Exhibit (d)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this 10th day of May, 2000 between Barclays Global
Fund Advisors, a corporation organized under the laws of the State of California
(the "Adviser"), and iShares Trust, a business trust organized under the laws of
the State of Delaware (the "Trust").
WHEREAS, the Adviser is principally engaged in the business of
rendering investment management services and is registered as an investment
adviser under the Investment Advisers Act of 1940 (the "Advisers Act"); and
WHEREAS, the Trust proposes to engage in the business of an investment
company and is registered as such under the Investment Company Act of 1940 (the
"1940 Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial interest
in separate series with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Trust intends initially to offer shares representing
interests in each of the separate series listed on Schedule A attached hereto
(each, an "Initial Fund" and collectively, the "Initial Funds"); and
WHEREAS, the Trust desires to appoint the Adviser to serve as the
investment adviser with respect to each of the Initial Funds; and
WHEREAS, the Trust may, from time to time, offer shares representing
interests in one or more additional series (each, an "Additional Fund" and
collectively, the "Additional Funds"); and
WHEREAS, the Trust may desire to appoint the Adviser as the investment
adviser with respect to one or more of the "Additional Funds" (each such
Additional Fund and Initial Fund being referred to herein individually as a
"Fund" and collectively as the "Funds");
NOW THEREFORE, the parties hereto hereby agree as follows:
1. APPOINTMENT OF ADVISER
The Trust hereby appoints the Adviser to act as investment adviser for
the Initial Funds for the period and on terms set forth herein. The
Adviser accepts such appointment and agrees to render such services for
the compensation set forth herein. In the event that the Trust desires
to retain the Adviser to render
investment advisory services hereunder with respect to an Additional
Fund, and the Adviser is willing to render such services, Schedule A
shall be amended in accordance with Section 8, paragraph b herein,
whereupon such Additional Fund shall become a Fund hereunder.
2. DUTIES OF THE ADVISER
The Adviser, at its own expense shall: (i) furnish continuously an
investment program for each Fund; (ii) manage the investment and
reinvestment of Fund assets; (iii) determine what investments shall be
purchased, held, sold or exchanged for each Fund and what portion, if
any, of the assets of each Fund shall be held uninvested; (iv) make
changes on behalf of the Trust in the investments for each Fund; (v)
provide the Trust with records concerning the Adviser's activities that
the Trust is required to maintain; and (vi) render reports to the
Trust's officers and Board of Trustees concerning the Adviser's
discharge of the foregoing responsibilities. In addition, the Adviser
will arrange for other necessary services, including custodial,
transfer agency and administration. The Adviser shall furnish to the
Trust all office facilities, equipment, services and executive and
administrative personnel necessary for managing the investment program
of the Trust for each Fund. The Adviser may at its expense employ
others to provide all or any part of such facilities and personnel.
The Adviser shall discharge the foregoing responsibilities subject to
the control of the Board of Trustees of the Trust and in compliance
with such policies as the Trustees may from time to time establish,
each Fund's investment objective and policies, as set forth in the then
current prospectus and statement of additional information for such
Fund contained in the Trust's Registration Statement on Form N-1A, as
such prospectus and statement of additional information is amended or
supplemented from time to time, and applicable laws and regulations.
3. CERTAIN RECORDS AND REPORTS
Any records required to be maintained and preserved pursuant to the
provisions of Rule 31a-1 and Rule 31a-2 under the 1940 Act that are
prepared or maintained by the Adviser (or any sub-adviser) on behalf of
the Trust are the property of the Trust and will be surrendered
promptly to the Trust at its request (the "Records"). The Adviser
agrees to preserve the Records for the periods prescribed in Rule 31a-2
under the 1940 Act. The Trust and the Adviser agree to furnish to each
other, if applicable, current prospectuses, proxy statements, reports
to shareholders, certified copies of their financial statements, and
such other information with regard to their affairs as each may
reasonably request.
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4. ADVISORY FEES
For the services to be provided by the Adviser hereunder with respect
to each Fund, the Trust shall pay to the Adviser a fee at the rate set
forth on Schedule A attached hereto. The Adviser agrees to pay all
expenses incurred by the Trust except for interest, taxes, brokerage
expenses and other expenses connected with the execution of portfolio
transactions, extraordinary expenses, and distribution fees and
expenses paid by the Trust under any distribution plan adopted pursuant
to rule 12b-1 under the 1940 Act. Schedule A shall be amended from time
to time to reflect the addition and/or termination of any Fund as a
Fund hereunder and to reflect any change in the advisory fees payable
with respect to any Fund duly approved in accordance with Section 8,
paragraph b hereunder. All fees payable hereunder shall be accrued
daily and paid as soon as practical after the last day of each month.
In any case of commencement or termination of this Agreement with
respect to any Fund during any calendar quarter, the fee with respect
to such Fund for that quarter shall be reduced proportionately based
upon the number of calendar days during which it is in effect, and the
fee shall be computed upon the average daily net assets of such Fund
for the days during which it is in effect.
5. PORTFOLIO TRANSACTIONS
In connection with the management of the investment and reinvestment of
Fund assets pursuant to this Agreement, the Adviser, acting by its own
officers, directors or employees, is authorized to select the brokers
or dealers (including brokers and dealers that are affiliated with the
Adviser or the Trust's principal underwriter) that will execute
purchase and sale transactions for the Trust. In executing portfolio
transactions and selecting brokers or dealers, if any, the Adviser will
use its best efforts to seek on behalf of a Fund the best overall terms
available, as described from time to time, in the Trust's Registration
Statement. In assessing the best overall terms available for any
transaction, the Adviser shall consider all factors it deems relevant,
including the breadth of the market in and the price of the security,
the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any (for the
specific transaction and on a continuing basis). In evaluating the best
overall terms available, and in selecting the broker or dealer, if any,
to execute a particular transaction, the Adviser may also consider the
brokerage and research services (as those terms are defined in Section
28(e) of the 0000 Xxx) provided to any fund of the Trust. The Adviser
may pay to a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction which is in
excess of the amount of commission another broker or dealer would have
charged for effecting the transaction if, but only if, the Adviser
determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided.
The Trust acknowledges
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that any such research may be useful to the Adviser in connection with
other accounts managed by it. Brokerage transactions for the Trust may
be effected through affiliates of the Adviser if approved by the Board
of Trustees, subject to applicable rules and regulations. The Adviser
will promptly communicate to the officers and the Trustees of the Trust
such information relating to Fund transactions as they may reasonably
request.
6. LIABILITY OF ADVISER
Neither the Adviser nor its officers, directors, employees, agents,
affiliated persons or controlling persons or assigns shall be liable
for any error of judgment or mistake of law or for any loss suffered by
the Trust or its shareholders in connection with the matters to which
this Agreement relates; provided that no provision of this Agreement
shall be deemed to protect the Adviser against any liability to the
Trust or its shareholders resulting from any willful misfeasance, bad
faith or gross negligence in the performance of its duties or
obligations hereunder, the reckless disregard of its duties or
obligations hereunder, or breach of its fiduciary duty to the Trust,
any Fund or its shareholders.
7. FORCE MAJEURE
Notwithstanding any other provision of this Agreement, Adviser shall
not be liable for any loss suffered by the Trust or its shareholders
caused directly or indirectly by circumstances beyond Adviser's
reasonable control including, without limitation, government
restrictions, exchange or market rulings, suspensions of trading, acts
of civil or military authority, national emergencies, labor
difficulties, fires, earthquakes, floods or other catastrophes, acts of
God, wars, riots or failures of communication or power supply.
8. DURATION, TERMINATION AND AMENDMENT
a. DURATION. This Agreement shall become effective with
respect to each Initial Fund on the date hereof and, with
respect to any Additional Fund, on the date Schedule A is
amended to reflect such Additional Fund in accordance with
paragraph b below. Unless terminated in accordance with this
Section 8, the Agreement shall remain in full force and effect
for two years from the date hereof with respect to each
Initial Fund and, with respect to each Additional Fund, for
two years from the date on which such Fund becomes a Fund
hereunder. Subsequent to such initial periods of
effectiveness, this Agreement shall continue in full force and
effect for periods of one year thereafter with respect to each
Fund so long as such continuance with respect to such Fund is
specifically approved at least annually (i) by either the
Board of Trustees of the Trust or by vote of a "majority of
the outstanding voting securities" (as defined in the 0000
Xxx) of such Fund, and (ii), in either event, by the vote of a
majority of the
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Trustees of the Trust who are not parties to this Agreement or
"interested persons" (as defined in the 0000 Xxx) of any such
party, cast in person at a meeting called for the purpose of
voting on such approval. If the shareholders of any Fund fail
to approve the Agreement as provided herein, the Adviser may
continue to serve hereunder in the manner and to the extent
permitted by the 1940 Act and rules and regulations
thereunder. The foregoing requirement that continuance of this
Agreement be "specifically approved at least annually" shall
be construed in a manner consistent with the 1940 Act and the
rules and regulations thereunder.
b. AMENDMENT. Any amendment to this Agreement shall become
effective with respect to a Fund upon approval of the Adviser,
the Board of Trustees of the Trust, including a majority of
the Trustees of the Trust who are not parties to this
Agreement or "interested persons" (as defined in the 0000 Xxx)
of any such party, cast in person at a meeting called for the
purpose of voting such approval and, if required under the
1940 Act, a majority of the outstanding voting securities (as
defined in the 0000 Xxx) of the Fund.
c. APPROVAL, AMENDMENT OR TERMINATION BY A FUND. Any approval,
amendment or termination of this Agreement with respect to a
Fund will not require the approval of any other Fund or the
approval of a majority of the outstanding voting securities of
the Trust, unless such approval is required by applicable law.
d. AUTOMATIC TERMINATION. This Agreement shall automatically
and immediately terminate in the event of its "assignment" (as
defined in the 1940 Act).
e. TERMINATION. This Agreement may be terminated with respect
to any Fund at any time, without payment of any penalty, by
vote of the Board of Trustees of the Trust or by vote of a
majority of the outstanding voting securities (as defined in
the 0000 Xxx) of that Fund, or by the Adviser, in each case on
not less than 30 days' nor more than 60 days' prior written
notice to the other party; provided, that a shorter notice
period shall be permitted for a Fund in the event its shares
are no longer listed on a national securities exchange.
9. SERVICES NOT EXCLUSIVE
The services of the Adviser to the Trust hereunder are not to be deemed
exclusive, and the Adviser shall be free to render similar services to
others so long as its services hereunder are not impaired thereby. The
Adviser shall be deemed to be an independent contractor and shall,
unless otherwise expressly provided or
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authorized, have no authority to act for or represent the Trust in any
way or otherwise be deemed an agent of the Trust.
10. MISCELLANEOUS
a. NOTICE. Any notice under this Agreement shall be in
writing, addressed and delivered or mailed, postage prepaid,
to the other party at such address as such other party may
designate in writing for the receipt of such notices.
b. SEVERABILITY. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or
otherwise, the remainder shall not be thereby affected.
c. APPLICABLE LAW. This Agreement shall be construed in
accordance with and governed by the laws of the State of
Delaware and the applicable provisions of the 1940 Act. To the
extent that the applicable laws of the State of Delaware, or
any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
d. EXECUTION BY COUNTERPART. This Agreement may be executed in
any number of counterparts, all of which together shall
constitute one agreement.
e. SURVIVAL AFTER TERMINATION. The rights and obligations set
forth in Paragraphs 5 and 7 shall survive the termination of
this Agreement.
f. PERMISSIBLE INTERESTS. Trustees, officers, agents and
shareholders of the Trust are or may be interested in
the Adviser (or any successor thereof) as directors,
partners, officers, agents, shareholders or
otherwise; directors, partners, officers, agents and
shareholders of the Adviser are or may be interested
in the Trust as Trustees, officers, agents,
shareholders or otherwise; and the Adviser (or any
successor thereof) is or may be interested in the
Trust as a shareholder or otherwise.
PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION
(THE "COMMISSION") IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE
CLIENTS, THIS DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED
WITH THE COMMISSION. THE COMMISSION DOES NOT PASS UPON THE MERITS OF
PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF
COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMISSION HAS
NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS DOCUMENT.
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BARCLAYS GLOBAL FUND ADVISORS
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
-------------------
Title: Chairman
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By: /s/ Xxx Xxxxxxxxx
----------------------
Name: Xxx Xxxxxxxxx
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Title: Managing Director
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Schedule A
to the
Investment Advisory Agreement dated May 10, 2000
between
iShares Trust
and
Barclays Global Fund Advisors
Pursuant to Section 4, the Trust shall pay the Adviser compensation at the
following annual rates:
Fund Annual Fee
---- ----------
iShares S&P 500 Index Fund %
iShares Xxxxxxx 1000 Index Fund %
iShares Dow Xxxxx U.S. Internet Index Fund %
iShares Dow Xxxxx U.S. Technology Sector Index Fund %
iShares S&P MidCap 400 Index Fund %
iShares S&P 000/XXXXX Xxxxxx Index Fund %
iShares S&P 500/BARRA Value Index Fund %
iShares S&P SmallCap 600 Index Fund %
iShares Xxxxxxx 1000 Growth Index Fund %
iShares Xxxxxxx 1000 Value Index Fund %
iShares Xxxxxxx 2000 Index %
iShares Xxxxxxx 3000 Index %
iShares Dow Xxxxx U.S. Financial Sector Index Fund %
iShares Dow Xxxxx U.S. Telecommunications Sector Index Fund %
iShares S&P Europe 350 Index Fund %
iShares S&P/TSE 60 Index %
iShares Dow Xxxxx U.S. Total Market Index Fund %
iShares Dow Xxxxx U.S. Basic Materials Sector Index Fund %
iShares Dow Xxxxx U.S. Consumer Cyclical Sector Index Fund %
iShares Dow Xxxxx U.S. Consumer Non-Cyclical Sector Index Fund %
iShares Dow Xxxxx U.S. Energy Sector Index Fund %
iShares Dow Xxxxx U.S. Healthcare Sector Index Fund %
iShares Dow Xxxxx U.S. Industrial Sector Index Fund %
iShares Dow Xxxxx U.S. Utilities Sector Index Fund %
iShares Dow Xxxxx U.S. Chemicals Index Fund %
iShares Dow Xxxxx U.S. Financial Services Index Fund %
iShares Dow Xxxxx U.S. Real Estate Index Fund %
iShares S&P MidCap 000/XXXXX Xxxxxx Index Fund %
iShares S&P MidCap 400/BARRA Value Index Fund %
iShares S&P SmallCap 000/XXXXX Xxxxxx Index Fund %
iShares S&P SmallCap 600/BARRA Value Index Fund %
iShares Xxxxxxx 2000 Growth Index Fund %
iShares Xxxxxxx 2000 Value Index Fund %
iShares Xxxxxxx 3000 Growth Index Fund %
iShares Xxxxxxx 3000 Value Index Fund %
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