SEC Company Response from DOMINI INVESTMENT TRUST (CIK 0000851680) — Oct 29, 2020
DOMINI INVESTMENT TRUST (CIK 0000851680)
Date: Oct. 29, 2020 · CIK: 0000851680 · Accession: 0001193125-20-280621
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File numbers found in text: 811-05823
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CORRESP 1 filename1.htm Domini International Opportunities Fund Domini Impact Investments LLC 180 Maiden Lane, Suite 1302 New York, NY 10038-4925 October 29, 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 follow-up comments received from Ms. Kimberly Browning of the Staff of the Securities and Exchange Commission (the “Commission”) on October 21 and October 26, 2020 regarding Post-Effective Amendment No. 75 (the “Amendment”) to the Registration Statement on Form N-1A of Domini Investment Trust (the “Registrant”), with respect to its series, the Domini International Opportunities Fund (the “Fund”). Following are the Staff’s comments and the Registrant’s responses thereto. 1. Comment: The Staff noted that the Registrant indicated in its response to the Staff’s initial comments that the Fund does not intend to invest in foreign currencies as a principal investment strategy. In light of the Fund’s focus on investments in securities of companies located outside of the U.S. and Canada, the Staff requested that the Registrant clarify the currencies in which the Fund’s investments are denominated and the related risks, or explain how exposure to foreign currencies are not a principal investment strategy and principal risk. Response: As set forth in Appendix A hereto, the Registrant will revise the investment strategy disclosure in Item 4 and Item 9 of the Prospectus to include a statement that “the Fund may invest in securities denominated in U.S. dollars, other major reserve currencies, such as the euro, yen and pound sterling, and currencies of other countries in which it can invest. To the extent that the Fund has significant exposure to securities of companies tied economically to a particular country or countries (including Japan, the United Kingdom and France), it generally will have corresponding exposure to the currency of such countries (including the yen, pound sterling and euro).” As noted in response to Comment 4 below, the Registrant will also include a currency risk factor in Item 4 and Item 9. www.domini.com | info@domini.com | Tel: 212-217-1100 | Fax: 212-217-1101 | Investor Services: 1-800-582-6757 180 Maiden Lane, Suite 1302 | New York, NY 10038-4925 | DSIL Investment Services LLC, Distributor Domini Impact Investments LLC October 29, 2020 Page 2 2. Comment: The Staff requested that the Registrant revise Item 4 and Item 9 to clarify that ESG factors are applied to all of the investment selections made by the Adviser, and to clarify whether ESG is the exclusive factor considered or one of several factors considered. Response: As set forth in Appendix A hereto, the Registrant will revise Item 4 and Item 9 to state that all of the investment selections made by the Adviser are based on the evaluation of environmental and social factors, and to clarify that the Fund is permitted to invest in companies that are subject to environmental and social factors and also demonstrate a commitment to sustainability solutions. The Registrant will also further clarify the disclosure to indicate that a security will be sold if the Adviser determines that the company is no longer eligible for investment based on the Adviser’s ongoing evaluation of environmental and social factors, and/or the company no longer demonstrates a commitment to sustainability solutions, as applicable. 3. Comment: The Staff suggested that the Registrant revise the first paragraph of the Item 4 investment strategy disclosure to incorporate the statement that the Fund will primarily invest in securities of issuers tied economically to developed market companies throughout the world, other than the U.S. and Canada. Response: As set forth in Appendix A hereto, the Registrant will revise the first paragraph of the Item 4 investment strategy disclosure to incorporate the statement that the Fund will primarily invest in securities of issuers tied economically to developed market companies throughout the world, other than the U.S. and Canada. 4. Comment: The Staff requested that the Registrant confirm supplementally that it has identified in Item 4 and Item 9 each country in which the Fund intends to invest as a principal investment strategy and has included corresponding risk disclosure. The Staff requested that the Registrant confirm that, to the extent that, in the future, the Fund invests in a particular country as a principal investment strategy, it will revise Item 4 and Item 9 to include principal investment strategy and principal risk disclosure with respect to investing in such country, consistent with the requirements of the Federal securities laws. Response: The Registrant confirms that it has identified in Item 4 and Item 9 each country in which the Fund intends to invest as a principal investment strategy and has included corresponding risk disclosure. The Registrant confirms that, to the extent that, in the future, the Fund invests in a particular country as a principal investment strategy, it will revise Item 4 and Item 9 to include principal investment strategy and principal risk disclosure with respect to investing in such country, consistent with the requirements of the Federal securities laws. Domini Impact Investments LLC October 29, 2020 Page 3 5. Comment: The Staff requested that the Registrant revise the Item 4 and Item 9 Country Risk to reconcile the statement in the Country Risk that a large percentage of the Fund’s portfolio may have exposure to a single country, including but not limited to Japan, France and the United Kingdom, with the statement in the Item 4 and Item 9 investment strategy disclosure that, under normal circumstances, the Fund’s investments will be tied economically to at least 10 different countries, other than the U.S. and Canada. The Staff also requested that the Registrant delete the phrase “but not limited to” from the statement in the Country Risk noted above. In addition, the Staff suggested that the Registrant consider including headings identifying the specific countries that are referred to in the Country Risk. Response: The Registrant notes that the Fund may not invest an equal percentage of its assets in each of the 10 or more countries in which it invests. Instead, the Fund may invest a large percentage of its assets in one or more of those 10 or more countries. For this reason, the Registrant states in the Item 4 principal investment strategy disclosure that the Fund may have significant exposure to securities of companies tied economically to Japan, the United Kingdom, or France. To better reconcile the disclosure and address the Staff’s comment, the Registrant will revise the Item 4 and Item 9 Country Risk factor, as set forth in Appendix A hereto, to (a) state that to the extent that the Fund invests from time to time a significant percentage of its assets in issuers tied economically to a particular country or countries, including Japan, the United Kingdom (the “U.K.”) or France, the Fund may be particularly affected by the economic, political, and social conditions in that country; and (b) include sub-headings with respect to the specific identified countries, including Japan, the United Kingdom and France. 6. Comment: The Staff requested that currency risk be presented as a separate risk factor in Item 4 and Item 9 in light of the Fund’s focus on investments in securities of companies located outside of the U.S. and Canada. Response: The Registrant will include the following currency risk factor as set forth in Appendix A hereto as a separate risk factor in Item 4 and Item 9: “Currency Risk. Fluctuations between the U.S. dollar and foreign currency exchange rates could negatively affect the value of the Fund’s investments. This fluctuation can affect both the value of the currencies in which the Fund’s investments are traded or an active investment position. The Fund will benefit when foreign currencies, including the yen, the pound sterling and the euro, strengthen against the dollar and will be hurt when foreign currencies weaken against the dollar. Currency exchange rates can be volatile and are affected by factors such as general economic conditions, the actions of U.S. and foreign governments or central banks, and the imposition of currency controls or restrictions, and speculation. Devaluation of a currency by a country’s government or banking authority also will have a significant impact on the value of any investments denominated in that currency. Currency markets generally are not as regulated as securities markets, may be riskier than other types of investments and may increase the volatility of the Fund.” Domini Impact Investments LLC October 29, 2020 Page 4 Please call the undersigned at 212-217-1114 with any questions. Sincerely, /s/ Megan L. Dunphy Megan L. Dunphy General Counsel Domini Impact Investments LLC October 29, 2020 Page 5 Appendix A Principal investment strategies: The Fund may invest in equity securities issued by companies of any market capitalization located throughout the world. For purposes of the Fund’s investment policies, equity securities include common stocks, warrants, rights, and preferred shares. Under normal circumstances, the Fund primarily invests in securities of mid-and large-capitalization companies tied economically to developed market countries throughout the world, other than located outside of the U.S. and Canada. Under normal circumstances, the Fund’s investments will be and its investments will be tied economically to at least 10 different countries, other than the U.S. Domini Impact Investments LLC (the “Adviser”), the Fund’s adviser, seeks to identify investment opportunities for the Fund that create positive environmental and social outcomes for people and the planet while seeking competitive financial returns (“Impact Investing”). All of the Iinvestment selections are made by the Adviser are based on the evaluation of environmental and social factors including the core business in which a company engages and/or how a company treats its key stakeholders, such as its customers, employees, suppliers, ecosystems, local, national and global communities, and investors (“environmental and social factors”). In addition, theThe Fund is permitted, but not required, to will invest in companies that are subject to environmental and social factors and alsoin companies that demonstrate a commitment to sustainability solutions. The Adviser will consider a company to demonstrate a commitment to sustainability solutions if, based on the Adviser’s fundamental analysis, the company provides, invests in or creates products or services that help: accelerate the transition to a low-carbon future, contribute to the development of sustainable communities, ensure access to clean water, support more sustainable food systems, promote societal health and well-being, broaden financial inclusion, or bridge the digital divide and/or expand access to economic opportunity. A security will be sold if the Adviser determines that the company is no longer eligible for investment based on the Adviser’s ongoing evaluation of environmental and social factors, and/or the company no longer demonstrates a commitment to sustainability solutions, as applicable. The Fund will primarily invest in securities of issuers tied economically to developed market companies throughout the world, other than the U.S. and Canada. The Fund may have significant exposure to securities of companies tied economically to Japan, the United Kingdom, orand France. The Fund may invest in securities denominated in U.S. dollars, other major reserve currencies, such as the euro, yen and pound sterling, and currencies of other countries in which it can invest. To the extent that the Fund has significant exposure to securities of companies tied economically to a particular country or countries (including Japan, the United Kingdom and France), it generally will have corresponding exposure to the currency of such countries (including the yen, pound sterling and euro). The Fund also may have significant exposure to securities of companies in the financial, industrial, consumer discretionary, and health care sectors. The Fund may have significant exposure to any region, country or sector at any time. SSGA Funds Management, Inc., (the “Subadviser”), 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. Principal risks: Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly in the short and long term. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. You may lose all or part of your investment in the Fund or your investment may not perform as well as other similar investments. There is no guarantee that the Fund’s investment objective will be achieved. The following is a summary description of certain risks of investing in the Fund. Each risk summarized below is a principal risk of investing in the Fund and different risks may be more significant at different times depending on market conditions or other factors. Domini Impact Investments LLC October 29, 2020 Page 6 • Foreign Investing Risk. Investments in foreign regions or in securities of issuers with significant exposure to foreign markets may be more volatile and less liquid than U.S. investments due to adverse political, social, and economic developments, such as nationalization or expropriation of assets, imposition of currency controls or restrictions, confiscatory taxation, terrorism and political or financial instability; regulatory differences such as accounting, auditing, and financial reporting standards and practices; natural disasters; and the degree of government oversight and supervision. Less information may be publicly available regarding foreign issuers. Foreign investing risk also involves the risk of negative foreign currency rate fluctuations, which may cause the value of securities denominated in such foreign currency (or other instruments through which the Fund has exposure to foreign currencies) to decline in value. Currency exchange rates may fluctuate significantly over short periods of time. These risks may be more pronounced in connection with the Fund’s investments in securities of issuers located in emerging countries. • Geographic Focus Risk. To the extent that the Fund invests from time to time a significant portion of its assets in issuers organized or located in a particular country or geographic region, the Fund may be particularly affected by adverse securities markets, exchange rates and social, political, regulatory or economic events which may occur in those countries or regions. • Country Risk. The Fund expects to diversify its investments among issuers with significant exposure to various countries throughout the world. To the extent that the Fund invests from time to time but, a largea significant percentage of the Fund’s portfolio may have exposure toits assets in issuers tied economically to a particularsingle country or countries, including but not limited to Japan, France and the United Kingdom (the “U.K.”) or France. Significant exposure to a particularsingle country would increase the risk that, the Fund may be particularly affected by the economic, political, and social conditions in that country will have a significant impac