Item 5 – Fees and Compensation
The extent and nature of advisory services that KL Capital provides will vary depending upon the specific
arrangements it makes with each client. As a result, KL Capital’s fees will differ among its client accounts due to a
number of factors, such as the type of product, size of the account, relationships to other accounts, the historical
or projected nature of trading for the account, and the extent of supplemental client services to be provided to the
account.
Advisory Fees and Compensation
Mutual Funds
Mutual Fund clients pay KL Capital an advisory fee at an annual rate based on each funds’ average daily net assets.
Advisory fees accrue daily and are paid monthly in arrears. Our advisory fee is in addition to a fund’s other
operating expenses (including custody, independent auditor, registration and offering expenses) that will be borne
by each fund. The annual operating expenses of each fund, as well as a breakdown of other fees and expenses, are
described in the respective fund’s offering materials.
Exchange Traded Fund
In contrast to mutual funds, ETFs do not charge a load. ETFs are traded directly on an exchange and may be subject
to brokerage commissions, which can vary depending on the firm. ETF expenses are usually stated in terms of a
fund's operating expense ratio (OER). The expense ratio is an annual rate the fund (not your broker) charges on the
total assets it holds to pay for portfolio management, administration and other costs. We receive a management
fee for providing investment advice to the ETF. Please refer to the ETFs prospectus for complete information on
the fees and expenses of investing in the ETF.
Managed Account Programs
For Managed Account Program services, KL Capital offers sponsors our Strategy portfolios for a fee. In connection
with providing these portfolio services, KL Capital is entitled to receive a fee, based on the value of the assets
under management that follow the strategy. KL Capital’s Managed Account Program fees are negotiable and will
vary based on the sponsor and whether KL Capital has been granted “dual-discretion” over the assets. Where KL
Capital receives a fee based on the value of the assets that follow the strategy, such fee range is between 0.50%
and 0.75% of assets and will not typically exceed the separately managed account fees set forth below.
Model-Based and Unified Managed Account Programs
Clients in model-based and UMA programs are charged a fee by the program sponsor. KL Capital receives a
management fee from the program sponsor. The current range of fees in the UMA program 0.40%-0.45% of assets
depending on strategy.
Separately Managed Accounts
The basic fee schedule for separately managed account clients is detailed below:
Client’s Aggregate Assets Annual Fee
$0 – $50 million 0.75% of assets
$50 – $100 million 0.60% of assets
Over $100 million Negotiable
The services rendered to each separately managed account are pursuant to a written management contract
generally terminable by either party on prior written notice. Fees are negotiable and may differ from the above
range. Accounts managed with the same investment objective may not have the same fee structure. Clients are
generally invoiced for fees. Invoiced fees are typically due within 30 days of receipt of the invoice. Clients may be
subject to other fees and expenses, including, without limitation, custody fees and brokerage/trading fees, as
further described in the written management contract. More information on brokerage services and fees are
outlined in Item 12 - Brokerage Practices.
Additional Information Concerning Fees and Expenses
KL Capital’s fees are exclusive of brokerage commissions, transaction fees, and other related costs and expenses
that may be incurred by a client. Clients may incur charges imposed by custodians, brokers and other third parties,
as well as deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and electronic fund fees, and
other fees and taxes imposed on brokerage accounts and securities transactions. ETFs and other funds in which KL
Capital may invest on behalf of clients also charge their own management fees that are disclosed in the respective
fund’s prospectus. Such other charges, fees, taxes, costs and commissions are exclusive of, and in addition to, our
management fee, and KL Capital does not receive any portion of these other charges, fees, taxes, costs and
commissions. Clients should consult the funds’ prospectuses for a complete description of all fees and expenses.
For clients in MAP and UMA programs, advisory fees may be bundled with other fees for other services provided
by the platform sponsor and can vary depending on specific platform agreements. These fees generally include
commissions for trades executed through the platform broker-dealer. Any trading done with an unaffiliated
broker-dealer would be subject to additional trading commissions.
We may manage accounts for employees, family members or other parties whereby we waive account minimums
or advisory fees.