Spectrum Asset Management Inc

Item 5 – Fees and Compensation

Spectrum provides discretionary investment advisory services to institutional clients generally
investing at least $25,000,000 for discretionary individually managed accounts. Spectrum offers
such services for an advisory fee calculated as a percentage of assets under management as
described below. Clients are invoiced for investment management fees. Spectrum charges
commissions for certain securities transactions executed by its affiliated FINRA member
broker/dealer according to its commission schedule, a copy of which is available upon request.
Item 12 herein further describes the factors that Spectrum considers in selecting or recommending
broker/dealers for client transactions and determining the reasonableness of their commissions.
Clients may also pay custodial fees to the custodian of their choosing, exchange fees and other
charges. To the extent a client’s portfolio includes closed end mutual funds, open end mutual funds
or exchange traded funds, such funds have expense ratios that will be paid by the client. Spectrum
does not reduce its advisory fees to offset commissions.

A client wanting to terminate an investment advisory contract before its expiration date generally
may do so by giving 30 days written notice, unless otherwise specified in the negotiated contract.

 The investment advisory fees generally charged by Spectrum for each of its products are as
follows:

        Individually Managed Accounts: Fees are generally charged based on the average daily
value or month end value of client assets under management, payable quarterly in arrears. Fees
are negotiable and may vary from those shown below to reflect circumstances that may apply to a
specific client or account. Accounts with special investment guidelines or other special
circumstances or requirements may be charged differently based on the services rendered. Some
existing clients may pay different fees that are not available to new clients. Clients may withdraw
funds from management at any time, upon delivery of notice to Spectrum. Clients are asked to
provide 30 days' notice of a withdrawal so that liquidation may be effected efficiently. Accounts
initiated or terminated during a calendar quarter will be charged a prorated fee. Upon termination
of any account, any paid, unearned fee will be promptly refunded, and any earned, unpaid fee will
be due and payable.

Spectrum's current basic fee schedule for individually managed accounts is as follows:

Account Value          Annual Fee Rate

 Initial $50 million           0.45%

 $50 - $250 million            0.40%

 Over $250 million             0.35%

        Investment Companies: Spectrum acts as a sub-adviser to U.S. registered investment
companies ("registered funds") and UCITS funds domiciled in Dublin, Ireland. The fees and other
contractual arrangements for each of these registered funds are described in the registered fund's
registration statement filed with the Securities and Exchange Commission and with the Central
Bank of Ireland.

         Wrap Programs: Spectrum is an investment manager for the separately managed
account/wrap fee programs ("wrap programs") listed in Schedule D, Section 5.I(2) of Spectrum's
Form ADV Part 1, including wrap programs created and/or serviced by the financial institutions
listed in Schedule D, Section 5.I(2) of Spectrum's Form ADV Part 1 which are "private-labeled" by
third-parties. In a typical wrap program, each client enters into an agreement with the sponsor of
the wrap program, and each investment manager available in the program maintains a sub-
advisory agreement with the sponsor of the wrap program or other service providers involved in
the program. Clients typically pay a single all-inclusive "wrap" fee to the wrap program sponsor
that covers, among other things, advisory, brokerage execution and custodial services.

Spectrum handles the placement of trades for some wrap fee programs and provides model
portfolio recommendations to the program sponsor. Model portfolio recommendations are
provided to the program sponsor throughout each business day. To ensure that over time no
account (or group of accounts) will be systematically favored over any other account (or group of
accounts), and with respect to certain wrap fee programs for which Spectrum executes step out
trades, Spectrum rotates the order of execution of such step out trades. For trade rotation
purposes, “model only” wrap fee program sponsors are accorded rotation slots on a similar basis
as the slots accorded to other wrap fee program sponsors, the only difference being that the model
portfolio is communicated to the “model only” wrap fee program sponsors and the trade orders
based on the model portfolio are communicated to the other wrap fee program sponsors.

Spectrum receives fees paid by wrap program sponsors that are generally a per annum percentage
of the market value of the accounts in the program. Some wrap programs provide for the wrap fee
(including the portfolio management portion payable to Spectrum out of that wrap fee) to be paid
by the client before the services are rendered by Spectrum, while some wrap programs provide
for the wrap fee to be paid in arrears by the client after Spectrum provides services for the period
covered by the fee.

Spectrum, in agreement with certain wrap sponsors, steps-out trades for the benefit of client
accounts in certain circumstances such as when, for example, the sponsor and Spectrum believe
that Spectrum may be able to achieve better execution, e.g., for larger block trades. In the event
Spectrum steps-out trades, Spectrum, through its affiliated broker-dealer, will facilitate the
purchase and sale of securities in accordance with its policies and procedures. (See Item 12).
Spectrum does not charge commissions for step-out trades. In certain programs, the fees and
services may be unbundled, and Spectrum may enter into an investment advisory agreement
...

Item 7 – Types of Clients

Spectrum provides portfolio management services to registered mutual funds, foreign funds such as
UCITS, sponsors of wrap account programs, corporate pension and profit–sharing plans, charitable
institutions, insurance companies, foundations, endowments, private investment funds and other
U.S. and international institutions. Generally, the minimum account size for opening and maintaining
an account is $25 million.