Alpine High Yield Managed Duration Municipal Fund - Institutional Class
Alpine High Yield Managed Duration Municipal Fund - Class A
INVESTMENT ADVISORY ARRANGEMENTS
The management of the Funds are supervised by the Board of Trustees of the Trust. Alpine Woods Capital Investors, LLC provides investment advisory services to the Funds pursuant to an investment advisory agreement entered into with the Trust (“Advisory Agreement”).
The Adviser, located at 2500 Westchester Avenue, Suite 215, Purchase, New York, 10577, is a Delaware limited liability company organized on December 3, 1997. It was formed for the purpose of providing investment advisory and management services to investment companies (including the Funds) and other advisory clients. All membership interests in the Adviser are owned by Alpine Woods, L.P. Samuel A. Lieber has a majority interest in this partnership and is the controlling person of its general partner. He co-founded the Adviser with his father, Stephen A. Lieber.
Under the Advisory Agreement, the Adviser has agreed to furnish reports, statistical and research services and recommendations with respect to each Fund’s portfolio of investments. In addition, the Adviser provides office facilities to the Funds and performs a variety of administrative services. Each Fund bears all of its other expenses and liabilities, including expenses incurred in connection with maintaining its registration under the 1933 Act and the 1940 Act, printing prospectuses (for existing shareholders) as they are updated, state qualifications, mailings, brokerage, custodian and stock transfer charges, printing, legal and auditing expenses, expenses of shareholders’ meetings and reports to shareholders.
The annual percentage rate and method used in computing the investment advisory fee of the Funds are described in the Prospectus.
The advisory fees paid by the Municipal Money Market Fund to the Adviser for the three most recent fiscal years ended October 31, were as follows:
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Name and Address Percentage Ownership Type of Ownership
Samuel A. Lieber
c/o Alpine Woods Capital Investors, LLC 2500 Westchester Ave., Suite 215
Purchase, NY 10577
46.85% Beneficial
Stephen A. Lieber
c/o Alpine Woods Capital Investors, LLC 2500 Westchester Ave., Suite 215
Purchase, NY 10577
32.91% Beneficial
Constance E. Lieber
c/o Alpine Woods Capital Investors, LLC 2500 Westchester Ave., Suite 215
Purchase, NY 10577
11.52% Beneficial
Name and Address Percentage Ownership Type of Ownership
Customer Account Viera, FL 32955 32.07% Record MSSB FBO Customer New Smyrna, FL 32169-4564 20.92% Record MSSB FBO Customer Denver, CO 80210 16.00% Record
Alpine Woods Capital Investors LLC 2500 Westchester Ave Suite 215 Purchase, NY 10577-2515
13.95% Record
MSSB FBO Customer New Smyrna, FL 32169-4564
The advisory fees paid by the Ultra Short Fund to the Adviser for the three most recent fiscal years ended October 31, were as follows:
The advisory fees paid by the High Yield Municipal Fund to the Adviser for the three most recent fiscal years ended October 31, were as follows:
Each Advisory Agreement is terminable, without the payment of any penalty, on sixty days’ written notice, by a vote of the holders of a majority of a Fund’s outstanding shares, by a vote of a majority of the Trustees or by the Adviser. Each Advisory Agreement provides that it will automatically terminate in the event of its assignment. The Advisory Agreement provides in substance that the Adviser shall not be liable for any action or failure to act in accordance with its duties thereunder in the absence of willful misfeasance, bad faith or gross negligence on the part of the Adviser or of reckless disregard of its obligations thereunder.
The initial Advisory Agreement for the Municipal Money Market Fund and Ultra Short Fund was approved by the Trustees, including a majority of the Independent Trustees, on November 15, 2002 and continues in effect from year to year after its initial term provided that its continuance is approved annually by the Trustees or by a majority of the outstanding voting shares of the Fund, and in each case is also approved by a majority of the Independent Trustees by vote cast in person at a meeting duly called for the purpose of voting on such approval. The High Yield Municipal Fund’s Advisory Agreement became effective on December 19, 2012 and was approved by the persons then serving as Trustees, including a majority of the Independent Trustees, on December 19, 2012.
The Adviser has agreed contractually to waive its fees and to absorb expenses of the Ultra Short Fund and High Yield Municipal Fund to the extent necessary to assure that ordinary operating expenses of the Funds (including 12b-1 fees, but excluding interest, brokerage commissions, acquired fund fees and expenses and extraordinary expenses) do not exceed annually 0.70% (Institutional Class) and 0.95% (Class A) for the Ultra Short Fund and 0.80% (Institutional Class) and 1.05% (Class A) for the High Yield Municipal Fund of a Fund’s average daily net assets.
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Year
Total Fees Accrued by Adviser
(Fees Waived)/ Expenses
Recovered Balance Paid to Adviser
2014 $671,850 $(467,008) $204,842
2013 $873,168 $(484,382) $388,786
2012 $1,227,372 $(655,944) $571,428
Year
Total Fees Accrued by Adviser
(Fees Waived)/ Expenses
Recovered Balance Paid to Adviser
2014 $8,565,656 $(4,223,255) $4,342,401
2013 $11,173,604 $(4,236,779) $6,936,825
2012 $13,548,188 $(3,353,608) $10,194,580
Year
Total Fees Accrued by Adviser
(Fees Waived)/ Expenses
Recovered Balance Paid to Adviser
2014 $164,227 $(106,330) $57,897
2013 $62,647 $(76,676) $(14,029)
2012 (1) N/A N/A N/A
(1) No advisory fees were paid by the High Yield Municipal Fund for 2012 because it commenced operations after the fiscal year ended October 31, 2012.
For the Ultra Short Fund and High Yield Municipal Fund, the Adviser may recapture amounts waived and/or reimbursed to a class if such recapture occurs within three years of the waiver and/or reimbursement and does not cause the total annual fund operating expenses of a Fund for any year to exceed the limits described above. This arrangement will remain in effect unless and until the Board of Trustees approves its modification or termination. Waived expenses subject to potential recovery by year of expiration are as follows:
Trade Allocations
Securities considered as investments for a Fund may also be appropriate for other investment accounts managed by the Adviser or its affiliates. If transactions on behalf of more than one fund during the same period increase the demand for securities purchased or the supply of securities sold, there may be an adverse effect on price or quantity. In addition, under its arrangements with the three unregistered funds that it manages, the General Partner of the unregistered funds, which is an affiliate of the Adviser, is entitled to receive an incentive allocation to the extent that returns for any of those Funds exceed a threshold return. This may create an incentive for the Adviser to allocate attractive investment opportunities to such funds. The Adviser has adopted a trade allocation policy to prohibit any allocation of trades in a manner that would permit the Adviser’s proprietary accounts (including any of the Funds or unregistered funds where at least 25% of account’s assets belong to the Adviser or Messrs. Samuel or Stephen Lieber, their family members and accounts for the benefit of such family members), affiliated accounts, or any particular or group of Fund(s) and/or other investment account(s) to receive more favorable treatment than any other Fund(s) and/or other investment account(s). The Adviser may aggregate trade orders in order for the Fund(s) and/or other investment account(s) to receive the benefits of volume pricing and the sharing of trading costs. If the aggregated order is filled in its entirety, it will be allocated among the Fund(s) and/or other investment account(s) in accordance with the stated allocation on the trade ticket at the average price obtained for all executions for the same security on the same side of the market on the same day; if the order is partially filled, it will generally be allocated pro rata in proportion to the individual Fund(s)’ and/or other investment account(s) original stated allocations listed in the trade order ticket. Notwithstanding the requirements described above, the Adviser’s trade allocation policy permits occasional instances where an order may have a final allocation different from that specified on the trade ticket. This differential is permitted as long as, over time, all participating Fund(s) and/or other investment account(s) receive fair and equitable treatment.
While these aggregation and allocation policies could have a detrimental effect on the price or amount of the securities available to a Fund from time to time, it is the opinion of the Trustees that the benefits of these policies outweigh any disadvantage that may arise from exposure to simultaneous transactions.
PORTFOLIO MANAGERS
Municipal Money Market Fund
Mr. Steven C. Shachat, Managing Director and Portfolio Manager of the Adviser, has the day-to-day responsibility for investment decisions for the Fund.
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Year of Expiration Ultra Short Fund
10/31/15 $3,353,608 10/31/16 $4,236,779 10/31/17 $4,223,255 Year of Expiration High Yield Municipal Fund 10/31/15 N/A 10/31/16 $76,676 10/31/17 $106,330