Sub-Item 77Q1(e)
SUB-ADVISORY CONTRACT
This contract is made as of December 14, 2011, by and among Invesco
Advisers, Inc. (the "Advisor") and Invesco PowerShares Capital Management LLC
(the "Sub-Advisor").
WHEREAS:
A) The Advisor has entered into an investment advisory agreement with
AIM Investment Funds (Invesco Investment Funds) (the "Trust"), an
open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), with
respect to, among others, the Invesco Premium Income Fund (the
"Fund");
B) The Advisor is authorized to delegate any or all of its rights,
duties and obligations under investment advisory agreements to
sub-advisors, including sub-advisors that are affiliated with the
Advisor;
C) The Sub-Advisor represents that it is registered with the U.S.
Securities and Exchange Commission ("SEC") as an investment advisor
under the Investment Advisers Act of 1940 ("Advisers Act"), or will
be so registered prior to providing any services to the Fund under
this Contract, and engages in the business of acting as an
investment advisor; and
D) The Sub-Advisor has been formed in part for the purpose of
researching and compiling information and recommendations on various
types of investments and investment techniques, and providing
investment advisory services in connection therewith.
NOW THEREFORE, in consideration of the promises and the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Advisor hereby appoints the Sub-Advisor as a sub-advisor of
the Fund for the period and on the terms set forth herein. The Sub-Advisor
accepts such appointment and agrees to render the services herein set forth, for
the compensation herein provided.
2. Duties as Sub-Advisor. Subject to paragraph 7 below, the Advisor may, in its
discretion, appoint the Sub-Advisor to perform one or more of the following
services with respect to all or a portion of the investments of the Fund. The
services and the portion of the investments of the Fund to be advised or managed
by the Sub-Advisor shall be as agreed upon from time to time by the Advisor and
the Sub-Advisor. The Sub-Advisor shall pay the salaries and fees of all its
personnel performing services for the Fund related to research, statistical and
investment activities.
(a) Investment Advice. If and to the extent requested by the Advisor, the
Sub-Advisor shall provide investment advice to the Fund and the Advisor with
respect to all or a portion of the investments of the Fund or with respect to
various investment techniques, and in connection with such advice shall furnish
the Fund and the Advisor with such factual information, research reports and
investment recommendations as the Advisor may reasonably require.
(b) Order Execution. If and to the extent requested by the Advisor, the
Sub-Advisor shall place orders for the purchase and sale of portfolio securities
or other investments for the Fund. In so doing, the Sub-Advisor agrees that it
shall comply with paragraph 3 below.
(c) Discretionary Investment Management. If and to the extent requested by
the Advisor, the Sub-Advisor shall, subject to the supervision of the Trust's
Board of Trustees (the "Board") and the Advisor, manage all or a portion of the
investments of the Fund in accordance with the investment objectives, policies
and limitations provided in the Trust's Registration Statement and such other
limitations as the Trust or the Advisor may impose with respect to the Fund by
notice to the Sub-Advisor and otherwise in accordance with paragraph 5 below.
With respect to the portion of the investments of the Fund, the Sub-Advisor is
authorized to: (i) make investment decisions on behalf of the Fund with
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regard to any stock, bond, other security or investment instrument, including
but not limited to foreign currencies, futures, options and other derivatives,
and with regard to borrowing money; (ii) place orders for the purchase and sale
of securities or other investment instruments with such brokers and dealers as
the Sub-Advisor may select; and (iii) upon the request of the Advisor, provide
additional investment management services to the Fund, including but not limited
to managing the Fund's cash and cash equivalents and lending securities on
behalf of the Fund. In selecting brokers or dealers to execute trades for the
Fund, the Sub-Advisor will comply with its written policies and procedures
regarding brokerage and trading, which policies and procedures shall have been
approved by the Board. All discretionary investment management and any other
activities of the Sub-Advisor shall at all times be subject to the control and
direction of the Advisor and the Board.
3. Broker-Dealer Relationships. The Sub-Advisor agrees that, in placing orders
with brokers and dealers, it will attempt to obtain the best net result in terms
of price and execution under the circumstances. Consistent with this obligation,
the Sub-Advisor may, in its discretion, purchase and sell portfolio securities
from and to brokers and dealers who sell shares of the Fund or provide the Fund,
the Advisor's other clients, or the Sub-Advisor's other clients with research,
analysis, advice and similar services. The Sub-Advisor may pay to brokers and
dealers, in return for such research and analysis, a higher commission or spread
than may be charged by other brokers and dealers, subject to the Sub-Advisor
determining in good faith that such commission or spread is reasonable in terms
either of the particular transaction or of the overall responsibility of the
Advisor and the Sub-Advisor to the Fund and their other clients and that the
total commissions or spreads paid by the Fund will be reasonable in relation to
the benefits to the Fund over the long term. In no instance will portfolio
securities be purchased from or sold to a Sub-Advisor, or any affiliated person
thereof, except in accordance with the applicable securities laws and the rules
and regulations thereunder and any exemptive orders currently in effect.
Whenever a Sub-Advisor simultaneously places orders to purchase or sell the same
security on behalf of the Fund and one or more other accounts advised by the
Sub-Advisor, such orders will be allocated as to price and amount among all such
accounts in a manner believed to be equitable to each account.
4. Books and Records. The Sub-Advisor will maintain all required books and
records with respect to the securities transactions of the Fund, and will
furnish the Board and the Advisor with such periodic and special reports as the
Board or the Advisor reasonably may request. The Sub-Advisor hereby agrees that
all records which it maintains for the Advisor are the property of the Advisor,
and agrees to preserve for the periods prescribed by applicable law any records
which it maintains for the Advisor and which are required to be maintained, and
further agrees to surrender promptly to the Advisor any records which it
maintains for the Advisor upon request by the Advisor.
5. Further Duties.
(a) In all matters relating to the performance of this Contract, the
Sub-Advisor will act in conformity with the Agreement and Declaration of Trust,
By-Laws and Registration Statement of the Trust and with the instructions and
directions of the Advisor and the Board and will comply with the requirements of
the 1940 Act, the rules, regulations, exemptive orders and no-action positions
thereunder, and all other applicable laws and regulations.
(b) The Sub-Advisor shall maintain compliance procedures for the Fund that
it and the Advisor reasonably believe are adequate to ensure compliance with the
federal securities laws (as defined in Rule 38a-1 under the 0000 Xxx) and the
investment objective(s) and policies as stated in the Fund's prospectus and
statement of additional information. The Sub-Advisor at its expense will provide
the Advisor or the Trust's Chief Compliance Officer with such compliance reports
relating to its duties under this Contract as may be requested from time to
time. Notwithstanding the foregoing, the Sub-Advisor will promptly report to the
Advisor any material violations of the federal securities laws (as defined in
Rule 38a-1 under the 0000 Xxx) that it is or should be aware of or of any
material violation of the Sub-Advisor's compliance policies and procedures that
pertain to the Fund.
(c) The Sub-Advisor at its expense will make available to the Board and
the Advisor at reasonable times its portfolio managers and other appropriate
personnel, either in person or, at the
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mutual convenience of the Advisor and the Sub-Advisor, by telephone, in order to
review the investment policies, performance and other investment related
information regarding the Fund and to consult with the Board and the Advisor
regarding the Fund's investment affairs, including economic, statistical and
investment matters related to the Sub-Advisor's duties hereunder, and will
provide periodic reports to the Advisor relating to the investment strategies it
employs. The Sub-Advisor and its personnel shall also cooperate fully with
counsel and auditors for, and the Chief Compliance Officer of, the Advisor and
the Trust.
(d) The Sub-Advisor will assist in the fair valuation of portfolio
securities held by the Fund. The Sub-Advisor will use its reasonable efforts to
provide, based upon its own expertise, and to arrange with parties independent
of the Sub-Advisor such as broker-dealers for the provision of, valuation
information or prices for securities for which prices are deemed by the Advisor
or the Trust's administrator not to be readily available in the ordinary course
of business from an automated pricing service. In addition, the Sub-Advisor will
assist the Fund and its agents in determining whether prices obtained for
valuation purposes accurately reflect market price information relating to the
assets of the Fund at such times as the Advisor shall reasonably request,
including but not limited to, the hours after the close of a securities market
and prior to the daily determination of the Fund's net asset value per share.
(e) The Sub-Advisor represents and warrants that it has adopted a code of
ethics meeting the requirements of Rule 17j-1 under the 1940 Act and the
requirements of Rule 204A-1 under the Advisors Act and has provided the Advisor
and the Board a copy of such code of ethics, together with evidence of its
adoption, and will promptly provide copies of any changes thereto, together with
evidence of their adoption. Upon request of the Advisor, but in any event no
less frequently than annually, the Sub-Advisor will supply the Advisor a written
report that (A) describes any issues arising under the code of ethics or
procedures since the Sub-Advisor's last report, including but not limited to
material violations of the code of ethics or procedures and sanctions imposed in
response to the material violations; and (B) certifies that the procedures
contained in the Sub-Advisor's code of ethics are reasonably designed to prevent
"access persons" from violating the code of ethics.
(f) Upon request of the Advisor, the Sub-Advisor will review draft reports
to shareholders and other documents provided or available to it and provide
comments on a timely basis. In addition, the Sub-Advisor and each officer and
portfolio manager thereof designated by the Advisor will provide on a timely
basis such certifications or sub-certifications as the Advisor may reasonably
request in order to support and facilitate certifications required to be
provided by the Trust's Principal Executive Officer and Principal Financial
Officer and will adopt such disclosure controls and procedures in support of the
disclosure controls and procedures adopted by the Trust as the Advisor, on
behalf of the Trust, deems are reasonably necessary.
(g) Unless otherwise directed by the Advisor or the Board, the Sub-Advisor
will vote all proxies received in accordance with the Advisor's proxy voting
policy or, if the Sub-Advisor has a proxy voting policy approved by the Board,
the Sub-Advisor's proxy voting policy. The Sub-Advisor shall maintain and shall
forward to the Fund or its designated agent such proxy voting information as is
necessary for the Fund to timely file proxy voting results in accordance with
Rule 30b1-4 of the 1940 Act.
(h) The Sub-Advisor shall provide the Fund's custodian on each business
day with information relating to all transactions concerning the assets of the
Fund and shall provide the Advisor with such information upon request of the
Advisor.
6. Services Not Exclusive. The services furnished by the Sub-Advisor hereunder
are not to be deemed exclusive and the Sub-Advisor shall be free to furnish
similar services to others so long as its services under this Contract are not
impaired thereby. Nothing in this Contract shall limit or restrict the right of
any director, officer or employee of the Sub-Advisor, who may also be a Trustee,
officer or employee of the Trust, to engage in any other business or to devote
his or her time and attention in part to the management or other aspects of any
other business, whether of a similar nature or a dissimilar nature.
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7. Use of Subsidiaries and Affiliates. The Sub-Advisor may perform any or all of
the services contemplated hereunder, including but not limited to providing
investment advice to the Fund pursuant to paragraph 2(a) above and placing
orders for the purchase and sale of portfolio securities or other investments
for the Fund pursuant to paragraph 2(b) above, directly or through such of its
subsidiaries or other affiliates, as the Sub-Advisor shall determine; provided,
however, that performance of such services through such subsidiaries or other
affiliates shall have been approved, when required by the 1940 Act, by (i) a
vote of a majority of the independent Trustees who are not parties to this
Contract or "interested persons" (as defined in the 0000 Xxx) of a party to this
Contract, other than as Board members ("Independent Trustees"), cast in person
at a meeting called for the purpose of voting on such approval, and/or (ii) a
vote of a majority of the Fund's outstanding voting securities.
8. Compensation.
(a) The only fees payable to the Sub-Advisors under this Contract are for
providing discretionary investment management services pursuant to paragraph
2(c) above. For such services, the Advisor will pay the Sub-Advisor a fee,
computed daily and paid monthly, equal to (i) 40% of the monthly compensation
that the Advisor receives from the Trust pursuant to its advisory agreement with
the Trust, multiplied by (ii) the fraction equal to the net assets of the Fund
as to which the Sub-Advisor shall have provided discretionary investment
management services pursuant to paragraph 2(c) above for that month divided by
the net assets of the Fund for that month. This fee shall be payable on or
before the last business day of the next succeeding calendar month. This fee
shall be reduced to reflect contractual or voluntary fee waivers or expense
limitations by the Advisor, if any, in effect from time to time as set forth in
paragraph 9 below. In no event shall the aggregate monthly fees paid to the
Sub-Advisor under this Contract exceed 40% of the monthly compensation that the
Advisor receives from the Trust pursuant to its advisory agreement with the
Trust, as reduced to reflect contractual or voluntary fee waivers or expense
limitations by the Advisor, if any.
(b) If this Contract becomes effective or terminates before the end of any
month, the fees for the period from the effective date to the end of the month
or from the beginning of such month to the date of termination, as the case may
be, shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs.
(c) If the Sub-Advisor provides the services under paragraph 2(c) above to
the Fund for a period that is less than a full month, the fees for such period
shall be prorated according to the proportion which such period bears to the
applicable full month.
9. Fee Waivers and Expense Limitations. If, for any fiscal year of the Fund, the
amount of the advisory fee which the Fund would otherwise be obligated to pay to
the Advisor is reduced because of contractual or voluntary fee waivers or
expense limitations by the Advisor, the fee payable to the Sub-Advisor pursuant
to paragraph 8 above shall be reduced proportionately; and to the extent that
the Advisor reimburses the Fund as a result of such expense limitations, the
Sub-Advisor shall reimburse the Advisor that proportion of such reimbursement
payments which the fee payable to the Sub-Advisor pursuant to paragraph 8 above
bears to the advisory fee under this Contract.
10. Limitation of Liability of Sub-Advisor and Indemnification. The Sub-Advisor
shall not be liable for any costs or liabilities arising from any error of
judgment or mistake of law or any loss suffered by the Fund or the Trust in
connection with the matters to which this Contract relates except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
the Sub-Advisor in the performance of its duties or from reckless disregard by
the Sub-Advisor of its obligations and duties under this Contract. Any person,
even though also an officer, partner, employee, or agent of the Sub-Advisor, who
may be or become a Trustee, officer, employee or agent of the Trust, shall be
deemed, when rendering services to a Fund or the Trust or acting with respect to
any business of a Fund or the Trust, to be rendering such service to or acting
solely for the Fund or the Trust and not as an officer, partner, employee, or
agent or one under the control or direction of the Sub-Advisor even though paid
by it.
11. Duration and Termination.
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(a) This Contract shall become effective with respect to the Sub-Advisor
upon the later of the date hereabove written and the date that the Sub-Advisor
is registered with the SEC as an investment advisor under the Advisors Act, if
the Sub-Advisor is not so registered as of the date hereabove written; provided,
however, that this Contract shall not take effect with respect to the Fund
unless it has first been approved (i) by a vote of a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of the Fund's outstanding voting
securities, when required by the 0000 Xxx.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in force and effect until [June 30, 2012]. Thereafter, if not
terminated, this Contract shall continue automatically for successive periods
not to exceed twelve months each, provided that such continuance is specifically
approved at least annually (i) by a vote of a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by the Board or by vote of a majority of the outstanding
voting securities of the Fund.
(c) Notwithstanding the foregoing, this Contract may be terminated at any
time, without the payment of any penalty, (i) by vote of the Board or by a vote
of a majority of the outstanding voting securities of the Fund on sixty days'
written notice to the Sub-Advisor; or (ii) by the Advisor on sixty days' written
notice to the Sub-Advisor; or (iii) by the Sub-Advisor on sixty days' written
notice to the Trust. Should this Contract be terminated with respect to the
Sub-Advisor, the Advisor shall assume the duties and responsibilities of the
Sub-Advisor unless and until the Advisor appoints another Sub-Advisor to perform
such duties and responsibilities. This Contract will automatically terminate in
the event of its assignment.
12. Amendment. No provision of this Contract 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, and, when required by the 1940 Act, no amendment of this Contract shall
be effective until approved by vote of a majority of the Fund's outstanding
voting securities.
13. Notices. Any notices under this Contract shall be in writing, addressed and
delivered, telecopied or mailed postage paid, to the other party entitled to
receipt thereof at such address as such party may designate for the receipt of
such notice. Until further notice to the other party, it is agreed that the
address of the Trust and the Advisor shall be 00 Xxxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxx, Xxxxx 00000-0000. Until further notice to the other party, it is agreed
that the address the Sub-Advisor shall be 000 Xxxx Xxxxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxx 00000.
14. Governing Law. This Contract shall be construed in accordance with the laws
of the State of Texas and the 1940 Act. To the extent that the applicable laws
of the State of Texas conflict with the applicable provisions of the 1940 Act,
the latter shall control.
15. Miscellaneous. The captions in this Contract 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 Contract
shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Contract shall not be affected thereby. This Contract
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors. Any question of interpretation of any term or
provision of this Contract having a counterpart in or otherwise derived from a
term or provision of the 1940 Act or the Advisors Act shall be resolved by
reference to such term or provision of the 1940 Act or the Advisors Act and to
interpretations thereof, if any, by the United States Courts or in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the SEC issued pursuant to said Acts. In addition, where the effect of a
requirement of the 1940 Act or the Advisors Act reflected in any provision of
the Contract is revised by rule, regulation or order of the SEC, such provision
shall be deemed to incorporate the effect of such rule, regulation or order.
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IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed by their officers designated as of the day and year first above
written.
INVESCO ADVISERS, INC.
ADVISOR
BY: /S/ XXXX X. XXXX
-------------------------
NAME: XXXX X. XXXX
TITLE: SENIOR VICE PRESIDENT
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INVESCO POWERSHARES CAPITAL MANAGEMENT LLC
Sub-Advisor
BY: /S/ XXXXXXXX X. XXXXXX
--------------------------------------
NAME: XXXXXXXX X. XXXXXX
TITLE: MANAGING DIRECTOR OF GLOBAL ETFS
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