Item 5. Fees and Compensation
The management fee schedule for investment advisory services to be rendered by the Adviser to its clients
that are not individuals, trusts or charitable foundations (the "Core Managed Account Group") will generally
range from 0.20% to 1.5% per annum of the market value of assets for which advisory services are
rendered. The management fee schedule for investment advisory services to be rendered by the Adviser
to Private Client Group Clients will generally range from 0.20% to 1% per annum of the market value of
assets for which advisory services are rendered. These ranges of fees correspond to the range of advisory
services provided to clients, from basic advisory services for large pensions to comprehensive money
management services for other clients. Accounts managed on behalf of persons associated with the
Adviser or members of their families may be managed without charge by the Adviser. Fees for services
provided to the Core Managed Account Group are generally payable in arrears and are prorated if the client
agreement is not in effect for the entire fiscal quarter. For certain clients, fees may be paid in advance, in
which case in the event of the termination of the client agreement during a fiscal quarter, any advance fee
payable for the remaining portion of the fiscal quarter shall be refunded to the client. Investment advisory
contracts will be terminable at the end of any month upon 30 days prior written notice.
All fees paid to the Adviser for investment advisory services are separate and distinct from the fees and
expenses charged by mutual funds or exchange traded funds to their shareholders. These fees and
expenses are described in each fund's prospectus. These fees generally include a management fee, other
fund expenses, and a possible distribution fee. If the fund also imposes sales charges, a client may pay an
initial or deferred sales charge. We generally seek to avoid funds with sales charges. However, some funds
may have early redemption fees if sold prior to the expiration of their holding periods.
A client could invest in a mutual fund directly, without the services of the Adviser. In that case, the client
would not receive the services provided by the Adviser which are designed, among other things, to assist
the client in determining which mutual fund or funds are most appropriate to each client's financial condition
and objectives. Accordingly, the client should review both the fees charged by the funds and the fees
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charged by the Adviser to fully understand the total amount of fees to be paid by the client and to thereby
evaluate the advisory services being provided.
Fees related to the Fund
The Adviser charges the Fund an investment management fee based on the value of the Fund's assets
under management in an amount equal to 0.50%. Investment management fees are charged each quarter
in advance based on the total market value of the assets in the Fund (including net unrealized appreciation
or depreciation of investments) on the first day of the quarter. The management fee will be prorated and
charged at the time of investment if investments are made during the quarter.
The Adviser may also be paid a performance-based allocation, which is compensation that is based on a
share of capital gains on or capital appreciation of the assets of the Fund. This compensation rate is 10%.
Performance-based compensation is subject to a preferred rate of return equal to the annual interest rate
payable as of January 1 each year on the most recently issued five-year U.S. Treasury Note.
The Adviser may waive or modify the management fee and/or the performance-based allocation for
Investors that are employees or affiliates of the Adviser, relatives of such persons, and for certain large or
strategic investors.
The Fund will bear other expenses in addition to the management fee and the performance-based
allocation, including legal, audit and accounting expenses (including third party accounting services);
investment expenses such as commissions, research fees and expenses (including research-related
travel); interest on margin accounts and other indebtedness; borrowing charges on securities sold short;
custodial fees; administrator fees and expenses; directors' fees and expenses and any other expenses
reasonably related to the purchase, sale or transmittal of Fund assets. Please refer to Item 12 of this
Brochure for a discussion of the Adviser's brokerage practices.
IRA Rollover Considerations
As a normal extension of financial advice, we provide education or recommendations related to the rollover
of an employer-sponsored retirement plan. A plan participant leaving employment has several options.
Each choice offers advantages and disadvantages, depending on desired investment options and services,
fees and expenses, withdrawal options, required minimum distributions, tax treatment, and the investor's
unique financial needs and retirement plans. The complexity of these choices may lead an investor to seek
assistance from us.
An Associated Person who recommends an investor roll over plan assets into an Individual Retirement
Account (“IRA”) may earn an asset-based fee as a result, but no compensation if assets are retained in the
plan. Thus, we have an economic incentive to encourage an investor to roll plan assets into an IRA. In
most cases, fees and expenses will increase to the investor as a result because the above-described fees
will apply to assets rolled over to an IRA and outlined ongoing services will be extended to these assets.
We are fiduciaries under the Investment Advisers Act of 1940 and when we provide investment advice to
you regarding your retirement plan account or individual retirement account, we are also fiduciaries within
the meaning of Title I of the Employee Retirement Income Security Act and/or the Internal Revenue Code,
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