Exhibit Q(1)(e)
INVESTMENT ADVISORY AGREEMENT
This Agreement is made and entered into as of
April 25, 2017, by and between GraniteShares ETF Trust, a
Delaware trust (the "Trust"), on behalf of each fund set
forth on Appendix A, each a series of shares of the
Trust (each a "Fund" and collectively the "Funds"), and
GraniteShares Advisors LLC, a Delaware limited
liability company (the "Adviser").
WHEREAS, the Trust is an open-end management
investment company, registered under the Investment
Company Act of 1940, as amended (the "1940 Act");
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 of the
Trust;
WHEREAS, the Adviser is registered as an investment
adviser under the Investment Advisers Act of 1940 (the
"Advisers Act"), and engages in the business of asset
management;
WHEREAS, the Trust desires to retain the Adviser to
render certain investment management services to the Fund,
and the Adviser is willing to render such services; and
WHEREAS, capitalized terms used but not otherwise
defined in herein shall have the meaning ascribed to
such terms in the prospectus and statement of
additional information of each Fund, as the same may be
amended from time to time.
NOW, THEREFORE, in consideration of the mutual
covenants herein contained, the parties hereto agree as
follows:
1. Obligations of Investment Adviser
(a) Services. The Adviser shall provide a
continuous program of investment management for each
Fund, subject to the general supervision of the Trust's
Board of Trustees and the provisions of this
Agreement. Specifically, and without limiting the
generality of the foregoing, the Adviser agrees to
perform the following services (the "Services") for
each Fund:
(1) manage the investment and reinvestment of the
assets of the Fund;
(2) continuously review, supervise, and
administer the investment program
of the Fund;
(3) determine, in its discretion, the
securities to be purchased, retained or sold
(and implement those decisions) with respect to
the Fund;
(4) with the assistance of the Fund's
distributor, determine the number of
shares of the Fund that will be created or
redeemed each Business Day based on the
purchase orders submitted by Authorized
Participants;
(5) provide, in a timely manner, such
information as may be reasonably requested
by the Trust or its designated agents in
connection with, among other things,
information about the Fund sufficient for a
pricing service or other entity to calculate
the Intraday Interim Value of the shares
of the Fund every fifteen seconds each
Business Day;
(6) provide the Trust and the Fund with
records concerning the Adviser's activities
under this Agreement which the Trust and the
Fund are required to maintain; and
(7) render regular reports to the Trust's
trustees and officers concerning the
Adviser's discharge of the foregoing
responsibilities.
(b) Control of the Trust. The Adviser
shall discharge the responsibilities described in
subsection (a) subject to the control of the trustees
and officers of the Trust and in compliance with (i)
such policies as the trustees may from time to time
establish; (ii) the relevant Fund's objectives,
policies, and limitations as set forth in its
prospectus and statement of additional information, as
the same may be amended from time to time; and (iii)
with all applicable laws and regulations.
(c) Sub-Adviser and Agents. All Services to be
furnished by the Adviser under this Agreement may be
furnished through the medium of any managers,
officers or employees of the Adviser or through such
other parties (including, without limitation, a sub-
adviser) as the Adviser may determine from time to time.
(d) Expenses and Personnel. The Adviser agrees,
at its own expense or at the expense of one or more
of its affiliates, to render the Services and to
provide the office space, furnishings, equipment and
personnel as may be reasonably required in the judgment
of the trustees and officers of the Trust to perform
the Services on the terms and for the compensation
provided herein. The Adviser shall authorize and permit
any of its officers, managers, or employees, who may be
elected as trustees or officers of the Trust, to serve in
the capacities in which they are elected. Except to the
extent expressly assumed by the Adviser and except to the
extent required by law to be paid by the Adviser, the
Trust shall pay all costs and expenses in connection with
its operation. Notwithstanding the foregoing, the Adviser
shall pay all expenses of the Trust, except for: (i)
brokerage expenses and other fees, charges, taxes, levies
or expenses (such as stamp taxes) incurred in connection
with the execution of portfolio transactions or in
connection with creation and redemption transactions
(including without limitation any fees, charges,
taxes, levies or expenses related to the purchase or
sale of an amount of any currency, or the patriation or
repatriation of any security or other asset, related
to the execution of portfolio transactions or any
creation or redemption transactions); (ii) legal fees or
expenses in connection with any arbitration, litigation
or pending or threatened arbitration or litigation,
including any
z
settlements in connection therewith; (iii) compensation
and expenses of the trustees of the Trust who are not
"interested persons" (as defined in the 0000 Xxx)
of the Trust (the "Independent Trustees"); (iv)
compensation and expenses of counsel to the
Independent Trustees; (v) compensation and expenses
of the Trust's chief compliance officer; (vi)
extraordinary expenses (in each case as determined
by a majority of the Independent Trustees); (vii)
distribution fees and expenses paid by the Trust under
any distribution plan adopted pursuant to Rule 12b-l
under the 1940 Act; (viii) interest and taxes of any
kind or nature (including, but not limited to, income,
excise, transfer and withholding taxes); (ix) any fees
and expenses related to the provision of securities
lending services; and (x) the advisory fee payable to
the Adviser under tills Agreement.
(e) Books and Records. The Adviser hereby
undertakes and agrees to maintain all records not
maintained by a service provider or sub-adviser pursuant
to their agreements with the Trust or Adviser, in the
form and for the period required by Rule 3 la-2 under
the
1940 Act. All books and records prepared and maintained
by the Adviser for the Trust and each Fund under this
Agreement shall be the property of the Trust and the Fund
and, upon request therefor, the Adviser shall surrender
to the Trust and the Fund such of the books and records
so requested. The Adviser further agrees that it will
not disclose or use any records or information
obtained pursuant to this Agreement in any manner
whatsoever except as authorized in this Agreement and
that it will keep confidential any information obtained
pursuant to this Agreement and disclose such
information only if the Trust has authorized such
disclosure, or if such disclosure is required by
federal or state regulatory authorities.
(f) Additional Services Provided at the Expense
of the Trust. The Adviser agrees, at the expense of the
Trust, (i) to assist in the preparation of all required
tax returns of the Trust and the Funds, (ii) to
prepare and submit reports to existing shareholders,
(iii) to assist in the periodic update of the
prospectuses and statements of additional information
of the Trust and (iv) to assist in the preparation of
reports to be filed with the Securities and Exchange
Commission and other regulatory authorities.
2. Fund Transactions.
(a) General. The Adviser is authorized to select
the brokers or dealers that will execute the purchases
and sales of portfolio securities for the Funds.
With respect to brokerage selection, the Adviser shall
seek to obtain the best overall execution for fund
transactions, which is a combination of price, quality
of execution and other factors. As permitted by Section
28(e) of the Securities Exchange Act of 1934 ("Section
28(e)"), the Adviser may pay to a broker which provides
brokerage and research services to the Fund an amount of
disclosed commission in excess of the commission which
another broker would have charged for effecting that
transaction. Such practice is subject to a good faith
determination that such commission is reasonable in light
of the services provided and to such policies as the
Trust's trustees may adopt from time to time. Such
services of brokers are used by the Adviser in connection
with all of its investment activities, and some of such
services obtained in connection with the execution of
transactions for a Fund may be used in managing other
investment accounts.
(b) Mixed-Use Services. On occasion, a broker-dealer
might furnish the Adviser with a service which has a
mixed use (i.e., the service is used both for
investment and brokerage activities and for other
activities). Where this occurs, the Adviser will
reasonably allocate the cost of the service, so that the
portion or specific component which assists in investment
and brokerage activities is obtained using portfolio
commissions from such Fund or Funds or other managed
accounts, and the portion or specific component which
provides other assistance (for example, administrative or
non-research assistance) is paid for by the Adviser from
its own funds.
(c) Exclusivity. Where the Adviser deems the
purchase or sale of a security to be in the best interest
of a Fund as well as its other customers (including any
other fund or other investment company or advisory account
for which the Adviser acts as investment adviser), the
Adviser, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be sold or
purchased for the Fund with those to be sold or
purchased for such other customers in order to obtain the
best net price and most favorable execution under the
circumstances. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in
the transaction, will be made by the Adviser, as
applicable, in the manner it considers to be equitable
and consistent with its fiduciary obligations to such
Fund and such other customers. In some instances, this
procedure may adversely affect the price and size of the
position obtainable for the Fund.
(d) Reporting. The Adviser will promptly
communicate to the officers and the trustees of the
Trust such information relating to portfolio
transactions as they may reasonably request.
(e) Delegation. The Adviser may delegate or share
responsibility for Fund transactions and the terms of
this Section 2 with a sub-adviser, pursuant to the terms
of Section l(c).
3. Compensation of the Adviser. For the
services rendered, the facilities furnished and
expenses assumed by the Adviser, the Funds shall
individually pay to the Adviser at the end of each
calendar month a fee for the Fund calculated as a
percentage of the average daily net assets of the Fund at
the annual rates set forth in Appendix A of this
Agreement. Appendix 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 hereof. The Adviser's
fee is accrued daily at l/365th of the applicable
annual rate set forth in Appendix A. For the purpose
of the fee accrual, the daily net assets of the
Fund are determined in the manner and at the times set
forth in the Trust's current prospectus and, on days on
which the net assets are not so determined, the net asset
value computation to be used shall be as determined on
the immediately preceding day on which the net assets were
determined. In the event of termination of this
Agreement, all compensation due through the date of
termination will be calculated on a pro-rated basis
through the date of termination and paid within fifteen
business days of the date of termination. The Adviser may
waive all or a portion of its fees provided for hereunder
and such waiver will be treated as a reduction in the
purchase price of its services. The Adviser shall be
contractually bound
under this Agreement by the terms of any publicly-
announced waiver of its fee, or any limitation of a
Fund's expenses, as if such waiver or limitation were
fully set forth in this Agreement. The waiver of any of
the Adviser's fee shall not obligate the Adviser to waive
any of its fee on a subsequent occasion.
4. Status of Investment Adviser. The services
of the Adviser to the Trust and each Fund are not to be
deemed exclusive, and the Adviser shall be free to render
similar services to others so long as its services to the
Trust and the Fund are not impaired thereby. The Adviser
shall be deemed to be an independent contractor and shall,
unless otherwise expressly provided or authorized, have no
authority to act for or represent the Trust or the Fund in
any way or otherwise be deemed an agent of the Trust or
the Fund. Nothing in this Agreement shall limit or
restrict the right of any manager, officer or employee
of the Adviser, 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.
5. Permissible Interests. Trustees, agents, and
shareholders of the Trust are or may be interested in the
Adviser ( or any successor thereof) as managers, officers,
members or otherwise; and managers, officers, agents, and
members of the Adviser are or may be interested in the
Trust as trustees, shareholders or otherwise; and the
Adviser (or any successor) is or may be interested in the
Trust as a shareholder or otherwise.
6. Limits of Liability; Indemnification. The
Adviser assumes no responsibility under this Agreement
other than to render the services called for hereunder.
The Adviser shall not be liable for any error of judgment
or for any loss suffered by the Trust or a Fund in
connection with the matters to which this Agreement
relates, except 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 the amount set forth in Section
36(b)(3) of the 0000 Xxx) or a loss resulting from
willful misfeasance, bad faith or gross negligence on
its part in the performance of, or from reckless
disregard by it of its obligations and duties under,
this Agreement. Tt is agreed that the Adviser shall have no
responsibility or liability for the accuracy or
completeness of the Trust's registration statement
under the 1940 Act or the Securities Act of 1933, as
amended (the "1933 Act"), except for information supplied
by the Adviser for inclusion therein. The Trust agrees to
indemnify the Adviser to the full extent permitted by the
Trust's Declaration of Trust. The terms of paragraph 6
of this Agreement shall survive the termination of this
Agreement.
7. Term. This Agreement shall remain in
effect for an initial term of two calendar years
commencing on the date on which the first of the
Funds commences operations, and from year to year
thereafter provided such continuance is approved at least
annually by the vote of a majority of the trustees of
the Trust who arc not "interested persons" (as defined
in the 0000 Xxx) of the Trust, which vote must be cast in
person at a meeting called for the purpose of voting on
such approval; provided, however, that:
(a) the Trust may, at any time and without the
payment of any penalty, terminate this Agreement upon 60
days written notice of a decision to terminate this
Agreement by
(i) the Trust's trustees; or (ii) the vote of a majority
of the outstanding voting securities of the Trust;
(b) the Agreement shall immediately terminate in
the event of its assignment
(within the meaning of the 1940 Act and the rules
promulgated thereunder); and
(c) the Adviser may, at any time and without
the payment of any penalty, terminate this Agreement
upon 60 days' written notice to the Trust and the Funds.
8. Amendments. No provision of this Agreement
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 no amendment of
this Agreement shall be effective with respect to a Fund
until approved by (a) to the extent required by applicable
law, the vote of the holders of a majority of the Fund's
outstanding voting securities and (b) a majority of those
trustees of the Trust who are not parties to this
Agreement or interested persons of any such party cast in
person at a meeting called for the purpose of voting on
such approval. Additional funds may be added by written
agreement of the Trust and the Adviser.
9. Applicable Law. This Agreement shall be
construed in accordance with, and governed by, the laws
of the State of Delaware without regard to the
principles of the conflict of laws or the choice of laws.
10. Representations and Warranties.
(a) Representations and Warranties of the
Adviser. The Adviser hereby represents and warrants
to the Trust as follows:
(i) the Adviser is a limited liability company
duly organized, validly existing, and in good
standing under the laws of the State of
Delaware and is fully authorized to enter mto
this Agreement and carry out its duties and
obligations hereunder;
(ii) the Adviser is registered as an investment
adviser with the SEC under the Advisers Act,
shall maintain such registration in effect at
all times during the term of this Agreement,
and shall notify the Trust immediately if the
Adviser ceases to be so registered; and
(iii) the Adviser has adopted a written code
of ethics complying with the requirements of
Rule 17j-l under the 1940 Act and will provide
the Trust with a copy of that code, together
with evidence of its adoption. Within
20 days of the end of each calendar quarter
during which this Agreement remains in effect,
the chief compliance officer of the Adviser
shall certify to the Trust that the Adviser has
complied with the requirements of Rule l 7j-l
(as amended from time to time) during the
previous quarter and that
there have been no violations of the
Adviser's code of ethics or, if such a
violation has occurred, that appropriate
action has been taken in response to such
violation. Upon written request of the
Trust, the Adviser shall permit
representatives of the Trust to examine the
reports (or sununaries of the reports)
required to be made to the Adviser by Rule
17j-l(c)(l) and other records evidencing
enforcement of the code of ethics.
(b) Representations and Warranties of the Trust.
The Trust hereby represents and warrants to the Adviser
as follows: (i) the Trust has been duly organized as a
trust under the laws of the State of Delaware and is
authorized to enter into this Agreement and carry out
its terms; (ii) shares of the Funds are (or will be)
registered for offer and sale to the public under the
1933 Act; and (iii) such registrations will be kept in
effect during the term of this Agreement.
11. Liability of Trust and Funds. It is expressly
agreed that the obligations of the Trust hereunder shall
not be binding upon any of the trustees, shareholders,
nominees, officers, agents or employees of the Trust
personally, but shall bind only the trust property of
the Trust as provided in the Declaration of Trust.
This Agreement shall not be deemed to have been made
by any of the persons listed in the first sentence
of this paragraph individually or to impose any
liability on such persons personally. With respect
to any obligation of the Trust or the Funds arising
under this Agreement, the Adviser shall look for
payment or satisfaction of such obligation solely to
the assets and property of the Fund to which such
obligation relates, and under no circumstances shall
the Adviser have the right to set off claims relating
to such Fund by applying property of any other series
of the Trust. The business and contractual
relationships created by this Agreement, consideration
for entering into this Agreement, and the
consequences of such relationship and
consideration relate solely to the Trust and the Funds.
12. Use of Names. The Trust acknowledges
that all rights to the names "GraniteShares" and
any derivation thereof ("Names"), as well as any logos
that are now or shall hereafter be associated with
Names ("Logos"), belong to the Adviser and its
affiliate GraniteShares, Inc., and that the Trust is
being granted a limited license to use such Names and
Logos in its name, the name of its series and the name
of its classes of shares. In the event that this
Agreement is terminated and the Adviser no longer acts as
investment adviser to the Trust, the Adviser reserves
the right to withdraw from the Trust and the Funds the
uses of Names and Logos or any name or logo that would
imply a continuing relationship between the Trust or the
Funds and the Adviser or any of its affiliates.
13. Severability. 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 and, to this
extent, the provisions of this Agreement shall be deemed to
be severable.
14. Notice. Notices of any kind to be given to the
Trust hereunder by the Adviser shall be in writing and
shall be duly given if mailed or delivered to the Trust at
00 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx XX 00000, or to such
other address or to such individual as
shall be so specified by the Trust to the Adviser.
Notices of any kind to be given to the Adviser hereunder
by the Trust shall be in writing and shall be duly given
if mailed or delivered to the Adviser at the Trust at 00
Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx XX 00000, or at such
other address or to such individual as shall be so
specified by the Adviser to the Trust. Notices shall be
deemed to have been given on the date delivered personally
or by courier service, or three days after sent by
registered or certified mail, postage prepaid, return
receipt requested.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed as of the day and the year
first written above.
GraniteShares ETF Trust
By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: President
GraniteShares Advisors LLC
By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: CEO
APPENDIX A
INVESTMENT ADVISORY AGREEMENT
GraniteShares Bloomberg Commodity Broad Strategy No K-1
ETF - 0.25% per annum
GraniteShares S&P GSCl Commodity Broad Strategy No K-1
ETF-0.35% per annum
