See All of This Company's Exhibits
EX-99.23(D)(1)
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v082201_ex99-23d1.txt
INVESTMENT ADVISORY AGREEMENT
TOUCHSTONE STRATEGIC TRUST
INVESTMENT ADVISORY AGREEMENT, dated as of May 1, 2000, amended December
31, 2002, by and between TOUCHSTONE ADVISORS, INC., an Ohio corporation (the
"Advisor"), and TOUCHSTONE STRATEGIC TRUST, a Massachusetts business trust
created pursuant to an Agreement and Declaration of Trust dated November 18,
1982, as amended from time to time (the "Trust").
WHEREAS, the Trust is an open-end diversified management investment
company registered under the Investment Company Act of 1940, as amended, (the
"1940 Act"); and
WHEREAS, shares of beneficial interest in the Trust are divided into
separate series (each, along with any series which may in the future be
established, a "Fund"); and
WHEREAS, the Trust desires to avail itself of the services, information,
advice, assistance and facilities of an investment advisor and to have an
investment advisor perform for it various investment advisory and research
services and other management services; and
WHEREAS, the Advisor is an investment advisor registered under the
Investment Advisers Act of 1940, as amended, and desires to provide investment
advisory services to the Trust;
NOW THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADVISOR. The Trust hereby employs the Advisor to
manage the investment and reinvestment of the assets of each Fund subject to the
control and direction of the Trust's Board of Trustees, for the period on the
terms hereinafter set forth. The Advisor hereby accepts such employment and
agrees during such period to render the services and to assume the obligations
herein set forth for the compensation herein provided. The Advisor shall for all
purposes herein be deemed to be independent contractor and shall, except as
expressly provided or authorized (whether herein or otherwise), have no
authority to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
2. OBLIGATIONS OF AND SERVICES TO BE PROVIDED BY THE ADVISOR. In providing
the services and assuming the obligations set forth herein, the Advisor may, at
its expense, employ one or more sub-advisors for any Fund. Any agreement between
the Advisor and a sub-advisor shall be subject to the renewal, termination and
amendment provisions of paragraph 10 hereof. The Advisor undertakes to provide
the following services and to assume the following obligations:
a) The Advisor will manage the investment and reinvestment of the
assets of each Fund, subject to and in accordance with the
respective investment objectives and policies of each Fund and
any directions which the Trust's Board of Trustees may issue
from time to time. In pursuance of the foregoing, the Advisor
may engage separate investment advisors ("Sub-Advisor(s)") to
make all determinations with respect to the investment of the
assets of each Fund, to effect the purchase and sale of
portfolio securities and to take such steps as may be
necessary to implement the same. Such determination and
services by each Sub-Advisor shall also include determining
the manner in which voting rights, rights to consent to
corporate action and any other rights pertaining to the
portfolio securities shall be exercised. The Advisor shall,
and shall cause each Sub-Advisor to, render regular reports to
the Trust's Board of Trustees concerning the Trust's and each
Fund's investment activities.
b) The Advisor shall, or shall cause the respective
Sub-Advisor(s) to place orders for the execution of all
portfolio transactions, in the name of the respective Fund and
in accordance with the policies with respect thereto set forth
in the Trust's registration statements under the 1940 Act and
the Securities Act of 1933, as such registration statements
may be amended from time to time. In connection with the
placement of orders for the execution of portfolio
transactions, the Advisor shall create and maintain (or cause
the Sub-Advisors to create and maintain) all necessary
brokerage records for each Fund, which records shall comply
with all applicable laws, rules and regulations, including but
not limited to records required by Section 31(a) of the 1940
Act. All records shall be the property of the Trust and shall
be available for inspection and use by the Securities and
Exchange Commission (the "SEC"), the Trust or any person
retained by the Trust. Where applicable, such records shall be
maintained by the Advisor (or Sub-Advisor) for the periods and
in the places required by Rule 31a-2 under the 1940 Act.
c) In the event of any reorganization or other change in the
Advisor, its investment principals, supervisors or members of
its investment (or comparable) committee, the Advisor shall
give the Trust's Board of Trustees written notice of such
reorganization or change within a reasonable time (but not
later than 30 days) after such reorganization or change.
d) The Advisor shall bear its expenses of providing services to
the Trust pursuant to this Agreement except such expenses as
are undertaken by the Trust. In addition, the Advisor shall
pay the salaries and fees, if any, of all Trustees, officers
and employees of the Trust who are affiliated persons, as
defined in Section 2(a)(3) of the 1940 Act, of the Advisor.
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e) The Advisor will manage, or will cause the Sub-Advisors to
manage, the Fund assets and the investment and reinvestment of
such assets so as to comply with the provisions of the 1940
Act and with Subchapter M of the Internal Revenue Code of
1986, as amended.
3. EXPENSES. The Trust shall pay the expenses of its operation, including
but not limited to (i) charges and expenses for Trust accounting, pricing and
appraisal services and related overhead, (ii) the charges and expenses of the
Trust's auditors; (iii) the charges and expenses of any custodian, transfer
agent, plan agent, dividend disbursing agent and registrar appointed by the
Trust with respect to the Funds; (iv) brokers' commissions, and issue and
transfer taxes, chargeable to the Trust in connection with securities
transactions to which the Trust is a party; (v) insurance premiums, interest
charges, dues and fees for Trust membership in trade associations and all taxes
and fees payable by the Trust to federal, state or other governmental agencies;
(vi) fees and expenses involved in registering and maintaining registrations of
the Trust and/or shares of the Trust with the SEC, state or blue sky securities
agencies and foreign countries, including the preparation of Prospectuses and
Statements of Additional Information for filing with the SEC; (vii) all expenses
of meetings of Trustees and of shareholders of the Trust and of preparing,
printing and distributing prospectuses, notices, proxy statements and all
reports to shareholders and to governmental agencies; (viii) charges and
expenses of legal counsel to the Trust; (ix) compensation of Trustees of the
Trust; and (x) interest on borrowed money, if any.
4. COMPENSATION OF THE ADVISOR.
a) As compensation for the services rendered and obligations
assumed hereunder by the Advisor, the Trust shall pay to the
Advisor monthly a fee that is equal on an annual basis to that
percentage of the average daily net assets of each Fund set
forth on Schedule 1 attached hereto (and with respect to any
future Fund, such percentage as the Trust and the Advisor may
agree to from time to time). Such fee shall be computed and
accrued daily. If the Advisor serves as investment advisor for
less than the whole of any period specified in this Section
4a, the compensation to the Advisor shall be prorated. For
purposes of calculating the Advisor's fee, the daily value of
each Fund's net assets shall be computed by the same method as
the Trust uses to compute the net asset value of that Fund.
b) The Advisor will pay all fees owing to each Sub-Advisor, and
the Trust shall not be obligated to the Sub-Advisors in any
manner with respect to the compensation of such Sub-Advisors.
c) The Advisor reserves the right to waive all or a part of its
fee.
5. ACTIVITIES OF THE ADVISOR. The services of the Advisor to the Trust
hereunder are not to be deemed exclusive, and the Advisor shall be free to
render similar services to others. It is understood that the Trustees and
officers of the Trust are or may become interested in the Advisor as
stockholders, officers or otherwise, and that stockholders and officers of the
Advisor are or may become similarly interested in the Trust, and that the
Advisor may become interested in the Trust as a shareholder or otherwise.
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6. USE OF NAMES. The Trust will not use the name of the Advisor in any
prospectus, sales literature or other material relating to the Trust in any
manner not approved prior thereto by the Advisor; except that the Trust may use
such name in any document which merely refers in accurate terms to its
appointment hereunder or in any situation which is required by the SEC or a
state securities commission; and provided further, that in no event shall such
approval be unreasonably withheld. The Advisor will not use the name of the
Trust in any material relating to the Advisor in any manner not approved prior
thereto by the Trust; except that the Advisor may use such name in any document
which merely refers in accurate terms to the appointment of the Advisor
hereunder or in any situation which is required by the SEC or a state securities
commission. In all other cases, the parties may use such names to the extent
that the use is approved by the party named, it being agreed that in no event
shall such approval be unreasonably withheld.
The Trustees of the Trust acknowledge that the Advisor has reserved
for itself the rights to the name "Touchstone Strategic Trust" (or any similar
names) and that use by the Trust of such name shall continue only with the
continuing consent of the Advisor, which consent may be withdrawn at any time,
effective immediately, upon written notice thereof to the Trust.
7. LIMITATION OF LIABILITY OF THE ADVISOR.
a) Absent willful misfeasance, bad faith, gross negligence, or
reckless disregard of obligations or duties hereunder on the
part of the Advisor, the Advisor shall not be subject to
liability to the Trust or to any shareholder in any Fund for
any act or omission in the course of, or connected with,
rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security. As
used in this Section 7, the term "Advisor" shall include
Touchstone Advisors, Inc. and/or any of its affiliates and the
directors, officers and employees of Touchstone Advisors, Inc.
and/or any of its affiliates.
b) The Trust will indemnify the Advisor against, and hold it
harmless from, any and all losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and
expenses) resulting from acts or omissions of the Trust.
Indemnification shall be made only after: (i) a final decision
on the merits by a court or other body before whom the
proceeding was brought that the Trust was liable for the
damages claimed or (ii) in the absence of such a decision, a
reasonable determination based upon a review of the facts,
that the Trust was liable for the damages claimed, which
determination shall be made by either (a) the vote of a
majority of a quorum of Trustees of the Trust who are neither
"interested persons" of the Trust nor parties to the
proceeding ("disinterested non-party Trustees") or (b) an
independent legal counsel satisfactory to the parties hereto,
whose determination shall be set forth in a written opinion.
The Advisor shall be entitled to advances from the Trust for
payment of the reasonable expenses incurred by it in
connection with the matter as to which it is seeking
indemnification in the manner and to the fullest extent that
would be permissible under the applicable provisions of the
General Corporation Law of Ohio. The Advisor shall provide to
the Trust a written affirmation of its good faith belief that
the standard of conduct necessary for indemnification under
such law has been met and a written undertaking to repay any
such advance if it should ultimately be determined that the
standard of conduct has not been met. In addition, at least
one of the following additional conditions shall be met: (i)
the Advisor shall provide security in form and amount
acceptable to the Trust for its undertaking; (ii) the Trust is
insured against losses arising by reason of the advance; or
(iii) a majority of a quorum of the Trustees of the Trust, the
members of which majority are disinterested non-party
Trustees, or independent legal counsel in a written opinion,
shall have determined, based on a review of facts readily
available to the Trust at the time the advance is proposed to
be made, that there is reason to believe that the Advisor will
ultimately be found to be entitled to indemnification.
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8. LIMITATION OF TRUST'S LIABILITY. The Advisor acknowledges that it has
received notice of and accepts the limitations upon the Trust's liability set
forth in its Declaration of Trust. The Advisor agrees that the Trust's
obligations hereunder in any case shall be limited to the Trust and to its
assets and that the Advisor shall not seek satisfaction of any such obligation
from the holders of the shares of any Fund nor from any Trustee, officer,
employee or agent of the Trust.
9. FORCE MAJEURE. The Advisor shall not be liable for delays or errors
occurring by reason of circumstances beyond its control, including but not
limited to acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot, or
failure of communication or power supply. In the event of equipment breakdowns
beyond its control, the Advisor shall take reasonable steps to minimize service
interruptions but shall have no liability with respect thereto.
10. RENEWAL, TERMINATION AND AMENDMENT.
a) This Agreement shall continue in effect, unless sooner
terminated as hereinafter provided, for a period of one year
from the date hereof and it shall continue indefinitely
thereafter as to each Fund, provided that such continuance is
specifically approved by the parties hereto and, in addition,
at least annually by (i) the vote of holders of a majority of
the outstanding voting securities of the affected Fund or by
vote of a majority of the Trust's Board of Trustees and (ii)
by the vote of a majority of the Trustees who are not parties
to this Agreement or interested persons of the Advisor, cast
in person at a meeting called for the purpose of voting on
such approval.
b) This Agreement may be terminated at any time, with respect to
any Fund(s), without payment of any penalty, by the Trust's
Board of Trustees or by a vote of the majority of the
outstanding voting securities of the affected Fund(s) upon 60
days' prior written notice to the Advisor and by the Advisor
upon 60 days' prior written notice to the Trust.
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c) This Agreement may be amended at any time by the parties
hereto, subject to approval by the Trust's Board of Trustees
and, if required by applicable SEC rules and regulations, a
vote of the majority of the outstanding voting securities of
any Fund affected by such change. This Agreement shall
terminate automatically in the event of its assignment.
d) The terms "assignment," "interested persons" and "majority of
the outstanding voting securities" shall have the meaning set
forth for such terms in the 1940 Act.
11. 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.
12. MISCELLANEOUS. Each party agrees to perform such further actions and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Ohio. The captions in this Agreement are
included for convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
Pursuant to the Trust's Agreement and Declaration of Trust, dated as of November
18, 1982, the obligations of this Agreement are not binding upon any of the
Trustees or shareholders of the Trust individually, but bind only the Trust
estate.
TOUCHSTONE STRATEGIC TRUST
By: /s/ Patrick T. Bannigan
-------------------------------
Patrick T. Bannigan
President
TOUCHSTONE ADVISORS, INC.
By: /s/ Michael S. Spangler
-------------------------------
Michael S. Spangler
Vice President
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EFFECTIVE FEBRUARY 25, 2005
SCHEDULE 1
LARGE CAP GROWTH FUND
The Fund pays the Advisor a fee equal to the annual rate of 0.75% on the first
$200 million of average daily net assets; 0.70% from $200 million to $1 billion
of average daily net assets; and 0.65% of such assets in excess of $1 billion.
GROWTH OPPORTUNITIES FUND
The Fund pays the Advisor a fee equal to the annual rate of 1.00% on the first
$50 million of average daily net assets; 0.90% of the next $50 million of
average daily net assets; 0.80% of the next $100 million of average daily net
assets; and 0.75% of such assets in excess of $200 million.
EMERGING GROWTH FUND
The Fund pays the Advisor a fee equal to the annual rate of 0.80% of average
daily net assets.
LARGE CAP CORE EQUITY FUND
The Fund pays the Advisor a fee equal to the annual rate of 0.65% on the first
$100 million of average daily net assets; 0.60% of the next $100 million of
average daily net assets; 0.55% of the next $100 million of average daily net
assets; and 0.50% of such assets in excess of $300 million.
VALUE PLUS FUND
The Fund pays the Advisor a fee equal to the annual rate of 0.75% on the first
$100 million of average daily net assets; 0.70% of the next $100 million of
average daily net assets; 0.65% of the next $100 million of average daily net
assets; and 0.60% of such assets in excess of $300 million.
SMALL CAP GROWTH FUND
The Fund pays the Advisor a fee equal to the annual rate of 1.25% of average
daily net assets.
MICRO CAP GROWTH FUND
The Fund pays the Advisor a fee equal to the annual rate of 1.25% of average
daily net assets.
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SCHEDULE 1
EFFECTIVE MARCH 6, 2006
LARGE CAP GROWTH FUND
The Fund pays the Advisor a fee equal to the annual rate of 0.75% on the first
$200 million of average daily net assets; 0.70% from $200 million to $1 billion
of average daily net assets; and 0.65% of such assets in excess of $1 billion.
GROWTH OPPORTUNITIES FUND
The Fund pays the Advisor a fee equal to the annual rate of 1.00% on the first
$50 million of average daily net assets; 0.90% of the next $50 million of
average daily net assets; 0.80% of the next $100 million of average daily net
assets; and 0.75% of such assets in excess of $200 million.
MID CAP GROWTH FUND
The Fund pays the Advisor a fee equal to the annual rate of 0.80% of average
daily net assets.
LARGE CAP CORE EQUITY FUND
The Fund pays the Advisor a fee equal to the annual rate of 0.65% on the first
$100 million of average daily net assets; 0.60% of the next $100 million of
average daily net assets; 0.55% of the next $100 million of average daily net
assets; and 0.50% of such assets in excess of $300 million.
VALUE PLUS FUND
The Fund pays the Advisor a fee equal to the annual rate of 0.75% on the first
$100 million of average daily net assets; 0.70% of the next $100 million of
average daily net assets; 0.65% of the next $100 million of average daily net
assets; and 0.60% of such assets in excess of $300 million.
SMALL CAP GROWTH FUND
The Fund pays the Advisor a fee equal to the annual rate of 1.25% of average
daily net assets.
MICRO CAP GROWTH FUND
The Fund pays the Advisor a fee equal to the annual rate of 1.25% of average
daily net assets.
LARGE CAP VALUE FUND
The Fund pays the Advisor a fee equal to the annual rate of 0.75% of average
daily net assets.
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SCHEDULE 1
EFFECTIVE AUGUST 15, 2006
LARGE CAP GROWTH FUND
The Fund pays the Advisor a fee equal to the annual rate of 0.75% on the first
$200 million of average daily net assets; 0.70% from $200 million to $1 billion
of average daily net assets; and 0.65% of such assets in excess of $1 billion.
GROWTH OPPORTUNITIES FUND
The Fund pays the Advisor a fee equal to the annual rate of 1.00% on the first
$50 million of average daily net assets; 0.90% of the next $50 million of
average daily net assets; 0.80% of the next $100 million of average daily net
assets; and 0.75% of such assets in excess of $200 million.
MID CAP GROWTH FUND
The Fund pays the Advisor a fee equal to the annual rate of 0.80% of average
daily net assets.
LARGE CAP CORE EQUITY FUND
The Fund pays the Advisor a fee equal to the annual rate of 0.65% on the first
$100 million of average daily net assets; 0.60% of the next $100 million of
average daily net assets; 0.55% of the next $100 million of average daily net
assets; and 0.50% of such assets in excess of $300 million.
SMALL CAP GROWTH FUND
The Fund pays the Advisor a fee equal to the annual rate of 1.25% of average
daily net assets.
MICRO CAP GROWTH FUND
The Fund pays the Advisor a fee equal to the annual rate of 1.25% of average
daily net assets.
LARGE CAP VALUE FUND
The Fund pays the Advisor a fee equal to the annual rate of 0.75% of average
daily net assets.
DIVERSIFIED SMALL CAP GROWTH FUND
The Fund pays the Advisor a fee equal to the annual rate of 1.05% of average
daily net assets.
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SCHEDULE 1
EFFECTIVE NOVEMBER 10, 2006
LARGE CAP GROWTH FUND
The Fund pays the Advisor a fee equal to the annual rate of 0.75% on the first
$200 million of average daily net assets; 0.70% from $200 million to $1 billion
of average daily net assets; and 0.65% of such assets in excess of $1 billion.
GROWTH OPPORTUNITIES FUND
The Fund pays the Advisor a fee equal to the annual rate of 1.00% on the first
$50 million of average daily net assets; 0.90% of the next $50 million of
average daily net assets; 0.80% of the next $900 million of average daily net
assets; and 0.75% of such assets in excess of $1 billion.
MID CAP GROWTH FUND
The Fund pays the Advisor a fee equal to the annual rate of 0.80% of average
daily net assets.
LARGE CAP CORE EQUITY FUND
The Fund pays the Advisor a fee equal to the annual rate of 0.65% on the first
$100 million of average daily net assets; 0.60% of the next $100 million of
average daily net assets; 0.55% of the next $100 million of average daily net
assets; and 0.50% of such assets in excess of $300 million.
SMALL CAP GROWTH FUND
The Fund pays the Advisor a fee equal to the annual rate of 1.25% of average
daily net assets.
MICRO CAP GROWTH FUND
The Fund pays the Advisor a fee equal to the annual rate of 1.25% of average
daily net assets.
LARGE CAP VALUE FUND
The Fund pays the Advisor a fee equal to the annual rate of 0.75% of average
daily net assets.
DIVERSIFIED SMALL CAP GROWTH FUND
The Fund pays the Advisor a fee equal to the annual rate of 1.05% of average
daily net assets.
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