UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number | 811-07797 |
|
SunAmerica Series, Inc. |
(Exact name of registrant as specified in charter) |
|
Harborside 5, 185 Hudson Street, Jersey City, NJ | | 07311 |
(Address of principal executive offices) | | (Zip code) |
|
John T. Genoy
Senior Vice President
SunAmerica Asset Management, LLC
Harborside 5,
185 Hudson Street,
Jersey City, NJ 07311 |
(Name and address of agent for service) |
|
Registrant’s telephone number, including area code: | (201) 324-6414 | |
|
Date of fiscal year end: | October 31 | |
|
Date of reporting period: | April 30, 2019 | |
| | | | | | | | |
Item 1. Reports to Stockholders
This filing is on behalf of one of the six series of portfolios of SunAmerica Series, Inc.
n AIG Focused Dividend Strategy II Fund
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of each Fund's shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. At any time, you may elect to receive reports and other communications from a Fund electronically by calling 800-858-8850 or contacting your financial intermediary directly.
You may elect to receive all future reports in paper free of charge. If your account is held directly at the Fund, you can inform the Fund that you wish to receive paper copies of reports by calling 800-858-8850. If your account is held through a financial intermediary, please contact the financial intermediary to make this election. Your election to receive paper will apply to all AIG Funds in which you are invested and may apply to all funds held with your financial intermediary.
A Message from the President | | | 1 | | |
Expense Example | | | 2 | | |
Statement of Assets and Liabilities | | | 4 | | |
Statement of Operations | | | 6 | | |
Statement of Changes in Net Assets | | | 7 | | |
Financial Highlights | | | 8 | | |
| Portfolio of Investments | | | 9 | | |
Notes to Financial Statements | | | 12 | | |
A MESSAGE FROM THE PRESIDENT
Dear Shareholders:
We are pleased to present this semi-annual update for the AIG Focused Dividend Strategy II Fund, a series of SunAmerica Series, Inc., covering the six-month period ended April 30, 2019.
Overall, global equities and global bonds advanced, while commodities generated negative returns. Virtually all asset classes saw volatility surge during the period.
Following a challenging October 2018, global equities enjoyed a brief reprieve as the semi-annual period began in November 2018 on dovish† comments from U.S. Federal Reserve ("Fed") Chair Powell and seemingly encouraging progress toward China-U.S. trade talks. However, the relief rally proved short-lived, with global equities plunging in December on renewed concerns about slowing global economic growth. China's economy grew at the weakest pace in a decade, and economic growth in Europe moderated. U.S. equities suffered their largest quarterly loss during the fourth quarter of 2018 since 2011.
In a sharp reversal, global equities rebounded in the first quarter of 2019 to their best quarterly return since September 2009. Though Brexit†† remained a key concern, markets were buoyed by productive trade negotiations between the U.S. and China and by dovish rhetoric and policy actions from the major central banks. U.S. equities rallied, supported by relatively strong fourth quarter 2018 corporate earnings and by a shift in Fed policy, wherein the Fed left its interest rates unchanged and indicated rates would likely remain stable in 2019.
On the following pages, you will find financial statements and portfolio information for the AIG Focused Dividend Strategy II Fund for the six-month period ended April 30, 2019.
Thank you for being a part of the SunAmerica Series Funds. We value your ongoing confidence in us and look forward to serving your investment needs in the future. As always, if you have any questions regarding your investments, please contact your financial advisor or get in touch with us directly at 800-858-8850 or via our website at www.aig.com/funds.
Sincerely,
Peter A. Harbeck
President & CEO
SunAmerica Asset Management, LLC
Past performance is no guarantee of future results.
† Dovish tends to suggest lower interest rates; opposite of hawkish.
†† Brexit indicates the U.K.'s path out of the European Union.
Because focused mutual funds are less diversified than typical mutual funds, the performance of each holding in a focused fund has a greater impact upon the overall portfolio, which increases risk. The AIG Focused Dividend Strategy II Fund holds up to 30 high dividend yielding common stocks selected annually from the Dow Jones Industrial Average and the broader market.
1
EXPENSE EXAMPLE — April 30, 2019 — (unaudited)
Disclosure of Fund Expenses in Shareholder Reports
As a shareholder of the AIG Focused Dividend Strategy II Fund (the "Fund"), a series of SunAmerica Series, Inc. (the "Series"), you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, and (2) ongoing costs, including management fees, distribution and account maintenance fees and other Fund expenses. The example set forth below is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at November 1, 2018 and held until April 30, 2019.
Actual Expenses
The "Actual" section of the table provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the column under the heading entitled "Expenses Paid During the Six Months Ended April 30, 2019" to estimate the expenses you paid on your account during this period. The "Expenses Paid During the Six Months Ended April 30, 2019" column and the "Annualized Expense Ratio" column do not include small account fees that may be charged if your account balance is below $500 ($250 for retirement plan accounts). In addition, the "Expenses Paid During the Six Months Ended April 30, 2019" column and the "Annualized Expense Ratio" column do not include administrative fees that may apply to qualified retirement plan accounts. See the Fund's Prospectus, your retirement plan document and/or materials from your financial adviser, for a full description of these fees. Had these fees been included, the "Expenses Paid During the Six Months Ended April 30, 2019" column would have been higher and the "Ending Account Value" column would have been lower.
Hypothetical Example for Comparison Purposes
The "Hypothetical" section of the table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an annual rate of return of 5% before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. The "Expenses Paid During the Six Months Ended April 30, 2019" column and the "Annualized Expense Ratio" column do not include small account fees that may be charged if your account balance is below $500 ($250 for retirement plan accounts). In addition, the "Expenses Paid During the Six Months Ended April 30, 2019 column and the "Annualized Expense Ratio" column do not include administrative fees that may apply to qualified retirement plan accounts and accounts held through financial institutions. See the Fund's Prospectus, your retirement plan document and/or materials from your financial adviser, for a full description of these fees. Had these fees been included, the "Expenses Paid During the Six Months Ended April 30, 2019" column would have been higher and the "Ending Account Value" column would have been lower.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, including sales charges on purchase payments, small account fees and administrative fees, if applicable, to your account. Please refer to the Fund's Prospectus, and/or material from your financial adviser, for more information. Therefore, the "Hypothetical" example is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs and other fees were included, your costs would have been higher.
2
EXPENSE EXAMPLE — April 30, 2019 — (unaudited) (continued)
| | Actual | | Hypothetical | | | |
| Fund | | Beginning
Account Value
At November 1,
2018 | | Ending Account
Value Using
Actual
Return at
April 30,
2019 | | Expenses Paid
During the
Six Months
Ended
April 30,
2019* | | Beginning
Account Value
At November 1,
2018 | | Ending Account
Value Using
a Hypothetical
5% Annual
Return at
April 30,
2019* | | Expenses Paid
During the
Six Months
Ended
April 30,
2019* | | Annualized
Expense
Ratio* | |
AIG Focused Dividend
Strategy II Fund# | | $ | 1,000.00 | | | $ | 1,007.78 | | | $ | 6.22 | | | $ | 1,000.00 | | | $ | 1,018.60 | | | $ | 6.26 | | | | 1.25 | % | |
* Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 181 days then divided by 365 days. These ratios do not reflect transaction costs, including sales charges on purchase payments, small account fees, and administrative fees, if applicable to your account. Please refer to the Fund's prospectus, your retirement plan document and/or materials from your financial adviser for more information.
# During the stated period, the investment adviser either waived a portion of or all of the fees and assumed a portion of or all expenses for the Fund or through recoupment provisions, recovered a portion of or all fees and expenses waived or reimbursed in the previous two fiscal years. As a result, if these fees and expenses had not been waived, the "Actual/Hypothetical Ending Account Value" would have been lower and the "Actual/Hypothetical Expenses Paid During the Six Months Ended April 30, 2019" and the "Annualized Expense Ratio" would have been higher. If these fees and expenses had not been recouped, the "Actual/Hypothetical Ending Account Value" would have been higher and the "Actual/Hypothetical Expenses Paid During the Six Months Ended April 30, 2019" and the "Annualized Expense Ratio" would have been lower.
3
STATEMENT OF ASSETS AND LIABILITIES — April 30, 2019 — (unaudited)
| | | AIG Focused
Dividend
Strategy II
Fund | |
ASSETS: | |
Investments at value (unaffiliated)* | | $ | 1,266,936 | | |
Cash | | | 16,213 | | |
Receivable for: | |
Dividends and interest | | | 2,767 | | |
Prepaid expenses and other assets | | | 3,996 | | |
Due from investment adviser for expense reimbursements/fee waivers | | | 21,848 | | |
Due from distributor for expense reimbursements/fee waivers | | | 354 | | |
Total assets | | | 1,312,114 | | |
LIABILITIES: | |
Payable for: | |
Investment advisory and management fees | | | 607 | | |
Distribution and account maintenance fees | | | 354 | | |
Transfer agent fees and expenses | | | 299 | | |
Directors' fees and expenses | | | 3 | | |
Other accrued expenses | | | 62,371 | | |
Total liabilities | | | 63,634 | | |
Net Assets | | $ | 1,248,480 | | |
*Cost | |
Investments (unaffiliated) | | $ | 1,237,163 | | |
See Notes to Financial Statements
4
STATEMENT OF ASSETS AND LIABILITIES — April 30, 2019 — (unaudited) (continued)
| | | AIG Focused
Dividend
Strategy II
Fund | |
NET ASSETS REPRESENTED BY: | |
Common stock, $0.0001 par value (3 billion shares authorized) | | $ | 10 | | |
Paid-in capital | | | 1,240,832 | | |
| | | | 1,240,842 | | |
Total accumulated earnings (loss) | | | 7,638 | | |
Net Assets | | $ | 1,248,480 | | |
Class A: | |
Net assets | | $ | 1,248,480 | | |
Shares outstanding | | | 102,924 | | |
Net asset value and redemption price per share (excluding any applicable
contingent deferred sales charge) | | $ | 12.13 | | |
Maximum sales charge (5.75% of offering price) | | | 0.74 | | |
Maximum offering price to public | | $ | 12.87 | | |
See Notes to Financial Statements
5
STATEMENT OF OPERATIONS — For the six months ended April 30, 2019 — (unaudited)
| | | AIG Focused
Dividend
Strategy II
Fund | |
INVESTMENT INCOME: | |
Dividends (unaffiliated) | | $ | 25,757 | | |
Total investment income | | | 25,757 | | |
Expenses: | |
Investment advisory and management fees | | | 3,572 | | |
Distribution and account maintenance fees: | |
Class A | | | 2,083 | | |
Transfer agent fees and expenses: | |
Class A | | | 1,698 | | |
Custodian and accounting fees | | | 12,449 | | |
Reports to shareholders | | | 7,885 | | |
| Audit and tax fees | | | 27,052 | | |
Legal fees | | | 7,259 | | |
Directors' fees and expenses | | | 31 | | |
Other expenses | | | 11,348 | | |
Total expenses before fee waivers, expense reimbursements, and expense recoupments | | | 73,377 | | |
Net (fees waived and expenses reimbursed)/recouped by investment advisor/distributor (Note 3) | | | (65,935 | ) | |
Net expenses | | | 7,442 | | |
Net investment income (loss) | | | 18,315 | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES: | |
Net realized gain (loss) on investments (unaffiliated) | | | 13,208 | | |
Net realized gain (loss) on investments and foreign currencies | | | 13,208 | | |
Change in unrealized appreciation (depreciation) on investments (unaffiliated) | | | (21,597 | ) | |
Net unrealized gain (loss) on investments and foreign currencies | | | (21,597 | ) | |
Net realized and unrealized gain (loss) on investments and foreign currencies | | | (8,389 | ) | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 9,926 | | |
See Notes to Financial Statements
6
STATEMENT OF CHANGES IN NET ASSETS
| | | AIG Focused Dividend
Strategy II Fund | |
| | | For the
six months
ended
April 30,
2019
(unaudited) | | For the
year
ended
October 31,
2018 | |
INCREASE (DECREASE) IN NET ASSETS | |
Operations: | |
Net investment income (loss) | | $ | 18,315 | | | $ | 33,538 | | |
Net realized gain (loss) on investments and foreign currencies | | | 13,208 | | | | (38,725 | ) | |
Net unrealized gain (loss) on investments and foreign currencies | | | (21,597 | ) | | | 90,034 | | |
Net increase (decrease) in net assets resulting from operations | | | 9,926 | | | | 84,847 | | |
Distributions to shareholders from: | |
Distributable earnings (Class A) | | | (17,234 | ) | | | (132,307 | ) | |
Total distributions to shareholders | | | (17,234 | ) | | | (132,307 | ) | |
Net increase (decrease) in net assets resulting from capital share transactions (Note 6) | | | 17,234 | | | | 132,308 | | |
Total increase (decrease) in net assets | | | 9,926 | | | | 84,848 | | |
NET ASSETS: | |
Beginning of period | | | 1,238,554 | | | | 1,153,706 | | |
End of period | | $ | 1,248,480 | | | $ | 1,238,554 | | |
See Notes to Financial Statements
7
Period
Ended | | Net
Asset
Value,
begin-
ning
of
period | | Net
investment
income(1) | | Net
gain
(loss)
on
invest-
ments
(both
realized
and un-
realized) | | Total
from
invest-
ment
opera-
tions | | Divi-
dends
from
net
invest-
ment
income | | Distri-
butions
from
net
real-
ized
gains | | Total
Distri-
butions | | Net
Asset
Value,
end of
period | | Total
Return(2) | | Net
Assets,
end of
period
(000's) | | Ratio
of
expenses
to
average
net
assets(4) | | Ratio
of net
investment
income to
average
net assets(4) | | Port-
folio
Turn-
over | |
AIG FOCUSED DIVIDEND STRATEGY II FUND | |
Class A | |
07/02/15@-10/31/15 | | $ | 12.00 | | | $ | 0.07 | | | $ | (0.13 | ) | | $ | (0.06 | ) | | $ | (0.07 | ) | | $ | — | | | $ | (0.07 | ) | | $ | 11.87 | | | | (0.49 | )% | | $ | 995 | | | | 1.25 | %(3) | | | 1.83 | %(3) | | | 4 | % | |
10/31/16 | | | 11.87 | | | | 0.34 | | | | 0.17 | | | | 0.51 | | | | (0.33 | ) | | | (0.00 | ) | | | (0.33 | ) | | | 12.05 | | | | 4.39 | | | | 1,039 | | | | 1.25 | | | | 2.80 | | | | 60 | | |
10/31/17 | | | 12.05 | | | | 0.35 | | | | 0.98 | | | | 1.33 | | | | (0.37 | ) | | | (0.30 | ) | | | (0.67 | ) | | | 12.71 | | | | 11.07 | | | | 1,154 | | | | 1.25 | | | | 2.81 | | | | 60 | | |
10/31/18 | | | 12.71 | | | | 0.34 | | | | 0.59 | | | | 0.93 | | | | (0.32 | ) | | | (1.11 | ) | | | (1.43 | ) | | | 12.21 | | | | 7.37 | | | | 1,239 | | | | 1.25 | | | | 2.73 | | | | 40 | | |
04/30/19(5) | | | 12.21 | | | | 0.18 | | | | (0.09 | ) | | | 0.09 | | | | (0.17 | ) | | | — | | | | (0.17 | ) | | | 12.13 | | | | 0.78 | | | | 1,248 | | | | 1.25 | (3) | | | 3.08 | (3) | | | 3 | | |
(1) Calculated based upon average shares outstanding.
(2) Total return is not annualized and does not reflect sales load. It does include expense reimbursements (recoupments).
(3) Annualized
(4) Net of the following expense reimbursements (based on average net assets):
Fund | | 10/31/15(3) | | 10/31/16 | | 10/31/17 | | 10/31/18 | | 04/30/19(3)(5) | |
AIG Focused Dividend Strategy II Class A | | | 31.39 | % | | | 10.65 | % | | | 10.36 | % | | | 11.27 | % | | | 11.08 | % | |
(5) Unaudited
@ Commencement of Operations
See Notes to Financial Statements
8
AIG Focused Dividend Strategy II Fund
PORTFOLIO PROFILE — April 30, 2019 — (unaudited)
Industry Allocation* | |
Medical-Drugs | | | 11.1 | % | |
Food-Misc./Diversified | | | 9.0 | | |
Advertising Agencies | | | 6.7 | | |
Tobacco | | | 6.5 | | |
Oil Companies-Integrated | | | 6.5 | | |
Semiconductor Components-Integrated Circuits | | | 5.5 | | |
Retail-Apparel/Shoe | | | 5.2 | | |
Cosmetics & Toiletries | | | 4.8 | | |
Networking Products | | | 4.0 | | |
Telephone-Integrated | | | 3.9 | | |
Retail-Mail Order | | | 3.8 | | |
Computers-Memory Devices | | | 3.8 | | |
Beverages-Non-alcoholic | | | 3.8 | | |
Diversified Banking Institutions | | | 3.7 | | |
Apparel Manufacturers | | | 3.5 | | |
Commercial Services-Finance | | | 3.3 | | |
Computer Services | | | 3.2 | | |
Computers | | | 3.0 | | |
Pharmacy Services | | | 2.7 | | |
Chemicals-Diversified | | | 2.7 | | |
Commercial Services | | | 2.7 | | |
Retail-Misc./Diversified | | | 2.1 | | |
| | | 101.5 | % | |
* Calculated as a percentage of net assets
9
AIG Focused Dividend Strategy II Fund
PORTFOLIO OF INVESTMENTS — April 30, 2019 — (unaudited)
Security Description | |
Shares | | Value
(Note 2) | |
COMMON STOCKS—101.5% | |
Advertising Agencies—6.7% | |
Interpublic Group of Cos., Inc. | | | 1,737 | | | $ | 39,951 | | |
Omnicom Group, Inc. | | | 542 | | | | 43,376 | | |
| | | | 83,327 | | |
Apparel Manufacturers—3.5% | |
Hanesbrands, Inc. | | | 2,386 | | | | 43,115 | | |
Beverages-Non-alcoholic—3.8% | |
Coca-Cola Co. | | | 959 | | | | 47,048 | | |
Chemicals-Diversified—2.7% | |
LyondellBasell Industries NV,
Class A | | | 386 | | | | 34,057 | | |
Commercial Services—2.7% | |
Nielsen Holdings PLC | | | 1,324 | | | | 33,802 | | |
Commercial Services-Finance—3.3% | |
H&R Block, Inc. | | | 1,513 | | | | 41,169 | | |
Computer Services—3.2% | |
International Business Machines
Corp. | | | 284 | | | | 39,837 | | |
Computers—3.0% | |
HP, Inc. | | | 1,896 | | | | 37,825 | | |
Computers-Memory Devices—3.8% | |
Western Digital Corp. | | | 922 | | | | 47,133 | | |
Cosmetics & Toiletries—4.8% | |
Procter & Gamble Co. | | | 563 | | | | 59,948 | | |
Diversified Banking Institutions—3.7% | |
JPMorgan Chase & Co. | | | 398 | | | | 46,188 | | |
Food-Misc./Diversified—9.0% | |
Campbell Soup Co. | | | 993 | | | | 38,419 | | |
General Mills, Inc. | | | 966 | | | | 49,720 | | |
Kraft Heinz Co. | | | 723 | | | | 24,033 | | |
| | | | 112,172 | | |
Medical-Drugs—11.1% | |
Bristol-Myers Squibb Co. | | | 783 | | | | 36,355 | | |
Merck & Co., Inc. | | | 698 | | | | 54,940 | | |
Pfizer, Inc. | | | 1,155 | | | | 46,904 | | |
| | | | 138,199 | | |
Networking Products—4.0% | |
Cisco Systems, Inc. | | | 902 | | | | 50,467 | | |
Oil Companies-Integrated—6.5% | |
Chevron Corp. | | | 321 | | | | 38,539 | | |
Exxon Mobil Corp. | | | 526 | | | | 42,227 | | |
| | | | 80,766 | | |
Pharmacy Services—2.7% | |
CVS Health Corp. | | | 628 | | | | 34,151 | | |
Retail-Apparel/Shoe—5.2% | |
Gap, Inc. | | | 1,366 | | | | 35,625 | | |
L Brands, Inc. | | | 1,160 | | | | 29,743 | | |
| | | | 65,368 | | |
Security Description | |
Shares | | Value
(Note 2) | |
Retail-Mail Order—3.8% | |
Williams-Sonoma, Inc. | | | 832 | | | $ | 47,565 | | |
Retail-Misc./Diversified—2.1% | |
GameStop Corp., Class A | | | 3,076 | | | | 26,607 | | |
Semiconductor Components-
Integrated Circuits—5.5% | |
QUALCOMM, Inc. | | | 797 | | | | 68,646 | | |
Telephone-Integrated—3.9% | |
Verizon Communications, Inc. | | | 843 | | | | 48,211 | | |
Tobacco—6.5% | |
Altria Group, Inc. | | | 710 | | | | 38,574 | | |
Philip Morris International, Inc. | | | 494 | | | | 42,761 | | |
| | | | 81,335 | | |
TOTAL INVESTMENTS
(cost $1,237,163)(1) | | | 101.5 | % | | | 1,266,936 | | |
Liabilities in excess of other assets | | | (1.5 | ) | | | (18,456 | ) | |
NET ASSETS | | | 100.0 | % | | $ | 1,248,480 | | |
(1) See Note 5 for cost of investments on a tax basis.
10
AIG Focused Dividend Strategy II Fund
PORTFOLIO OF INVESTMENTS — April 30, 2019 — (unaudited) (continued)
The following is a summary of the inputs used to value the Fund's net assets as of April 30, 2019 (see Note 1):
| | Level 1 — Unadjusted
Quoted Prices | | Level 2 — Other
Observable Inputs | | Level 3 — Significant
Unobservable Inputs | | Total | |
ASSETS: | |
Investments at Value:* | |
Common Stocks | | $ | 1,266,936 | | | $ | — | | | $ | — | | | $ | 1,266,936 | | |
* For a detailed presentation of investments, please refer to the Portfolio of Investments.
See Notes to Financial Statements
11
NOTES TO FINANCIAL STATEMENTS — April 30, 2019 — (unaudited)
Note 1. Organization
SunAmerica Series, Inc. (the "Series"), is an open-end management investment company organized as a Maryland corporation on July 3, 1996. The Series is managed by SunAmerica Asset Management, LLC (the "Adviser" or "SunAmerica"). The Series consists of six separate mutual funds, one of which is included in this report; AIG Focused Dividend Strategy II Fund (the "Fund").
The investment goal of the Fund is total return (including capital appreciation and current income). The Fund's principal investment strategy is value. The principal investment technique of the Fund is to employ a "buy and hold" strategy with up to thirty high dividend yielding equity securities selected annually from the Dow Jones Industrial Average and broader market. At least 80% of the Fund's net assets, plus any borrowing for investment purposes, will be invested in dividend yielding equity securities.
The Fund is diversified as defined by the Investment Company Act of 1940, as amended, (the "1940 Act").
Classes of Shares: The shares of the Fund are not offered for sale as of the date of this shareholder report. The Class A shares of the Fund are presented in the Statement of Assets and Liabilities. There are no Class C and Class W shares outstanding as of the date of this report. The cost structure for each class is as follows:
Class A shares— Offered at net asset value per share plus an initial sales charge. Additionally, purchases of Class A shares of $1,000,000 or more will be purchased at net asset value but will be subject to a contingent deferred sales charge on redemptions made within two years of purchase.
Class C shares— Offered at net asset value per share without an initial sales charge and may be subject to a contingent deferred sales charge on redemptions made within 12 months of purchase. Effective March 1, 2018, Class C shares will convert automatically to Class A shares approximately ten years after purchase and at such time will be subject to the lower distribution fee applicable to Class A shares.
Class W shares— Offered at net asset value per share. The class is offered exclusively through advisory fee-based programs sponsored by certain financial intermediaries and other programs.
Each class of shares bears the same voting, dividend, liquidation and other rights and conditions, except as may otherwise be provided in the Fund's registration statement. Class A and Class C shares each make distribution and account maintenance fee payments under the distribution plans pursuant to Rule 12b-1 under the 1940 Act, with Class C shares being subject to higher distribution fee rates. Class W shares have not adopted a 12b-1 Plan and make no payments thereunder, however, Class W shares pay a service fee to the Funds' distributor for administrative and shareholder services.
Indemnification: Under the Series' organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the Series. In addition, pursuant to Indemnification Agreements between the Series and each of the current directors who is not an "interested person," as defined in Section 2(a)(19) of the 1940 Act, of the Series (collectively, the "Disinterested Directors"), the Series provides the Disinterested Directors with a limited indemnification against liabilities arising out of the performance of their duties to the Series, whether such liabilities are asserted during or after their service as directors. In addition, in the normal course of business, the Series enters into contracts that contain the obligation to indemnify others. The Series' maximum exposure under these arrangements is unknown. Currently, however, the Series expects the risk of loss to be remote.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates and those differences could be significant. The Fund is considered an investment company under GAAP and follows the accounting and reporting guidance
12
NOTES TO FINANCIAL STATEMENTS — April 30, 2019 — (unaudited) (continued)
applicable to investment companies. The following is a summary of significant accounting policies consistently followed by the Series in the preparation of its financial statements:
Security Valuation: In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the Fund discloses the fair value of its investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. In accordance with GAAP, fair value is defined as the price that the Fund would receive upon selling an asset or pay upon transferring a liability in a timely transaction to an independent third party in the principal or most advantageous market. GAAP establishes a three-tier hierarchy to provide more transparency around the inputs used to measure fair value and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-tiers are as follows:
Level 1 – Unadjusted quoted prices in active markets for identical securities
Level 2 – Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, referenced indices, quoted prices in inactive markets, adjusted quoted prices in active markets, adjusted quoted prices on foreign equity securities that were adjusted in accordance with pricing procedures approved by the Board of Directors ("the Board"), etc.)
Level 3 – Significant unobservable inputs (includes inputs that reflect the Fund's own assumptions about the assumptions market participants would use in pricing the security, developed based on the best information available under the circumstances)
Changes in valuation techniques may result in transfers in or out of an investment's assigned Level within the hierarchy. The methodology used for valuing investments is not necessarily an indication of the risk associated with investing in those investments and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to each security.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is recently issued and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The summary of the Fund's assets and liabilities classified in the fair value hierarchy as of April 30, 2019, is reported on a schedule at the end of the Portfolio of Investments.
Stocks are generally valued based upon closing sales prices reported on recognized securities exchanges on which the securities are principally traded and are generally categorized as Level 1. Stocks listed on the NASDAQ are valued using the NASDAQ Official Closing Price ("NOCP"). Generally, the NOCP will be the last sale price unless the reported trade for the stock is outside the range of the bid/ask price. In such cases, the NOCP will be normalized to the nearer of the bid or ask price. For listed securities having no sales reported and for unlisted securities, such securities will be valued based upon the last reported bid price.
As of the close of regular trading on the New York Stock Exchange ("NYSE"), securities traded primarily on security exchanges outside the United States are valued at the last sale price on such exchanges on the day of valuation, or if there is no sale on the day of valuation, at the last-reported bid price. If a security's price is available from more than one exchange, the Fund uses the exchange that is the primary market for the security. Such securities are generally
13
NOTES TO FINANCIAL STATEMENTS — April 30, 2019 — (unaudited) (continued)
categorized as Level 1. However, depending on the foreign market, closing prices may be up to 15 hours old when they are used to price a Fund's shares, and the Fund may determine that certain closing prices do not reflect the fair value of the security. This determination will be based on the review of a number of factors, including developments in foreign markets, the performance of U.S. securities markets, and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. If the Fund determines that closing prices do not reflect the fair value of the securities, the Fund will adjust the previous closing prices in accordance with pricing procedures approved by the Board to reflect what it believes to be the fair value of the securities as of the close of regular trading on the NYSE. The Fund may also fair value securities in other situations, for example, when a particular foreign market is closed but a Fund is open. For foreign equity securities and foreign equity futures contracts, the Fund uses an outside pricing service to provide it with closing market prices and information used for adjusting those prices, and when so adjusted, such securities and futures are generally categorized as Level 2.
Bonds, debentures, and other debt securities, are valued at evaluated bid prices obtained for the day of valuation from a Board-approved pricing service, and are generally categorized as Level 2. The pricing service may use valuation models or matrix pricing which considers information with respect to comparable bond and note transactions, quotations from bond dealers, or by reference to other securities that are considered comparable in such characteristics as rating, interest rate, and maturity date, option adjusted spread models, prepayments projections, interest rate spreads, and yield curves to determine current value. If a price is unavailable from a Board-approved pricing service, the securities may be priced at the mean of two independent quotes obtained from brokers.
Investments in registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded. Registered investment companies are generally categorized as Level 1.
Other securities are valued on the basis of last sale or bid price (if a last sale price is not available) which is, in the opinion of the Adviser, the broadest and most representative market, that may be either a securities exchange or over-the-counter ("OTC") market, and are generally categorized as Level 1 or Level 2.
The Board is responsible for the share valuation process and has adopted policies and procedures (the "PRC Procedures") for valuing the securities and other assets held by the Fund, including procedures for the fair valuation of securities and other assets for which market quotations are not readily available or are unreliable. The PRC Procedures provide for the establishment of a pricing review committee, which is responsible for, among other things, making certain determinations in connection with the Fund's fair valuation procedures. Securities for which market quotations are not readily available or the values of which may be significantly impacted by the occurrence of developments or significant events are generally categorized as Level 3. There is no single standard for making fair value determinations, which may result in prices that vary from those of other funds.
Securities Transactions, Investment Income, Expenses, Dividends and Distributions to Shareholders: Security transactions are recorded on a trade date basis. Realized gains and losses on the sale of investments are calculated on the identified cost basis. Interest income is accrued daily from settlement date except when collection is not expected. Dividend income is recorded on the ex-dividend date except for certain dividends from foreign securities, which are recorded as soon as the Fund is informed after the ex-dividend date. Distributions received from the Fund's investments in U.S. real estate investment trusts ("REITS") often include a "return of capital" which is recorded as a reduction to the cost basis of the securities held.
Net investment income, expenses other than class specific expenses, and realized and unrealized gains and losses are allocated daily to each class of shares based upon the relative net asset value of outstanding shares of each class of shares at the beginning of the day (after adjusting for current capital share activity of the respective class).
Expenses common to the Series are allocated to the Fund based upon relative net assets or other appropriate allocation methods. In all other respects, expenses are charged to the Fund as incurred on a specific identification basis.
14
NOTES TO FINANCIAL STATEMENTS — April 30, 2019 — (unaudited) (continued)
Dividends from net investment income, if any, are normally paid quarterly for the Fund. Capital gain distributions, if any, are paid annually. The Fund reserves the right to declare and pay dividends less frequently than disclosed above, provided that the net realized capital gains and net investment income, if any, are paid at least annually. The Fund records dividends and distributions to their shareholders on the ex-dividend date. The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, which may differ from GAAP. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts at fiscal year end based on their federal tax-basis treatment; temporary differences do not require reclassification. Net assets are not affected by these reclassifications.
The Fund is considered a separate entity for tax purposes and intends to comply with the requirements of the Internal Revenue Code, as amended, applicable to regulated investment companies and distribute all of its taxable income, including any net capital gains on investments, to its shareholders. The Fund also intends to distribute sufficient net investment income and net capital gains, if any, so that it will not be subject to excise tax on undistributed income and gains. Therefore, no federal income tax or excise tax provision is required.
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained, assuming examination by tax authorities. Management has analyzed the Fund's tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years 2015-2017 or expected to be taken in the Fund's 2018 tax return. The Fund is not aware of any tax provisions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months. The Fund files U.S. federal and certain state income tax returns. With few exceptions, the Fund is no longer subject to U.S. federal and state examinations by tax authorities for tax returns ending before 2015.
Foreign Currency Translation: The books and records of the Fund are maintained in U.S. dollars. Assets and liabilities denominated in foreign currencies and commitments under forward foreign currency contracts are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation.
The Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the changes in the market prices of securities held at the end of the period. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the changes in the market prices of portfolio securities sold during the period.
Realized foreign exchange gains and losses on other assets and liabilities and change in unrealized foreign exchange gains and losses on other assets and liabilities located in the Statement of Operations include realized foreign exchange gains and losses from currency gains or losses between the trade and the settlement dates of securities transactions, the difference between the amounts of interest, dividends and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid and changes in the unrealized foreign exchange gains and losses relating to the other assets and liabilities arising as a result of changes in the exchange rates.
New Accounting Pronouncements: In August 2018, the SEC adopted amendments to certain financial statement disclosure requirements to conform them to GAAP for investment companies. The final rule became effective on November 5, 2018. All required changes have been made in accordance with Regulation S-X.
In August 2018, the FASB issued Accounting Standards Update ("ASU") No. 2018-13 "Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement". The ASU eliminates, modifies, and adds disclosure requirements for fair value measurements and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The ASU allows for early adoption of either the entire standard or only the provisions that eliminate or modify the requirements. Management has elected to early adopt the provisions that eliminate disclosure requirements and is still evaluating the impact of applying the rest of the ASU.
15
NOTES TO FINANCIAL STATEMENTS — April 30, 2019 — (unaudited) (continued)
Note 3. Investment Advisory and Management Agreement, Distribution Agreement and Service Agreements
The Series, on behalf of the Fund, has entered into an Investment Advisory and Management Agreement (the "Agreement") with SunAmerica. Under the Agreement, SunAmerica provides continuous supervision of the Fund and administers its corporate affairs, subject to general review by the Board. In connection therewith, SunAmerica furnishes the Fund with office facilities, maintains certain of the Fund's books and records, and pays for the salaries and expenses of all personnel, including officers of the Fund who are employees of SunAmerica and its affiliates. The annual rate of the investment advisory and management fee payable by the Fund to SunAmerica as full compensation for services and facilities furnished to the Fund, based on the average daily net assets of the Fund: 0.60% on the first $1.5 billion; 0.50% on the next $1.5 billion; and 0.40% in excess of $3 billion.
SunAmerica contractually agreed to waive fees and/or reimburse expenses, if necessary, to keep annual operating expenses at or below the following percentage of the Fund's average daily net assets. For the purposes of waived fee and/or reimbursed expense calculations, annual fund operating expenses shall not include extraordinary expenses (i.e., expenses that are unusual in nature and infrequent in occurrence, such as litigation), or acquired fund fees and expenses, brokerage commissions and other transactional expenses relating to the purchase and sale of portfolio securities, interest, taxes, governmental fees and other expenses not incurred in the ordinary course of the Fund's business. The contractual expense waivers and fee reimbursements will continue in effect indefinitely, unless terminated by the Board, including a majority of the Disinterested Trustees.
Fund | | Percentage | |
AIG Focused Dividend Strategy II Class A | | | 1.25 | % | |
For the six months ended April 30, 2019, pursuant to the contractual expense limitations in the above table SunAmerica has waived and/or reimbursed expenses as follows:
| Fund | | Fund Level
Expenses
Reimbursed | |
AIG Focused Dividend Strategy II | | $ | 62,152 | | |
| Fund | | Class Specific
Expenses
Reimbursed | |
AIG Focused Dividend Strategy II Class A | | $ | 1,700 | | |
At April 30, 2019, expenses previously waived or reimbursed by SunAmerica that are subject to recoupment and expire during the time period indicated are as follows:
| | Fund Level Expenses Reimbursed | |
Fund | | October 31, 2019 | | October 31, 2020 | | April 30, 2021 | |
AIG Focused Dividend Strategy II | | $ | 59,574 | | | $ | 130,025 | | | $ | 62,152 | | |
| | Class Specific Expenses Reimbursed | |
Fund | | October 31, 2019 | | October 31, 2020 | | April 30, 2021 | |
AIG Focused Dividend Strategy II Class A | | $ | 1,989 | | | $ | 4,000 | | | $ | 1,700 | | |
The Series, on behalf of the Fund, has entered into a Distribution Agreement with AIG Capital Services, Inc. ("ACS" or the "Distributor"), an affiliate of SunAmerica. The Fund has adopted a Distribution Plan on behalf of each class of shares of the Fund (other than Class W shares of the Fund) (each a "Plan" and collectively, the "Plans"), in accordance with the provisions of Rule 12b-1 under the 1940 Act, hereinafter referred to as the "Class A Plan," and "Class C Plan." In adopting the Plans, the Board determined that there was a reasonable likelihood that each such Plan would
16
NOTES TO FINANCIAL STATEMENTS — April 30, 2019 — (unaudited) (continued)
benefit the Fund and the shareholders of the respective class. The sales charge and distribution fees of a particular class will not be used to subsidize the sale of shares of any other class.
Under the Class A Plan and Class C Plan of the Fund, the Distributor receives a distribution fee from the Fund at an annual rate of 0.10% and 0.75%, respectively, of average daily net assets of such Fund's Class to compensate the Distributor and certain securities firms for providing sales and promotional activities for distributing that class of shares. The distribution costs for which the Distributor may be compensated include fees paid to broker-dealers that have sold Fund shares, commissions and other expenses such as those incurred for sales literature, prospectus printing and distribution and compensation to wholesalers. It is possible that in any given year, the amount paid to the Distributor under each Class's Plan may exceed the Distributor's distribution costs as described above. The Plans provide that each class of shares of the Fund will also pay the Distributor an account maintenance fee up to an annual rate of 0.25% of the aggregate average daily net assets of such class of shares for payments to broker-dealers for providing continuing account maintenance. The Distributor does not receive or retain any distribution and/or account maintenance fees for any shares when the shareholder does not have a broker of record. For the six months ended April 30, 2019, ACS waived fees in the amount of $2,083 for Class A shares of the Fund and no fees were earned for the Class C shares since Class C shares of the Fund were not offered for sale during the period of this shareholder report.
The Series, on behalf of the Fund, has entered into an Administrative and Shareholder Services Agreement with ACS, pursuant to which ACS is paid an annual fee of 0.15% of average daily net assets of Class W shares as compensation for providing administrative and shareholder services to Class W shareholders. For the six months ended April 30, 2019, there were no fees earned since Class W shares of the Fund were not offered for sale during the annual period of this shareholder report.
ACS receives sales charges on the Fund's Class A shares, portions of which are reallowed to affiliated broker-dealers and non-affiliated broker-dealers. ACS also receives the proceeds of contingent deferred sales charges paid by investors in connection with certain redemptions of the Fund's Class A shares and Class C shares. ACS has advised the Fund that for the six months ended April 30, 2019, there were no proceeds received from sales since shares of the Fund were not offered for sale during the annual period of this shareholder report.
The Series, on behalf of the Fund, has entered into a Service Agreement with AIG Fund Services, Inc. ("AFS"), an affiliate of SunAmerica. Under the Service Agreement, AFS performs certain shareholder account functions by assisting the Fund's transfer agent, DST Asset Manager Solutions, Inc. ("DST"), in connection with the services that it offers to the shareholders of the Fund. The Service Agreement, pursuant to which AFS receives a fee from the Fund to compensate AFS for services rendered based upon an annual rate of 0.22% of average daily net assets, is approved annually by the Board. For the six months ended April 30, 2019, the Fund incurred the following expenses, which are included in transfer agent fees payable in the Statement of Assets and Liabilities and in transfer agent fees and expenses in the Statement of Operations, to compensate AFS pursuant to the terms of the Service Agreement.
Fund | | Expense | | Payable At
April 30, 2019 | |
AIG Focused Dividend Strategy II | | $ | 223 | | | $ | 1,310 | | |
As of the six months ended April 30, 2019, SunAmerica owned 100% of the outstanding shares of the AIG Focused Dividend Strategy II Fund.
17
NOTES TO FINANCIAL STATEMENTS — April 30, 2019 — (unaudited) (continued)
Note 4. Purchases and Sales of Investment Securities
During the six months ended April 30, 2019, the Fund's cost of purchases and proceeds from sale of long-term Investments were $92,633 and $30,984, respectively.
Note 5. Federal Income Taxes
The following details the tax basis of distributions as well as the components of distributable earnings. The tax basis components of distributable earnings differ from the amounts reflected in the Statement of Assets and Liabilities by temporary book/tax differences primarily arising from wash sales, and non-deductible expenses.
| | | Distributable Earnings | | Tax Distributions | |
| | | For the year ended October 31, 2018 | |
Fund | | Ordinary
Income | | Long-term Gains/
Capital Loss
Carryover | | Unrealized
Appreciation
(Depreciation)* | | Ordinary
Income | | Long-Term
Capital
Gains | |
AIG Focused Dividend Strategy II | | $ | 2,605 | | | $ | (36,569 | ) | | $ | 48,909 | | | $ | 104,591 | | | $ | 27,716 | | |
* Unrealized appreciation (depreciation) includes amounts for derivatives and other assets and liabilities denominated in foreign currency.
For the six months ended April 30, 2019, the amounts of aggregate unrealized gain (loss) and the cost of the investment securities for federal income tax purposes, were as follows:
| | AIG Focused
Dividend
Strategy II
Fund | |
Cost (tax basis) | | $ | 1,239,624 | | |
Appreciation | | | 156,274 | | |
Depreciation | | | (128,962 | ) | |
Net unrealized appreciation (depreciation) | | $ | 27,312 | | |
On December 22, 2017, the Tax Cuts and Jobs Act (the "Act") was signed into law. Certain provisions of the Act were effective upon enactment with the remainder becoming effective for tax years beginning after December 31, 2017. All required changes have been made in accordance with the Act.
Note 6. Capital Share Transactions
| | | AIG Focused Dividend Strategy II Fund | |
| | | Class A | |
| | | For the six months ended
April 30, 2019
(unaudited) | | For the year ended
October 31, 2018 | |
| | | Shares | | Amount | | Shares | | Amount | |
Shares sold | | | — | | | $ | — | | | | — | | | $ | — | | |
Reinvested dividends | | | 1,464 | | | | 17,234 | | | | 10,682 | | | | 132,307 | | |
Shares redeemed | | | — | | | | — | | | | — | | | | — | | |
Net increase (decrease) | | | 1,464 | | | $ | 17,234 | | | | 10,682 | | | $ | 132,307 | | |
18
NOTES TO FINANCIAL STATEMENTS — April 30, 2019 — (unaudited) (continued)
Note 7. Line of Credit
The Series, along with certain other funds managed by the Adviser, has access to a $75 million committed unsecured line of credit and a $50 million uncommitted unsecured line of credit. The committed and uncommitted lines of credit are renewable on an annual basis with State Street Bank and Trust Company ("State Street"), the Series' custodian. Interest is currently payable on the committed lines of credit at the higher of the Federal Funds Rate (but not less than zero) plus 125 basis points or the One-Month London Interbank Offered Rate (but not less than zero) plus 125 basis points and State Street's discretionary bid rate on the uncommitted line of credit. There is also a commitment fee of 25 basis points per annum on the daily unused portion of the committed line of credit and a one-time closing fee of $25,000 on the uncommitted line of credit. Borrowings under the line of credit will commence when the respective Fund's cash shortfall exceeds $100,000. For the six months ended April 30, 2019, the Fund had no borrowings.
Note 8. Interfund Lending Agreement
Pursuant to the exemptive relief granted by the SEC, the Fund is permitted to participate in an interfund lending program among investment companies advised by SunAmerica or an affiliate. The interfund lending program allows the participating Fund to borrow money from and lend money to each other for temporary or emergency purposes. An interfund loan will be made under this facility only if the participating Funds receive a more favorable interest rate than would otherwise be available from a typical bank for a comparable transaction. For the six months ended April 30, 2019, the Fund did not participate in this program.
19
Harborside 5
185 Hudson Street, Suite 3300
Jersey City, NJ 07311
Directors
Richard W. Grant
Peter A. Harbeck
Dr. Judith L. Craven
William F. Devin
Stephen J. Gutman
Eileen A. Kamerick
Officers
John T. Genoy, President
and Chief Executive Officer
Gregory R. Kingston, Treasurer
Shawn Parry, Vice President and Assistant Treasurer
Donna McManus, Vice President and Assistant Treasurer
James Nichols, Vice President
Tim Pettee, Vice President
Gregory N. Bressler, Secretary
Kathleen Fuentes, Chief Legal Officer
and Assistant Secretary
Christopher C. Joe, Chief Compliance Officer
Matthew Hackethal, Anti-Money Laundering Compliance Officer
Investment Adviser
SunAmerica Asset Management, LLC
Harborside 5
185 Hudson Street, Suite 3300
Jersey City, NJ 07311
Distributor
AIG Capital Services, Inc.
Harborside 5
185 Hudson Street, Suite 3300
Jersey City, NJ 07311
Shareholder Servicing Agent
AIG Fund Services, Inc.
Harborside 5
185 Hudson Street, Suite 3300
Jersey City, NJ 07311
Custodian
State Street Bank and Trust Company
One Lincoln Street
Boston, MA 02110
Transfer Agent
DST Asset Manager Solutions, Inc.
303 W 11th Street
Kansas City, MO 64105
VOTING PROXIES ON FUND PORTFOLIO SECURITIES
A description of the policies and procedures that the Series uses to determine how to vote proxies relating to securities held in the Fund which is available in the Series' Statement of Additional Information, may be obtained without charge upon request, by calling (800) 858-8850. This information is also available from the EDGAR database on the U.S. Securities and Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD ON SUNAMERICA SERIES, INC. FUNDS
Information regarding how SunAmerica Series, Inc. Funds voted proxies relating to securities held in the SunAmerica Series, Inc. Funds during the most recent twelve month period ended June 30 is available, once filed with the U.S. Securities and Exchange Commission, without charge, upon request, by calling (800)858-8850 or on the U.S. Securities and Exchange Commission's website at http://www.sec.gov.
DISCLOSURE OF QUARTERLY PORTFOLIO HOLDINGS
The Fund is required to file its complete schedule of portfolio holdings quarterly with the U.S. Securities and Exchange Commission on Form N-PORT. The Fund's Forms N-PORT are available on the U.S. Securities and Exchange Commission's website at http://www.sec.gov.
DELIVERY OF SHAREHOLDER DOCUMENTS
The Funds have adopted a policy that allows them to send only one copy of a Fund's prospectus, proxy material, annual report and semi-annual report (the "shareholder documents") to shareholders with multiple accounts residing at the same "household." This practice is called householding and reduces Fund expenses, which benefits you and other shareholders. Unless the Funds receive instructions to the contrary, you will only receive one copy of the shareholder documents. The Funds will continue to household the shareholder documents indefinitely, until we are instructed otherwise. If you do not wish to participate in householding, please contact Shareholder Services at (800) 858-8850 ext. 6010 or send a written request with your name, the name of your fund(s) and your account number(s) to AIG Funds, P.O. Box 219186, Kansas City MO, 64121-9186. We will resume individual mailings for your account within thirty (30) days of receipt of your request.
This report is submitted solely for the general information of shareholders of the Funds. Distribution of this report to persons other than shareholders of the Fund is authorized only in connection with a currently effective prospectus, setting forth details of the Fund, which must precede or accompany this report.
The accompanying report has not been audited by independent accountants and accordingly no opinion has been expressed thereon.
Did you know that you have the option to
receive your shareholder reports online?
By choosing this convenient service, you will no longer receive paper copies of Fund documents such as annual reports, semi-annual reports, prospectuses and proxy statements in the mail. Instead, you are provided with quick and easy access to this information via the Internet.
Why Choose Electronic Delivery?
It's Quick — Fund documents will be received faster than via traditional mail.
It's Convenient — Elimination of bulky documents from personal files.
It's Cost Effective — Reduction of your Fund's printing and mailing costs.
To sign up for electronic delivery, follow these simple steps:
| 1 | | | Go to www.aig.com/funds | |
| 2 | | | Click on the link to "Go Paperless!!" | |
The email address you provide will be kept strictly confidential. Once your enrollment has been processed, you will begin receiving email notifications when anything you receive electronically is available online.
You can return to www.aig.com/funds at any time to change your email address, edit your preferences or to cancel this service if you choose to resume physical delivery of your Fund documents.
Please note — this option is only available to accounts opened through the Funds.
For information on receiving this report online, see inside back cover.
AIG Funds are advised by SunAmerica Asset Management, LLC (SAAMCo) and distributed by AIG Capital Services, Inc. (ACS), Member FINRA. Harborside 5, 185 Hudson Street, Suite 3300, Jersey City, NJ 07311, 800-858-8850. SAAMCo and ACS are members of American International Group, Inc. (AIG).
Investors should carefully consider a Fund's investment objectives, risks, charges and expenses before investing. The prospectus, containing this and other important information, can be obtained from your financial adviser, from the AIG Funds Sales Desk at 800-858-8850, ext. 6003, or at aig.com/funds. Read the prospectus carefully before investing.
FD2SAN - 4/19
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
Included in Item 1 to the Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board of Directors that were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by 22(b)(15)) of Schedule 14A (17 CFR 240.14a- 101), or this Item 10.
Item 11. Controls and Procedures.
(a) An evaluation was performed within 90 days of the filing of this report, under the supervision and with the participation of the registrant’s management, including the President and Treasurer, of the effectiveness of the design and operation of the registrant’s disclosure controls and procedures (as defined under Rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))). Based on that evaluation, the registrant’s management, including the President and Treasurer, concluded that the registrant’s disclosure controls and procedures are effective.
(b) There was no change in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 (17 CFR 270.30a-3(d))) that occurred during the registrant’s last fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal contro1 over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13. Exhibits.
(a) (1) Not applicable.
(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) and Section 906 of the Sarbanes- Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SunAmerica Series, Inc.
By: | /s/ John T. Genoy | |
| John T. Genoy |
| President |
Date: July 8, 2019
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ John T. Genoy | |
| John T. Genoy |
| President |
Date: July 8, 2019
By: | /s/ Gregory R. Kingston | |
| Gregory R. Kingston |
| Treasurer |
Date: July 8, 2019
