KLD's Domini 400 Social Index Shifts to
Float-Adjusted Market Capitalization Weights

Over the last few years, float adjustment has become the accepted standard for capitalization-weighted indexes. To ensure that the Domini 400 Social^SM Index remains the most useful benchmark for social investors, KLD began the Index's transition to float-adjusted market capitalization weights earlier this year. The float adjustment methodology and schedule for the DSI replicate those of its index calculator, Standard & Poor's.

Market capitalization is calculated by multiplying a company's share price by the number of shares outstanding. Market capitalization weighted indexes determine the weight of each holding as the proportion of its market cap to the total capitalization of the index.

Float adjustment more accurately measures market capitalization by reflecting only the shares available to investors rather than the total shares outstanding which used to be the standard practice. The float factor is the percent of total market capitalization available to investors.

Float adjustment reduces the share counts of stocks in the index to eliminate blocks of stocks held by a control group, founding family, another corporation or government. It more accurately represents an index’s liquidity, enhancing its precision as a market gauge and reliability as an investment vehicle.

KLD adopted S&P's float adjustment methodology because the Domini 400 includes 246 S&P 500 companies. The DSI is being adjusted in two steps. On March 18th, the DSI shifted to half float adjustment. On September 16th, the DSI will complete the shift to full float. For example, a company with an 80% float factor was adjusted to 90% float in March, or half way from 100% to 80%. In September the company will be fully adjusted to its 80% float factor.

Float adjustment will have little impact on fundamental characteristics of the Domini Index. Its structure, diversification, turnover and risk will remain nearly the same. The main change to the Index occurs only at the time of the shift, where certain company weights will change to reflect the float-adjusted market capitalization.

S&P provides DSI values on KLD's web site (www.KLD.com) and on Bloomberg and Reuters under the ticker KLDDSI.