UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number 811-5824
DOMINI SOCIAL TRUST
(Exact Name of Registrant as Specified in Charter)
536 Broadway, 7th Floor, New York, New York 10012
(Address of Principal Executive Offices)
Amy L. Domini
Domini Social Investments LLC
536 Broadway, 7th Floor
New York, New York 10012
(Name and Address of Agent for Service)
Registrant's Telephone Number, including Area Code: 212-217-1100
Date of Fiscal Year End: July 31
Date of Reporting Period: July 31, 2005
Item 1. Reports to Stockholders.
A copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 follows.
Domini Social Index Portfolio
Portfolio of Investments
July 31, 2005
Security | Shares | Value | ||||||||||||||
Consumer Discretionary 15.3% | ||||||||||||||||
American Greetings Corporation, Class A | 19,100 | $ | 485,904 | |||||||||||||
AutoZone, Inc. (a) | 17,231 | 1,678,989 | ||||||||||||||
Bandag, Inc. | 4,900 | 226,037 | ||||||||||||||
Bed Bath & Beyond (a) | 78,600 | 3,607,740 | ||||||||||||||
Best Buy Co., Inc. | 80,000 | 6,128,000 | ||||||||||||||
Black & Decker Corp. | 21,500 | 1,941,665 | ||||||||||||||
Bright Horizons Family Solutions, Inc. (a) | 6,400 | 292,992 | ||||||||||||||
Centex Corporation | 33,900 | 2,507,922 | ||||||||||||||
Champion Enterprises, Inc. (a) | 20,200 | 243,612 | ||||||||||||||
Charming Shoppes, Inc. (a) | 29,400 | 344,862 | ||||||||||||||
Circuit City Stores, Inc. | 50,300 | 917,975 | ||||||||||||||
Claire's Stores, Inc. | 27,000 | 686,070 | ||||||||||||||
Comcast Corporation, Class A (a) | 588,058 | 18,071,023 | ||||||||||||||
Cooper Tire and Rubber Company | 17,400 | 350,088 | ||||||||||||||
Dana Corporation | 39,500 | 620,545 | ||||||||||||||
Darden Restaurants, Inc. | 39,500 | 1,370,650 | ||||||||||||||
Delphi Automotive Systems Corporation | 152,500 | 808,250 | ||||||||||||||
DeVry, Inc. (a) | 18,100 | 360,009 | ||||||||||||||
Disney (Walt) Company (The) | 544,700 | 13,966,108 | ||||||||||||||
Dollar General Corporation | 78,751 | 1,600,220 | ||||||||||||||
Dow Jones & Company | 17,900 | 671,787 | ||||||||||||||
eBay Inc. (a) | 323,772 | 13,527,194 | ||||||||||||||
Emmis Communications Corporation, Class A (a) | 8,860 | 181,896 | ||||||||||||||
Family Dollar Stores Inc. | 44,800 | 1,155,840 | ||||||||||||||
Foot Locker, Inc. | 40,600 | 1,015,000 | ||||||||||||||
Gaiam, Inc. (a) | 2,200 | 22,440 | ||||||||||||||
Gap Inc. | 201,397 | 4,251,491 | ||||||||||||||
Genuine Parts Company | 47,300 | 2,165,867 | ||||||||||||||
Harley-Davidson, Inc. | 75,900 | 4,037,121 | ||||||||||||||
Harman International Industries, Inc. | 17,220 | 1,480,059 | ||||||||||||||
Hartmarx Corporation (a) | 8,500 | 86,870 | ||||||||||||||
Home Depot, Inc. (The) | 572,044 | 24,889,634 | ||||||||||||||
Horton (D.R.), Inc. | 73,033 | 3,000,196 | ||||||||||||||
Interface, Inc., Class A (a) | 11,400 | 116,394 | ||||||||||||||
Consumer Discretionary (Continued) | ||||||||||||||||
Johnson Controls, Inc. | 51,000 | $ | 2,929,440 | |||||||||||||
KB Home | 22,400 | 1,834,784 | ||||||||||||||
Lee Enterprises, Inc. | 12,500 | 535,125 | ||||||||||||||
Leggett & Platt, Incorporated | 51,300 | 1,297,377 | ||||||||||||||
Limited Brands | 101,330 | 2,470,425 | ||||||||||||||
Liz Claiborne, Inc. | 28,000 | 1,165,080 | ||||||||||||||
Lowe's Companies, Inc. | 206,300 | 13,661,186 | ||||||||||||||
Mattel, Inc. | 110,685 | 2,064,275 | ||||||||||||||
May Department Stores Company | 78,600 | 3,226,530 | ||||||||||||||
Maytag Corporation | 22,600 | 381,262 | ||||||||||||||
McDonald's Corporation | 337,900 | 10,532,343 | ||||||||||||||
McGraw-Hill Companies | 100,000 | 4,601,000 | ||||||||||||||
Media General, Inc., Class A | 6,800 | 465,800 | ||||||||||||||
Men's Wearhouse, Inc. (a) | 13,050 | 469,278 | ||||||||||||||
Meredith Corporation | 11,700 | 579,150 | ||||||||||||||
Modine Manufacturing Company | 8,700 | 313,809 | ||||||||||||||
New York Times Company, Class A | 38,900 | 1,226,128 | ||||||||||||||
Newell Rubbermaid, Inc. | 73,378 | 1,824,911 | ||||||||||||||
Nordstrom, Inc. | 65,500 | 2,424,155 | ||||||||||||||
Office Depot (a) | 84,000 | 2,383,920 | ||||||||||||||
Omnicom Group, Inc. | 49,300 | 4,184,091 | ||||||||||||||
Penney (J.C.) Company, Inc. | 70,100 | 3,935,414 | ||||||||||||||
Pep Boys – Manny, Moe & Jack | 14,000 | 190,260 | ||||||||||||||
Phillips-Van Heusen Corporation | 7,200 | 244,080 | ||||||||||||||
Pixar (a) | 23,400 | 1,006,434 | ||||||||||||||
Proliance International Inc. (a) | 2,050 | 12,897 | ||||||||||||||
Pulte Homes, Inc. | 31,900 | 2,986,478 | ||||||||||||||
Radio One, Inc. (a) | 5,800 | 76,502 | ||||||||||||||
RadioShack Corporation | 41,900 | 983,393 | ||||||||||||||
Reebok International Ltd. | 15,800 | 668,340 | ||||||||||||||
Ruby Tuesday, Inc. | 15,800 | 395,316 | ||||||||||||||
Russell Corporation | 8,300 | 157,036 | ||||||||||||||
Scholastic Corporation (a) | 9,700 | 358,609 |
1
Domini Social Index Portfolio / Portfolio of Investments (Continued)
July 31, 2005
Security | Shares | Value | ||||||||||||||
Consumer Discretionary (Continued) | ||||||||||||||||
Scripps (E.W.) Company (The), Class A | 33,100 | $ | 1,672,543 | |||||||||||||
Snap-On Incorporated | 15,050 | 552,034 | ||||||||||||||
Spartan Motors, Inc. | 3,100 | 36,332 | ||||||||||||||
Stanley Works | 19,900 | 973,707 | ||||||||||||||
Staples, Inc. | 195,584 | 4,453,448 | ||||||||||||||
Starbucks Corporation (a) | 103,957 | 5,462,940 | ||||||||||||||
Stride Rite Corporation | 10,800 | 151,200 | ||||||||||||||
Target Corporation | 235,500 | 13,835,625 | ||||||||||||||
Tiffany & Co. | 37,300 | 1,269,319 | ||||||||||||||
Timberland Company (The) (a) | 15,700 | 524,066 | ||||||||||||||
Time Warner, Inc. (a) | 1,248,920 | 21,256,618 | ||||||||||||||
TJX Companies, Inc. | 123,800 | 2,910,538 | ||||||||||||||
Tribune Company | 79,556 | 2,903,794 | ||||||||||||||
Tupperware Corporation | 15,000 | 319,950 | ||||||||||||||
Univision Communications, Inc., Class A (a) | 78,200 | 2,211,496 | ||||||||||||||
Valassis Communications Inc. (a) | 13,600 | 537,880 | ||||||||||||||
Value Line, Inc. | 1,500 | 55,995 | ||||||||||||||
Visteon Corporation | 34,000 | 302,600 | ||||||||||||||
Washington Post Company, Class B | 1,800 | 1,599,840 | ||||||||||||||
Wendy's International, Inc. | 30,100 | 1,556,170 | ||||||||||||||
Whirlpool Corporation | 17,800 | 1,423,644 | ||||||||||||||
246,405,017 | ||||||||||||||||
Consumer Staples 12.3% | ||||||||||||||||
Alberto-Culver Company, Class B | 22,450 | 1,012,944 | ||||||||||||||
Albertson's, Inc. | 98,800 | 2,105,428 | ||||||||||||||
Avon Products, Inc. | 126,900 | 4,150,899 | ||||||||||||||
Campbell Soup Company | 86,800 | 2,677,780 | ||||||||||||||
Church & Dwight Co., Inc. | 17,700 | 664,635 | ||||||||||||||
Clorox Company | 40,600 | 2,267,510 | ||||||||||||||
Coca-Cola Company | 603,300 | 26,400,408 | ||||||||||||||
Colgate-Palmolive Company | 139,500 | 7,385,130 | ||||||||||||||
Costco Wholesale Corporation | 127,830 | 5,876,345 | ||||||||||||||
CVS Corporation | 217,200 | 6,739,716 | ||||||||||||||
Estée Lauder Companies, Inc. (The), Class A | 44,200 | 1,729,988 | ||||||||||||||
Consumer Staples (Continued) | ||||||||||||||||
General Mills Incorporated | 98,700 | $ | 4,678,380 | |||||||||||||
Gillette Company | 266,338 | 14,294,360 | ||||||||||||||
Green Mountain Coffee, Inc. (a) | 1,800 | 63,090 | ||||||||||||||
Hain Celestial Group, Inc. (The) (a) | 8,700 | 172,521 | ||||||||||||||
Heinz (H.J.) Company | 93,300 | 3,431,574 | ||||||||||||||
Hershey Foods Corporation | 57,400 | 3,666,138 | ||||||||||||||
Kellogg Company | 92,800 | 4,204,768 | ||||||||||||||
Kimberly-Clark Corporation | 127,564 | 8,133,481 | ||||||||||||||
Kroger Company (a) | 196,000 | 3,890,600 | ||||||||||||||
Longs Drug Stores Corporation | 8,800 | 381,832 | ||||||||||||||
McCormick & Company, Inc. | 34,900 | 1,213,822 | ||||||||||||||
Nature's Sunshine Products, Inc. | 4,200 | 83,790 | ||||||||||||||
PepsiAmericas, Inc. | 29,200 | 752,776 | ||||||||||||||
PepsiCo, Inc. | 446,370 | 24,340,556 | ||||||||||||||
Procter & Gamble Company | 659,594 | 36,693,214 | ||||||||||||||
Safeway Inc. | 120,600 | 2,930,580 | ||||||||||||||
Smucker (J.M.) Company | 15,105 | 718,545 | ||||||||||||||
SUPERVALU, Inc. | 36,900 | 1,306,260 | ||||||||||||||
Sysco Corporation | 168,700 | 6,083,322 | ||||||||||||||
Tootsie Roll Industries, Inc. | 10,038 | 314,089 | ||||||||||||||
United Natural Foods, Inc. (a) | 10,000 | 337,200 | ||||||||||||||
Walgreen Company | 273,400 | 13,084,924 | ||||||||||||||
Whole Foods Market, Inc. | 17,200 | 2,347,972 | ||||||||||||||
Wild Oats Markets, Inc. (a) | 6,550 | 87,967 | ||||||||||||||
Wrigley (Wm.) Jr. Company | 52,500 | 3,734,850 | ||||||||||||||
197,957,394 | ||||||||||||||||
Energy 2.6% | ||||||||||||||||
Anadarko Petroleum Corporation | 62,385 | 5,511,715 | ||||||||||||||
Apache Corporation | 87,624 | 5,993,482 | ||||||||||||||
Cooper Cameron Corp. (a) | 14,200 | 1,007,916 | ||||||||||||||
Devon Energy Corporation | 126,244 | 7,081,025 | ||||||||||||||
EOG Resources, Inc. | 64,300 | 3,928,730 |
2
Domini Social Index Portfolio / Portfolio of Investments (Continued)
July 31, 2005
Security | Shares | Value | ||||||||||||||
Energy (Continued) | ||||||||||||||||
Helmerich & Payne, Inc. | 13,000 | $ | 742,560 | |||||||||||||
Kinder Morgan, Inc. | 28,800 | 2,559,168 | ||||||||||||||
Noble Energy, Inc. | 23,200 | 1,914,232 | ||||||||||||||
Pioneer Natural Resources Company | 38,700 | 1,676,871 | ||||||||||||||
Rowan Companies, Inc. | 29,200 | 997,472 | ||||||||||||||
Smith International | 28,300 | 1,922,702 | ||||||||||||||
Sunoco, Inc. | 18,500 | 2,326,005 | ||||||||||||||
Williams Companies, Inc. | 152,100 | 3,230,604 | ||||||||||||||
XTO Energy Inc. | 94,700 | 3,323,023 | ||||||||||||||
42,215,505 | ||||||||||||||||
Financials 22.7% | ||||||||||||||||
AFLAC, Inc. | 133,700 | 6,029,870 | ||||||||||||||
Allied Capital Corporation | 36,100 | 1,026,684 | ||||||||||||||
AMBAC Financial Group, Inc. | 29,100 | 2,090,544 | ||||||||||||||
American Express Company | 312,300 | 17,176,500 | ||||||||||||||
American International Group, Inc. | 691,676 | 41,638,895 | ||||||||||||||
AmSouth Bancorporation | 94,500 | 2,637,495 | ||||||||||||||
BB&T Corporation | 145,200 | 6,072,264 | ||||||||||||||
Capital One Financial Corporation | 66,800 | 5,511,000 | ||||||||||||||
Cathay General Bancorp | 12,990 | 461,665 | ||||||||||||||
Chittenden Corporation | 13,220 | 387,214 | ||||||||||||||
Chubb Corporation | 52,200 | 4,636,404 | ||||||||||||||
Cincinnati Financial Corporation | 45,017 | 1,855,601 | ||||||||||||||
Comerica Incorporated | 44,800 | 2,737,280 | ||||||||||||||
Edwards (A.G.), Inc. | 20,887 | 925,294 | ||||||||||||||
Fannie Mae | 258,565 | 14,443,441 | ||||||||||||||
Fifth Third Bancorp | 139,011 | 5,991,374 | ||||||||||||||
First Horizon National Corporation | 33,400 | 1,362,386 | ||||||||||||||
FirstFed Financial Corp. (a) | 4,500 | 281,160 | ||||||||||||||
Franklin Resources, Inc. | 53,100 | 4,291,542 | ||||||||||||||
Freddie Mac | 184,100 | 11,649,848 | ||||||||||||||
Genl Growth Properties | 62,534 | 2,875,313 | ||||||||||||||
Golden West Financial | 75,100 | 4,890,512 | ||||||||||||||
Hartford Financial Services Group (The) | 79,000 | 6,365,030 | ||||||||||||||
Heartland Financial USA, Inc. | 4,200 | 86,100 | ||||||||||||||
Janus Capital Group Inc. | 62,026 | 931,631 | ||||||||||||||
Financials (Continued) | ||||||||||||||||
Jefferson-Pilot Corporation | 36,925 | $ | 1,852,527 | |||||||||||||
KeyCorp | 108,700 | 3,721,888 | ||||||||||||||
Lincoln National Corporation | 46,700 | 2,255,610 | ||||||||||||||
M&T Bank Corp. | 26,300 | 2,853,813 | ||||||||||||||
Maguire Properties Inc. | 7,900 | 236,605 | ||||||||||||||
Marsh & McLennan Companies, Inc. | 143,300 | 4,151,401 | ||||||||||||||
MBIA, Inc. | 36,400 | 2,210,936 | ||||||||||||||
MBNA Corporation | 339,475 | 8,541,191 | ||||||||||||||
Medallion Financial Corp. | 4,300 | 41,839 | ||||||||||||||
Mellon Financial Corporation | 113,700 | 3,463,302 | ||||||||||||||
Merrill Lynch & Co., Inc. | 252,292 | 14,829,724 | ||||||||||||||
MGIC Investment Corporation | 24,700 | 1,693,926 | ||||||||||||||
Moody's Corporation | 73,500 | 3,477,285 | ||||||||||||||
Morgan (J.P.) Chase & Co. | 937,892 | 32,957,525 | ||||||||||||||
National City Corporation | 158,300 | 5,842,853 | ||||||||||||||
Northern Trust Corporation | 54,100 | 2,748,280 | ||||||||||||||
PNC Financial Services Group | 75,300 | 4,127,946 | ||||||||||||||
Popular Inc. | 71,800 | 1,852,440 | ||||||||||||||
Progressive Corporation (The) | 52,900 | 5,273,601 | ||||||||||||||
Providian Financial Corporation (a) | 77,000 | 1,455,300 | ||||||||||||||
Regions Financial Corp. (New) | 123,700 | 4,161,268 | ||||||||||||||
SAFECO Corporation | 34,300 | 1,884,442 | ||||||||||||||
Schwab (Charles) Corporation | 303,700 | 4,160,690 | ||||||||||||||
SLM Corporation | 111,700 | 5,751,433 | ||||||||||||||
Sovereign Bancorp | 98,700 | 2,367,813 | ||||||||||||||
St. Paul Travelers Companies, Inc. (The) | 180,464 | 7,944,025 | ||||||||||||||
State Street Corporation | 89,000 | 4,426,860 | ||||||||||||||
SunTrust Banks, Inc. | 90,600 | 6,588,432 | ||||||||||||||
Synovus Financial Corporation | 83,850 | 2,479,445 | ||||||||||||||
U.S. Bancorp | 489,221 | 14,705,983 | ||||||||||||||
UnumProvident Corporation | 80,900 | 1,549,235 | ||||||||||||||
Wachovia Corporation | 420,143 | 21,166,804 |
3
Domini Social Index Portfolio / Portfolio of Investments (Continued)
July 31, 2005
Security | Shares | Value | ||||||||||||||
Financials (Continued) | ||||||||||||||||
Wainwright Bank & Trust Co. | 2,625 | $ | 28,875 | |||||||||||||
Washington Mutual, Inc. | 233,804 | 9,931,994 | ||||||||||||||
Wells Fargo & Company | 449,706 | 27,584,966 | ||||||||||||||
Wesco Financial Corporation | 1,200 | 421,200 | ||||||||||||||
365,096,504 | ||||||||||||||||
Health Care 13.3% | ||||||||||||||||
Affymetrix Inc (a) | 16,700 | 779,723 | ||||||||||||||
Allergan, Inc. | 34,705 | 3,101,586 | ||||||||||||||
Amgen, Inc. (a) | 329,853 | 26,305,777 | ||||||||||||||
Bard (C.R.), Inc. | 28,400 | 1,896,836 | ||||||||||||||
Bausch & Lomb Incorporated | 14,400 | 1,218,960 | ||||||||||||||
Baxter International, Inc. | 165,400 | 6,495,258 | ||||||||||||||
Becton Dickinson and Company | 66,800 | 3,698,716 | ||||||||||||||
Biogen Idec Inc. (a) | 90,250 | 3,545,923 | ||||||||||||||
Biomet, Inc. | 66,400 | 2,531,832 | ||||||||||||||
Boston Scientific Corporation (a) | 199,700 | 5,781,315 | ||||||||||||||
CIGNA Corporation | 35,200 | 3,757,600 | ||||||||||||||
Cross Country Healthcare, Inc. (a) | 8,600 | 169,764 | ||||||||||||||
Dionex Corporation (a) | 5,600 | 258,496 | ||||||||||||||
Fisher Scientific (a) | 32,000 | 2,145,600 | ||||||||||||||
Forest Laboratories, Inc. (a) | 90,700 | 3,620,744 | ||||||||||||||
Genzyme Corporation (a) | 66,600 | 4,955,706 | ||||||||||||||
Guidant Corporation | 86,438 | 5,946,934 | ||||||||||||||
Hillenbrand Industries, Inc. | 15,500 | 796,855 | ||||||||||||||
Humana, Inc. (a) | 42,900 | 1,709,565 | ||||||||||||||
IMS Health, Inc. | 62,813 | 1,710,398 | ||||||||||||||
Invacare Corporation | 7,700 | 324,555 | ||||||||||||||
Invitrogen Corporation (a) | 14,000 | 1,200,780 | ||||||||||||||
Johnson & Johnson | 792,580 | 50,693,416 | ||||||||||||||
King Pharmaceuticals Inc. (a) | 66,200 | 738,130 | ||||||||||||||
Manor Care, Inc. | 22,400 | 850,304 | ||||||||||||||
McKesson HBOC, Inc. | 77,820 | 3,501,900 | ||||||||||||||
MedImmune, Inc. (a) | 66,500 | 1,889,265 | ||||||||||||||
Medtronic, Inc. | 323,200 | 17,433,408 | ||||||||||||||
Merck & Co., Inc. | 587,200 | 18,238,432 | ||||||||||||||
Health Care (Continued) | ||||||||||||||||
Millipore Corporation (a) | 13,700 | $ | 839,399 | |||||||||||||
Mylan Laboratories, Inc. | 75,475 | 1,310,246 | ||||||||||||||
St. Jude Medical, Inc. (a) | 97,400 | 4,617,734 | ||||||||||||||
Stryker Corporation | 99,600 | 5,387,364 | ||||||||||||||
Synovis Life Technologies, Inc. (a) | 2,600 | 23,140 | ||||||||||||||
Thermo Electron Corporation (a) | 43,700 | 1,304,882 | ||||||||||||||
UnitedHealth Group Incorporated | 337,634 | 17,658,258 | ||||||||||||||
Waters Corporation (a) | 30,600 | 1,385,568 | ||||||||||||||
Watson Pharmaceuticals (a) | 29,200 | 975,280 | ||||||||||||||
Zimmer Holdings, Inc. (a) | 65,700 | 5,411,052 | ||||||||||||||
214,210,701 | ||||||||||||||||
Industrials 6.4% | ||||||||||||||||
3M Company | 205,500 | 15,412,499 | ||||||||||||||
Alaska Air Group, Inc. (a) | 6,900 | 241,362 | ||||||||||||||
American Power Conversion | 48,000 | 1,349,280 | ||||||||||||||
AMR Corporation (a) | 37,600 | 528,280 | ||||||||||||||
Apogee Enterprises, Inc. | 7,400 | 116,994 | ||||||||||||||
Ault, Inc. (a) | 1,200 | 3,420 | ||||||||||||||
Avery Dennison Corporation | 27,400 | 1,552,758 | ||||||||||||||
Baldor Electric Company | 8,800 | 220,352 | ||||||||||||||
Banta Corporation | 6,550 | 312,697 | ||||||||||||||
Brady Corporation, Class A | 12,000 | 410,400 | ||||||||||||||
CLARCOR, Inc. | 12,900 | 402,480 | ||||||||||||||
Cooper Industries, Inc., Class A | 24,800 | 1,601,584 | ||||||||||||||
Cross (A.T.) Company (a) | 3,800 | 19,038 | ||||||||||||||
Cummins, Inc. | 11,600 | 991,104 | ||||||||||||||
Deere & Company | 65,700 | 4,830,921 | ||||||||||||||
Delta Air Lines, Inc. (a) | 32,000 | 94,720 | ||||||||||||||
Deluxe Corporation | 13,100 | 524,000 | ||||||||||||||
Donaldson Company, Inc. | 20,500 | 667,890 | ||||||||||||||
Donnelley (R.R.) & Sons Company | 57,400 | 2,069,270 | ||||||||||||||
Emerson Electric Company | 111,600 | 7,343,280 | ||||||||||||||
Fastenal Company | 18,200 | 1,194,648 |
4
Domini Social Index Portfolio / Portfolio of Investments (Continued)
July 31, 2005
Security | Shares | Value | ||||||||||||||
Industrials (Continued) | ||||||||||||||||
FedEx Corporation | 80,500 | $ | 6,769,245 | |||||||||||||
GATX Corporation | 12,600 | 476,280 | ||||||||||||||
Graco, Inc. | 18,552 | 709,243 | ||||||||||||||
Grainger (W.W.), Inc. | 22,400 | 1,395,968 | ||||||||||||||
Granite Construction Incorporated | 10,625 | 363,588 | ||||||||||||||
Herman Miller, Inc. | 19,300 | 616,249 | ||||||||||||||
HNI Corporation | 13,300 | 773,395 | ||||||||||||||
Hubbell Incorporated, Class B | 16,960 | 769,984 | ||||||||||||||
Ikon Office Solutions | 38,800 | 372,480 | ||||||||||||||
Illinois Tool Works, Inc. | 73,000 | 6,252,450 | ||||||||||||||
JetBlue Airways Corporation (a) | 27,300 | 573,300 | ||||||||||||||
Kadant Inc. (a) | 3,700 | 84,545 | ||||||||||||||
Kansas City Southern Industries, Inc. (a) | 20,000 | 451,200 | ||||||||||||||
Kelly Services, Inc. | 8,475 | 257,810 | ||||||||||||||
Lawson Products, Inc. | 2,500 | 102,300 | ||||||||||||||
Lincoln Electric Holdings, Inc. | 11,000 | 402,710 | ||||||||||||||
Masco Corporation | 115,600 | 3,919,996 | ||||||||||||||
Milacron, Inc. (a) | 12,633 | 23,624 | ||||||||||||||
Monster Worldwide (a) | 31,200 | 947,544 | ||||||||||||||
Nordson Corporation | 8,000 | 266,960 | ||||||||||||||
Norfolk Southern Corporation | 106,700 | 3,970,307 | ||||||||||||||
Pall Corp. | 34,200 | 1,059,174 | ||||||||||||||
Pitney Bowes, Inc. | 60,800 | 2,710,464 | ||||||||||||||
Robert Half International, Inc. | 43,100 | 1,460,659 | ||||||||||||||
Ryder System, Inc. | 18,000 | 701,820 | ||||||||||||||
Smith (A.O.) Corporation | 5,200 | 140,400 | ||||||||||||||
Southwest Airlines Co. | 193,962 | 2,752,321 | ||||||||||||||
SPX Corporation | 20,030 | 979,066 | ||||||||||||||
Standard Register Company | 6,000 | 91,500 | ||||||||||||||
Steelcase, Inc. | 27,100 | 396,744 | ||||||||||||||
Tennant Company | 2,300 | 85,100 | ||||||||||||||
Thomas & Betts Corporation (a) | 15,100 | 509,927 | ||||||||||||||
Toro Company | 10,800 | 434,592 | ||||||||||||||
Trex Company, Inc. (a) | 3,700 | 108,780 | ||||||||||||||
United Parcel Service, Inc., Class B | 296,933 | 21,667,201 | ||||||||||||||
Yellow Roadway Corporation (a) | 13,880 | 734,391 | ||||||||||||||
103,218,294 | ||||||||||||||||
Information Technology 19.8% | ||||||||||||||||
3Com Corporation (a) | 103,000 | $ | 374,920 | |||||||||||||
Adaptec, Inc. (a) | 27,400 | 105,490 | ||||||||||||||
ADC Telecommunications (a) | 31,228 | 816,300 | ||||||||||||||
Advanced Micro Devices, Inc. (a) | 103,800 | 2,084,304 | ||||||||||||||
Advent Software, Inc. (a) | 8,500 | 204,255 | ||||||||||||||
Analog Devices, Inc. | 98,700 | 3,869,040 | ||||||||||||||
Andrew Corporation (a) | 43,800 | 481,362 | ||||||||||||||
Apple Computer, Inc. (a) | 219,900 | 9,378,735 | ||||||||||||||
Applied Materials, Inc. | 440,200 | 8,126,092 | ||||||||||||||
Arrow Electronics, Inc. (a) | 31,600 | 948,632 | ||||||||||||||
Autodesk, Inc. | 61,500 | 2,102,685 | ||||||||||||||
Automatic Data Processing, Inc. | 155,474 | 6,904,600 | ||||||||||||||
BMC Software, Inc. (a) | 60,800 | 1,160,672 | ||||||||||||||
CDW Corporation | 19,500 | 1,209,000 | ||||||||||||||
Ceridian Corporation (a) | 39,700 | 830,921 | ||||||||||||||
Cisco Systems, Inc. (a) | 1,703,314 | 32,618,463 | ||||||||||||||
Coherent, Inc. (a) | 7,700 | 262,108 | ||||||||||||||
Compuware Corporation (a) | 98,800 | 832,884 | ||||||||||||||
Convergys Corp. (a) | 35,500 | 516,525 | ||||||||||||||
Dell Inc. (a) | 645,286 | 26,114,724 | ||||||||||||||
Electronic Arts Inc. (a) | 81,700 | 4,705,920 | ||||||||||||||
Electronic Data Systems Corporation | 139,800 | 2,875,686 | ||||||||||||||
EMC Corporation (a) | 641,800 | 8,786,242 | ||||||||||||||
Entegris, Inc. (a) | 15,700 | 184,789 | ||||||||||||||
Gerber Scientific, Inc. (a) | 5,700 | 34,314 | ||||||||||||||
Hewlett-Packard Company | 769,310 | 18,940,412 | ||||||||||||||
Hutchinson Technology Incorporated (a) | 6,500 | 216,385 | ||||||||||||||
Imation Corporation | 9,100 | 394,485 | ||||||||||||||
Intel Corporation | 1,645,355 | 44,654,935 | ||||||||||||||
Lexmark International Group, Inc. (a) | 34,300 | 2,150,610 | ||||||||||||||
LSI Logic Corporation (a) | 104,200 | 1,016,992 | ||||||||||||||
Lucent Technologies, Inc. (a) | 1,183,992 | 3,469,097 | ||||||||||||||
Merix Corporation (a) | 3,750 | 23,589 | ||||||||||||||
Micron Technology, Inc. (a) | 165,200 | 1,962,576 |
5
Domini Social Index Portfolio / Portfolio of Investments (Continued)
July 31, 2005
Security | Shares | Value | ||||||||||||||
Information Technology (Continued) | ||||||||||||||||
Microsoft Corporation | 2,678,230 | $ | 68,589,470 | |||||||||||||
Molex Incorporated | 44,846 | 1,266,451 | ||||||||||||||
National Semiconductor Corporation | 93,000 | 2,298,030 | ||||||||||||||
Novell, Inc. (a) | 101,600 | 617,728 | ||||||||||||||
Novellus Systems, Inc. (a) | 35,500 | 1,024,175 | ||||||||||||||
Palm Inc (a) | 13,904 | 396,820 | ||||||||||||||
Paychex, Inc. | 94,800 | 3,309,468 | ||||||||||||||
Plantronics Inc. | 13,400 | 457,744 | ||||||||||||||
Polycom Inc. (a) | 24,300 | 402,651 | ||||||||||||||
Qualcomm, Inc. | 436,200 | 17,225,538 | ||||||||||||||
Red Hat, Inc. (a) | 43,700 | 665,988 | ||||||||||||||
Sapient Corporation (a) | 27,200 | 211,616 | ||||||||||||||
Scientific-Atlanta, Inc. | 40,400 | 1,555,400 | ||||||||||||||
Solectron Corporation (a) | 262,000 | 1,006,080 | ||||||||||||||
Sun Microsystems, Inc. (a) | 913,300 | 3,507,072 | ||||||||||||||
Symantec Corporation (a) | 316,400 | 6,951,308 | ||||||||||||||
Tektronix, Inc. | 23,000 | 576,380 | ||||||||||||||
Tellabs, Inc. (a) | 121,800 | 1,183,896 | ||||||||||||||
Texas Instruments, Inc. | 443,078 | 14,072,157 | ||||||||||||||
Xerox Corporation (a) | 253,600 | 3,350,056 | ||||||||||||||
Xilinx, Inc. | 94,400 | 2,676,240 | ||||||||||||||
319,702,012 | ||||||||||||||||
Materials 1.6% | ||||||||||||||||
Air Products & Chemicals, Inc. | 61,400 | 3,669,264 | ||||||||||||||
Airgas, Inc. | 17,800 | 525,100 | ||||||||||||||
Aleris International, Inc. (a) | 6,100 | 139,507 | ||||||||||||||
Bemis Company, Inc. | 28,800 | 777,600 | ||||||||||||||
Cabot Corporation | 16,800 | 581,112 | ||||||||||||||
Calgon Carbon Corporation | 10,100 | 88,476 | ||||||||||||||
Caraustar Industries, Inc. (a) | 7,200 | 86,184 | ||||||||||||||
Crown Holdings, Inc. (a) | 43,200 | 682,128 | ||||||||||||||
Ecolab, Inc. | 59,100 | 1,984,578 | ||||||||||||||
Engelhard Corporation | 32,200 | 923,818 | ||||||||||||||
Fuller (H.B.) Company | 7,300 | 252,069 | ||||||||||||||
Lubrizol Corporation | 18,100 | 796,400 | ||||||||||||||
MeadWestvaco Corp. | 48,512 | 1,417,521 | ||||||||||||||
Minerals Technologies, Inc. | 5,300 | 329,872 | ||||||||||||||
Nucor Corporation | 43,100 | 2,389,895 | ||||||||||||||
Praxair, Inc. | 87,000 | 4,296,930 | ||||||||||||||
Materials (Continued) | ||||||||||||||||
Rock-Tenn Company, Class A | 9,000 | $ | 121,230 | |||||||||||||
Rohm & Haas Company | 51,087 | 2,353,067 | ||||||||||||||
Schnitzer Steel Industries Inc., Class A | 5,800 | 165,880 | ||||||||||||||
Sealed Air Corporation (a) | 23,000 | 1,220,380 | ||||||||||||||
Sigma-Aldrich Corporation | 18,400 | 1,180,544 | ||||||||||||||
Sonoco Products Company | 25,645 | 712,931 | ||||||||||||||
Valspar Corporation | 13,100 | 642,686 | ||||||||||||||
Wausau-Mosinee Paper Corporation | 15,700 | 197,506 | ||||||||||||||
Wellman, Inc. | 8,200 | 68,388 | ||||||||||||||
Worthington Industries, Inc. | 22,200 | 392,496 | ||||||||||||||
25,995,562 | ||||||||||||||||
Telecommunication Services 4.8% | ||||||||||||||||
AT&T Corporation | 212,416 | 4,205,837 | ||||||||||||||
BellSouth Corporation | 489,000 | 13,496,400 | ||||||||||||||
Citizens Communications Company | 92,367 | 1,213,702 | ||||||||||||||
SBC Communications, Inc. | 880,428 | 21,526,465 | ||||||||||||||
Sprint Corp. – FON Group | 394,500 | 10,612,050 | ||||||||||||||
Telephone and Data Systems, Inc. | 28,300 | 1,127,755 | ||||||||||||||
Verizon Communications | 737,522 | 25,245,378 | ||||||||||||||
77,427,587 | ||||||||||||||||
Utilities 0.8% | ||||||||||||||||
AGL Resources, Inc. | 20,600 | 792,070 | ||||||||||||||
Cascade Natural Gas Corporation | 2,900 | 63,307 | ||||||||||||||
Cleco Corporation | 12,200 | 274,256 | ||||||||||||||
Energen Corporation | 19,400 | 680,940 | ||||||||||||||
Equitable Resources, Inc. | 16,400 | 1,165,220 | ||||||||||||||
IDACORP, Inc. | 11,300 | 355,385 | ||||||||||||||
KeySpan Corporation | 44,800 | 1,822,911 | ||||||||||||||
MGE Energy, Inc. | 4,400 | 162,932 | ||||||||||||||
National Fuel Gas Company | 21,800 | 662,720 | ||||||||||||||
NICOR, Inc. | 11,400 | 465,348 |
6
Domini Social Index Portfolio / Portfolio of Investments (Continued)
July 31, 2005
Security | Shares | Value | ||||||||||||||
Utilities (Continued) | ||||||||||||||||
NiSource, Inc. | 73,647 | $ | 1,788,886 | |||||||||||||
Northwest Natural Gas Company | 6,500 | 250,835 | ||||||||||||||
OGE Energy Corporation | 24,200 | 735,196 | ||||||||||||||
Peoples Energy Corporation | 10,900 | 470,335 | ||||||||||||||
Pepco Holdings, Inc. | 50,700 | 1,210,209 | ||||||||||||||
Questar Corporation | 23,100 | 1,621,158 | ||||||||||||||
Southern Union Company (a) | 24,306 | $ | 618,345 | |||||||||||||
WGL Holdings | 12,600 | 434,070 | ||||||||||||||
13,574,123 | ||||||||||||||||
Total Investments — 99.6% | ||||||||||||||||
(Cost $1,362,330,689)(b) | 1,605,802,699 | |||||||||||||||
Other Assets, less liabilities — 0.4% | 6,165,864 | |||||||||||||||
Net Assets — 100.0% | $ | 1,611,968,563 |
(a)
Non-income producing security.
(b)
The aggregate cost for federal income tax purposes is $1,464,165,066. The aggregate gross unrealized appreciation is $345,976,822 and the aggregate gross unrealized depreciation is $204,339,189, resulting in net unrealized appreciation of $141,637,633.
Copyright in the Domini 400 Social IndexSM is owned by KLD Research & Analytics, Inc., and the Index is reproduced here by permission. No portion of the Index may be reproduced or distributed by any means or in any medium without the express written consent of the copyright owner.
SEE NOTES TO FINANCIAL STATEMENTS
7
Domini Social Index Portfolio
Statement of Assets and Liabilities
July 31, 2005
ASSETS: | |||||||||
Investments at value (Cost $1,362,330,689) | $ | 1,605,802,699 | |||||||
Cash | 3,630,037 | ||||||||
Receivable for securities sold | 801,124 | ||||||||
Dividends receivable | 2,230,890 | ||||||||
Total assets | 1,612,464,750 | ||||||||
LIABILITIES: | |||||||||
Management fee payable (Note 2) | 270,334 | ||||||||
Other accrued expenses | 225,853 | ||||||||
Total liabilities | 496,187 | ||||||||
NET ASSETS APPLICABLE TO INVESTORS' BENEFICIAL INTERESTS | $ | 1,611,968,563 |
SEE NOTES TO FINANCIAL STATEMENTS
8
Domini Social Index Portfolio
Statement of Operations
Year Ended July 31, 2005
INVESTMENT INCOME: | ||||||||||||||||
Dividends | $ | 33,980,615 | ||||||||||||||
EXPENSES: | ||||||||||||||||
Management fee (Note 2) | $ | 3,165,651 | ||||||||||||||
Custody fees (Note 3) | 248,619 | |||||||||||||||
Professional fees | 140,158 | |||||||||||||||
Trustees fees | 63,604 | |||||||||||||||
Miscellaneous | 23,844 | |||||||||||||||
Total expenses | 3,641,876 | |||||||||||||||
Fees paid indirectly (Note 3) | (93,517 | ) | ||||||||||||||
Net expenses | 3,548,359 | |||||||||||||||
NET INVESTMENT INCOME | 30,432,256 | |||||||||||||||
Net realized loss on investments: | ||||||||||||||||
Proceeds from sales | $ | 202,332,853 | ||||||||||||||
Cost of securities sold | (246,560,468 | ) | ||||||||||||||
Net realized loss on investments | (44,227,615 | ) | ||||||||||||||
Net changes in unrealized appreciation of investments: | ||||||||||||||||
Beginning of period | $ | 57,948,649 | ||||||||||||||
End of period | 243,472,010 | |||||||||||||||
Net change in unrealized appreciation | 185,523,361 | |||||||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 171,728,002 |
SEE NOTES TO FINANCIAL STATEMENTS
9
Domini Social Index Portfolio
Statements of Changes in Net Assets
Year Ended July 31, 2005 | Year Ended July 31, 2004 | |||||||||||||||
INCREASE IN NET ASSETS: | ||||||||||||||||
From Operations: | ||||||||||||||||
Net investment income | $30,432,256 | $18,456,783 | ||||||||||||||
Net realized loss on investments | (44,227,615) | (22,378,148) | ||||||||||||||
Net change in unrealized appreciation of investments | 185,523,361 | 162,852,493 | ||||||||||||||
Net Increase in Net Assets Resulting from Operations | 171,728,002 | 158,931,128 | ||||||||||||||
Transactions in Investors' Beneficial Interest: | ||||||||||||||||
Additions | 238,673,782 | 318,907,730 | ||||||||||||||
Reductions | (325,346,892) | (269,267,844) | ||||||||||||||
Net Increase/(Decrease) in Net Assets from Transactions in Investors' Beneficial Interests | (86,673,110) | 49,639,886 | ||||||||||||||
Total Increase in Net Assets | 85,054,892 | 208,571,014 | ||||||||||||||
NET ASSETS: | ||||||||||||||||
Beginning of period | 1,526,913,671 | 1,318,342,657 | ||||||||||||||
End of period | $1,611,968,563 | $1,526,913,671 |
SEE NOTES TO FINANCIAL STATEMENTS
10
Domini Social Index Portfolio
Financial Highlights
Year Ended July 31, | |||||||||||||||||||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||||||||||||||
Net assets (in millions) | $1,612 | $1,527 | $1,318 | $1,239 | $1,729 | ||||||||||||||||||||||||||||||||
Total return | 11.48% | 12.01% | 12.13% | (22.71)% | (17.28)% | ||||||||||||||||||||||||||||||||
Ratio of net investment income to average net assets (annualized) | 1.92% | 1.25% | 1.32% | 1.02% | 0.78% | ||||||||||||||||||||||||||||||||
Ratio of expenses to average net assets (annualized) | 0.22 | %(2) | 0.24 | %(2) | 0.23 | %(1)(2) | 0.22 | %(2) | 0.22 | %(2) | |||||||||||||||||||||||||||
Portfolio turnover rate | 9% | 8% | 8% | 13% | 19% |
(1)
Reflects an expense reimbursement and fee waiver by the Manager of 0.01% for the year ended July 31, 2003. Had the Manager not waived its fee and reimbursed expenses, the ratio of expenses to average net assets would have been 0.24% for the year ended July 31, 2003.
(2)
Ratio of expenses to average net assets includes indirectly paid expenses. Excluding indirectly paid expenses, the expense ratios would have been 0.23%, 0.24%, 0.23%, 0.22%, and 0.21% for the years ended July 31, 2005, 2004, 2003, 2002, and 2001, respectively.
SEE NOTES TO FINANCIAL STATEMENTS
11
DOMINI SOCIAL INDEX PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2005
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Domini Social Index Portfolio (the "Trust") is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company that was organized as a trust under the laws of the State of New York on June 7, 1989. Effective August 1, 2005, the Trust changed its name to Domini Social Trust, and renamed its series portfolio which previously had the same name as the Trust, the Domini Social Index Trust (the "Portfolio"). The Portfolio intends to correlate its investment portfolio as closely as is practicable with the Domini 400 Social Index,SM which is a common stock index developed and maintained by KLD Research & Analytics, Inc. The Declaration of Trust permits the Trustees to issue an unlimited number of beneficial interests in the Portfolio. The Portfolio commenced operations effective on August 10, 1990, and began investment operations on June 3, 1991. The Domini European Social Equity Trust, another series of the Trust, is scheduled to commence operations on October 3, 2005.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of the Portfolio's significant accounting policies.
(A) Valuation of Investments. The Portfolio values securities listed or traded on national securities exchanges at the last sale price or, if there have been no sales that day, at the mean of the current bid and ask price which represents the current value of the security. Securities listed on the NASDAQ National Market System are valued using the NASDAQ Official Closing Price (NOCP). If an NOCP is not available for a security listed on the NASDAQ National Market System, the security will be valued at the last sale price or, if there have been no sales that day, at the mean of the current bid and ask price. Portfolio securities for which there are no such quotations or valuations are valued at fair value as determined in good faith by or at the direction of the Portfolio's Board of Trustees.
(B) Dividend Income. Dividend income is recorded on the ex-dividend date.
(C) Federal Taxes. The Portfolio will be treated as a partnership for U.S. federal income tax purposes and is therefore not subject to U.S. federal
12
income tax. As such, each investor in the Portfolio will be taxed on its share of the Portfolio's ordinary income and capital gains. It is intended that the Portfolio will be managed in such a way that an investor will be able to satisfy the requirements of the Internal Revenue Code applicable to regulated investment companies.
(D) Other. Investment transactions are accounted for on the trade date. Gains and losses are determined on the basis of identified cost.
2. TRANSACTIONS WITH AFFILIATES
(A) Manager. Domini Social Investments LLC (Domini) is registered as an investment adviser under the Investment Advisers Act of 1940. The services provided by Domini consist of investment supervisory services, overall operational support, and administrative services. The administrative services include the provision of general office facilities and supervising the overall administration of the Portfolio. For its services under the Management Agreement, Domini receives from the Portfolio a fee accrued daily and paid monthly at an annual rate equal to 0.20% of the Portfolio's average daily net assets.
(B) Submanager. SSgA Funds Management, Inc. (SSgA) provides investment submanagement services to the Portfolio on a day-to-day basis pursuant to a Submanagement Agreement with Domini. SSgA does not determine the composition of the Domini 400 Social Index.SM The Index's composition is determined by KLD Research & Analytics, Inc.
3. INVESTMENT TRANSACTIONS
For the year ended July 31, 2005, cost of purchases and proceeds from sales of investments, other than U.S. government securities and short-term obligations, aggregated $146,569,112 and $202,332,853, respectively. For the year ended July 31, 2005, custody fees of the Portfolio were reduced by $93,517, which was compensation for uninvested cash left on deposit with the custodian.
Domini Social Index Portfolio—Notes to Financial Statements 13
Report of Independent Registered Public Accounting Firm
The Board of Trustees and Investors
Domini Social Trust:
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Domini Social Index Portfolio (the "Portfolio"), a series of Domini Social Trust, as of July 31, 2005, and the related statement of operations for the year then ended, statements of changes in net assets for each of the years in the two-year period then ended, and financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of July 31, 2005, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Domini Social Index Portfolio as of July 31, 2005, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Boston, Massachusetts
September 16, 2005
14
BOARD OF TRUSTEES' CONSIDERATION OF MANAGEMENT AND SUBMANAGEMENT AGREEMENTS
The Board of Trustees of the Domini Social Index Portfolio approved the continuance of the Portfolio's Management and Submanagement Agreements with Domini Social Investments LLC (Domini) and SSgA Funds Management, Inc. (SSgA), respectively, on April 29, 2005. The Trustees, including all of the Independent Trustees, concluded that each of Domini and SSgA had the capabilities, resources, and personnel necessary to manage the Portfolio.
In their deliberations, the Trustees considered the information provided to them throughout the year at regular board meetings, as well as the information prepared specifically in connection with the annual renewal review process. The Trustees evaluated all information available to them. The Trustees did not identify any particular information or factor that was all-important or controlling.
In reaching their determination to approve the continuance of the Management and Submanagement Agreements, the Trustees considered a variety of factors they believed relevant and balanced a number of considerations. The primary factors and the conclusions are described below.
Nature, Quality, and Extent of Services Provided
The Trustees considered that, pursuant to the Management and Submanagement Agreements, Domini, subject to the direction of the Board, is responsible for providing advice and guidance with respect to the Portfolio and for managing the investment of the assets of the Portfolio, which it does by engaging and overseeing the activities of SSgA. The Trustees also considered that SSgA provides the day-to-day portfolio management of the Portfolio, including making purchases and sales of portfolio securities consistent with the Portfolio's investment objective and policies. The terms of the Management and Submanagement Agreements were reviewed by the Trustees.
The Trustees considered the scope and quality of the services provided by each of Domini and SSgA under the Management and Submanagement Agreements. They considered the professional experience, tenure, and qualifications of the Portfolio's portfolio management team and other senior personnel at Domini and SSgA, noting that they intended to continue to work with SSgA regarding diversity issues. The Trustees also considered Domini's capabilities and experience in the development and application of social and environmental screens and its reputation and leadership in the socially responsible investment community. In addition, they considered each of Domini's and SSgA's compliance policies and procedures and compliance record.
15
The Trustees concluded that they were satisfied with the nature, quality, and extent of services provided by Domini and SSgA to the Portfolio under the Management and Submanagement Agreements.
Costs of Services Provided and Profitability
The Trustees reviewed information provided to them by Domini concerning the costs borne by and profitability of Domini in respect of its advisory relationship with the Portfolio for the 2004 calendar year, along with a description of the methodology used by Domini in preparing the profitability information. They also reviewed information provided to them by SSgA concerning the costs borne by and profitability of SSgA in respect of its submanagement relationship with the Portfolio for the 2004 calendar year. The Trustees also reviewed the financial results realized by Domini in connection with the operations of the Portfolio and SSgA's statements of income for December 31, 2003, and December 31, 2004.
The Trustees considered Domini's profit margin with respect to the Portfolio in comparison to industry data provided by Domini. They also reviewed SSgA's profit margin with respect to the Portfolio in comparison to the same industry data. They noted that the breakpoints proposed by Domini for the Management Agreement would likely reduce Domini's profit margins. The Trustees concluded that they were satisfied that each of Domini's and SSgA's level of profitability was not excessive in view of the nature, quality, and extent of services provided.
Other Benefits
The Trustees considered the other benefits which Domini, SSgA, and their respective affiliates receive from their relationship with the Portfolio.
The Trustees reviewed the character and amount of payments received by Domini and its affiliates, other than in respect of the Management and Submanagement Agreements. The Trustees considered the brokerage practices of Domini and SSgA and noted that, based on information provided to them, neither Domini nor SSgA received the benefits of "soft dollar" commissions with respect to the Portfolio. The Trustees also considered the intangible benefits that may accrue to Domini and SSgA and their respective affiliates by virtue of their relationship with the Portfolio.
The Trustees concluded that the benefits received by each of Domini and SSgA and their respective affiliates, as outlined above, were reasonable in the context of the relationship between each of Domini and SSgA and the Portfolio.
Investment Results
The Trustees reviewed the investment performance of the Portfolio. The Trustees considered the performance of the Portfolio for the three months, six months, one- and two-year periods ended December 31, 2004, and March 31, 2005, as well as its cumulative performance from inception
16
through December 31, 2004, and through March 31, 2005. They considered the performance of the S&P 500 and the Domini 400 Social IndexSM for the same periods.
Because the objective of the Portfolio is to provide its investors with a long-term total return that matches the performance of the Domini 400 Social IndexSM, the Trustees paid particular attention to the Portfolio's tracking error. They compared the tracking error to SSgA's tracking error with respect to other index funds for which it acts as adviser. They noted that the tracking error had been in an acceptable range. Based on their review, the Trustees concluded that the performance of the Portfolio over time had been satisfactory.
Fees and Other Expenses
The Trustees considered the advisory fees to be paid by the Portfolio to Domini and the submanagement fees to be paid by Domini to SSgA. The Trustees considered the level of advisory fees versus the peer group for the Portfolio, as well as the Portfolio's total expense ratio compared to those peers.
The Trustees also reviewed the fees that each of Domini and SSgA charges its other clients with investment objectives similar to the Portfolio. The Trustees reviewed materials provided by Domini describing the differences in services provided to its non-fund client with similar objectives to the Portfolio and noted that the Portfolio, although it may receive more services than such non-fund client, paid a lower advisory fee. The Trustees also noted that Domini pays the submanager from its advisory fee for the Portfolio. The Trustees also considered that the advisory fees SSgA receives with respect to its other index clients are within the general range of the submanagement fee it receives with respect to the Portfolio.
The Trustees considered that, based on the information provided with respect to its peer group, the advisory fee for the Portfolio was the lowest in its peer group and lower than the relevant industry averages.
The Trustees also noted that Domini would be implementing breakpoints in the fees payable to it under the Management Agreement and that such breakpoints would reduce the expense ratios as Portfolio assets increase. The Trustees concluded that the expense ratios for the Portfolio were satisfactory.
Economies of Scale
The Trustees also considered whether economies of scale would be realized by Domini and SSgA as the Portfolio gets larger and the extent to which this is reflected in the level of fees charged. The Trustees noted that there were breakpoints in the SSgA submanagement fee and that Domini would implement breakpoints in the fees payable to it under the Management Agreement. The Trustees concluded that such breakpoints were an effective way to experience economies of scale for the Portfolio.
The Trustees will consider whether to renew the Management and Submanagement Agreements again after a one-year period.
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Trustees and Officers
The following table presents information about each Trustee and each Officer of the Domini Social Index Portfolio as of July 31, 2005. Asterisks indicate that those Trustees and Officers are "interested persons" (as defined in the Investment Company Act of 1940) of the Portfolio. Each Trustee and each Officer of the Portfolio noted as an interested person is interested by virtue of his or her position with Domini Social Investments LLC as described below. Unless otherwise indicated below, the address of each Trustee and each Officer is 536 Broadway, 7th Floor, New York, NY 10012. The Portfolio does not hold annual shareholder meetings for the purpose of electing Trustees, and Trustees are not elected for fixed terms. This means that each Trustee will be elected to hold office until his or her successor is elected or until he or she retires, resigns, dies, or is removed from office. No Trustee or Officer is a director of a public company or a registered investment company other than, with respect to the Trustees, the Domini Funds.
Interested Trustee and Officer | ||||||||
Name, Age, Position(s) Held, and Length of Time Served | Principal Occupation(s) During Past 5 Years and Other Directorships Held | Number of Funds and Portfolios in the Domini Family of Funds Overseen by Trustee | ||||||
Amy L. Domini* (55) Chair, Trustee, and President of the Portfolio since 1990 | CEO (since 2002), President (2002-June 2005), and Manager (since 1997), Domini Social Investments LLC; Manager, DSIL Investment Services LLC (since 1998); Manager, Domini Holdings LLC (holding company) (since 2002); Tom's of Maine, Inc. (natural care products) (2004); Board Member, Progressive Government Institute (nonprofit education on executive branch of the federal government) (since 2003); Board Member, Financial Markets Center (nonprofit financial markets research and education resources provider) (2002-2004); Trustee, New England Quarterly (periodical) (since 1998); Trustee, Episcopal Church Pension Fund (since 1994); CEO, Secretary, and Treasurer, KLD Research & Analytics, Inc. (social research provider) (1990-2000); Private Trustee, Loring, Wolcott & Coolidge Office (fiduciary) (since 1987). | 5 |
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Disinterested Trustees | ||||||||
Name, Age, Position(s) Held, and Length of Time Served | Principal Occupation(s) During Past 5 Years and Other Directorships Held | Number of Funds and Portfolios in the Domini Family of Funds Overseen by Trustee | ||||||
Julia Elizabeth Harris (57) Trustee of the Portfolio since 1999 | Director and President, Alpha Global Solutions, LLC (agribusiness) (2004); Trustee, Fiduciary Trust Company (financial institution) (2001-2005); Executive Vice President, UNC Partners, Inc. (financial management) (since 1990). | 5 | ||||||
Kirsten S. Moy (58) Trustee of the Portfolio since 1999 | Board Member, Community Reinvestment Fund (since 2003); Director, Economic Opportunities Program, The Aspen Institute (research and education) (since 2001); Consultant on Social Investments, Equitable Life/AXA (1998-2001); Project Director, Community Development Innovation and Infrastructure Initiative (research) (1998-2001). | 5 | ||||||
William C. Osborn (61) Trustee of the Portfolio since 1997 | Manager, Massachusetts Green Energy Fund Management 1, LLC (venture capital) (since 2004); Manager, Commons Capital Management LLC (venture capital) (since 2000); Special Partner/Consultant, Arete Corporation (venture capital) (since 1999); Director, World Power Technologies, Inc. (power equipment production) (1999-2004); Director, Investors' Circle (socially responsible investor network) (since 1999). | 5 | ||||||
Karen Paul (60) Trustee of the Portfolio since 1997 | Visiting Professor, Escuela Graduado Administración Dirección Empresas, Instituto Tecnológico y de Estudios Superiores de Monterrey (2004); Professor, Catholic University of Bolivia (2003); Fulbright Fellow, U.S. Department of State (2003); Partner, Trinity Industrial Technology (1997-2002); Executive Director, Center for Management in the Americas (1997-2002); Professor of Management and International Business, Florida International University (since 1990). | 5 | ||||||
Gregory A. Ratliff (45) Trustee of the Portfolio since 1999 | Community Investment Consultant (self-employment) (since 2002); Senior Fellow, The Aspen Institute (research and education) (2002); Director, Economic Opportunity, John D. and Catherine T. MacArthur Foundation (private philanthropy) (1997-2002). | 5 |
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Disinterested Trustees (continued) | ||||||||
Name, Age, Position(s) Held, and Length of Time Served | Principal Occupation(s) During Past 5 Years and Other Directorships Held | Number of Funds and Portfolios in the Domini Family of Funds Overseen by Trustee | ||||||
John L. Shields (52) Trustee of the Portfolio since 2004 | Managing Director, Navigant Consulting, Inc. (management consulting firm) (since 2004); Advisory Board Member, Vestmark, Inc. (software company) (since 2003); Managing Principal, Shields Smith & Webber LLC (management consulting firm) (2002-2004); President and CEO, Citizens Advisers, Inc. (1998-2002); President and CEO, Citizens Securities, Inc. (1998-2002); President and Trustee, Citizens Funds (1998-2002). | 5 | ||||||
Frederick C. Williamson, Sr. (89) Trustee of the Portfolio since 1990 | President's Advisory Board, Salve Regina University, Newport, R.I. (since 1999); Board Member, Preserve Rhode Island (nonprofit preservation) (since 1999); Board of Directors, Grow Smart Rhode Island (nonprofit state planning) (since 1998); Advisor, National Parks and Conservation Association (1997-2001); Chairman, Rhode Island Historical Preservation and Heritage Commission (state government) (since 1995); Treasurer and Trustee, RIGHA Foundation (charitable foundation supporting healthcare needs) (since 1994); Trustee, National Park Trust (nonprofit land acquisition) (since 1983); Trustee, Rhode Island Black Heritage Society (nonprofit education) (since 1974); State Historic Preservation Officer (state government) (since 1969). | 5 |
Officers | ||||||||
Name, Age, Position(s) Held, and Length of Time Served | Principal Occupation(s) During Past 5 Years and Other Directorships Held | Number of Funds and Portfolios in the Domini Family of Funds Overseen by Trustee | ||||||
Megan L. Dunphy* (35) Secretary of the Portfolio since 2005 | Mutual Fund Counsel, Domini Social Investments LLC (since 2005); Secretary, Domini Funds (since 2005); Counsel, ING (formerly Aetna Financial Services) (financial services) (1999-2004). | N/A | ||||||
Adam M. Kanzer* (39) Chief Legal Officer of the Portfolio since 2003 | General Counsel and Director of Shareholder Advocacy (since 1998) and Chief Compliance Officer (April 2005-May 2005), Domini Social Investments LLC; Chief Compliance Officer (April 2005-July 2005) and Chief Legal Officer (since 2003), Domini Funds. | N/A |
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Officers (continued) | ||||||||
Name, Age, Position(s) Held, and Length of Time Served | Principal Occupation(s) During Past 5 Years and Other Directorships Held | Number of Funds and Portfolios in the Domini Family of Funds Overseen by Trustee | ||||||
Carole M. Laible* (41) Treasurer of the Portfolio since 1997 | President (since July 2005), Chief Operating Officer (since 2002), and Financial/Compliance Officer (1997-2003), Domini Social Investments LLC; President and CEO (since 2002), Chief Compliance Officer (since 2001), Chief Financial Officer, Secretary, and Treasurer (since 1998), DSIL Investment Services LLC; Treasurer, Domini Funds (since 1997). | N/A | ||||||
Steven D. Lydenberg* (59) Vice President of the Portfolio since 1990 | Chief Investment Officer (since 2003) and Member (since 1997), Domini Social Investments LLC; Vice President, Domini Funds (since 1990); Director (1990-2003) and Director of Research (1990-2001), KLD Research & Analytics, Inc. (social research provider). | N/A | ||||||
Maurizio Tallini* (31) Chief Compliance Officer of the Portfolio since July 2005 | Chief Compliance Officer, Domini Social Investments LLC (since May 2005); Chief Compliance Officer, Domini Funds (since July 2005); Venture Capital Controller, Rho Capital Partners (venture capital) (2001-2005); Manager, PricewaterhouseCoopers LLP (independent registered public accounting firm) (1995-2001). | N/A |
The Portfolio's Registration Statement includes information about the Trustees and is available without charge, upon request, by calling the following toll-free number: 1-800-217-0017.
21
PROXY VOTING INFORMATION
The Domini Funds’ Proxy Voting Policies and Procedures are available, free of charge, by calling 1-800-762-6814, by visiting www.domini.com/shareholder-advocacy/Proxy-Voting/index.htm, or by visiting the EDGAR database on the Securities and Exchange Commission’s (SEC) website at www.sec.gov. All proxy votes cast for the Domini Funds are posted to Domini’s website on an ongoing basis over the course of the year. An annual record of all proxy votes cast for the Funds during the most recent 12-month period ended June 30 can be obtained, free of charge, at www.domini.com, and on the EDGAR database on the SEC’s website at www.sec.gov.
QUARTERLY PORTFOLIO SCHEDULE INFORMATION
The Domini Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Domini Funds’ Forms N-Q are available on the EDGAR database on the SEC’s website at www.sec.gov. These Forms may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information about the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The information on Form N-Q is also available to be viewed at www.domini.com.
22
Item 2. Code of Ethics.
(a) As of the end of the period covered by this report on Form N-CSR, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, and principal accounting officer.
(c) Not applicable.
(d) Not applicable.
Item 3. Audit Committee Financial Expert.
John L. Shields, a member of the Audit Committee, has been determined by the Board of Trustees of the registrant in its reasonable business judgment to meet the definition of "audit committee financial expert" as such term is defined in the instructions to Form N-CSR. In addition, Mr. Shields is an "independent" member of the Audit Committee as defined in the instructions to Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a) Audit Fees
For the fiscal years ended July 31, 2005, and July 31, 2004, the aggregate audit fees billed to the registrant by KPMG LLP ("KPMG") for professional services rendered for the audits of the financial statements, or services that are normally provided in connection with statutory and regulatory filings or engagements for those fiscal years, are shown in the table below:
Fund | 2005 | 2004 | ||||||||
Domini Social Trust | $ | 28,500 | $ | 26,000 | ||||||
(b) Audit-Related Fees
There were no audit-related fees billed by KPMG for services rendered for assurance and related services to the registrant that were reasonably related to the performance of the audit or review of the registrant's financial statements, but not reported as audit fees, for the fiscal years ended July 31, 2005, and July 31, 2004.
There were no audit-related fees billed by KPMG for the fiscal years ended July 31, 2005, and July 31, 2004, that were required to be approved by the registrant's Audit Committee for services rendered on behalf of Domini Social Investments LLC and entities controlling, controlled by, or under common control with Domini Social Investments LLC (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that provide ongoing services to the registrant ("Service Providers").
(c) Tax Fees
In each of the fiscal years ended July 31, 2005, and July 31, 2004, the aggregate tax fees billed by KPMG for professional services rendered for tax compliance, tax advice, and tax planning for the registrant are shown in the table below:
Fund | 2005 | 2004 | ||||||||
Domini Social Trust | $ | 6,400 | $ | 5,750 | ||||||
There were no tax fees billed by KPMG for the fiscal years ended July 31, 2005, and July 31, 2004, that were required to be approved by the registrant's Audit Committee for services rendered on behalf of the registrant's Service Providers.
(d) All Other Fees
There were no other fees billed by KPMG for the fiscal years ended July 31, 2005, and July 31, 2004, for other non-audit services rendered to the registrant.
There were no other fees billed by KPMG for the fiscal years ended July 31, 2005, and July 31, 2004, that were required to be approved by the registrant's Audit Committee for other non-audit services rendered on behalf of the registrant's Service Providers.
(e)(1) The registrant's Audit Committee must pre-approve all audit and non-audit services provided by KPMG relating to the operations or financial reporting of the registrant and all non-audit services provided by KPMG to the registrant's Service Providers if the engagement relates directly to the operations and financial reporting of the registrant. Prior to the commencement of any audit or non-audit services, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.
(e)(2) None, or 0%, of the services relating to the audit-related fees, tax fees, and all other fees paid by the registrant disclosed above were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X (which permits audit committee approval after the start of the engagement with respect to services other than audit review or attest services, if certain conditions are satisfied).
(f) According to KPMG for the fiscal year ended July 31, 2005, the percentage of hours spent on the audit of the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons who are not full-time, permanent employees of KPMG is as follows:
Fund | 2005 | |||||
Domini Social Trust | 0% | |||||
(g) There were no non-audit fees billed by KPMG, the registrant's accountant, for services rendered to the registrant's Service Providers for the last two fiscal years of the registrant. The aggregate non-audit fees billed by KPMG for services rendered to the registrant for the fiscal year ended July 31, 2005, were $6,400, and for the fiscal year ended July 31, 2004, were $5,750.
(h) Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable to the registrant.
Item 6. Schedule of Investments.
The Schedule of Investments is included as part of the report to stockholders filed under Item 1.
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable to the registrant.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to the registrant.
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable to the registrant.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may submit recommendations for nominees to the registrant's Board of Trustees.
Item 11. Controls and Procedures.
(a) Within 90 days prior to the filing of this report on Form N-CSR, Amy L. Domini, the registrant's President and Principal Executive Officer, and Carole M. Laible, the registrant's Treasurer and
Principal Financial Officer, reviewed the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) of the Investment Company Act of 1940) and evaluated their effectiveness. Based on their evaluation, Ms. Domini and Ms. Laible determined that the disclosure controls and procedures adequately ensure that information required to be disclosed by the registrant in this report on Form N-CSR is recorded, processed, summarized, and reported within the time periods required by the Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the registrant's second fiscal half-year that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) The Code of Ethics referred to in Item 2 is filed herewith.
(a)(2) Separate certifications required by Rule 30a-2(a) under the Investment Company Act of 1940 for each principal executive officer and principal financial officer of the registrant are filed herewith.
(a)(3) Not applicable to the registrant.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DOMINI SOCIAL TRUST | ||||||||||
By: | /s/ Amy L. Domini | |||||||||
Amy L. Domini President | ||||||||||
Date: October 5, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Amy L. Domini | |||||||||
Amy L. Domini President (Principal Executive Officer) | ||||||||||
Date: October 5, 2005
By: | /s/ Carole M. Laible | |||||||||
Carole M. Laible Treasurer (Principal Financial Officer) | ||||||||||
Date: October 5, 2005