Item 5: Fees and Compensation
A. Description and Billing
For its separately managed accounts, GQAM receives a management fee based on the
assets under management for each client and a performance fee for certain clients. The
performance fee is discussed below in Item 6. Clients will pay GQAM a monthly
management fee, payable in arrears on the first business day of each calendar month,
based on the ending net asset value of the account for the previous month-end (the
“Management Fee”). Net Asset Value includes all cash and all other assets of the account
(valued at liquidation value) under management after taking into account all brokerage
commissions and fees, and other expenses of the account.
All open positions shall be valued at their then market value, which means the
settlement price as determined by the exchange on which the transaction is effected, or
the most recent appropriate quotation as supplied by the clearing broker or banks
through which the transaction is effected. If there are no trades on the date of the
calculation due to operation of the daily price fluctuation limits or due to a closing of
the exchange on which the transaction is executed, the contract will be valued at fair
value as of the close of the then most recent trading day. Interest, if any, shall accrue
monthly.
GQAM can instruct the client’s qualified custodian to debit GQAM’s fees from the client’s
account by providing the qualified custodian with written notice of the amount of fee to
be deducted. All fees will be deducted directly from the account will be paid to GQAM
from the amount on deposit in the account. The client will provide written authorization
permitting the fees to be paid directly from the account. GQAM will also provide the
client with a written invoice itemizing the fee, including any formulae used to calculate
the fee, the time period covered by the fee, and methods of analysis for the amount of
assets under management on which the fee was based.
GQAM reserves the right to waive or discount fees based on the needs and
circumstances of clients. All of the below-referenced fees are negotiable. Account
minimums may be revised from time to time to reflect the market liquidity and
availability of appropriate trading instruments.
Active Asset Allocation using ETFs will have a Management Fee of 1.00% per annum
subject to a $20,000 account minimum.
Active Asset Allocation strategy using proprietary stock selection and dynamic macro
allocation will have a Management Fee of 1.00% per annum subject to a $ 500,000
account minimum.
Diversified Long-Short Equities strategy will have a Management Fee of 2.00% per
annum subject to a $200,000 account minimum.
Dynamic Macro trading strategy will have a Management Fee of 2.00% per annum
subject to a $200,000 account minimum.
The Memorandum contains the fees charged with respect to GQAM’s management of the
Fund.
B. Other Fees and Payments
There may be additional fees or charges that result from the maintenance of or trading
within your account. A client account may be assessed transaction charges for individual
stocks, bonds, and certain transaction fee mutual funds as stated below. Each client’s
account will be subject to brokerage fees charged by the account’s broker- dealer. Client
accounts will also be charged on a pro-rata pass-through basis for market data costs
assessed by the broker or by exchange. Please see Item 12 for more information
regarding GQAM’s brokerage practices. Additional fees are imposed by third parties in
connection with investments made through your account, including but not limited to,
no-load mutual fund 12(b)-1 distribution fees, certain deferred sales charges on
previously purchased mutual funds, and IRA and Qualified Retirement Plan fees. All fees
paid by GQAM for investment advisory services are separate and apart and distinct from
the fees and expenses charged by mutual funds to their shareholders. These fees and
expenses are described in each fund’s prospectus, which we recommend the client to
review. These fees will generally include a management fee, other fund expenses, and a
possible distribution fee. Clients should review the fees charged by the mutual fund and
the fees we charge to understand the total amount of fees paid.
C. Refund Policy
Separately managed account Clients may terminate their advisory agreement without
penalty by providing thirty (30) day’s written notice to the other party. In the event of
account termination, management fees will be prorated to the date of termination and
any unearned portion of prepaid fees will be refunded in accordance with the advisory
agreement.
Unless a client has received the Firm’s disclosure brochure at least 48 hours prior to
signing the investment advisory contract, the investment advisory contract may be
terminated by the client within five (5) business days of signing the contract without
incurring any advisory fees.
D. Other Compensation
GQAM currently does not receive any compensation other than the Management Fee or
Performance Fee.