SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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Collaborative Investment Series Trust
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1
Mercator International Opportunity Fund
Collaborative Investment Series Trust
8000 Town Centre Drive, Suite 400
Broadview Heights, Ohio 44147
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held January 11, 2019
Dear Shareholders:
The Board of Trustees of theCollaborative Investment Series Trust (the “Trust”), an open-end management investment company organized as a Delaware statutory trust, has called a special meeting of the shareholders ofMercator International Opportunity Fund(the “Fund”), to be held at the offices of the Fund’s Administrator, Mutual Shareholder Services, LLC., 8000 Town Centre Drive, Suite 400, Broadview Heights, Ohio 44147, on January 11, 2019 at 10:00 a.m., Eastern time, for the following purposes:
Proposals | Recommendation of the Board of Trustees | |
1. | To approve a new advisory agreement between Mercator Investment Management, LLC and the Trust. | FOR |
2. | To transact such other business as may properly come before the Meeting or any adjournments or postponements thereof. |
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Shareholders of record at the close of business on November 28, 2018 are entitled to notice of, and to vote at, the special meeting and any adjournments or postponements thereof.
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on January 11, 2019.
By Order of the Board of Trustees
Brandon Pokersnik, Esq., Secretary
December 6, 2018
YOUR VOTE IS IMPORTANT
To assure your representation at the meeting, please complete the enclosed proxy and return it promptly in the accompanying envelope, by calling the number listed on your proxy card, or by faxing it to the number listed on your proxy card, or via internet as indicated in the voting instruction materials whether or not you expect to be present at the meeting. If you attend the meeting, you may revoke your proxy and vote your shares in person.
Mercator International Opportunity Fund
a series of
Collaborative Investment Series Trust
with its principal offices at
8000 Town Centre Drive, Suite 400
Broadview Heights, Ohio 44147
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PROXY STATEMENT
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SPECIAL MEETING OF SHAREHOLDERS
To Be Held December January 11, 2019
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INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Trustees (the “Board” or the “Trustees”) of theCollaborative Investment Series Trust (the “Trust”) on behalf ofMercator International Opportunity Fund (the “Fund”), for use at a Special Meeting of Shareholders of the Trust (the “Meeting”) to be held at the offices of the Mutual Shareholder Services, located at 8000 Town Centre Drive, Suite 400, Broadview Heights, Ohio 44147 on January 11, 2019 at 10:00 a.m., Eastern time, and at any and all adjournments thereof. The Notice of Meeting, Proxy Statement, and accompanying form of proxy will be mailed to shareholders on or about December 3.
The Meeting has been called by the Board for the following purposes:
1.
To approve a new Investment Advisory Agreement with Mercator Investment Management, LLC.No fee increase is proposed
2.
To transact such other business as may properly come before the meeting or any adjournments or postponements thereof.
Only shareholders of record at the close of business on November 28, 2018 (the “Record Date”) are entitled to notice of, and to vote at, the Meeting and any adjournments or postponements thereof.
A copy of the Fund’s most recent annual report, including financial statements and schedules, is available at no charge by sending a written request to the Fund, 8000 Town Centre Drive, Suite 400, Broadview Heights, Ohio 44147 or by calling 1-800-869-1679.
PROPOSAL I
APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN
THE TRUST AND MERCATOR INVESTMENT MANAGEMENT, LLC.
Background
The Fund’s current investment adviser, Belpointe Asset Management, LLC (“BAM”), has served in such capacity since inception of the Fund, pursuant to an advisory agreement with the Trust (the “Current Advisory Agreement”). Mercator Investment Management, LLC (“Mercator” or the “Adviser”) is owned in equal shares by Mercator, LLC, an entity owned by Herve van Caloen, the Fund’s portfolio manager and by Belpointe Financial Holdings, LLC. Mr. van Caloen has served as the portfolio manager since inception and will remain portfolio manager.
At a meeting on October 19, 2018, the Board of Trustees approved the Proposed Advisory Agreement between the Trust, on behalf of the Fund, and Mercator, subject to shareholder approval. At the Board meeting, the Trustees approved the termination of the Current Advisory Agreement, such termination to be concurrent with the effective date of the Proposed Advisory Agreement.
Under the Investment Company Act of 1940, as amended (the “1940 Act”), it is unlawful for any person to serve or act as an investment adviser of a registered investment company, except pursuant to a written contract, which contract has been approved by the vote of a majority of the outstanding voting securities. The transaction, as described above, is presumed to require shareholder approval due to the change in an investment advisers. In order for Mercator to serve as the investment adviser to the Fund, the Trustees are requesting that shareholders approve a new investment advisory agreement with Mercator (the “Proposed Advisory Agreement”). Approval of the Proposed Advisory Agreement will not raise the investment advisory fee or overall fees paid by the Fund or the Fund’s shareholders. Mercator believes the transaction will not result in any interruption or decrease in the quality of services.
The 1940 Act requires that investment advisory agreements such as the Proposed Advisory Agreement be approved by a vote of a majority of the outstanding shares of a Fund. Therefore, shareholders are being asked to approve the Proposed Advisory Agreement with Mercator.
The proposed change to the Fund’s management structure will shift management oversight responsibility for the Fund from BAM to Mercator. By engaging Mercator as the adviser to the Fund, the Fund will continue to be advised by the same portfolio manager that currently advises the Fund.
Current Advisory Agreement and Proposed Advisory Agreement
The Proposed Advisory Agreement is attached asExhibit A. You should read the Proposed Advisory Agreement. The description in this Proxy Statement of the Proposed Advisory Agreement is only a summary.
The Current Advisory Agreement and the Proposed Advisory Agreement are identical except for the effective date, the annual fee, and the adviser.
Under the terms of the Current Advisory Agreement, BAM is entitled to receive an annual fee from the Fund equal to 1.19% of the Fund’s average daily net assets. Under the terms of the Proposed Advisory Agreement, Mercator is entitled to receive an annual fee from the Fund equal to 0.84% of the Fund’s average daily net assets. For such compensation, Mercator, at its expense, continuously furnishes an investment program for the Fund, makes investment decisions on behalf of the Fund, and places all orders for the purchase and sale of portfolio securities, subject to the Fund’s investment objectives, policies, and restrictions and such policies as the Trustees may determine.
The Proposed Advisory Agreement provides that it will continue in force for an initial period of two years, and from year to year thereafter, but only so long as its continuance is approved at least annually by (i) the Board or (ii) a vote of a majority of the outstanding voting securities of the Fund, provided that in either event continuance is also approved by a majority of the Independent Trustees, by a vote cast in person at a meeting called for the purpose of voting such approval. The Proposed Advisory Agreement automatically terminates on assignment and is terminable on not more than 60 days’ notice by the Fund. In addition, the New Agreement may be terminated upon 60 days’ notice by Mercator given to the Fund
Information Concerning Mercator Investment Management, LLC
Mercator Investment Management, LLC is a Connecticut limited liability company located at 125 Greenwich Avenue, Greenwich, CT 06830. The names, addresses, and principal occupations of the principal executive officers and shareholders of Mercator Investment Management, LLC as of the date of this Proxy Statement are set forth below:
Name and Address: | Principal Occupation: |
Kimberley Raimondo | Chief Compliance Officer |
Mercator LLC* | Member |
Belpointe Financial Holdings, LLC** | Member |
* Mercator LLC is owned by Herve van Caloen
** Belpointe Financial Holdings, LLC is owned in equal shares by Brandon E. Lacoff and Gregory H. Skidmore
During the fiscal year ended July 31, 2018, under the Current Agreement, the Fund incurred investment advisory fees of $1,686.
Evaluation by the Board of Trustees
Nature, Extent and Quality of Service. In evaluating whether to approve the Proposed Advisory Agreement, the Board considered the nature, extent and quality of services to be provided under the agreement. Although the Adviser is newly registered, the Board noted that the portfolio manager serves as the portfolio manager to the Fund under the current investment adviser. The Board evaluated the compliance program developed by the Adviser. The Board noted the Adviser’s intention not to make any changes to the Fund’s investment objectives or strategy. The Board concluded it was comfortable that the Adviser had the capabilities to oversee the operations of the Fund. Based on their review, the Trustees concluded that, overall, the nature, extent and quality of services expected to be provided to the Fund were satisfactory.
Performance. The Board discussed the limited performance history of the Adviser. Although the Adviser was recently organized, the Board expressed confidence in the Adviser’s portfolio manager, Mr. Herve van Caloen. The Board noted that Mr. van Caloen served as the portfolio manager for the current adviser, and will continue to serve as the portfolio manager for the Adviser. The Board noted the Fund’s performance while Mr. van Caloen’s served as portfolio manager, and that the Fund had outperformed the Fund’s Morningstar category since its inception.
Fees and Expenses. The Trustees reviewed information regarding fees charged by advisers to a peer group of funds with investment objectives and strategies comparable to the Fund’s. The Trustees noted that the proposed advisory fee of 0.84% was less than the Fund’s current advisory fee and was slightly less was less than the peer group average. The Trustees remarked that the proposed advisory fee was lower than Morningstar Peer Group Foreign Small/Mid Blend category. The Trustees also considered that the Adviser had agreed to maintain the Fund’s current expense limitation of 1.19% of Institutional Class shares’ net assets. After further discussion, the Board concluded that the proposed advisory fee of 0.84% was reasonable.
Economies of Scale. The Trustees considered whether the Adviser will realize economies of scale with respect to the management of the Fund. The Trustees agreed that meaningful economies of scale had not yet been reached due to the limited operation of the Fund. The Trustees agreed to continue to monitor Fund growth and evaluate the appropriateness of breakpoints in the advisory fee as Fund assets increase.
Profitability. The Trustees considered the projected profits by the Adviser in connection with the operation of the Fund for the first two years under the Proposed Advisory Agreement and whether the amount of profit would be a fair entrepreneurial profit for the management of the Fund. The Trustees noted that the Adviser expected to receive a marginal profit both in terms of percentage of revenue and dollar amount over both years. The Board concluded that the Adviser’s estimated level of profitability from its relationship with the Fund was not excessive.
Conclusion. Having requested and received such information from the Adviser as the Board believed to be reasonably necessary to evaluate the terms of the Proposed Advisory Agreement, and as assisted by the advice of counsel, the Board concluded that the advisory fee is reasonable and that approval of the Proposed Advisory Agreement is in the best interests of the shareholders of the Fund.
The Board of Trustees of the Trust, including the Independent Trustees, recommends that shareholders of the Fund vote “FOR” approval of the Proposed Advisory Agreement.
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OTHER INFORMATION
The Fund is a diversified series of the Collaborative Investment Series Trust, an open-end investment management company organized as a Delaware statutory trust and formed by an Agreement and Declaration of Trust on July 26, 2017. The Trust’s principal executive offices are located at 8000 Towne Centre Drive, Suite 400, Broadview Heights, Ohio 44147. The Board of Trustees supervises the business activities of the Fund. Like other mutual funds, the Fund retains various organizations to perform specialized services. The Fund currently retains Belpointe Asset Management, LLC as investment advisor. Arbor Court Capital, LLC, located 8000 Town Centre Drive, Suite 400, Broadview Heights, Ohio 44147, serves as principal underwriter and distributor of the Fund. Mutual Shareholder Services, LLC, with principal offices located at 8000 Town Centre Drive, Suite 400, Broadview Heights, Ohio 44147, provides the Fund with transfer agent and accounting services.
THE PROXY
The Board of Trustees solicits proxies so that each shareholder has the opportunity to vote on the proposal to be considered at the Meeting. A proxy for voting your shares at the Meeting is enclosed. The shares represented by each valid proxy received in time will be voted at the meeting as specified. If no specification is made, the shares represented by a duly executed proxy will be voted for approval of the Proposed Advisory Agreement and at the discretion of the holders of the proxy on any other matter that may come before the meeting that the Trust did not have notice of a reasonable time prior to the mailing of this Proxy Statement. You may revoke your proxy at any time before it is exercised by (1) submitting a duly executed proxy bearing a later date, (2) submitting a written notice to the President of the Trust revoking the proxy, or (3) attending and voting in person at the Meeting.
VOTING SECURITIES AND VOTING
As of the Record Date, there were 585,244 shares of beneficial interest of the Fund issued and outstanding.
All shareholders of record of the Fund on the Record Date are entitled to vote at the Meeting on Proposal I. Each shareholder is entitled to one (1) vote per share held, and fractional votes for fractional shares held, on any matter submitted to a vote at the Meeting.
An affirmative vote of the holders of a majority of the outstanding shares of the Fund is required for the approval of Proposal I. As defined in the 1940 Act, a vote of the holders of a majority of the outstanding shares of the Fund means the vote of (1) 67% or more of the voting shares of the Fund present at the meeting, if the holders of more than 50% of the outstanding shares of the Fund are present in person or represented by proxy, or (2) more than 50% of the outstanding voting shares of the Fund, whichever is less.
Broker non-votes and abstentions will be considered present for purposes of determining the existence of a quorum and the number of shares of the Fund represented at the meeting, but they are not affirmative votes for any proposal. As a result, with respect to approval of the Proposal I, non-votes and abstentions will have the same effect as a vote against the proposal because the required vote is a percentage of the shares present or outstanding.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
To the best knowledge of the Trust, there were no Trustees or officers of the Trust who were the beneficial owners of more than 5% of the outstanding shares of the Fund on the Record Date. As of the Record Date, the following shareholders of record owned 5% or more of the outstanding shares of the Fund:
BENEFICIAL OWNER INFORMATION
Shareholders owning more than 25% of the shares of the Fund are considered to “control” the Fund, as that term is defined under the 1940 Act. Persons controlling the Fund can determine the outcome of any proposal submitted to the shareholders for approval. The table below provides information on beneficial owners of the Fund.
Name and Address | Number and Class of Shares | Percentage of the Fund | Percentage of the Class |
Ameritrade Inc. FBO 9950065291 P.O. Box 226 Omaha, NE 68103-2226 | 442,691.62 (Class I) | 75.64% | 75.64% |
As a group, the Trustees and officers of the Trust owned less than 1% of the outstanding shares of the Fund as of the Record Date.
CONTROL PERSON
As of the Record Date, the following shareholders of record owned 5% or more of the outstanding shares of the Fund:
Name and Address | Number and Class of Shares | Percentage of the Fund | Percentage of the Class |
Charles Schwab & Co. Inc. Special Custody A/C FBO Cust. 211 Main Street San Franciso, CA 94105 | 142,552.04 (Class I) | 24.36% | 24.36% |
SHAREHOLDER PROPOSALS
The Trust has not received any shareholder proposals to be considered for presentation at the Meeting. Under the proxy rules of the Securities & Exchange Commission, shareholder proposals may, under certain conditions, be included in the Trust’s Proxy Statement and proxy for a particular meeting. Under these rules, proposals submitted for inclusion in the Trust’s proxy materials must be received by the Trust within a reasonable time before the solicitation is made. The fact that the Trust receives a shareholder proposal in a timely manner does not ensure its inclusion in its proxy materials, because there are other requirements in the proxy rules relating to such inclusion. You should be aware that annual meetings of shareholders are not required as long as there is no particular requirement under the 1940 Act, which must be met by convening such a shareholder meeting. Any shareholder proposal should be sent to Any shareholder proposal should be sent to Brandon Pokersnik, Esq., Secretary, Collaborative Fund Series Trust, 8000 Town Centre Drive, Suite 400, Broadview Heights, Ohio 44147.
COST OF SOLICITATION
The Board of Trustees is making this solicitation of proxies. The cost of preparing and mailing this Proxy Statement, the accompanying Notice of Special Meeting and proxy and any additional materials relating to the meeting and the cost of soliciting proxies will be borne by Mercator. In addition to solicitation by mail, the Trust will request banks, brokers and other custodial nominees and fiduciaries, to supply proxy materials to the respective beneficial owners of shares of the Fund of whom they have knowledge, and Mercator will reimburse them for their expenses in so doing. Certain officers, employees and agents of the Trust and Mercator may solicit proxies in person or by telephone, facsimile transmission, or mail, for which they will not receive any special compensation.
OTHER MATTERS
The Trust’s Board of Trustees know of no other matters to be presented at the Meeting other than as set forth above. If any other matters properly come before the meeting that the Trust did not have notice of a reasonable time prior to the mailing of this Proxy Statement, the holders of the proxy will vote the shares represented by the proxy on such matters in accordance with their best judgment, and discretionary authority to do so is included in the proxy.
PROXY DELIVERY
If you and another shareholder share the same address, the Trust may only send one Proxy Statement unless you or the other shareholder(s) request otherwise. Call or write to the Trust if you wish to receive a separate copy of the Proxy Statement, and the Trust will promptly mail a copy to you. You may also call or write to the Trust if you wish to receive a separate proxy in the future or if you are receiving multiple copies now and wish to receive a single copy in the future. For such requests, call the Trust at 1-800-869-1679, or write the Trust at 8000 Town Centre Drive, Suite 400, Broadview Heights, Ohio 44147.
Important Notice Regarding the Availability of Proxy materials for the Shareholder Meeting to be Held on January 11, 2019
BY ORDER OF THE BOARD OF TRUSTEES
Brandon Pokersnik, Esq., Secretary
Dated: December 6, 2018
If you have any questions before you vote, please call 1-800-869-1679. Representatives are available Monday through Friday 9 a.m. to 5 p.m., Eastern Time to answer your questions about the proxy material or about how to how to cast your vote. You may also receive a telephone call reminding you to vote your shares. Thank you for your participation in this important initiative.
PLEASE DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED REPLY ENVELOPE OR FAX YOUR PROXY CARD TO THE NUMBER LISTED ON YOUR PROXY CARD.
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Exhibit A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT (the “Agreement”), made as of December, 2018 between COLLABORATIVE INVESTMENT SERIES TRUST, a Delaware statutory trust (the “Trust”),and MERCATOR INVESTMENT MANAGEMENT, LLC, a limited liability company organized and existing under the laws of the State of Connecticut (the “Adviser”) located at 125 Greenwich Avenue, Greenwich, Connecticut 06830.
WITNESSETH:
WHEREAS, the Trustis an open-end management investment company and is registered as such under the Investment Company Act of 1940, as amended (the “Act”);
WHEREAS, the Trust is authorized to issue shares of beneficial interest in separate series, each having its own investment objective or objectives, policies and limitations;
WHEREAS, the Trust offers shares in the series named onAppendix A hereto (such series, together with all other series subsequently established by the Trust and made subject to this Agreement in accordance with Section 1.3, being herein referred to as a “Fund,” and collectively as the “Funds”);
WHEREAS, the Adviser is registered as an investment adviser under the Investment Advisers Act of 1940; and
WHEREAS, the Trust desires to retain the Adviser to render investment advisoryservices to the Trust with respect to the Fund in the manner and on the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto agree as follows:
1.
Services of the Adviser.
1.1Investment Advisory Services. The Adviser shall act as the investment adviser to the Fund and, as such, shall (i) obtain and evaluate such information relating to the economy, industries, business, securities markets and securities as it may deem necessary or useful in discharging its responsibilities hereunder, (ii) formulate a continuing program for the investment of the assets of the Fund in a manner consistent with its investment objective(s), policies and restrictions, and (iii) determine from time to time securities to be purchased, sold, retained or lent by the Fund, and implement those decisions, including the selection of entities with or through which such purchases, sales or loans are to be effected; provided, that the Adviser will place orders pursuant to its investment determinations either directly with the issuer or with a broker or dealer, and if with a broker or dealer, (a) will attempt to obtain the best price and execution of its orders, and (b) may nevertheless in its discretion purchase and sell portfolio securities from and to brokers who provide the Adviser with research, analysis, advice and similar services and pay such brokers in return a higher commission than may be charged by other brokers.
The Trust hereby authorizes any entity or person associated with the Adviser or anysub-adviser retained by the Adviser pursuant to Section9 of this Agreement, which is a member of a national securities exchange, to effect any transaction on the exchange for the account of the Trust which is permitted by Section 11(a) of the Securities Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby consents to the retention of compensation for such transactions in accordance with Rule 11a2-2(T)(a)(2)(iv).
The Adviser shall carry out its duties with respect to the Fund’s investments in accordance with applicable law and the investment objectives, policies and restrictions set forth in the Fund’s then-current Prospectus and Statement of Additional Information, and subject to such further limitations as the Trust may from time to time impose by written notice to the Adviser.
1.2Administrative Services. The Trust has engaged the services of an administrator. The Adviser shallprovide suchadditional administrativeservicesrelated to its advisory functions or the functions listed below, as reasonably requested by the Board of Trustees or officers of the Trust; provided, that the Adviser shall not have any obligation to provide under this Agreement any direct or indirect services to Trust shareholders, any services related to the distribution of Trust shares, or any other services which are the subject of a separate agreement or arrangement between the Trust and the Adviser. Subject to the foregoing, in providing administrative services hereunder, the Adviser shall:
1.2.1Office Space, Equipment and Facilities. Provide such office space, office equipment and office facilities as are adequate to fulfill the Adviser’s obligations hereunder.
1.2.2Personnel. Provide, without remuneration from or other cost to the Trust, the services of individuals competent to performtheadministrative functions, assumed in this Section, .
1.2.4Trustees and Officers. Authorize and permit the Adviser’s directors, officers and employees who may be elected or appointed as Trustees or officers of the Trust to serve in such capacities, without remuneration from or other cost to the Trust.
1.2.5Books and Records. Assure that all financial, accounting and other records required to be maintained and preserved by the Adviser on behalf of the Trust are maintained and preserved by it in accordance with applicable laws and regulations.
1.2.6Reports and Filings. Provide such information as may be reasonably requested in connection with the preparation of all periodic reports by theFund to its shareholders and all reports and filings required to maintain the registration and qualification of theFund andFund shares, or to meet other regulatory or tax requirements applicable to theFund, under federal and state securities and tax laws, and review sections of those reports and filings related to Adviser’s functions and designated responsibilities under this Agreement.
1.3Additional Series. In the event that the Trust establishes one or more series after the effectiveness of this Agreement (“Additional Series”),Appendix A to this Agreement may be amended to make such Additional Series subject to this Agreement upon the approval of the Board of Trustees of the Trust and the shareholder(s) of the Additional Series, in accordance with the provisions of the Act. The Trust or the Adviser may elect not to make any such series subject to this Agreement.
1.4Change in Management or Control. The Adviser shall provide at least sixty (60) days’ prior written notice to the Trust of any change in “control,” as that term is defined in Section 2 of the Act. The Adviser shall provide prompt, advance notice, to the extent practicable, of any change in the portfolio manager(s) responsible for the day-to-day management of the Fund.
2.
2.1Expenses to be Paid by Adviser. The Adviser shall pay all salaries, expenses and fees of any officers, Trustees and employees of the Trust who are officers, directors, members or employees of the Adviser. Notwithstanding the foregoing, the Adviser is not obligated to pay the compensation or expenses of the Trust’s Chief Compliance Officer, regardless of whether the Chief Compliance Officer is affiliated with the Adviser. The salaries, expenses and fees of any officers, Trustees and employees of the Trust who are not officers, directors, members or employees of the Adviser will be paid by the Trust.
In the event that the Adviser pays or assumes any expenses of the Trust not required to be paid or assumed by the Adviser under this Agreement, the Adviser shall not be obligated hereby to pay or assume the same or any similar expense in the future; provided, that nothing herein contained shall be deemed to relieve the Adviser of any obligation to theFund under any separate agreement or arrangement between the parties.
2.2Expenses to be Paid by theFund. The Fund shall bear all expenses of its operation, except those specifically allocated to the Adviser under this Agreement or under any separate agreement between the Trust and the Adviser. Subject to any separate agreement or arrangement between the Trust and the Adviser, the expenses hereby allocated to aFund, and not to the Adviser, include but are not limited to:
2.2.1Custody. All charges of depositories, custodians, and other agents for the transfer, receipt, safekeeping, and servicing of theFund’s cash, securities, and other property.
2.2.2Shareholder Servicing. All expenses of maintaining and servicing shareholder accounts, including but not limited to the charges of any shareholder servicing agent, dividend disbursing agent, transfer agent or other agent engaged by the Trust to service shareholder accounts.
2.2.3Shareholder Reports. All expenses of preparing, setting in type, printing and distributing reports and other communications to shareholders.
2.2.4Prospectuses. All expenses of preparing, converting to EDGAR format, filing with the Securities and Exchange Commission or other appropriate regulatory body, setting in type, printing and mailing annual or more frequent revisions of theFund’s Prospectus and Statement of Additional Information and any supplements thereto and of supplying them to shareholders.
2.2.5Pricing and Portfolio Valuation. All expenses of computing theFund’s net asset value per share, including any equipment or services obtained for the purpose of pricing shares or valuing theFund’s investment portfolio.
2.2.6Communications. All charges for equipment or services used for communications between the Adviser or the Trust and any custodian, shareholder servicing agent, portfolio accounting services agent, or other agent engaged by the Trust.
2.2.7Legal and Accounting Fees. All charges for services and expenses of the Trust’s legal counsel and independent accountants.
2.2.8Trustees’ Fees and Expenses. All compensation of Trustees other than those affiliated with the Adviser, all expenses incurred in connection with such unaffiliated Trustees’ services as Trustees, and all other expenses of meetings of the Trustees and committees of the Trustees.
2.2.9Shareholder Meetings. All expenses incidental to holding meetings of shareholders, including the printing of notices and proxy materials, and proxy solicitations therefor.
2.2.10Federal Registration Fees. All fees and expenses of registering and maintaining the registration of theFund under the Act and the registration of theFund’s shares under the Securities Act of 1933 (the “1933 Act”), including all fees and expenses incurred in connection with the preparation, converting to EDGAR format, setting in type, printing, and filing of any Registration Statement, Prospectus and Statement of Additional Information under the 1933 Act or the Act, and any amendments or supplements that may be made from time to time.
2.2.11State Registration Fees. All fees and expenses of taking required action to permit the offer and sale of theFund’s shares under securities laws of various states or jurisdictions, and of registration and qualification of theFund under all other laws applicable to the Trust or its business activities (including registering the Trust as a broker-dealer, or any officer of the Trust or any person as agent or salesperson of the Trust in any state).
2.2.12Confirmations. All expenses incurred in connection with the issue and transfer ofFund shares, including the expenses of confirming all share transactions.
2.2.13Bonding and Insurance. All expenses of bond, liability, and other insurance coverage required by law or regulation or deemed advisable by the Trustees of the Trust, including, without limitation, such bond, liability and other insurance expenses that may from time to time be allocated to theFund in a manner approved by its Trustees.
2.2.14Brokerage Commissions. All brokers’ commissions and other charges incident to the purchase, sale or lending of theFund’s portfolio securities.
2.2.15Taxes. All taxes or governmental fees payable by or with respect to theFund to federal, state or other governmental agencies, domestic or foreign, including stamp or other transfer taxes.
2.2.16Trade Association Fees. All fees, dues and other expenses incurred in connection with the Trust’s membership in any trade association or other investment organization.
2.2.18Compliance Fees. All charges for services and expenses of the Trust’s Chief Compliance Officer.
2.2.19Nonrecurring and Extraordinary Expenses. Such nonrecurring and extraordinary expenses as may arise including the costs of actions, suits, or proceedings to which the Trust is a party and the expenses the Trust may incur as a result of its legal obligation to provide indemnification to its officers, Trustees and agents.
3.
Advisory Fee.
As compensation for all services rendered, facilities provided and expenses paid or assumed by the Adviser under this Agreement, the Fund shall pay the Adviser on the last day of each month, or as promptly as possible thereafter, a fee calculated by applying a monthly rate, based on an annual percentage rate, to the Fund’s average daily net assets for the month. The annual percentage rate applicable to the Fund is set forth inAppendix Ato this Agreement, as it may be amended from time to time in accordance with Section 1.3 of this Agreement. If this Agreement shall be effective for only a portion of a month with respect to a Fund, the aforesaid fee shall be prorated for the portion of such month during which this Agreement is in effect for the Fund.
Proxy Voting.
The Adviser will vote, or make arrangements to have voted, all proxies solicited by or with respect to the issuers of securities in which assets of a Fund may be invested from time to time. Such proxies will be voted in a manner that you deem, in good faith, to be in the best interest of the Fund and in accordance with your proxy voting policy. You agree to provide a copy of your proxy voting policy to the Trust prior to the execution of this Agreement, and any amendments thereto promptly.
5.
Records.
5.1Tax Treatment. Both the Adviser and the Trust shall maintain, or arrange for others to maintain, the books and records of the Trust in such a manner that treats the Fund as a separate entity for federal income tax purposes.
5.2Ownership. All records required to be maintained and preserved by the Trust pursuant to the provisions or rules or regulations of the Securities and Exchange Commission under Section 31(a) of the Act and maintained and preserved by the Adviser on behalf of the Trust are the property of the Trust and shall be surrendered by the Adviser promptly on request by the Trust; provided, that the Adviser may at its own expense make and retain copies of any such records.
6.
Reports to Adviser.
The Trust shall furnish or otherwise make available to the Adviser such copies ofthe Fund’s Prospectus, Statement of Additional Information, financial statements, proxy statements, reports and other information relating to its business and affairs as the Adviser may, at any time or from time to time, reasonably require in order to discharge any of its obligations under this Agreement.
7.
Reports to the Trust.
The Adviser shall prepare and furnish to the Trust such reports, statistical data and other information in such form and at such intervals as the Trust may reasonably request.
8.
Code of Ethics.
The Adviser has adopted a written code of ethics complying with the requirements of Rule 17j-1 under the Act and will provide the Trust with a copy of the code and evidence of its adoption. Within 45 days of the last calendar quarter of each year while this Agreement is in effect, the Adviser will provide to the Board of Trustees of the Trust a written report that describes any issues arising under the code of ethics since the last report to the Board of Trustees, including, but not limited to, information about material violations of the code and sanctions imposed in response to the material violations; and which certifies that the Adviser has adopted procedures reasonably necessary to prevent “access persons” (as that term is defined in Rule 17j-1) from violating the code.
9.
Retention of Sub-Adviser.
Subject to the Trust’s obtaining the initial and periodic approvals required under Section 15 of the Act, the Adviser may retain one or more sub-advisers, at the Adviser’s own cost and expense, for the purpose of managing the investments of the assets of one or more Funds of the Trust. Retention of one or more sub-advisers shall in no way reduce the responsibilities or obligations of the Adviser under this Agreement and the Adviser shall, subject to Section11 of this Agreement, be responsible to the Trust for all acts or omissions of any sub-adviser in connection with the performance of the Adviser’s duties hereunder.
10.
Services to Other Clients.
Nothing herein contained shall limit the freedom of the Adviser or any affiliated person of the Adviser to render investment management and administrative services to other investment companies, to act as investment adviser or investment counselor to other persons, firms or corporations, or to engage in other business activities.
11.
Limitation of Liability of Adviser and its Personnel.
Neither the Adviser nor any director, manager, officer or employee of the Adviser performing services for the Trust at the direction or request of the Adviser in connection with the Adviser’s discharge of its obligations hereunder shall be liable for any error of judgment or mistake of law or for any loss suffered by the Trust in connection with any matter to which this Agreement relates, and the Adviser shall not be responsible for any action of the Trustees of the Trust in following or declining to follow any advice or recommendation of the Adviser or any sub-adviser retained by the Adviser pursuant to Section9 of this Agreement; PROVIDED, that nothing herein contained shall be construed (i) to protect the Adviser against any liability to the Trust or its shareholders to which the Adviser would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of the Adviser’s duties, or by reason of the Adviser’s reckless disregard of its obligations and duties under this Agreement, or (ii) to protect any director, manager, officer or employee of the Adviser who is or was a Trustee or officer of the Trust against any liability of the Trust or its shareholders to which such person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person’s office with the Trust.
12.
Effect of Agreement.
Nothing herein contained shall be deemed to require to the Trust to take any action contrary to its Declaration of Trust or its By-Laws or any applicable law, regulation or order to which it is subject or by which it is bound, or to relieve or deprive the Trustees of the Trust of their responsibility for and control of the conduct of the business and affairs of the Trust.
13.
Term of Agreement.
The term of this Agreement shall begin on the date first above written, and unless sooner terminated as hereinafter provided, this Agreement shall remain in effect for a period of two years. Thereafter, this Agreement shall continue in effect with respect to the Fund from year to year, subject to the termination provisions and all other terms and conditions hereof; PROVIDED, such continuance with respect to a Fund is approved at least annually by vote of the holders of a majority of the outstanding voting securities of the Fund or by the Trustees of the Trust; PROVIDED, that in either event such continuance is also approved annually by the vote, cast in person at a meeting called for the purpose of voting on such approval, of a majority of the Trustees of the Trust who are not parties to this Agreement or interested persons of either party hereto. The Adviser shall furnish to the Trust, promptly upon its request, such information as may reasonably be necessary to evaluate the terms of this Agreement or any extension, renewal or amendment thereof.
14.
Amendment or Assignment of Agreement.
Any amendment to this Agreement shall be in writing signed by the parties hereto; PROVIDED, that no such amendment shall be effective unless authorized (i) by resolution of the Trustees of the Trust, including the vote or written consent of a majority of the Trustees of the Trust who are not parties to this Agreement or interested persons of either party hereto, and (ii) by vote of a majority of the outstanding voting securities of the Fund affected by such amendment as required by applicable law. This Agreement shall terminate automatically and immediately in the event of its assignment.
15.
Termination of Agreement.
This Agreement may be terminated as to any Fund at any time by either party hereto, without the payment of any penalty, upon sixty (60) days’ prior written notice to the other party; PROVIDED, that in the case of termination by any Fund, such action shall have been authorized (i) by resolution of the Trust’s Board of Trustees, including the vote or written consent of Trustees of the Trust who are not parties to this Agreement or interested persons of either party hereto, or (ii) by vote of majority of the outstanding voting securities of the Fund.
16.
Use of Name.
The Trust is named the Collaborative Investment Series Trust and the Fund may be identified, in part, by the name “Collaborative Investment.”
17.
Declaration of Trust.
The Adviser is hereby expressly put on notice of the limitation of shareholder liability as set forth in the Trust’s Declaration of Trust and agrees that the obligations assumed by the Trust or a Fund, as the case may be, pursuant to this Agreement shall be limited in all cases to the Trust or a Fund, as the case may be, and its assets, and the Adviser shall not seek satisfaction of any such obligation from the shareholders or any shareholder of the Trust. In addition, the Adviser shall not seek satisfaction of any such obligations from the Trustees or any individual Trustee. The Adviser understands that the rights and obligations of any Fund under the Declaration of Trust are separate and distinct from those of any and all other Funds. The Adviser further understands and agrees that no Fund of the Trust shall be liable for any claims against any other Fund of the Trust and that the Adviser must look solely to the assets of the pertinent Fund of the Trust for the enforcement or satisfaction of any claims against the Trust with respect to that Fund.
18.
Confidentiality.
The Adviser agrees to treat all records and other information relating to the Trust and the securities holdings of the Funds as confidential and shall not disclose any such records or information to any other person unless (i) the Board of Trustees of the Trust has approved the disclosure or (ii) such disclosure is compelled by law. In addition, the Adviser and the Adviser’s officers, directors and employees are prohibited from receiving compensation or other consideration, for themselves or on behalf of the Fund, as a result of disclosing the Fund’s portfolio holdings. The Adviser agrees that, consistent with the Adviser’s Code of Ethics, neither the Adviser nor the Adviser’s officers, directors, members or employees may engage in personal securities transactions based on nonpublic information about a Fund’s portfolio holdings.
19.
Governing Law.
This Agreement shall be governed and construed in accordance with the laws of the State of New York.
20.
Interpretation and Definition of Terms.
Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a term or provision of the Act shall be resolved by reference to such term or provision of the Act and to interpretation thereof, if any, by the United States courts, or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Securities and Exchange Commission validly issued pursuant to the Act. Specifically, the terms “vote of a majority of the outstanding voting securities,” “interested persons,” “assignment” and “affiliated person,” as used in this Agreement shall have the meanings assigned to them by Section 2(a) of the Act. In addition, when the effect of a requirement of the Act reflected in any provision of this Agreement is modified, interpreted or relaxed by a rule, regulation or order of the Securities and Exchange Commission, whether of special or of general application, such provision shall be deemed to incorporate the effect of such rule, regulation or order.
21.
Captions.
The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect.
22.
Execution in Counterparts.
This Agreement may be executed simultaneously in counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument.
[Signature Page Follows]
1
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their respective officers thereunto duly authorized as of the date and year first above written.
COLLABORATIVE INVESTMENT
SERIES TRUST
By:
/s/Gregory Skidmore
Name:
Gregory Skidmore
Title:
President
MERCATOR INVESTMENT
MANAGEMENT, LLC
By:
/s/ Herve van Caloen
Name:
Herve van Caloen
Title:
Member
2
COLLABORATIVE INVESTMENT SERIES TRUST
INVESTMENT ADVISORY AGREEMENT
APPENDIX A
ANNUAL ADVISORY FEE AS A % OF
NAME OF FUND
AVERAGE NET ASSETS OF THE FUND
Mercator International Opportunity Fund
0.84%
A-1
[LOGO]PROXY CARD
MERCATOR INTERNATIONAL OPPORTUNITY FUND
a series of the Collaborative Investment Series Trust
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON January 11, 2019
The undersigned, revoking previous proxies, if any, with respect to the shares described below, hereby appoints Brandon Pokersnik as the attorney, agent, and proxy of the undersigned, with full power of substitution, to vote at the Special Meeting of Shareholders (the "Meeting") of Collaborative Investment Series Trust (the "Trust") to be held at the offices of the Trust's administrator, 8000 Town Centre Drive, Suite 400, Broadview Heights, OH 44147 on January 11, 2019 at 10:00 a.m., Eastern time, and at any and all adjournments thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES, AND MAY BE REVOKED PRIOR TO ITS EXERCISE BY FILING WITH THE SECRETARY OF THE COMPANY AN INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR BY APPEARING IN-PERSON AND VOTING AT THE MEETING.
YOUR SIGNATURE IS REQUIRED FOR YOUR VOTE TO BE COUNTED. The undersigned acknowledges receipt with this Proxy Statement of the Board of Trustees. Your signature(s) on this should be exactly as your name(s) appear on this Proxy. If the shares are held jointly, each holder should sign this Proxy. Attorneys-in-fact, executors, administrators, trustees or guardians should indicate the full title and capacity in which they are signing.
______________________________________ _____________
Signature
Date
________________________________________ _____________
Signature (if held jointly)
Date
__________________________________________
Title if a corporation, partnership or other entity
▲FOLD HERE - PLEASE DO NOT TEAR▲
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY SHARES YOU OWN. THE MATTER WE ARE SUBMITTING FOR YOUR CONSIDERATION IS SIGNIFICANT TO THE FUND AND TO YOU AS A FUND SHAREHOLDER. PLEASE TAKE THE TIME TO READ THE PROXY STATEMENT AND CAST YOUR VOTE USING ANY OF THE METHODS DESCRIBED BELOW.
Three simple methods to vote your proxy:
1. Mail: | Simply sign, date, and complete the reverse side of this proxy card and return it in the postage paid envelope provided. |
| “Control Number” |
TAGID:
“TAG ID”
CUSIP: “CUSIP”
PROXY CARD
MERCATOR INTERNATIONAL OPPORTUNITY FUND
a series of the Collaborative Investment Series Trust
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON January 11, 2019
THIS PROXY IS SOLICITED ON BEHALF OF THE FUND’S BOARD OF TRUSTEES, AND THE PROPOSALS BELOW HAS BEEN PROPOSED BY THE BOARD OF TRUSTEES.
THIS PROXY WILL, WHEN PROPERLY EXECUTED, BE VOTED AS DIRECTED HEREIN BY THE SIGNING SHAREHOLDER(S). IF NO CONTRARY DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS RETURNED, THIS PROXY WILL BE VOTED "FOR" THE PROPOSALS AND IN THE APPOINTED PROXIES' DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
TO VOTE, MARK ONE BOX IN BLUE OR BLACK INK. Example: X
PROPOSALS:
|
|
| FOR | AGAINST | ABSTAIN |
1. | To approve a new Investment Advisory Agreement between Collaborative Investment Series Trust and Mercator Investment Management, LLC with respect to the Mercator International Opportunity Fund. | □ | □ | □ | |
YOU CAN VOTE BY TELEPHONE OR BY MAIL.
PLEASE SEE THE REVERSE SIDE FOR INSTRUCTIONS.
YOUR VOTE IS IMPORTANT.
WE URGE YOU TO VOTE PROMPTLY.
“Scanner Bar Code”
