INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT made as of the __ day of _______, 2000 by and between Hussman
Econometrics Advisors, Inc. (the "Investment Adviser"), a Maryland corporation,
and Hussman Investment Trust (the "Trust"), an Ohio business trust.
WHEREAS, the Trust is an open-end, diversified management investment company
registered under the Investment Company Act of 1940, as amended (the "Act"), and
is currently authorized to issue separate series of shares, each having its own
investment objective, policies and restrictions, all as more fully described in
the prospectus and the statement of additional information constituting parts of
the Trust's Registration Statement on Form N-1A filed the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended, and the Act (the "Registration Statement"); and
WHEREAS, the Trust proposes to engage in the business of investing and
reinvesting the assets of each of its series in securities ("the portfolio
assets") of the type and in accordance with the limitations specified in the
Trust's Agreement and Declaration of Trust and Registration Statement, and any
representations made in its prospectus and statement of additional information,
all in such manner and to such extent as may from time to time be authorized by
the Trustees; and
WHEREAS, the Trustees of the Trust have authorized and established the Hussman
Strategic Growth Fund (the "Fund") as a series of the Trust, and wish to employ
the Investment Adviser to manage the investment and reinvestment of the Fund's
portfolio assets as above specified and, without limiting the generality of the
foregoing, to provide management and other services specified below and
acknowledges that it has received prior to entering into this Agreement a copy
of Form ADV-Part II as filed by the Investment Adviser with the Commission.
NOW, THEREFORE, the parties agree as follows:
1. The Trust hereby appoints the Investment Adviser to supervise and
direct the investments of and for the Fund and as the Fund's agent and
attorney-in-fact with full discretionary and exclusive power and
authority to establish, maintain and trade in brokerage accounts for
and in the name of the Fund and to buy, sell and trade in all stocks,
bonds and other assets of the Fund.
2. Unless advised by the Trustees of the Trust of an objection, the
Investment Adviser may direct that a portion of the brokerage
commissions that may be generated by the Fund be applied to payment
for brokerage and research services. Brokerage and research services
furnished by brokers may include, but are not limited to, written
information and analyses concerning specific securities, companies or
sectors; market, financial and economic studies and forecasts as well
as discussions with research personnel; financial publications; and
statistic and pricing services utilized in the investment
management process. Brokerage and research services obtained by the
use of commissions arising from the Fund's portfolio transactions may
be used by the Investment Adviser it its other investment activities.
In selecting brokers and negotiating commission rates, the Investment
Adviser will take into account the financial stability and reputation
of brokerage firms and the brokerage, execution and research services
provided by such brokers. The benefits which the Fund may receive from
such services may not be in direct proportion to the commissions
generated by the Fund. The Trust acknowledges that since commission
rates are generally negotiable, selecting brokers on the basis of
considerations which are not limited to applicable commission rates
may result in higher transaction costs that would otherwise by
obtainable.
3. The Investment Adviser, when in its sole discretion deems it to be in
the best interest of the Fund, xxxx xxxxx orders for the Fund with
orders for the same security for other accounts managed by the
Investment Adviser or its affiliates. In such instances, the Fund will
be charged the average price per unit for the security in such
transactions. Complete records of such transactions will be maintained
by the Investment Adviser and will be made available to the Trust upon
request.
4. The Investment Adviser shall report to the Board of Trustees at each
meeting thereof all changes in the portfolio assets since the prior
report, and will also keep the Trustees in touch with important
developments affecting the portfolio assets and on the Investment
Adviser's own initiative will furnish the Trustees from time to time
with such information as the Investment Adviser may believe
appropriate for this purpose, whether concerning the individual
issuers whose securities are included in the portfolio assets, the
industries in which they engage, or the conditions prevailing in the
economy generally. The Investment Adviser will also furnish the
Trustees with such statistical and analytical information with respect
to the portfolio assets as the Investment Adviser may believe
appropriate or as the Trustees reasonably may request. In making such
purchases and sales of the portfolio assets, the Investment Adviser
will bear in mind the policies set from time to time by the Board of
Trustees as well as the limitations imposed by the Trust's Agreement
and Declaration of Trust, and in the Trust's Registration Statement,
in each case as amended from time to time, the limitations in the Act
and of the Internal Revenue Code of 1986, as amended, in respect of
regulated investment companies and the investment objective, policies
and practices, including restrictions applicable to the Fund's
portfolio.
5. The Investment Adviser shall not be liable for any mistake of judgment
or in any event whatsoever, except for lack of good faith, provided
that nothing herein shall be deemed to protect, or purport to protect,
the Investment Adviser against any liability to the Fund or to its
security holders to which the Investment Adviser would otherwise be
subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its
duties hereunder, or by reason of the Investment Adviser's reckless
disregard of its obligations and duties hereunder. It is understood
that the Investment Adviser performs various investment advisory and
managerial services for others, and the Trust agrees that the
Investment Adviser may give advice and take action in the performance
of its duties with respect to others which may differ from advice
given or action taken with respect to the Fund. Nothing contained
herein shall in any way constitute a waiver or limitation of any
rights which the Fund's shareholders may have under common law, or any
federal or state securities laws.
6. This Agreement shall become effective on the date hereof and shall
remain in effect for two years and continue in effect thereafter only
so long as its continuance is specifically approved at least annually
by the Board of Trustees or by a vote of a majority of the outstanding
voting securities (as defined in the Act) of the Fund, and, in either
case, by a vote, cast in person at a meeting called for the purpose of
voting on such approval, of a majority of the Trust's Trustees who are
not parties to this Agreement or interested persons, as defined in the
Act, of any party to this Agreement (other than as Trustees of the
Trust), and provided further, however, that if the continuation of
this Agreement is not approved, the Investment Adviser may continue to
render to the Fund the services described herein in the manner and to
the extent permitted by the Act and the rules and regulations
thereunder. Upon the effectiveness of this Agreement, it shall
supersede all previous agreements between the parties covering the
subject matter hereof. This Agreement may be terminated at any time,
without the payment of any penalty, by vote of a majority of the
outstanding voting securities (as defined in the Act) of the Fund, or
by a vote of the Board of Trustees on 60 days' written notice to the
Investment Adviser, or by the Investment Adviser on 60 days' written
notice to the Trust.
7. This Agreement shall not be amended unless such amendment is approved
by vote, cast in person at a meeting called for the purpose of voting
on such approval, of a majority of the Trust's Trustees who are not
parties to this Agreement or interested persons, as defined in the
Act, of any party to this Agreement (other than as Trustees of the
Trust), and, if required by law, by vote of a majority of the
outstanding voting securities (as defined in the Act) of the Fund.
Shareholders of the Fund not affected by any such amendment shall have
no right to participate in any such vote.
8. This Agreement may not be assigned by the Investment Adviser and shall
terminate automatically in the event of any assignment by the
Investment Adviser. The term "assignment" as used in this paragraph
shall have the meaning ascribed thereto by the Act and any regulations
or interpretations of the Commission thereunder.
9. If the Investment Adviser ceases to act as investment adviser to the
Fund, or, in any event, if the Investment Adviser so requests in
writing, the Trust agrees to take all necessary action to change the
names of the Trust and the Fund to a name not including the term
"Hussman." The Investment Adviser may from time to time make available
without charge to the Trust for its use such marks or symbols owned by
the Investment Adviser, including marks or symbols containing the term
"Hussman" or any variation thereof, as the Investment Adviser may
consider appropriate. Any such marks or symbols so made available will
remain the Investment Adviser's property and it shall have the right,
upon notice in writing, to require the Trust to cease the use of such
xxxx or symbol at any time.
10. The Fund shall pay the Investment Adviser an investment advisory fee
equal to 1.5% per annum of the average daily net assets of the Fund.
The investment advisory fee will be paid monthly. The Investment
Adviser's compensation for the period from the date hereof through the
last day of the month of the effective date hereof will be prorated
based on the proportion that such period bears to the full month. In
the event of any termination of this Agreement, the Investment
Adviser's compensation will be calculated on the basis of a period
ending on the last day on which this Agreement is in effect, subject
to proration based on the number of days elapsed in the current period
as a percentage of the total number of days in such period.
11. Unless otherwise agreed to in writing by the parties, the Fund shall
be responsible and hereby assume the obligation for payment of all of
its expenses, including: (a) payment to the Investment Adviser of the
fee provided for in the foregoing paragraph; (b) custody, transfer and
dividend disbursing expenses; (c) fees of trustees who are not
affiliated persons; (d) legal and auditing expenses; (e) clerical,
accounting and other office costs; (f) the cost of personnel providing
services to the Fund; (g) costs of printing the Fund's prospectuses
and shareholder reports; (h) cost of maintenance of the Fund's
corporate existence; (i) interest charges, taxes, brokerage fees and
commissions; (j) costs of stationery and supplies; (k) expenses and
fees related to registration and filing with the Commission and with
state regulatory authorities; and (l) such promotional, shareholder
servicing and other expenses as may be contemplated by one or more
effective plans pursuant to Rule 12b-1 under the Act or one or more
effective non-Rule 12b-1 shareholder servicing plans, in each case
provided, however, that the Fund's payment of such promotional,
shareholder servicing and other expenses shall be in the amounts, and
in accordance with the procedures, set forth in such plan or plans.
12. Except to the extent necessary to perform the Investment Adviser's
obligations hereunder, nothing herein shall be deemed to limit or
restrict the right of the Investment Adviser or its members, officers
or employees to
engage in any other business or to devote time and attention to the
management of other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any
other individual or entity.
13. The validity of the Agreement and the rights and liabilities of the
parties hereunder shall be determined in accordance with the laws of
the State of Maryland without regard to its conflict of laws
provisions, provided, however, that nothing herein shall be construed
as being inconsistent with the Act.
14. The Investment Adviser shall promptly notify the Trust of any change
in the ownership or control of the Investment Adviser.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day first above written.
HUSSMAN INVESTMENT TRUST
By: __________________________
HUSSMAN ECONOMETICS ADVISORS, INC.
By: __________________________
