STERLING CAPITAL MANAGEMENT LLC

Sterling Capital Management LLC (Sterling, we, or us) is an investment adviser registered with the SEC under the Investment Advisers Act of 1940 (the Advisers Act). The firm was founded in 1970 and is organized as a North Carolina limited liability company. Sterling is an indirect, wholly-owned subsidiary of Guardian Capital Group Limited ("Guardian"), a Canadian publicly listed (TSX: GCG) (TSX: GCG.A) global diversified financial services company.

Sterling has over 180 employees and is headquartered in Charlotte, NC, with additional offices in Raleigh, NC; Virginia Beach, VA; King of Prussia, PA; and San Francisco, CA.

Assets Under Management

As of December 31, 2024, Sterling's assets under management (AUM) totaled $66,159,908,769. Of that total, we managed, on a discretionary basis, $66,023,494,926 in client assets. Non-discretionary client assets totaled $136,413,843.

Description of Advisory Services

As a registered investment adviser, Sterling has a fiduciary obligation to our clients in providing investment management services. As a fiduciary, we will act in our clients best interests and will endeavor to ensure that clients are informed about and have access to material facts and information related to Sterlings services. This Brochure is a key element in meeting this disclosure obligation. The fiduciary standards we aim to follow are established under the Advisers Act and state laws, where applicable.

Sterling provides discretionary investment management services and has the authority to select securities or other investment vehicles (all collectively referred to in this Brochure as securities) consistent with clients' investment guidelines. However, certain clients may limit or prohibit investment in certain sectors, instruments, and securities as further described in Item 16 Investment Discretion. Sterling also provides discretionary investment services and non-discretionary investment advice to separately managed account programs and platforms sponsored by affiliated and unaffiliated investment advisers, broker-dealers, and other financial service firms. Sterling offers the following services:

Institutional and Individual Separate Account Management

Sterling provides investment management services to a broad range of institutional and individual clients pursuant to the terms of individually negotiated investment management agreements. Sterling provides our services in an array of fixed income, equity or other investment strategies including in the broad categories of municipal bonds, taxable fixed income, value, growth and core equities and asset allocation.

Sterlings separate account management services include the development of investment strategies, evaluation and appraisal of securities held as well as securities considered for purchase, construction of investment portfolios, execution of securities purchase and sale transactions, and portfolio administration, including the tracking of and reporting on portfolio performance and investment results.

Wrap and Model Programs

Sterling provides investment management services to separately managed account (SMA) or wrap fee programs and platforms (each, a Wrap Program) sponsored by investment advisers, broker-dealers and other financial services firms (each, a Program Sponsor). Sterling provides these services pursuant to an advisory agreement either directly with the Program Sponsor (e.g., a single contract SMA) or with the Program Sponsor and the underlying end investor (e.g., dual contract SMA) depending on the program. Sterling also provides discretionary and non-discretionary investment services and advice to Program Sponsors and/or overlay managers through model investment portfolios (collectively referred to as Model Programs).

In a Wrap Program, Sterling is appointed to act as an investment adviser through a process administered or assisted by the Program Sponsor. Clients participating in a Wrap Program, generally with assistance from the Program Sponsor, may select Sterling to provide investment management services for their account (or a portion thereof) for a particular strategy. Sterling provides investment management services in accordance with one or more of our investment strategies. In a typical Wrap Program clients enter into an agreement with the applicable Program Sponsor that provides or arranges for the provision of an array of services to the clients which may include but not be limited to: assistance with establishing investment goals and objectives, asset allocation analysis, security selection and other portfolio management services, selection of investment advisers, sub-advisers, custodians and/or broker-dealers, trade execution and providing ongoing monitoring, reporting and client support all of which may be covered by a single wrap fee to the client.

There are certain differences between how we manage accounts in a Wrap Program versus how we manage other client portfolios. For example, in Wrap Programs the Program Sponsor is generally responsible for determining the suitability of the Wrap Program, including the use of a Sterling investment strategy for the client. Sterling is typically only responsible for managing the clients assets in accordance with the selected investment strategy and any reasonable restrictions imposed by the client and agreed upon by Sterling. In certain Wrap Programs, the Program Sponsor may limit the information available to us. In addition, Program Sponsors may restrict us from communicating directly with Wrap Program clients.

Sterling may make the same or similar strategies that are available to other Sterling clients available through Wrap Programs. However, not all of Sterlings strategies are available through Wrap Programs and not every Sterling strategy is available through a particular Wrap Program. The performance of a strategy available through a Wrap Program may differ from the performance of the same or similar strategy executed through another Wrap Program, client, or platform.

Typically, the investment management services Sterling provides in connection with these Wrap Programs are discretionary. Sterling is generally responsible for causing the portion of each discretionary Wrap Program account managed by Sterling to engage in transactions that are appropriate for the selected strategy. Wrap Program accounts within a particular strategy are generally managed similarly, subject to a Wrap Program clients ability to impose reasonable restrictions (such as a prohibition on holding the securities of a particular issuer). Because Sterlings advisory services to these accounts are strategy-dependent, Sterling will not accept a restriction that we believe would be inconsistent with the investment strategy.

Sterling may participate in Wrap Programs sponsored by unaffiliated, third-party sponsors as well as Wrap Programs sponsored by an affiliate of Sterling. Program Sponsors may apply different methods of analysis, use different types of information, or apply different thresholds in determining whether to recommend an affiliated manager; this method of analysis may be applied differently when recommending an unaffiliated manager.

All Wrap Program clients and prospective clients should carefully review the terms of the agreement with the Program Sponsor and the relevant Wrap Program Brochures and disclosure documents to understand the terms, services, minimum account size and any additional fees or expenses that may be associated with a Wrap Program account. In evaluating a Wrap Program arrangement, the client should consider the amount of portfolio activity and the value attributed to monitoring, custodial and any other services provided.

In addition to the investment management services we provide for Wrap Programs, Sterling may also provide non-discretionary Model Program services to the Program Sponsor who exercises investment discretion. In these Model Programs, Sterling will typically provide a model portfolio to the Program Sponsor who will be responsible for reviewing, implementing, and executing the orders for the client as the Program Sponsor determines. Where Sterling participates in a Model Program, the Model Program Sponsor or overlay manager is generally responsible for investment decisions and performing many other services and functions typically handled by Sterling in a traditional discretionary managed account program. In these Model Programs, Sterling does not have an advisory relationship with clients of the Program Sponsor or overlay manager of the Model Program, and Sterling generally does not have any investment discretion or trading responsibilities. Similarly, in these Model Programs, Sterling does not manage model portfolios based on the financial situation or investment objectives of individual clients.

Sterling may make available the same or similar strategies that are available to other Sterling clients through Model Programs. However, not all of Sterlings strategies are available through Model Programs and not every Sterling strategy is available through a particular Model Program. The performance of a strategy available through a Model Program may differ from the performance of the same or similar strategy executed through another Model Program, client, or platform.

In a non-discretionary Model Program, Sterling does not consider itself to have an advisory relationship with clients of the Program Sponsor or overlay manager. If Sterlings Form ADV Part 2A is delivered to the Sponsors model-based clients with whom Sterling does not have an advisory relationship, or where it is not legally required to be delivered, it is provided for informational purposes only.'

Outsourced Chief Investment Officer Services

For clients seeking comprehensive asset allocation and investment selection solutions, Sterlings Advisory Solutions team provides Outsourced Chief Investment Officer (OCIO) services by offering an asset allocation framework with a comprehensive investment manager search-and-selection methodology to create client-specific portfolios. These open architecture, multi-asset class portfolios are constructed using specific investment objectives, risk tolerance, and other considerations of the client with a goal of delivering consistent, long-term, risk-adjusted performance.

While the asset allocation ranges included in a portfolio's investment objectives seek to provide a guide for Sterling's asset allocation services, the portfolios actual asset allocation may, at any time, vary from the clients target asset allocation weights for various reasons, including, but not limited to, fund flows into or out of the portfolio, market movements, and asset allocation decisions.

Registered Investment Companies and Other Pooled Vehicles

Sterling may act as an investment adviser to a variety of pooled investment vehicles (collectively, Affiliated Funds), including: 

(i) Registered investment companies, registered under the Investment Company Act of 1940, including open-end investment companies (mutual funds) and exchange-traded funds (ETFs); 

(ii) Collective investment funds and trusts (CIFs), common trust funds (CTFs), common and collective trusts; and 

(iii) Private investment funds.

Sterling administers and serves as the investment adviser to the Sterling Capital Funds and serves as the investment adviser for the Sterling Capital ETFs (Sterling ETFs), CIF, and CTF. Sterling, where appropriate and consistent with client guidelines, may purchase for client portfolios shares of the Affiliated Funds as part of the portfolios applicable investment strategy. Clients should note that Sterling has a conflict of interest and financial incentive to choose Affiliated Funds because Sterling receives investment management and other fees from the Affiliated Funds. Sterling reduces our investment management fees with respect to investments in Affiliated Funds in client portfolios. However, this reduction in fees does not eliminate the conflict of interest as there are other incentives such as increasing Sterlings AUM or providing support to the Affiliated Funds. Clients have the right, at any time, to prohibit us from investing any of their managed assets in the Affiliated Funds.

With regard to the Sterling ETFs, CIF and CTF, Sterling serves as investment adviser to the applicable trust that is administered by unaffiliated third-party trustees (e.g., Hand, Benefits & Trust Company (Hand) with regard to the Sterling CIF and CTF; Northern Lights Fund Trust IV and Capitol Series Trust with regard to the Sterling ETFs) pursuant to a separate investment advisory agreement with the applicable trustee. Sterling, where appropriate and consistent with client guidelines, may recommend and introduce clients to Hand to establish an investment in the Sterling CIF and/or CTF and may recommend to or make investments of client accounts in Sterling Capital Funds and the Sterling ETFs. Sterling does not receive a referral fee for introducing clients to Hand or in connection with investments in the Sterling Capital Funds and Sterling ETFs. Sterling nevertheless has conflicts of interests in making such introductions, recommendations, and investments because (i) we have a financial incentive to introduce the client to Hand as Sterling will receive an increase in investment management fees should the client invest in the Sterling CIF or CTF and (ii) we have a financial incentive to recommend and make client investments in the Sterling Capital Funds and the Sterling ETFs because Sterling receives investment management and other fees from the Sterling Capital Funds and the Sterling ETFs. Sterling reduces our investment management fees with respect to investments in the Sterling Capital Funds and the Sterling ETFs in client portfolios. However, this reduction in fees does not eliminate the conflict of interest, as there are other incentives such as increasing Sterlings AUM or providing support to the Sterling Capital Funds and the Sterling ETFs. Clients have the right, at any time, to prohibit us from investing any of their managed assets in the Sterling Capital Funds and the Sterling ETFs.

The prospectus or offering document for each of the Affiliated Funds contains a complete description of the compensation Sterling receives for our services to each of the Affiliated Funds. The fees (e.g., expenses and advisory fees) payable by a client with respect to an Affiliated Fund may exceed the fees of an unaffiliated fund that employs a similar investment strategy as the relevant Affiliated Fund.

Sterling may serve as investment subadvisor to funds sponsored by investment advisers, banks, and affiliated or third-party financial institutions. Dependent on the duties described in the investment subadvisory agreement, Sterling may provide one or more of the following services: day-to-day investment management services to the fund(s); support the funds compliance with applicable investment restrictions and investment policies; periodic performance and compliance reports to the funds adviser and its board; and assist the funds service providers in pricing certain securities and preparing various fund-related materials to be included in fund registration statements, proxies, and semi-annual and annual reports. Sterling may also provide investment-related content, fund communications, and meeting support to the funds' sponsors and their applicable affiliates.

Retirement Plan Services

Sterling provides investment management services to Retirement Plans (Plans) on a non-discretionary basis as a Co-Fiduciary under Section 3(21) of the Employee Retirement Income Security Act of 1974 (ERISA) and on a discretionary basis as an Investment Manager under Section 3(38) of ERISA. As a 3(21) Co-Fiduciary, Sterling has a shared fiduciary arrangement with the Plan where Sterling provides ongoing investment advice to the Plan; however, the Plan retains ultimate decision-making authority concerning the investments for Plan participants and may accept or reject the non-discretionary investment recommendations provided by Sterling. As a 3(38) Investment Manager, Sterling provides discretionary investment management services through a broad range of investment solutions and support services for the Plans and their participants.

Direct Indexing and Ultra Tax Management Solutions

Sterlings Direct Indexing and Tax Management business seeks to give clients broad US equity index exposure via portfolios comprised of hundreds of individual securities. Utilizing individual securities affords clients the ability to customize their index exposure, restrict individual securities, industries, or sectors, target preferred characteristics (such as dividend yield or value) and effect a charitable gifting program in a tax-efficient manner. In addition, management featuring continual monitoring for tax loss harvesting candidates is an extension of the service capability available for Direct Indexing clients.

Client Investment Guidelines

Each investment strategy offered by Sterling is defined by its own portfolio construction parameters and investment guidelines developed by the firm. Further, each investment management agreement between Sterling and a client details the manner in which we are required to manage that clients portfolio, including the selected strategy and client-specific guidelines and restrictions. Certain clients have additional guidelines or restrictions imposed on their portfolios by law or regulations. This includes ERISA, the Investment Company Act of 1940, the Internal Revenue Code, or other local or state laws.

Clients may impose reasonable investment restrictions (e.g., prohibiting investing in certain securities or types of securities) or other specialized requirements on the management of their account (e.g., socially responsible restrictions or religious values). Prior to opening an account that can accept client-specific restrictions, Sterling personnel (including portfolio management and compliance staff) reviews the clients proposed investment guidelines. If the client requested restrictions prevent Sterling from properly servicing the client account, or if the restrictions would require Sterling to deviate from our standard investment management services, Sterling may not accept a restriction and reserves the right to request the client to modify or remove the restriction or end the relationship. In addition, clients should be aware that investment restrictions imposed on a clients account can limit Sterling's ability to act in the client's best interest and as a result the investment performance and diversification of the assets in a clients account may differ from a similar account in which no such restrictions have been imposed. Further, because of the timing and processes required to satisfy the requirements and circumstances relevant to an investment restriction, there will be circumstances where it is necessary for a clients account with an investment restriction to trade after Affiliated Funds that are invested in the same investment strategy and other Sterling managed accounts that do not contain an applicable trading or account restriction or client preference.