Exhibit (6)(h)
HSBC INVESTOR FUND
HSBC INVESTOR EQUITY FUND
FORM OF SUB-ADVISORY AGREEMENT
AGREEMENT, effective commencing on January 30, 2004, between NWQ Investment
Management Company, LLC (the "Sub-adviser") and HSBC Asset Management (Americas)
Inc. (the "Manager").
WHEREAS, the Manager has been retained by HSBC Investor Funds, a
Massachusetts business trust (the "Trust") registered as an open-end diversified
investment management company under the Investment Company Act of 1940, as
amended (the "1940 Act"), to provide investment advisory services to the HSBC
Investor Equity Fund (the "Fund") pursuant to an Investment Advisory Contract
and Supplement thereto dated December 31, 1999 and amended and restated March 1,
2001 (the "Advisory Agreement");
WHEREAS, the Trust's Board of Trustees, including a majority of the
Trustees who are not parties to this Agreement or "interested persons," as
defined in the 1940 Act, of any party to this Agreement, have approved the
appointment of the Sub-adviser to perform certain investment advisory services
for the Fund pursuant to this Sub-advisory Agreement and the Sub-adviser is
willing to perform such services for the Fund;
WHEREAS, the Sub-adviser is registered or exempt from registration as an
investment adviser under the Investment Advisers Act of 1940, as amended
("Advisers Act");
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the Manager and the Sub-adviser as follows:
1. Appointment. The Manager hereby appoints the Sub-adviser to perform
advisory services to the Fund for the periods and on the terms set forth in this
Sub-advisory Agreement. The Sub-adviser accepts such appointment and agrees to
furnish the services herein set forth, for the compensation herein provided.
2. Investment Advisory Duties. Subject to the supervision of the Board of
Trustees of the Trust and the Manager, the Sub-adviser will, in coordination
with the Manager, (a) provide a program of continuous investment management for
the portion of the Fund allocated by the Manager to the Sub-adviser (the
"Sub-adviser's Portfolio") for management in accordance with the Fund's
investment objectives, policies and limitations as stated in the Fund's
Prospectus and Statement of Additional Information included as part of the
Trust's Registration Statement on behalf of the Fund filed with the Securities
and Exchange Commission, as they may be amended from time to time, copies of
which shall be provided to the Sub-adviser by the Manager; (b) make investment
decisions for the Sub-adviser's Portfolio; and (c) place orders to purchase and
sell securities for the Sub-adviser's Portfolio. In particular, the Sub-adviser
will be responsible for the market timing of purchases and sales and for all
yield enhancement strategies used in managing the Sub-adviser's Portfolio.
In performing its investment management services to the Fund hereunder, the
Sub-adviser will provide the Fund with ongoing investment guidance and policy
direction. The Sub-adviser will determine the securities, instruments,
repurchase agreements, options and other investments and techniques that the
Fund will purchase, sell, enter into or use, and will provide an ongoing
evaluation of the Sub-adviser's Portfolio. The Sub-adviser will determine what
portion of the Sub-adviser's Portfolio shall be invested in securities and other
assets.
The Sub-adviser further agrees that, in performing its duties hereunder, it
will:
(a) comply with the 1940 Act and all rules and regulations thereunder, the
Advisers Act, applicable sections of the Internal Revenue Code of 1986, as
amended (the "Code"), and all other applicable federal and state laws and
regulations, and with any applicable procedures adopted by the Trustees;
(b) manage the Sub-adviser's Portfolio so that it will qualify, and
continue to qualify (except where extraordinary circumstances dictate
otherwise), as a regulated investment company under Subchapter M of the Code and
regulations issued thereunder;
(c) place orders pursuant to its investment determinations for the
Sub-adviser's Portfolio directly with the issuer, or with any broker or dealer
the Sub-adviser may choose, in accordance with applicable policies expressed in
the Fund's Prospectus and/or Statement of Additional Information and in
accordance with applicable legal requirements;
(d) furnish to the Trust whatever statistical information the Trust may
reasonably request in writing with respect to the Sub-adviser's Portfolio's
assets or contemplated investments. In addition, the Sub-adviser will keep the
Trust and the Trustees informed of developments materially affecting the
Sub-adviser's Portfolio and shall, on the Sub-adviser's own initiative, furnish
to the Trust from time to time whatever information the Sub-adviser believes
appropriate for this purpose;
(e) make available to the Manager and the Trust, promptly upon their
written request, such copies of its investment records and ledgers with respect
to the Sub-adviser's Portfolio as may be required to assist the Manager and the
Trust in their compliance with applicable laws and regulations. The Sub-adviser
will furnish the Trustees with such periodic and special reports regarding the
Sub-adviser's Portfolio as they may reasonably request in writing;
(f) immediately notify the Manager and the Trust in the event that the
Sub-adviser or any of its affiliates: (1) becomes aware that it is subject to a
statutory disqualification that prevents the Sub-adviser from serving as an
investment adviser pursuant to this Sub-advisory Agreement; or (2) becomes aware
that it is the subject of an administrative proceeding or enforcement action by
the SEC or other regulatory authority. The Sub-adviser further agrees to notify
the Trust and the Manager promptly if any statement regarding the Sub-adviser
contained in the Trust's
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Registration Statement with respect to the Fund, or any amendment or supplement
thereto, becomes untrue or incomplete in any material respect.
In performing its duties under this Agreement, the Sub-adviser shall manage
and invest the Sub-adviser's Portfolio assets in accordance with the Fund's
investment objectives, policies and restrictions as well as applicable federal
and state securities laws, based upon instructions as may be provided to the
Sub-adviser by the Manager, the Fund's administrator, accountant, custodian or
other agent designated by the Manager as responsible for testing compliance of
the Fund (the "Compliance Agent"). The Sub-adviser further agrees to manage and
invest the Sub-adviser's Portfolio assets in accordance with instructions as may
be provided to the Sub-adviser from time to time by the Manager or the
Compliance Agent in an effort to ensure that the Fund meets and maintains, so
long as required by the Code, the requirements for qualification as a regulated
investment company under Subchapter M of the Code and regulations issued
thereunder.
In fulfilling its obligations under this Agreement, the Sub-adviser shall
be entitled to reasonably rely on and act in accordance with instructions
provided by the Manager or Compliance Agent.
3. Allocation of Charges and Expenses. Except as otherwise specifically
provided in this Section 3, the Sub-adviser shall pay the compensation and
expenses of all its directors, partners, officers and employees, if any, who
serve as officers and executive employees of the Trust (including the Fund's
share of payroll taxes), and the Sub-adviser shall make available, without
expense to the Fund, the service of its directors, partners, officers and
employees, if any, who may be duly elected officers of the Trust, subject to
their individual consent to serve and to any limitations imposed by law.
The Sub-adviser shall not be required to pay any expenses of the Fund other
than those specifically allocated to the Sub-adviser in this Section 3. In
particular, but without limiting the generality of the foregoing, the
Sub-adviser shall not be responsible, except to the extent of the reasonable
compensation of such of the Trust's employees as are officers or employees of
the Sub-adviser whose services may be involved, for the following expenses of
the Fund: organization and offering expenses of the Fund (including
out-of-pocket expenses); fees payable to any other Fund advisers or consultants;
legal expenses; auditing and accounting expenses; interest expenses; telephone,
telex, facsimile, postage and other communications expenses; taxes and
governmental fees; dues and expenses incurred by or with respect to the Fund in
connection with membership in investment company trade organizations; cost of
insurance relating to fidelity coverage for the Trust's officers and employees;
fees and expenses of any custodian, subcustodian, transfer agent, registrar, or
dividend disbursing agent of the Fund; payments for maintaining the Fund's
financial books and records and calculating the daily net asset value of the
Fund's shares; other payments for portfolio pricing or valuation services to
pricing agents, accountants, bankers and other specialists, if any; expenses
relating to investor and public relations; expenses of registering and
qualifying shares of the Fund for sale (if any); freight, insurance and other
charges in connection with the shipment of the portfolio securities of the
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Fund; brokerage commissions or other costs of acquiring or disposing of any
portfolio securities or other assets of the Fund, or of entering into other
transactions or engaging in any investment practices with respect to the Fund;
expenses of printing and distributing prospectuses, Statements of Additional
Information, reports, notices and dividends to stockholders; costs of
stationery; litigation expenses; costs of stockholders' and other meetings; the
compensation and all expenses (specifically including travel expenses relating
to the Fund's business) of officers, trustees and employees of the Trust who are
not interested persons of the Sub-adviser; and travel expenses (or an
appropriate portion thereof) of officers or trustees of the Trust who are
officers, directors or employees of the Sub-adviser to the extent that such
expenses relate to attendance at meetings of the Board of Trustees of the Trust
or any committees thereof or advisers thereto.
4. Compensation. As compensation for the services provided and expenses
assumed by the Sub-adviser under this Agreement, the Trust will pay the
Sub-adviser within 21 calendar days after the end of each calendar quarter an
advisory fee computed daily based on the basis of the Sub-adviser's Portfolio
average daily net assets allocated to the Sub-Adviser at an annual rate of 0.35%
of the net assets up to $500 million, 0.30% of the net assets over $500 million
up to $1 billion, and 0.25% of net assets in excess of $1 billion. The "average
daily net assets" of the Sub-adviser's Portfolio shall mean the average of the
values attributed to the Fund's net assets as of 4:00 p.m. (New York time) on
each day on which the net asset value of the Fund is determined consistent with
the provisions of Rule 22c-1 under the 1940 Act or, if the Fund lawfully
determines the value of its net assets as of some other time on each business
day, as of such other time. The value of net assets of the Fund shall always be
determined pursuant to the applicable provisions of the Trust's Declaration of
Trust, as amended, and Registration Statement. If, pursuant to such provisions,
the determination of net asset value is suspended for any particular business
day, then for the purposes of this Section 4, the value of the net assets of the
Fund as last determined shall be deemed to be the value of its net assets as of
the close of regular trading on the New York Stock Exchange, or as of such other
time as the value of the net assets of the Fund's portfolio may lawfully be
determined, on that day. If the determination of the net asset value of the
shares of the Fund has been so suspended for a period including any quarter end
when the Sub-adviser's compensation is payable pursuant to this Section, then
the Sub-adviser's compensation payable at the end of such quarter shall be
computed on the basis of the value of the net assets of the Fund as last
determined (whether during or prior to such quarter). If the Fund determines the
value of the net assets of its portfolio more than once on any day, then the
last such determination thereof on that day shall be deemed to be the sole
determination thereof on that day for the purposes of this Section 4. In the
event that this Agreement is terminated pursuant to Section 10 hereof, the
Sub-adviser shall be entitled to a pro rata portion of the fee under this
Section 4 through and including the date upon which the Agreement is terminated
and the Sub-adviser ceases to provide investment advisory services to the Fund
hereunder.
5. Books and Records. The Sub-adviser agrees to maintain such books and
records with respect to its services to the Fund as are required by Section 31
under the 1940 Act, and rules adopted thereunder, and by other applicable legal
provisions, including the Investment Advisers Act of 1940 and the Securities and
Exchange Act of 1934, and to preserve such records
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for the periods and in the manner required by that Section, and those rules and
legal provisions. The Manager shall maintain all books and other records not
related to the Fund's transactions. The Sub-adviser also agrees that records it
maintains and preserves pursuant to Rules 31a-1 and Rule 31a-2 under the 1940
Act and otherwise in connection with its services hereunder are the joint
property of the Fund and the Sub-adviser and a copy will be provided promptly to
the Fund upon its written request. The Sub-adviser further agrees that it will
furnish to regulatory authorities having the requisite authority any information
or reports in connection with its services hereunder which may be requested in
order to determine whether the operations of the Fund are being conducted in
accordance with applicable laws and regulations.
6. Standard of Care and Limitation of Liability. The Sub-adviser shall
exercise its best judgment in rendering the services provided by it under this
Sub-advisory Agreement. The Sub-adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund or the holders
of the Fund's shares in connection with the matters to which this Sub-advisory
Agreement relate, provided that nothing in this Sub-advisory Agreement shall be
deemed to protect or purport to protect the Sub-adviser against any liability to
the Fund or to holders of the Fund's shares to which the Sub-adviser would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or by reason of the
Sub-adviser's reckless disregard of its obligations and duties under this
Sub-advisory Agreement. As used in this Section 6, the term "Sub-adviser" shall
include any officers, directors, partners, employees, agents or other affiliates
of the Sub-adviser performing services for the Fund.
7. Indemnification.
(a) The Sub-adviser hereby agrees to indemnify and hold harmless the
Manager from any controversies, claims, suits, losses, liabilities, judgments,
awards or settlements, and costs or expenses, including reasonable legal fees,
directly or proximately caused by, the investment decisions rendered by the
Sub-adviser in bad faith in a grossly negligent manner inconsistent with the
Fund's stated investment objectives, guidelines and restrictions, any
intentional failure of the Sub-adviser to fulfill any of its other obligations
under this Sub-advisory Agreement, any willful omission to disclose material
facts, by the Sub-adviser to the Fund or the Manager or any willful violation of
applicable law by the Sub-adviser. The Sub-adviser also agrees to indemnify and
hold harmless the Manager with respect to any reasonable losses incurred as the
result of grossly negligent errors made by the Sub-adviser in transmitting
orders to any broker for execution.
(b) The Manager hereby agrees to indemnify and hold harmless the
Sub-adviser from any controversies, claims, suits, losses, liabilities,
judgments, awards or settlements, and costs or expenses, including reasonable
legal fees, caused by, or in any related to, its failure to fulfill any of its
obligations under this Sub-advisory Agreement any willful omission to disclose
material facts by the Manager to the Fund or the Sub-Adviser or any willful
violation of applicable law by the Manager.
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(c) If any party seeks indemnification under this Agreement (an
"indemnified party"), it shall notify the other party (the "indemnifying party")
in writing of the assertion of any third party claim or action and shall deliver
all copies of materials received in connection with the matter to the
indemnifying party. The indemnifying party shall have the right to control the
defense of any such claim or action with counsel of its own choosing, and the
indemnified party shall cooperate fully with the indemnifying party in the
defense or settlement of any matter that is covered by paragraphs (a) or (b)
above, subject to reimbursement by the indemnifying party for expenses incurred
by the indemnified party in connection with the indemnifying party's
participation in the defense.
8. Services Not Exclusive. It is understood that the services of the
Sub-adviser are not exclusive, and that nothing in this Sub-advisory Agreement
shall prevent the Sub-adviser from providing similar services to other
individuals, institutions or investment companies (whether or not their
investment objectives and policies are similar to those of the Fund) or from
engaging in other activities, provided such other services and activities do
not, during the term of this Sub-advisory Agreement, interfere in a material
manner with the Sub-adviser's ability to meet its obligations to the Trust and
the Fund hereunder. When the Sub-adviser recommends the purchase or sale of a
security for other investment companies and other clients, and at the same time
the Sub-adviser recommends the purchase or sale of the same security for the
Fund, the Sub-adviser may, but shall not be obligated to, aggregate the orders
for securities to be purchased or sold. It is understood that in light of its
fiduciary duty to the Fund, such transactions will be executed on a basis that
is fair and equitable to the Fund. In connection with purchases or sales of
portfolio securities for the account of the Fund, neither the Sub-adviser nor
any of its directors, partners, officers or employees shall act as a principal
or agent or receive any commission.
9. Documentation. The Trust shall provide the Sub-adviser with the
following documents, as requested by the Sub-adviser:
(a) the Trust's registration statement relating to the Fund, and any
amendments thereto;
(b) the current Declaration of Trust and By-laws (and any amendments
thereto) of the Trust;
(c) resolutions of the Board of Trustees of the Trust authorizing the
appointment of the Sub-adviser to serve as Sub-adviser and approving this
Sub-advisory Agreement; and
(d) the Trust's Notification of Registration on Form N-8A.
10. Duration and Termination. This Sub-advisory Agreement shall continue
for an initial term of two years from the date set forth above, unless sooner
terminated as provided herein. Notwithstanding the foregoing, this Sub-advisory
Agreement may be terminated: (a) at any time without penalty upon thirty (30)
days' written notice to the Sub-adviser by the Fund upon the vote of a majority
of the Trustees or upon the vote of a majority of the Fund's
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outstanding voting securities, (b) at any time without penalty upon thirty (30)
days' written notice to the Sub-adviser by the Manager, or (c) by the
Sub-adviser upon thirty (30) days' written notice to the Trust or the Manager.
Anything to the contrary herein notwithstanding, any termination carried out
pursuant to this Section 10(c) shall be without penalty and, further, the
compensation schedule set forth in Section 4 hereof shall apply to the service
of the Sub-adviser beyond the end of the notice period provided in this Section
10(c). This Sub-advisory Agreement will also terminate automatically in the
event of its assignment (as defined in the 0000 Xxx) or the assignment or
termination of the Advisory Agreement.
11. Amendments. No provision of this Sub-advisory Agreement may be changed,
waived, discharged or terminated orally, unless by an instrument in writing
signed by both parties, and no amendment of this Sub-advisory Agreement shall be
effective until approved by an affirmative vote of (i) a majority of the
outstanding voting securities of the Fund, and (ii) a majority of the Trustees
of the Fund, including a majority of Trustees who are not interested persons of
any party to this Sub-advisory Agreement, cast in person at a meeting called for
the purpose of voting on such approval, if such approval is required by
applicable law.
12. Notices. Any notice or other communication required or permitted to be
given hereunder shall be given in writing and mailed, faxed or delivered to the
other party at its address as follows:
If to the Manager:
HSBC Asset Management (Americas) Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxx X. Xxxxxxx
If to the Sub-adviser:
NWQ Investment Management Company, LLC
0000 Xxxxxxx Xxxx Xxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx-Xxxx Xxxxxx
Any party may specify a different or additional address for notice by
sending a written notice to the other at the address above, or at that or those
last given hereunder.
13. Miscellaneous.
(a) This Sub-advisory Agreement shall be governed by the laws of the State
of New York, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act, or rules or orders of the SEC
thereunder. Exclusive original jurisdiction
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to any claim, action or dispute between the parties arising out of this
Agreement shall be solely in state or federal district courts sitting in the
State of New York.
(b) The captions of this Sub-advisory Agreement are included for
convenience only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
(c) If any provision of this Sub-advisory Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Sub-advisory Agreement shall not be affected hereby and, to this extent, the
provisions of this Sub-advisory Agreement shall be deemed to be severable.
(d) Nothing herein shall be construed as constituting the Sub-adviser, or
any of its directors, officers or employees, an agent of the Manager or the
Fund, nor the Manager, or any of its directors, officers or employees, an agent
of the Sub-adviser.
(e) This Sub-advisory Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but counterparts
shall, together, constitute only one Sub-advisory Agreement.
(f) The undersigned officer of the Fund has executed this Sub-advisory
Agreement not individually, but as an officer under the Fund's Declaration of
Trust, and the obligations of this Sub-advisory Agreement are not binding upon
the Fund's Trustees, its officers, or shareholders in the Fund individually, but
bind only the Fund Trust estate.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of January 30, 2004.
NWQ INVESTMENT MANAGEMENT COMPANY, LLC
By
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Name:
Title:
HSBC ASSET MANAGEMENT (AMERICAS) INC.
By
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Name:
Title:
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