485APOS 1 file001.htm POST-EFFECTIVE AMENDMENT


     As filed with the Securities and Exchange Commission on June 10, 2005.


                                                     Registration Nos. 33-29180
                                                                       811-5823

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    FORM N-1A

             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
                         POST-EFFECTIVE AMENDMENT NO. 27

                                       and

         REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
                                AMENDMENT NO. 29

                         DOMINI SOCIAL INVESTMENT TRUST
               (Exact Name of Registrant as Specified in Charter)

                536 Broadway, 7th Floor, New York, New York 10012
                    (Address of Principal Executive Offices)

        Registrant's Telephone Number, including Area Code: 212-217-1100

                                  Amy L. Domini
                          Domini Social Investments LLC
                             536 Broadway, 7th Floor
                            New York, New York 10012
                     (Name and Address of Agent for Service)

                                    Copy To:
                              Roger P. Joseph, Esq.
                              Bingham McCutchen LLP
                               150 Federal Street
                           Boston, Massachusetts 02110



It is proposed that this filing will become effective on September 1, 2005,
pursuant to paragraph (a)(2) of Rule 485.

*This filing relates to shares of the Trust's series Domini European Social
Equity Fund.

Domini Social Index Portfolio has also executed this registration statement.

PROSPECTUS 2005
DOMINI EUROPEAN SOCIAL EQUITY FUND(sm)

2005

[DOMINI LOGO]

Investing For Good(SM)

[GRAPHIC OMITTED]

As with all mutual funds, the Securities and Exchange Commission has not judged
whether this fund is a good investment or whether the information in this
prospectus is truthful and complete. Anyone who indicates otherwise is
committing a crime.

TABLE OF CONTENTS

THE FUND AT A GLANCE
Investment Objective..............................................
Primary Investment Strategies.....................................
Primary Risks.....................................................
Past Performance..................................................
Fees and Expenses.................................................

MORE ABOUT THE FUND
Socially Responsible Investing....................................
Additional Investment Strategies, Risk, and Portfolio
Holdings Information..............................................
Who Manages the Fund?.............................................
The Fund's Distribution Plan......................................

SHAREHOLDER MANUAL....................................................... A-1
Information about buying, selling, and exchanging Investor shares
of the Fund, how Fund shares are valued, Fund distributions, and
the tax consequences of an investment in the Fund.

FINANCIAL HIGHLIGHTS..................................................... B-1

FOR ADDITIONAL INFORMATION Back cover

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The Fund at a Glance

INVESTMENT OBJECTIVE
The Domini European Social Equity Fund's objective is to seek to provide its
shareholders with long-term total return. The Fund seeks its objective by
investing primarily in stocks of European companies that meet the Fund's social
and environmental standards. The Fund pursues its investment objective by
investing its assets in the Domini European Social Equity Trust (the "Trust"),
another registered mutual fund with the same investment objective and policies.
For more information, please refer to "More About the Fund - Additional
Investment Strategies, Risk and Portfolio Holdings Information."

PRIMARY INVESTMENT STRATEGIES
The Domini European Social Equity Fund (the Fund) invests in stocks of companies
that meet a comprehensive set of social and environmental standards applied by
Domini Social Investments LLC (Domini or the Manager). The Fund may invest in
companies of any capitalization but under normal market conditions will invest
primarily in mid- to large- capitalization companies. There is no requirement
that every security that pass Domini's social and environmental standards be
owned by the Fund.

Subject to Domini's social and environmental standards, the Fund's submanager
will seek to add value using a diversified quantitative stock selection
approach, while managing risk through portfolio construction.. The Fund's
submanager will seek to invest in stocks it believes are undervalued by the
market and whose technical and fundamental attributes are attractive. The Fund
seeks to diversify its investments among developed and emerging market
countries.

The Fund has a non-fundamental policy to invest, under normal circumstances, at
least 80% of its assets in equity securities and related investments of European
companies. For purposes of this prospectus, European companies include (1)
companies organized or domiciled within a European country; (2) companies having
at least 50% of their assets in, or deriving 50% or more of their revenues or
profits from, a European country; (3) European governments or supranational
organizations and agencies or underlying instrumentalities of European
governments or supranational organizations; and (4) issuers whose economic
fortunes and risks are otherwise linked with a European market (as determined by
the Fund's submanager). While the Fund's submanager expects that most of the
securities held by the Fund will be traded in European securities markets, some
could be traded outside the region. The Fund will give you 60 days' prior notice
if it changes this 80% policy.

The Fund seeks to hold the stocks of corporations that the Manager determines on
balance contribute positively to the creation of a wealthy and healthy society.
Corporations can make such positive contributions not only through their
innovations and efficiencies in providing products and services, but also
through strong corporate governance and communications with their stockowners,
investments in their employees, the adoption of business practices that preserve
and enhance the environment, and sensitivity to labor and other human rights
issues.

The Fund seeks to avoid securities and obligations of corporations that the
Manager determines derive significant revenues from the manufacture of tobacco
products or alcoholic beverages, derive significant revenues from gambling
enterprises, or have a significant direct ownership

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share in, operate, or design, nuclear power plants. The Fund also seeks to avoid
investment in firearms manufacturers and major military contractors.

The Manager reserves the right to alter these standards, or to add new standards
at any time without shareholder approval. For additional information about the
standards used for evaluating companies, please see "More about the Fund -
Socially Responsible Investing."

PRIMARY RISKS
o GENERAL. There can be no guarantee that the Fund will be able to achieve its
investment objective. The investment objective of the Fund may be changed
without the approval of the Fund's shareholders, but shareholders will be given
notice at least 30 days before any change is implemented. The Manager currently
has no intention to change the Fund's investment objective.

o STOCK MARKET RISK. The Fund's total return, like the stock market in general,
will fluctuate widely. You could lose money by investing in the Fund over short
or long periods of time. An investment in the Fund is not a bank deposit and is
not insured or guaranteed.

o FOREIGN INVESTING RISK. Investing in European securities may represent a
greater degree of risk than investing in U.S. securities due to political,
social, and economic developments abroad, such as political upheaval or
financial troubles. Additionally, there is risk resulting from the differences
between the regulations to which U.S. and European issuers and markets are
subject, such as accounting, auditing, and financial reporting standards and
practices, and the degree of government oversight and supervision. These factors
can make foreign investments more volatile and potentially less liquid than U.S.
investments. In addition, foreign markets can perform differently from the U.S.
market.

o CURRENCY RISK. Fluctuations between the U.S. dollar and foreign currencies
could negatively affect the value of the Fund's investments in the event of an
unfavorable change in the currency exchange rates.

o COUNTRY RISK. Although the Fund expects to diversify its investments
primarily among various European countries, it may hold a large number of
securities in a single country. If the Fund concentrates its investments in a
particular country, it assumes the risk that economic, political, and social
conditions in that country will have a significant impact on Fund performance.

o GEOGRAPHIC CONCENTRATION RISK. The Fund will be largely invested in companies
based in Europe. Market changes or other factors affecting the region, including
political instability and unpredictable economic conditions, could have a
significant impact on the Fund due to its regional concentration.

o MID- TO LARGE-CAPITALIZATION COMPANIES. Under normal market conditions, the
Fund will invest primarily in the stocks of mid- to large-capitalization
companies based in Europe. Mid-cap and large-cap stocks tend to go through
cycles when they do better, or worse, than other asset classes and each other or
the stock market overall. The performance of your investment will generally
follow these market trends.

o EMERGING MARKETS RISK. The securities markets of Eastern European and other
emerging countries are less liquid, are especially subject to greater price
volatility, have smaller market capitalizations, have less government regulation
and are not subject to as extensive and frequent accounting, financial and other
reporting requirements as the securities markets of more developed countries.
Further, investment in equity securities of issuers located in

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emerging countries involves risk of loss resulting from problems in share
registration and custody and substantial economic and political disruptions. The
Fund may also utilize derivative instruments, such as equity linked securities,
to gain exposure to certain emerging markets, but not as a principal investment
strategy. These risks are not normally associated with investments in more
developed countries.

o SOCIALLY RESPONSIBLE INVESTING. The Fund's portfolio is subject to multiple
social and environmental standards. As a result, Fund management may pass up
opportunities to buy certain securities when it is otherwise advantageous to do
so, or may sell certain securities for social or environmental reasons when it
is otherwise disadvantageous to do so. If the Manager determines that a security
held by the Fund no longer meets Domini's social and environmental standards, it
will be removed from the Fund's portfolio within 90 days after such
determination, under normal circumstances.

PAST PERFORMANCE

The Fund is newly created and does not yet have any operating history or
performance information.

- 5 -

FEES AND EXPENSES

The table below describes the fees and expenses that you would pay if you buy
and hold shares of the Fund.*

SHAREHOLDER FEES
(fees paid directly by you)
Sales Charge (Load) Imposed on Purchases: None
Deferred Sales Charge (Load): None
Redemption Fee+ (as a percentage of amount redeemed, if applicable): 2.00%**
Exchange Fee: None

ANNUAL FUND OPERATING EXPENSES
(expenses deducted from the Fund's assets)
Management Fees: 0.75%
Distribution (12b-1) Fees: 0.25%
Other Expenses
Administrative Services and Sponsorship fee: 0.50%
Other Expenses***: 0.64%
Total Annual Fund Operating Expenses: 2.14%
Fee Waiver++: 0.54%
NET EXPENSES: 1.60%

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* The table and the following example reflect the aggregate expenses of the Fund
and the Domini European Social Equity Trust, the underlying portfolio in which
the Fund invests.

** In order to discourage use of the Fund for market timing, an early redemption
fee is charged on sales or exchanges of shares made less than 90 days after
settlement of purchase or acquisition through exchange, with certain exceptions.

***Other Expenses are estimated for the Fund's current fiscal year end.

+ If you wish to receive your redemption proceeds by bank wire, there is a $10
wire service fee. For additional information, please refer to the Shareholder
Manual.

++ Until [ ] 2006, Domini has contractually agreed to waive certain fees
and/or reimburse certain expenses, including management fees, so that the Fund's
expenses, net of waivers and reimbursements, will not exceed, on a per annum
basis, 1.60% of the average Fund's daily net assets, absent an earlier
modification by the Board of Trustees, which oversees the Fund.

- 6 -

EXAMPLE

The example below is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. It illustrates the
hypothetical expenses that you would incur if you invest $10,000 in the Fund for
the time periods indicated and then sell all of your shares at the end of each
period. This example assumes that the Fund provides a return of 5% a year, all
dividends and distributions are reinvested, operating expenses remain the same
for the time period indicated, and the fee waiver reflected in the fee table is
in effect for the one-year time period. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:

-------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------
$163* $618 $1,100 $2,430
-------------------------------------------------------------------------------

* For redemptions less than 90 days after settlement of purchase or acquisition
through exchange, the cost of investing could be up to $207 higher due to the
early redemption fee. For additional information, please refer to the
Shareholder Manual.

This example should not be considered to represent actual expenses or
performance for the past or the future. Actual future expenses may be higher or
lower than those shown.

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QUICK GUIDE TO IMPORTANT INFORMATION

MINIMUM INITIAL INVESTMENT: $2,500 ($1,500 for IRAs and Automatic Investment
Plans) ($1,000 for UGMA/UTMA Accounts and Coverdell Education Savings Accounts)
INVESTMENT ADVISER: Domini Social Investments LLC
COMMENCEMENT OF OPERATIONS: _________, 2005
DIVIDENDS: Distributed semi-annually, usually in June and December
CAPITAL GAINS: Distributed annually, usually in December
CUSIP NUMBER: [ ___ ]

WEBSITE: www.domini.com
SHAREHOLDER SERVICES: 1-800-582-6757
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More About the Fund

Socially Responsible Investing

In addition to traditional financial considerations, socially responsible
investors factor social and environmental standards into their investment
decisions. They believe that this helps to encourage greater corporate
responsibility, and may also help to identify companies that have enlightened
management able to serve the challenges of long-term broad-based wealth creation
in society. In the course of seeking financial gain for themselves, socially
responsible investors look for opportunities to use their investments to create
a more sustainable world.

Typically, socially responsible investors seek to invest in corporations and
other issuers with positive qualities, such as a responsible environmental
record or strong employee relations. They seek to avoid companies that
manufacture products, or employ practices, that they believe have harmful
effects on society or the natural environment.

At Domini, in addition to applying social and environmental standards to all of
our investments, we work with companies to improve their social and
environmental performance through dialogue with corporations on these issues
when appropriate. In addition, we vote company proxies in a manner consistent
with our social and environmental standards.

The Social and Environmental
Standards Applied to the Fund

The Domini European Social Equity Fund provides shareholders with exposure to a
core portfolio of companies based in Europe selected according to a balancing of
multiple social and environmental standards. The Manager focuses on the concept
of long-term, broad-based, societal wealth creation as a primary theme driving
its assessment of corporations. In order to judge the suitability of a company
for investment by the Fund, the Manager evaluates the overall potential of the
company to create broad-based societal wealth, balancing positive and negative
factors as they relate to the company's core business and the vision and
strategy of management on social and environmental issues. The companies that
the meet the social and environmental standards of the Manager must then meet
financial performance criteria of the submanager.

Although European companies, investors, and other stakeholders share many of the
social and environmental concerns that arise in the United States, differences
exist between U.S. and European companies and between U.S. and European
stakeholders. An international socially responsible mutual fund is best managed
with an understanding and respect for these cultural and regulatory differences.
The Manager will work to appropriately reflect European social and environmental
concerns, while continuing to address the concerns of U.S. investors.

The Fund applies multiple social and environmental standards to all of its
investments. In addition, the Fund seeks to use its position as a shareholder to
raise issues of social and environmental performance with corporate management.

- 8 -

The Fund seeks to avoid securities and obligations of corporations that derive
significant revenues from the manufacture of tobacco products or alcoholic
beverages, derive significant revenues from gambling enterprises, or have a
significant direct ownership share in, operate or design, nuclear power plants.
The Fund also seeks to avoid investment in firearms manufacturers and major
military contractors.

Once a company has passed the set of exclusionary standards described above, it
is subject to a range of qualitative factors designed to measure the quality of
its relations with its various stakeholders, including employees, consumers,
communities, and the natural environment.

Domini considers the following factors when evaluating companies for possible
investment and may exclude companies based on poor performance in these areas:

o CORPORATE GOVERNANCE

o COMMUNITY AND CORPORATE CITIZENSHIP

o EMPLOYEE RELATIONS AND DIVERSITY

o ENVIRONMENT AND SUSTAINABILITY

o LABOR AND OTHER HUMAN RIGHTS

o PRODUCT AND CONSUMER ISSUES

The social and environmental standards used to select the Fund's investments are
designed to reflect many of those widely used by socially responsible investors
in the U.S. and Europe. However, you may find that some companies in which the
Fund invests do not reflect your social or environmental standards. You may wish
to review a list of the companies in the Fund's portfolio to decide if they meet
your personal standards. To obtain portfolio holdings information, please refer
to "Additional Investment Strategies, Risk, and Portfolio Holdings Information."

No company is a perfect model of social or environmental responsibility. Each
year, the Fund will seek to use its voice as a shareholder to raise issues of
social and environmental performance with corporate management. Various
barriers, including regulatory, geographic, and language barriers, may impair
the Fund's ability to use its influence effectively.

Domini may, at its discretion, choose to apply additional standards, or to
modify the application of the standards listed above, to the Fund, at any time,
without shareholder approval. This will impact investments held by the Fund, and
may cause certain companies or industries to be dropped from or added to the
Fund's portfolio. In addition, Domini reserves the right to vary the application
of these standards to the Fund, depending, for example, on such factors as asset
class, market capitalization, investment style, access to quality data on an
issuer's social or environmental performance, and cultural factors that may vary
by region or country.

- 9 -

Additional Investment
Strategies, Risk, and
Portfolio Holdings
Information

TEMPORARY INVESTMENTS

The Fund may temporarily use a different investment strategy for defensive
purposes in response to market conditions, economic factors, or other
occurrences. This may adversely affect the Fund's performance. You should note,
however, that the Fund may decide not to use a different investment strategy for
defensive purposes in the future -- even in the event of deteriorating market
conditions.

CASH RESERVES

Although the Fund seeks to be fully invested at all times, it keeps a small
percentage of its assets in cash or cash equivalents. These reserves provide the
Fund with flexibility to meet redemptions and expenses, and to readjust its
portfolio holdings. The Fund may hold these cash reserves uninvested or may
invest them in high-quality, short-term debt securities, bankers' acceptances,
commercial paper, certificates of deposit, bank deposits, repurchase agreements,
or certificates of deposit at banks or other financial institutions focused on
sustainability or community investing. The issuers of these securities must
satisfy the Fund's social standards as applied by the Manager.

USE OF OPTIONS, FUTURES AND OTHER DERIVATIVES

Although it is not a principal investment strategy, the Fund may purchase and
sell options, enter into futures contracts and/or utilize other derivative
contracts and securities with respect to stocks, bonds, groups of securities
(such as financial indices), foreign currencies, interest rates or inflation
indices. These techniques, which are incidental to the Fund's primary strategy,
permit the Fund to gain exposure to a particular security, group of securities,
interest rate or index, and thereby have the potential for the Fund to earn
returns that are similar to those which would be earned by direct investments in
those securities or instruments.

These techniques are also used to manage risk by hedging the Fund's portfolio
investments. Hedging techniques may not always be available to the Fund, and it
may not always be feasible for the Fund to use hedging techniques even when they
are available.

Derivatives have risks, however. If the issuer of the derivative instrument does
not pay the amount due, the Fund could lose money on the instrument. In
addition, the underlying security or investment on which the derivative is
based, or the derivative itself, may not perform the way the submanager
expected. As a result, the use of these techniques may result in losses to the
Fund or increase volatility in the Fund's performance. Some derivatives are
sophisticated instruments that typically involve a small investment of cash
relative to the magnitude of risks

- 10 -

assumed. Derivative securities are subject to market risk, which could be
significant for those that have a leveraging effect.

The Fund may not invest more than 15% of its net assets in illiquid securities,
which may be difficult to value properly and may involve greater risks than
liquid securities. Illiquid securities include those legally restricted as to
resale, and may include commercial paper issued pursuant to Section 4(2) of the
Securities Act of 1933 and securities eligible for resale pursuant to Rule 144A
thereunder. Certain Section 4(2) and Rule 144A securities may be treated as
liquid securities if the investment adviser determines that such treatment is
warranted. Even if determined to be liquid, holdings of these securities may
increase the level of Fund illiquidity if eligible buyers become uninterested in
purchasing them.

INVESTMENT STRUCTURE

The Fund invests its assets in another registered investment company that has
the same investment objective as the Fund and invests in securities using the
strategies described in this prospectus. The Fund may withdraw its investment
from its underlying portfolio at any time if the Board of Trustees of the Fund
determines that it is in the best interest of the Fund's shareholders to do so.
The Board of Trustees would then consider what action might be taken, including
investing all of the Fund's assets in another similarly structured portfolio
having the same investment objective as the Fund, or hiring an investment
advisor to manage the Fund's assets. There is currently no intention to change
the Fund's investment structure. References to the Fund in this prospectus
include its underlying portfolio, unless the context requires otherwise.

TURNOVER RATE

The annual portfolio turnover rate for the Domini European Social Equity Trust,
in which the Domini European Social Equity Fund invests, is expected to be
within a range of 70 - 110%. The sale of securities may produce capital gains,
which when distributed are taxable to the Fund's shareholders. Active trading
may result in increased transaction costs.

PORTFOLIO HOLDINGS INFORMATION

A description of the Fund's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information and at www.domini.com. Currently, disclosure
of the Fund's holdings is required to be made quarterly within 60 days of the
end of each fiscal quarter (January 31, April 30, July 31, and October 31) in
the Annual Report and Semi-Annual Report to Fund shareholders and in the
Quarterly Report on Form N-Q. The Annual and Semi-Annual Reports will be
available by mail from Domini. To obtain copies of Annual and Semi-Annual
Reports, free of charge (when available), call 1-800-582-6757. Each Annual,
Semi-Annual and Quarterly Report will also be available online at www.domini.com
and on the EDGAR database on the SEC's website, www.sec.gov. The Fund is newly
created and has not yet issued any Annual, Semi-Annual, or Quarterly Reports.

In addition, Domini's website contains information about the Fund's portfolio
holdings, including, as applicable, the security description, the ticker symbol,
the security identification number, price per share, par value, market value,
and percentage of total investments, in each case updated as of the end of the
most recent calendar quarter (i.e., each March 31, June 30, September 30, and
December 31). This information is provided on the website with a lag of at least
30 days and will be available until updated for the next calendar quarter. To
find this information, please visit www.domini.com, click on "Domini Funds" at
the top of the page, and select the Fund to retrieve its portfolio holdings
information.

- 11 -

ADDITIONAL INFORMATION

The Fund is not required to use every investment technique or strategy listed in
this prospectus or in the Statement of Additional Information. For additional
information about the Fund's investment strategies and risks, the Fund's
Statement of Additional Information is available, free of charge, from Domini.

Who Manages the Fund?

INVESTMENT MANAGER

Domini Social Investments LLC (Domini or the Manager), 536 Broadway, 7th floor,
New York, NY 10012, has been managing money since November 1997. As of June 30,
2005, Domini has more than $1.5 billion in assets for investors who are working
to create positive change in society by using social and environmental standards
in their investment decisions. Domini provides the Fund with research,
investment supervisory services, overall operational support, and administrative
services to the Fund. Domini sets the social and environmental standards for the
Fund and determines which stocks meet these standards.

The investment research team at Domini is comprised of Steven Lydenberg, Jeff
MacDonagh, and Kimberly Gladman.

Steven Lydenberg, CFA, is chief investment officer of Domini Social Investments
and vice president of the Domini Funds. He has been active in social research
since 1975. Mr. Lydenberg was a founder of KLD Research & Analytics, Inc.,
served as its research director from 1990 to 2001, and served on KLD's Domini
400 Social IndexSM Committee from 2001 through March 31, 2005. From 1987 to
1989, he was an associate with Franklin Research and Development Corporation
(now known as Trillium Asset Management). For 12 years he worked with the
Council on Economic Priorities, ultimately as director of corporate
accountability research. Mr. Lydenberg holds a B.A. in English from Columbia
College and an M.F.A. in theater arts from Cornell University, and holds the
Chartered Financial Analyst designation.

Jeff MacDonagh, CFA, is the senior research analyst responsible for the
application of the Fund's social and environmental standards. Mr. MacDonagh was
an Assistant Portfolio Manager at Loring, Wolcott & Coolidge Fiduciary Advisors
from 2003 through June 2005. His responsibilities included portfolio management,
screening for social investments, proxy voting, and community development
investing. From 2000 to 2003, he was a social investment researcher at KLD
Research & Analytics, Inc. Mr. MacDonagh graduated from University of Wisconsin
- Madison with degrees in Mathematics, Physics, and Philosophy, and holds
Master's degrees in Technology Policy and Environmental Planning from MIT, and
the Chartered Financial Analyst designation.

Kimberly Gladman, Ph.D. is the associate research analyst responsible for the
application of the Fund's social and environmental standards. Dr. Gladman
previously worked in Domini's Shareholder Advocacy department, where she engaged
companies on a range of social and environmental issues through shareholder
resolution filings and direct dialogue. Before joining Domini in 2001, she had
an academic career, focused on interdisciplinary teaching and research. She
holds degrees in Literature from Yale and NYU.

- 12 -

INVESTMENT SUBMANAGER

Wellington Management Company, LLP (Wellington or the Submanager), with its main
offices at 75 State Street, Boston, MA 02109, provides investment submanagement
services to the Fund pursuant to a Submanagement Agreement with Domini.
Wellington had approximately $[ ] billion in assets under management as of June
30, 2005, including $[ ] billion in assets for which Wellington acts as a
submanager. Wellington and its affiliated companies managed over $[ ] billion in
socially responsible assets as of June 30, 2005.

The Submanager buys and sells stocks that Domini determines meet the Fund's
social and environmental standards using a quantitative stock selection approach
within a risk-managed portfolio construction framework. The quantitative stock
selection approach incorporates a diverse set of strategies based on fundamental
and technical inputs. The models incorporate value and momentum as primary
investment themes.

Sylvia S. Han, CFA, is the portfolio manager responsible for the management of
the Fund. Doris T. Dwyer provides portfolio management and securities analysis
services to the Fund. Ms. Han joined Wellington Management as an investment
professional in 1990. Ms. Dwyer joined Wellington Management as an investment
professional in 1998. The Statement of Additional Information contains
additional information about the compensation of these investment professionals,
other accounts managed by these investment professionals, and their ownership of
the securities of the Fund.

For the services Domini and the Submanager provide to the Fund during the fiscal
year ended July 31, 2006, it is estimated that they will receive a total of
0.71% of the average daily net assets of the Fund, after waivers.

The Fund's Distribution Plan

DSIL Investment Services LLC, a wholly owned subsidiary of Domini, is the
distributor of the Fund's shares. The Fund has adopted a Rule 12b-1 plan that
allows the Fund to pay its distributor on an annual basis for the sale and
distribution of its shares and for services provided to shareholders. These
annual distribution and service fees may equal up to 0.25% of the average daily
net assets of the Fund's Investor shares. Because distribution and service fees
are paid out of the assets of the Fund on an ongoing basis, over time the fee
will increase the cost of your investment and may cost you more than paying
other types of sales charges. For more information about the Fund's distribution
plan, see the expense table in "The Fund at a Glance" and the Statement of
Additional Information.

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Shareholder Manual

This section provides you with information about buying, selling, and exchanging
shares of the Fund, how Fund shares are valued, Fund distributions, and the tax
consequences of an investment in the Fund.

TABLE OF CONTENTS

How to Open an Account.....................................................
Types of Accounts......................................................
Buying, Selling, and Exchanging Shares.....................................
Automatic Transaction Plans................................................
Additional Information on Selling Shares...................................
How the Price of Your Shares Is Determined.................................
How can I find out the NAV of my shares?...............................
How do you determine what price I will get when I buy shares?..........
How do you determine what price I will get when I sell shares?.........
How is the value of securities held by the Fund determined?............
Fund Statements and Reports................................................
Dividends and Capital Gains................................................
Taxes......................................................................
Anti-Money Laundering......................................................
Rights Reserved by the Fund................................................

FOR MORE INFORMATION

Call our Shareholder Services department toll-free at 1-800-582-6757 or visit
our website at WWW.DOMINI.COM for more information on the following:

o Investing in the Fund

o Your account

o The daily share price of your shares

o Socially responsible investing

Shareholder Services representatives are available to take your call business
days, 9 am - 5 pm, Eastern Time.

You may make transactions, review account information, and obtain the share
price for your shares 24 hours a day, 7 days a week, by using our automated
telephone system or visiting our website.

IMPORTANT INFORMATION ABOUT PROCEDURES
FOR OPENING A NEW ACCOUNT

To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify,
and record information that identifies each person who opens an account.

WHAT THIS MEANS FOR YOU: WHEN YOU OPEN AN ACCOUNT, WE WILL ASK FOR YOUR NAME,
ADDRESS, AND OTHER INFORMATION THAT WILL ALLOW US TO IDENTIFY YOU. WE MAY ALSO
ASK TO SEE YOUR DRIVER'S LICENSE OR OTHER IDENTIFYING DOCUMENTS.

- A-1 -

Shareholder Manual

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QUICK REFERENCE - DOMINI EUROPEAN SOCIAL EQUITY FUND

ACCOUNT STATEMENTS are mailed quarterly.

TRADE CONFIRMATIONS are sent after purchases (except Automatic Investment Plan
purchases) and redemptions.

ANNUAL AND SEMI-ANNUAL REPORTS are mailed in late September and March,
respectively, and are available online at www.domini.com.

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- A-2 -

Shareholder Manual

How to Open an Account

1. Read this prospectus (and please keep it for future reference).

2. Review "Types of Accounts" and decide which type is appropriate for you.

3. Decide how much you want to invest.

The minimum initial investment in the Fund is:

o $2,500 for regular accounts ($1,500 if using our Automatic
Investment Plan)

o $1,500 for Retirement Accounts (our Automatic Investment Plan
is also available for Retirement Accounts)

o $1,000 for UGMA/UTMA Accounts (our Automatic Investment Plan is
also available for UGMA/UTMA Accounts)

o $1,000 for Coverdell Education Savings Accounts (our Automatic
Investment Plan is also available for Coverdell Education
Savings Accounts)

The minimum to buy additional shares of the Fund is:

o $50 for accounts using our Automatic Investment Plan

o $100 for all other accounts

4. Decide whether to make your initial purchase by mail or bank wire. Follow
the simple instructions under "Buying, Selling, and Exchanging Shares."

Be sure to completely fill out and sign the Account Application appropriate for
the account type you have selected. If you need assistance, please call
1-800-582-6757, business days, 9 am - 5 pm, Eastern Time.

--------------------------------------------------------------------------------

WHAT IS "GOOD ORDER"?

Purchase, exchange, and sale requests must be in "good order" to be accepted by
the Fund. To be in "good order" a request must include:

o The Fund name

o The account number

o The funds for the purchase by check or by wire or the amount of the
transaction (in dollars or shares) for the exchange or sale

o Name, address, and other information that will allow us to identify you

o The signatures of all owners exactly as registered on the account (for
redemption or exchange requests by mail)

o A Medallion Signature Guarantee, if required (see "Additional Information
on Selling Shares" below)

o Any supporting legal documentation that may be required

- A-3 -

Shareholder Manual

TYPES OF ACCOUNTS

You may invest in the Fund through the following types of accounts:
<TABLE>
---------------------------------------------------------------------------------------------------------------------

INDIVIDUAL AND JOINT ACCOUNTS Invest as an individual or with one or more people. If you are opening a
(NONRETIREMENT) joint account, joint tenancy with rights of survivorship will be assumed
unless other ownership is noted on your Account Application. You may also
open an account to invest assets held in an existing personal trust.
---------------------------------------------------------------------------------------------------------------------
INDIVIDUAL RETIREMENT ACCOUNTS You may open an account to fund a traditional IRA or a Roth IRA. There
(IRAS) is a $10 annual maintenance fee per shareholder.
---------------------------------------------------------------------------------------------------------------------
UNIFORM GIFTS/TRANSFERS TO These accounts are maintained by a custodian you choose (which may be you)
MINORS ACT (UGMA/UTMA) on behalf of a minor. They provide a simple method for giving irrevocable
ACCOUNTS gifts to children without having to establish a formal trust.
---------------------------------------------------------------------------------------------------------------------
COVERDELL EDUCATION SAVINGS These accounts may be established on behalf of any child with a Social
ACCOUNTS (FORMERLY EDUCATION Security number and are used to save for higher education expenses. There
IRAS) is a $10 annual maintenance fee per shareholder.
---------------------------------------------------------------------------------------------------------------------
EMPLOYER-SPONSORED RETIREMENT If offered by your employer, you may be able to open an account as part of
PLANS an employer-sponsored retirement plan, such as a 401(k) plan, 403(b) plan,
SEP-IRA, or SIMPLE IRA.
---------------------------------------------------------------------------------------------------------------------
FOR AN ORGANIZATION You may open an account for a trust, corporation, partnership, endowment,
foundation, or other entity.
---------------------------------------------------------------------------------------------------------------------
</TABLE>

You may download or request the application you need for the account type you
have selected at www.domini.com or by calling 1-800-582-6757.

Automatic transaction plans are available for all account types. Please see
"Buying, Selling, and Exchanging Shares" for more information.

- A-4 -

Shareholder Manual

Buying, Selling, and Exchanging Shares

The following chart describes all the ways you can buy, sell, and exchange
Investor shares of the Fund. If you need any additional information or
assistance, please call 1-800-582-6757.

METHOD INSTRUCTIONS
--------------------------------------------------------------------------------
MAIL(4) Domini Funds
By Mail you may: P.O. Box 9785
Providence, RI 02940-9785
BUY To buy shares:
SELL
EXCHANGE o For your initial investment, complete an Account
Application and mail it with your check.

o For subsequent investments, fill out the investment
slip included with trade confirmations or account
statements, or send a note with your check
indicating the Fund name, the account number, and
the dollar amount.

o Your check must be made payable to "Domini Funds."

o Always include your account number on your check.
Note: For our mutual protection, the Fund cannot
accept cashier's o checks, money orders, checks made
payable to third parties, starter checks, or
travelers checks.

o Please note that if you purchase shares by check and
you sell those shares soon after purchase, your
redemption proceeds will not be sent to you until
your check clears, which may take up to 8 business
days after purchase.

To sell shares:

You must include the following information or your
request may be returned:

o The Fund name

o The Fund account number

o The dollar amount or number of shares

o The signatures of all authorized signers exactly as
they appear on the initial application

o A Medallion Signature Guarantee, if required (see
"Additional Information on Selling Shares" below)

- A-5 -

Shareholder Manual

METHOD INSTRUCTIONS
--------------------------------------------------------------------------------
MAIL(4) To exchange shares:
(Continued)
You must include the following information or your
request may be returned:

o The Fund names

o The Fund account numbers

o The dollar amount or number of shares

o The signatures of all authorized signers exactly as
they appear on the initial application
--------------------------------------------------------------------------------
ONLINE(1),(3),(4) Current shareholders may buy, sell, and exchange shares
online 24 hours a day by following these steps:

Online you may: o Visit www.domini.com.

BUY o Click the "Account Access" button.
SELL
EXCHANGE o Enter your Social Security number and Personal
Identification Number (PIN) in the appropriate
fields.

o The "Account List" will provide you with an overview
of your accounts and transaction processing options.

o Online help is available at each screen.
--------------------------------------------------------------------------------
PHONE (1),(2),(3),(4) Automated:

By Phone you may: Current shareholders may buy, sell, and exchange shares
using our automated Celephone account access system 24
BUY hours a day by following these steps:
SELL
EXCHANGE o Dial 1-800-582-6757.

o Select "1" for automated account access.

o Select "1" again for account information.

o Enter your account number followed by the pound
sign (#).

o Enter your Personal Identification Number (PIN).

o Press "2" to process a transaction.

o At any time you may press "8" to return to the
previous menu or "9" to return to the main menu.

Shareholder Services:

Current shareholders may buy, sell, and exchange shares
by calling 1-800-582-6757, business days, 9 am - 5 pm,
Eastern Time, by following these steps:

o Dial 1-800-582-6757.

o Select "2" to speak with a Shareholder Services
representative.
--------------------------------------------------------------------------------

- A-6 -

Shareholder Manual

METHOD INSTRUCTIONS
--------------------------------------------------------------------------------
BANK WIRE(4) To buy shares:

By Bank Wire you may: For your initial investment, complete an Account
Application and mail it to Domini Funds at the address
shown above for purchasing shares by mail.

BUY New accounts, call 1-800-582-6757 to obtain an account
SELL number before wiring funds.

You must include the following information in your wire
transfer or your money may be returned uninvested:

o Bank: PNC Bank

o ABA: 031000053

o Acct Name: Domini Social Investments

o Acct #: 86-0690-5468

o FBO: Fund Name, Account Name, and Account
Number at Domini Funds

To sell shares:

You may request receipt of redemption proceeds by wire
online, in writing, or by speaking with a Shareholder
Services representative at 1-800-582-6757.

To establish wire redemption privileges on a new
account, fill out the appropriate area on the Account
Application and attach a voided check.

If you would like to establish wire redemption
privileges on an existing account, you must submit a
written request that contains the following information:

o Bank name and address

o ABA/routing number

o Account name and number

o Account type (checking, money market, or savings)

A Medallion Signature Guarantee must be included on the
letter (see "Additional Information on Selling Shares"
below). There is a $10 wire transfer fee (deducted
directly from sale proceeds) and a $1,000 minimum wire
amount. The wire transfer fee and the minimum wire
amount may be waived for certain individuals and
institutions at the Manager's discretion.
--------------------------------------------------------------------------------

1 First-time users will need to call 1-800-582-6757, business days, 9 am - 5
pm, Eastern Time, to obtain a PIN and to set up ACH (Automated Clearing
House) privileges, which are necessary to use this service.

2 Neither the Fund nor its transfer agent or distributor will be liable for
any loss, liability, cost, or expense for acting on telephone instructions
believed to be genuine. The Fund will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine. Please
contact the Fund if you wish to suspend telephone redemption privileges.

3 Current shareholders may place ACH transactions online or through the
automated telephone account access system. Your ACH transaction will be
considered in good order on the date the payment for shares is received by
the Fund if received by 4 pm. This may take up to 48 hours.

- A-7 -

Shareholder Manual

4 Redemptions or exchanges of shares made less than 90 days after settlement
of purchase or acquisition through exchange will be subject to a redemption
fee equal to 2% of the amount redeemed or exchanged, subject to certain
exceptions. The redemption fee will be deducted from your proceeds and
returned to the Fund. If you acquired shares on different days, the "first
in, first out" (FIFO) method is used to determine the holding period. This
means that the shares you held the longest will be redeemed or exchanged
first for purposes of determining whether the redemption fee applies. This
fee ensures that portfolio trading costs are borne by investors making the
transaction and not by shareholders remaining in the Fund. Please see
"Market Timing and Redemption Fee" below for additional information.

You may exchange all or a portion of your Fund shares into shares of the same
class of any other available Domini Fund. You may also deposit redemption
proceeds into the Domini Money Market Account.(R)

--------------------------------------------------------------------------------
DOMINI MONEY MARKET ACCOUNT(R)

The Domini Money Market Account (DMMA) offered through ShoreBank is an
FDIC-insured (up to certain limits) interest-bearing account with direct
community development benefits. You may open and maintain a DMMA at no charge,
and take advantage of free check-writing (with a $500 minimum per check) and
easy transfers by telephone to and from your Domini Fund account. A DMMA
investment is subject to certain terms and conditions. Please call
1-800-582-6757 or visit www.domini.com for more information. The rate of
return for the DMMA will vary. The Domini Funds are not insured by the FDIC.
--------------------------------------------------------------------------------

For more information on transferring assets from another mutual fund family,
please call 1-800-582-6757.

- A-8 -

Shareholder Manual

Automatic Transaction Plans

Automatic transaction plans are available for your convenience to purchase or
to sell shares at specified intervals without having to manually initiate each
transaction.

AUTOMATIC INVESTMENT PLAN

Our Automatic Investment Plan allows you to have specified amounts
automatically deducted from your bank account or Domini Money Market Account
and invested in the Fund in monthly, quarterly, semi-annual, or annual
intervals. This service can be established for your account at any time. Call
1-800-582-6757 for more information.

This service may take up to four weeks to begin. Also, due to the varying
amounts of money at regular procedures to prepare, process, and forward the bank
withdrawal information to intervals (monthly, quarterly, the Fund, there may be
periodic delays in posting the funds to your account. and so on) over a long
period

SYSTEMATIC WITHDRAWAL PLAN

If you own shares of the Fund with an aggregate value of $10,000 or more, you
averaging is that an investor may establish a Systematic Withdrawal Plan under
which shares will be sold, at buys more shares at lower net asset value, in the
amount and for the periods specified (minimum $100 per prices, and fewer shares
at payment). Shares redeemed under the plan will not be subject to a redemption
higher prices. As a result, an fee (if applicable). investor ends up paying an

There is no charge to participate in the Systematic Withdrawal Plan. Call
1-800-582-6757 for more information.

--------------------------------------------------------------------------------

THE ADVANTAGE OF DOLLAR-COST AVERAGING

One thing is certain: Markets fluctuate. Even experienced investors often find
it impossible to accurately time a market, and to "buy low and sell high."

Dollar-cost averaging is an investment strategy designed to avoid the pitfalls
of market timing by investing equal amounts of money at regular intervals
(monthly, quarterly, and so on) over a long period of time.

The advantage of dollar-cost averaging is that an investor buys more shares at
lower prices, and fewer shares at higher prices. As a result, an investor ends
up paying an average price per share over a period of time.

The key to dollar-cost averaging is to stick with it for the long term, through
periods of rising and falling markets. Of course, no strategy can guarantee a
profit, or protect your investment from losses. Strictly adhering to a long-term
dollar-cost averaging strategy, however, is a good way to avoid the mistake of
investing all of your money when the market is high.

To facilitate dollar-cost averaging you may purchase Fund shares at regular
intervals through the Fund's Automatic Investment Plan.

- A-9 -

Shareholder Manual

Additional Information on Selling Shares

SIGNATURE GUARANTEES

You are required to obtain a Medallion Signature Guarantee from a participating
institution for any of the following:

o Sales (redemptions) exceeding $100,000

o Written sales requests, regardless of amount, made within 30 days following
any changes in account registration

o Redemptions made to a third party or to an address other than the address
for which the account is registered (unless already established on your
account)

The following types of institutions may participate in the Medallion Signature
Guarantee program:

o Banks

o Savings institutions

o Credit unions

o Broker-dealers

o Other guarantors acceptable to the Fund and its transfer agent

The Fund and its transfer agent cannot accept guarantees from notaries public or
organizations that do not provide reimbursement in the case of fraud. There are
different Medallion limits based on the amount of money being redeemed. Please
ensure you obtain the proper Medallion. The Fund or its transfer agent may, at
its option, request further documentation or waive certain documentation
requirements prior to accepting requests for redemptions.

UNUSUAL CIRCUMSTANCES

The Fund reserves the right to revise or terminate the telephone or the online
redemption privilege at any time, without notice. In the event that the Fund
suspends telephone or online redemption privileges, or if you have difficulty
getting through on the phone or on the internet, you will still be able to
redeem your shares through the other methods listed above.

- A-10 -

Shareholder Manual

The Fund may postpone payment of redemption proceeds under either of these
circumstances:

o During any period in which the New York Stock Exchange is closed or in which
trading is restricted

o If the SEC determines that an emergency exists

LARGE REDEMPTIONS

It is important that you call the Fund before you redeem any amount in excess of
$500,000. We must consider the interests of all Fund shareholders and so reserve
the right to delay delivery of your redemption proceeds -- up to 7 days -- if
the amount to be redeemed will disrupt the Fund's operation or performance.

The Fund reserves the right to pay part or all of the redemption proceeds in
kind, i.e., in securities, rather than cash. If payment is made in kind, you may
incur brokerage commissions if you elect to sell the securities for cash.

In an effort to protect the Fund from the possible adverse effects of a
substantial redemption in a large account, as a matter of general policy no
shareholder or group of shareholders controlled by the same person or group of
persons will knowingly be permitted to purchase in excess of 5% of the
outstanding shares of the Fund, except upon approval of the Manager.

MARKET TIMING AND REDEMPTION FEE

The Fund is a long-term investment. Market timers, who buy and sell rapidly in
the hopes of making a short-term profit, drive up costs for all other
shareholders, including long-term shareholders who do not generate these costs.
Market timers can disrupt portfolio investment strategies, for example by
causing a portfolio manager to sell securities to meet a redemption request when
the manager might otherwise have continued to hold the securities, and may
increase the Fund's transaction costs, such as brokerage expenses. DO NOT INVEST
WITH THE FUND IF YOU ARE A MARKET TIMER.

The Board of Trustees has approved a redemption fee to discourage the Fund from
being used as a vehicle for frequent short-term shareholder trading. The Fund
will deduct a redemption fee of 2% from any redemption or exchange proceeds if
you sell or exchange shares after holding them less than 90 days. The redemption
fee will be deducted from your redemption or exchange proceeds and returned to
the Fund. If you acquired shares on different days, the "first in, first out"
(FIFO) method is used to determine the holding period. This means that the
shares you hold the longest will be redeemed or exchanged first for purposes of
determining whether the redemption fee applies.

The redemption fee is not imposed on:

o Shares acquired as a result of reinvestment of dividends or distributions

o Shares purchased, exchanged, or redeemed by means of a preapproved Automatic
Investment Plan or Systematic Withdrawal Plan arrangement

o Shares redeemed or exchanged by omnibus accounts maintained by
intermediaries that do not have the systematic capability to process the
redemption fee

o Shares redeemed or exchanged through certain qualified retirement plans that
do not have the systematic capability to process the redemption fee

- A-11 -

o Shares redeemed following the death of a shareholder

o Shares redeemed on the initiation of the Fund (e.g., for failure to meet
account minimums)

The Fund's Board of Trustees has also approved methods for the fair valuation of
securities held in the Fund's portfolio in an effort to deter market timing
activities. Please see "How the Price of Your Shares is Determined -- How is the
value of securities held by the Fund determined?" for more information.

In addition, the Fund's Board of Trustees has adopted policies and procedures
that are designed to discourage and detect excessive trading and market timing
activities. These policies and procedures provide that Domini reviews
transactions in excess of specific limits each day in order to monitor trading
activity. If Domini suspects a pattern of market timing, we reject the
transaction, close the account, and/or suspend or terminate the broker if
possible to prevent any future activity. The Fund does not maintain any
arrangements to permit excessive trading or market timing activities.

Omnibus account arrangements permit financial intermediaries such as brokers and
retirement plan administrators to aggregate their clients' transactions. In
these circumstances, the Fund does not know the identity of the shareholders in
the omnibus account and must rely on systems of the financial intermediary or
retirement plan to charge the redemption fee. In addition, the Fund may not be
able to review transactions of any particular investor if that investor holds
Fund shares through an omnibus account. The Fund encourages intermediaries that
maintain omnibus accounts and retirement plan administrators to develop systems
to impose mutual fund redemption fees and improve transparency. Because the Fund
may not be able to detect all instances of market timing, particularly in
omnibus accounts, there is no guarantee that the Fund will be able to deter or
eliminate market timing or excessive trading of Fund shares.

---------------------------------------------------------------

IMPORTANT: Once a redemption order is placed, the
transaction CANNOT be cancelled by the shareholder.

---------------------------------------------------------------

- A-12 -

Shareholder Manual

How the Price of Your Shares
Is Determined

The price of your shares is the net asset value (NAV) per share of the Fund next
determined after receipt of your request in good order. The net asset value per
share of the Fund is determined at the close of regular trading on the New York
Stock Exchange, normally 4 pm, Eastern Time, on each day the Exchange is open
for trading. This calculation is made by deducting the amount of the Fund's
liabilities (debts) from the value of its assets, and dividing the difference by
the number of outstanding shares of the Fund.

--------------------------------------------------------------------------------
Total Assets - Total Liabilities
Net Asset Value (NAV) per Share = --------------------------------
Number of Shares Outstanding
--------------------------------------------------------------------------------

To calculate the value of your investment, simply multiply the NAV per share by
the number of shares of the Fund you own.

HOW CAN I FIND OUT THE NAV OF MY SHARES?

You may obtain the NAV for your shares 24 hours a day ONLINE at www.domini.com
or BY PHONE by calling 1-800-582-6757 from a touch-tone phone and accessing our
automated telephone system.

QUARTERLY STATEMENTS: You will also receive this information quarterly, on your
account statement.

HOW DO YOU DETERMINE WHAT PRICE I WILL GET
WHEN I BUY SHARES?

If your order is received by the Fund by 4 pm, Eastern Time, in good order, the
price you will receive will be the NAV per share determined at the end of that
day. For current shareholders who place ACH transactions online or through the
automated telephone account access system, please note that your ACH transaction
will be considered in good order on the date the payment for shares is received
by the Fund. This may take up to 48 hours.

The Fund may stop offering its shares for sale at any time and may reject any
order for the purchase of its shares.

HOW DO YOU DETERMINE WHAT PRICE I WILL GET
WHEN I SELL SHARES?

When you sell shares, you will receive the next share price that is calculated
after your sale request is received by the Fund in good order. See "What Is
`Good Order'?" on page [A-3] of this prospectus. Please note that redemption
requests received after the share price has been calculated for the Fund,
normally 4 pm, Eastern Time, will be processed at the share price that is
calculated by the Fund on the next business day the Fund's share price is
calculated.

The Fund will normally pay for the shares on the next day the New York Stock
Exchange is open for trading, but in any event within 7 days. Sales of shares
made less than 90 days after settlement of a purchase or acquisition through
exchange will be subject to an early redemption

- A-13 -

fee, with certain exceptions. (See "Additional Information on Selling Shares --
Market Timing and Redemption Fee" above for more information.) If you purchased
the shares you are selling by check, the Fund may delay the payment of the
redemption proceeds until the check has cleared, which may take up to 8 business
days from the purchase date. The Fund may pay by check or, if you have completed
the appropriate box on the Account Application, by wire transfer.

Access to the automated telephone system and online processing may be limited
during periods of peak demand, market volatility, system upgrades or
maintenance, or for other reasons.

HOW IS THE VALUE OF SECURITIES HELD BY THE FUND
DETERMINED?
The Fund typically uses market prices to value securities. However, when a
market price is not available, or when the Fund has reason to believe that the
price does not represent market realities, the Fund will value securities
instead by using methods approved by the Fund's Board of Trustees. When the Fund
uses fair value pricing, the Fund's value for a security may be different from
quoted market values.

Because the Fund invests primarily in the stocks of companies based in Europe,
it is expected that there may be circumstances in which the Fund will use fair
value pricing -- for example, when significant events which may have an impact
on the market price of securities occur after the local closing time of a
European exchange but prior to the time the Fund calculates its NAV.

Please note that the Fund holds securities that are primarily listed on foreign
exchanges that may trade on weekends or other days when the Fund does not price
its shares. Therefore, the value of the securities held by the Fund may change
on days when shareholders will not be able to purchase or sell the Fund's
shares.

Each short-term obligation (with a remaining maturity of less than 60 days) is
valued at amortized cost, which constitutes fair value as determined by the
Board of Trustees.

Fund Statements and Reports

HOUSEHOLDING

To keep the Fund's costs as low as possible, and to conserve paper usage, where
practical we attempt to eliminate duplicate mailings to the same address. When
we find that two or more Fund shareholders have the same last name and address,
rather than send a separate report to each shareholder, we will send just one
report to that address. If your household is receiving separate mailings that
you feel are unnecessary, or if you want us to send separate statements, notify
our Shareholder Services department at 1-800-582-6757.

CONFIRMATION STATEMENTS

Statements confirming the trade date and the amount of your transaction are sent
each time you buy, sell, or exchange shares. Confirmation statements are not
sent for reinvested dividends or for purchases made through automatic investment
plans. Always verify your transactions by reviewing your confirmation statement
carefully for accuracy. Please report any discrepancies promptly to our
Shareholder Services department at 1-800-582-6757.

- A-14 -

FUND FINANCIAL REPORTS

The Fund's Annual Report is mailed in September, and the Fund's Semi-Annual
Report is mailed in March. These reports include information about the Fund's
performance, as well as a complete listing of the Fund's holdings. You may
choose to receive these reports by email rather than hard copy by signing up for
e-delivery at www.domini.com. The Fund's most recent reports will be available
online at www.domini.com. The Fund is newly created and has not yet issued any
Annual or Semi-Annual Reports.

TAX STATEMENTS

Each year we will send you a statement reporting the previous year's dividend
and capital gains distributions, proceeds from the sale of shares, and
distributions from IRAs or other retirement accounts as required by the IRS.
These are generally mailed in January.

Dividends and Capital Gains

The Fund pays to its shareholders substantially all of its net income in the
form of dividends. Dividends from net income (excluding capital gains), if any,
are typically paid by the Fund semi-annually (usually in June and December). Any
capital gain dividends are distributed annually in December.

You may elect to receive dividends either by check or in additional shares.
Unless you choose to receive your dividends by check, all dividends will be
reinvested in additional shares. In either case, dividends are normally taxable
to you in the manner described below.

Taxes

This discussion of taxes is for general information only. You should consult
your own tax adviser about your particular situation and the status of your
account under state and local laws.

- A-15 -

Shareholder Manual

TAXABILITY OF DIVIDENDS

Each year the Fund will mail you a report of your dividends for the prior year
and how they are treated for federal tax purposes. You will normally have to pay
federal income taxes on the dividends you receive from the Fund, whether you
take the dividends in cash or reinvest them in additional shares. Noncorporate
shareholders will be taxed at reduced rates on distributions designated by the
Fund as "qualified dividend income." Dividends designated by the Fund as capital
gain dividends are taxable as long-term capital gains. Other dividends are
generally taxable as ordinary income. Some dividends paid in January may be
taxable to you as if they had been paid the previous December.

BUYING A DIVIDEND

Dividends paid by the Fund will reduce the Fund's net asset value per share. As
a result, if you buy shares just before the Fund pays a dividend, you may pay
the full price for the shares and then effectively receive a portion of the
purchase price back as a dividend on which you may need to pay tax.

TAXABILITY OF TRANSACTIONS

Any time you sell or exchange shares held in a nonretirement account, it is
considered a taxable event for you. Depending on the purchase price and the sale
price of the shares you sell or exchange, you may have a gain or a loss on the
transaction. You are responsible for any tax liabilities generated by your
transactions.

--------------------------------------------------------------------------------
IMPORTANT: By law, you must certify that the Social Security or taxpayer
identification number you provide the Fund is correct and that you are not
otherwise subject to backup withholding for failing to report income to
the IRS. The Fund may be required to withhold (and pay over to the IRS for
your credit) taxes, at the rate of 28%, from certain distributions and
proceeds it pays you if you fail to provide this information or otherwise
violate IRS regulations.
--------------------------------------------------------------------------------

- A-16 -

Shareholder Manual

Anti-Money Laundering

As part of our required anti-money laundering program, we may ask you to provide
various identification documents or other information when you open or make
certain significant changes to your account. Until you provide the information
or documents required, you may not be able to open an account or effect
additional transactions.

Rights Reserved by the Fund

The Fund and its agents reserve the following rights:

o To waive or change investment minimums

o To refuse any purchase or exchange order

o To stop selling shares at any time

o To change, revoke, or suspend the exchange privilege ]

o To suspend telephone or online transactions

o To cancel any purchase or exchange order (including, but not limited to,
orders that involve, in the Manager's opinion, excessive trading, market
timing, fraud, or 5% ownership) upon notice to the shareholder

o To change the terms and conditions of the Systematic Withdrawal Plan

o To implement additional policies designed to prevent excessive trading

o To adopt policies requiring redemption of shares in certain circumstances

o To freeze any account and suspend account services when notice has been
received of a dispute between the registered or beneficial account owners or
there is a reason to believe a fraudulent transaction may occur

o To otherwise modify the conditions of purchase and any services at any time

o To act on instructions believed to be genuine

o To notify shareholders and redeem accounts (other than retirement and
Automatic Investment Plan accounts) with a value of less than $1,500

These actions will be taken when, in the sole discretion of management, they are
deemed to be in the best interest of the Fund.

- A-17 -

Financial Highlights

The Fund is newly created and has not yet issued financial highlights.

Domini Social Investments,(R) Domini Money Market Account,(R) The Way You Invest
Matters,(R) and domini.com(R) are registered service marks of Domini Social
Investments LLC.

FOR ADDITIONAL INFORMATION

ANNUAL AND SEMI-ANNUAL REPORTS

Additional information about the Fund's investments will be available in the
Fund's Annual and Semi-Annual Reports to shareholders. These reports will
include a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year or the
last six months, as applicable, as well as a complete listing of the Fund's
holdings. They will be available by mail from Domini Social Investments, or
online at www.domini.com. The Fund is newly created and has not yet issued any
Annual or Semi-Annual Reports.

STATEMENT OF ADDITIONAL INFORMATION
The Fund's Statement of Additional Information contains more detailed
information about the Fund and its management and operations. The Statement of
Additional Information is incorporated by reference into this prospectus and is
legally part of it. It is available by mail from Domini Social Investments, or
online at www.domini.com.

PROXY VOTING AND SOCIALLY RESPONSIBLE INVESTING
Visit www.domini.com for more complete information about Domini Social
Investments' proxy voting policies and procedures, and to learn more about
socially responsible investing.

CONTACT DOMINI
To make inquiries about the Fund or obtain copies of any of the above free of
charge, call 1-800-582-6757 or write to:

Domini Social Investments
P.O. Box 9785
Providence, RI 02940-9785

SECURITIES AND EXCHANGE COMMISSION
Information about the Fund (including the Statement of Additional Information)
is available on the EDGAR database on the SEC's website, www.sec.gov. Copies may
be obtained upon payment of a duplicating fee by electronic request at the
following email address: publicinfo@sec.gov, or by writing the Public Reference
Section of the SEC, Washington, DC 20549-0102. You may also visit the SEC's
Public Reference Room in Washington, D.C. For more information about the Public
Reference Room you may call the SEC at 1-202-942-8090.

File No. 811-5823



                       STATEMENT OF ADDITIONAL INFORMATION

                                             , 2005
                                   ----------

                       DOMINI EUROPEAN SOCIAL EQUITY FUND
                   a series of DOMINI SOCIAL INVESTMENT TRUST


TABLE OF CONTENTS                                                           PAGE

1.   The Fund..............................................................

2.   Investment Information................................................

3.   Determination of Net Asset Value; Valuation of Portfolio Securities;
     Additional Purchase and Sale Information..............................

4.   Management of the Fund and the Master Fund............................

5.   Independent Registered Public Accounting Firm.........................

6.   Taxation..............................................................

7.   Portfolio Transactions and Brokerage Commissions......................

8.   Description of Shares, Voting Rights, and Liabilities.................

9.   Financial Statements..................................................

Appendix A - Proxy Voting Policies and Procedures..........................  A-1

         This Statement of Additional Information sets forth information which
may be of interest to investors but which is not necessarily included in the
Domini European Social Equity Fund's Prospectus dated _______, 2005, as amended
from time to time. This Statement of Additional Information should be read in
conjunction with the Prospectus. An investor may obtain copies of the Fund's
Prospectus without charge from Domini Social Investments by calling (800)
582-6757 or online at www.domini.com.

         This Statement of Additional Information is NOT a prospectus and is
authorized for distribution to prospective investors only if preceded or
accompanied by an effective prospectus and should be read only in conjunction
with such prospectus.


                                      -2-


                                   1. THE FUND

         The Domini European Social Equity Fund (the "Fund") is a no-load,
diversified, open-end management investment company. The Fund is a series of
shares of beneficial interest of Domini Social Investment Trust (the "Trust"),
which was organized as a business trust under the laws of the Commonwealth of
Massachusetts on June 7, 1989, and commenced operations on June 3, 1991. Prior
to January 20, 2000, the name of the Trust was "Domini Social Equity Fund." The
two classes of shares of the Fund are designated Investor Shares and Class R
Shares. This Statement of Additional Information relates to the Investor Shares.
No Class R Shares are outstanding or being offered as of the date of this
Statement of Additional Information.

         The Fund offers to buy back (redeem) its shares from its shareholders
at any time at net asset value. References in this Statement of Additional
Information to the "Prospectus" are to the current Prospectus of the Fund, as
amended or supplemented from time to time.

         Domini Social Investments LLC ("Domini" or the "Manager") is the Fund's
sponsor and supervises the overall administration of the Fund. The Board of
Trustees provides broad supervision over the affairs of the Fund. Shares of the
Fund are continuously sold by DSIL Investment Services LLC, the Fund's
distributor ("DSILD" or the "Distributor"). An investor should obtain from
Domini, and should read in conjunction with the Prospectus, the materials
describing the procedures under which Fund shares may be purchased and redeemed.

         The Fund seeks to achieve its investment objective by investing all of
its assets in the Domini European Social Equity Trust (the "Master Fund"), a
diversified, open-end management investment company having the same investment
objective as the Fund. The Master Fund is a series of Domini Social Trust. Prior
to _____, 2005, the Domini Social Trust was named the Domini Social Index
Portfolio. The Master Fund seeks to achieve its investment objective by
investing primarily in stocks of companies based in Europe that meet the Master
Fund's social and environmental standards. Domini is the Master Fund's
investment manager. Domini determines which companies meet the Master Fund's
social and environmental standards. Wellington Management Company, LLP
("Wellington" or the "Submanager") is the Master Fund's investment submanager.
Wellington manages the investments of the Master Fund from day-to-day in
accordance with the Master Fund's investment objective and policies. References
to the Fund in this Statement of Additional Information include the Master Fund,
unless the context requires otherwise.


                            2. INVESTMENT INFORMATION

                              INVESTMENT OBJECTIVE

         The Fund's objective is to seek to provide its shareholders with
long-term total return. The Fund seeks its objective by investing primarily in
stocks of European companies that meet the Fund's social and environmental
standards.

         The investment objective of the Fund may be changed without the
approval of the Fund's shareholders, but not without written notice thereof to
shareholders 30 days prior to implementing the change. If there is a change in
the Fund's investment objective, shareholders of the Fund should consider
whether the Fund remains an appropriate investment in light of their financial
positions and needs. The investment objective of the Master Fund may also be
changed without the approval of investors in the Master Fund, but not without
written notice thereof to the investors in the Master Fund (and notice by the


                                      -3-


Fund to its shareholders) 30 days prior to implementing the change. There can,
of course, be no assurance that the investment objective of the Fund or the
Master Fund will be achieved.


                      INFORMATION CONCERNING FUND STRUCTURE

         Unlike other mutual funds which directly acquire and manage their own
portfolio securities, the Fund seeks to achieve its investment objective by
investing all of its investable assets in the Master Fund, a separate registered
investment company with the same investment objective as the Fund. In addition
to selling a beneficial interest to the Fund, the Master Fund may sell
beneficial interests to other mutual funds or institutional investors. Such
investors will invest in the Master Fund on the same terms and conditions as the
Fund and will bear a proportionate share of the Master Fund's expenses. However,
the other investors investing in the Master Fund are not required to sell their
shares at the same public offering price as the Fund due to variations in sales
commissions and other operating expenses. Investors in the Fund should be aware
that differences in sales commissions and operating expenses may result in
differences in returns experienced by investors in the different funds that
invest in the Master Fund. Such differences in returns are also present in other
mutual fund structures. Information concerning other holders of interests in the
Master Fund is available from the Manager at 212-217-1100.

         Smaller funds investing in the Master Fund may be materially affected
by the actions of larger funds investing in the Master Fund. For example, if a
large fund withdraws from the Master Fund, the remaining funds may experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Master Fund may become less diverse, resulting in increased
portfolio risk. This possibility also exists for traditionally structured funds
which have large or institutional investors. Also, funds with a greater pro rata
ownership in the Master Fund could have effective voting control of the
operations of the Master Fund. Subject to exceptions that are not inconsistent
with applicable rules or policies of the Securities and Exchange Commission (the
"SEC"), whenever the Fund is requested to vote on matters pertaining to the
Master Fund, the Fund will hold a meeting of shareholders of the Fund and will
cast all of its votes in the same proportion as the votes of the Fund's
shareholders. Fund shareholders who do not vote will not affect the Fund's votes
at the Master Fund meeting. The percentage of the Fund's votes representing Fund
shareholders not voting will be voted by the Trustees of the Fund in the same
proportion as the Fund shareholders who do, in fact, vote. Certain changes in
the Master Fund's investment objective, policies, or restrictions may require
the Fund to withdraw its interest in the Master Fund. Any such withdrawal could
result in a distribution "in kind" of portfolio securities (as opposed to a cash
distribution) from the Master Fund. If securities are distributed, the Fund
could incur brokerage, tax, or other charges in converting the securities to
cash. In addition, the distribution "in kind" may result in a less diversified
portfolio of investments or adversely affect the liquidity of the Fund.
Notwithstanding the above, there are other potential means for meeting
shareholder redemption requests, such as borrowing.

         The Board of Trustees believes that the aggregate per share expenses of
the Fund and the Master Fund are less than or approximately equal to the
expenses which the Fund would incur if it retained the services of an investment
manager and an investment submanager and invested directly in the types of
securities being held by the Master Fund.

         The Fund may withdraw its investment from the Master Fund at any time
if the Board of Trustees determines that it is in the best interests of the
Fund's shareholders to do so. The Fund may realize taxable income as the result
of receiving a distribution of cash in connection with a withdrawal of its
investment from the Master Fund. In addition, any such withdrawal could result
in a distribution "in kind" of portfolio securities (as opposed to a cash
distribution) from the Master Fund. If securities are distributed, the Fund may
incur brokerage, tax, or other charges in converting the securities to cash. The
Fund may also realize taxable income as the result of receiving an "in kind"
distribution in connection with any such withdrawal or as the result of
contributing securities it receives from the Master Fund to


                                      -4-


another pooled investment entity. Upon any such withdrawal, the Board of
Trustees would consider what action might be taken, including the investment of
all the assets of the Fund in another pooled investment entity having the same
investment objective as the Fund or the retention of an investment adviser to
manage the Fund's assets in accordance with the investment policies described
above with respect to the Master Fund. In the event the Trustees were unable to
find a substitute investment company in which to invest the Fund's assets and
were unable to secure directly the services of an investment manager and
investment submanager, the Trustees would seek to determine the best course of
action.


                               INVESTMENT POLICIES

         The following supplements the information concerning the Fund's
investment policies contained in the Prospectus and should only be read in
conjunction therewith. References to the Master Fund include the Fund, and
references to the Fund include the Master Fund, unless in either case the
context otherwise requires.

FOREIGN SECURITIES AND FOREIGN ISSUERS

         Investing in the securities of foreign issuers involves special
considerations which are not typically associated with investing in the
securities of U.S. issuers. Investments in securities of foreign issuers may
involve risks arising from differences between U.S. and foreign securities
markets, including less volume, much greater price volatility in and illiquidity
of certain foreign securities markets, greater difficulty in determining the
fair value of securities, different trading and settlement practices and less
governmental supervision and regulation, from changes in currency exchange
rates, from high and volatile rates of inflation, from economic, social and
political conditions such as wars, terrorism, civil unrest and uprisings, and
from fluctuating interest rates.

         There may be less publicly-available information about a foreign issuer
than about a U.S. issuer, and foreign issuers may not be subject to the same
accounting, auditing and financial record-keeping standards and requirements as
U.S. issuers. In particular, the assets and profits appearing on the financial
statements of an foreign issuer may not reflect its financial position or
results of operations in the way they would be reflected had the financial
statements been prepared in accordance with U.S. generally accepted accounting
principles. In addition, for an issuer that keeps accounting records in local
currency, inflation accounting rules may require, for both tax and accounting
purposes, that certain assets and liabilities be restated on the issuer's
balance sheet in order to express items in terms of currency of constant
purchasing power. Inflation accounting may indirectly generate losses or
profits. Consequently, financial data may be materially affected by restatements
for inflation and may not accurately reflect the real condition of those issuers
and securities markets. Finally, in the event of a default in any such foreign
obligations, it may be more difficult for the Fund to obtain or enforce a
judgment against the issuers of such obligations.

         Other investment risks include the possible imposition of foreign
withholding taxes on certain amounts of the Fund's income, the possible seizure
or nationalization of foreign assets and the possible establishment of exchange
controls, expropriation, confiscatory taxation, other foreign governmental laws
or restrictions which might affect adversely payments due on securities held by
the Fund, the lack of extensive operating experience of eligible foreign
subcustodians and legal limitations on the ability of the Fund to recover assets
held in custody by a foreign subcustodian in the event of the subcustodian's
bankruptcy.

         In some countries, banks or other financial institutions may constitute
a substantial number of the leading companies or companies with the most
actively traded securities. The 1940 Act limits the Fund's ability to invest in
any equity security of an issuer which, in its most recent fiscal year, derived
more than 15% of its revenues from "securities related activities," as defined
by the rules thereunder. These


                                      -5-


provisions may also restrict the Fund's investments in certain foreign banks and
other financial institutions.

         There generally is less governmental supervision and regulation of
exchanges, brokers and issuers in foreign countries than there is in the United
States. For example, there may be no comparable provisions under certain foreign
laws to insider trading and similar investor protection securities laws that
apply with respect to securities transactions consummated in the United States.
Further, brokerage commissions and other transaction costs on foreign securities
exchanges generally are higher than in the United States.

         Foreign markets have different clearance and settlement procedures, and
in certain markets there have been times when settlements have failed to keep
pace with the volume of securities transactions, making it difficult to conduct
such transactions. Further, satisfactory custodial services for investment
securities may not be available in some countries having smaller, emerging
capital markets, which may result in the Fund incurring additional costs and
delays in transporting such securities outside such countries. Delays in
settlement or other problems could result in periods when assets of the Fund are
uninvested and no return is earned thereon. The inability of the Fund to make
intended security purchases due to settlement problems or the risk of
intermediary counterparty failures could cause the Fund to forego attractive
investment opportunities. The inability to dispose of a portfolio security due
to settlement problems could result either in losses to the Fund due to
subsequent declines in the value of such portfolio security or, if the Fund has
entered into a contract to sell the security, could result in possible liability
to the purchaser.

         Rules adopted under the 1940 Act permit the Fund to maintain its
foreign securities and cash in the custody of certain eligible non-U.S. banks
and securities depositories. Certain banks in foreign countries may not be
"eligible sub-custodians," as defined in the 1940 Act, for the Fund, in which
event the Fund may be precluded from purchasing securities in certain foreign
countries in which it otherwise would invest or which may result in the Fund's
incurring additional costs and delays in providing transportation and custody
services for such securities outside of such countries. The Fund may encounter
difficulties in effecting on a timely basis portfolio transactions with respect
to any securities of issuers held outside their countries. Other banks that are
eligible foreign sub-custodians may be recently organized or otherwise lack
extensive operating experience. In addition, in certain countries there may be
legal restrictions or limitations on the ability of the Fund to recover assets
held in custody by foreign sub-custodians in the event of the bankruptcy of the
sub-custodian.

         Certain of the risks associated with international investments and
investing in smaller capital markets are heightened for investments in emerging
market countries. For example, some of the currencies of emerging market
countries have experienced devaluation relative to the U.S. dollar, and major
adjustments have been made periodically in certain of such currencies. Certain
of such countries face serious exchange constraints. In addition, governments of
many emerging market countries have exercised and continue to exercise
substantial influence over many aspects of the private sector. In certain cases,
the government owns or controls many companies. Accordingly, government actions
in the future could have a significant effect on economic conditions in
developing countries which could affect private sector companies and
consequently, the value of certain securities held in the Fund's portfolio.

         Investment in certain emerging market securities is restricted or
controlled to varying degrees which may at times limit or preclude investment in
certain emerging market securities and increase the costs and expenses of the
Fund. Certain emerging market countries require governmental approval prior to
investments by foreign persons, limit the amount of investment by foreign
persons in a particular issuer, limit the investment by foreign persons only to
a specific class of securities of an issuer that may have less advantageous
rights than other classes, restrict investment opportunities in issuers in
industries deemed important to national interests and/or impose additional taxes
on foreign investors.


                                      -6-


         The manner in which foreign investors may invest in companies in
certain emerging market countries, as well as limitations on such investments,
also may have an adverse impact on the operations of the Fund. For example, the
Fund may be required in some countries to invest initially through a local
broker or other entity and then have the shares purchased re-registered in the
name of the Fund. Re-registration may in some instances not occur on a timely
basis, resulting in a delay during which the Fund may be denied certain of its
rights as an investor.

         Certain emerging market countries may require governmental approval for
the repatriation of investment income, capital or the proceeds of sales of
securities by foreign investors which could adversely affect the Fund. In
addition, if a deterioration occurs in the country's balance of payments, it
could impose temporary restrictions on foreign capital remittances. Investing in
local markets in emerging market countries may require the Fund to adopt special
procedures, seek local government approvals or take other actions, each of which
may involve additional costs to the Fund.

         With respect to investments in certain emerging market countries,
different legal standards may have an adverse impact on the Fund. For example,
while the potential liability of a shareholder in a U.S. corporation with
respect to acts of the corporation is generally limited to the amount of the
shareholder's investment, the notion of limited liability is less clear in
certain emerging market countries. Similarly, the rights of investors in
emerging market companies may be more limited than those of shareholders of U.S.
corporations.

         Certain markets are in only the earliest stages of development. There
is also a high concentration of market capitalization and trading volume in a
small number of issuers representing a limited number of industries, as well as
a high concentration of investors and financial intermediaries. Many of such
markets also may be affected by developments with respect to more established
markets in the region. Brokers in emerging market countries typically are fewer
in number and less capitalized than brokers in the United States. These factors,
combined with the U.S. regulatory requirements for open-end investment companies
and the restrictions on foreign investment, result in potentially fewer
investment opportunities for the Fund and may have an adverse impact on the
investment performance of the Fund.

SUPRANATIONAL OBLIGATIONS

         Supranational entities include international organizations designated
or supported by governmental entities to promote economic reconstruction or
development and international banking institutions and related government
agencies. Examples include the World Bank, the European Investment Bank, the
European Bank for Reconstruction and Development, the Asian Development Bank and
the Inter-American Development Bank. Supranational issued instruments may be
denominated in multi-national currency units. Obligations of the World Bank and
certain other supranational organizations are supported by subscribed but unpaid
commitments of member countries. There is no assurance that these commitments
will be undertaken or complied with in the future.

DEPOSITORY RECEIPTS

         Securities of foreign issuers may be purchased directly or through
depository receipts, such as American Depository Receipts ("ADRs"), European
Depository Receipts ("EDRs") and Global Depository Receipts ("GDRs") or other
securities representing underlying shares of foreign companies. Generally, ADRs,
in registered form, are designed for use in U.S. securities markets and EDRs and
GDRs, in bearer form, are designed for use in European and global securities
markets. ADRs are receipts typically issued by a U.S. bank or trust company
evidencing ownership of the underlying securities. EDRs and GDRs are European
and global receipts, respectively, evidencing a similar arrangement.


                                      -7-


         ADRs, EDRs and GDRs are issued through "sponsored" or "unsponsored"
arrangements. In a sponsored arrangement, the foreign issuer assumes the
obligation to pay some or all of the depository's transaction fees, whereas
under an unsponsored arrangement, the foreign issuer assumes no obligation and
the depository's transaction fees are paid by the holders. In addition, less
information is generally available in the United States about the issuer of an
unsponsored depository receipt as it is for the issuer of a sponsored depository
receipt.

COMMON STOCK

         Common stocks are shares of a corporation or other entity that entitle
the holder to a pro rata share of the profits of the corporation, if any,
without preference over any other shareholder or class of shareholders,
including holders of the entity's preferred stock and other senior equity.
Common stock usually carries with it the right to vote and frequently an
exclusive right to do so. Common stocks do not represent an obligation of the
issuer, and do not offer the degree of protection of debt securities. The
issuance of debt securities or preferred stock by an issuer will create prior
claims which could adversely affect the rights of holders of common stock with
respect to the assets of the issuer upon liquidation or bankruptcy.

PREFERRED STOCK

         Preferred stocks, like common stocks, represent an equity ownership in
an issuer, but generally have a priority claim over common stocks, but not over
debt, with respect to dividend payments and upon the liquidation or bankruptcy
of the issuer. Therefore, preferred stock is subject to the credit risk of the
issuer, but because of its subordinate position to debt obligations of the
issuer, the deterioration of the credit of an issuer is likely to cause greater
decreases in the value of preferred stock than in more senior debt obligations.
The market value of preferred stocks with no conversion rights and fixed
dividend rates, like fixed income securities, tends to move inversely with
interest rates, with the price determined by the dividend rate. However, because
most preferred stocks do not have a fixed maturity date (although they may have
call features giving the issuer the right to call the securities under certain
circumstances or redemption features giving the holder the right to cause the
issuer to repurchase the securities under certain circumstances), these
securities generally will fluctuate more in value when interest rates change
than, for example, debt issued by the same issuer. Some preferred stocks may pay
dividends at an adjustable rate, based on an auction, an index or other formula.
In the absence of credit deterioration, adjustable rate preferred stocks tend to
have less price volatility than fixed rate preferred stocks.

         Unlike common stocks, preferred stocks do not typically have voting
rights. Some preferred stocks have convertible features.

CONVERTIBLE SECURITIES

         Convertible securities are typically preferred stock or bonds that are
convertible into common stock at a specified price or conversion ratio. Because
they have the characteristics of both fixed-income securities and common stock,
convertible securities are sometimes called "hybrid" securities. Convertible
bonds, debentures and notes are debt obligations offering a stated interest
rate; convertible preferred stocks are senior securities of a company offering a
stated dividend rate. Convertible securities will at times be priced in the
market like other fixed income securities - that is, their prices will tend to
rise when interest rates decline and will tend to fall when interest rates rise.
However, because a convertible security provides an option to the holder to
exchange the security for either a specified number of the issuer's common
shares at a stated price per share or the cash value of such common shares, the
security market price will tend to fluctuate in relationship to the price of the
common shares into which it is convertible. Thus, convertible securities will
ordinarily provide opportunities for producing both current income and
longer-term capital appreciation. Because convertible securities are usually
viewed by the


                                      -8-


issuer as future common stock, they are generally subordinated to other senior
securities and therefore are rated one category lower than the issuer's
non-convertible debt obligations or preferred stock.

SMALLER MARKET CAPITALIZATION COMPANIES

         Investments in companies with smaller market capitalizations, including
companies generally considered to be small cap issuers and medium sized
companies, may involve greater risks and volatility than investments in larger
companies. Companies with smaller market capitalizations may be at an earlier
stage of development, may be subject to greater business risks, may have limited
product lines, limited financial resources and less depth in management than
more established companies. In addition, these companies may have difficulty
withstanding competition from larger more established companies in their
industries. The securities of companies with smaller market capitalizations may
be thinly traded (and therefore have to be sold at a discount from current
market prices or sold in small lots over an extended period of time), may be
followed by fewer investment research analysts and may be subject to wider price
swings and thus may create a greater chance of loss than investing in securities
of larger capitalization companies. In addition, transaction costs in smaller
capitalization stocks may be higher than those of larger capitalization
companies.

WARRANTS

         Warrants are securities which permit, but do not obligate, their holder
to subscribe for other securities. Warrants are subject to the same market risks
as stocks, but may be more volatile in price. Warrants do not carry the right to
dividends or voting rights with respect to their underlying securities, and they
do not represent any rights in assets of the issuer. An investment in warrants
may be considered speculative. In addition, the value of a warrant does not
necessarily change with the value of the underlying securities and a warrant
ceases to have value if it is not exercised prior to its expiration date.

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 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. Loans of
securities involve a risk that the borrower may fail to return the securities or
may fail to provide additional collateral.

         In connection with lending securities, the Fund may pay reasonable
finders, administrative, and custodial fees. No such fees will be paid to any
person if it or any of its affiliates is affiliated with the Fund, Domini, or
the Submanager.

SHORT SALES

         Short sales of securities are transactions in which the Fund sells a
security it does not own in anticipation of a decline in the market value of the
security. To complete such a transaction, the Fund must borrow the security to
make delivery to the buyer. The Fund then is obligated to replace the security



                                      -9-


borrowed by purchasing it at the market price at or prior to the time of
replacement. The price at such time may be more or less than the price at which
the security was sold by the Fund. Until the security is replaced, the Fund is
required to replay the lender any dividends or interest paid during the period
of the loan. To borrow the security, the Fund also may be required to pay a
premium, which would increase the cost of the security sold short. A portion of
the net proceeds of the short sale may be retained by the broker (or by the
Fund's custodian in a special custody account) to the extent necessary to meet
margin sales. The Fund will incur a loss as a result of the short sale if the
price of the security increases between the date of the short sale and the date
on which the Fund replaces the borrowed security. The amount of any gain will be
decreased, and the amount of any loss increased, by the amount of premiums,
dividends, interest or expenses the fund may be required to pay in connection
with a short sale. An increase in the value of a security sold short by the Fund
over the price which it was sold short will result in a loss to the Fund, and
there can be no assurance that the Fund will be able to close out the position
at any particular time or at an acceptable price. Where short sales are not
against the box, losses may be unlimited.

         The Fund may only enter into a short sale if it is "against the box".
If the Fund enters into a short sale against the box, it will be required to set
aside securities equivalent in kind and amount to the securities sold short (or
securities convertible or exchangeable into such securities at no additional
cost to the Fund) and will be required to hold such securities while the short
sale is outstanding. The Fund will incur transaction costs, including interest
expense, in connection with opening, maintaining, and closing short sales
against the box. If the Fund engages in any short sales against the box, it will
incur the risk that the security sold short will appreciate in value after the
sale, with the result that a Fund will lose the benefit of any such
appreciation. The Fund may make short sales both as a form of hedging to offset
potential declines in long positions in similar securities and in order to
maintain portfolio flexibility. Short sales may be subject to special tax rules,
one of the effects of which may be to accelerate income to the Fund.

CONCENTRATION

         It is a fundamental policy of the Fund that it may not invest more than
25% of the total assets of the Fund in any one industry. If the Fund were to
concentrate its investments in a single industry, the Fund would be more
susceptible to any single economic, political, or regulatory occurrence than
would be another investment company which was not so concentrated.

ILLIQUID INVESTMENTS

         The Fund may invest up to 15% of its net assets in illiquid securities,
or securities for which there is no readily available market. The absence of a
trading market may make it difficult to establish a market value for illiquid
securities. It may be difficult or impossible for the Fund to sell illiquid
securities at the desired time and at an acceptable price.

RULE 144A SECURITIES

         The Fund may invest in certain restricted securities ("Rule 144A
securities") for which there is a secondary market of qualified institutional
buyers, as defined in Rule 144A under the Securities Act of 1933, as amended
(the "1933 Act"). Rule 144A provides an exemption from the registration
requirements of the 1933 Act for the resale of certain restricted securities to
qualified institutional buyers. The Fund has no current intention to invest in
these securities.

         One effect of Rule 144A is that certain restricted securities may now
be liquid, though there is no assurance that a liquid market for Rule 144A
securities will develop or be maintained. In promulgating Rule 144A, the SEC
stated that the ultimate responsibility for liquidity determinations is that of
an


                                      -10-


investment company's board of directors. However, the SEC stated that the board
may delegate the day-to-day function of determining liquidity to the fund's
investment adviser, provided that the board retains sufficient oversight.

         To the extent that liquid Rule 144A securities that the Fund holds
become illiquid, due to the lack of sufficient qualified institutional buyers or
market or other conditions, the percentage of the Fund's assets invested in
illiquid assets would increase. The Manager and the Submanager will monitor the
Fund's investments in Rule 144A securities and will consider appropriate
measures to enable the Fund to maintain sufficient liquidity for operating
purposes and to meet redemption requests.

BORROWING

         The Fund may borrow in certain limited circumstances. See "Investment
Restrictions." Borrowing creates an opportunity for increased return, but, at
the same time, creates special risks. For example, borrowing may exaggerate
changes in the net asset value of the Fund's shares and in the return on the
Fund's portfolio. The Fund may be required to liquidate portfolio securities at
a time when it would be disadvantageous to do so in order to make payments with
respect to any borrowing, which could affect the strategy of the Manager and
Submanager and the ability of the Fund to comply with certain provisions of the
Code in order to provide pass-though tax treatment to shareholders. Interest on
any borrowings will be the Fund expense and will reduce the value of the Fund's
shares.

REVERSE REPURCHASE AGREEMENTS

         A reverse repurchase agreement involves the sale of portfolio
securities by the Fund to a broker/dealer or other financial institution, with
an agreement by the Fund to repurchase the securities at an agreed upon price,
date and interest payment and are considered borrowings by the Fund and are
subject to any borrowing limitations set forth under "Investment Restrictions"
in this Statement of Additional Information. The Fund may have an opportunity to
earn a great rate of interest on the investment of the cash proceeds of the
sale. However, opportunities to realize earnings from the use of the proceeds
equal to or greater than the interest required to be paid by the Fund under the
reverse repurchase agreement may not always be available. The use of reverse
repurchase agreements involves the speculative factor known as "leverage" and
may exaggerate any interim increase or decrease in the value of the Fund's
assets. If the Fund enters into a reverse repurchase agreement, the Fund will
maintain assets with its custodian having a value equal to or greater than the
value of its commitments under the agreement. The Fund's liquidity and ability
to manage its assets may be adversely affected when it sets aside cash or
securities to cover its commitments. Reverse repurchase agreements involve the
risk that the market value of the securities sold by the Fund may decline below
the repurchase price of those securities, that the assets purchased with the
proceeds of the agreement decline in value, or that the buyer under a reverse
repurchase agreement files for bankruptcy or becomes insolvent.

REPURCHASE AGREEMENTS

         The Fund may invest in repurchase agreements that are fully
collateralized by securities in which the Fund may otherwise invest. A
repurchase agreement involves the purchase of a security that must later be sold
back to the seller (which is usually a member bank of the U.S. Federal Reserve
System or a member firm of the NYSE (or a subsidiary thereof)) at an agreed time
(usually not more than seven days from the date of purchase) and price. The
resale price reflects the purchase price plus an agreed-upon market rate of
interest. Under the Investment Company Act of 1940, as amended (the "1940 Act"),
repurchase agreements may be considered to be loans by the buyer. If the seller
defaults, the underlying security constitutes collateral for the seller's
obligation to pay although the Fund may incur certain costs in liquidating this
collateral and in certain cases may not be permitted to liquidate this
collateral. In the event of the bankruptcy of the other party to a repurchase
agreement, the Fund could experience delays in


                                      -11-


recovering either the securities or cash. To the extent that, in the meantime,
the value of the securities purchased has decreased, the Fund could experience a
loss.

DERIVATIVES

         The Fund may use various investment strategies described below to hedge
market risks (such as broad or specific market movements and currency exchange
rates), or to seek to increase the Fund's income or gain.

         The Fund may purchase and sell single stock, currency or stock index
futures contracts and enter into currency transactions; purchase and sell (or
write) exchange listed and over-the-counter ("OTC") put and call options on
securities, currencies, futures contracts, indices and other financial
instruments; enter into equity swaps and related transactions; and invest in
indexed securities and other similar transactions which may be developed in the
future to the extent that the Submanager determines that they are consistent
with the Fund's investment objective and policies and applicable regulatory
requirements (collectively, these transactions are referred to as
"Derivatives"). The Fund's currency transactions may take the form of currency
forward contracts, currency futures contracts and options thereof, currency
swaps and options on currencies.

         The Fund is operated by persons who have claimed an exclusion, granted
to operators of registered investment companies like the Fund, from registration
as a "commodity pool operator" with respect to the Fund under the Commodity
Exchange Act, and therefore, are not subject to registration or regulation with
respect to the Fund under the Commodity Exchange Act. The use of certain
Derivatives in certain circumstances will require that the Fund segregate cash
or other liquid assets to the extent the Fund's obligations are not otherwise
'covered' through ownership of the underlying security, financial instrument or
currency. See "Use of Segregated and Other Special Accounts" below.

         Derivatives involve special risks, including possible default by the
other party to the transaction, illiquidity and, to the extent the Submanager's
view as to certain market movements is incorrect, the risk that the use of
Derivatives could result in significantly greater losses than if it had not been
used. See "Risk Factors Associated with Derivatives" below. The degree of the
Fund's use of Derivatives may be limited by certain provisions of the Code. See
"Effects of Certain Investments and Transactions" below.

         CURRENCY TRANSACTIONS. The Fund may engage in currency transactions
with counterparties to hedge the value of portfolio securities denominated in
particular currencies against fluctuations in relative value or to generate
income or gain. Currency transactions include currency forward contracts,
exchange-listed currency futures contracts and options thereon, exchange-listed
and OTC options on currencies, and currency swaps. A currency forward contract
involves a privately negotiated obligation to purchase or sell (with delivery
generally required) a specific currency at a future date, which may be any fixed
number of days from the date of the contract agreed upon by the parties, at a
price set at the time of the contract. A currency swap is an agreement to
exchange cash flows based on the notional difference among two or more
currencies and operates similarly to an equity swap, which is described below
under "Equity Swaps and Related Transactions." The Fund may enter into currency
transactions only with counterparties that the Submanager deems to be
creditworthy.

         The Fund may enter into currency forward contracts when the Submanager
believes that the currency of a particular country may suffer a substantial
decline against the U.S. dollar. In those circumstances, the Fund may enter into
a currency forward contract to sell, for a fixed amount of U.S. dollars, the
amount of that currency approximating the value of some or all of the Fund's
portfolio securities denominated in such currency. Currency forward contracts
may limit potential gain from a positive change in the relationship between the
U.S. dollar and foreign currencies.


                                      -12-


         Transaction hedging is entering into a currency transaction with
respect to specific assets or liabilities of the Fund, which will generally
arise in connection with the purchase or sale of the Fund's portfolio securities
or the receipt of income from them. Position hedging is entering into a currency
transaction with respect to portfolio securities positions denominated or
generally quoted in that currency. The Fund will not enter into a transaction to
hedge currency exposure to an extent greater, after netting all transactions
intended wholly or partially to offset other transactions, than the aggregate
market value (at the time of entering into the transaction) of the securities
held by the Fund that are denominated or generally quoted in or currently
convertible into the currency, other than with respect to proxy hedging as
described below.

         The Fund may cross-hedge currencies by entering into transactions to
purchase or sell one or more currencies that are expected to increase or decline
in value relative to other currencies to which the Fund has or in which the Fund
expects to have exposure. To reduce the effect of currency fluctuations on the
value of existing or anticipated holdings of its securities, the Fund may also
engage in proxy hedging. Proxy hedging is often used when the currency to which
the Fund's holdings is exposed is difficult to hedge generally or difficult to
hedge against the dollar. Proxy hedging entails entering into a forward contract
to sell a currency, the changes in the value of which are generally considered
to be linked to a currency or currencies in which some or all of the Fund's
securities are or are expected to be denominated, and to buy dollars. The amount
of the contract would not exceed the market value of the Fund's securities
denominated in linked currencies.

         Currency transactions are subject to risks different from other
portfolio transactions, as discussed below under "Risk Factors Associated with
Derivatives." If the Fund enters into a currency hedging transaction, the Fund
will comply with the asset segregation requirements described below under "Use
of Segregated and Other Special Accounts."

         FUTURES CONTRACTS. The Fund may trade futures contracts: (1) on
domestic and foreign exchanges on currencies; and (2) on domestic and foreign
exchanges on single stocks and stock indices. Futures contracts are generally
bought and sold on the commodities exchanges on which they are listed with
payment of initial and variation margin as described below. The sale of a
futures contract creates a firm obligation by the Fund, as seller, to deliver to
the buyer the specific type of financial instrument called for in the contract
at a specific future time for a specified price (or with respect to certain
instruments, the net cash amount). The Fund's use of financial futures contracts
and options thereon will in all cases be consistent with applicable regulatory
requirements and in particular the rules and regulations of the CFTC.
Maintaining a futures contract or selling an option on a futures contract will
typically require the Fund to deposit with a financial intermediary, as security
for its obligations, an amount of cash or other specified assets ("initial
margin") that initially is from 1% to 10% of the face amount of the contract
(but may be higher in some circumstances particularly in the case of single
stock futures). Additional cash or assets ("variation margin") may be required
to be deposited thereafter daily as the mark-to-market value of the futures
contract fluctuates. The value of all futures contracts sold by the Fund
(adjusted for the historical volatility relationship between the Fund and the
contracts) will not exceed the total market value of the Fund's securities. In
addition, the value of the Fund's long futures and options positions (futures
contracts on single stocks, stock indices, or foreign currencies and call
options on such futures contracts) will not exceed the sum of: (a) liquid assets
segregated for this purpose; (b) cash proceeds on existing investments due
within thirty days; and (c) accrued profits on the particular futures or options
positions. The segregation requirements with respect to futures contracts and
options thereon are described below under "Use of Segregated and Other Special
Accounts."

         SINGLE STOCK FUTURES. Recent legislation permits the trading on U.S.
exchanges of standardized futures contacts on individual equity securities, such
as common stocks, exchange traded funds and American Depository Receipts, as
well as narrow-based securities indices, generally called security futures
contracts or "SFCs". As with other futures contracts, a SFC involves an
agreement to purchase or


                                      -13-


sell in the future a specific quantity of shares of a security or the component
securities of the index. The initial margin requirements (typically 20 percent)
are generally higher than with other futures contracts. Trading SFCs involves
many of the same risks as trading other futures contracts, including the risks
involved with leverage, and losses are potentially unlimited. Under certain
market conditions, for example if trading is halted due to unusual trading
activity in either the SFC or the underlying security due to recent new events
involving the issuer of the security, it may be difficult or impossible for a
fund to liquidate its position or manage risk by entering into an offsetting
position. In addition, the prices of the SFCs may not correlate as anticipated
with the prices of the underlying security. And unlike options on securities in
which a fund may invest, where the fund had a position in a SFC, the fund has
both the right and the obligation to buy or sell the security at a future date,
or otherwise offset its position.

         OPTIONS. In order to hedge against adverse market shifts or to increase
income or gain, the Fund may purchase put and call options or write "covered"
put and call options on futures contracts on stock indices and currencies. In
addition, in order to hedge against adverse market shifts or to increase its
income, the Fund may purchase put and call options and write "covered" put and
call options on securities, indices, currencies and other financial instruments.
The Fund may utilize options on currencies in order to hedge against currency
exchange rate risks. A call option is "covered" if, so long as the Fund is
obligated as the writer of the option, it will: (i) own the underlying
investment subject to the option; (ii) own securities convertible or
exchangeable without the payment of any consideration into the securities
subject to the option; (iii) own a call option on the relevant security or
currency with an exercise price no higher than the exercise price on the call
option written or (iv) deposit with its custodian in a segregated account liquid
assets having a value equal to the excess of the value of the security or index
that is the subject of the call over the exercise price. A put option is
"covered" if, to support its obligation to purchase the underlying investment if
a put option that the Fund writes is exercised, the Fund will either (a) deposit
with its custodian in a segregated account liquid assets having a value at least
equal to the exercise price of the underlying investment or (b) continue to own
an equivalent number of puts of the same "series" (that is, puts on the same
underlying investment having the same exercise prices and expiration dates as
those written by the Fund), or an equivalent number of puts of the same "class"
(that is, puts on the same underlying investment) with exercise prices greater
than those that it has written (or, if the exercise prices of the puts it holds
are less than the exercise prices of those it has written, it will deposit the
difference with its custodian in a segregated account). Parties to options
transactions must make certain payments and/or set aside certain amounts of
assets in connection with each transaction, as described below.

         In all cases, by writing a call, the Fund will limit its opportunity to
profit from an increase in the market value of the underlying investment above
the exercise price of the option for as long as the Fund's obligation as writer
of the option continues. By writing a put, the Fund bears the risk of a decrease
in the market value of the underlying investment below the exercise price of the
option for as long as the Fund's obligation as writer of the option continues.
Upon the exercise of a put option written by the Fund, the Fund may suffer an
economic loss equal to the difference between the price at which the Fund is
required to purchase the underlying investment and its market value at the time
of the option exercise, less the premium received for writing the option. Upon
the exercise of a call option written by the Fund, the Fund may suffer an
economic loss equal to an amount not less than the excess of the investment's
market value at the time of the option exercise over the Fund's acquisition cost
of the investment, less the sum of the premium received for writing the option
and the positive difference, if any, between the call price paid to the Fund and
the Fund's acquisition cost of the investment.

         In all cases, in purchasing a put option, the Fund will seek to benefit
from, or protect against, a decline in the market price of the underlying
investment, while in purchasing a call option, the Fund will seek to benefit
from an increase in the market price of the underlying investment. If an option
purchased is not sold or exercised when it has remaining value, or if the market
price of the underlying investment remains equal to or greater than the exercise
price, in the case of a put, or remains equal to or below the



                                      -14-


exercise price, in the case of a call, during the life of the option, the Fund
will lose its investment in the option. For the purchase of an option to be
profitable, the market price of the underlying investment must decline
sufficiently below the exercise price, in the case of a put, and must increase
sufficiently above the exercise price, in the case of a call, to cover the
premium and transaction costs.

         The Fund may choose to exercise the options it holds, permit them to
expire or terminate them prior to their expiration by entering into closing
transactions. The Fund may enter into a closing purchase transaction in which
the Fund purchases an option having the same terms as the option it had written
or a closing sale transaction in which the Fund sells an option having the same
terms as the option it had purchased. A covered option writer unable to effect a
closing purchase transaction will not be able to sell the underlying security
until the option expires or the underlying security is delivered upon exercise,
with the result that the writer will be subject to the risk of market decline in
the underlying security during such period. Should the Fund choose to exercise
an option, the Fund will receive, in the case of a call option, or sell in the
case of a put option, the securities, commodities or commodity futures contracts
underlying the exercised option.

         Exchange-listed options on securities and currencies, with certain
exceptions, generally settle by physical delivery of the underlying security or
currency, although in the future, cash settlement may become available.
Frequently, rather than taking or making delivery of the underlying instrument
through the process of exercising the option, listed options are closed by
entering into offsetting purchase or sale transactions that do not result in
ownership of the new option. Index options are cash settled for the net amount,
if any, by which the option is "in-the-money" (that is, the amount by which the
value of the underlying instrument exceeds, in the case of a call option, or is
less than, in the case of a put option, the exercise price of the option) at the
time the option is exercised.

         Put options and call options typically have similar structural
characteristics and operational mechanics regardless of the underlying
instrument on which they are purchased or sold. Thus, the following general
discussion relates to each of the particular types of options discussed in
greater detail below. In addition, many Derivatives involving options require
segregation of Fund assets in special accounts, as described below under "Use of
Segregated and Other Special Accounts."

         A put option gives the purchaser of the option, upon payment of a
premium, the right to sell, and the writer of the obligation to buy, the
underlying security, index, currency or other instrument at the exercise price.
The Fund's purchase of a put option on a security, for example, might be
designed to protect its holdings in the underlying instrument (or, in some
cases, a similar instrument) against a substantial decline in the market value
of such instrument by giving the Fund the right to sell the instrument at the
option exercise price. A call option, upon payment of a premium, gives the
purchaser of the option the right to buy, and the seller the obligation to sell,
the underlying instrument at the exercise price. The Fund's purchase of a call
option on a security, financial futures contract, index, currency or other
instrument might be intended to protect the Fund against an increase in the
price of the underlying instrument that it intends to purchase in the future by
fixing the price at which it may purchase the instrument. An "American" style
put or call option may be exercised at any time during the option period,
whereas a "European" style put or call option may be exercised only upon
expiration or during a fixed period prior to expiration. Exchange-listed options
are issued by a regulated intermediary such as the Options Clearing Corporation
("OCC"), which guarantees the performance of the obligations of the parties to
the options. The discussion below uses the OCC as an example, but may also be
applicable to other similar financial intermediaries.

         OCC-issued and exchange-listed options, including options on
securities, currencies and financial instruments generally settle for cash,
although physical settlement maybe required in some cases. Index options are
cash settled for the net amount, if any, by which the option is "in-the-money"
(that is, the amount by which the value of the underlying instrument exceeds, in
the case of a call option, or is less than, in the case of a put option, the
exercise price of the option) at the time the option is



                                      -15-


exercised. Frequently, rather than taking or making delivery of the underlying
instrument through the process of exercising the option, listed options are
closed by entering into offsetting purchase or sale transactions that do not
result in ownership of the new option.

         The Fund's ability to close out its position as a purchaser or seller
of an OCC-issued or exchange-listed put or call option is dependent, in part,
upon the liquidity of the particular option market. Among the possible reasons
for the absence of a liquid option market on an exchange are: (1) insufficient
trading interest in certain options, (2) restrictions on transactions imposed by
an exchange, (3) trading halts, suspensions or other restrictions imposed with
respect to particular classes or series of options or underlying securities,
including reaching daily price limits, (4) interruption of the normal operations
of the OCC or an exchange, (5) inadequacy of the facilities of an exchange or
the OCC to handle current trading volume or (6) a decision by one or more
exchanges to discontinue the trading of options (or a particular class or series
of options), in which event the relevant market for that option on that exchange
would cease to exist, although any such outstanding options on that exchange
would continue to be exercisable in accordance with their terms.

         The hours of trading for listed options may not coincide with the hours
during which the underlying financial instruments are traded. To the extent that
the option markets close before the markets for the underlying financial
instruments, significant price and rate movements can take place in the
underlying markets that would not be reflected in the corresponding option
markets.

         OTC options are purchased from or sold to securities dealers, financial
institutions or other parties (collectively referred to as "Counterparties" and
individually referred to as a "Counterparty") through a direct bilateral
agreement with the Counterparty. In contrast to exchange-listed options, which
generally have standardized terms and performance mechanics, all of the terms of
an OTC option, including such terms as method of settlement, term, exercise
price, premium, guaranties and security, are determined by negotiation of the
parties. It is anticipated that the Fund authorized to use OTC options will
generally only enter into OTC options that have cash settlement provisions,
although it will not be required to do so.

         Unless the parties provide for it, no central clearing or guaranty
function is involved in an OTC option. As a result, if a Counterparty fails to
make or take delivery of the security, currency or other instrument underlying
an OTC option it has entered into with the Fund or fails to make a cash
settlement payment due in accordance with the terms of that option, the Fund
will lose any premium it paid for the option as well as any anticipated benefit
of the transaction. Thus, the Submanager must assess the creditworthiness of
each such Counterparty or any guarantor or credit enhancement of the
counterparty's credit to determine the likelihood that the terms of the OTC
option will be met. The Fund will enter into OTC option transactions only with
U.S. Government securities dealers recognized by the Federal Reserve Bank of New
York as "primary dealers," or broker-dealers, domestic or foreign banks, or
other financial institutions that the Investment Manager deems to be
creditworthy. In the absence of a change in the current position of the staff of
the SEC, OTC options purchased by the Fund and the amount of the Fund's
obligation pursuant to an OTC option sold by the Fund (the cost of the sell-back
plus the in-the-money amount, if any) or the value of the assets held to cover
such options will be deemed illiquid.

         If the Fund sells a call option, the premium that it receives may serve
as a partial hedge, to the extent of the option premium, against a decrease in
the value of the underlying securities or instruments held by the Fund or will
increase the Fund's income. Similarly, the sale of put options can also provide
gains for the Fund.

         The Fund may purchase and sell call options on securities that are
traded on U.S. and foreign securities exchanges and in the OTC markets, and on
securities indices, currencies and futures contracts. All calls sold by the Fund
must be "covered" (that is, the Fund must own the securities or futures contract
subject to the call), or must otherwise meet the asset segregation requirements
described below for so


                                      -16-


long as the call is outstanding. Even though the Fund will receive the option
premium to help protect it against loss, a call sold by the Fund will expose the
Fund during the term of the option to possible loss of opportunity to realize
appreciation in the market price of the underlying security or instrument and
may require the Fund to hold a security or instrument that it might otherwise
have sold.

         The Fund reserves the right to purchase or sell options on instruments
and indices which may be developed in the future to the extent consistent with
applicable law, the Fund's investment objective and the restrictions set forth
herein.

         The Fund may purchase and sell put options on securities (whether or
not it holds the securities in its portfolio) and on securities indices,
currencies and futures contracts. In selling put options, the Fund faces the
risk that it may be required to buy the underlying security at a disadvantageous
price above the market price.

                  (A) OPTIONS ON STOCKS AND STOCK INDICES. The Fund may purchase
         put and call options and write covered put and call options on stocks
         and stock indices listed on domestic and foreign securities exchanges
         in order to hedge against movements in the equity markets or to
         increase income or gain to the Fund. In addition, the Fund may purchase
         options on stocks that are traded over-the-counter. Options on stock
         indices are similar to options on specific securities. However, because
         options on stock indices do not involve the delivery of an underlying
         security, the option represents the holder's right to obtain from the
         writer cash in an amount equal to a fixed multiple of the amount by
         which the exercise price exceeds (in the case of a put) or is less than
         (in the case of a call) the closing value of the underlying stock index
         on the exercise date. Options traded may include the Standard & Poor's
         100 Index of Composite Stocks, Standard & Poor's 500 Index of Composite
         Stocks (the "S&P 500 Index"), the New York Stock Exchange ("NYSE")
         Composite Index, the American Stock Exchange ("AMEX") Market Value
         Index, the National Over-the-Counter Index and other standard broadly
         based stock market indices. Options are also traded in certain industry
         or market segment indices such as the Computer Technology Index and the
         Transportation Index. Stock index options are subject to position and
         exercise limits and other regulations imposed by the exchange on which
         they are traded.

                  If the Submanager expects general stock market prices to rise,
         the Fund might purchase a call option on a stock index or a futures
         contract on that index as a hedge against an increase in prices of
         particular equity securities it wants ultimately to buy. If the stock
         index does rise, the price of the particular equity securities intended
         to be purchased may also increase, but that increase would be offset in
         part by the increase in the value of the Fund's index option or futures
         contract resulting from the increase in the index. If, on the other
         hand, the Submanager expects general stock market prices to decline, it
         might purchase a put option or sell a futures contract on the index. If
         that index does decline, the value of some or all of the equity
         securities in the Fund's portfolio may also be expected to decline, but
         that decrease would be offset in part by the increase in the value of
         the Fund's position in such put option or futures contract.

                  (B) OPTIONS ON CURRENCIES. The Fund may invest in options on
         currencies traded on domestic and foreign securities exchanges in order
         to hedge against currency exchange rate risks or to increase income or
         gain, as described above in "Currency Transactions."

                  (C) OPTIONS ON FUTURES CONTRACTS. The Fund may purchase put
         and call options and write covered put and call options on futures
         contracts on stock indices, and currencies traded on domestic and, to
         the extent permitted by the CFTC, foreign exchanges, in order to hedge
         all or a portion of its investments or to increase income or gain and
         may enter into closing transactions in order to terminate existing
         positions. There is no guarantee that such closing transactions can be
         effected. An option on a stock index futures contract or currency
         futures contract, as contrasted with the direct investment in such a
         contract, gives the purchaser the right, in return for the premium
         paid, to assume a position in the underlying contract at a specified
         exercise price at any



                                      -17-


         time on or before the expiration date of the option. Upon exercise of
         an option, the delivery of the futures position by the writer of the
         option to the holder of the option will be accompanied by delivery of
         the accumulated balance in the writer's futures margin account. The
         potential loss related to the purchase of an option on a futures
         contract is limited to the premium paid for the option (plus
         transaction costs). While the price of the option is fixed at the point
         of sale, the value of the option does change daily and the change would
         be reflected in the net asset value of the Fund.

                  The purchase of an option on a financial futures contract
         involves payment of a premium for the option without any further
         obligation on the part of the Fund. If the Fund exercises an option on
         a futures contract it will be obligated to post initial margin (and
         potentially variation margin) for the resulting futures position just
         as it would for any futures position. Futures contracts and options
         thereon are generally settled by entering into an offsetting
         transaction, but no assurance can be given that a position can be
         offset prior to settlement or that delivery will occur.

         EQUITY SWAPS AND RELATED TRANSACTIONS. The Fund may enter into equity
swaps and may purchase or sell (i.e., write) equity caps, floors and collars.
The Fund expects to enter into these transactions in order to hedge against
either a decline in the value of the securities included in the Fund's portfolio
or against an increase in the price of the securities which it plans to
purchase, in order to preserve or maintain a return or spread on a particular
investment or portion of its portfolio or to achieve a particular return on cash
balances, or in order to increase income or gain. Equity swaps involve the
exchange by the Fund with another party of their respective commitments to make
or receive payments based on a notional principal amount. The purchase of an
equity cap entitles the purchaser, to the extent that a specified index exceeds
a predetermined level, to receive payments on a contractually-based principal
amount from the party selling the equity cap. The purchase of an equity floor
entitles the purchaser, to the extent that a specified index falls below a
predetermined rate, to receive payments on a contractually-based principal
amount from the party selling the equity floor. A collar is a combination of a
cap and a floor, which preserve a certain return within a predetermined range of
values.

         The Fund may enter into equity swaps, caps, floors and collars on
either an asset-based or liability-based basis, depending on whether it is
hedging its assets or its liabilities, and will usually enter into equity swaps
on a net basis (i.e., the two payment streams are netted out), with the Fund
receiving or paying, as the case may be, only the net amount of the two
payments. The net amount of the excess, if any, of the Fund's obligations over
its entitlements with respect to each equity swap will be accrued on a daily
basis, and an amount of liquid assets having an aggregate net asset value at
least equal to the accrued excess will be maintained in a segregated account by
the Fund's custodian in accordance with procedures established by the Board. If
the Fund enters into an equity swap on other than a net basis, the Fund will
maintain a segregated account in the full amount accrued on a daily basis of the
Fund's obligations with respect to the swap. The Fund will only enter into
equity swap, cap, floor or collar transactions with counterparties the
Submanager deems to be creditworthy. The Submanager will monitor the
creditworthiness of counterparties to its equity swap, cap, floor and collar
transactions on an ongoing basis. If there is a default by the other party to
such a transaction, the Fund will have contractual remedies pursuant to the
agreements related to the transaction. The swap market has grown substantially
in recent years with a large number of banks and investment banking firms acting
both as principals and agents utilizing standardized swap documentation. The
Submanager has determined that, as a result, the swap market is liquid. Caps,
floors and collars are more recent innovations for which standardized
documentation has not yet been developed and, accordingly, they are less liquid
than swaps. To the extent the Fund sells caps, floors and collars it will
maintain in a segregated account cash and/or, cash equivalents or other liquid
high grade debt securities having an aggregate net asset value at least equal to
the full amount, accrued on a daily basis, of the Fund's obligations with
respect to the caps, floors or collars. The use of equity swaps is a highly
specialized activity which involves investment techniques


                                      -18-


and risks different from those associated with ordinary portfolio securities
transactions. If the Submanager is incorrect in its forecasts of market values,
interest rates and other applicable factors, the investment performance of the
Fund would diminish compared with what it would have been if these investment
techniques were not utilized. Moreover, even if the Submanager is correct in its
forecasts, there is a risk that the swap position may correlate imperfectly with
the price of the asset or liability being hedged.

         The liquidity of swap agreements will be determined by the Submanager
based on various factors, including (1) the frequency of trades and quotations,
(2) the number of dealers and prospective purchasers in the marketplace, (3)
dealer undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for trades
(including the ability to assign or offset the Fund's rights and obligations
relating to the investment). Such determination will govern whether a swap will
be deemed within the percentage restriction on investments in securities that
are not readily marketable.

         The Fund will maintain liquid assets in a segregated custodial account
to cover its current obligations under swap agreements. If the Fund enters into
a swap agreement on a net basis, it will segregate assets with a daily value at
least equal to the excess, if any, of the Fund's accrued obligations under the
swap agreement over the accrued amount the Fund is entitled to receive under the
agreement. If the Fund enters into a swap agreement on other than a net basis,
it will segregate assets with a value equal to the full amount of the Fund's
accrued obligations under the agreement. See "Use of Segregated and Other
Special Accounts" below.

         There is no limit on the amount of equity swap transactions that may be
entered into by the Fund. These transactions do not involve the delivery of
securities or other underlying assets or principal. Accordingly, the risk of
loss with respect to equity swaps is limited to the net amount of payments that
the Fund is contractually obligated to make, if any. The effective use of swaps
and related transactions by the Fund may depend, among other things, on the
Fund's ability to terminate the transactions at times when the Submanager deems
it desirable to do so. Because swaps and related transactions are bilateral
contractual arrangements between the Fund and counterparties to the
transactions, the Fund's ability to terminate such an arrangement may be
considerably more limited than in the case of an exchange traded instrument. To
the extent the Fund does not, or cannot, terminate such a transaction in a
timely manner, the Fund may suffer a loss in excess of any amounts that it may
have received, or expected to receive, as a result of entering into the
transaction. If the other party to a swap defaults, the Fund's risk of loss is
the net amount of payments that the Fund contractually is entitled to receive,
if any. The Fund may purchase and sell caps, floors and collars without
limitation, subject to the segregated account requirement described above.

         INDEXED SECURITIES. The Fund may purchase securities whose prices are
indexed to the prices of other securities, securities indices, currencies, or
other financial indicators. Indexed securities typically, but not always, are
debt securities or deposits whose value at maturity or coupon rate is determined
by reference to a specific instrument or statistic. Currency-indexed securities
typically are short-term to intermediate-term debt securities whose maturity
values or interest rates are determined by reference to the values of one or
more specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities of equivalent issuers. Currency-indexed securities
may be positively or negatively indexed; that is, their maturity value may
increase when the specified currency value increases, resulting in a security
that performs similarly to a foreign currency-denominated instrument, or their
maturity value may decline when foreign currencies increase, resulting in a
security whose price characteristics are similar to a put on the underlying
currency. Currency-indexed securities may also have prices that depend on the
values of a number of different foreign currencies relative to each other.

         COMBINED TRANSACTIONS. The Fund may enter into multiple transactions,
including multiple options transactions, multiple futures transactions, multiple
currency transactions (including forward


                                      -19-


currency contracts), and any combination of futures, options, and currency
transactions, instead of a single Derivative, as part of a single or combined
strategy when, in the judgment of the Submanager, it is in the best interests of
the Fund to do so. A combined transaction will usually contain elements of risk
that are present in each of its component transactions. Although combined
transactions will normally be entered into by the Fund based on the Submanager's
judgment that the combined strategies will reduce risk or otherwise more
effectively achieve the desired portfolio management goal, it is possible that
the combination will instead increase the risks or hinder achievement of the
Fund's objective.

         RISK FACTORS ASSOCIATED WITH DERIVATIVES. Derivatives have special
risks associated with them, including possible default by the counterparty to
the transaction, illiquidity and, to the extent the Submanager's view as to
certain market movements is incorrect, the risk that the use of the Derivatives
could result in losses greater than if they had not been used. Use of put and
call options could result in losses to the Fund, force the sale or purchase of
portfolio securities at inopportune times or for prices higher than (in the case
of put options) or lower than (in the case of call options) current market
values, or cause the Fund to hold a security it might otherwise sell.

         The use of futures and options transactions entails certain special
risks. In particular, the variable degree of correlation between price movements
of futures contracts and price movements in the related securities position of
the Fund could create the possibility that losses on the hedging instrument are
greater than gains in the value of the Fund's position. In addition, futures and
options markets could be illiquid in some circumstances and certain OTC options
could have no markets. As a result, in certain markets, the Fund might not be
able to close out a transaction without incurring substantial losses. Although
the Fund's use of futures and options transactions for hedging should tend to
minimize the risk of loss due to a decline in the value of the hedged position,
at the same time it will tend to limit any potential gain to the Fund that might
result from an increase in value of the position. There is also the risk of loss
by the Fund of margin deposits in the event of bankruptcy of a broker with whom
the Fund has an open position in a futures contract or option thereon. Finally,
the daily variation margin requirements for futures contracts create a greater
ongoing potential financial risk than would purchases of options, in which case
the exposure is limited to the cost of the initial premium. However, because
option premiums paid by the Fund are small in relation to the market value of
the investments underlying the options, buying options can result in large
amounts of leverage. The leverage offered by trading in options could cause the
Fund's net asset value to be subject to more frequent and wider fluctuation than
would be the case if the Fund did not invest in options.

         As is the case with futures and options strategies, the effective use
of swaps and related transactions by the Fund may depend, among other things, on
the Fund's ability to terminate the transactions at times when the Submanager
deems it desirable to do so. To the extent the Fund does not, or cannot,
terminate such a transaction in a timely manner, the Fund may suffer a loss in
excess of any amounts that it may have received, or expected to receive, as a
result of entering into the transaction.

         Currency hedging involves some of the same risks and considerations as
other transactions with similar instruments. Currency transactions can result in
losses to the Fund if the currency being hedged fluctuates in value to a degree
or in a direction that is not anticipated. Further, the risk exists that the
perceived linkage between various currencies may not be present or may not be
present during the particular time that the Fund is engaging in proxy hedging.
Currency transactions are also subject to risks different from those of other
portfolio transactions. Because currency control is of great importance to the
issuing governments and influences economic planning and policy, purchases and
sales of currency and related instruments can be adversely affected by
government exchange controls, limitations or restrictions on repatriation of
currency, and manipulations or exchange restrictions imposed by governments.
These forms of governmental actions can result in losses to the Fund if it is
unable to deliver or receive currency or monies in settlement of obligations and
could also cause hedges it has entered into to be rendered useless, resulting in
full currency exposure as well as incurring transaction


                                      -20-


costs. Buyers and sellers of currency futures contracts are subject to the same
risks that apply to the use of futures contracts generally. Further, settlement
of a currency futures contract for the purchase of most currencies must occur at
a bank based in the issuing nation. Trading options on currency futures
contracts is relatively new, and the ability to establish and close out
positions on these options is subject to the maintenance of a liquid market that
may not always be available. Currency exchange rates may fluctuate based on
factors extrinsic to that country's economy.

         Because the amount of interest and/or principal payments which the
issuer of indexed securities is obligated to make is linked to the prices of
other securities, securities indices, currencies, or other financial indicators,
such payments may be significantly greater or less than payment obligations in
respect of other types of debt securities. As a result, an investment in indexed
securities may be considered speculative. Moreover, the performance of indexed
securities depends to a great extent on the performance of and may be more
volatile than the security, currency, or other instrument to which they are
indexed, and may also be influenced by interest rate changes in the United
States and abroad. At the same time, indexed securities are subject to the
credit risks associated with the issuer of the security, and their values may
decline substantially if the issuer's creditworthiness deteriorates.

         Losses resulting from the use of Derivatives will reduce the Fund's net
asset value, and possibly income, and the losses can be greater than if
Derivatives had not been used.

         RISKS OF DERIVATIVES OUTSIDE THE UNITED STATES. When conducted outside
the United States, Derivatives transactions may not be regulated as rigorously
as in the United States, may not involve a clearing mechanism and related
guarantees, and will be subject to the risk of governmental actions affecting
trading in, or the prices of, foreign securities, currencies and other
instruments. In addition, the price of any foreign futures or foreign options
contract and, therefore, the potential profit and loss thereon, may be affected
by any variance in the foreign exchange rate between the time an order is placed
and the time it is liquidated, offset or exercised. The value of positions taken
as part of non-U.S. Derivatives also could be adversely affected by: (1) other
complex foreign political, legal and economic factors, (2) lesser availability
of data on which to make trading decisions than in the United States, (3) delays
in the Fund's ability to act upon economic events occurring in foreign markets
during nonbusiness hours in the United States, (4) the imposition of different
exercise and settlement terms and procedures and margin requirements than in the
United States and (5) lower trading volume and liquidity.

         USE OF SEGREGATED AND OTHER SPECIAL ACCOUNTS. Use of many Derivatives
by the Fund will require, among other things, that the Fund segregate liquid
assets with its custodian, or a designated sub-custodian, to the extent the
Fund's obligations are not otherwise "covered" through ownership of the
underlying security, financial instrument or currency. In general, either the
full amount of any obligation by the Fund to pay or deliver securities or assets
must be covered at all times by the securities, instruments or currency required
to be delivered, or, subject to any regulatory restrictions, an amount of liquid
assets at least equal to the current amount of the obligation must be segregated
with the custodian or subcustodian in accordance with procedures established by
the Board. The segregated assets cannot be sold or transferred unless equivalent
assets are substituted in their place or it is no longer necessary to segregate
them. A call option on securities written by the Fund, for example, will require
the Fund to hold the securities subject to the call (or securities convertible
into the needed securities without additional consideration) or to segregate
liquid high grade debt obligations sufficient to purchase and deliver the
securities if the call is exercised. A call option sold by the Fund on an index
will require the Fund to own portfolio securities that correlate with the index
or to segregate liquid high grade debt obligations equal to the excess of the
index value over the exercise price on a current basis. A put option on
securities written by the Fund will require the Fund to segregate liquid high
grade debt obligations equal to the exercise price. Except when the Fund enters
into a forward contract in connection with the purchase or sale of a security
denominated in a foreign currency or for other non-speculative purposes, which
requires no segregation, a currency contract that obligates the Fund to buy or
sell a foreign


                                      -21-


currency will generally require the Fund to hold an amount of that currency or
liquid securities denominated in that currency equal to the Fund's obligations
or to segregate liquid high grade debt obligations equal to the amount of the
Fund's obligations.

         OTC options entered into by the Fund, including those on securities,
currency, financial instruments or indices, and OCC-issued and exchange-listed
index options will generally provide for cash settlement, although the Fund will
not be required to do so. As a result, when the Fund sells these instruments it
will segregate an amount of assets equal to its obligations under the options.
OCC-issued and exchange-listed options sold by the Fund other than those
described above generally settle with physical delivery, and the Fund will
segregate an amount of assets equal to the full value of the option. OTC options
settling with physical delivery or with an election of either physical delivery
or cash settlement will be treated the same as other options settling with
physical delivery. If the Fund enters into OTC option transactions, it will be
subject to counterparty risk.

         In the case of a futures contract or an option on a futures contract,
the Fund must deposit initial margin and, in some instances, daily variation
margin in addition to segregating liquid assets sufficient to meet its
obligations to purchase or provide securities or currencies, or to pay the
amount owed at the expiration of an index-based futures contract. The Fund will
accrue the net amount of the excess, if any, of its obligations relating to
swaps over its entitlements with respect to each swap on a daily basis and will
segregate with its custodian, or designated sub-custodian, an amount of liquid
assets having an aggregate value equal to at least the accrued excess. Caps,
floors and collars require segregation of liquid assets with a value equal to
the Fund's net obligation, if any.

         Derivatives may be covered by means other than those described above
when consistent with applicable regulatory policies. The Fund may also enter
into offsetting transactions so that its combined position, coupled with any
segregated assets, equals its net outstanding obligation in related Derivatives.
The Fund could purchase a put option, for example, if the strike price of that
option is the same or higher than the strike price of a put option sold by the
Fund. Moreover, instead of segregating assets if it holds a futures contract or
forward contract, the Fund could purchase a put option on the same futures
contract or forward contract with a strike price as high or higher than the
price of the contract held. Other Derivatives may also be offset in
combinations. If the offsetting transaction terminates at the time of or after
the primary transaction, no segregation is required, but if it terminates prior
to that time, assets equal to any remaining obligation would need to be
segregated.

         Investors should note that the Fund's ability to pursue certain of
these strategies may be limited by applicable regulations of the Securities and
Exchange Commission ("SEC"), the Commodity Futures Trading Commission ("CFTC")
and the federal income tax requirements applicable to regulated investment
companies.

CASH RESERVES

         The Fund may invest cash reserves in short-term debt securities (i.e.,
securities having a remaining maturity of one year or less) issued by agencies
or instrumentalities of the United States government, bankers' acceptances,
commercial paper, certificates of deposit, bank deposits, or repurchase
agreements, provided that the issuer satisfies certain social criteria. The Fund
does not currently intend to invest in direct obligations of the United States
government. Short-term debt instruments purchased by the Fund will be rated at
least P-1 by Moody's or A-1+ or A-1 by S&P or, if not rated, determined to be of
comparable quality by the Board of Trustees. The Fund's policy is to hold its
assets in such securities pending readjustment of its portfolio holdings of
stocks comprising the Index and in order to meet anticipated redemption
requests.

                            -------------------------


                                      -22-


         The approval of the shareholders of the Fund and, as applicable, the
investors in the Master Fund, is not required to change the investment objective
or any of the investment policies discussed above (other than the policy
regarding concentration by the Fund and the Master Fund), including those
concerning security transactions.

                              PROXY VOTING POLICIES

         The Fund has adopted proxy voting policies and procedures to ensure
that all proxies for securities held by the Fund are cast in the best interests
of the Fund's shareholders. Because the Fund has a fiduciary duty to vote all
shares in the best interests of its shareholders, the Fund votes proxies after
considering its shareholders' financial interests and social objectives. The
proxy voting policies and procedures are designed to ensure that all proxies are
voted in the best interests of Fund shareholders by isolating the proxy voting
function from any potential conflicts of interest. In most instances, votes are
cast according to predetermined policies, and potential conflicts of interest
cannot influence the outcome of voting decisions. There are, however, several
voting guidelines that require a case-by-case determination, and other instances
where votes may vary from predetermined policies. Certain procedures have been
adopted to ensure that conflicts of interest in such circumstances are
identified and appropriately addressed. The Board of Trustees has delegated the
responsibility to vote proxies for the Fund to Domini. More details about the
Fund's proxy voting guidelines and Domini's proxy voting policies and
procedures, including procedures adopted by Domini to address any potential
conflicts of interest, are provided in the complete Proxy Voting Policies and
Procedures in Appendix A.

         All proxy votes cast for the Fund 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 Fund 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.

                         PORTFOLIO HOLDINGS INFORMATION

         The Fund has implemented portfolio holdings disclosure policies and
procedures that govern the timing and circumstances of disclosure to
shareholders and third parties of information regarding the portfolio
investments held by the Fund. These portfolio holdings disclosure policies and
procedures have been approved by the Board of Trustees of the Fund and are
subject to periodic review by the Board of Trustees.

         Disclosure of the Fund's portfolio holdings is required to be made
quarterly within 60 days of the end of each fiscal quarter (currently, each
January 31, April 30, July 31, and October 31) in the Annual Report and the
Semi-Annual Report to Fund shareholders and in the Quarterly Report on Form N-Q.
The Fund is newly created and has not yet issued any Annual, Semi-Annual, or
Quarterly Reports. These reports will be available, free of charge, on the EDGAR
database on the SEC's website at www.sec.gov. In addition, Domini's website
(www.domini.com) will contain information about the Fund's complete portfolio
holdings, including, as applicable, the security description, the ticker symbol,
the security identification number, price per share, par value, interest rate,
maturity date, market value, and percentage of total investments, in each case
updated as of the end of the most recent calendar quarter (i.e., each March 31,
June 30, September 30, and December 31). This information will be provided on
the website with a lag of at least 30 days and will be available until updated
for the next calendar quarter. This information is publicly available to all
categories of persons.

         From time to time rating and ranking organizations, such as Standard
and Poor's, may request complete portfolio holdings information in connection
with rating the Fund. Similarly, pension plan sponsors and/or their consultants
may request a complete list of portfolio holdings in order to assess the


                                      -23-


risks of the Fund's portfolio along with related performance attribution
statistics. The Fund believes that these third parties have legitimate
objectives in requesting such portfolio holdings information. To prevent such
parties from potentially misusing portfolio holdings information, the Fund will
generally only disclose such information as of the end of the most recent
calendar quarter, with a lag of at least 30 days, as described above. In
addition, the Fund's Chief Compliance Officer, or his or her designee, may grant
exceptions to permit additional disclosure of the Fund's portfolio holdings
information at differing times and with different lag times to rating agencies
and to pension plan sponsors and/or their consultants, provided that (1) the
recipient is subject to a confidentiality agreement, (2) the recipient will
utilize the information to reach certain conclusions about the investment
management characteristics of the Fund and will not use the information to
facilitate or assist in any investment program, (3) the recipient will not
provide access to third parties to this information, and (4) the recipient will
receive this information no earlier than seven business days after the end of
the calendar quarter. In approving a request for an exception, the Chief
Compliance Officer will consider the recipient's need for the relevant holdings
information, whether the disclosure will be in the best interest of the Fund and
its shareholders, and whether conflicts of interest from such disclosures are
appropriately resolved. As of the date of this Statement of Additional
Information, the Fund has not entered into any arrangements to provide
additional disclosure of portfolio holdings information to any rating and
ranking organizations or pension plan consultants. The Board of Trustees will
receive periodic reports if any entities receive disclosure regarding the Fund's
portfolio holdings as described in this paragraph.

         In addition, the service providers of the Master Fund and the Fund,
such as the Submanager, custodian, and transfer agent, may receive portfolio
holdings information in connection with their services to the Master Fund and
the Fund, as applicable. The Submanager also provides information regarding the
Master Fund's portfolio holdings to certain of its service providers in
connection with the services provided to the Submanager by such service
providers (such as performance attribution analysis, portfolio management
systems and clearing).

         In no event shall Domini, Domini's affiliates or employees, the
Submanager, the Submanager's affiliates or employees, or the Master Fund or Fund
receive any direct or indirect compensation in connection with the disclosure of
information about the Master Fund's or the Fund's portfolio holdings.

                             INVESTMENT RESTRICTIONS

FUNDAMENTAL RESTRICTIONS

         Each of the Master Fund and the Fund has adopted the following policies
which may not be changed without approval by holders of a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the Master Fund
or Fund, respectively, which as used in this Statement of Additional Information
means the vote of the lesser of (i) 67% or more of the outstanding "voting
securities" of the Master Fund or Fund present at a meeting, if the holders of
more than 50% of the outstanding "voting securities" of the Master Fund or Fund
are present or represented by proxy, or (ii) more than 50% of the outstanding
"voting securities" of the Master Fund or Fund. The term "voting securities" as
used in this paragraph has the same meaning as in the 1940 Act except that each
Fund shareholder will have one vote for each dollar of net asset value.

         Except as described below, whenever the Fund is requested to vote on a
change in the investment restrictions of the Master Fund, the Fund will hold a
meeting of its shareholders and will cast its vote proportionately as instructed
by its shareholders. However, subject to applicable statutory and regulatory
requirements, the Fund would not request a vote of its shareholders with respect
to (a) any proposal relating to the Master Fund, which proposal, if made with
respect to the Fund, would not require the vote of the shareholders of the Fund,
or (b) any proposal with respect to the Master Fund that is identical in all


                                      -24-


material respects to a proposal that has previously been approved by the
shareholders of the fund. Any proposal submitted to investors in the Master Fund
that is not required to be voted on by shareholders of the Fund would
nevertheless be voted on by the Trustees of the Fund.

         Neither the Master Fund nor the Fund may:

         (1) borrow money if such borrowing is specifically prohibited by the
1940 Act or the rules and regulations promulgated thereunder;

         (2) make loans to other persons if such loans are prohibited by the
1940 Act or the rules and regulations promulgated thereunder;

         (3) purchase or sell real estate or interests in oil, gas or mineral
leases in the ordinary course of business (each of the Master Fund and the Fund
reserves the freedom of action to hold and to sell real estate acquired as the
result of the ownership of securities by the Master Fund or the Fund, as
applicable);

         (4) purchase or sell commodities or commodities contracts in the
ordinary course of business (the foregoing shall not preclude the Master Fund or
the Fund from purchasing or selling futures contracts or options thereon);

         (5) underwrite securities issued by other persons, except that all or
any portion of the assets of the Master Fund or the Fund may be invested in one
or more investment companies, to the extent not prohibited by the 1940 Act, the
rules and regulations thereunder, and exemptive orders granted under such Act,
and except insofar as the Master Fund or the Fund may technically be deemed an
underwriter under the 1933 Act, in selling a security;

         (6) issue any senior security (as that term is defined in the 1940 Act)
if such issuance is specifically prohibited by the 1940 Act or the rules and
regulations promulgated thereunder; or

         (7) invest more than 25% of its assets in any one industry except that
all or any portion of the assets of the Master Fund or the Fund may be invested
in one or more investment companies, to the extent not prohibited by the 1940
Act, the rules and regulations thereunder, and exemptive orders granted under
such Act.

         For purposes of restriction (1) above, covered mortgage dollar rolls
and arrangements with respect to securities lending are not treated as
borrowing.

NON-FUNDAMENTAL RESTRICTIONS

         The following policies are not fundamental and may be changed with
respect to the Fund by the Fund without approval of the Fund's shareholders or,
with respect to the Master Fund, by the Master Fund without the approval of the
Fund or the other investors in the Master Fund. The Fund will comply with the
state securities laws and regulations of all states in which it is registered.

         Neither the Master Fund nor the Fund will, as a matter of operating
policy:

         (1) as to 75% of its total assets, purchase securities of any issuer if
such purchase at the time thereof would cause more than 5% of the Master Fund's
or the Fund's, as applicable, total assets (taken at market value) to be
invested in the securities of such issuer (other than securities or obligations
issued or guaranteed by (a) the United States, (b) any state or political
subdivision thereof, (c) any political subdivision of any such state, or (d) any
agency or instrumentality of the United States, any state or


                                      -25-


political subdivision thereof, or any political subdivision of any such state),
provided that, for purposes of this restriction, (i) the issuer of an option or
futures contract shall not be deemed to be the issuer of the security or
securities underlying such contract and (ii) each of the Master Fund and the
Fund may invest all or any portion of its assets in one or more investment
companies to the extent not prohibited by the 1940 Act, the rules and
regulations thereunder, and exemptive orders granted under such Act; or

         (2) as to 75% of its total assets, purchase securities of any issuer if
such purchase at the time thereof would cause more than 10% of the voting
securities of such issuer to be held by the Master Fund or the Fund, as
applicable, provided that, for purposes of this restriction, (a) the issuer of
an option or futures contract shall not be deemed to be the issuer of the
security or securities underlying such contract and (b) each of the Master Fund
and the Fund may invest all or any portion of its assets in one or more
investment companies to the extent not prohibited by the 1940 Act, the rules and
regulations thereunder, and exemptive orders granted under such Act.

         Neither the Master Fund nor the Fund will, as a matter of operating
policy, invest more than 15% of its net assets in illiquid securities, except
that each of the Master Fund and the Fund may invest all or any portion of its
assets in one or more investment companies, to the extent not prohibited by the
1940 Act or the rules and regulations thereunder.

         The Fund has a non-fundamental policy to invest, under normal
circumstances, at least 80% of its assets in equity securities and related
investments of European companies. For purposes of this policy, European
companies include (1) companies organized or domiciled within a European
country; (2) companies having at least 50% of their assets in, or deriving 50%
or more of their revenues or profits from, a European country; (3) European
governments or supranational organizations and agencies or underlying
instrumentalities of European governments or supranational organizations; and
(4) issuers whose economic fortunes and risks are otherwise linked with a
European market (as determined by the Submanager). The Fund will give its
shareholders 60 days' prior notice of any change in the non-fundamental policy
set forth in this paragraph.

         In addition, , the Master Fund has a non-fundamental policy to invest,
under normal circumstances, at least 80% of its assets in equity securities and
related investments of European companies. For purposes of this policy, European
companies include (1) companies organized or domiciled within a European
country; (2) companies having at least 50% of their assets in, or deriving 50%
or more of their revenues or profits from, a European country; (3) European
governments or supranational organizations and agencies or underlying
instrumentalities of European governments or supranational organizations; and
(4) issuers whose economic fortunes and risks are otherwise linked with a
European market (as determined by the Submanager). The Master Fund will provide
its investors, including the Fund, with at least 60 days' prior notice of any
change in the non-fundamental policy set forth in this paragraph.

PERCENTAGE AND RATING RESTRICTIONS

         If a percentage restriction or rating restriction on investment or
utilization of assets set forth above or referred to in the Prospectus is
adhered to at the time an investment is made or assets are so utilized, a
subsequent change in circumstances will not be considered a violation of policy;
provided that if at any time the ratio of borrowings of the Master Fund or the
Fund to the net asset value of the Master Fund or the Fund, respectively,
exceeds the ratio permitted by Section 18(f) of the 1940 Act, the Master Fund or
the Fund, as the case may be, will take the corrective action required by
Section 18(f).


                                      -26-


                      3. DETERMINATION OF NET ASSET VALUE;
                       VALUATION OF PORTFOLIO SECURITIES;
                    ADDITIONAL PURCHASE AND SALE INFORMATION

         The net asset value of each share of each class of the Fund is
determined each day on which the NYSE is open for trading ("Fund Business Day").
As of the date of this Statement of Additional Information, the NYSE is open for
trading every weekday, except in an emergency and the following holidays: New
Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. This
determination of net asset value of shares of each class of the Fund is made
once during each such day as of the close of regular trading of the NYSE by
dividing the value of the net assets of the applicable class (i.e., the value of
its investment in the Master Fund and any other assets less its liabilities,
including expenses payable or accrued) by the number of shares of the class
outstanding at the time the determination is made. Purchases and redemptions
will be effected at the time of the next determination of net asset value
following the receipt of any purchase or redemption order deemed to be in good
order. See "Shareholder Manual" in the Prospectus.

         The value of the Master Fund's net assets (i.e., the value of its
securities and other assets less its liabilities, including expenses payable or
accrued) is determined at the same time and on the same day as the Fund
determines its net asset value per share of each class. The net asset value of
the investment of each class of the Fund in the Master Fund is equal to that
class' pro rata share of the total investment of the class and of other
investors in the Master Fund less that class' pro rata share of the Master
Fund's liabilities.

         Securities listed or traded on national securities exchanges are 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 which represents the current value of the
security. Securities listed on the NASDAQ National Market System are valued
using the NASDAQ Official Closing Price (the "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. Options and futures
contracts are normally valued at the settlement price on the exchange on which
they are traded.

         Securities that are primarily traded on foreign exchanges generally are
valued at the closing price of such securities on their respective exchanges,
except that if the Manager or Submanager, as applicable, is of the opinion that
such price would result in an inappropriate value for a security, including as a
result of an occurrence subsequent to the time a value was so established, then
the fair value of those securities may be determined by consideration of other
factors by or under the direction of the Board of Trustees or its delegates. In
valuing assets, prices denominated in foreign currencies are converted to U.S.
dollar equivalents at the current exchange rate.

         Bonds and other fixed income securities (other than short-term
obligations) are valued on the basis of valuations furnished by independent
pricing services, use of which has been approved by the Board of Trustees of the
Master Fund or the Fund, as applicable. In making such valuations, the pricing
services utilize both dealer supplied valuations and electronic data processing
techniques which take into account appropriate factors such as institutional
size trading in similar groups of securities, yield, quality, coupon rate,
maturity, type of issue, trading characteristics, and other market data, without
exclusive reliance upon quoted prices or exchange or over the counter prices,
since such valuations are believed to reflect more accurately the fair value of
such securities.

         Short-term obligations (maturing in 60 days or less) are valued at
amortized cost, which constitutes fair value as determined by the Board of
Trustees. Amortized cost involves valuing an


                                      -27-


instrument at its original cost to the Master Fund or the Fund, as applicable,
and thereafter assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument.

         All other securities and other assets of the Master Fund or the Fund
for which market quotations are determined to be not readily available will be
valued using fair value procedures established by and under the supervision of
the Board of Trustees. Factors that the Master Fund or Fund may consider in
determining whether market quotations are readily available include the
existence of a thin market, as well as the occurrence of a significant event
that may affect the securities' value following the close of a market.

         A determination of value used in calculating net asset value must be a
fair value determination made in good faith utilizing procedures approved by the
Board of Trustees. While no single standard for determining fair value exists,
as a general rule, the current fair value of a security would appear to be the
amount which the Master Fund or the Fund, as applicable, could expect to receive
upon its current sale. Some, but not necessarily all, of the general factors
which may be considered in determining fair value include: (a) the fundamental
analytical data relating to the investment, (b) the nature and duration of
restrictions on disposition of the securities, and (c) an evaluation of the
forces which influence the market in which these securities are purchased and
sold. Without limiting or including all of the specific factors which may be
considered in determining fair value, some of the specific factors include: type
of security, financial statements of the issuer, cost at date of purchase, size
of holding, discount from market value, value of unrestricted securities of the
same class at the time of purchase, special reports prepared by analysts,
information as to any transactions or offers with respect to the security,
existence of merger proposals or tender offers affecting the security, price and
extent of public trading in similar securities of the issuer or comparable
companies, and other relevant matters.

         Interest income on long-term obligations is determined on the basis of
interest accrued plus amortization of "original issue discount" (generally, the
difference between issue price and stated redemption price at maturity) and
premiums (generally, the excess of purchase price over stated redemption price
at maturity). Interest income on short-term obligations is determined on the
basis of interest accrued less amortization of premium.

         Shares may be purchased directly from the Distributor or through
Service Organizations (see "Transfer Agent, Custodian, and Service
Organizations" below) by clients of those Service Organizations. If an investor
purchases shares through a Service Organization, the Service Organization must
promptly transmit such order to the appropriate Fund so that the order receives
the net asset value next determined following receipt of the order. Investors
wishing to purchase shares through a Service Organization should contact that
organization directly for appropriate instructions. Investors making purchases
through a Service Organization should be aware that it is the responsibility of
the Service Organization to transmit orders for purchases of shares by its
customers to the Transfer Agent and to deliver required funds on a timely basis.

         The Fund has authorized certain brokers to accept on its behalf
purchase and redemption orders and has authorized these brokers to designate
intermediaries to accept such orders. The Fund will be deemed to have received
such an order when an authorized broker or its designee accepts the order.
Orders will be priced at the appropriate Fund's net asset value next computed
after they are accepted by an authorized broker or designee. Investors may be
charged a fee if they effect transactions in Fund shares through a broker or
agent.


                                      -28-


                       EXCESSIVE TRADING AND MARKET TIMING

         The Fund's Board of Trustees has adopted policies and procedures that
are designed to discourage and detect excessive trading and market timing
activities. These policies and procedures provide that Domini reviews
transactions in excess of specific limits each day in order to monitor trading
activity. If Domini suspects market timing, it cancels the transaction if
possible and closes the account and/or broker number to prevent any future
activity. The Fund does not maintain any arrangements to permit excessive
trading and market timing activities.

         In addition, the Board of Trustees has approved a redemption fee to
discourage the Fund from being used as a vehicle for frequent short-term
shareholder trading. The Fund will deduct a redemption fee of 2% from any
redemption or exchange proceeds if a shareholder sells or exchanges shares after
holding them less than 90 days. The redemption fee will be deducted from a
shareholder's redemption proceeds and returned to the Fund. If a shareholder
acquired shares on different days, the "first in, first out" (FIFO) method is
used to determine the holding period. This means that the shares held the
longest will be redeemed first for purposes of determining whether the
redemption fee applies.

         The redemption fee is not imposed on: (i) shares acquired as a result
of reinvestment of dividends or distributions; (ii) shares purchased, exchanged,
or redeemed by means of a preapproved Automatic Investment Plan or Systematic
Withdrawal Plan arrangement; (iii) shares redeemed by omnibus accounts
maintained by intermediaries that do not have the systematic capability to
process the redemption fee; (iv) shares redeemed through certain qualified
retirement plans that do not have the systematic capability to process the
redemption fee; (v) shares redeemed following the death of a shareholder; or
(vi) shares redeemed on the initiation of the Fund (e.g., for failure to meet
account minimums).

         Omnibus account arrangements permit financial intermediaries such as
brokers and retirement plan administrators to aggregate their clients'
transactions. In these circumstances, the Fund does not know the identity of the
shareholders in the omnibus account and must rely on systems of the financial
intermediary or retirement plan to charge the redemption fee. The Fund
encourages intermediaries that maintain omnibus accounts and retirement plan
administrators to develop systems to impose mutual fund redemption fees. Because
omnibus accounts aggregate individual investor transactions, it is difficult for
the Fund to review transactions of any specific individual investor without the
assistance of the financial intermediary that maintains the omnibus account.

                  4. MANAGEMENT OF THE FUND AND THE MASTER FUND

         The management and affairs of the Trust and the Fund are supervised by
the Trust's Board of Trustees under the laws of the Commonwealth of
Massachusetts. The management and affairs of the Master Fund are supervised by
the Board of Trustees of Domini Social Trust (the "Master Trust") under the laws
of the State of New York.

         The Trustees and officers of the Trust and the Master Trust, their
ages, their principal occupations during the past five years, the number of
investment companies in the Domini family of funds that the Trustees oversee,
and other directorships held, are set forth below. Their titles may have varied
during that period. Each Trustee holds office until his or her successor is
elected or until he or she retires, resigns, dies, or is removed from office.



                                      -29-


         Asterisks indicate that those Trustees and officers are "interested
persons" (as defined in the 1940 Act) of the Trust and the Master Trust. Each
Trustee and officer of the Trust or Master Trust noted as an "interested person"
is interested by virtue of his or her position with Domini as described in the
table below. Unless otherwise indicated below, the address of each Trustee and
officer is 536 Broadway, 7th Floor, New York, New York 10012.

             TRUSTEES AND OFFICERS OF THE TRUST AND THE MASTER TRUST

<TABLE>

                     POSITION(S) HELD
                    WITH THE TRUST AND                                           NUMBER OF FUNDS AND
                     THE MASTER TRUST                                           PORTFOLIOS IN DOMINI
                    AND LENGTH OF TIME   PRINCIPAL OCCUPATION(S) DURING            FAMILY OF FUNDS     OTHER DIRECTORSHIPS
  NAME AND AGE           SERVED                  PAST 5 YEARS                   OVERSEEN BY TRUSTEE    HELD BY TRUSTEE(1)
---------------------------------------------------------------------------------------------------------------------------

INTERESTED
TRUSTEE AND
OFFICER:

Amy L. Domini*     Chair, President,     President and CEO (since 2002)                  8                    None
Age: 55            and Trustee of the    and Manager (since 1997),
                   Trust and the         Domini Social Investments LLC;
                   Master Trust since    Manager, DSIL Investment
                   1990                  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).
DISINTERESTED
TRUSTEES:
Julia Elizabeth    Trustee of the        Director and President, Alpha                   8                    None
Harris             Trust and the         Global Solutions, LLC
Age: 57            Master Trust since    (agribusiness) (since 2004);
                   1999                  Trustee, Fiduciary Trust Company
                                         (financial institution) (since 2001);
                                         Vice

</TABLE>


                                      -30-


<TABLE>

                     POSITION(S) HELD
                    WITH THE TRUST AND                                           NUMBER OF FUNDS AND
                     THE MASTER TRUST                                           PORTFOLIOS IN DOMINI
                    AND LENGTH OF TIME   PRINCIPAL OCCUPATION(S) DURING            FAMILY OF FUNDS     OTHER DIRECTORSHIPS
  NAME AND AGE           SERVED                  PAST 5 YEARS                   OVERSEEN BY TRUSTEE    HELD BY TRUSTEE(1)
---------------------------------------------------------------------------------------------------------------------------

                                         President, UNC Partners, Inc.
                                         (financial management) (since 1990).

Kirsten S. Moy     Trustee of the        Board Member, Community                         8                    None
Age: 58            Trust and the         Reinvestment Fund (since
                   Master Trust since    2003); Director, Economic
                   1999                  Opportunities Program, The
                                         Aspen Institute (research and
                                         education) (since 2001); Group Leader,
                                         Financial Innovations Roundtable
                                         (research) (2000-2001); Member, Board
                                         of Overseers, Graduate Program in
                                         Community Development at Southern New
                                         Hampshire University (1999-2002);
                                         Consultant on Social Investments,
                                         Equitable Life/AXA (1998-2001); Project
                                         Director, Community Development
                                         Innovation and Infrastructure
                                         Initiative (research) (1998-2001).

William C. Osborn  Trustee of the        Manager, Massachusetts Green                    8                    None
Age: 61            Trust since 1990      Energy Fund Management 1, LLC
                   Trustee of the        (venture capital) (since
                   Master Trust since    2004); Manager, Commons
                   1997                  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).

Karen Paul         Trustee of the        Visiting Professor, Escuela                     8                    None
Age: 60            Trust since 1990      Graduado Administracion
                   Trustee of the        Direccion Empresas, Instituto
                   Master Trust since    Tecnologico y de Estudios
                   1997                  Superiores de Monterrey
                                         (2004); Professor, Catholic University
                                         of Bolivia (2003); Fulbright Fellow,
                                         U.S.
</TABLE>


                                      -31-


<TABLE>

                     POSITION(S) HELD
                    WITH THE TRUST AND                                           NUMBER OF FUNDS AND
                     THE MASTER TRUST                                           PORTFOLIOS IN DOMINI
                    AND LENGTH OF TIME   PRINCIPAL OCCUPATION(S) DURING            FAMILY OF FUNDS     OTHER DIRECTORSHIPS
  NAME AND AGE           SERVED                  PAST 5 YEARS                   OVERSEEN BY TRUSTEE    HELD BY TRUSTEE(1)
---------------------------------------------------------------------------------------------------------------------------

                                         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).

Gregory A.         Trustee of the        Community Investment Consultant                 8                    None
Ratliff            Trust and the         (self-employment) (since 2002); Senior
Age: 45            Master Trust since    Fellow, The Aspen Institute (research
                   1999                  and education) (2002); Director,
                                         Economic Opportunity, John D. and
                                         Catherine T. MacArthur Foundation
                                         (private philanthropy) (1997-2002).

John L. Shields    Trustee of the        Director, Navigant Consulting,                  8                    None
Age: 52            Trust and the         Inc. (management consulting
                   Master Trust since    firm) (since 2004); Advisory
                   2004                  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).

Frederick C.       Trustee of the        President's Advisory Board, Salve               8                    N/A
Williamson, Sr.    Trust since 1997      Regina University, Newport, R.I. (since
Age: 89            Trustee of the        1999); Board Member, Preserve Rhode
                   Master Trust since    Island (nonprofit preservation) (since
                   1990                  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
</TABLE>


                                      -32-

<TABLE>

                     POSITION(S) HELD
                    WITH THE TRUST AND                                           NUMBER OF FUNDS AND
                     THE MASTER TRUST                                           PORTFOLIOS IN DOMINI
                    AND LENGTH OF TIME   PRINCIPAL OCCUPATION(S) DURING            FAMILY OF FUNDS     OTHER DIRECTORSHIPS
  NAME AND AGE           SERVED                  PAST 5 YEARS                   OVERSEEN BY TRUSTEE    HELD BY TRUSTEE(1)
---------------------------------------------------------------------------------------------------------------------------

                                         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).
</TABLE>


                                      -33-

<TABLE>

                     POSITION(S) HELD
                    WITH THE TRUST AND                                           NUMBER OF FUNDS AND
                     THE MASTER TRUST                                           PORTFOLIOS IN DOMINI
                    AND LENGTH OF TIME   PRINCIPAL OCCUPATION(S) DURING            FAMILY OF FUNDS     OTHER DIRECTORSHIPS
  NAME AND AGE           SERVED                  PAST 5 YEARS                   OVERSEEN BY TRUSTEE    HELD BY TRUSTEE(1)
---------------------------------------------------------------------------------------------------------------------------

OFFICERS:
Adam M. Kanzer*    Chief Legal Officer   General Counsel and Director of                 N/A                   N/A
Age: 39            of the Trust since    Shareholder Advocacy, Domini Social
                   2003                  Investments LLC (since 1998). Chief
                   Chief Legal Officer   Legal Officer of the Domini Social
                   of the Master Trust   Index Portfolio (since 2003).
                   since 2003
                   Chief Compliance
                   Officer of the
                   Trust and the
                   Master Trust since
                   2005

Carole M. Laible*  Treasurer of the      Chief Operating Officer (since 2002)            N/A                   N/A
Age: 41            Trust since 1997      and Financial/Compliance Officer
                   Treasurer of the      (1997-2003), Domini Social Investments
                   Master Trust since    LLC; President and CEO (since 2002),
                   1997                  Chief Compliance Officer (since 2001),
                                         Chief Financial Officer, Secretary, and
                                         Treasurer (since 1998), DSIL Investment
                                         Services LLC. Treasurer of the Domini
                                         Social Index Portfolio (since 1997).

Steven D.          Vice President of     Chief Investment Officer (since 2003)           N/A                   N/A
Lydenberg*         the Trust since 1990  and Member (since 1997), Domini Social
Age: 59            Vice President of     Investments LLC; Director (1990-2003)
                   the Master Trust      and Director of Research (1990-2001),
                   since 1990            KLD Research & Analytics, Inc. (social
                                         research provider). Vice president of
                                         the Domini Social Index Portfolio
                                         (since 1990)
</TABLE>

(1) This includes all directorships (other than those of the Domini Funds) that
are held by each Trustee as a director of a public company or a registered
investment company.

                                   COMMITTEES

         The Board of Trustees of the Trust has a standing Audit Committee
composed of all of the Trustees who are not "interested persons" of the Trust
within the meaning of the 1940 Act. The Audit Committee will review the internal
and external accounting procedures of the Fund and, among other things, to
consider the selection of the independent certified public accountant for the
Fund, to approve all


                                      -34-


significant services proposed to be performed by the accountants, and to
consider the possible effect of such services on their independence.

         The Board of Trustees also has a standing Nominating Committee. All of
the Trustees who are not "interested persons" of the Trust within the meaning of
the 1940 Act are members of the Nominating Committee. The Nominating Committee
is responsible for, among other things, recommending candidates to fill
vacancies on the Board of Trustees. The Nominating Committee will consider
nominees recommended by shareholders. If you would like to recommend a nominee
to the Nominating Committee, please deliver your recommendation in writing to
the Secretary of the Trust, 536 Broadway, 7th Floor, New York, New York 10012.

              OWNERSHIP OF SHARES IN THE FUND AND IN OTHER ENTITIES

         The Fund is newly offered and has no shareholders as of the date of
this Statement of Additional Information. The following table shows the amount
of equity securities owned by the Trustees in all investment companies in the
Domini family of funds supervised by the Trustees as of December 31, 2004:

<TABLE>

                                                    AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN ALL
                                                    INVESTMENT COMPANIES OVERSEEN BY THE TRUSTEE IN THE
                 NAME OF TRUSTEE                                  DOMINI FAMILY OF FUNDS

INTERESTED TRUSTEE:
Amy L. Domini                                                        over $100,000

DISINTERESTED TRUSTEES:
Julia Elizabeth Harris                                               $1 -  $10,000
Kirsten S. Moy                                                    $10,001 -  $50,000
William C. Osborn                                                 $50,001 -  $100,000
Karen Paul                                                        $50,001 -  $100,000
Gregory A. Ratliff                                                        N/A
John L. Shields                                                      $1 -  $10,000
Frederick C. Williamson, Sr.                                      $50,001 -  $100,000
</TABLE>


                     COMPENSATION AND INDEMNITY OF TRUSTEES

         Information regarding compensation paid to the Trustees by the Trust
for the fiscal year ended July 31, 2004, is set forth below. Ms. Domini is not
compensated by the Trust for her service as a Trustee because of her affiliation
with Domini.

         Each of the Trustees who are not interested persons receives an annual
retainer for serving as a Trustee of the Trust, the Master Trust, the Domini
Institutional Trust and the Domini Advisor Trust of $10,000, and in addition,
receives $1,250 for attendance at each joint meeting of the Boards of the Trust,
the Master Trust, the Domini Institutional Trust and the Domini Advisor Trust
(reduced to $625 in the event that a Trustee participates at an in-person
meeting by telephone). In addition, each Trustee receives reimbursement for
reasonable expenses incurred in attending meetings.


                                      -35-

<TABLE>


                                                                                             TOTAL COMPENSATION FROM
                                                                                              THE TRUST, THE MASTER
                                                                                                TRUST, THE DOMINI
                                                                                               INSTITUTIONAL TRUST,
                                  AGGREGATE      PENSION OR RETIREMENT    ESTIMATED ANNUAL    AND THE DOMINI ADVISOR
                                COMPENSATION      BENEFITS ACCRUED AS      BENEFITS UPON        TRUST PAID TO THE
         NAME OF TRUSTEE       FROM THE TRUST    PART OF FUND EXPENSES       RETIREMENT             TRUSTEE(1)

INTERESTED TRUSTEE:
Amy L. Domini                       None                  None                  None                   None
DISINTERESTED TRUSTEES:
Julia Elizabeth Harris             $6,525                 None                  None                 $15,000
Kirsten S. Moy                     $6,525                 None                  None                 $15,000
William C. Osborn                  $6,525                 None                  None                 $15,000
Karen Paul                         $6,525                 None                  None                 $15,000
Gregory A. Ratliff                 $5,989                 None                  None                 $13,750
John L. Shields(2)                 $  732                 None                  None                 $ 1,667
Frederick C. Williamson, Sr.       $6,525                 None                  None                 $15,000
</TABLE>

(1)  As of _______, 2005, there were eight funds in the Domini family of funds.
(2)  Mr. Shields was appointed as a Trustee on June 1, 2004.

         The Trustees who are not "interested persons" (the "Independent
Trustees") of the Trust as defined by the 1940 Act, are the same as the
Independent Trustees of the Master Trust. Any conflict of interest between the
Fund and the Master Fund will be resolved by the Trustees in accordance with
their fiduciary obligations and in accordance with the 1940 Act. The Trust's
Declaration of Trust provides that it will indemnify its Trustees and officers
(the "Indemnified Parties") against liabilities and expenses incurred in
connection with litigation in which they may be involved because of their
offices with the Trust, unless, as to liability to the Trust or its
shareholders, it is finally adjudicated that the Indemnified Parties engaged in
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in their offices, or unless with respect to any other matter it
is finally adjudicated that the Indemnified Parties did not act in good faith in
the reasonable belief that their actions were in the best interests of the
Trust. In case of settlement, such indemnification will not be provided unless
it has been determined by a court or other body approving the settlement or
other disposition, or by a reasonable determination, based upon a review of
readily available facts, by vote of a majority of Disinterested Trustees or in a
written opinion of independent counsel, that such Indemnified Parties have not
engaged in willful misfeasance, bad faith, gross negligence, or reckless
disregard of their duties.

               APPROVAL OF MANAGEMENT AND SUBMANAGEMENT AGREEMENTS

         At a meeting held on July 22, 2005, the Board of Trustees considered
the approval of the Management Agreement between the Master Fund and Domini (the
"Management Agreement") and the Submanagement Agreement between Domini and
Wellington (the "Submanagement Agreement").

         [DISCUSSION OF MATERIAL FACTORS AND CONCLUSIONS THAT FORMED THE BASIS
OF THE BOARD'S APPROVAL OF THE MANAGEMENT AGREEMENT AND THE SUBMANAGEMENT
AGREEMENT TO BE ADDED BY AMENDMENT.]

                             MANAGER AND SUBMANAGER

         Domini provides advice to the Master Fund pursuant to the Management
Agreement. The services provided by Domini consist of furnishing continuously an
investment program for the Master


                                      -36-


Fund. Domini will have authority to determine from time to time what securities
are purchased, sold, or exchanged, and what portion of assets of the Master Fund
is held uninvested. Domini will also perform such administrative and management
tasks as may from time to time be reasonably requested, including: (a)
maintaining office facilities and furnishing clerical services necessary for
maintaining the organization of the Master Fund and for performing
administrative and management functions, (b) supervising the overall
administration of the Master Fund, including negotiation of contracts and fees
with, and monitoring of performance and billings of, the Master Fund's transfer
agent, shareholder servicing agents, custodian, and other independent
contractors or agents, (c) overseeing (with the advice of the Master Fund's
counsel) the preparation of and, if applicable, the filing of all documents
required for compliance by the Master Fund with applicable laws and regulations,
including registration statements, prospectuses and statements of additional
information, semi-annual and annual reports to shareholders, proxy statements,
and tax returns, (d) preparing agendas and supporting documents for, and minutes
of meetings of, the Trustees, committees of the Trustees, and shareholders, and
(e) arranging for maintenance of the books and records of the Master Fund.
Domini furnishes at its own expense all facilities and personnel necessary in
connection with providing these services. The Management Agreement for the
Master Fund will continue in effect if such continuance is specifically approved
at least annually by the Master Fund's Board of Trustees or by a majority of the
outstanding voting securities of the Master Fund at a meeting called for the
purpose of voting on the Management Agreement (with the vote of each investor in
the Master Fund being in proportion to the amount of its investment), and, in
either case, by a majority of the Master Fund's Trustees who are not parties to
the Management Agreement or interested persons of any such party at a meeting
called for the purpose of voting on the Management Agreement.

         The Management Agreement provides that Domini may render services to
others. Domini may employ, at its own expense, or may request that the Master
Fund employ (subject to the requirements of the 1940 Act) one or more
subadvisers or submanagers, subject to Domini's supervision. The Management
Agreement is terminable without penalty on not more than 60 days' nor less than
30 days' written notice by the Master Fund, when authorized either by majority
vote of the outstanding voting securities of the Master Fund (with the vote of
each investor in the Master Fund being in proportion to the amount of its
investment), or by a vote of a majority of the Master Trust's Board of Trustees,
or by Domini, and will automatically terminate in the event of its assignment.
The Management Agreement provides that neither Domini nor its personnel shall be
liable for any error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in its services to the Master Fund,
except for willful misfeasance, bad faith, or gross negligence or reckless
disregard of its or their obligations and duties under the Management Agreement.

         Under the Management Agreement between the Master Fund and Domini,
Domini's fee for advisory services to the Master Fund is 1.00% of the average
daily net assets of the Master Fund. Domini also provides administrative
services to the Master Fund under the Management Agreement. Because the Master
Fund is newly offered, it has not paid any management fees as of the date of
this Statement of Additional Information.

         Domini is a Massachusetts limited liability company with offices at 536
Broadway, 7th Floor, New York, NY 10012, and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"). The names of the members of Domini and their relationship to the Trust
and to the Master Trust, if any, are as follows: Amy L. Domini, Chair of the
Board and President of the Trust and the Master Trust and the Manager,
President, and Chief Executive Officer of Domini; Steven D. Lydenberg, Vice
President of the Trust and the Master Trust and Chief Investment Officer of
Domini; James E. Brooks; Jotham C. Kinder; John G. Kinder; Dal LaMagna; Domini
Holdings LLC; and Committed Capital, LLC.


                                      -37-


         Wellington manages the assets of the Master Fund pursuant to the
Submanagement Agreement. The Submanager furnishes at its own expense all
services, facilities, and personnel necessary in connection with managing the
Master Fund's investments and effecting securities transactions for the Master
Fund. The Submanagement Agreement will continue in effect if such continuance is
specifically approved at least annually by the Master Trust's Board of Trustees
or by a majority vote of the outstanding voting securities of the Master Fund at
a meeting called for the purpose of voting on the Submanagement Agreement (with
the vote of each investor in the Master Fund being in proportion to the amount
of its investment), and by a majority of the Master Trust's Trustees who are not
parties to the Submanagement Agreement or interested persons of any such party
at a meeting called for the purpose of voting on the Submanagement Agreement.

         Wellington is a Massachusetts limited liability partnership with
principal offices at 75 State Street, Boston, Massachusetts 02109. Wellington is
a professional investment counseling firm which provides investment services to
investment companies, employee benefit plans, endowments, foundations and other
institutions. Wellington and its predecessor organizations have provided
investment advisory services since 1928. As of March 31, 2005, Wellington had
investment management authority with respect to approximately $470 billion in
assets. Wellington is owned by its 87 active partners, all of whom are active in
the firm. The managing partners of Wellington are Laurie A. Gabriel, John R.
Ryan, and Perry M. Traquina.

         Ms. Sylvia S. Han, CFA, is the portfolio manager primarily responsible
for the day-to-day management of the Master Fund. Ms. Han joined Wellington as
an investment professional in 1990. In addition to her responsibilities
regarding the Master Fund, as of [_______], 2005 Ms. Han has day-to-day
management responsibilities for the assets of: (i) [ ___ ] other registered
investment companies with approximately $[ ___ ] in assets under management;
(ii) [ ___ ] other pooled investment vehicles with approximately $[ ___ ] in
assets under management; and (iii) [ ___ ] other accounts with a total of
approximately $[ ___ ] in assets under management. [ ___ ] of these funds or
accounts (with [$____] in aggregate assets) pay performance-based fees to
Wellington.

         Ms. Doris T. Dwyer, provides portfolio management and securities
analysis services to the Master Fund. Ms. Dwyer joined Wellington as an
investment professional in 1998. In addition to her responsibilities regarding
the Master Fund, as of [_______], 2005 Ms. Dwyer has day-to-day management
responsibilities for the assets of: (i) [ ___ ] other registered investment
companies with approximately $[ ___ ] in assets under management; (ii) [ ___ ]
other pooled investment vehicles with approximately $[ ___ ] in assets under
management; and (iii) [ ___ ] other accounts with a total of approximately $[
___ ] in assets under management. [ ___ ] of these funds or accounts (with
[$____] in aggregate assets) pay performance-based fees to Wellington.

CONFLICTS OF INTEREST BETWEEN THE MASTER FUND AND OTHER ACCOUNTS SUB-ADVISED BY
WELLINGTON

         Individual investment professionals at Wellington manage multiple
portfolios for multiple clients. These accounts may include mutual funds,
separate accounts (assets managed on behalf of institutions such as pension
funds, insurance companies, foundations), bank common trust accounts, and hedge
funds. The Wellington investment professionals listed above who are primarily
responsible for the day-to-day management of the Master Fund (the "Investment
Professionals") generally manage portfolios in several different investment
styles. These portfolios may have investment objectives, strategies, time
horizons, tax considerations and risk profiles that differ from those of the
Master Fund. The Investment Professionals make investment decisions for each
portfolio, including the Master Fund, based on the investment objectives,
policies, practices, benchmarks, cash flows, tax and other relevant investment
considerations applicable to that portfolio. Consequently, the Investment
Professionals may purchase or sell securities, including IPOs, for one portfolio
and not another portfolio, and the performance of


                                      -38-


securities purchased for one portfolio may vary from the performance of
securities purchased for other portfolios. The Investment Professionals or other
investment professionals at Wellington may place transactions on behalf of other
accounts that are directly or indirectly contrary to investment decisions made
on behalf of the Master Fund, or make investment decisions that are similar to
those made for the Master Fund, both of which have the potential to adversely
impact the Master Fund depending on market conditions. For example, an
Investment Professional may purchase a security in one portfolio while
appropriately selling that same security in another portfolio. In addition, some
of these portfolios have fee structures, including performance fees, that are or
have the potential to be higher, in some cases significantly higher, than the
fees paid by the Domini to Wellington with respect to the Master Fund. Because
incentive payments are tied to revenues earned by Wellington, and where noted,
to the performance achieved by the manager in each account, the incentives
associated with any given fund may be significantly higher or lower than those
associated with other accounts managed by a given Investment Professional.

         Wellington's goal is to meet its fiduciary obligation to treat all
clients fairly and provide high quality investment services to all of its
clients. Wellington has adopted and implemented policies and procedures,
including brokerage and trade allocation policies and procedures, that it
believes address the conflicts associated with managing multiple accounts for
multiple clients. In addition, Wellington monitors a variety of areas, including
compliance with primary fund guidelines, the allocation of IPOs, and compliance
with the firm's Code of Ethics, and places additional investment restrictions on
Investment Professionals who manage hedge funds and certain other accounts.
Furthermore, senior investment and business personnel at Wellington periodically
review the performance of Wellington's Investment Professionals. Although
Wellington does not track the time an Investment Professional spends on a single
portfolio, Wellington does periodically assess whether an Investment
Professional has adequate time and resources to effectively manage the
Investment Professional's various client mandates.

COMPENSATION OF WELLINGTON INVESTMENT PROFESSIONALS

         Domini pays Wellington a fee based on the assets under management of
the Master Fund as set forth in the Submanagement Agreement between Wellington
and Domini with respect to the Master Fund. Wellington pays its investment
professionals out of its total revenues and other resources, including the
advisory fees earned with respect to the Master Fund. The following information
relates to the period ended [INSERT DATE].

         Wellington's compensation structure is designed to attract and retain
high-caliber investment professionals necessary to deliver high quality
investment management services to its clients. Wellington's compensation of its
investment professionals includes a base salary and incentive components. The
base salary for each Investment Professional is determined by the Investment
Professional's experience and performance in her role as an Investment
Professional. Base salaries for non-partners are reviewed annually and may be
adjusted based on the recommendation of the Investment Professional's business
manager, using guidelines established by Wellington's Compensation Committee,
which has final oversight responsibility for base salaries for non-partners. The
Investment Professionals are eligible to receive incentive payments based on the
revenues earned by Wellington from the Master Fund and generally each other
portfolio managed by the Investment Professionals. The Investment Professionals'
incentive payments relating to the Master Fund will be linked to the gross
pre-tax performance of the Master Fund compared to the a benchmark which
reflects the MSCI Europe Index as modified by the application of Domini's social
and environmental standards over one and three year periods, with an emphasis on
three year results once the Master Fund has been in existence for three years or
longer. Wellington applies similar incentive compensation structures (although
the benchmarks or peer groups, time periods and rates may differ) to other
portfolios managed by the Investment Professionals, including portfolios with
performance fees. Portfolio-based incentives across all portfolios managed by a


                                      -39-


Investment Professionals can, and typically do, represent a significant portion
of a Investment Professional's overall compensation; performance-based incentive
compensation varies significantly by individual and can vary significantly from
year to year. Some Investment Professionals are also eligible for bonus payments
based on their overall contribution to Wellington's business operations. Senior
management at Wellington may reward individuals as it deems appropriate based on
factors other than portfolio performance.

         As the Fund is newly offered, neither Ms. Han nor Ms. Dwyer owns any
equity securities of the Fund.

         The Submanagement Agreement provides that the Submanager may render
services to others. The Submanagement Agreement is terminable without penalty
upon not more than 60 days' nor less than 30 days' written notice by the Fund
when authorized either by majority vote of the outstanding voting securities in
the Master Fund (with the vote of each investor in the Master Fund being in
proportion to the amount of their investment) or by a vote of the majority of
the Board of Trustees, or by Domini with the consent of the Trustees, and may be
terminated by the Submanager on not less than 90 days' written notice to Domini
and the Trustees, and will automatically terminate in the event of its
assignment. The Submanagement Agreement provides that the Submanager shall not
be liable for any error of judgment or mistake of law or for any loss arising
out of any investment or for any act or omission in its services to the Master
Fund, except for willful misfeasance, bad faith, or gross negligence or reckless
disregard for its or their obligations and duties under the Submanagement
Agreement.

         Under the Submanagement Agreement, Domini will pay Wellington an annual
investment submanagement fee equal to the fee based on the following schedule:

             0.75% of the first $25 million of net assets managed
             0.65% of the next $25 million of net assets managed
             0.50% of the next $250 million of net assets managed
             0.45% of net assets managed in excess of $300 million

         There is no minimum annual fee for the first eighteen months after the
date of the Submanagement Agreement (until __, 2007). The minimum fee payable by
Domini to Wellington pursuant to the Submanagement Agreement for the
twelve-month period from ___________, 2007 and each twelve-month period
thereafter is $350,000.

         Because the Master Fund is newly established, Domini has not paid
Wellington any fees under the Submanagement Agreement as of the date of this
Statement of Additional Information.

                                     SPONSOR

         Pursuant to a Sponsorship Agreement, Domini provides the Fund with
oversight, administrative, and management services. Domini provides the Fund
with general office facilities and supervises the overall administration of the
Fund, including, among other responsibilities, the negotiation of contracts and
fees with, and the monitoring of performance and billings of, the independent
contractors and agents of the Fund; the preparation and filing of all documents
required for compliance by the Fund with applicable laws and regulations,
including registration statements, prospectuses and statements of additional
information, semi-annual and annual reports to shareholders, proxy statements,
and tax returns; preparing agendas and supporting documents for, and minutes of
meetings of, the Trustees, committees of the Trustees, and shareholders;
maintaining telephone coverage to respond to shareholder inquiries; answering
questions from the general public, the media, and investors in the Fund
regarding the securities holdings of the Master Fund, limits on investment, and
the Fund's proxy voting philosophy and


                                      -40-


shareholder activism philosophy; and arranging for the maintenance of books and
records of the Fund. Domini provides persons satisfactory to the Board of
Trustees of the Trust to serve as officers of the Trust. Such officers, as well
as certain other employees and Trustees of the Trust, may be directors,
officers, or employees of Domini or its affiliates.

         Under the Sponsorship Agreement, Domini's fee for services with respect
to the Fund is [ ___ ]% of the average daily net assets of each class of the
Fund. Currently, Domini is reducing its fee to the extent necessary to keep the
aggregate operating annual expenses of the Fund (including the Fund's share of
the Master Fund's expenses but excluding brokerage fees and commissions,
interest, taxes, and other extraordinary expenses), net of waivers and
reimbursements, at no greater than 1.60% of the average daily net assets of the
shares of the Fund.

         The Sponsorship Agreement provides that Domini may render
administrative and management services to others. The Sponsorship Agreement also
provides that neither Domini nor its personnel shall be liable for any error of
judgment or mistake of law or for any act or omission in the oversight,
administration, or management of the Fund or the performance of its or their
duties under the Sponsorship Agreement except for willful misfeasance, bad
faith, or gross negligence in the performance of its or their duties or by
reason of the reckless disregard of its or their obligations and duties under
the Sponsorship Agreement. Because the Fund is newly offered, it has not paid
any fees under the Sponsorship Agreement as of the date of this Statement of
Additional Information.

                                   DISTRIBUTOR

         The Fund has adopted a Distribution Plan with respect to its shares.
The Distribution Plan provides that Investor shares of the Fund may pay the
Distributor a fee not to exceed 0.25% per annum of the average daily net assets
of that class as compensation for distribution services provided by the
Distributor in connection with the sale of the Fund's shares, not as
reimbursement for specific expenses incurred. Thus, even if the Distributor's
expenses exceed the fees provided for by the Distribution Plan, the Fund will
not be obligated to pay more than those fees, and, if the Distributor's expenses
are less than the fees paid to it, it will realize a profit. The Distributor may
use such fees to pay broker-dealers who advise shareholders regarding the
purchase, sale, or retention of shares of the Fund, the advertising expenses and
the expenses of printing and distributing prospectuses and reports used for
sales purposes, the expenses of preparing and printing sales literature, and
other distribution-related expenses. Because the Fund is newly offered, it has
not paid any distribution fees as of the date of this Statement of Additional
Information.

         The Distribution Plan will continue in effect indefinitely as to a
class if such continuance is specifically approved at least annually by a vote
of both a majority of the Trust's Trustees and a majority of the Trust's
Trustees who are not "interested persons of the Fund" and who have no direct or
indirect financial interest in the operation of the Distribution Plan or in any
agreement related to such Plan ("Independent Trustees"). The Distributor will
provide to the Trustees of the Fund a quarterly written report of amounts
expended by the applicable class under the Distribution Plan and the purposes
for which such expenditures were made. The Distribution Plan further provides
that the selection and nomination of the Trust's Independent Trustees shall be
committed to the discretion of the Independent Trustees of the Trust. The
Distribution Plan may be terminated as to a class at any time by a vote of a
majority of the Trust's Independent Trustees or by a vote of the shareholders of
that class. The Distribution Plan may not be materially amended with respect to
a class without a vote of the majority of both the Trust's Trustees and
Independent Trustees. The Distributor will preserve copies of any plan,
agreement, or report made pursuant to the Distribution Plan for a period of not
less than six (6) years from the date of the Distribution Plan, and for the
first two (2) years the Distributor will preserve such copies in an easily
accessible place.


                                      -41-


         The Fund has entered into a Distribution Agreement with the
Distributor. Under the Distribution Agreement, the Distributor acts as the agent
of the Fund in connection with the offering of shares of the Fund and is
obligated to use its best efforts to find purchasers for shares of the Fund. The
Distributor acts as the principal underwriter of shares of the Fund and bears
the compensation of personnel necessary to provide such services and all costs
of travel, office expenses (including rent and overhead), and equipment.

              TRANSFER AGENT, CUSTODIAN, AND SERVICE ORGANIZATIONS

         The Fund has entered into a Transfer Agency Agreement with PFPC Inc.
(the "Transfer Agent"), 4400 Computer Drive, Westborough, MA 01581, pursuant to
which PFPC acts as the transfer agent for the Fund. The Transfer Agent maintains
an account for each shareholder of the Fund, performs other transfer agency
functions, and acts as dividend disbursing agent for the Fund.

         The Fund has entered into a Custodian Agreement with Investors Bank &
Trust Company ("IBT" or the "Custodian"), 200 Clarendon Street, Boston, MA
02116, pursuant to which IBT acts as custodian for the Fund. The Master Fund has
entered into a Transfer Agency Agreement with IBT pursuant to which IBT acts as
transfer agent for the Master Fund. The Master Fund also has entered into a
Custodian Agreement with IBT pursuant to which IBT acts as custodian for the
Master Fund. The Custodian's responsibilities include safeguarding and
controlling the Master Fund's and the Fund's cash and securities, handling the
receipt and delivery of securities, determining income and collecting interest
on the Master Fund's and the Fund's investments, maintaining books of original
entry for portfolio and fund accounting and other required books and accounts,
and calculating the daily net asset value of the Master Fund and the Fund.
Securities held by the Master Fund and the Fund may be deposited into certain
securities depositories. The Custodian does not determine the investment
policies of the Master Fund or the Fund or decide which securities the Master
Fund or the Fund will buy or sell. The Fund may, however, invest in securities
of the Custodian and may deal with the Custodian as principal in securities
transactions.

         The Fund may from time to time enter into agreements with various
banks, trust companies, broker-dealers (other than the Distributor), or other
financial organizations (collectively, "Service Organizations") to provide
services for the Fund, such as maintaining shareholder accounts and records. The
Fund may pay fees to Service Organizations (which may vary depending upon the
services provided) in amounts up to an annual rate of 0.25% of the daily net
asset value of the shares of the Fund owned by shareholders with whom the
Service Organization has a servicing relationship. In addition, the Fund may
reimburse Service Organizations for their costs related to servicing shareholder
accounts. The Fund is newly offered and has not accrued Service Organization
fees as of the date of this Statement of Additional Information.

                                    EXPENSES

         Each of the Master Fund and the Fund is responsible for all of its
expenses, including the compensation of its Trustees who are not interested
persons of the Master Trust or the Trust, as applicable; governmental fees;
interest charges; taxes; membership dues in the Investment Company Institute
allocable to the Master Fund or the Fund; fees and expenses of independent
registered public accounting firms, of legal counsel, and of any transfer agent,
custodian, registrar, or dividend disbursing agent of the Fund or the Master
Fund; insurance premiums; and expenses of calculating the net asset value of the
Master Fund and the Fund.

         The Fund will also pay sponsorship fees payable to Domini and all
expenses of distributing and redeeming shares and servicing shareholder
accounts; expenses of preparing, printing, and mailing prospectuses, reports,
notices, proxy statements, and reports to shareholders and to governmental
offices


                                      -42-


and commissions; expenses of shareholder meetings; and expenses relating to the
issuance, registration, and qualification of shares of the Fund, and the
preparation, printing, and mailing of prospectuses for such purposes.

         The Master Fund will pay the expenses connected with the execution,
recording and settlement of security transactions, and the investment management
fees payable to Domini. The Master Fund also will pay the fees and expenses of
its custodian for all services to the Master Fund, including safekeeping of
funds and securities and maintaining required books and accounts; expenses of
preparing and mailing reports to investors and to governmental offices and
commissions; and expenses of meetings of investors.

                                 CODES OF ETHICS

         The Master Fund, the Fund, Domini, Wellington, and the Distributor have
each adopted a Code of Ethics (collectively, the "Codes of Ethics") under Rule
17j-1 under the 1940 Act. The Codes of Ethics permit personnel subject to the
Codes of Ethics to invest in securities, including securities that may be
purchased or held by the Master Fund or the Fund. The Codes of Ethics can be
reviewed and copied at the SEC's Public Reference Room in Washington, D.C.
Information on the operation of the Public Reference Room may be obtained by
calling the SEC at 1-202-942-8090. The Codes of Ethics are available on the
EDGAR database on the SEC's Internet site at http://www.sec.gov, and copies of
the Codes of Ethics may be obtained, after paying a duplicating fee, by
electronic request at the following e-mail address: publicinfo@sec.gov, or by
writing the SEC's Public Reference Section, Washington, DC 20549-0102.

                5. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

         KPMG LLP, 99 High Street, Boston, MA 02110, is the independent
registered public accounting firm for the Master Fund and the Fund, providing
audit services, tax return preparation, and reviews with respect to the
preparation of filings with the SEC.

                                   6. TAXATION

                    TAXATION OF THE FUND AND THE MASTER FUND

FEDERAL TAXES

         The Fund is treated as a separate entity for federal tax purposes under
the Internal Revenue Code of 1986, as amended (the "Code").

         The Fund has elected to be treated and intends to qualify as a
"regulated investment company" under Subchapter M of the Code. Domini plans to
maintain this election in effect for the Fund. As a regulated investment
company, the Fund will not be subject to any federal income or excise taxes on
its net investment income and the net realized capital gains that it distributes
to shareholders in accordance with the timing requirements imposed by the Code.
If the Fund should fail to qualify as a "regulated investment company" in any
year, the Fund would incur a regular corporate federal income tax upon its
taxable income and Fund distributions would generally be taxable as ordinary
dividend income to shareholders.

         It is anticipated that the Master Fund will be treated as a partnership
for federal income tax purposes. As such, the Master Fund is not subject to
federal income taxation. Instead, the fund mast take into account its share of
the Master Fund's income, gain, losses, deductions, credits, and other items,
without regard to whether it has received any distribution from the Master Fund.


                                      -43-


FOREIGN INCOME TAXES

         The Fund may be subject to certain taxes, including without limitation,
taxes imposed by foreign countries with respect to its income and capital gains.
If eligible, the Fund may elect, for United States federal income tax purposes,
to "pass through" foreign taxes to its shareholders. The Fund expects to qualify
for and make this election.

         For any year that the Fund makes such an election, each shareholder of
the Fund will be required to include in its income an amount equal to his or her
allocable share of such income taxes paid by the Fund to a foreign country's
government and shareholders of the Fund will be entitled, subject to certain
limitations, to credit their portions of these amounts against their United
States federal income tax due, if any, or to deduct their portions from their
United States taxable income, if any. No deductions for foreign taxes paid by
the Fund may be claimed, however, by non-corporate shareholders (including
certain foreign shareholders described below) who do not itemize deductions. In
addition, shareholders will not be able to claim a foreign tax credit with
respect to taxes paid by the Fund unless certain holding period requirements are
met. Shareholders that are exempt from tax under Section 501(a) of the Code,
such as pension plans, generally will derive no benefit from this election. The
Fund expects to qualify for and make this election.

STATE TAXES

         The Fund is organized as a series of the Trust, a Massachusetts
business trust. As long as it qualifies as a "regulated investment company"
under the Code, the Fund will not have to pay Massachusetts income or excise
taxes. The Master Fund is organized as a series of the Master Trust, a New York
trust. The Master Fund is not subject to any income or franchise tax in the
State of New York or the Commonwealth of Massachusetts.

                            TAXATION OF SHAREHOLDERS

TAXATION OF DISTRIBUTIONS

         Shareholders of the Fund normally will have to pay federal income taxes
on the dividends and other distributions they receive from the Fund. Dividends
from ordinary income and any distributions from net short-term capital gains are
taxable to shareholders as ordinary income for federal income tax purposes,
whether the distributions are paid in cash or reinvested in additional shares.
Distributions of ordinary dividends to the Fund's noncorporate shareholders may
be treated as "qualified dividend income," which is taxed at reduced rates, to
the extent such distributions are derived from, and designated by the Fund as,
"qualified dividend income." If more than 95% of the Fund's gross income,
calculated without taking into account long-term capital gains, represents
"qualified dividend income," the Fund may designate, and the Fund's noncorporate
shareholders may then treat, all of those distributions as "qualified dividend
income." "Qualified dividend income" generally is income derived from dividends
from U.S. corporations or from "qualified foreign corporations," which are
corporations that are either incorporated in a U.S. possession or eligible for
benefits under certain U.S. tax treaties. Distributions from a foreign
corporation that is not a "qualified foreign corporation" may nevertheless be
treated as "qualified dividend income" if the applicable stock is readily
tradable on an established U.S. securities market. "Passive foreign investment
companies," "foreign personal holding companies," and "foreign investment
companies" are not "qualified foreign corporations." Distributions of net
capital gains (i.e., the excess of net long-term capital gains over net
short-term capital losses), whether paid in cash or reinvested in additional
shares, are taxable to shareholders as long-term capital gains for federal
income tax purposes without regard to the length of time the shareholders have
held their shares.


                                      -44-


         Any Fund dividend that is declared in October, November, or December of
any calendar year, that is payable to shareholders of record in such a month,
and that is paid the following January will be treated as if received by the
shareholders on December 31 of the year in which the divided is declared.

DIVIDENDS-RECEIVED DEDUCTION

         A portion of the ordinary income dividends paid to the Fund (but none
of the Fund's capital gains) is normally eligible for the dividends-received
deduction for corporations if the recipient otherwise qualifies for that
deduction with respect to its holding of Fund shares. Availability of the
deduction for a particular corporate shareholder is subject to certain
limitations, and deducted amounts may be subject to the alternative minimum tax
and result in certain basis adjustments. Moreover, the portion of the Fund's
dividends that is derived from investments in foreign corporations will not
qualify for such deduction.

"BUYING A DIVIDEND"

         Any Fund distribution will have the effect of reducing the per share
net asset value of shares in the Fund by the amount of the distribution.
Shareholders purchasing shares shortly before the record date of any
distribution may thus pay the full price for the shares and then effectively
receive a portion of the purchase price back as a taxable distribution.

DISPOSITION OF SHARES

         In general, any gain or loss realized upon a taxable disposition of
shares of the Fund by a shareholder that holds such shares as a capital asset
will be treated as long-term capital gain or loss if the shares have been held
for more than 12 months and otherwise as a short-term capital gain or loss.
However, any loss realized upon a disposition of shares in the Fund held for six
months or less will be treated as a long-term capital loss to the extent of any
distributions of net capital gain made with respect to those shares. Any loss
realized upon a disposition of shares may also be disallowed under rules
relating to wash sales.

U.S. TAXATION OF NON-U.S. SHAREHOLDERS

         Dividends and certain other payments (but not including distributions
of net capital gains) to persons who are neither citizens nor residents of the
United States or U.S. entities ("Non-U.S. Persons") are generally subject to
U.S. tax withholding at the rate of 30%. The Fund intends to withhold at that
rate on taxable dividends and other payments to Non-U.S. Persons that are
subject to such withholding. The Fund may withhold at a lower rate permitted by
an applicable treaty if the shareholder provides the documentation required by
the Fund. For Fund taxable years beginning in 2005 through 2007, the 30%
withholding tax will not apply to dividends that the Fund designates as (a)
interest-related dividends, to the extent such dividends are derived from the
Fund's "qualified net interest income," or (b) short-term capital gain
dividends, to the extent such dividends are derived from the Fund's "qualified
short-term gain." "Qualified net interest income" is the Fund's net income
derived from interest and from original issue discount, subject to certain
exceptions and limitations. "Qualified short-term gain" generally means the
excess of the net short-term capital gain of the Fund for the taxable year over
its net long-term capital loss, if any.

BACKUP WITHHOLDING

         The Fund is required in certain circumstances to apply backup
withholding at the rate of 28% on taxable dividends, including capital gain
dividends, redemption proceeds, and certain other payments that are paid to any
non-corporate shareholder (including a Non-U.S. Person) who does not furnish to
the


                                      -45-


Fund certain information and certifications or who is otherwise subject to
backup withholding. Backup withholding will not, however, be applied to payments
that are (or would be, but for the application of a treaty) subject to the 30%
withholding tax on shareholders who are Non-U.S. Persons. Any amounts
overwithheld may be recovered by such persons by filing a claim for refund with
the U.S. Internal Revenue Service within the time period appropriate to such
claims.

                 EFFECTS OF CERTAIN INVESTMENTS AND TRANSACTIONS

OPTIONS, ETC.

         The Fund's transactions in options, futures contracts, forward
contracts, swaps, and related transactions will be subject to special tax rules
that may affect the amount, timing, and character of Fund income and
distributions to shareholders. For example, certain positions held by the Fund
on the last business day of each taxable year will be marked to market (e.g.,
treated as if closed out) on that day, and any gain or loss associated with the
positions will be treated as 60% long-term and 40% short-term capital gain or
loss. Certain positions held by the Fund that substantially diminish its risk of
loss with respect to other positions in its portfolio may constitute
"straddles," and may be subject to special tax rules that would cause deferral
of fund losses, adjustments in the holding periods of fund securities, and
conversion of short-term into long-term capital losses. Certain tax elections
exist for straddles that may alter the effects of these rules. The Fund intends
to limit its activities in options, futures contracts, forward contracts, swaps,
and related transactions to the extent necessary to meet the requirements of the
Code.

FOREIGN SECURITIES

         Special tax considerations apply with respect to foreign investments of
the Fund. Foreign exchange gains and losses realized by the Fund will generally
be treated as ordinary income and losses. Use of non-U.S. currencies for
non-hedging purposes may have to be limited in order to avoid a tax on the Fund.

         The foregoing is limited to a discussion of federal taxation. It should
not be viewed as a comprehensive discussion of the items referred to nor as
covering all provisions relevant to investors. Dividends and distributions may
also be subject to state, local, or foreign taxes. Shareholders should consult
their own tax advisers for additional details on their particular tax status.

              7. PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS

         Specific decisions to purchase or sell securities for the Master Fund
are made by portfolio managers who are employees of the Submanager and who are
appointed and supervised by its senior officers. The portfolio managers of the
Master Fund may serve other clients of the Submanager in a similar capacity.

         The primary consideration in placing securities transactions for the
Master Fund with broker-dealers for execution is to obtain and maintain the
availability of execution at the most favorable prices and in the most effective
manner possible. The Submanager attempts to achieve this result by selecting
broker-dealers to execute transactions on behalf of the Master Fund and other
clients of the Submanager on the basis of their professional capability, the
value and quality of their brokerage services, and the level of their brokerage
commissions. The Submanager may also consider social factors, such as whether
the brokerage firm is minority-owned, in selecting broker-dealers, subject to
the Submanager's duty to obtain best execution. In the case of securities traded
in the over-the-counter market (where no stated commissions are paid but the
prices include a dealer's markup or markdown), the Submanager normally seeks to
deal directly with the primary market makers, unless in its opinion, best
execution is available elsewhere. In the case of securities purchased from
underwriters, the cost of such securities generally


                                      -46-


includes a fixed underwriting commission or concession. While Submanager
generally seeks the best price in placing its orders, the Master Fund may not
necessarily be paying the lowest price available.

         Notwithstanding the above, in compliance with Section 28(e) of the
Securities Exchange Act of 1934, the Submanager may select brokers who charge a
commission in excess of that charged by other brokers, if the Submanager
determines in good faith that the commission to be charged is reasonable in
relation to the brokerage and research services provided to the Submanager by
such brokers. Research services generally consist of research or statistical
reports or oral advice from brokers and dealers regarding particular companies,
industries or general economic conditions. The Submanager may also have
arrangements with brokers pursuant to which such brokers provide research
services to the Submanager in exchange for a certain volume of brokerage
transactions to be executed by such brokers. While the payment of higher
commissions increases the Master Fund's costs, the Submanager does not believe
that the receipt of such brokerage and research services significantly reduces
its expenses as the Submanager. Arrangements for the receipt of research
services from brokers may create conflicts of interest.

         Research services furnished to the Submanager by brokers who effect
securities transactions for the Master Fund may be used by the Submanger in
servicing other investment companies and accounts which it manages. Similarly,
research services furnished to Submanager by brokers who effect securities
transactions for other investment companies and accounts which the Submanager
manages may be used by the Submanager in servicing the Master Fund. Not all of
these research services are used by the Submanager in managing any particular
account, including the Master Fund.

         Since the Master Fund is newly established, it has not paid any
brokerage commissions as of the date of this Statement of Additional
Information.

         No portfolio transactions may be executed with the Manager or the
Submanager, or with any affiliate of the Manager or the Submanager, acting
either as principal or as broker, except as permitted by applicable law.

         In certain instances there may be securities which are suitable for the
Master Fund as well as for one or more of the Submanager's or Domini's other
clients. Investment decisions for the Master Fund and for the Submanager's or
Domini's other clients are made with a view to achieving their respective
investment objectives. It may develop that a particular security is bought or
sold for only one client even though it might be held by, or bought or sold for,
other clients. Likewise, a particular security may be bought for one or more
clients when one or more clients are selling that same security. Some
simultaneous transactions are inevitable when several clients receive investment
advice from the same investment adviser, particularly when the same security is
suitable for the investment objectives of more than one client. When two or more
clients are simultaneously engaged in the purchase or sale of the same security,
the securities are allocated among clients in a manner believed to be equitable
to each. It is recognized that in some cases this system could have a
detrimental effect on the price or volume of the security as far as the Master
Fund is concerned. However, it is believed that the ability of the Master Fund
to participate in volume transactions will produce better executions for the
Master Fund.

            8. DESCRIPTION OF SHARES, VOTING RIGHTS, AND LIABILITIES

         The Trust is a Massachusetts business trust established under a
Declaration of Trust dated as of March 1, 1990. The Trust's Declaration of Trust
permits the Trust's Board of Trustees to issue an unlimited number of shares of
beneficial interest (par value $0.00001 per share) in separate series and to
divide any such series into classes of shares. Currently the Fund, the Domini
Social Equity Fund and the Domini Social Bond Fund are the only series offered
by the Trust. The Fund has two classes of shares,


                                      -47-


the Investor Shares and the Class R Shares. No Class R Shares are being offered
or are outstanding as of the date of this Statement of Additional Information.
Each share of each class represents an equal proportionate interest in a series
with each other share of that Class. Upon liquidation or dissolution of the
Fund, the Fund's shareholders are entitled to share pro rata in the Fund's net
assets available for distribution to its shareholders. The Trust reserves the
right to create and issue additional series and classes of shares, and to
redesignate series and classify and reclassify classes, whether or not shares of
the series or class are outstanding. The Trust also reserves the right to modify
the preferences, voting powers, rights, and privileges of shares of each class
without shareholder approval. Shares of each series participate equally in the
earnings, dividends, and distribution of net assets of the particular series
upon the liquidation or dissolution (except for any differences among classes of
shares of a series).

         The assets of the Trust received for the issue or sale of the shares of
each series and all income, earnings, profits, and proceeds thereof, subject
only to the rights of creditors, are specifically allocated to such series and
constitute the underlying assets of such series. The underlying assets of each
series are segregated on the books of account, and are to be charged with the
liabilities in respect to such series and with such a share of the general
liabilities of the Trust. If a series were unable to meet its obligations, the
assets of all other series might be available to creditors for that purpose, in
which case the assets of such other series could be used to meet liabilities
which are not otherwise properly chargeable to them. Expenses with respect to
any two or more series are to be allocated in proportion to the asset value of
the respective series except where allocations of direct expenses can otherwise
be fairly made. The officers of the Trust, subject to the general supervision of
the Trustees, have the power to determine which liabilities are allocable to a
given series, or which are general or allocable to two or more series. In the
event of the dissolution or liquidation of the Trust or any series, the holders
of the shares of any series are entitled to receive as a class the value of the
underlying assets of such shares available for distribution to shareholders.

         The Trustees of the Trust have the authority to designate additional
series and classes of shares, to divide any series, and to designate the
relative rights and preferences as between the different series and classes of
shares. All shares issued and outstanding will be fully paid and nonassessable
by the Trust, and redeemable as described in this Statement of Additional
Information and in the Prospectus. The Trust may involuntarily redeem
shareholder's shares at any time for any reason the Trustees of the Trust deem
appropriate, including for the following reasons: (a) in order to eliminate
inactive, lost, or very small accounts for administrative efficiencies and cost
savings, (b) to protect the tax status of the Fund if necessary, and (c) to
eliminate ownership of shares by a particular shareholder when the Trustees
determine that the particular shareholder's ownership is not in the best
interests of the other shareholders of the Fund.

         Each shareholder of the Fund is entitled to one vote for each dollar of
net asset value (number of shares owned times net asset value per share)
represented by the shareholder's shares in the Fund, on each matter on which the
shareholder is entitled to vote. Each fractional dollar amount is entitled to a
proportionate fractional vote. Shareholders of the Fund and all other series of
the Trust will generally vote together on all matters except when the Trustees
determine that only shareholders of a particular fund, series or class are
affected by a particular matter or when applicable law requires shareholders to
vote separately by fund or series or class. Except when a larger vote is
required by applicable law, a majority of the voting power of the shares voted
in person or by proxy on a matter will decide that matter and a plurality of the
voting power of the shares voted in person or by proxy will elect a Trustee.
Shareholders of the Trust do not have cumulative voting rights, and shareholders
owning more than 50% of the outstanding shares of the Trust may elect all of the
Trustees of the Trust if they choose to do so, and in such event the other
shareholders of the Trust would not be able to elect any Trustee.


                                      -48-


         The Trust is not required and has no current intention to hold annual
meetings of shareholders, but the Trust will hold special meetings of the
Trust's or the Fund's shareholders when in the judgment of the Trust's Trustees
it is necessary or desirable to submit matters for a shareholder vote.
Shareholders have the right to remove one or more Trustees under certain
circumstances.

         The Trust may, without shareholder approval, change the Fund's form of
organization, reorganize the Fund, any other series, any class, or the Trust as
a whole into a newly created entity or a newly created series of an existing
entity, or incorporate the Fund, any other series, any class, or the Trust as a
whole as a newly created entity. If recommended by the Trustees, the Trust, the
Fund, any other series, or any class of the Trust may merge or consolidate or
may sell, lease, or exchange all or substantially all of its assets if
authorized at any meeting of shareholders by a vote of the majority of the
outstanding voting securities (as defined in the 1940 Act) of the Trust voting
as a single class or of the affected fund, series, or class, or by written
consent, without a meeting, of the holders of shares representing a majority of
the voting power of the outstanding shares of the Trust voting as a single
class, or of the affected fund, series or class. The Trust may be terminated at
any time by a vote of the majority of the outstanding voting securities (as
defined in the 1940 Act) of the Trust. The Fund, any other series of the Trust,
or any class of any series, may be terminated at any time by a vote of the
majority of the outstanding voting securities (as defined in the 1940 Act) of
the Fund or that series or class, or by the Trustees by written notice to the
shareholders of the Fund or that series or class. If not so terminated, the
Trust will continue indefinitely. Except in limited circumstances, the Trustees
may, without any shareholder vote, amend or otherwise supplement the Trust's
Declaration of Trust.

         The Trust's Declaration of Trust provides that, at any meeting of
shareholders of the Trust or of the Fund, a Shareholder Servicing Agent may vote
any shares as to which such Shareholder Servicing Agent is the agent of record
and which are not represented in person or by proxy at the meeting,
proportionately in accordance with the votes cast by holders of all shares
otherwise represented at the meeting in person or by proxy as to which such
Shareholder Servicing Agent is the agent of record. Any shares so voted by a
Shareholder Servicing Agent will be deemed represented at the meeting for
purposes of quorum requirements.

         The Declaration of Trust provides that obligations of the Trust are not
binding upon the Trustees individually but only upon the property of the Trust,
that the Trustees and officers will not be liable for errors of judgment or
mistakes of fact or law, and that the Trust will indemnify its Trustees and
officers against liabilities and expenses incurred in connection with litigation
in which they may be involved because of their offices with the Trust unless, as
to liability to the Trust or Fund shareholders, it is finally adjudicated that
they engaged in willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in their offices, or unless with respect to any
other matter it is finally adjudicated that they did not act in good faith in
the reasonable belief that their actions were in the best interests of the
Trust. In the case of settlement, such indemnification will not be provided
unless it has been determined by a court or other body approving the settlement
or other disposition, or by a reasonable determination, based upon a review of
readily available facts, by vote of a majority of Disinterested Trustees (as
defined in the Declaration of Trust) or in a written opinion of independent
counsel, that such Trustees or officers have not engaged in willful misfeasance,
bad faith, gross negligence, or reckless disregard of their duties.

         Under Massachusetts law, shareholders of a Massachusetts business trust
may, under certain circumstances, be held personally liable as partners for its
obligations and liabilities. However, the Declaration of Trust contains an
express disclaimer of shareholder liability for acts or obligations of the Fund
and provides for indemnification and reimbursement of expenses out of Fund
property for any shareholder held personally liable for the obligations of the
Fund. The Declaration of Trust also provides for the maintenance, by or on
behalf of the Trust and the Fund, of appropriate insurance (e.g., fidelity
bonding and errors and omissions insurance) for the protection of the Fund and
its shareholders and the


                                      -49-


Trust's Trustees, officers, employees, and agents covering possible tort and
other liabilities. Thus, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which both
inadequate insurance existed and the Fund itself was unable to meet its
obligations.

         The Trust's Declaration of Trust provides that shareholders may not
bring suit on behalf of the Fund without first requesting that the Trustees
bring such suit unless there would be irreparable injury to the Fund or if a
majority of the Trustees have a personal financial interest in the action.
Trustees are not considered to have a personal financial interest by virtue of
being compensated for their services as Trustees or as trustees of funds with
the same or an affiliated investment adviser or distributor.

         The Trust's Declaration of Trust provides that by becoming a
shareholder of the Fund, each shareholder shall be expressly held to have
assented to and agreed to be bound by the provisions of the Declaration.

         The Master Fund, in which all of the investable assets of the Fund are
invested, is a series of the Master Trust. The Master Trust is organized as a
trust under the laws of the State of New York. The Master Trust's Declaration of
Trust provides that the Fund and other entities investing in the Master Fund
(i.e., other investment companies, insurance company separate accounts, and
common and commingled trust funds) will each be liable for all obligations of
the Master Fund. However, the risk of the Fund incurring financial loss on
account of such liability is limited to circumstances in which both inadequate
insurance existed and the Master Fund itself was unable to meet its obligations.
Accordingly, the Trust's Trustees believe that neither the Fund nor its
shareholders will be adversely affected by reason of the Fund's investing in the
Master Fund.

         Each investor in the Master Fund, including the Fund, may add to or
reduce its investment in the Master Fund on each Fund Business Day. At the close
of each such business day, the value of each investor's interest in the Master
Fund will be determined by multiplying the net asset value of the Master Fund by
the percentage representing that investor's share of the aggregate beneficial
interests in the Master Fund effective for that day. Any additions or
withdrawals, which are to be effected as of the close of business on that day,
will then be effected. The investor's percentage of the aggregate beneficial
interests in the Master Fund will then be re-computed as the percentage equal to
the fraction, (a) the numerator of which is the value of such investor's
investment in the Master Fund as of the close of business on such day plus or
minus, as the case may be, the amount of any additions to or withdrawals from
the investor's investment in the Master Fund effected as of the close of
business on such day and (b) the denominator of which is the aggregate net asset
value of the Master Fund as of the close of business on such day plus or minus,
as the case may be, the amount of the net additions to or withdrawals from the
aggregate investments in the Master Fund by all investors in the Master Fund.
The percentage so determined will then be applied to determine the value of the
investor's interest in the Master Fund as of the close of business on the
following Fund Business Day.

                             9. FINANCIAL STATEMENTS

         The Fund is newly created and does not yet have any financial
statements as of the date of this Statement of Additional Information.

                                    * * * * *

         Domini Social Investments,(R) Domini Social Equity Fund,(R) Domini
Social Bond Fund,(R) Domini Money Market Account,(R) The Way You Invest
Matters,(R) The Responsible Index Fund,(R) and domini.com(R) are registered
service marks of Domini Social Investments LLC.


                                       A-1



                                   APPENDIX A

                      PROXY VOTING POLICIES AND PROCEDURES

                             Adopted         , 2005
                                      -------

                           [TO BE ADDED BY AMENDMENT.]

PART C

Item 23. Exhibits

(7) a(1) Second Amended and Restated Declaration of Trust of the
Registrant.
(*) a(2) Amended and Restated Establishment and Designation of Series
of the Registrant.
(7) b Amended and Restated By-Laws of the Registrant.
(6) d(1) Management Agreement between the Registrant and Domini Social
Investments LLC ("Domini") with respect to Domini Social Bond
Fund.
d(2) Submanagement Agreement between Domini and Seix Advisors
("Seix") with respect to Domini Social Bond Fund.
(9) e(1) Amended and Restated Distribution Agreement with respect to
Investor Shares between the Registrant and DSIL Investment
Services LLC ("DSILD"), as distributor.
(9) e(2) Distribution Agreement with respect to Class R Shares between
the Registrant and DSILD, as distributor.
(3) g(1) Custodian Agreement between the Registrant and Investors Bank
& Trust Company ("IBT"), as custodian.
(6) g(2) Letter Agreement adding Domini Social Bond Fund to the
Custodian Agreement between the Registrant and IBT, as
custodian.
(8) g(3) Amendment to the Custodian Agreement between the Registrant
and IBT, as custodian.
(9) g(4) Amendment to the Custodian Agreement between the Registrant
and IBT, as custodian.
(*) g(5) Letter Agreement adding Domini European Social Equity Fund to
the Custodian Agreement between the Registrant and IBT, as
custodian.
(10) h(1) Transfer Agency Agreement between the Registrant and PFPC
Inc. ("PFPC").
(1) h(2) Sponsorship Agreement between the Registrant and Domini, as
sponsor.
(11) h(3) Expense Limitation Agreement with respect to Domini Social
Equity Fund.
(11) h(4) Expense Limitation Agreement with respect to Domini Social
Bond Fund.
(11) h(5) Expense Limitation Agreement with respect to Domini Social
Bond Fund.
(*) h(6) Expense Limitation Agreement with respect to Domini European
Social Equity Fund.
(6) h(6) Administration Agreement between the Registrant and Domini.
(2)(4)(*) i Opinion and consent of counsel.
(9) m Amended and Restated Distribution Plan of the Registrant with
respect to Investor Shares.
(8) n Multiple Class Plan of the Registrant.
p(1) Code of Ethics of the Registrant, Domini Social Index
Portfolio, Domini Institutional Trust, and Domini Advisor
Trust.
p(2) Code of Ethics of Domini and DSILD.
(10) p(3) Code of Ethics of SSgA Funds Management, Inc.
p(4) Code of Ethics of Seix.
p(5) Code of Ethics of Wellington Management Company, LLP.
(11) q Powers of Attorney.
------------------------

(1) Incorporated herein by reference from Post-Effective Amendment No.
11 to the Registrant's Registration Statement as filed with the SEC
on November 25, 1997.
(2) Incorporated herein by reference from Post-Effective Amendment No.
13 to the Registrant's Registration Statement as filed with the SEC
on September 29, 1999.
(3) Incorporated herein by reference from Post-Effective Amendment No.
14 to the Registrant's Registration Statement as filed with the SEC
on November 23, 1999.
(4) Incorporated herein by reference from Post-Effective Amendment No.
16 to the Registrant's Registration Statement as filed with the SEC
on January 13, 2000.
(5) Incorporated herein by reference from Post-Effective Amendment No.
17 to the Registrant's Registration Statement as filed with the SEC
on March 31, 2000.
(6) Incorporated herein by reference from Post-Effective Amendment No.
19 to the Registrant's Registration Statement as filed with the SEC
on November 28, 2000.
(7) Incorporated herein by reference from Post-Effective Amendment No.
20 to the Registrant's Registration Statement as filed with the SEC
on September 28, 2001.

(8) Incorporated herein by reference from Post-Effective Amendment No.
23 to the Registrant's Registration Statement as filed with the SEC
on September 29, 2003.
(9) Incorporated herein by reference from Post-Effective Amendment No.
24 to the Registrant's Registration Statement as filed with the SEC
on November 26, 2003.
(10) Incorporated herein by reference from Post-Effective Amendment No.
25 to the Registrant's Registration Statement as filed with the SEC
on September 29, 2004.
(11) Incorporated herein by reference from Post-Effective Amendment No.
26 to the Registrant's Registration Statement as filed with the SEC
on November 24, 2004.
(*) To be filed by amendment.

Item 24. Persons Controlled by or under Common Control with Registrant

Not applicable.

Item 25. Indemnification

Reference is hereby made to (a) Article V of the Registrant's Second
Amended and Restated Declaration of Trust, incorporated herein by reference; and
(b) Section 4 of the Distribution Agreements by and between the Registrant and
DSIL Investment Services LLC, incorporated herein by reference.

The trustees and the officers of the Registrant and the personnel of
the Registrant's administrator and distributor are insured under an errors and
omissions liability insurance policy. The Registrant and its officers are also
insured under the fidelity bond required by Rule 17g-1 under the Investment
Company Act of 1940, as amended.

Item 26. Business and Other Connections of Investment Adviser

Domini Social Investments LLC ("Domini") is a Massachusetts limited
liability company with offices at 536 Broadway, 7th Floor, New York, New York
10012, and is registered as an investment adviser under the Investment Advisers
Act of 1940, as amended. The members of Domini are James E. Brooks; Amy L.
Domini; Steven D. Lydenberg; Jotham C. Kinder; John G. Kinder; Dal LaMagna;
Committed Capital, LLC; and Domini Holdings LLC. The officers of Domini are as
follows:

<TABLE>

Other Business, Profession, Vocation,
Name and Capacity or Employment During the Principal
with Domini Past Two Fiscal Years Business Address

Amy L. Domini Private Trustee, Loring, Wolcott & 230 Congress Street
Chief Executive Officer Coolidge Office (fiduciary) Boston, MA 02110

Manager, DSIL Investment Services LLC 536 Broadway, 7th Floor
(broker-dealer); Manager, Domini New York, NY 10012
Holdings LLC (holding company)

Carole M. Laible President, CEO, Chief Compliance 536 Broadway, 7th Floor
Chief Operating Officer Officer, Chief Financial Officer, New York, NY 10012
Secretary, and Treasurer, DSIL
Investment Services LLC (broker-dealer)

Steven D. Lydenberg Director, KLD Research & Analytics, 536 Broadway, 7th Floor
Chief Investment Officer Inc. (social research provider) (until New York, NY 10012
2003)
</TABLE>

C-2

SSgA Funds Management, Inc. ("SSgA") is a wholly owned subsidiary of
State Street Corporation, with its main offices at State Street Financial
Center, One Lincoln Street, Boston, MA 02111. SSgA is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended. The
directors and officers of SSgA are as follows:

<TABLE>

Other Business, Profession, Vocation,
Name and Capacity or Employment During the Principal
with SSgA Past Two Fiscal Years Business Address

Agustin Fleites Senior Principal, State Street Global State Street Financial Center
President & Director Advisors, a division of State Street One Lincoln Street
Bank and Trust Company; Senior Boston, MA 02111
Principal, State Street Global Markets,
LLC, Boston, MA

Thomas P. Kelly Principal and Comptroller, State Street State Street Financial Center
Treasurer Global Advisors, a division of State One Lincoln Street
Street Bank and Trust Company Boston, MA 02111

Mark J. Duggan Principal and Associate Counsel, State State Street Financial Center
Chief Legal Officer Street Global Advisors, a division of One Lincoln Street
State Street Bank and Trust Company Boston, MA 02111

Peter A. Ambrosini Senior Principal and Chief Compliance State Street Financial Center
Chief Compliance Officer and Risk Management Officer, State One Lincoln Street
Street Global Advisors, a division of Boston, MA 02111
State Street Bank and Trust Company

Mitchell H. Shames Senior Principal and Chief Counsel, State Street Financial Center
Director State Street Global Advisors, a One Lincoln Street
division of State Street Bank and Trust Boston, MA 02111
Company
</TABLE>

Seix Advisors is the fixed-income division of Trusco Capital
Management, Inc. ("Trusco"), with its offices at 10 Mountainview Road, Suite
C-200, Upper Saddle River, NJ 07458. Trusco is a wholly owned subsidiary of
SunTrust Banks, Inc. Trusco is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended. Other business, profession,
vocation, or employment of a substantial nature in which each director or
principal officer of Trusco is or has been, at any time during the last two
fiscal years, engaged for his own account or in the capacity of director,
officer, employee, partner, or trustee are as follows:

<TABLE>

Name and Position
with Trusco Name of Other Company Connection with Other Company

David Eidson SunTrust Banks, Inc. Senior Vice President
Director SunTrust Bank Senior Vice President
SunTrust Capital Markets Senior Vice President

William H. Rogers SunTrust Banks, Inc. Executive Vice President
Director

Douglas S. Phillips SunTrust Bank Chief Investment Officer
President/CEO/Director Zevenbergen Capital Investments LLC Director

Paul L. Robertson, III SunTrust Banks, Inc. Vice President
Executive VicePresident/ SunTrust Bank Vice President
Secretary/Treasurer
</TABLE>

C-3

<TABLE>

Andrew J. Muldoon, III SunTrust Bank Executive Vice President
Executive Vice President

G. Bradley Ball SunTrust Bank Vice President
Executive Vice President

Elizabeth G. Pola Zevenbergen Capital Investments LLC Director
Executive Vice President

Robert J. Rhodes SunTrust Bank Officer
Executive Vice President

Christina Seix -- --
Executive Vice President

John Talty -- --
Executive Vice President

David C. Anderson SunTrust Bank Vice President
Vice President

Charles B. Arrington SunTrust Bank Officer
Vice President

Frances J. Aylor -- --
Vice President

Brett L. Barner SunTrust Bank Officer
Managing Director

James N. Behre -- --
Vice President

Richard M. Bemis SunTrust Bank Vice President
Vice President

Theresa N. Benson SunTrust Bank Vice President
Vice President

Edward E. Best SunTrust Bank Officer
Managing Director

Glen Blackston -- --
Vice President

Gordon Boardway -- --
Vice President

Matthew Boden -- --
Vice President

Noel Crissman Boggan SunTrust Bank Officer
Vice President
</TABLE>

C-4

<TABLE>

Robert S. Bowman SunTrust Bank Officer
Managing Director

John Brennan -- --
Vice President

Casey C. Brogdon SunTrust Bank Officer
Managing Director

Daniel Bromstad -- --
Vice President

Marlon Brown SunTrust Bank Officer
Vice President

William B. Buie SunTrust Bank Officer
Vice President

Joseph Calabrese -- --
Managing Director

George E. Calvert, Jr. SunTrust Bank Officer
Vice President

Ann Caner SunTrust Bank Vice President
Vice President

Matthew Carney -- --
Vice President

Christopher D. Carter SunTrust Bank Vice President
Vice President

Carlos Catoya -- --
Vice President

Denise E. Claridy -- --
Vice President

Benjamin M. Clark SunTrust Bank Vice President
Vice President

Shane Coldren SunTrust Bank Officer
Managing Director

Robert W. Corner SunTrust Bank Officer
Managing Director

Scott Craig -- --
Vice President

Stacey Culver -- --
Vice President

William Davis -- --
Vice President
</TABLE>

C-5

<TABLE>

J. Chadwick Deakins SunTrust Bank Officer
Managing Director

Louis Joseph Douglass, IV -- --
Vice President

Martin J. Duffy SunTrust Bank Officer
Vice President

Mary Durkin SunTrust Bank Officer
Vice President

Bob M. Farmer SunTrust Bank Vice President
Managing Director

Douglas J. Farmer -- --
Vice President

Robert Felice -- --
Managing Director

James Fitzpatrick -- --
Vice President

John Floyd SunTrust Bank Officer
Managing Director

James P. Foster SunTrust Bank Officer
Managing Director

Gregory Fraser -- --
Vice President

Holly Freeman SunTrust Bank Vice President
Vice President

Laura B. Friend -- --
Vice President

Elena Fyodorova -- --
Vice President

Michelle Gallo -- --
Vice President

Mark D. Garfinkel SunTrust Bank Officer
Managing Director

Alan M. Gayle -- --
Managing Director

Eunice Gillespie SunTrust Bank Vice President
Vice President
</TABLE>

C-6

<TABLE>

Frank P. Giove -- --
Vice President

Steven Elliott Gordon SunTrust Bank Vice President
Managing Director

George Goudelias -- --
Managing Director

David Grachek SunTrust Bank Vice President
Vice President

Neil L. Halpert -- --
Vice President

Melvin E. Hamilton SunTrust Bank Vice President
Managing Director

Edward Hugh Head -- --
Vice President

Michael Todd Hill SunTrust Bank Officer
Vice President

Michael J. Honsharuk SunTrust Bank Officer
Vice President

Debra Hooper SunTrust Bank Vice President
Vice President

Deborah Hopkins -- --
Vice President

David Hunt -- --
Vice President

Michael A. Jenacova -- --
Vice President

Jim Johnstone -- --
Vice President

Christopher A. Jones -- --
Managing Director

Christine Y. Keefe SunTrust Bank Vice President
Vice President

Nat King -- --
Vice President

Michael Kirkpatrick -- --
Vice President

Patrick W. Kirksey -- --
Vice President
</TABLE>

C-7

<TABLE>

James E. Kofron SunTrust Bank Officer
Vice President

Ray Kramer -- --
Vice President

Ken Kresch -- --
Vice President

Deborah A. Lamb SunTrust Banks, Inc. Officer
Managing Director SunTrust Bank Officer

Wayne G. Larochelle SunTrust Bank Vice President
Managing Director

Gerard Leen -- --
Vice President

Charles B. Leonard SunTrust Bank Officer
Managing Director

Carla Leslie -- --
Managing Director

Biron Lim -- --
Vice President

Tina Y. Long -- --
Vice President

William Longan SunTrust Bank Officer
Vice President

Jennifer J. Love SunTrust Bank Vice President
Vice President

Kimberly C. Maichle SunTrust Bank Officer
Vice President

James B. Mallory SunTrust Bank Vice President
Vice President

Jeffrey E. Markunas SunTrust Bank Officer
Managing Director

Patrick K. Mason SunTrust Bank Vice President
Vice President

Mike McEachern -- --
Managing Director

Andrew McGhee -- --
Managing Director
</TABLE>

C-8

<TABLE>

Evan Melcher SunTrust Bank Officer
Vice President

Tom Meyers -- --
Managing Director

R. Douglas Mitchell -- --
Vice President

Peter T. Montgomery SunTrust Bank Officer
Vice President

Sharon Moran -- --
Vice President

Elizabeth T. Morrison SunTrust Bank Officer
Vice President

Stephen Murrin -- --
Vice President

Timothy James Nash SunTrust Bank Officer
Vice President

Robert Neinken SunTrust Bank Vice President
Managing Director

Harold F. Nelson SunTrust Bank Officer
Managing Director

Brian Nold -- --
Vice President

Brian O'Connell -- --
Managing Director

Thomas J. O'Neil -- --
Vice President

Agnes G. Pampush SunTrust Bank Officer
Managing Director

Cynthia Panebianco -- --
Vice President

Christopher Paolella SunTrust Bank Vice President
Managing Director

Patrick Paparelli SunTrust Banks, Inc. Vice President
Managing Director SunTrust Bank Vice President

Sheri L. Paquette SunTrust Bank Officer
Vice President

Ty Parrish SunTrust Bank Vice President
Vice President
</TABLE>

C-9

<TABLE>

Ronnie G. Pennell SunTrust Bank Officer
Vice President

Elliott A. Perny SunTrust Bank Officer
Managing Director

James Phebus Jr. SunTrust Bank Officer
Vice President

Gary Plourde SunTrust Bank Vice President
Managing Director

Sean Porrello -- --
Vice President

Raymond Prophater -- --
Vice President

Joe E. Ransom SunTrust Bank Officer
Managing Director

Boyce G. Reid SunTrust Bank Officer
Vice President

David W. Reidy -- --
Vice President

Kristin Hildebrand Ribic -- --
Vice President

Mills A. Riddick SunTrust Bank Officer
Managing Director

Josie C. Rosson -- --
Managing Director

James L. Savage SunTrust Bank Officer
Vice President

Diane Schmidt -- --
Vice President

Marc H. Schneidau SunTrust Bank Officer
Managing Director

Ronald H. Schwartz SunTrust Bank Officer
Managing Director

Michael G. Sebesta SunTrust Bank Officer
Managing Director

Dusty L. Self SunTrust Bank Officer
Vice President
</TABLE>

C-10

<TABLE>

Bob Sherman -- --
Managing Director

Julia Short -- --
Vice President

Robin Shulman -- --
Managing Director

Garrett P. Smith SunTrust Bank Officer
Managing Director

George D. Smith, Jr. SunTrust Bank Officer
Managing Director

Stephen Smith -- --
Vice President

E. Dean Speer SunTrust Bank Officer
Vice President

Ellen Spong SunTrust Bank Vice President
Managing Director

Jeffrey St. Amand -- --
Vice President

Celia S. Stanley -- --
Vice President

John H. Stebbins SunTrust Banks, Inc. Vice President
Managing Director SunTrust Bank Vice President

Chad K. Stephens SunTrust Bank Officer
Vice President

Adam C. Stewart -- --
Vice President

E. Sonny Surkin SunTrust Bank Officer
Vice President

Hubert Swecker SunTrust Bank Vice President
Vice President

Paul V. Taffe SunTrust Bank Vice President
Vice President

William F. Tarry SunTrust Bank Officer
Vice President

Parker W. Thomas Jr. SunTrust Bank Officer
Managing Director

James M. Thomas SunTrust Bank Vice President
Vice President
</TABLE>

C-11

<TABLE>

Perry Troisi -- --
Managing Director

Stuart F. Van Arsdale SunTrust Bank Officer
Managing Director

David M. Walrod -- --
Vice President

Casey Walsh -- --
Vice President

Francis P. Walsh -- --
Vice President

Joseph Walsh SunTrust Bank Vice President
Vice President

George Way -- --
Vice President

Adrien Webb -- --
Managing Director

Gregory Webster -- --
Vice President

Darren C. Weems -- --
Vice President

Matthew Welden -- --
Vice President

Ellen Welsh -- --
Managing Director

Elizabeth Wilson -- --
Managing Director

William L. Wilson, Jr. SunTrust Bank Officer
Vice President

Tom Winters -- --
Managing Director

Donald Wordell SunTrust Bank Officer
Vice President

Natalie Wright -- --
Vice President

Stephen M. Yarbrough SunTrust Banks, Inc. Vice President
Managing Director SunTrust Bank Vice President

Steven M. Yates SunTrust Bank Officer
Managing Director
</TABLE>

C-12

<TABLE>

Jay Young -- --
Vice President

Jon Yozzo -- --
Vice President

Scott Yuschak -- --
Vice President

Sam Zona -- --
Managing Director
</TABLE>

The principal business address of Wellington Management Company, LLP
("Wellington Management") is 75 State Street, Boston, MA 02109. Wellington
Management is registered as an investment adviser under the Investment Advisers
Act of 1940, as amended. The partners and managing partners of Wellington
Management are as follows:

<TABLE>

Name and Position with
Wellington Management Name of Other Company Connection with Other Company

Kenneth Lee Abrams -- --
Partner

Nicholas Charles Adams -- --
Partner

Rand Lawrence Alexander -- --
Partner

Deborah Louise Allinson -- --
Partner

Steven C. Angeli -- --
Partner

James Halsey Averill -- --
Partner

John F. Averill -- --
Partner

Karl E. Bandtel -- --
Partner

David W. Barnard -- --
Partner

Mark James Beckwith -- --
Partner

James A. Bevilacqua -- --
Partner

Kevin J. Blake -- --
Partner
</TABLE>

C-13

<TABLE>

William Nicholas Booth -- --
Partner

John A. Boselli -- --
Partner

Michael J. Boudens -- --
Partner

Edward P. Bousa -- --
Partner

John V. Brannen -- --
Partner

Paul Braverman -- --
Partner

Robert A. Bruno -- --
Partner

Michael T. Carmen -- --
Partner

Maryann Evelyn Carroll -- --
Partner

William R.H. Clark -- --
Partner

Cynthia M. Clarke -- --
Partner

Richard M. Coffman -- --
Partner

John DaCosta -- --
Partner

Pamela Dippel -- --
Partner

Scott M. Elliott -- --
Partner

Robert Lloyd Evans -- --
Partner

David R. Fassnacht -- --
Partner

Hollis French -- --
Partner
</TABLE>

C-14

<TABLE>

Lisa de la Fuente Finkel -- --
Partner

Mark A. Flaherty -- --
Partner

Laurie Allen Gabriel -- --
Managing Partner

Ann C. Gallo -- --
Partner

Bruce L. Glazer -- --
Partner

Subbiah Gopalraman -- --
Partner

Paul J. Hamel -- --
Partner

William J. Hannigan -- --
Partner

Lucius Tuttle Hill, III -- --
Partner

James P. Hoffmann -- --
Partner

Jean M. Hynes -- --
Partner

Steven T. Irons -- --
Partner

Mark D. Jordy -- --
Partner

Paul David Kaplan -- --
Partner

Lorraine A. Keady -- --
Partner

John Charles Keogh -- --
Partner

George Cabot Lodge, Jr. -- --
Partner

Nancy Therese Lukitsh -- --
Partner

Mark Thomas Lynch -- --
Partner
</TABLE>

C-15

<TABLE>

Norman L. Malcolm -- --
Partner

Mark D. Mandel -- --
Partner

Christine Smith Manfredi -- --
Partner

Lucinda M. Marrs -- --
Partner

Earl Edward McEvoy -- --
Partner

Matthew Edward Megargel -- --
Partner

James Nelson Mordy -- --
Partner

Diane Carol Nordin -- --
Partner

Stephen T. O'Brien -- --
Partner

Andrew S. Offit -- --
Partner

Edward Paul Owens -- --
Partner

Saul Joseph Pannell -- --
Partner

Thomas Louis Pappas -- --
Partner

Jonathan Martin Payson -- --
Partner

Philip H. Perelmuter -- --
Partner

Robert Douglas Rands -- --
Partner

Jamie A. Rome -- --
Partner

James Albert Rullo -- --
Partner
</TABLE>

C-16

<TABLE>

John Robert Ryan -- --
Managing Partner

Joseph Harold Schwartz -- --
Partner

James H. Shakin -- --
Partner

Theodore Shasta -- --
Partner

Andrew J. Shilling -- --
Partner

Binkley Calhoun Shorts -- --
Partner

Scott E. Simpson -- --
Partner

Trond Skramstad -- --
Partner

Stephen Albert Soderberg -- --
Partner

Haluk Soykan -- --
Partner

Kent M. Stahl -- --
Partner

Eric Stromquist -- --
Partner

Brendan James Swords -- --
Partner

Harriett Tee Taggart -- --
Partner

Frank L. Teixeira -- --
Partner

Perry Marques Traquina -- --
Managing Partner

Nilesh P. Undavia -- --
Partner

Kim Williams -- --
Partner

Itsuki Yamashita -- --
Partner
</TABLE>

C-17

<TABLE>

David S. Zimble -- --
Partner
</TABLE>

Item 27. Principal Underwriters

(a) DSIL Investment Services LLC is the distributor for the
Registrant.
DSIL Investment Services LLC serves as the distributor or the
placement agent for the following other registered investment
companies: Domini Institutional Social Equity Fund, Domini
Social Equity Portfolio, and Domini Social Index Portfolio.
(b) The information required by this Item 27 with respect to each
manager or officer of DSIL Investment Services LLC is
incorporated herein by reference from Schedule A of Form BD as
filed by DSIL Investment Services LLC (File No. 008-44763)
pursuant to the Securities Exchange Act of 1934, as amended.
(c) Not applicable.

Item 28. Location of Accounts and Records

The accounts and records of the Registrant are located, in whole or
in part, at the offices of the Registrant and at the following locations:

Name: Address:

Domini Social Investments LLC 536 Broadway, 7th Floor
(manager) New York, NY 10012

SSgA Funds Management, Inc. State Street Financial Center
(submanager) One Lincoln Street
Boston, MA 02111

Seix Advisors, the fixed-income division of 10 Mountainview Road, Suite C-200
Trusco Capital Management, Inc. Upper Saddle River, NJ 07458
(submanager)

Wellington Management Company, LLP 75 State Street
(submanager) Boston, MA 02109

DSIL Investment Services LLC 536 Broadway, 7th Floor
(distributor) New York, NY 10012

Investors Bank & Trust Company 200 Clarendon Street
(custodian) Boston, MA 02116

PFPC Inc. 4400 Computer Drive
(transfer agent) Westborough, MA 01581

Item 29. Management Services

Not applicable.

Item 30. Undertakings

Not applicable.

C-18

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City of New York and the State of New York
on the 10th day of June, 2005.

DOMINI SOCIAL INVESTMENT TRUST
By: /s/ Amy L. Domini
-------------------------------------
Amy L. Domini
President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated below on June 10, 2005.

Signature Title
/s/ Amy L. Domini President (Principal Executive Officer)
---------------------------------- and Trustee of Domini Social Investment
Amy L. Domini Trust

/s/ Carole M. Laible Treasurer (Principal Accounting and
---------------------------------- Financial Officer) of Domini Social
Carole M. Laible Investment Trust

Julia Elizabeth Harris* Trustee of Domini Social Investment Trust
----------------------------------
Julia Elizabeth Harris

Kirsten S. Moy* Trustee of Domini Social Investment Trust
----------------------------------
Kirsten S. Moy

William C. Osborn* Trustee of Domini Social Investment Trust
----------------------------------
William C. Osborn

Karen Paul* Trustee of Domini Social Investment Trust
----------------------------------
Karen Paul

Gregory A. Ratliff* Trustee of Domini Social Investment Trust
----------------------------------
Gregory A. Ratliff

John L. Shields* Trustee of Domini Social Investment Trust
----------------------------------
John L. Shields

Frederick C. Williamson, Sr.* Trustee of Domini Social Investment Trust
----------------------------------
Frederick C. Williamson, Sr.

*By: /s/ Amy L. Domini
-------------------------------
Amy L. Domini
Executed by Amy L. Domini on behalf of those
indicated pursuant to Powers of Attorney.

SIGNATURES

Domini Social Index Portfolio has duly caused this Registration
Statement on Form N-1A (File No. 33-29180) of Domini Social Investment Trust to
be signed on its behalf by the undersigned, duly authorized, in the City of New
York and the State of New York on the 10th day of June, 2005.

DOMINI SOCIAL INDEX PORTFOLIO
By: /s/ Amy L. Domini
-------------------------------------
Amy L. Domini
President

This Registration Statement on Form N-1A of Domini Social Investment
Trust has been signed below by the following persons in the capacities indicated
below on June 10, 2005.

Signature Title
/s/ Amy L. Domini President (Principal Executive Officer)
----------------------------------- and Trustee of Domini Social Index
Amy L. Domini Portfolio

/s/ Carole M. Laible Treasurer (Principal Accounting and
----------------------------------- Financial Officer) of Domini Social
Carole M. Laible Index Portfolio

Julia Elizabeth Harris* Trustee of Domini Social Index Portfolio
-----------------------------------
Julia Elizabeth Harris

Kirsten S. Moy* Trustee of Domini Social Index Portfolio
-----------------------------------
Kirsten S. Moy

William C. Osborn* Trustee of Domini Social Index Portfolio
-----------------------------------
William C. Osborn

Karen Paul* Trustee of Domini Social Index Portfolio
-----------------------------------
Karen Paul

Gregory A. Ratliff* Trustee of Domini Social Index Portfolio
-----------------------------------
Gregory A. Ratliff

John L. Shields* Trustee of Domini Social Index Portfolio
-----------------------------------
John L. Shields

Frederick C. Williamson, Sr.* Trustee of Domini Social Index Portfolio
-----------------------------------
Frederick C. Williamson, Sr.

*By: /s/ Amy L. Domini
-------------------------------
Amy L. Domini
Executed by Amy L. Domini on behalf of those
indicated pursuant to Powers of Attorney.

INDEX TO EXHIBITS

EXHIBIT NO. DESCRIPTION OF EXHIBIT

d(2) Submanagement Agreement between Domini and Seix
Advisors ("Seix") with respect to Domini Social Bond
Fund.
p(1) Code of Ethics of the Registrant, Domini Social Index
Portfolio, Domini Institutional Trust, and Domini
Advisor Trust.
p(2) Code of Ethics of Domini and DSILD.
p(4) Code of Ethics of Seix.
p(5) Code of Ethics of Wellington Management Company, LLP.