E*TRADE Funds
Proposed Fee Schedule*
For 5 Funds
December 14, 2000
CUSTODY, FUND ACCOUNTING, CALCULATION OF N.A.V. and
PARTIAL ADMINISTRATION
Assumptions in developing the fee schedule:
o Assumes that Investors Bank will provide services to the funds listed
below as well as any new feeders and standalone funds sponsored by E*TRADE
- New Dow Jones Financial Sector Fund
- New Fund of Funds
- Global Titans
- Technology Index
- E-Commerce Index
o Custody, fund accounting and partial administration services
o Fund of Funds will only hold the 5 E*TRADE feeder funds
o Assumes the trade ticket for the fund of funds will be provided by E*TRADE
o Assumes Investors Bank will not be tracking re-balances into the fund of
funds
o E*TRADE will perform legal administration
o Fee is predicated on Investors Bank performing cash management, foreign
exchange and securities lending
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A. Domestic Custody and Fund Accounting
The following basis point fee is based on each fund's assets for which we
are providing services. This amount does not include transactions or
global custody.
Annual Fee
First $150 million in assets 2.5 Basis Points
Next $350 million in assets 1.5 Basis Points
Assets in excess of $500 million 1.0 Basis Point
There will be a yearly per fund minimum as described below.
Domestic Funds $34,000 per fund
Global Funds $45,000 per fund
Each class beyond one $8,000 per fund/class
Fund of Funds (E*TRADE Funds only) $22,000 per fund (no basis points)
B. Transactions*
o DTCC/Fed Book Entry $ 6.25
o Physical Securities 35
o Options and Futures 18
o GNMA Securities 30
o Principal Paydown 5
o Foreign Currency 18**
o Outgoing Wires 7
o Incoming Wires 5
o Internal Mutual Funds 5
* These fees assume that trade information is sent to Investors Bank
electronically. The DTCC fee will increase to $8 per trade when assets reach
$500 million. There are no transaction charges for the use of Investors Bank
Repo product or for securities lending transactions when Investors Bank acts as
agent
**There are no transaction charges for F/X contracts executed by Investors
Bank
C. Foreign Subcustodian Fees
o Incremental basis point and transaction fees will be charged for all
foreign assets for which we are custodian. The asset based fees and
transaction fees vary by country, based upon the attached global
custody fee schedule. Local duties, script fees, reclaims,
registration, exchange fees, and other market charges are
out-of-pocket.
o Investors Bank will require the fund to hold all international
assets at the subcustodian of our choice.
D. Partial Administration
The following basis point fee is based on each fund's assets for which we
are providing services.
Annual Fee
First $150 million in assets 3.0 Basis Points
Next $350 million in assets 2.5 Basis Points
Assets in excess of $500 million 2.0 Basis Points
There will be a yearly per fund minimum of $45,000.
Each class beyond one $10,000 per fund/class
Fund of Funds $40,000 per fund (no basis points)
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MISCELLANEOUS
A. Out-of-Pocket
o The charges next to each section are for proforma purposes only.
Actual charges may vary.
o These charges consist of:
-Third Party Review ($250/fd/yr) -InvestView
-Legal Expenses -Customized Reporting
-Printing, Delivery & Postage -Customized Development/Extracts
-International Verification -Blue Sky ($125 per permit)
-Forms and Supplies -Initial Blue Sky Set-up
-Edgar Filings -Support Equipment
-Extraordinary Travel Expenses -Copy fitting
-State Registration Fees -Data Transmissions
-Pricing (per security/fund/day $.6 equities, .36 bonds, .40 int'l)
-Telecommunications (Per month/fund dom 61.25, Int'l 77.06)
-Printing of shareholder reports
-Financial statement report modification (after initial agreed upon
parameters) as to style, layout or format.
B. Domestic Balance Credit
o We allow use of balance credit against fees (excluding out-of-pocket
charges) for fund balances arising out of the custody relationship.
The credit is based on collected balances reduced by balances
required to support the activity charges of the accounts. The
monthly earnings allowance is equal to 75% of the 90-day T-bill
rate.
C. Cash Management, Securities Lending and Foreign Exchange
o The assumption was made that Investors Bank would perform cash
management, securities lending and foreign exchange for the
portfolios. Securities Lending will be split with the funds on a
60%/40%; 40% going to the funds. After the first 2 years the split
will change to 50%/50%; 50% going to the funds. After the third year
the split will change to 60%/40%; 60% going to the funds.
D. Systems
o The details of any systems work will be determined after a thorough
business analysis. Any systems work will be billed on a time and
material basis. Investors Bank provides an allowance of 10 system
hours for data extract set-up and reporting extract set-up.
Additional systems hours will be billed on a time and material
basis.
E. Payment
o The above fees will be charged against the fund's custodian checking
account on the last business day of the month.
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* This fee schedule assumes the execution of our standard contractual
agreements for a minimum of five years. Also, this fee schedule is
contingent on all 5 funds contracting for custody, fund accounting,
administration, securities lending, foreign exchange and cash
management services. If the contract is terminated within the first 12
months from the date that all the funds are serviced by Investors Bank,
any payments owed would also include an amount equal to one years fees
for fund accounting and fund administration for 2 E*TRADE funds.
