ITEM 5: FEES AND COMPENSATION
Generally, fees are not negotiable. In addition to the fee schedules outlined below, different fee
schedules may apply for long standing clients as well as clients with customized mandates or
special service needs. For certain investors, CGTC may have a separate performance related fee
as discussed in Item 6 (Performance Based Fees and Side-By-Side Management). Client
accounts also incur brokerage and other transaction costs. For further details on CGTC’s
brokerage policies please refer to Item 12 (Brokerage Practices) of this brochure.
Sales and marketing professionals may receive direct or indirect compensation related to the
services CGTC provides. This presents a conflict of interest, as marketing and sales associates
have an incentive to recommend services because of the compensation they are provided by
CGTC.
The annual fees for advisory services provided by CGTC to Capital Bank and Trust Company, in
its capacity as trustee to certain collective investment trusts, are agreed upon from time to time in
writing. The fees that Capital Bank and Trust Company receives for such collective investment
trusts are described in the characteristic documents.
CGTC investment advisory services are also available through various consulting, or bundled
“wrap fee” programs sponsored by certain unaffiliated broker-dealers or other financial
institutions where the sponsor offers bundled investment management, custody, brokerage or
other services for a single fee. Fees charged by CGTC to the wrap program’s sponsor for such
services will vary based on the relationship, services provided, level of discretion and other
factors. The “wrap fee” paid by the client to the sponsor, which includes the fee for advisory
services provided by CGTC is generally based on a percentage of assets. Clients should contact
their program sponsor for more information on fees in connection with such programs.
Fees charged to sponsors generally fall within the following ranges:
U.S. Equity: 0.28% - 0.51%
Non-U.S. / Global Equity: 0.35% - 0.56%
U.S. Fixed Income: 0.22% - 0.30%
Sponsor firms should refer to their agreements with CGTC for details on the fee schedule that
applies for their relationship.
SERVICES TO INSTITUTIONAL CLIENTS
The fees and services discussed below are for separate accounts and privately-offered collective
investment trusts (“CITs”) that are exempt from registration. Such funds currently include: (i)
common trust funds designed for U.S. charitable tax-exempt organizations; and (ii) collective
trust funds designed for U.S. qualified employee benefit and government plans. For detailed
information regarding funds designed primarily for defined contribution plans, please refer to
that fund's characteristics.
In order to provide the same investment pool to different types of plans and with different fee
payment options, a number of the CITs structured as “unit class" funds generally will include
one or more unit classes as follows: (i) two unit classes are designed primarily for use by
participant-directed, defined contribution retirement plans (Unit Classes S and T) and/or (ii) one
unit class is designed primarily for use by defined-benefit retirement plans (Unit Class DB).
While the "S" unit class charges the investment management fees internally, all other funds
offered charge the investment management fees externally. Operating expenses including
expenses for custody, audit and ordinary trust administration services are charged internally to all
funds (and are reflected in the net asset value of each fund); such expenses may be higher in
certain funds given higher administrative costs associated with operating the fund and/or the
nature of the investments.
Calculation of Fees
Generally, investment management fees are calculated at each quarter end, based on the market
or appraised value of the account at such time, and are charged quarterly and payable in arrears.
With regard to clients who invest in CITs, fees can be (i) charged outside of the unit class
directly to the participating plan ("externally charged fees"), or (ii) for certain unit classes that
permit daily admissions and withdrawals, the management fee may be incurred within the unit
class (“internally charged fees”).
Minimum Account Size
Please see the fee schedules below for the minimum account size for each mandate and vehicle.
In some instances, the minimum may be waived due to the overall size of the client relationship
or other factors. Due to the nature of the plans, minimum size requirements are not imposed on
unit classes designed for use primarily by defined contribution plans (i.e., Unit Classes S and T),
however a minimum plan size may be required. Unit Class T, however, is only available to
eligible plans as determined by the trustee of the CITs based on certain factors including the
plan's overall assets under management and number and type of accounts.
Fee Discounts
A management fee discount, as well as additional breakpoints, may be available to eligible
accounts.
Sub-Advisory Fees
The investment management fees for sub-advisory clients that are U.S. registered investment
companies are generally higher than the corresponding rates for each of the investment mandates
listed under the annual fee schedule below. Fees may also vary between accounts due to the size
and relationship status of accounts and other relevant factors. The annual fees for sub-advisory
services provided to affiliates are agreed upon from time to time in writing.
Model Investment Portfolios
On occasion, CGTC may agree to a relationship with a third party involving the provision of
model investment portfolios. Fees for such services will vary based on the relationship, services
provided and other factors.
ANNUAL FEE SCHEDULE FOR INVESTMENT MANAGEMENT SERVICES
FOR INSTITUTIONAL CLIENTS
Fees are expressed as a percentage of total assets. All assets are stated in U.S. dollars.
U.S. Equity
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