GRAYSCALE FUNDS TRUST APPROVAL OF ADVISORY AGREEMENT AND SUB-ADVISORY AGREEMENT
Grayscale Bitcoin Miners ETF, Grayscale Bitcoin Covered Call ETF, Grayscale Bitcoin Adopters ETF and Grayscale Bitcoin Premium Income ETF At a meeting held on January 3, 2025 (“Meeting”), the Board of Trustees (the “Board”) of Grayscale Funds Trust (the “Trust”), including the trustees who are not “interested persons” of the Trust, as defined in the Investment Company Act of 1940, as amended (the “Independent Trustees”), considered, on behalf of Grayscale Bitcoin Miners ETF, Grayscale Bitcoin Covered Call ETF, Grayscale Bitcoin Adopters ETF and Grayscale Bitcoin Premium Income ETF (each a “Fund,” and together, the “Funds”), the approval of the Investment Advisory Agreement (the “Advisory Agreement”) between the Trust and Grayscale Advisers, LLC (the “Adviser”) and the Sub-Advisory Agreement (the “Sub-Advisory Agreement” and together with the Advisory Agreement, the “Agreements”) between the Trust, on behalf of the Funds, the Adviser and Vident Asset Management (the “Sub-Adviser”). In preparation for its deliberations, the Board requested and received written responses from the Adviser and Sub-Adviser to due diligence questionnaires circulated by counsel on the Board's behalf concerning the services to be provided by the Adviser and Sub-Adviser. In addition, the Board received oral presentations from the Adviser and Sub-Adviser at the Meeting. The Board, and the Independent Trustees separately, discussed the written submissions of the Adviser and Sub-Adviser with counsel at the Meeting, and the Independent Trustees were advised by independent Trustee counsel in connection with their deliberations. In reviewing the Agreements, the Board considered, among other things, its duties under the Investment Company Act of 1940, as amended (the “1940 Act”), as well as under the general principles of state law. In this regard, the Board reviewed with counsel the fiduciary duty of investment advisors with respect to advisory agreements and advisory agreement compensation, the standards applied by courts when reviewing approvals of advisory agreements by investment company boards, and the factors to be considered by boards in voting on such agreements. With respect to the Agreements for each Fund the Board considered, among other factors: (1) the nature, extent and quality of the services to be provided to the Fund by the Adviser and Sub-Adviser; (2) the costs of the services to be provided and profitability of the Fund to the Adviser and Sub-Adviser; (3) information concerning the advisory fee and total expense ratio of the Fund, including a comparison thereof to the fees and total expense ratios of a peer group of funds assembled by the Adviser (“Expense Group”); (4) the extent to which economies of scale may be realized as the Fund grows and how the advisory fee enables investors to share in the benefits of economies of scale; and (5) other benefits received by the Adviser and Sub-Adviser from their relationships with the Fund. Nature, Extent and Quality of Services In evaluating whether to approve the Agreements for each Fund, the Board considered the nature, extent and quality of the services to be provided by the Adviser and the Sub-Adviser under the Agreements. Among other matters, the Board considered that the Adviser would be responsible for the overall management and administration of the Fund and reviewed the services to be provided by the Adviser to the Fund, including oversight of the Sub-Adviser. The Board considered that the Fund would employ an advisor/sub-advisor management structure and reviewed the services that the Sub-Adviser would provide to the Fund under the Sub-Advisory Agreement. The Board considered the experience (including for certain Funds options investing experience), qualifications, integrity and professional background of the Adviser’s and Sub-Adviser’s personnel, including the portfolio managers and other personnel with principal responsibility for the Fund. The Board considered also the adequacy of the Adviser’s and Sub-Adviser’s resources, noting the Adviser’s representation that it is financially able to meet its payment obligations with respect to the Fund under the unitary fee Advisory Agreement. Because no Fund had yet to commence investment operations, the Board observed that it could not consider relevant historical investment performance. Based on the presentation and the materials provided, the Board concluded that, overall, it was satisfied with the nature, extent and quality of services to be provided to each Fund under the Agreements. Cost of Services, Profitability and Economies of Scale The Board considered the proposed unitary fee rate payable by each Fund under the Advisory Agreement for the services to be provided. The Board noted that, under the Advisory Agreement, each Fund would pay the Adviser a unitary fee and that, from the unitary fee, the Adviser would pay all expenses of the Fund, including the Sub-Adviser’s sub-advisory fee, but not including (i) the fee paid to the Adviser under the Advisory Agreement, (ii) interest charges on any borrowings, (iii) dividend and other expenses on securities sold short, (iv) taxes, (v) brokerage commissions and
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