EXPENSE LIMITATION AGREEMENT MORNINGSTAR FUNDS TRUST
This Expense Limitation Agreement (the “Agreement”) is made as of the 30th day of April, 2018 by and between Morningstar Funds Trust, a Delaware statutory trust (the “Trust”), on behalf of each of its series listed on Schedule A, as such may be amended from time to time (each, a “Fund” and, collectively, the “Funds”), and Morningstar Investment Management LLC, a Delaware corporation (“Morningstar”).
RECITALS
WHEREAS, the Trust is registered as an open-end management investment company under the Investment Company Act of 1940 (the “1940 Act”) and Morningstar is registered as an investment adviser under the Investment Advisers Act of 1940; and
WHEREAS, the Trust includes the Funds identified on Schedule A (as it may be amended from time to time); and
WHEREAS, Morningstar entered into an Investment Advisory Agreement with the Trust, dated March 9, 2018 (the “Advisory Agreement”), pursuant to which Morningstar provides, or arranges for the provision of, investment advisory and management services to each Fund, and for which it is compensated based on the average daily net assets of each such Fund; and
WHEREAS, the Trust and Morningstar have determined that it is appropriate and in the best interests of each Fund and its shareholders to limit the total expenses of each Fund to the amount provided for each Fund on Schedule A hereto, as may be amended from time to time;
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the parties agree as follows:
1. Expense Waiver and Expense Assumption by Morningstar. Morningstar hereby agrees to waive all or a portion of its advisory fees and, if necessary, to assume certain other expenses (to the extent permitted by the Internal Revenue Code of 1986, as amended) of each Fund, to the extent necessary to ensure that the Total Annual Fund Operating Expenses (excluding taxes, interest, brokerage commissions, trading costs, Acquired Fund Fees and Expenses (as such term is defined in Form N-1A), litigation, and extraordinary expenses) do not exceed a specified percentage of the average daily net assets of the Fund, as indicated on Schedule A to this Agreement.
2. Duty of Fund to Reimburse. Subject to approval by the Board of Trustees, the Trust, on behalf of each Fund, agrees to reimburse Morningstar any waived fees or expenses assumed for the Fund in later periods; provided, however, that the repayment shall be payable only to the extent that it (1) can be made during the three years after the end of the calendar month in which Morningstar waived fees or assumed expenses for the Fund under this Agreement, and (2) can be repaid without causing the Total Annual Fund Operating Expenses (excluding taxes, interest, brokerage commissions, trading costs, Acquired Fund Fees and Expenses, litigation, and extraordinary expenses) of the Fund to exceed any applicable expense limitation that was in place for the Fund at the time of the waiver and/or assumption of expenses. The Trust agrees to furnish or otherwise make available to Morningstar such copies of its financial statements, reports, and other information relating to its business and affairs as Morningstar may, at any time or from time to time, reasonably request in connection with this Agreement.
3. Assignment. No assignment of this Agreement shall be made by Morningstar without the prior consent of the Trust.
4. Duration and Termination. This Agreement shall be effective as to each Fund on the date set forth in Schedule A through the termination date in Schedule A and shall continue in effect from year to year thereafter upon mutual agreement of the Trust and Morningstar. This Agreement shall automatically terminate upon the termination of the Advisory Agreement between Morningstar and the Trust.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
| MORNINGSTAR FUNDS TRUST | MORNINGSTAR INVESTMENT MANAGEMENT LLC | |||||||
| By: | By: | |||||||
| Name: | Xxxxxx Xxxxxxx | Name: | Xxxxxxx Xxxxxxxxx | |||||
| Title: | Director | Title: | Chief Operating Officer | |||||
SCHEDULE A
| Fund | Expense Limit* |
Original Effective Date |
Original Termination Date | |||||
| Morningstar U.S. Equity Fund |
.87 | % | XXX0 | XXX0 | ||||
| Morningstar International Equity Fund |
1.01 | % | XXX0 | XXX0 | ||||
| Morningstar Global Income Fund |
.89 | % | XXX0 | XXX0 | ||||
| Morningstar Total Return Bond Fund |
.55 | % | XXX0 | XXX0 | ||||
| Morningstar Municipal Bond Fund |
.63 | % | XXX0 | XXX0 | ||||
| Morningstar Defensive Bond Fund |
.51 | % | XXX0 | XXX0 | ||||
| Morningstar Multisector Bond Fund |
.80 | % | XXX0 | XXX0 | ||||
| Morningstar Unconstrained Allocation Fund |
1.00 | % | XXX0 | XXX0 | ||||
| Morningstar Alternatives Fund |
1.29 | % | XXX0 | XXX0 | ||||
| * | As an annual percentage of the Fund’s average daily net assets. |
| 1 | Date Morningstar Funds Trust commences investment operations. |
| 2 | Date one year after the date Morningstar Funds Trust commences investment operations. |
