Item 5 - Fees and Compensation
Description
Our advisory fees are generally based on a percentage of the assets managed by us (“managed assets”).
For SMAs of fixed income and money market securities, managed assets is generally based on amortized
cost plus accrued interest and for OCIO accounts, managed assets is generally based on net market value.
Fees vary based upon several factors including, but not limited to, the type of Client Account, permitted
investments, the investment style chosen, service requirements associated with the account and the size of
the account. We may voluntarily waive or reimburse certain fees and expenses of a Client Account to the
extent necessary to avoid a negative yield, or a yield below a specified level, which may vary from time to
time in our sole discretion. We may terminate these waivers and reimbursements at any time. Fees may
also differ based on account type (e.g., a pooled investment vehicle or an SMA).
Pooled Investment Vehicles
We provide investment advisory services to each pooled investment vehicle for which we receive a fee
based on the net assets of each fund. Such fees are outlined in each pooled investment vehicle’s governing
disclosure document.
SMAs
Advisory fees for our SMA clients are generally based on a percentage of the managed assets as described
in the investment advisory agreement. Managed assets are only those assets managed by us, and include
assets held in cash sweep vehicles unless otherwise agreed to in writing by clients. Client-directed
investments may be excluded from the fee calculation, as agreed to in writing by clients. With respect to
investments in the Money Market Funds or Multi-Manager Funds; either (i) such funds are excluded from
the fee calculation; or (ii) our management fee on the portion of the Client’s assets in the Money Market
Funds is deducted from the account’s management fee or (iii) we will credit the investment advisory fee we
earn on the client’s investment in the Multi-Manager Funds against investment advisory fees due us related
to the client’s SMA, as agreed in writing with the client. Fees may be negotiated, based on a number of
factors including, but not limited to, the size of the Client Account, complexity of the client’s mandate, and
the overall relationship with us and other U.S. Bancorp affiliates and therefore some clients fee schedules
will differ from those shown below. As part of a negotiated fee, clients may also pay for non-advisory
services provided by us, our affiliates or unaffiliated service providers and as a result the fee may be higher
than the fees shown in the tables below.
For SMAs for fixed income and money market strategies, the following advisory fee schedule serves as a
general guideline for investment advisory services:
Fixed Income and Money Market Strategies
Basis Points Assets (Millions)
5 - 30 First $100
Minimum Annual Account Fee: $40,000 4.5 - 15 Next $100
(may be waived or modified) 3-8 Next $200
3-7 Next $600
Negotiated Over $1,000
As a general guideline for OCIO discretionary management, where the client desires a portfolio
management strategy utilizing public securities and pooled vehicles, which may include hybrid and
alternative investments, the following advisory fee schedule serves as a general guideline for investment
advisory services:
OCIO Discretionary
Basis Points Assets (Millions)
8 - 50 First $100
Minimum Annual Account Fee: $40,000 5 - 22 Next $150
(may be waived or modified) 2 - 17 Next $750
Negotiated Over $1,000
Non-discretionary Advice
We generally charge fixed fees for non-discretionary advice services, depending upon the services the
client requests, and the complexity of the services.
We also offer non-discretionary advice on certificate of deposit investment programs for LGIP investors,
which are designed to provide clients with a fixed rate to a fixed maturity date. Fees typically range up to
0.25% per annum of the cost of the investment purchased by our clients and are payable upon settlement of
the investment.
Consulting Services
For investment consulting services we generally charge clients either a fixed fee or a fee based on a
percentage of assets. The fixed fee is based on the size of the portfolio, complexity, and scope of services
which we perform. As a general guideline, we charge asset-based fees in a range from 0.05% to 0.30%
annually, based on the characteristics listed above. From time to time, we charge hourly fees for these
types of services.
Structured Products
For structured product engagements, we typically charge a fixed fee. We and our clients agree upon a fee
at the outset of each of these engagements and the fee is a function of the size and complexity of the
engagement. The client may pay the fee or may instruct the investment contract counterparty or
underwriter in writing to pay our fee on the client’s behalf. As a general guideline, the typical fee for
investment of municipal bond proceeds in a structured investment, or in a refunding bond escrow
structuring and procurement engagement, is less than or equal to 0.20% of the cost of the portfolio or the
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