennsylvania

J.D., Columbia Law School

Mr. Kanzer directs Domini’s shareholder advocacy activities, where for

more than ten years he has led numerous dialogues with corporations on a

wide range of social and environmental issues.

Shin Furuya

Vice President, Responsible

Investment Research & Engagement

Specialist



B.A., University of Oregon

M.A., Syracuse University

Mr. Furuya contributes to the Domini Funds research process through his

development and review of our industry-specific key performance

indicators, which are the cornerstone to Domini’s research process, as

well as advising and coordinating on the overall research process and

approach. Further, as the Engagement Specialist, Mr. Furuya actively

engages with companies, civil society organizations as well as

governments on wide-range of thematic and sector-specific issues. He

serves as a voting member of the Domini Funds’ Investment Committee.

Tessie Petion

Vice President, Responsible

Investment Research & MIS



B.S., University of Albany, SUNY

M.A., Tufts University (TU)

M.A., TU, Fletcher School

Ms. Petion is a lead research analyst responsible for the application of the

Domini Funds’ social and environmental standards to global equities. Ms.

Petion is active on engagement with companies, as well as, issue-specific

advocacy, with a focus on food and responsible lending. She serves as a

voting member of the Domini Funds’ Investment Committee.

Eri Yamaguchi

Lead Research Analyst



B.A., Kwansei Gakuin University

M.A., Columbia University

Ms. Yamaguchi is a research analyst responsible for the application of the

Domini Funds’ social and environmental standards to global equities. Her

responsibilities also include community impact and financial research and

analysis for a high community impact portion of fixed income

investments. She serves as a voting member of the Domini Social Bond

Fund Investment Committee.




Conan Magee

Research Analyst


1 year with Domini Social Investments

B.S., Tulane University

M.B.A., Tulane University

Mr. Magee is a research analyst responsible for the application of

the Domini Funds’ social and environmental standards to global

equities. He also serves as a non-voting member of the Domini

Funds’ Investment Committee.

Lionella Pezza

Research Associate



LL.B., University of Roma Tre

LL.M., University of Roma Tre

LL.M., Fordham University

Ms. Pezza is a research associate responsible for the application

of the Domini Funds’ social and environmental standards to global

equities. She also serves as a non-voting member of the Domini


Hillary Marshall

Research Associate



B.A., Boston College

Ms. Marshall is a research associate responsible for the application

of the Domini Funds’ social and environmental standards to global



Bridget Realmuto

Research Associate

1 year of industry experience

1 year with Domini Social Investments

B.A., George Washington University

Ms. Realmuto is a research associate responsible for the

application of the Domini Funds’ social and environmental

standards to global equities. She also serves as a non-voting

member of the Domini Funds’ Investment Committee.

Jeannie Cho

Research Associate

Recently joined Domini Social Investments

B.B.A., Loyola Marymount University

J.D., Fordham University

Ms. Cho is a research associate responsible for the application of

the Domini Funds’ social and environmental standards to global



Research and Shareholder Advocacy Team



Disclosure

Past performance is no guarantee of future results. The Domini Funds are subject to market risks and are not insured. 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. For performance information current to the most recent month-end, visit www.domini.com or call 1-800-498-1351. 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 Domini Social Bond Fund is not insured and is subject to market risks, including interest rate and credit risks. During periods of

rising interest rates, bond funds can lose value. The Domini Social Bond Fund currently holds a large percentage of its portfolio in

mortgage-backed securities. During periods of falling interest rates, mortgage-backed securities may prepay the principal due, which

may lower the Fund’s return by causing it to reinvest at lower interest rates. Some of the Domini Social Bond Fund's community

development investments may be unrated and carry greater credit risks than its other investments.

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 Fund’s share price is denominated in U.S. dollars and generally will be exposed to foreign

currency movements. In addition to other risks, the Fund will benefit when foreign currencies strengthen against the dollar and will be

hurt when foreign currencies weaken against the dollar.

The composition of the Funds’ portfolios is subject to change. This commentary should not be considered a recommendation of the

financial attractiveness as an investment of any of the companies mentioned.

Before investing, the Domini Funds’ investment objectives, risks, charges and expenses should be considered. The prospectus should

be read carefully before investing or sending money.

This material must be preceded or accompanied by the Funds’ current prospectus. DSIL Investment Services LLC, Distributor. 1/16

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