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Exhibit (d)(4)
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 (Far East) 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, is registered with Securities and Futures Commission ("SFC") as an
Investment Adviser and as a Commodity Trading Adviser, 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, the 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.
2. Asset Allocation. Baring International Investment Limited shall allocate the
assets of each of the Funds for which the Sub-Adviser, Baring International
Investment Limited and Baring Asset Management, Inc. act as co-sub-advisers
(collectively, the "Co-Sub-Advisers") among the Co-Sub-Advisers.
3. 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
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in respect of, and make investment decisions for, the portions of the Funds
allocated directly to it by the Investment Adviser or, with regard to the Funds
to be managed by the Co-Sub-Advisers as indicated on Schedule A, the portions of
the Funds allocated to it by Baring International Investment Limited. The
Sub-Adviser will place all orders for the purchase and sale of securities for
such portions of the Funds allocated to it. In the performance of its duties,
the Sub-Adviser will (a) comply with the provisions of the Trust's written
procedures adopted by its Board of Trustees, and the investment objective,
policies and restrictions of the Funds as provided in pre-effective amendment
no.1 to the Trust's registration statement on form N-1A dated October 28, 1998
and in subsequent post-effective amendments to its registration statement and
filings made under Rule 497 of the Securities Act of 1933, as amended, that are
delivered to the Sub-Adviser in writing, (b) use its best efforts to safeguard
and promote the welfare of the Funds, and (c) 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 in writing to the
Sub-Adviser.
The Sub-Adviser further agrees that it:
(a) 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;
(b) will place orders pursuant to its investment determinations
for the Funds either directly with the issuer or with any
broker or dealer or, in the case of foreign exchange
transactions, with a bank;
(c) 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;
(d) will maintain books and records with respect to the Funds'
securities transactions as are required of the Sub-Adviser
pursuant to Paragraph 7 hereof and will furnish the Trust's
Board of Trustees such periodic and special reports as the
Board may reasonably request;
(e) will treat confidentially all records and other information
relative to the Trust; and
(f) 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.
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4. Sub-Adviser Disclosures as Required by SFC. In accordance with the rules of
SFC, the Sub-Adviser is required to inform the Trust that:
(a) the price of securities can and do fluctuate, and any
individual security may experience upward or downward
movements, and may even become valueless. There is an inherent
risk that losses may be incurred rather than profit made as a
result of buying and selling securities;
(b) investments may be made by the Sub-Adviser in various
currencies in accordance with the investment objective,
policies and restrictions of the Funds as described under
Paragraph 3 and the movement of exchange rates may have a
separate effect, unfavourable as well as favourable, on the
gains or losses otherwise experienced on the investments;
(c) the Sub-Adviser may effect transactions in warrants in
accordance with the investment objective, policies and
restrictions of the Funds as described under Paragraph 3,
which often involve a high degree of gearing so that a
relatively small movement in the price of the security to
which the warrant relates may result in a disproportionately
large movement, unfavourable as well as favourable, in the
price of the warrant;
(d) the risk of loss in trading futures contracts or options can
be substantial. In some circumstances, a client may sustain
losses in excess of its initial margin funds. Placing
contingent orders, such as "stop-loss" or "stop-limit" orders,
will not necessarily achieve the desired results. Market
conditions may make it impossible to execute such orders. A
Fund may be called upon at short notice to deposit additional
margin funds. If the required funds are not provided within
the prescribed time, the Fund's position may be liquidated.
The Fund will remain liable for any resulting deficit in its
account. The Investment Adviser should therefore study and
understand futures contracts and options before permitting the
Sub-Adviser to trade and carefully consider whether such
trading is suitable in the light of the Funds' investment
objectives; and
(e) the Investment Adviser and the Sub-Adviser undertake to notify
the other in the event of any material change to the
information provided in this agreement.
5. 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)
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and Rule 17e-1 under the Investment Company Act of 1940, as amended (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 seek the best overall terms available and will take the
following into consideration: the best net price available; the reliability,
integrity, financial condition and execution capability of the broker-dealer;
the size of and difficulty in executing the order; and the value of the
brokerage and research services provided by the broker-dealer. Accordingly, the
price to a Fund in any transaction may be less favorable than that available
from another broker-dealer.
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 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 Trust. 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, the Trust and/or other accounts over which the Sub-Adviser
or an affiliate excercises investment discretion. Such allocation shall be in
such amounts and proportions as the Sub-Adviser shall determine and the
Sub-Adviser will report regularly to the Board of Trustees of the Trust
indicating the brokers to whom such allocations have been made and the basis
therefor. In addition, the Sub-Adviser will report to the Trust annually its
soft dollar practices and provide a description of research goods and services
received by the Sub-Adviser.
6. 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 and the Investment Advisers
Act and any rules and regulations adopted thereunder as amended; (b) the
provisions of the Registration Statement of the Trust 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.
7. 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
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Trust or to the Investment Adviser copies of 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 the Sub-Adviser on behalf of the Investment Adviser under Rule
3la-1(b)(5), (6), (7), (9) and (10) under the Investment Company Act.
8. 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.
9. 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. With regard to certain of the Funds
indicated on Schedule A for which the Co-Sub-Advisers provide co-sub-advisory
services, the Investment Adviser will pay the full fee to Baring Asset
Management, Inc. who will accept the fee on behalf of all the Co-Sub-Advisers
and who will in turn pay to the other Co-Sub-Advisers their compensation as
agreed between Baring Asset Management, Inc. and the other Co-Sub-Advisers. 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 9 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. The Sub-Adviser
will be given at least 30 days' written notice of any proposed waiver, deferral
or reduction of investment advisory and sub-advisory fees. 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.
10. Exclusivity. The investment management services furnished by the Sub-Adviser
shall not be deemed exclusive, and the Sub-Adviser shall be free to render
investment advisory and administrative or other services to other clients
(including other investment companies) and engage in other activities. It is
understood that depending upon the investment objectives, policies and
circumstances of the Sub-Adviser's other clients, the investment advice rendered
by the Sub-Adviser to such other clients may differ from the investment advice
rendered to the Funds.
11. 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
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services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security.
12. 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 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.
13. 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 A 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 Section 2(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.
14. 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 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.
15. 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.
16. Notices. Any notices under this Agreement may be by facsimile, electronic
mail or by any other method, provided that such notice shall be followed by
written notice, addressed and delivered or mailed postage paid to the other
party at the address set forth below or such address as may subsequently be
designated for the receipt of such notice in accordance with the provisions
hereof. 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 00/X
Xxxxxxxxx Xxxxx, Xxx Xxxxxxxx, 00 Xxxxxx Xxxx, Xxxxxxx Xxxx Kong.
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17. 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. In addition, where the effect of a
requirement of the Investment Company Act reflected in any provision of this
Agreement is modified 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.
18. Counterparts. This Agreement may be executed in counterparts, each of which
shall constitute an original and both of which, collectively, shall constitute
one agreement.
19. 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 CO. LLC
(FAR EAST) LIMITED
By: /s/ By: /s/Xxxx X. Xxxxxxx
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Title: Chief Operating Officer Title: President
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Attest By: /s/ Attest By: /s/Xxxxx X. Xxxxxx
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Title: Director - Finance Title: Senior Vice President
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Schedule A
Name of Fund Fee Rate* Organizational Approval Date
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ING Emerging Markets Equity Fund** 0.625% October 30, 1998
ING International Equity Fund** 0.625% October 30, 1998
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.
** The Sub-Adviser with the other Co-Sub-Advisers provides co-sub-advisory
services to these Funds.
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