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5(b)(ii)
SUBADVISORY AGREEMENT
THIS AGREEMENT is made this 30th day of October, 1998 by and between ING MUTUAL
FUNDS MANAGEMENT CO. LLC, a Delaware limited liability company (the "Investment
Adviser"), and Baring International Investment Limited
(the "Sub-Adviser").
W I T N E S S E T H
WHEREAS, the Investment Adviser is registered and will remain
registered during the term of this Agreement as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Investment Advisers Act"), and
engages in the business of acting as an investment adviser; and
WHEREAS, the Sub-Adviser is registered and will remain registered
during the term of this Agreement as an investment adviser under the Investment
Advisers Act, and engages in the business of acting as an investment adviser;
and
WHEREAS, the Investment Adviser desires to retain the Sub-Adviser to
furnish investment advisory services to the Investment Adviser in connection
with the underlying investment funds specified on Schedule A hereto
(collectively, the "Funds," and each, a "Fund"), each of which is an investment
portfolio of the ING Funds Trust (the "Trust"); and
WHEREAS, Sub-Adviser is willing to make available to the Investment
Adviser and to the Funds certain sub-investment advisory services.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. Appointment. The Investment Adviser hereby appoints the Sub-Adviser to
provide certain sub-investment advisory services for the period and on the terms
set forth in this Agreement. The Sub-Adviser accepts such appointment and agrees
to furnish the services herein set forth for the compensation herein provided.
Sub-Investment Advisory Services. Subject always to the supervision of
the Investment Adviser and the Trust's Board of Trustees, the
Sub-Adviser will furnish an investment program in respect of, and make
investment decisions for, the portions of the Funds allocated to it by
the Investment Adviser, and place all orders for the purchase and sale
of securities for such portions of the Funds. In the performance of its
duties, the Sub-Adviser will comply with the provisions of the Trust's
organizational documentation, and the respective stated investment
objective, policies and restrictions of the Funds, as amended, will use
its best efforts to safeguard and promote the welfare of the Funds, and
will comply with other policies which the Trust's Board of Trustees or
the Investment Adviser, as the case may be, may from time to time
determine and communicate to the Sub-Adviser.
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The Sub-Adviser further agrees that it:
will use the same skill and care in providing such services as it uses in
providing services to other accounts for which it has investment management
responsibilities;
will place orders pursuant to its investment determinations for the Funds either
directly with the issuer or with any broker or dealer;
will report regularly to the Board of Trustees of the Trust and to the
Investment Adviser and will make appropriate persons available for the purpose
of reviewing with representatives of the Investment Adviser on a regular basis
the management of the Funds, including, without limitation, review of the
general investment strategy of the Funds, interest rate considerations and
general conditions affecting the marketplace;
will maintain books and records with respect to the Funds' securities
transactions as are required by applicable laws and regulations to be maintained
and will furnish the Trust's Board of Trustees such periodic and special reports
as are required by applicable laws and regulations to be furnished or as the
Board may reasonably request;
will treat confidentially and as proprietary information of the Trust all
records and other information relative to the Trust, and will not use records
and information for any purpose other than performance of its responsibilities
and duties hereunder, except after prior notification to and approval in writing
by the Trust, which approval shall not be unreasonably withheld and may not be
withheld where the Sub-Adviser may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Trust;
will receive the recommendations as to guidelines and benchmarks of the
Investment Adviser with respect to the investment and reinvestment of the assets
of the Funds and perform its duties hereunder in accordance therewith;
in making investment recommendations for the Funds, the Sub-Adviser's personnel
will not inquire as to or take into consideration whether the issuers of
securities proposed for purchase or sale for a Fund's accounts are clients of
the Sub-Adviser or of its affiliates. In dealing with such clients, the
Sub-Adviser and its affiliates will not inquire as to or take into consideration
whether securities of those customers are held by the Trust; and
will provide advice and recommendations with respect to other aspects of the
business and affairs of the Funds and perform such other functions related to
the provision of investment management services as the Investment Adviser may
reasonably request.
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3. Broker-Dealer Relationships. With regard to the portions of the Funds
allocated to it, the Sub-Adviser is responsible for decisions to buy and sell
securities, broker-dealer selection, and negotiation of brokerage commission
rates. The Sub-Adviser may select any affiliated person of the Trust, the
Investment Adviser, or the Sub-Adviser to the extent permitted pursuant to the
Trust's procedures for securities transactions with affiliated brokers pursuant
to Section 17(e)(2) and Rule 17e-1 under the Investment Company Act.
The Sub-Adviser's primary consideration in effecting a security
transaction will be execution at a price that is reasonable and fair compared to
the commission, fee or other remuneration received or to be received by other
brokers in connection with comparable transactions, including similar securities
being purchased or sold on a securities exchange during a comparable period of
time. In selecting a broker-dealer to execute each particular transaction, the
Sub-Adviser will take the following into consideration: the best net price
available; the reliability, integrity and financial condition of the
broker-dealer; the size of and difficulty in executing the order; and the value
of the expected contribution of the broker-dealer to the investment performance
of the Fund on a continuing basis. Accordingly, the price to a Fund in any
transaction may be less favorable than that available from another broker-dealer
if the difference is reasonably justified by other aspects of the portfolio
execution services offered.
Subject to such policies and procedures as the Board of Trustees may
determine, the Sub-Adviser shall not be deemed to have acted unlawfully or to
have breached any duty created by this Agreement or otherwise solely by reason
of its having caused a Fund to pay a broker or dealer that provides brokerage
and research services to the Sub-Adviser for the Fund's use an amount of
commission for effecting a portfolio investment transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, if the Sub-Adviser determines in good faith that such amount
of commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the Sub-Adviser's overall responsibilities with
respect to the Fund. The Sub-Adviser is further authorized to allocate the
orders placed by it on behalf of a Fund to such brokers and dealers who also
provide research or statistical material, or other services to the Fund or the
Sub-Adviser for the Fund's use. Such allocation shall be in such amounts and
proportions as the Sub-Adviser shall determine and the Sub-Adviser will report
on said allocations regularly to the Board of Trustees of the Trust indicating
the brokers to whom such allocations have been made and the basis therefor.
Compliance with Applicable Requirements. In carrying out its obligations under
this Agreement, the Sub-Adviser shall at all times conform to: (a) all
applicable provisions of the Investment Company Act of 1940, as amended (the
"Investment Company Act") and the Investment Advisers Act and any rules and
regulations adopted thereunder as amended; (b) the provisions of the
Registration Statement of the Trust
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under the Securities Act of 1933, as amended, and the Investment Company Act;
(c) the provisions of the Trust Instrument of the Trust, as amended; (d) the
provisions of the By-laws of the Trust, as amended; and (e) any other applicable
provisions of state and federal law.
Books and Records. In compliance with Rule 3la-3 under the Investment
Company Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Trust on behalf of the Investment Adviser are the
property of the Trust and further agrees to surrender promptly to the
Trust or to the Investment Adviser any of such records upon request.
The Sub-Adviser further agrees to preserve for the periods prescribed
by Rule 3la-2 adopted under the Investment Company Act all records
required to be maintained by Sub-Adviser on behalf of the Investment
Adviser under Rule 3la-1 under the Investment Company Act.
Expenses. During the term of this Agreement, the Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities (including brokerage commissions, if any)
purchased for the Funds.
Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, the Investment Adviser will pay the
Sub-Adviser and the Sub-Adviser will accept as full compensation
therefor a fee computed daily and paid monthly in arrears at the annual
rate set forth on Schedule A, based on each Fund's average daily net
assets, computed in the manner set forth in the Registration Statement
of the Trust. In the event that investment advisory fees charged to a
Fund by the Investment Adviser are waived, deferred or reduced, then
sub-advisory fees payable in accordance with this Paragraph 7 shall be
proportionally waived, deferred or reduced. Such fee reduction, if
applicable, shall be applied on a monthly basis at the time each
payment of sub-advisory fees is due hereunder. Further, if the fees
payable to the Sub-Adviser begin to accrue before the end of any month,
or if this Agreement terminates before the end of any month, then such
fees for such month shall be prorated according to the proportion which
the partial period bears to the full month in which such effectiveness
or termination occurs.
Liability of Sub-Adviser. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder on the
part of the Sub-Adviser or any of its officers, directors or employees, the
Sub-Adviser shall not be subject to liability to the Investment Adviser for any
act or omission in the course of, or connected with, rendering services
hereunder or for any losses than may be sustained in the purchase, holding or
sale of any security.
Limit of Liability. The terms the "ING Funds Trust" and "Trustees" (of the
Trust) refer, respectively to the trust created and the Trustees, as trustees
but not individually or personally, acting from time to time under the Trust's
organizational
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documentation, to which reference is hereby made. The obligations of the "ING
Funds Trust" entered into in the name or on behalf thereof by any of the
Trustees, representatives or agents are made not individually, but in such
capacities and are not binding upon any of the Trustees, shareholders or
representatives of the Trust personally, but bind only the assets of the Funds,
and all persons dealing with the Funds or other series of the Trust must look
solely to the assets of the Funds for the enforcement of any claims against the
Trust.
Term. This Agreement shall become effective as it pertains to a Fund at the
close of business on the date opposite the Fund's name on Schedule 1 and shall
remain in force and effect for two years for the Fund from such date and
thereafter from year to year, provided that such continuance is specifically
approved at least annually: (a) (i) by the Trust's Board of Trustees or (ii) by
the vote of a majority of the Fund's outstanding voting securities (as defined
in Section2(a)(42) of the Investment Company Act); and (b) by the affirmative
vote of a majority of the Trustees who are not parties to this Agreement or
interested persons of a party to this Agreement (other than as Trust trustees),
by votes cast in person at a meeting specifically called for such purpose.
Termination. This Agreement may be terminated at any time as it pertains to a
Fund, without the payment of any penalty, by vote of the Trust's Board of
Trustees or by vote of a majority of the Fund's outstanding voting securities,
by the Investment Adviser, or by the Sub-Adviser on sixty (60) days' written
notice to the other parties. The notice provided for herein may be waived by any
party. This Agreement shall automatically terminate as it pertains to all Funds
in the event of its assignment. The term "assignment" for the purpose of this
paragraph has the meaning defined in Section 2(a)(4) of the Investment Company
Act.
Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.
Notices. Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party at such address as such
other party may designate for the receipt of such notice. Until further notice
to the other party, it is agreed that the address of the Trust and the
Investment Adviser shall be 00 Xxxxxx Xxxx., Xxxxx 000, Xxxxxxx Xxxxxx, XX
00000, and the address of the Sub-Adviser shall be 000 Xxxxxxxxxxx, Xxxxxx,
Xxxxxxx.
Questions of Interpretation. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from a
term or provision of the Investment Company Act shall be resolved by reference
to such term or provision of the Act and to interpretations thereof, if any, by
the United States Courts or in the absence of any controlling decision of any
such court, by rules, regulations
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or orders of the Securities and Exchange Commission issued pursuant to said Act.
In addition, where the effect of a requirement of the Investment Company Act
reflected in any provision of this Agreement is released by rules, regulation or
order of the Securities and Exchange Commission, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
Counterparts. This Agreement may be executed in counterparts, each of which
shall constitute an original and both of which, collectively, shall constitute
one agreement.
Miscellaneous. The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and shall be governed by the laws of the
State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year
first above written.
BARING INTERNATIONAL INVESTMENT ING MUTUAL FUNDS MANAGEMENT
LIMITED CO. LLC
By:____________________________ By:________________________
Title:_________________________ Title:_____________________
Attest By:_____________________ Attest By:_________________
Title:_________________________ Title:_____________________
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Schedule A
Name of Fund Fee Rate* Organizational
Approval Date
ING Emerging Markets Equity Fund 0.625% October 30, 1998
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ING International Equity Fund 0.625% October 30, 1998
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ING International Bond Fund 0.500% October 30, 1998
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* For the first year of operations, the fee rate will be one-quarter
(1/4) of the annual fee rate reflected herein. For the second year of
operations, the fee rate will be one-half (1/2) of the annual fee rate
reflected herein.
