The Deutsche Portfolios
INVESTMENT ADVISORY AGREEMENT
Agreement made as of July 28, 1997 by and among Deutsche Fund
Management, Inc., a Delaware corporation (the "Investment Manager"), DWS
Portfolio Management GmbH, a company organized under the laws of the Federal
Republic of Germany (hereinafter called the "DWS Adviser"), and Deutsche Xxxxxx
Xxxxxxxx Investment Management Inc., a Delaware corporation (hereinafter called
the "DMGIM Adviser").
W I T N E S S E T H:
WHEREAS, the Investment Manager has entered into an Investment
Management Agreement dated July 28, 1997 (the "Investment Management Agreement")
with the Deutsche Portfolios, an open-end management investment company
registered under the Investment Company Act of 1940 (the "1940 Act") and
organized as a trust under the laws of the State of New York (the "Trust") on
behalf of its ten non-diversified sub-trusts named herein (each such sub-trust,
together with each sub- trust hereafter established by the Trustees of the Trust
and made subject to this Agreement in accordance with Section 11 hereof,
individually a "Portfolio" and, collectively, the "Portfolios"), pursuant to
which the Investment Manager will act as investment manager to the sub-trusts
named in the Investment Management Agreement;
WHEREAS, the Investment Management Agreement contemplates that
the Investment Manager may appoint an adviser to perform certain services
relating to the management of the investment operations of the sub-trusts of the
Trust, and the each of the DWS Adviser and the DMGIM Adviser is willing to
render such investment advisory services to the respective Portfolios designated
herein; and
WHEREAS, each of the DWS Adviser and the DMGIM Adviser is
registered as an investment adviser under the Investment Advisers Act of 1940.
NOW, THEREFORE, in consideration of the premises and mutual
promises hereinafter set forth, the parties hereto agree as follows:
1 The Investment Manager hereby appoints (a) the DWS Adviser to act as adviser
to the Portfolios set forth under its name on Schedule A and (b) the DMGIM
Adviser to act as adviser to the Portfolios set forth under its name on Schedule
A, in each case for the period and on the terms set forth in this Agreement.
Each of the DWS Adviser and the DMGIM Adviser accepts such appointment and
agrees to render the services herein set forth, for the compensation herein
provided. In this Agreement, the term "Adviser" shall hereinafter refer to the
DWS
Adviser, with respect to the Portfolios for which it is appointed to act as
adviser under this Section 1, and to the DMGIM Adviser, with respect to the
Portfolios for which it is appointed to act as adviser under this Section 1.
1 Subject to the general supervision of the Trustees of the Trust and the
Investment Manager, the Adviser shall manage the investment operations of each
Portfolio and the composition of each Portfolio's holdings of securities and
other investments, including cash, the purchase, retention and disposition
thereof and agreements relating thereto, in accordance with such Portfolio's
investment objective and policies as stated in the Registration Statement (as
defined in paragraph 3(d) of this Agreement) and subject to the following
understandings:
1 The Adviser, in the performance of its duties and obligations under this
Agreement, shall act in conformity with the Declaration of Trust and By-Laws of
the Trust and the Registration Statement and with the instructions and
directions of the Trustees of the Trust and will conform to and comply with the
requirements of the 1940 Act and all other applicable federal and state laws and
regulations;
1 the Adviser shall furnish a continuous investment program for each Portfolio
and determine from time to time what securities, instruments and other
investments including future contracts will be purchased, retained, sold or lent
by such Portfolio, and what portion of the assets will be invested or held
uninvested as cash;
1 the Adviser shall use the same skill and care in the management of each
Portfolio's investments as it uses in the administration of other accounts for
which it has investment responsibility as agent;
1 the Adviser shall determine the securities or other investments to be
purchased, sold or lent by the Portfolio and as agent for each Portfolio will
effect portfolio transactions pursuant to its determinations either directly
with the issuer or with any broker and/or dealer in such securities, including a
broker affiliated with the Adviser; in placing orders with brokers and/or
dealers the Adviser intends to seek best price and execution for purchases and
sales; the Adviser shall also determine whether or not a Portfolio shall enter
into repurchase or reverse repurchase agreements;
On occasions when the Adviser deems the purchase or sale of a
security or other investment to be in the best interest of a Portfolio as well
as other customers of the Adviser, the Adviser may, to the extent permitted by
applicable laws and regulations, but shall not be obligated to, aggregate the
securities to be so sold or purchased on behalf of such Portfolio and such other
customer of the Adviser in order to obtain best execution, including lower
brokerage commissions, if applicable. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made
by the Adviser in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to a Portfolio;
1 the Adviser shall maintain a set of books and records with respect to each
Portfolio's securities transactions as required by the Advisers Act and other
applicable laws and regulations and shall render to the Trustees of the Trust
such periodic and special reports as the Trustees may reasonably request; and
1 the services of the Adviser to the Trust under this Agreement are not to be
deemed exclusive, and the Adviser shall be free to render similar services to
others.
Notwithstanding the foregoing, the Adviser is not authorized, and shall not be
deemed to have assumed any duties under this Agreement, to make any business,
operational or management decisions on behalf of the Trust or any Portfolio
other than with respect to the investment operations and composition of a
Portfolio's holdings of securities and other investments as set forth herein.
1 The Investment Manager has delivered copies of each of the following documents
to the Adviser and will promptly notify and deliver to it all future amendments
and supplements, if any:
(a) Declaration of Trust of the Trust (such
Declaration of Trust, as presently in effect and as amended from time to time,
is herein called the "Declaration of Trust");
(b) By-laws of the Trust (such By-laws, as presently
in effect and as amended from time to time, are herein called the "By-
laws");
(c) Certified resolutions of the Trustees of the
Trust authorizing the appointment of the Adviser and approving the form
of this Agreement;
(d) The Trust's Notification of Registration on
Form N-8A under the 1940 Act, its Registration Statement on Form N-1A under the
1940 Act (No. _______) and the Registration Statement on Form N-1A of Deutsche
Funds, Inc. (No. 333-27709) under the Securities Act of 1933, as amended, and
the 1940 Act, as filed with the Securities and Exchange Commission (the
"Commission") on May 23, 1997, including all amendments thereto (together with
the Registration Statement of the Trust, the "Registration Statement").
1 The Adviser shall keep the books and records required to be maintained by it
pursuant to paragraph 2(e) of this Agreement. The Adviser agrees that all
records that it maintains for the Trust are the property of the Trust and it
will promptly surrender any of such records to the Trust or to the Investment
Manager upon request. The Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 of the Commission under the 1940 Act any such records
as are required to be maintained by the Adviser with respect to the Portfolios
by Rule 31a-2 of the Commission under the 1940 Act.
1 During the term of this Agreement, the Adviser will pay all expenses,
including personnel costs and overhead, incurred by it in connection with its
activities under this Agreement, other than the cost of securities and
investments purchased or sold for the Portfolios (including taxes and brokerage
commissions, if any) and extraordinary expenses.
1 The Investment Manager shall continue to have responsibility for all services
to be provided to the Portfolios pursuant to the Investment Management Agreement
and shall oversee and review the Adviser's performance of its duties under this
Agreement.
1 For the services provided and the expenses borne pursuant to this Agreement,
the Investment Manager will pay to the Adviser, as full compensation therefor a
fee, calculated daily and payable monthly in arrears, at an annual rate equal to
the percentage of the average daily net assets of each Portfolio specified in
Schedule A hereto.
1 The Adviser shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Investment Manager, the Trust or any Portfolio in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
1 This Agreement shall continue in effect until the date two years
after the date of its execution and shall continue in effect from year
to year thereafter with respect to each Portfolio if such continuance is
specifically approved at least annually in conformity with the
requirements of the 1940 Act; provided, however, that this Agreement may
be terminated with respect to the Trust in its entirety or with respect
to any Portfolio, at any time, without the payment of any penalty,(a) by
the Investment Manager or (b) by the Trust, by vote of a majority of all
the Trustees of the Trust or by vote of a majority of the outstanding
voting securities (as defined in the 0000 Xxx) of the Trust or such
Portfolio, as the case may be, in each case on 60 days' written notice
to the Adviser, or by the Adviser with respect to its respective
Portfolios, at any time, without the payment of any penalty, on 90 days'
written notice to the Investment Manager and to the Trust. This
Agreement will automatically and immediately terminate in the event of its
"assignment" (as defined in the 0000 Xxx) or upon termination of the Investment
Management Agreement.
1 The Adviser shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided herein or authorized
by the Trustees of the Trust and the Investment Manager from time to time, have
no authority to act for or represent the Trust or any Portfolio in any way or
otherwise be deemed an agent of the Trust or any Portfolio.
1 This Agreement may be amended by the mutual consent of the parties. Any such
amendment shall also require the consent of the Trust, which must be approved
(a) by vote of a majority of those Trustees of the Trust who are not parties to
this Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such amendment, and (b) by vote of a
majority of the outstanding voting securities of the Trust or, in the case of
any such amendment affecting only one or several Portfolios, a majority of the
outstanding voting securities of each such Portfolio. In the event that the
Trustees of the Trust establish one or more additional sub-trusts with respect
to which they retain the Investment Manager to act as investment manager, the
Investment Manager and the DWS Adviser or the DMGIM Adviser, as the case may be,
may amend Schedule A hereto to add each such sub-trust and specify the fee
payable to such Adviser in respect thereof, in which event such sub-trust shall
become subject to the provisions of this Agreement and be deemed a "Portfolio"
hereunder to the same extent as the existing Portfolios, except to the extent
that such provisions may be modified with respect to any additional Portfolio in
writing by the Investment Manager and such Adviser at the time of the addition
of the Portfolio.
1 Notices of any kind to be given hereunder shall be in writing and shall be
duly given if mailed or delivered as follows: (a) to the Adviser at
Xxxxxxxxxxxxx 000-000, Xxxxxxxxx xx Xxxx 00000, Xxxxxxx, Attention: President,
with a copy to the Investment Manager; (b) to the Investment Manager at 00 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: President and Managing
Director; (c) to the Trust at Cardinal Avenue, Xxxxxx Town, Grand Cayman, Cayman
Islands, BWI; or (d) at such other address or to such other individual as any of
the foregoing shall designate by notice to the others.
1 This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the 28th day
of July, 1997.
DEUTSCHE FUND MANAGEMENT, INC.
By: ________________________________
President and Managing Director
DWS PORTFOLIO MANAGEMENT GmbH
By: _________________________________
DEUTSCHE XXXXXX XXXXXXXX INVESTMENT MANAGEMENT INC.
By: ________________________________
Acknowledged and Confirmed.
DEUTSCHE PORTFOLIOS
By:________________________
Schedule A
Fee (annualized
% of average
Portfolio daily net assets)
--------- -----------------
DWS ADVISER
Top 50 World Portfolio 0.75%
Top 50 Europe Portfolio 0.75
Top 50 Asia Portfolio 0.75
Provesta Portfolio 0.60
Investa Portfolio 0.60
DWS Japan Portfolio 0.60
Inter-Renta Portfolio 0.50
German Bond Portfolio 0.50
DMGIM ADVISER
Top 50 US Portfolio 0.75%
US Money Market Portfolio 0.1125
