WASATCH FUNDS - Curian Clearing

MARCH 31, 2015 (UNAUDITED)
affiliates may receive as a result of its relationship with the
Funds. In this regard, the Independent Trustees considered
that the Advisor benefits from soft dollar arrangements
pursuant to which it receives research from brokers that
execute an applicable Fund’s brokerage transactions that
may be useful in managing the assets of the Funds or other
clients. The Advisor may receive soft dollar benefits from
each Fund, subject to the exceptions noted below for the
sub-advised Funds. The Independent Trustees reviewed
information regarding the soft dollar arrangements including,
among other things, the commissions paid, the research
credits earned and the services provided. The Independent
Trustees recognized that soft dollar arrangements provide
benefits to the Advisor derived from a Fund’s brokerage
transactions by obtaining research that it would otherwise
have to acquire with hard dollars. Accordingly, the Advisor’s
profitability would be somewhat lower if it did not receive
the research services pursuant to soft dollar arrangements.
The Independent Trustees took these “fall out” benefits, if
any, into account when reviewing the level of advisory fees.
With respect to the Sub-Advisors, the Independent Trustees
recognized that the Sub-Advisors currently do not have soft
dollar arrangements on behalf of their respective Funds.
F. ANNUAL APPROVAL OF ADVISORY AND SUB-ADVISORY
AGREEMENTS
The Independent Trustees did not identify any single factor
discussed previously as all-important or controlling. The
Independent Trustees, including a majority of Independent
Trustees, concluded that the terms of the Advisory Agreement
for each Fund, the HIMCO Sub-Advisory Agreement
for the U.S. Treasury Fund, and the 1st Source Sub-Advisory
Agreement for the Income Fund were fair and reasonable,
that the Advisor’s and Sub-Advisors’ fees are reasonable in
light of the services provided to each respective Fund, and
that the Advisory Agreement should be approved on behalf
of each Fund and the Sub-Advisory Agreements should be
approved on behalf of the U.S. Treasury Fund and the
Income Fund, respectively.
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