SEC Company Response from DOMINI INVESTMENT TRUST (CIK 0000851680) — Feb 6, 2020
DOMINI INVESTMENT TRUST (CIK 0000851680)
Date: Feb. 6, 2020 · CIK: 0000851680 · Accession: 0001193125-20-026957
AI Filing Summary & Sentiment
File numbers found in text: 811-05823
Letter
Domini Impact Investments LLC
180 Maiden Lane, Suite 1302
New York, NY 10038-4925
February 6, 2020
VIA EDGAR
Securities and Exchange Commission
Division of Investment Management
100 F Street, NE
Washington, D.C.
Attn.: Ms. Kimberly Browning
Re: Domini Investment Trust (File Nos. 811-05823 and 33-29180)
Ladies and Gentlemen:
This letter responds to comments received from Ms. Kimberly Browning of the Staff of the Securities and Exchange Commission (the “Commission”) on December 20, 2019, regarding Post-Effective Amendment No. 68 (the “Amendment”) to the Registration Statement on Form N-1A of Domini Investment Trust (the “Registrant”) filed on November 12, 2019 with respect to the Domini Sustainable Solutions Fund (the “Fund”). A summary of the Staff’s comments and the Registrant’s responses are set forth below.
Summary Section – Fee Table
1.
Comment:
The Staff notes that the Fund may invest in other funds, and requested that the Registrant confirm that the Fund does not intend to invest in other investment companies to the extent that Acquired Fund Fees and Expenses should be reflected in the Fee Table, or revise the Fee Table to reflect Acquired Fund Fees and Expenses, as applicable.
Response:
The Registrant confirms that the Fund does not intend to invest in other investment companies to the extent that Acquired Fund Fees and Expenses should be reflected in the Fee Table.
2.
Comment:
The Staff requested that the Registrant include a footnote to the Fee Table indicating that Other Expenses are based on estimated amounts for the current fiscal year.
Response:
The Registrant will add a footnote to the Fee Table indicating that Other Expenses are based on estimated amounts for the current fiscal year.
3.
Comment:
The Staff requested that the Registrant confirm in its response that the Fund’s Adviser does not have the ability to recoup amounts waived or expenses reimbursed under the contractual fee waiver discussed in footnote 2 to the Fee Table or disclose the attendant rights of recoupment.
Response:
The Registrant confirms that the Fund’s Adviser does not have the ability to recoup amounts waived or expenses reimbursed under the contractual fee waiver arrangement reflected in footnote 2 to the Fee Table.
4.
Comment:
The Staff requested that the Registrant revise the second sentence of footnote 2 to the Fee Table to clarify the period for which the expense waiver arrangement is expected to continue, including the expected termination date, and to briefly describe who can terminate the arrangement and under what circumstances. The Staff also requested that the Registrant define the term “agreement” as used in footnote 2 to the Fee Table.
Response:
The Registrant will revise footnote 2 to the Fee Table to address the Staff’s comments as follows:
The Fund’s Adviser has contractually agreed to waive certain fees and/or reimburse certain ordinary operating expenses in order to limit Investor and Institutional share expenses to 1.40% and 1.15%, respectively. These expense limitations are in effect through November 30, 2021. There can be no assurance that the Adviser will extend the expense limitations beyond such time. While in effect, the arrangement may be terminated for a class only by agreement of the Adviser and the Board of Trustees.
Summary Section – Portfolio Turnover
5.
Comment:
The Staff requested that the Registrant revise the disclosure regarding portfolio turnover to explain why a portfolio turnover rate for the most recent fiscal year is not included.
Response:
The Registrant will revise the disclosure regarding portfolio to address the Staff’s comment as follows:
The Fund is newly offered; therefore, it does not have a turnover rate to report for the most recent fiscal year.
Summary Section – Principal Investment Strategies
6.
Comment:
The Staff noted that the Registrant indicates in Item 4 and Item 9 of the Prospectus that the Fund invests at least 80% of its assets in companies that demonstrate a commitment to sustainability solutions, and also that investments are selected based on the Adviser’s environmental and social standards. The Staff requested the Registrant revise the disclosure in Item 4 and Item 9 of the Prospectus to clarify the sustainability criteria in the Fund’s 80% investment policy and how the Adviser’s investment process, including the Adviser’s environmental and social standards, implements the Fund’s investment strategies generally.
Response:
The Registrant will revise the disclosure to address the Staff’s comment as set forth in Appendix A hereto.
7.
Comment:
The Staff requested that if investing in securities of specific countries, regions, emerging or frontier markets is an element of the Fund’s principal investment strategy, to add corresponding disclosure in the principal investment strategies and principal risks sections.
Response:
The Registrant confirms that investing in securities of specific countries, regions, emerging or frontier markets is not an element of the Fund’s principal investment strategy and, accordingly, respectfully submits that no change to the principal investment strategy disclosure is required.
8.
Comment:
The Staff noted that the Registrant states that that the Fund may invest in securities that “the Adviser believes” demonstrate a commitment to sustainable solutions. The Staff requested that the Registrant revise the disclosure to omit the phrase “the Adviser’s believes” and to explain in more detail the criteria the Adviser uses to select the Fund’s investments.
Response:
The Registrant will revise the disclosure to address the Staff’s comment as set forth in Appendix A hereto.
9.
Comment:
The Staff noted that the Registrant references real estate investment trusts in the principal investment strategies section, but does not provide corresponding principal risk disclosure. The Staff requested that the Registrant revise the disclosure to clarify if investing in real estate investment trusts is an element of the Fund’s principal investment strategy and to include corresponding risk disclosure, as applicable.
Response:
The Registrant notes that investing in real estate investment trusts is not an element of the Fund’s principal investment strategy and will delete the disclosure referenced by the Staff.
10.
Comment:
The Staff requested that the Registrant confirm if investing in other funds is an element of the Fund’s principal investment strategy and, if applicable, revise the disclosure to clarify whether the Fund invests in both open-end and closed-end funds.
Response:
The Registrant notes that investing in other funds is not an element of the Fund’s principal investment strategy and will delete the disclosure referenced by the Staff.
11.
Comment:
The Staff noted that the Registrant states that the Fund may have significant exposure to securities of issuers tied economically to the United States, and requested that the Registrant clarify supplementally if this disclosure is intended to relate to Fund investments in securities of non-U.S. issuers and/or countries.
Response:
The Registrant notes that investing in securities of non-U.S. issuers or countries is not an element of the Fund’s principal investment strategy and will delete the disclosure referenced by the Staff. The Registrant notes supplementally that the Fund expects to have significant exposure to securities of U.S. issuers from time to time.
12.
Comment:
The Staff noted that the Registrant states that the Fund may hold cash or other short-term investments to provide the Fund flexibility to meet redemptions and expenses and to readjust its portfolio holdings. The Staff requested that the Registrant revise the disclosure to clarify how short-term investments are an element of the Fund’s principal investment strategy, or to omit such disclosure from the principal investment strategies section.
Response:
The Registrant notes that investing in short-term investments is not an element of the Fund’s principal investment strategy and will delete the disclosure referenced by the Staff.
13.
Comment:
The Staff requested that the Registrant add language to paragraph two of Item 4 to clarify the weights provided to the Subadviser with the Adviser’s investment selections.
Response:
The Registrant will revise the disclosure to address the Staff’s comments as follows:
The Fund’s Subadviser will purchase or sell securities to implement the Adviser’s investment selections at a time determined appropriate by the Subadviser and in accordance with, but not necessarily in the identical amounts as provided with the Adviser’s investment selections.
14.
Comment:
The Staff requested that the Registrant add disclosure to clarify what is meant by “impact investors” and “impact investing risk” in the principal investment strategies and principal investment risk disclosure.
Response:
The Registrant will delete the reference to “impact investors” in the principal investment strategies section and replace the reference to “impact investing risk” with “sustainable investing risk” to address the Staff’s comment.
Summary Section – Principal Investment Risks
15.
Comment:
The Staff notes that Valuation Risk was included as a principal risk of the Fund and requested that the Fund add corresponding disclosure in the principal investment strategies section of the Prospectus with respect to investments in securities that trade in thin or volatile markets or that are valued using fair value methodologies or revise the risk disclosure as applicable.
Response:
The Registrant notes that the Fund does not invest in securities that trade in thin or volatile markets or that are valued using fair value methodologies as a principal investment strategy. The Registrant further notes that the disclosure referenced by the Staff addresses risks with respect to the valuation of securities generally, and respectfully submits that such disclosure is relevant to investors. Accordingly, the Registrant respectfully submits that no change to the disclosure is required.
16.
Comment:
The Staff notes that Liquidity Risk was included as a principal risk of the Fund. The Staff requests that the Fund add corresponding disclosure in the principal investment strategies section of the Prospectus with respect to investments in illiquid securities or revise the risk disclosure as applicable.
Response:
The Registrant notes that the Fund does not invest in illiquid securities as a principal investment strategy. The Registrant further notes that the disclosure referenced by the Staff addresses risks with respect to the liquidity of securities generally, and respectfully submits that such disclosure is relevant to investors. Accordingly, the Registrant respectfully submits that no change to the disclosure is required.
More on the Fund’s Investment Objectives and Strategies
17.
Comment:
The Staff requested that the Registrant confirm that all principal investment strategies and risks of the Fund that are summarized in Item 9 of the Prospectus and the Statement of Additional Information, as applicable, are summarized in Item 4 of the Prospectus, or revise the disclosure accordingly.
Response:
The Registrant confirms that all principal investment strategies and risks of the Fund are summarized in Item 4.
18.
Comment:
The Staff noted that certain of the strategies or risks described in Item 9 merely repeat or are substantially identical to information already included in the summary section, and suggested that the Registrant consider revising the disclosure to remove disclosure that is addressed in Item 4.
Response:
The Registrant believes that the disclosure is consistent with Form N-1A and respectfully submits that no change to the disclosure is required.
19.
Comment:
The Staff noted that the Registrant states that, among other criteria, the Fund may invest in securities of companies that “otherwise demonstrate a commitment to sustainable business practices.” The Staff noted its belief that this statement is overly broad and requested that it be deleted
Response:
The Registrant will delete the disclosure referenced by the Staff.
Other Fund Investment Strategies
20.
Comment:
The Staff noted that the Registrant refers to depositary receipts in the principal investment strategies section of the Prospectus, but also includes disclosure regarding depositary receipts in the other fund investment strategies section of the Prospectus. The Staff requested that the Registrant confirm if investing in depositary receipts is an element of the Fund’s principal investment strategy and to revise the disclosure accordingly.
Response:
The Registrant confirms that investing in depositary receipts is not an element of the Fund’s principal investment strategy and will revise the disclosure regarding the Fund’s principal investment strategies accordingly.
21.
Comment:
The Staff requested that the Registrant revise the disclosure in the Prospectus regarding securities lending to explain that the cost of engaging in securities lending are not disclosed in the Fee Table, to state the maximum amount in which the fund may engage in securities lending, expressed as a percentage of total assets, and to include such disclosure in the principal investment strategies section if securities lending is a principal investment strategy of the Fund. The Staff also requested that the Registrant disclose, if true, that the Fund bears the entire risk of loss for any re-invested collateral received in connection with securities lending and, with respect to proxy voting, that the Fund may be unable to recall securities in time to exercise voting rights
Response:
The Registrant notes that it does not currently engage in securities lending. The Registrant will delete the disclosure referenced by the Staff from the Prospectus and revise the disclosure regarding securities lending in the Statement of Additional Information to address the Staff’s comments, as follows:
Loans of Securities
Consistent with applicable regulatory policies, including those of the Board of Governors of the Federal Reserve System and the SEC, the Fund may make loans of its securities to brokers, dealers, or other financial institutions, provided that (a) the loan is secured continuously by collateral, consisting of securities, cash, or cash equivalents, which is marked to market daily to ensure that each loan is fully collateralized, at all times, (b) the Fund may at any time call the loan and obtain the return of the securities loaned within three business days, (c) the Fund will receive any interest or dividends paid on the securities loaned, and (d) the aggregate market value of securities loaned will not at any time exceed 30% of the total assets of the Fund. The Fund reserves the right to recall loaned securities so that it may exercise voting rights on loaned securities according to the Fund’s Proxy Voting Policy and Procedures.
The Fund will earn income for lending its securities either in the form of fees received from the borrower of the securities or in connection with the investment of cash collateral in short-term money market instruments. The Fund will continue to have market risk and other risks associated with owning the securities on loan, as well as the risks associated with the investment of the cash collateral received in connection with the loan. Loans of securities involve a risk that the borrower may fail to return the securities or may fail to provide additional collateral, and the risk that the Fund is unable to recall a security in time to exercise voting rights or sell the security.
Where the collateral received is cash, the cash will be invested and the Fund will be entitled to a share of the income earned on the investment, but will also be subject to investment risk on the collateral an
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CORRESP 1 filename1.htm CORRESP Domini Impact Investments LLC 180 Maiden Lane, Suite 1302 New York, NY 10038-4925 February 6, 2020 VIA EDGAR Securities and Exchange Commission Division of Investment Management 100 F Street, NE Washington, D.C. 20549 Attn.: Ms. Kimberly Browning Re: Domini Investment Trust (File Nos. 811-05823 and 33-29180) Ladies and Gentlemen: This letter responds to comments received from Ms. Kimberly Browning of the Staff of the Securities and Exchange Commission (the “Commission”) on December 20, 2019, regarding Post-Effective Amendment No. 68 (the “Amendment”) to the Registration Statement on Form N-1A of Domini Investment Trust (the “Registrant”) filed on November 12, 2019 with respect to the Domini Sustainable Solutions Fund (the “Fund”). A summary of the Staff’s comments and the Registrant’s responses are set forth below. Summary Section – Fee Table 1. Comment: The Staff notes that the Fund may invest in other funds, and requested that the Registrant confirm that the Fund does not intend to invest in other investment companies to the extent that Acquired Fund Fees and Expenses should be reflected in the Fee Table, or revise the Fee Table to reflect Acquired Fund Fees and Expenses, as applicable. Response: The Registrant confirms that the Fund does not intend to invest in other investment companies to the extent that Acquired Fund Fees and Expenses should be reflected in the Fee Table. 2. Comment: The Staff requested that the Registrant include a footnote to the Fee Table indicating that Other Expenses are based on estimated amounts for the current fiscal year. Response: The Registrant will add a footnote to the Fee Table indicating that Other Expenses are based on estimated amounts for the current fiscal year. 3. Comment: The Staff requested that the Registrant confirm in its response that the Fund’s Adviser does not have the ability to recoup amounts waived or expenses reimbursed under the contractual fee waiver discussed in footnote 2 to the Fee Table or disclose the attendant rights of recoupment. Response: The Registrant confirms that the Fund’s Adviser does not have the ability to recoup amounts waived or expenses reimbursed under the contractual fee waiver arrangement reflected in footnote 2 to the Fee Table. 4. Comment: The Staff requested that the Registrant revise the second sentence of footnote 2 to the Fee Table to clarify the period for which the expense waiver arrangement is expected to continue, including the expected termination date, and to briefly describe who can terminate the arrangement and under what circumstances. The Staff also requested that the Registrant define the term “agreement” as used in footnote 2 to the Fee Table. Response: The Registrant will revise footnote 2 to the Fee Table to address the Staff’s comments as follows: The Fund’s Adviser has contractually agreed to waive certain fees and/or reimburse certain ordinary operating expenses in order to limit Investor and Institutional share expenses to 1.40% and 1.15%, respectively. These expense limitations are in effect through November 30, 2021. There can be no assurance that the Adviser will extend the expense limitations beyond such time. While in effect, the arrangement may be terminated for a class only by agreement of the Adviser and the Board of Trustees. Summary Section – Portfolio Turnover 5. Comment: The Staff requested that the Registrant revise the disclosure regarding portfolio turnover to explain why a portfolio turnover rate for the most recent fiscal year is not included. Response: The Registrant will revise the disclosure regarding portfolio to address the Staff’s comment as follows: The Fund is newly offered; therefore, it does not have a turnover rate to report for the most recent fiscal year. Summary Section – Principal Investment Strategies 6. Comment: The Staff noted that the Registrant indicates in Item 4 and Item 9 of the Prospectus that the Fund invests at least 80% of its assets in companies that demonstrate a commitment to sustainability solutions, and also that investments are selected based on the Adviser’s environmental and social standards. The Staff requested the Registrant revise the disclosure in Item 4 and Item 9 of the Prospectus to clarify the sustainability criteria in the Fund’s 80% investment policy and how the Adviser’s investment process, including the Adviser’s environmental and social standards, implements the Fund’s investment strategies generally. Response: The Registrant will revise the disclosure to address the Staff’s comment as set forth in Appendix A hereto. 7. Comment: The Staff requested that if investing in securities of specific countries, regions, emerging or frontier markets is an element of the Fund’s principal investment strategy, to add corresponding disclosure in the principal investment strategies and principal risks sections. 2 Response: The Registrant confirms that investing in securities of specific countries, regions, emerging or frontier markets is not an element of the Fund’s principal investment strategy and, accordingly, respectfully submits that no change to the principal investment strategy disclosure is required. 8. Comment: The Staff noted that the Registrant states that that the Fund may invest in securities that “the Adviser believes” demonstrate a commitment to sustainable solutions. The Staff requested that the Registrant revise the disclosure to omit the phrase “the Adviser’s believes” and to explain in more detail the criteria the Adviser uses to select the Fund’s investments. Response: The Registrant will revise the disclosure to address the Staff’s comment as set forth in Appendix A hereto. 9. Comment: The Staff noted that the Registrant references real estate investment trusts in the principal investment strategies section, but does not provide corresponding principal risk disclosure. The Staff requested that the Registrant revise the disclosure to clarify if investing in real estate investment trusts is an element of the Fund’s principal investment strategy and to include corresponding risk disclosure, as applicable. Response: The Registrant notes that investing in real estate investment trusts is not an element of the Fund’s principal investment strategy and will delete the disclosure referenced by the Staff. 10. Comment: The Staff requested that the Registrant confirm if investing in other funds is an element of the Fund’s principal investment strategy and, if applicable, revise the disclosure to clarify whether the Fund invests in both open-end and closed-end funds. Response: The Registrant notes that investing in other funds is not an element of the Fund’s principal investment strategy and will delete the disclosure referenced by the Staff. 11. Comment: The Staff noted that the Registrant states that the Fund may have significant exposure to securities of issuers tied economically to the United States, and requested that the Registrant clarify supplementally if this disclosure is intended to relate to Fund investments in securities of non-U.S. issuers and/or countries. Response: The Registrant notes that investing in securities of non-U.S. issuers or countries is not an element of the Fund’s principal investment strategy and will delete the disclosure referenced by the Staff. The Registrant notes supplementally that the Fund expects to have significant exposure to securities of U.S. issuers from time to time. 12. Comment: The Staff noted that the Registrant states that the Fund may hold cash or other short-term investments to provide the Fund flexibility to meet redemptions and expenses and to readjust its portfolio holdings. The Staff requested that the Registrant revise the disclosure to clarify how short-term investments are an element of the Fund’s principal investment strategy, or to omit such disclosure from the principal investment strategies section. 3 Response: The Registrant notes that investing in short-term investments is not an element of the Fund’s principal investment strategy and will delete the disclosure referenced by the Staff. 13. Comment: The Staff requested that the Registrant add language to paragraph two of Item 4 to clarify the weights provided to the Subadviser with the Adviser’s investment selections. Response: The Registrant will revise the disclosure to address the Staff’s comments as follows: The Fund’s Subadviser will purchase or sell securities to implement the Adviser’s investment selections at a time determined appropriate by the Subadviser and in accordance with, but not necessarily in the identical amounts as provided with the Adviser’s investment selections. 14. Comment: The Staff requested that the Registrant add disclosure to clarify what is meant by “impact investors” and “impact investing risk” in the principal investment strategies and principal investment risk disclosure. Response: The Registrant will delete the reference to “impact investors” in the principal investment strategies section and replace the reference to “impact investing risk” with “sustainable investing risk” to address the Staff’s comment. Summary Section – Principal Investment Risks 15. Comment: The Staff notes that Valuation Risk was included as a principal risk of the Fund and requested that the Fund add corresponding disclosure in the principal investment strategies section of the Prospectus with respect to investments in securities that trade in thin or volatile markets or that are valued using fair value methodologies or revise the risk disclosure as applicable. Response: The Registrant notes that the Fund does not invest in securities that trade in thin or volatile markets or that are valued using fair value methodologies as a principal investment strategy. The Registrant further notes that the disclosure referenced by the Staff addresses risks with respect to the valuation of securities generally, and respectfully submits that such disclosure is relevant to investors. Accordingly, the Registrant respectfully submits that no change to the disclosure is required. 16. Comment: The Staff notes that Liquidity Risk was included as a principal risk of the Fund. The Staff requests that the Fund add corresponding disclosure in the principal investment strategies section of the Prospectus with respect to investments in illiquid securities or revise the risk disclosure as applicable. Response: The Registrant notes that the Fund does not invest in illiquid securities as a principal investment strategy. The Registrant further notes that the disclosure referenced by the Staff addresses risks with respect to the liquidity of securities generally, and respectfully submits that such disclosure is relevant to investors. Accordingly, the Registrant respectfully submits that no change to the disclosure is required. 4 More on the Fund’s Investment Objectives and Strategies 17. Comment: The Staff requested that the Registrant confirm that all principal investment strategies and risks of the Fund that are summarized in Item 9 of the Prospectus and the Statement of Additional Information, as applicable, are summarized in Item 4 of the Prospectus, or revise the disclosure accordingly. Response: The Registrant confirms that all principal investment strategies and risks of the Fund are summarized in Item 4. 18. Comment: The Staff noted that certain of the strategies or risks described in Item 9 merely repeat or are substantially identical to information already included in the summary section, and suggested that the Registrant consider revising the disclosure to remove disclosure that is addressed in Item 4. Response: The Registrant believes that the disclosure is consistent with Form N-1A and respectfully submits that no change to the disclosure is required. 19. Comment: The Staff noted that the Registrant states that, among other criteria, the Fund may invest in securities of companies that “otherwise demonstrate a commitment to sustainable business practices.” The Staff noted its belief that this statement is overly broad and requested that it be deleted Response: The Registrant will delete the disclosure referenced by the Staff. Other Fund Investment Strategies 20. Comment: The Staff noted that the Registrant refers to depositary receipts in the principal investment strategies section of the Prospectus, but also includes disclosure regarding depositary receipts in the other fund investment strategies section of the Prospectus. The Staff requested that the Registrant confirm if investing in depositary receipts is an element of the Fund’s principal investment strategy and to revise the disclosure accordingly. Response: The Registrant confirms that investing in depositary receipts is not an element of the Fund’s principal investment strategy and will revise the disclosure regarding the Fund’s principal investment strategies accordingly. 21. Comment: The Staff requested that the Registrant revise the disclosure in the Prospectus regarding securities lending to explain that the cost of engaging in securities lending are not disclosed in the Fee Table, to state the maximum amount in which the fund may engage in securities lending, expressed as a percentage of total assets, and to include such disclosure in the principal investment strategies section if securities lending is a principal investment strategy of the Fund. The Staff also requested that the Registrant disclose, if true, that the Fund bears the entire risk of loss for any re-invested collateral received in connection with securities lending and, with respect to proxy voting, that the Fund may be unable to recall securities in time to exercise voting rights 5 Response: The Registrant notes that it does not currently engage in securities lending. The Registrant will delete the disclosure referenced by the Staff from the Prospectus and revise the disclosure regarding securities lending in the Statement of Additional Information to address the Staff’s comments, as follows: Loans of Securities Consistent with applicable regulatory policies, including those of the Board of Governors of the Federal Reserve System and the SEC, the Fund may make loans of its securities to brokers, dealers, or other financial institutions, provided that (a) the loan is secured continuously by collateral, consisting of securities, cash, or cash equivalents, which is marked to market daily to ensure that each loan is fully collateralized, at all times, (b) the Fund may at any time call the loan and obtain the return of the securities loaned within three business days, (c) the Fund will receive any interest or dividends paid on the securities loaned, and (d) the aggregate market value of securities loaned will not at any time exceed 30% of the total assets of the Fund. The Fund reserves the right to recall loaned securities so that it may exercise voting rights on loaned securities according to the Fund’s Proxy Voting Policy and Procedures. The Fund will earn income for lending its securities either in the form of fees received from the borrower of the securities or in connection with the investment of cash collateral in short-term money market instruments. The Fund will continue to have market risk and other risks associated with owning the securities on loan, as well as the risks associated with the investment of the cash collateral received in connection with the loan. Loans of securities involve a risk that the borrower may fail to return the securities or may fail to provide additional collateral, and the risk that the Fund is unable to recall a security in time to exercise voting rights or sell the security. Where the collateral received is cash, the cash will be invested and the Fund will be entitled to a share of the income earned on the investment, but will also be subject to investment risk on the collateral an