Item 5 – Fees and Compensation
Our fees are subject to negotiation and all fee arrangements will comply with Section 205 of the
Advisers Act. As payment for its services as investment adviser to the Fund, the Fund pays
Montage a monthly management fee that is calculated at an annual rate of 1.50% of the Fund’s
average daily net assets.
For direct advisory clients of Montage, the specific manner in which our fees are charged is
established in the Agreement. We will generally bill our fees in advance on a quarterly basis
based upon the value of assets under management on the last day of the previous quarter, and as
more fully described in the Agreement. The Agreement and/or the separate agreement with any
financial institution(s) may authorize us to invoice the custodian for the advisory fee. The
Agreement further authorizes the custodian to deduct the amount stated in the fee statement from
one or more of the client’s accounts in accordance with applicable custody rules. The financial
institution(s) recommended by us have agreed to send a statement to the client, at least quarterly,
indicating all amounts disbursed from the account including the amount of management fees
paid directly to us. Further details regarding our fees and billing practices are described in the
Agreement.
Our fees are exclusive of brokerage commissions, transaction fees, and other related costs and
expenses which shall be incurred by a client. Clients may incur certain charges imposed by
custodians, brokers, third party investment managers and other third parties such as fees charged
by managers, custodial fees, deferred sales charges, odd-lot differentials, transfer taxes, wire
transfer and electronic fund fees, and other fees and taxes on brokerage accounts and securities
transactions. Mutual funds and exchange traded funds also charge internal management fees,
which are disclosed in a fund’s prospectus. Such charges, fees and commissions are exclusive of
and in addition to our fee, and we shall not receive any portion of these commissions, fees, and
costs. Advisory clients should note that they have the option to purchase investment products
recommended by us through other brokers or agents that are not affiliated with us.
Under certain circumstances, we may utilize affiliated investment advisers in the management of
a client’s account. We have fee sharing agreements with each of these affiliated investment
advisers in which the investment adviser compensates Montage with a percentage of the fees
received from advisory clients referred by Montage. There is no increase in the investment
management fees payable to these affiliated investment advisers by clients as a result of the
compensation paid to Montage under the fee sharing agreements.
Item 12 further describes the factors that we consider in selecting or recommending broker-
dealers for client transactions and determining the reasonableness of their compensation (e.g.,
commissions).