JANUS DETROIT STREET TRUST FORM OF INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT JANUS FUNDS
Exhibit (d)(1)
This Investment Advisory and Management Agreement (the “Agreement”) is made and entered into as of
this _____ day of______________, 2016, by and between Janus Capital Management LLC, a
Delaware limited liability company (the “Adviser”), and Janus Detroit Street Trust, a Delaware
statutory trust (the “Trust”), regarding the fund(s) listed in Appendix A (each, a “Fund” and
together, the “Funds”).
WHEREAS, the Trust is registered as an open-end, management investment company under the Investment
Company Act of 1940, as amended (the “1940 Act”); and
WHEREAS, the Board of Trustees of the Trust (the “Board”) has approved this Agreement, and the
Adviser is willing to furnish certain investment advisory services upon the terms and conditions
herein set forth.
NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, it is
agreed between the parties hereto as follows:
1. Appointment of the Adviser. The Trust desires to employ the Fund’s capital by investing
and reinvesting in investments of the kind and in accordance with the limitations specified in its
Trust Instrument dated August 6, 2015, and in such Fund’s Prospectus and the Statement of
Additional Information as from time to time in effect (the “Prospectus”), and in the manner and to
the extent as may from time to time be approved by the Board. The Trust desires to employ and
hereby appoints the Adviser to act as investment adviser to the Fund. The Adviser accepts the
appointment and agrees to furnish the services described herein for the compensation set forth
below.
2. Delivery of Fund Documents. The Trust has furnished the Adviser with copies, properly
certified or authenticated, of each of the following:
| a | Trust Instrument; | ||
| b | Bylaws; | ||
| c. | Resolutions of the Board of Trustees of the Trust selecting Janus Capital Management LLC as Adviser to the Fund and approving the form of this Agreement; and | ||
| d. | the Trust’s Form N-1A Registration Statement. |
The Trust will furnish the Adviser from time to time with copies, properly certified or
authenticated, of all amendments of or supplements to the foregoing, if any.
3. Services provided by the Adviser. Subject to the supervision and direction of the Board,
the Adviser will, either directly or by employing suitable Sub-Advisers: (a) act in strict
conformity with the Trust’s Trust Instrument, the Trust’s Bylaws, the 1940 Act and the Investment
Advisers Act of 1940, as amended; (b) manage the Fund and furnish a continual investment program
for the Fund in accordance with such Fund’s investment objective and policies as described in the
Fund’s Prospectus; (c) make investment decisions for the Fund; (d) provide the Fund with investment
research and statistical data, advice and supervision, data processing and clerical services;
(e) provide the Trust with access to certain office facilities, which may be the Adviser’s own
offices; (f) determine what securities or investment instruments shall be purchased for
the Fund; what securities or investment instruments shall be held or sold by the Fund, and allocate
assets of the Fund to separate sub-accounts of the approved Sub-Advisers, and determine what
portion of the Fund’s assets shall be held uninvested; (g) review asset allocations and investment
policies with the Board from time to timer; and (h) advise and assist the officers of the Trust in
taking such steps as are necessary or appropriate to carry out the decisions of the Board and its
committees with respect to the foregoing matters and the conduct of the business of the Fund. In
addition, the Adviser will furnish the Trust with whatever statistical information the Trust may
reasonably request with respect to the securities or investment instruments that the Fund may hold
or contemplate purchasing. The appointment of Sub-Advisors shall be subject to approval by the
Board and, to the extent required by the 1940 Act or any other law or regulation, approval of the
shareholders of the Trust. To the extent a Fund seeks to track an index, the Adviser shall
initially determine and make such modifications to the identity and number of shares of the
securities to be accepted pursuant to each Fund’s benchmark index in exchange for “Creation Units”
for each Fund and the securities that will be applicable
that day to redemption requests received for each Fund as may be necessary as a result of
rebalancing adjustments and corporate action events (and may give directions to the Trust’s
custodian with respect to such designations).
The Adviser will keep the Trust informed of developments materially affecting the Fund, and will,
on its own initiative, furnish the Trust from time to time with whatever information the Adviser
believes is appropriate for this purpose.
4. Allocation of Charges and Expenses. The Adviser will make available, without expense to
the Trust or the Fund, the services of such of its officers, directors and employees as may be duly
elected as officers or trustees of the Trust, subject to the individual consent of such persons to
serve and to any limitations imposed by law. The Adviser will pay all expenses incurred in
performing its investment advisory services under this Agreement, including compensation of and
office space for officers and employees of the Adviser connected with management of the Fund. The
Adviser will not be required to pay any investment advisory related expenses of the Fund other than
those specifically allocated to it in this paragraph. In particular, but without limiting the
generality of the foregoing, the Fund will be required to pay distribution fees (if any),
brokerage expenses or commissions, interest, dividends, taxes, litigation expenses, acquired fund
fees and expenses (if any), and expenses and other extraordinary expenses not incurred in the
ordinary course of the Fund’s business.
5. Compensation of the Adviser. In consideration for the services to be performed
under this Agreement, the Adviser shall receive from the Trust an annual management fee, accrued
daily at the rate of 1/365th (1/366th in a leap year) of the
applicable advisory fee rate and payable monthly as soon as practicable after the last day of each
month in the amount set forth on Appendix B. This is a unitary fee structure in
which each Fund pays the Adviser the aforementioned fees in return for providing certain investment
advisory, supervisory, and administrative services to the Fund, including the costs of transfer
agency, custody, fund administration (such as Trustee compensation, fund accounting fees), legal
(including fund and independent trustee counsel fees), audit, and other services. This management
fee is also used to pay the licensing fee, if any, to Janus Index & Calculation Services LLC.
6. Services to other Accounts. The Trust understands that the Adviser acts as investment
adviser to other managed accounts, and the Trust has no objection to the Adviser so acting,
provided that whenever the Fund and one or more other accounts advised by the Adviser are prepared
to purchase or sell the same security, available investments or opportunities for sales will be
allocated in accordance with the written policies of the Adviser and in a manner believed by the
Adviser to be equitable to each entity under the specific circumstances. The Trust recognizes that
in some cases this procedure may affect adversely the price paid or received by the Fund or the
size of the position purchased or sold by the Fund. In addition, the Trust understands that the
persons employed by the Adviser to provide service to the Fund in connection with the performance
of the Adviser’s duties under this Agreement will not devote their full time to that service.
Moreover, nothing contained in this Agreement will be deemed to limit or restrict the right of the
Adviser or any “affiliated person” of the Adviser to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature to other persons or entities,
including serving as investment adviser to, or employee, officer, director or trustee of, other
investment companies.
7. Brokerage and Avoidance of Conflicts of Interest. In connection with purchases or
sales of Fund securities or investment instruments for the account of the Fund, neither the Adviser
nor any of its trustees, officers or employees will act as a principal or agent or receive any
commission with respect to such purchases or sales. The Adviser or its agents shall arrange for the
placing of all orders for the purchase and sale of Fund securities for the Fund’s account with
brokers or dealers selected by the Adviser. In the selection of such brokers or dealers and the
placing of such orders, the Adviser will use its best efforts to seek for the Fund the most
favorable execution and net price available and will consider all factors the Adviser deems
relevant in making such decisions including, but not limited to, price (including any applicable
brokerage commission or dealer spread), size of order, difficulty of execution, and operational
facilities of the firm involved and the firm’s risk in positioning a block of securities.
The parties agree that it is in the interests of the Fund that the Adviser have access to
supplemental investment and market research and security and economic analyses provided by brokers
who may execute brokerage transactions at a higher cost to such Fund than may result when brokerage
is allocated to other brokers on the basis of the best price and execution. The Adviser is
authorized to place orders for the purchase and sale of securities for the Fund with such brokers,
subject to review by the Board from time to time. In selecting brokers or dealers to execute a
particular transaction and in evaluating the best price and execution available, the Adviser may
consider the brokerage and
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research services (as such terms are defined in Section 28(e) of the
Securities Exchange Act of 1934, as amended) provided to the Fund and/or other accounts over which
the Adviser exercises investment discretion.
8. Standard of Care; Limitation of Liability. The Adviser will exercise its best judgment
in rendering the services described herein. The Adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust or the Fund in connection with the
matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from reckless disregard
by the Adviser of its obligations and duties under this Agreement, or a loss resulting from a
breach of fiduciary duty with respect to receipt of compensation for services (in which case any
award of damages shall be limited to the period and amount set forth in Section 36(b)(3) of the
1940 Act).
9. Voting. The Adviser will take any action and provide any advice with respect to the
voting of securities held by the Fund in accordance with the Adviser’s Proxy Voting Policies and
Procedures, as amended and revised from time to time.
10. Duration and Termination of this Agreement. This Agreement shall remain in force for an
initial term of two years and from year to year thereafter, but only so long as such continuance is
specifically approved at least annually by the vote of a majority of the members of the Board who
are not interested persons as defined in the 1940 Act, cast in person at a meeting called for the
purpose of voting on such approval and by a vote of the Board or of a majority of the outstanding
voting securities of the Trust. The 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. This Agreement may, on sixty (60) days written notice, be
terminated at any time without the payment of any penalty, by the Board, or by vote of a majority
of the outstanding voting securities of the Fund, individually, or by the Adviser. This Agreement
shall automatically terminate in the event of its assignment. In interpreting the provisions of
this Agreement, the definitions contained in Section 2(a) of the 1940 Act (particularly the
definitions of “interested person”, “assignment” and “majority of the outstanding voting
securities”), as from time to time amended, shall be applied, subject, however, to such exemptions
as may be granted by the Securities and Exchange Commission by any rule, regulation or order.
11. Amendment of this Agreement. A provision of this Agreement may be amended,
changed, waived, discharged or terminated only by an instrument in writing signed by the party
against whom enforcement of the amendment, change, waiver, discharge or termination is sought. An
amendment to this Agreement shall not be effective until approved by the Board, including a
majority of the directors who are not interested persons of the Adviser, distributor, or of the
Trust. To the extent legal counsel to the Trust concludes that shareholder approval of a particular
amendment to this Agreement is required under the 1940 Act, such amendment will not be effective
until the required shareholder approval has been obtained.
12. Notice. Any notice, advice or report to be given pursuant to this Agreement shall be
delivered or mailed:
To the Adviser at:
Janus Capital Management LLC
000 Xxxxxxx Xxxxxx Xxxxxx, XX 00000
000 Xxxxxxx Xxxxxx Xxxxxx, XX 00000
To the Trust or the Fund at:
Janus Detroit Street Trust 000 Xxxxxxx Xxxxxx Xxxxxx, XX 00000
13. Governing Law. This Agreement constitutes the entire agreement of the parties, shall be
binding upon and shall inure to the benefit of the parties hereto and shall be governed by Delaware
law in a manner not in conflict with the provisions of the 1940 Act.
14. Miscellaneous. Neither the holders of shares of the Fund nor the officers or trustees
of the Trust in their capacities as such shall be personally liable hereunder. The captions in this
Agreement are included for convenience of reference only and in no way define or limit 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.
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15. Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their
officers designated below as of the day and year first above written.
| JANUS CAPITAL MANAGEMENT LLC |
JANUS DETROIT STREET TRUST |
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By:
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By: | |||||||
Name:
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Name: | |||||||
Title:
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Title: | |||||||
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Appendix A
Janus Small Cap Growth Alpha ETF
Janus Small/Mid Cap Growth Alpha ETF
Janus Velocity Tail Risk Hedged Large Cap ETF
Janus Velocity Volatility Hedged Large Cap ETF
Janus Small/Mid Cap Growth Alpha ETF
Janus Velocity Tail Risk Hedged Large Cap ETF
Janus Velocity Volatility Hedged Large Cap ETF
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Appendix B
Management Fee Rates
| Fund | Average Daily Net Assets | |||
Janus Small Cap Growth Alpha ETF |
0.50% | |||
Janus Small/Mid Cap Growth Alpha ETF |
0.50% | |||
Janus Velocity Tail Risk Hedged Large Cap ETF |
0.65% | |||
Janus Velocity Volatility Hedged Large Cap ETF |
0.65% | |||
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