INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT made as of the 20th day of July, 2000 by and between Hussman
Econometrics Advisors, Inc. (the "Investment Adviser"), a Maryland corporation,
and Hussman Investment Trust (the "Trust"), an Ohio business trust.
WHEREAS, the Trust is an open-end, diversified management investment company
registered under the Investment Company Act of 1940, as amended (the "Act"), and
is currently authorized to issue separate series of shares, each having its own
investment objective, policies and restrictions, all as more fully described in
the prospectus and the statement of additional information constituting parts of
the Trust's Registration Statement on Form N-1A filed the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended, and the Act (the "Registration Statement"); and
WHEREAS, the Trust proposes to engage in the business of investing and
reinvesting the assets of each of its series in securities ("the portfolio
assets") of the type and in accordance with the limitations specified in the
Trust's Agreement and Declaration of Trust (the "Declaration") and Registration
Statement, and any representations made in its prospectus and statement of
additional information, all in such manner and to such extent as may from time
to time be authorized by the Trustees; and
WHEREAS, the Declaration established Hussman Strategic Growth Fund (the "Fund")
as a series of the Trust, and wish to employ the Investment Adviser to manage
the investment and reinvestment of the Fund's portfolio assets as above
specified and, without limiting the generality of the foregoing, to provide
management and other services specified below and acknowledges that it has
received prior to entering into this Agreement a copy of Form ADV-Part II as
filed by the Investment Adviser with the Commission.
NOW, THEREFORE, the parties agree as follows:
1. The Trust hereby appoints the Investment Adviser to supervise and
direct the investments of and for the Fund and as the Fund's agent and
attorney-in-fact with full discretionary and exclusive power and
authority to establish, maintain and trade in brokerage accounts for
and in the name of the Fund and to buy, sell and trade in all stocks,
bonds and other assets of the Fund. The Investment Adviser hereby
accepts such appointment and agrees to manage the portfolio assets in
a manner consistent with the investment objective, policies and
restrictions of the Fund and with applicable law.
2. Unless advised by the Trustees of the Trust of an objection, the
Investment Adviser may direct that a portion of the brokerage
commissions that may be generated by the Fund be applied to payment
for brokerage and research services. Brokerage and research services
furnished by brokers may include, but are not limited to, written
information and analyses concerning specific
securities, companies or sectors; market, financial and economic
studies and forecasts as well as discussions with research personnel;
financial publications; and statistic and pricing services utilized in
the investment management process. Brokerage and research services
obtained by the use of commissions arising from the Fund's portfolio
transactions may be used by the Investment Adviser in its other
investment activities. In selecting brokers and negotiating commission
rates, the Investment Adviser will take into account the financial
stability and reputation of brokerage firms and the brokerage,
execution and research services provided by such brokers. The benefits
which the Fund may receive from such services may not be in direct
proportion to the commissions generated by the Fund. The Trust
acknowledges that since commission rates are generally negotiable,
selecting brokers on the basis of considerations which are not limited
to applicable commission rates may result in higher transaction costs
that would otherwise by obtainable.
3. The Investment Adviser may bunch orders for the Fund with orders for
the same security for other accounts managed by the Investment Adviser
or its affiliates. In such instances, the Fund will be charged the
average price per unit for the security in such transactions. Complete
records of such transactions will be maintained by the Investment
Adviser and will be made available to the Trust upon request.
4. The Investment Adviser shall report to the Board of Trustees at each
meeting thereof all changes in the portfolio assets since the prior
report, and will also keep the Trustees in touch with important
developments affecting the portfolio assets and on the Investment
Adviser's own initiative will furnish the Trustees from time to time
with such information as the Investment Adviser may believe
appropriate for this purpose, whether concerning the individual
issuers whose securities are included in the portfolio assets, the
industries in which they engage, or the conditions prevailing in the
economy generally. The Investment Adviser will also furnish the
Trustees with such statistical and analytical information with respect
to the portfolio assets as the Investment Adviser may believe
appropriate or as the Trustees reasonably may request. In making
purchases and sales of the portfolio assets, the Investment Adviser
will bear in mind the policies set from time to time by the Board of
Trustees as well as the limitations imposed by the Trust's Agreement
and Declaration of Trust, and in the Trust's Registration Statement,
in each case as amended from time to time, the limitations in the Act
and of the Internal Revenue Code of 1986, as amended, in respect of
regulated investment companies and the investment objective, policies
and practices, including restrictions applicable to the Fund's
portfolio.
5. The Investment Adviser shall not be liable for any mistake of judgment
or in any event whatsoever, except for lack of good faith, provided
that nothing herein shall be deemed to protect, or purport to protect,
the Investment
-2-
Adviser against any liability to the Fund or to its security holders
to which the Investment Adviser would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder, or by reason of the Investment
Adviser's reckless disregard of its obligations and duties hereunder.
It is understood that the Investment Adviser performs various
investment advisory and managerial services for others, and the Trust
agrees that the Investment Adviser may give advice and take action in
the performance of its duties with respect to others which may differ
from advice given or action taken with respect to the Fund. Nothing
contained herein shall in any way constitute a waiver or limitation of
any rights which the Fund or its shareholders may have under common
law, or any federal or state securities laws.
6. This Agreement shall become effective on the date hereof and shall
remain in effect for an initial term of two years and shall continue
in effect from year to year thereafter so long as its continuance is
specifically approved at least annually by the Board of Trustees or by
a vote of a majority of the outstanding voting securities (as defined
in the Act) of the Fund, and, in either case, by a vote, cast in
person at a meeting called for the purpose of voting on such approval,
of a majority of the Trust's Trustees who are not parties to this
Agreement or interested persons, as defined in the Act, of any party
to this Agreement, and provided further, however, that if the
continuation of this Agreement is not approved, the Investment Adviser
may continue to render to the Fund the services described herein in
the manner and to the extent permitted by the Act and the rules and
regulations thereunder. Upon the effectiveness of this Agreement, it
shall supersede all previous agreements between the parties covering
the subject matter hereof. This Agreement may be terminated at any
time, without the payment of any penalty, by vote of a majority of the
outstanding voting securities (as defined in the Act) of the Fund, or
by a vote of the Board of Trustees on 60 days' written notice to the
Investment Adviser, or by the Investment Adviser on 60 days' written
notice to the Trust.
7. This Agreement shall not be amended unless such amendment is approved
by vote, cast in person at a meeting called for the purpose of voting
on such approval, of a majority of the Trust's Trustees who are not
parties to this Agreement or interested persons, as defined in the
Act, of any party to this Agreement (other than as Trustees of the
Trust), and, if required by law, by vote of a majority of the
outstanding voting securities (as defined in the Act) of the Fund.
8. This Agreement may not be assigned by the Investment Adviser and shall
terminate automatically in the event of any assignment by the
Investment Adviser. The term "assignment" as used in this paragraph
shall have the meaning ascribed thereto by the Act and any regulations
or interpretations of the Commission thereunder.
-3-
9. If the Investment Adviser ceases to act as investment adviser to the
Fund, or, in any event, if the Investment Adviser so requests in
writing, the Trust agrees to take all necessary action to change the
names of the Trust and the Fund to a name not including the term
"Hussman." The Investment Adviser may from time to time make available
without charge to the Trust for its use of such marks or symbols owned
by the Investment Adviser, including marks or symbols containing the
term "Hussman" or any variation thereof, as the Investment Adviser may
consider appropriate. Any such marks or symbols so made available will
remain the Investment Adviser's property and it shall have the right,
upon notice in writing, to require the Trust to cease the use of such
xxxx or symbol at any time.
10. The Fund shall pay the Investment Adviser an investment advisory fee
equal to 1.5% per annum of the average daily net assets of the Fund.
The investment advisory fee will be paid monthly. The Investment
Adviser's compensation for the period from the date hereof through the
last day of the month of the effective date hereof will be prorated
based on the proportion that such period bears to the full month. In
the event of any termination of this Agreement, the Investment
Adviser's compensation will be calculated on the basis of a period
ending on the last day on which this Agreement is in effect, subject
to proration based on the number of days elapsed in the current period
as a percentage of the total number of days in such period.
11. Unless otherwise agreed to in writing by the parties, the Fund shall
be responsible and hereby assumes the obligation for payment of all of
its expenses, including: (a) payment to the Investment Adviser of the
fee provided for in the foregoing paragraph; (b) custody, transfer and
dividend disbursing expenses; (c) fees of trustees who are not
affiliated persons of the Investment Adviser or any administrator of
the Trust; (d) legal and auditing expenses; (e) clerical, accounting
and other office costs; (f) the cost of personnel providing services
to the Fund; (g) costs of printing the Fund's prospectuses and
shareholder reports for existing shareholders; (h) cost of maintenance
of the Fund's corporate existence; (i) interest charges, taxes,
brokerage fees and commissions; (j) costs of stationery and supplies;
(k) expenses and fees related to registration and filing with the
Commission and with state regulatory authorities; and (l) such
promotional, shareholder servicing and other expenses as may be
contemplated by one or more effective plans pursuant to Rule 12b-1
under the Act or one or more effective non-Rule 12b-1 shareholder
servicing plans, in each case provided, however, that the Fund's
payment of such promotional, shareholder servicing and other expenses
shall be in the amounts, and in accordance with the procedures, set
forth in such plan or plans.
-4-
12. Except to the extent necessary to perform the Investment Adviser's
obligations hereunder, nothing herein shall be deemed to limit or
restrict the right of the Investment Adviser or its members, officers
or employees to engage in any other business or to devote time and
attention to the management of other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of
any kind to any other individual or entity.
13. The validity of the Agreement and the rights and liabilities of the
parties hereunder shall be determined in accordance with the laws of
the State of Maryland without regard to its conflict of laws
provisions, provided, however, that nothing herein shall be construed
as being inconsistent with the Act.
14. A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of the State of Ohio, and notice is hereby
given that this instrument is executed on behalf of the Board of
Trustees of the Trust and not individually and that the obligations of
this instrument are not binding upon any of the Trustees, officers or
shareholders individually but are binding only upon the assets and
property of the Fund, and the Investment Adviser shall look only to
the assets of the Fund for the satisfaction of such obligations.
15. The Investment Adviser shall promptly notify the Trust of any change
in the ownership or control of the Investment Adviser.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first above written.
HUSSMAN INVESTMENT TRUST
By: /s/ Xxxx X. Xxxxxxx
-------------------------
HUSSMAN ECONOMETICS ADVISORS, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------
-5-
