Exhibit 99.(h)(5)(i)
EXPENSE LIMITATION AGREEMENT
AS AMENDED FEBRUARY 28, 2007
HSBC INVESTOR FUNDS
EXPENSE LIMITATION AGREEMENT, effective as of February 28, 2007 by and
between HSBC Investments (USA) Inc. (the "Investment Manager") and the HSBC
Investor Funds (the "Trust"), on behalf of each series of the Trust set forth in
Schedule A (each a "Fund," and collectively, the "Funds").
WHEREAS, the Trust is a Massachusetts Business Trust, and is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management company of the series type, and each Fund is a series of the
Trust; and
WHEREAS, the Trust and the Investment Manager have entered into an
Investment Management Agreement (the "Management Agreements"), pursuant to which
the Investment Manager provides investment management services to each Fund for
compensation based on the value of the average daily net assets of each such
Fund; and
WHEREAS, the Funds may, from time to time, invest in affiliated or
unaffiliated money market funds or other investment companies such as
exchange-traded funds (ETFs) and the LifeLine Funds of the Trust(1) may invest
in other Funds of the Trust, such underlying investments collectively referred
to herein as "Acquired Funds"; and
WHEREAS, the Trust and the Investment Manager have determined that it is
appropriate and in the best interests of each Fund and its shareholders to
maintain the expenses of each Fund at a level below the level to which each such
Fund may normally be subject;
NOW THEREFORE, the parties hereto agree as follows:
1. EXPENSE LIMITATION.
1.1. APPLICABLE EXPENSE LIMIT. To the extent that the ordinary operating
expenses incurred by a Fund in any fiscal year, including but not limited to
investment management fees of the Investment Manager and amounts payable
pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act
("Fund Operating Expenses"), but excluding interest, taxes, brokerage
commissions, Acquired Fund fees and expenses, extraordinary expenses such as
litigation, and other expenses not incurred in the ordinary course of such
Fund's business, exceed the Operating Expense Limit, as defined in Section 1.2
below, such excess amount (the "Excess Amount") shall be the liability of the
Investment Manager.
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(1) The LifeLine Funds of the Trust include the HSBC Investor Aggressive Growth
Strategy Fund, the HSBC Investor Growth Strategy Fund, the HSBC Investor
Moderate Growth Strategy Fund, the HSBC Investor Conservative Growth
Strategy Fund and the HSBC Investor Conservative Income Strategy Fund.
1.2. OPERATING EXPENSE LIMIT. The maximum Operating Expense Limit in any
year with respect to each Fund shall be the amount specified in Schedule A based
on a percentage of the average daily net assets of each Fund.
1.3. DURATION OF OPERATING EXPENSE LIMIT. The Operating Expense Limit with
respect to each Fund shall remain in effect until the date specified for that
Fund on Schedule B. The Investment Manager may extend, but may not during the
term of this Agreement shorten, the duration of the Operating Expense Limit for
any Fund without the consent of the Trust by delivering a revised Schedule B to
the Trust reflecting such extension. Such an extension must continue at the same
Operating Expense Limit amount specified on SCHEDULE A.
1.4. METHOD OF COMPUTATION. To determine the Investment Manager's
obligation with respect to the Excess Amount, each day the Fund Operating
Expenses for each Fund shall be estimated and accrued. Each day, the Fund shall
also calculate a year-to-date Operating Expense Limit Amount, based on each
Fund's year to date average net assets and its Annual Expense Limit. If the
total year to date expenses exceed the year to date Operating Expense Limit
Amount, the Fund shall record a receivable from the Investment Manager in an
amount equal to the year to date Excess Amount less any such receivables
previously recorded for the fiscal period. Shortly after the end of each month,
the Fund shall deliver to the Investment Manager a statement indicating the
Excess Amount owed to the Fund for the month and the Investment Manager will
remit to the Fund an amount that, together with any waived or reduced investment
management fee, is sufficient to pay that monthly Excess Amount.
1.5. YEAR-END ADJUSTMENT. If necessary, on or before the last day of the
first month of each fiscal year, an adjustment payment shall be made by the
appropriate party in order that the amount of the investment management fees
waived or reduced and other payments remitted by the Investment Manager to the
Fund or Funds with respect to the previous fiscal year shall equal the Excess
Amount.
2. REIMBURSEMENT OF FEE WAIVERS AND EXPENSE REIMBURSEMENTS.
2.1. REIMBURSEMENT. If on any day during which the Management Agreement is
in effect, the estimated annualized Fund Operating Expenses of such Fund for
that day are less than the Operating Expense Limit, the Investment Manager shall
be entitled to reimbursement by such Fund of the investment management fees
waived or reduced and other payments remitted by the Investment Manager to such
Fund pursuant to Section 1 hereof (the "Reimbursement Amount") during any of the
previous thirty-six (36) months, to the extent that the Fund's annualized
Operating Expenses plus the amount so reimbursed equals, for such day, the
Operating Expense Limit provided in Schedule A, provided that such amount paid
to the Investment Manager will in no event exceed the total Reimbursement Amount
and will not include any amounts previously reimbursed.
2.2. YEAR-END ADJUSTMENT. If necessary, on or before the last day of the
first month of each fiscal year, an adjustment payment shall be made by the
appropriate party in order that the actual Fund Operating Expenses of a Fund for
the prior fiscal year (including any reimbursement payments hereunder with
respect to such fiscal year) do not exceed the Operating Expense Limit.
3. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall terminate upon termination of the Investment
Management Agreement, or it may be terminated by either party hereto, without
payment of any penalty, upon ninety (90) days' prior written notice to the other
party at its principal place of business.
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4. MISCELLANEOUS.
4.1. CAPTIONS. The captions in this Agreement are included for convenience
of reference only and in no other way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
4.2. INTERPRETATION. Nothing herein contained shall be deemed to require
the Company or the Funds to take any action contrary to the Company's
Declaration of Trust or By-Laws, or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Company's Board of Trustees of its responsibility for and control of
the conduct of the affairs of the Company or the Funds.
4.3. DEFINITIONS. Any question of interpretation of any term or provision
of this Agreement, including but not limited to the investment management fee,
the computations of net asset values, and the allocation of expenses, having a
counterpart in or otherwise derived from the terms and provisions of the
Management Agreement or the 1940 Act, shall have the same meaning as and be
resolved by reference to such Management Agreement or the 1940 Act.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
HSBC INVESTOR FUNDS
ON BEHALF OF
EACH OF ITS SERIES SET FORTH IN SCHEDULE A
By: /S/ XXXX XXXXXXX
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Name: Xxxx Xxxxxxx
Title: Vice President
HSBC INVESTMENTS (USA) INC.
By: /S/ XXXXXXX XXXXXXXX
---------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President
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SCHEDULE A
OPERATING EXPENSE LIMITS
This Agreement relates to the following Funds of the Trust:
Maximum Operating
Expense Limit
(as a percentage of
NAME OF FUND average net assets)
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HSBC Investor Core Plus Fixed Income Fund Class A Shares: 0.70%
Class B Shares: 1.45%
Class C Shares: 1.45%
Class I Shares: 0.45%
HSBC Investor High Yield Fixed Income Fund Class A Shares: 0.80%
Class B Shares: 1.55%
Class C Shares: 1.55%
Class I Shares: 0.55%
HSBC Investor Short Duration Fixed Income Fund Class A Shares: 0.65%
Class B Shares: 1.40%
Class C Shares: 1.40%
Class I Shares: 0.40%
HSBC Investor Intermediate Duration Fund Class A Shares: 0.65%
Class B Shares: 1.40%
Class C Shares: 1.40%
Class I Shares: 0.40%
HSBC Investor Core Fixed Income Fund Class A Shares: 0.65%
Class B Shares: 1.40%
Class C Shares: 1.40%
Class I Shares: 0.40%
HSBC Investor Growth Fund Class A Shares: 1.20%
Class B Shares: 1.95%
Class C Shares: 1.95%
Class I Shares: 0.95%
HSBC Investor Growth and Income Fund Class A Shares: 1.20%
Class B Shares: 1.95%
Class C Shares: 1.95%
Class I Shares: 0.95%
HSBC Investor Mid-Cap Fund Class A Shares: 1.35%
Class B Shares: 2.10%
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Class C Shares: 2.10%
Class I Shares: 1.10%
HSBC Investor Overseas Equity Fund Class A Shares: 1.85%
Class B Shares: 2.60%
Class C Shares: 2.60%
HSBC Investor Opportunity Fund Class A Shares: 1.65%
Class B Shares: 2.40%
Class C Shares: 2.40%
HSBC Investor Value Fund Class A Shares: 1.20%
Class B Shares: 1.95%
Class C Shares: 1.95%
Class I Shares: 0.95%
HSBC Investor Money Market Fund Class I Shares: 0.20%
HSBC Investor Cash Management Fund Class A Shares: 0.70%
Class B Shares: 1.30%
Class C Shares: 1.30%
Class D Shares: 0.55%
Class I Shares: 0.20%
Class Y Shares: 0.30%
HSBC Investor U.S. Government Money Market Fund Class I Shares: 0.20%
HSBC Investor U.S. Treasury Money Market Fund Class I Shares: 0.20%
HSBC Investor California Tax-Free Money Market Fund Class A Shares: 0.80%
Class B Shares: 1.40%
Class C Shares: 1.40%
Class D Shares: 0.65%
Class Y Shares: 0.40%
HSBC Investor Aggressive Growth Strategy Fund Class A Shares: 1.50%
Class B Shares: 2.25%
Class C Shares: 2.25%
Class R Shares: 2.00%
HSBC Investor Growth Strategy Fund Class A Shares: 1.50%
Class B Shares: 2.25%
Class C Shares: 2.25%
Class R Shares: 2.00%
HSBC Investor Moderate Growth Strategy Fund Class A Shares: 1.50%
Class B Shares: 2.25%
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Class C Shares: 2.25%
Class R Shares: 2.00%
HSBC Investor Conservative Growth Strategy Fund Class A Shares: 1.50%
Class B Shares: 2.25%
Class C Shares: 2.25%
Class R Shares: 2.00%
HSBC Investor Conservative Income Strategy Fund Class A Shares: 1.50%
Class B Shares: 2.25%
Class C Shares: 2.25%
Class R Shares: 2.00%
HSBC Investor Global Emerging Markets Fixed Income Fund Class A Shares: 1.10%
Class I Shares: 0.85%
HSBC Investor Global Fixed Income Fund (U.S. Dollar Hedged) Class A Shares: 1.00%
Class I Shares: 0.75%
HSBC Investor Global Fixed Income Fund Class A Shares: 1.00%
Class I Shares: 0.75%
HSBC Investor Principal Guaranteed Fund 2012 Class A Shares (DURING THE
OFFERING PERIOD) 0.75%
HSBC Investor Principal Guaranteed Fund 2012 Class A Shares (DURING THE
GUARANTEE PERIOD) 2.05%
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SCHEDULE B
DURATION OF OPERATING EXPENSE LIMITS
The duration of each Operating Expense Limit shall be as follows:
Date on Which
Operating Expense
NAME OF FUND LIMIT TERMINATES
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HSBC Investor Core Plus Fixed Income Fund March 1, 2008
HSBC Investor High Yield Fixed Income Fund March 1, 2008
HSBC Investor Short Duration Fixed Income Fund March 1, 2008
HSBC Investor Intermediate Duration Fund March 1, 2008
HSBC Investor Core Fixed Income Fund March 1, 2008
HSBC Investor Growth Fund March 1, 2008
HSBC Investor Growth and Income Fund March 1, 2008
HSBC Investor Mid-Cap Fund March 1, 2008
HSBC Investor Overseas Equity Fund March 1, 2008
HSBC Investor Opportunity Fund March 1, 2008
HSBC Investor Value Fund March 1, 2008
HSBC Investor Money Market Fund March 1, 2008
HSBC Investor Cash Management Fund March 1, 2008
HSBC Investor U.S. Government Money Market Fund March 1, 2008
HSBC Investor U.S. Treasury Money Market Fund March 1, 2008
HSBC Investor California Tax-Free Money Market Fund March 1, 2008
HSBC Investor Aggressive Growth Strategy Fund March 1, 2008
HSBC Investor Growth Strategy Fund March 1, 2008
HSBC Investor Moderate Growth Strategy Fund March 1, 2008
HSBC Investor Conservative Growth Strategy Fund March 1, 2008
HSBC Investor Conservative Income Strategy Fund March 1, 2008
HSBC Investor Global Emerging Markets Fixed Income Fund March 1, 2008
HSBC Investor Global Fixed Income Fund (U.S. Dollar Hedged) March 1, 2008
HSBC Investor Global Fixed Income Fund March 1, 2008
HSBC Investor Principal Guaranteed Fund 2012 March 1, 2008
