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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 811-08789
VALIC Company II
(Exact name of registrant as specified in charter)
2929 Allen Parkway, Houston, TX 77019
(Address of principal executive offices) (Zip code)
John T. Genoy
President
SunAmerica Asset Management, LLC
Harborside 5
185 Hudson Street, Suite 3300
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: August 31
Date of reporting period: August 31, 2017
Table of Contents
Item 1. Reports to Stockholders
Table of Contents
VALIC Company II
Annual Report, August 31, 2017
SAVING :INVESTING :PLANNING
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VALIC Company II
ANNUAL REPORT AUGUST 31, 2017
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VALIC Company II
Dear Valued Investor:
We are pleased to provide you with the following Annual Report for VALIC Company II. The report contains the investment portfolio information and the financial statements of VALIC Company II for the twelve-month period ending August 31, 2017. We encourage you to carefully read this report and hope you find it informative and helpful.
Domestically, the total return for the S&P 500® Index,* widely regarded as the best single gauge of the U.S. equity market, rose 16.23%. The election of Donald Trump as the next U.S. President changed the course of the fourth quarter ending 2016. After the S&P 500® Index’s nearly 2% decline in October, the U.S. equity market completely reversed itself and rallied into year-end, supported by continued improvement of economic fundamentals and ignited by the anticipation of tax cuts and reform, regulatory relief and infrastructure spending under the new administration. In short, a renewed optimism of stronger economic growth captured the markets, rallying U.S. equities and raising U.S. Treasury yields. In April 2017, the technology heavy Nasdaq 100® Index broke through the 6,000 point threshold for the first time in history, seventeen years after it first climbed to 5,000. However, toward the end of the period, confidence in the Trump administration’s ability to implement their stimulus plan began to fade. Furthermore, following the repeated failure of the U.S. Senate to repeal the Affordable Care Act, uncertainty prevailed over the fate of tax reform legislation.
While fiscal policy is once again in the spotlight with the Trump Administration’s tax initiative, monetary policy continues to have a near-term impact on the economy. As anticipated prior to the presidential election, the Federal Reserve (the “Fed”) began increasing the federal funds target rate to a range between 1.00% and 1.25% following their June meeting. Equity markets continue to deliver positive returns with low volatility, with a background of slow but continual economic growth and low inflation.
The MSCI EAFE Index (net), ** designed to measure the equity market performance of developed foreign markets (Europe, Australasia, Far East), excluding the U.S. and Canada, rose 17.64%. Global growth continued to improve during the period as economic data remained positive and political uncertainty waned. This was in sharp contrast to earlier in the period, as the international markets reacted negatively to the fallout and potential ramifications from the United Kingdom’s vote to leave the European Union, dubbed “Brexit” (British Exit).
Fixed income markets were mixed over the reporting period. The Bloomberg Barclays U.S. Aggregate Bond Index, *** a broad measure of the bond market, rose 0.49%. Long-term U.S. Treasury securities, as measured by the Bloomberg Barclays U.S. Treasury Long Index, **** declined 5.82% for the period. Risk assets, such as high yield assets, as measured by the Bloomberg Barclays U.S. Corporate Bond Index, ***** continued to gain ground, rising 8.63%.
Planning for your financial future in such an uncertain world should be a top priority. Your investment with VALIC Company II is an important step to help you reach your long-term financial goals. Another important step, we believe, is to meet with your financial advisor periodically to ensure that you maintain a diversified portfolio appropriate for your goals and risk tolerance.
We appreciate being part of your investment program and thank you for your ongoing confidence in us. We look forward to helping you meet your investment goals in the years ahead.
Sincerely,
John T. Genoy, President
VALIC Company II
* | The S&P 500® Index is an index of the stocks of 500 major large-cap U.S. corporations, chosen for market size, liquidity, and industry group representation. It is a market-value weighted index, with each stock’s percentage in the Index in proportion to its market value. |
** | The MSCI EAFE Index (net) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. The MSCI EAFE Index consists of the following 21 developed market country indexes: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. Net total return indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. |
*** | The Bloomberg Barclays U.S. Aggregate Bond Index measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage- and asset-backed securities and commercial mortgage-backed securities. |
**** | The Bloomberg Barclays U.S. Treasury Long Index measures U.S. dollar-denominated, fixed-rate, nominal debt issued by the U.S. Treasury. Treasury bills are excluded by the maturity constraint, but are part of a separate Short Treasury Index. STRIPS are excluded from the index because their inclusion would result in double-counting. |
***** | The Bloomberg Barclays U.S. Corporate Bond Index measures the investment grade, fixed-rate, taxable corporate bond market. It includes USD-denominated securities publicly issued by the U.S. and non-U.S. industrial, utility and financial issuers. |
You cannot invest directly in an index. These unmanaged indexes do not reflect management fees and transaction costs that are associated with some investments. Past performance is no guarantee of future results.
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Table of Contents
VALIC Company II
EXPENSE EXAMPLE — August 31, 2017 (unaudited)
Disclosure of Fund Expenses in Shareholder Reports
As a shareholder of a Fund in VALIC Company II (“VC II”), you incur ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds 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 March 1, 2017 and held until August 31, 2017. Shares of VC II are currently issued and redeemed only in connection with investments in and payments under variable annuity contracts and variable life insurance policies (“Variable Contracts”), qualified retirement plans (the “Plans”) and Individual Retirement Accounts (“IRA”) offered by The Variable Annuity Life Insurance Company (“VALIC”), the investment adviser to VC II and other life insurance companies affiliated with VALIC. The fees and expenses associated with the Variable Contracts, Plans and IRA’s are not included in these Examples, and had such fees and expenses been included, your costs would have been higher. Please see your Variable Contract prospectus or Plan/IRA documents for more details on the fees associated with your Variable Contract, Plan or IRAs.
Actual Expenses
The “Actual” section of the table provides information about your 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 August 31, 2017” to estimate the expenses you paid on your account during this period. The “Expenses Paid During the Six Months Ended August 31, 2017” column and the “Annualized Expense Ratio” column do not include fees and expenses that may be charged by the Variable Contracts, Plans and IRAs, in which the Funds are offered. Had these fees and expenses been included, the “Expenses Paid During the Six Months Ended August 31, 2017” 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 each 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 Funds 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 August 31, 2017” column and the “Annualized Expense Ratio” column do not include fees and expenses that may be charged by the Variable Contracts, Plans or IRAs in which the Funds are offered. Had these fees and expenses been included, the “Expenses Paid During the Six Months Ended August 31, 2017” 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 fees and expenses that may be charged by the Variable Contracts, Plans or IRAs. Please refer to your Variable Contract prospectus or Plan/IRA document for more information. Therefore, the “hypothetical” example is useful in comparing ongoing costs and will not help you determine the relative total costs of owning different funds. In addition, if these fees and expenses were included, your costs would have been higher.
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VALIC Company II
EXPENSE EXAMPLE — August 31, 2017 (unaudited) — (continued)
Actual | Hypothetical | |||||||||||||||||||||||||||
Fund | Beginning Account Value at March 1, 2017 | Ending Account Value Using Actual Return at August 31, 2017 | Expenses Paid During the Six Months Ended August 31, 2017* | Beginning Account Value at March 1, 2017 | Ending Account Value Using a Hypothetical 5% Annual Return at August 31, 2017 | Expenses Paid During the Six Months Ended August 31, 2017* | Annualized Expense Ratio | |||||||||||||||||||||
Aggressive Growth Lifestyle# | $ | 1,000.00 | $ | 1,044.85 | $ | 0.52 | $ | 1,000.00 | $ | 1,024.70 | $ | 0.51 | 0.10 | % | ||||||||||||||
Capital Appreciation# | $ | 1,000.00 | $ | 1,071.65 | $ | 4.44 | $ | 1,000.00 | $ | 1,020.92 | $ | 4.33 | 0.85 | % | ||||||||||||||
Conservative Growth Lifestyle# | $ | 1,000.00 | $ | 1,032.24 | $ | 0.51 | $ | 1,000.00 | $ | 1,024.70 | $ | 0.51 | 0.10 | % | ||||||||||||||
Core Bond# | $ | 1,000.00 | $ | 1,028.27 | $ | 3.94 | $ | 1,000.00 | $ | 1,021.32 | $ | 3.92 | 0.77 | % | ||||||||||||||
Government Money Market II# | $ | 1,000.00 | $ | 1,001.51 | $ | 2.77 | $ | 1,000.00 | $ | 1,022.43 | $ | 2.80 | 0.55 | % | ||||||||||||||
High Yield Bond# | $ | 1,000.00 | $ | 1,031.73 | $ | 4.92 | $ | 1,000.00 | $ | 1,020.37 | $ | 4.89 | 0.96 | % | ||||||||||||||
International Opportunities# | $ | 1,000.00 | $ | 1,205.52 | $ | 5.56 | $ | 1,000.00 | $ | 1,020.16 | $ | 5.09 | 1.00 | % | ||||||||||||||
Large Cap Value# | $ | 1,000.00 | $ | 997.82 | $ | 4.08 | $ | 1,000.00 | $ | 1,021.12 | $ | 4.13 | 0.81 | % | ||||||||||||||
Mid Cap Growth# | $ | 1,000.00 | $ | 1,100.66 | $ | 4.50 | $ | 1,000.00 | $ | 1,020.92 | $ | 4.33 | 0.85 | % | ||||||||||||||
Mid Cap Value | $ | 1,000.00 | $ | 1,004.59 | $ | 5.31 | $ | 1,000.00 | $ | 1,019.91 | $ | 5.35 | 1.05 | % | ||||||||||||||
Moderate Growth Lifestyle# | $ | 1,000.00 | $ | 1,037.49 | $ | 0.51 | $ | 1,000.00 | $ | 1,024.70 | $ | 0.51 | 0.10 | % | ||||||||||||||
Small Cap Growth# | $ | 1,000.00 | $ | 1,132.90 | $ | 6.24 | $ | 1,000.00 | $ | 1,019.36 | $ | 5.90 | 1.16 | % | ||||||||||||||
Small Cap Value# | $ | 1,000.00 | $ | 974.62 | $ | 4.73 | $ | 1,000.00 | $ | 1,020.42 | $ | 4.84 | 0.95 | % | ||||||||||||||
Socially Responsible# | $ | 1,000.00 | $ | 1,044.98 | $ | 2.89 | $ | 1,000.00 | $ | 1,022.38 | $ | 2.85 | 0.56 | % | ||||||||||||||
Strategic Bond | $ | 1,000.00 | $ | 1,036.49 | $ | 4.57 | $ | 1,000.00 | $ | 1,020.72 | $ | 4.53 | 0.89 | % |
* | Expenses are equal to each Fund‘s annualized expense ratio multiplied by the average account value over the period, multiplied by 184 days then divided by 365 days (to reflect the one-half year period) . These ratios do not reflect fees and expenses associated with the Variable Contracts, Plans or IRA‘s. If such fees and expenses had been included, the expenses would have been higher. Please refer to your Variable Contract prospectus for details on the expenses that apply to the Variable Contracts or your Plan/IRA document for details on the administration fees charged by your Plan sponsor. |
# | During the stated period, the investment adviser waived a portion of or all fees and assumed a portion of or all expenses for the Fund. As a result, if these fees and expenses had not been waived or assumed, the “Actual/Hypothetical Ending Account Value” would have been lower and the “Actual/Hypothetical Expenses Paid During the Six Months Ended August 31, 2017” and the “Annualized Expense Ratio” would have been higher. |
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VALIC Company II Aggressive Growth Lifestyle Fund
PORTFOLIO PROFILE — August 31, 2017 (unaudited)
Industry Allocation*
Domestic Equity Investment Companies | 60.5 | % | ||
Domestic Fixed Income Investment Companies | 19.9 | |||
International Equity Investment Companies | 13.2 | |||
Real Estate Investment Companies | 5.6 | |||
International Fixed Income Investment Companies | 0.8 | |||
100.0 | % | |||
* | Calculated as a percentage of net assets |
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VALIC Company II Aggressive Growth Lifestyle Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017
Security Description | Shares | Value (Note 2) | ||||||
AFFILIATED REGISTERED INVESTMENT COMPANIES#(1) — 100.0% |
| |||||||
Domestic Equity Investment Companies — 60.5% |
| |||||||
VALIC Co. I Blue Chip Growth Fund | 909,742 | $ | 16,730,155 | |||||
VALIC Co. I Dividend Value Fund | 1,582,234 | 19,508,946 | ||||||
VALIC Co. I Large Cap Core Fund | 294,500 | 3,466,268 | ||||||
VALIC Co. I Mid Cap Index Fund | 1,511,975 | 40,309,262 | ||||||
VALIC Co. I Mid Cap Strategic Growth Fund | 412,505 | 5,960,702 | ||||||
VALIC Co. I Nasdaq-100 Index Fund | 651,136 | 8,171,760 | ||||||
VALIC Co. I Science & Technology Fund | 245,651 | 6,770,137 | ||||||
VALIC Co. I Small Cap Index Fund | 2,554,209 | 53,102,000 | ||||||
VALIC Co. I Small Cap Special Values Fund | 1,798,216 | 23,628,564 | ||||||
VALIC Co. I Stock Index Fund | 295,457 | 11,085,532 | ||||||
VALIC Co. I Value Fund | 223,369 | 3,730,271 | ||||||
VALIC Co. II Capital Appreciation Fund | 1,160,523 | 19,206,654 | ||||||
VALIC Co. II Large Cap Value Fund | 609,678 | 12,595,944 | ||||||
VALIC Co. II Mid Cap Growth Fund† | 627,775 | 6,315,418 | ||||||
VALIC Co. II Mid Cap Value Fund | 2,561,988 | 54,391,014 | ||||||
VALIC Co. II Small Cap Growth Fund | 853,599 | 14,494,119 | ||||||
VALIC Co. II Small Cap Value Fund | 3,063,343 | 44,326,574 | ||||||
Total Domestic Equity Investment Companies | ||||||||
(cost $311,678,361) | 343,793,320 | |||||||
Domestic Fixed Income Investment Companies — 19.9% |
| |||||||
VALIC Co. I Capital Conservation Fund | 1,268,348 | 12,632,750 | ||||||
VALIC Co. I Government Securities Fund | 1,137,830 | 12,197,539 | ||||||
VALIC Co. I Inflation Protected Fund | 3,999,240 | 44,831,484 | ||||||
VALIC Co. II Core Bond Fund | 1,548,591 | 17,266,793 | ||||||
VALIC Co. II High Yield Bond Fund | 1,475,148 | 11,432,397 | ||||||
VALIC Co. II Strategic Bond Fund | 1,275,475 | 14,514,910 | ||||||
Total Domestic Fixed Income Investment Companies | ||||||||
(cost $110,708,163) | 112,875,873 | |||||||
Security Description | Shares | Value (Note 2) | ||||||
International Equity Investment Companies — 13.2% |
| |||||||
VALIC Co. I Foreign Value Fund | 2,551,307 | $ | 27,018,339 | |||||
VALIC Co. I International Equities Index Fund | 2,675,037 | 19,340,521 | ||||||
VALIC Co. I International Growth Fund | 792,181 | 10,726,137 | ||||||
VALIC Co. II International Opportunities Fund | 914,850 | 17,729,802 | ||||||
Total International Equity Investment Companies | ||||||||
(cost $68,936,862) | 74,814,799 | |||||||
International Fixed Income Investment Companies — 0.8% |
| |||||||
VALIC Co. I International Government Bond Fund† | ||||||||
(cost $4,522,954) | 383,202 | 4,632,914 | ||||||
Real Estate Investment Companies — 5.6% |
| |||||||
VALIC Co. I Global Real Estate Fund | ||||||||
(cost $32,487,247) | 4,042,812 | 31,816,933 | ||||||
TOTAL INVESTMENTS | ||||||||
(cost $528,333,587)(2) | 100.0 | % | 567,933,839 | |||||
Liabilities in excess of other assets | (0.0 | ) | (90,611 | ) | ||||
NET ASSETS | 100.0 | % | $ | 567,843,228 | ||||
# | The Aggressive Growth Lifestyle Fund invests in various VALIC Company I or VALIC Company II Funds, some of which are not presented in this report. Additional information on the underlying funds including such fund’s prospectuses and shareholder reports is available at our website, www.valic.com. |
† | Non-income producing security |
(1) | See Note 3. |
(2) | See Note 5 for cost of investments on a tax basis. |
The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2017 (see Note 2):
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at Value:* | ||||||||||||||||
Affiliated Registered Investment Companies | $ | 567,933,839 | $ | — | $ | — | $ | 567,933,839 | ||||||||
* | For a detailed presentation of investments, please refer to the Portfolio of Investments. |
The Fund’s policy is to recognize transfers between Levels as of the end of the reporting period. There were no transfers between Levels during the reporting period.
See Notes to Financial Statements
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Table of Contents
VALIC Company II Capital Appreciation Fund
PORTFOLIO PROFILE — August 31, 2017 (unaudited)
Industry Allocation*
Applications Software | 10.7 | % | ||
Electronic Components — Semiconductors | 6.4 | |||
Internet Content — Entertainment | 5.2 | |||
Web Portals/ISP | 4.9 | |||
E-Commerce/Products | 4.9 | |||
Medical — HMO | 4.7 | |||
Medical — Drugs | 4.5 | |||
Cable/Satellite TV | 4.1 | |||
Medical — Biomedical/Gene | 4.0 | |||
Computers | 3.6 | |||
Beverages — Non-alcoholic | 2.8 | |||
Commercial Services — Finance | 2.5 | |||
Retail — Discount | 2.5 | |||
Retail — Building Products | 2.2 | |||
E-Commerce/Services | 2.1 | |||
Time Deposits | 2.1 | |||
Instruments — Controls | 2.1 | |||
Finance — Credit Card | 2.0 | |||
Aerospace/Defense — Equipment | 1.5 | |||
Chemicals — Diversified | 1.4 | |||
Aerospace/Defense | 1.4 | |||
Insurance — Property/Casualty | 1.3 | |||
Transport — Rail | 1.3 | |||
Electronic Measurement Instruments | 1.2 | |||
Home Decoration Products | 1.2 | |||
Investment Management/Advisor Services | 1.1 | |||
Medical Instruments | 1.1 | |||
Auto — Cars/Light Trucks | 1.1 | |||
Entertainment Software | 1.0 | |||
Casino Hotels | 1.0 | |||
Data Processing/Management | 1.0 | |||
Cellular Telecom | 1.0 | |||
Steel — Producers | 1.0 | |||
Auto — Heavy Duty Trucks | 1.0 | |||
Computer Data Security | 1.0 | |||
Retail — Perfume & Cosmetics | 1.0 | |||
Building Products — Cement | 1.0 | |||
Commercial Services | 0.9 | |||
Food — Misc./Diversified | 0.9 | |||
Auto/Truck Parts & Equipment — Original | 0.9 | |||
Therapeutics | 0.9 | |||
Computer Software | 0.8 | |||
Diversified Banking Institutions | 0.8 | |||
Computer Services | 0.7 | |||
Retail — Major Department Stores | 0.7 | |||
Registered Investment Companies | 0.5 | |||
Networking Products | 0.5 | |||
100.5 | % | |||
* | Calculated as a percentage of net assets |
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Table of Contents
VALIC Company II Capital Appreciation Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS — 97.9% |
| |||||||
Aerospace/Defense — 1.4% |
| |||||||
Raytheon Co. | 6,919 | $ | 1,259,327 | |||||
Aerospace/Defense - Equipment — 1.5% |
| |||||||
United Technologies Corp. | 11,189 | 1,339,547 | ||||||
Applications Software — 10.7% |
| |||||||
Citrix Systems, Inc.† | 13,279 | 1,038,551 | ||||||
HubSpot, Inc.†# | 6,504 | 477,068 | ||||||
Microsoft Corp. | 69,366 | 5,186,496 | ||||||
salesforce.com, Inc.† | 16,322 | 1,558,588 | ||||||
ServiceNow, Inc.† | 8,577 | 996,562 | ||||||
Twilio, Inc., Class A†# | 17,816 | 521,652 | ||||||
9,778,917 | ||||||||
Auto - Cars/Light Trucks — 1.1% |
| |||||||
Tesla, Inc.†# | 2,834 | 1,008,621 | ||||||
Auto - Heavy Duty Trucks — 1.0% |
| |||||||
PACCAR, Inc. | 13,366 | 886,567 | ||||||
Auto/Truck Parts & Equipment - Original — 0.9% |
| |||||||
Delphi Automotive PLC | 8,608 | 829,811 | ||||||
Beverages - Non-alcoholic — 2.8% |
| |||||||
Monster Beverage Corp.† | 13,502 | 753,682 | ||||||
PepsiCo, Inc. | 15,395 | 1,781,663 | ||||||
2,535,345 | ||||||||
Building Products - Cement — 1.0% |
| |||||||
Vulcan Materials Co. | 7,212 | 874,527 | ||||||
Cable/Satellite TV — 4.1% |
| |||||||
Charter Communications, Inc., Class A† | 3,426 | 1,365,398 | ||||||
Comcast Corp., Class A | 58,766 | 2,386,487 | ||||||
3,751,885 | ||||||||
Casino Hotels — 1.0% |
| |||||||
Las Vegas Sands Corp. | 14,925 | 928,484 | ||||||
Cellular Telecom — 1.0% |
| |||||||
T-Mobile US, Inc.† | 13,937 | 901,863 | ||||||
Chemicals - Diversified — 1.4% |
| |||||||
Dow Chemical Co. | 19,539 | 1,302,274 | ||||||
Commercial Services — 0.9% |
| |||||||
Quanta Services, Inc.† | 23,998 | 862,248 | ||||||
Commercial Services - Finance — 2.5% |
| |||||||
PayPal Holdings, Inc.† | 25,383 | 1,565,623 | ||||||
Square, Inc., Class A†# | 27,050 | 706,276 | ||||||
2,271,899 | ||||||||
Computer Data Security — 1.0% |
| |||||||
Fortinet, Inc.† | 23,014 | 879,135 | ||||||
Computer Services — 0.7% |
| |||||||
Teradata Corp.†# | 21,151 | 675,140 | ||||||
Computer Software — 0.8% |
| |||||||
Splunk, Inc.†# | 10,954 | 734,904 | ||||||
Computers — 3.6% |
| |||||||
Apple, Inc. | 20,306 | 3,330,184 | ||||||
Data Processing/Management — 1.0% |
| |||||||
First Data Corp., Class A†# | 49,636 | 913,799 | ||||||
Diversified Banking Institutions — 0.8% |
| |||||||
JPMorgan Chase & Co. | 7,608 | 691,491 | ||||||
E-Commerce/Products — 4.9% |
| |||||||
Amazon.com, Inc.† | 4,550 | 4,461,730 | ||||||
Security Description | Shares | Value (Note 2) | ||||||
E-Commerce/Services — 2.1% |
| |||||||
Priceline Group, Inc.† | 1,056 | $ | 1,955,796 | |||||
Electronic Components - Semiconductors — 6.4% |
| |||||||
Broadcom, Ltd. | 8,881 | 2,238,634 | ||||||
NVIDIA Corp. | 11,438 | 1,938,055 | ||||||
Texas Instruments, Inc. | 20,493 | 1,697,230 | ||||||
5,873,919 | ||||||||
Electronic Measurement Instruments — 1.2% |
| |||||||
Fortive Corp. | 17,583 | 1,142,368 | ||||||
Entertainment Software — 1.0% |
| |||||||
Activision Blizzard, Inc. | 14,693 | 963,273 | ||||||
Finance - Credit Card — 2.0% |
| |||||||
Visa, Inc., Class A | 17,733 | 1,835,720 | ||||||
Food - Misc./Diversified — 0.9% |
| |||||||
Kraft Heinz Co. | 10,522 | 849,652 | ||||||
Home Decoration Products — 1.2% |
| |||||||
Newell Brands, Inc. | 23,403 | 1,129,897 | ||||||
Instruments - Controls — 2.1% |
| |||||||
Honeywell International, Inc. | 13,674 | 1,890,704 | ||||||
Insurance - Property/Casualty — 1.3% |
| |||||||
Progressive Corp. | 25,131 | 1,168,089 | ||||||
Internet Content - Entertainment — 5.2% |
| |||||||
Facebook, Inc., Class A† | 27,555 | 4,738,633 | ||||||
Investment Management/Advisor Services — 1.1% |
| |||||||
Ameriprise Financial, Inc. | 7,567 | 1,048,105 | ||||||
Medical Instruments — 1.1% |
| |||||||
Boston Scientific Corp.† | 37,690 | 1,038,359 | ||||||
Medical - Biomedical/Gene — 4.0% |
| |||||||
BioMarin Pharmaceutical, Inc.†# | 10,624 | 958,179 | ||||||
Celgene Corp.† | 14,398 | 2,000,314 | ||||||
Regeneron Pharmaceuticals, Inc.† | 1,491 | 740,878 | ||||||
3,699,371 | ||||||||
Medical - Drugs — 4.5% |
| |||||||
Clovis Oncology, Inc.†# | 5,718 | 434,968 | ||||||
Eli Lilly & Co. | 18,025 | 1,465,252 | ||||||
Merck & Co., Inc. | 11,567 | 738,669 | ||||||
TESARO, Inc.†# | 4,200 | 542,388 | ||||||
Zoetis, Inc. | 15,777 | 989,218 | ||||||
4,170,495 | ||||||||
Medical - HMO — 4.7% |
| |||||||
Aetna, Inc. | 8,082 | 1,274,531 | ||||||
UnitedHealth Group, Inc. | 15,469 | 3,076,784 | ||||||
4,351,315 | ||||||||
Networking Products — 0.5% |
| |||||||
Arista Networks, Inc.† | 2,805 | 494,101 | ||||||
Retail - Building Products — 2.2% |
| |||||||
Home Depot, Inc. | 13,178 | 1,974,987 | ||||||
Retail - Discount — 2.5% |
| |||||||
Costco Wholesale Corp. | 8,866 | 1,389,657 | ||||||
Dollar Tree, Inc.† | 10,910 | 868,872 | ||||||
2,258,529 | ||||||||
Retail - Major Department Stores — 0.7% |
| |||||||
Nordstrom, Inc.# | 14,118 | 629,945 | ||||||
Retail - Perfume & Cosmetics — 1.0% |
| |||||||
Ulta Beauty, Inc.† | 3,973 | 878,073 | ||||||
7 |
Table of Contents
VALIC Company II Capital Appreciation Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares/ Principal Amount | Value (Note 2) | ||||||
COMMON STOCKS (continued) |
| |||||||
Steel - Producers — 1.0% |
| |||||||
Nucor Corp. | 16,217 | $ | 893,719 | |||||
Therapeutics — 0.9% |
| |||||||
Neurocrine Biosciences, Inc.†# | 14,220 | 804,852 | ||||||
Transport - Rail — 1.3% |
| |||||||
Union Pacific Corp. | 11,041 | 1,162,617 | ||||||
Web Portals/ISP — 4.9% |
| |||||||
Alphabet, Inc., Class A† | 1,031 | 984,853 | ||||||
Alphabet, Inc., Class C† | 3,711 | �� | 3,485,854 | |||||
4,470,707 | ||||||||
Total Long-Term Investment Securities | ||||||||
(cost $69,747,552) | 89,640,924 | |||||||
SHORT-TERM INVESTMENT SECURITIES — 2.6% |
| |||||||
Registered Investment Companies — 0.5% |
| |||||||
State Street Navigator Securities Lending Government Money Market Portfolio | 515,081 | 515,081 | ||||||
Time Deposits — 2.1% |
| |||||||
Euro Time Deposit with State Street Bank and Trust Co. 0.12% due 09/01/2017 | $ | 1,908,000 | 1,908,000 | |||||
Total Short-Term Investment Securities | ||||||||
(cost $2,423,081) | 2,423,081 | |||||||
TOTAL INVESTMENTS | ||||||||
(cost $72,170,633)(3) | 100.5 | % | 92,064,005 | |||||
Liabilities in excess of other assets | (0.5 | ) | (484,825 | ) | ||||
NET ASSETS | 100.0 | % | $ | 91,579,180 | ||||
† | Non-income producing security |
# | The security or a portion thereof is out on loan (see Note 2). |
(1) | At August 31, 2017, the Fund had loaned securities with a total value of $8,180,169. This was secured by collateral of $515,081, which was received in cash and subsequently invested in short-term investments currently valued at $515,081 as reported in the Portfolio of Investments. Additional collateral of $7,711,284 was received in the form of fixed income pooled securities, which the Fund cannot sell or repledge and accordingly are not reflected in the Fund’s assets and liabilities. |
The components of the fixed income pooled securities referenced above are as follows:
Securities | Coupon Range | Maturity Date Range | Value as of August 31, 2017 | |||||
Federal Home Loan Mtg. Corp. | 2.50% to 4.50% | 08/01/2027 to 01/01/2047 | $ | 1,195,413 | ||||
Federal National Mtg. Assoc. | 2.63% to 4.25% | 10/25/2029 to 11/01/2046 | 982,270 | |||||
Government National Mtg. Assoc. | 2.50% to 3.50% | 01/20/2043 to 05/16/2053 | 2,052,145 | |||||
United States Treasury Bills | 0.00% | 09/07/2017 to 03/01/2018 | 180,749 | |||||
United States Treasury Notes/Bonds | zero coupon to 5.50% | 09/30/2017 to 02/15/2047 | 3,300,707 |
(2) | The rate shown is the 7-day yield as of August 31, 2017. |
(3) | See Note 5 for cost of investments on a tax basis. |
The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2017 (see Note 2):
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at Value:* | ||||||||||||||||
Common Stocks | $ | 89,640,924 | $ | — | $ | — | $ | 89,640,924 | ||||||||
Short Term Investment Securities: | ||||||||||||||||
Registered Investment Companies | 515,081 | — | — | 515,081 | ||||||||||||
Time Deposits | — | 1,908,000 | — | 1,908,000 | ||||||||||||
Total Investments at Value | $ | 90,156,005 | $ | 1,908,000 | $ | — | $ | 92,064,005 | ||||||||
* | For a detailed presentation of investments, please refer to the Portfolio of Investments. |
The Fund’s policy is to recognize transfers between Levels as of the end of the reporting period. There were no transfers between Levels during the reporting period.
See Notes to Financial Statements
8 |
Table of Contents
VALIC Company II Conservative Growth Lifestyle Fund
PORTFOLIO PROFILE — August 31, 2017 (unaudited)
Industry Allocation*
Domestic Fixed Income Investment Companies | 60.7 | % | ||
Domestic Equity Investment Companies | 30.8 | |||
International Equity Investment Companies | 4.1 | |||
Real Estate Investment Companies | 2.6 | |||
International Fixed Income Investment Companies | 1.8 | |||
100.0 | % | |||
* | Calculated as a percentage of net assets |
9 |
Table of Contents
VALIC Company II Conservative Growth Lifestyle Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017
Security Description | Shares | Value (Note 2) | ||||||
AFFILIATED REGISTERED INVESTMENT COMPANIES#(1) — 100.0% |
| |||||||
Domestic Equity Investment Companies — 30.8% |
| |||||||
VALIC Co. I Blue Chip Growth Fund | 110,445 | $ | 2,031,075 | |||||
VALIC Co. I Dividend Value Fund | 656,652 | 8,096,520 | ||||||
VALIC Co. I Large Cap Core Fund | 117,121 | 1,378,510 | ||||||
VALIC Co. I Mid Cap Index Fund | 514,096 | 13,705,807 | ||||||
VALIC Co. I Mid Cap Strategic Growth Fund | 36,681 | 530,039 | ||||||
VALIC Co. I Nasdaq-100 Index Fund | 68,436 | 858,874 | ||||||
VALIC Co. I Science & Technology Fund | 32,547 | 896,985 | ||||||
VALIC Co. I Small Cap Index Fund | 799,348 | 16,618,443 | ||||||
VALIC Co. I Small Cap Special Values Fund | 896,351 | 11,778,047 | ||||||
VALIC Co. I Value Fund | 55,985 | 934,943 | ||||||
VALIC Co. II Capital Appreciation Fund | 245,550 | 4,063,849 | ||||||
VALIC Co. II Large Cap Value Fund | 187,168 | 3,866,886 | ||||||
VALIC Co. II Mid Cap Growth Fund† | 79,022 | 794,957 | ||||||
VALIC Co. II Mid Cap Value Fund | 988,388 | 20,983,477 | ||||||
VALIC Co. II Small Cap Growth Fund | 92,575 | 1,571,929 | ||||||
VALIC Co. II Small Cap Value Fund | 1,014,236 | 14,675,997 | ||||||
Total Domestic Equity Investment Companies | ||||||||
(cost $97,223,482) | 102,786,338 | |||||||
Domestic Fixed Income Investment Companies — 60.7% |
| |||||||
VALIC Co. I Capital Conservation Fund | 1,701,688 | 16,948,814 | ||||||
VALIC Co. I Government Securities Fund | 105,523 | 1,131,202 | ||||||
VALIC Co. I Inflation Protected Fund | 3,296,440 | 36,953,090 | ||||||
VALIC Co. II Core Bond Fund | 4,313,109 | 48,091,167 | ||||||
VALIC Co. II High Yield Bond Fund | 4,230,236 | 32,784,328 | ||||||
VALIC Co. II Strategic Bond Fund | 5,853,397 | 66,611,658 | ||||||
Total Domestic Fixed Income Investment Companies | ||||||||
(cost $200,505,816) | 202,520,259 | |||||||
Security Description | Shares | Value (Note 2) | ||||||
International Equity Investment Companies — 4.1% |
| |||||||
VALIC Co. I Foreign Value Fund | 514,896 | $ | 5,452,745 | |||||
VALIC Co. I International Equities Index Fund | 256,628 | 1,855,422 | ||||||
VALIC Co. I International Growth Fund | 135,744 | 1,837,975 | ||||||
VALIC Co. II International Opportunities Fund | 240,847 | 4,667,617 | ||||||
Total International Equity Investment Companies | ||||||||
(cost $12,611,134) | 13,813,759 | |||||||
International Fixed Income Investment Companies — 1.8% |
| |||||||
VALIC Co. I International Government Bond Fund† (cost $6,021,315) | 511,335 | 6,182,038 | ||||||
Real Estate Investment Companies — 2.6% |
| |||||||
VALIC Co. I Global Real Estate Fund | 1,097,965 | 8,640,984 | ||||||
TOTAL INVESTMENTS | ||||||||
(cost $325,138,351)(2) | 100.0 | % | 333,943,378 | |||||
Liabilities in excess of other assets | (0.0 | ) | (36,389 | ) | ||||
NET ASSETS | 100.0 | % | $ | 333,906,989 | ||||
# | The Conservative Growth Lifestyle Fund invests in various VALIC Company I or VALIC Company II Funds, some of which are not presented in this report. Additional information on the underlying funds including such fund’s prospectuses and shareholder reports is available at our website, www.valic.com. |
† | Non-income producing security |
(1) | See Note 3. |
(2) | See Note 5 for cost of investments on a tax basis. |
The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2017 (see Note 2):
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at Value:* | ||||||||||||||||
Affiliated Registered Investment Companies | $ | 333,943,378 | $ | — | $ | — | $ | 333,943,378 | ||||||||
* | For a detailed presentation of investments, please refer to the Portfolio of Investments. |
The Fund’s policy is to recognize transfers between Levels as of the end of the reporting period. There were no transfers between Levels during the reporting period.
See Notes to Financial Statements
10 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO PROFILE — August 31, 2017 (unaudited)
Industry Allocation*
Federal National Mtg. Assoc. | 18.9 | % | ||
Federal Home Loan Mtg. Corp. | 12.3 | |||
Diversified Banking Institutions | 6.4 | |||
Time Deposits | 5.3 | |||
United States Treasury Notes | 3.9 | |||
Sovereign | 3.9 | |||
Diversified Financial Services | 3.9 | |||
United States Treasury Bonds | 3.7 | |||
Banks — Commercial | 3.3 | |||
Registered Investment Companies | 2.9 | |||
Government National Mtg. Assoc. | 2.8 | |||
Pipelines | 2.5 | |||
Electric — Integrated | 2.2 | |||
Oil Companies — Exploration & Production | 2.1 | |||
Telephone — Integrated | 2.0 | |||
Oil Companies — Integrated | 1.6 | |||
Auto — Cars/Light Trucks | 1.5 | |||
Banks — Super Regional | 1.2 | |||
Cable/Satellite TV | 1.1 | |||
Computers | 0.9 | |||
Paper & Related Products | 0.9 | |||
Insurance — Life/Health | 0.7 | |||
Savings & Loans/Thrifts | 0.7 | |||
Insurance — Multi-line | 0.7 | |||
Medical Labs & Testing Services | 0.5 | |||
Enterprise Software/Service | 0.5 | |||
Brewery | 0.5 | |||
Banks — Special Purpose | 0.5 | |||
Diversified Manufacturing Operations | 0.5 | |||
Cellular Telecom | 0.5 | |||
Networking Products | 0.4 | |||
Electric — Generation | 0.4 | |||
Finance — Other Services | 0.4 | |||
Aerospace/Defense — Equipment | 0.4 | |||
Real Estate Investment Trusts | 0.4 | |||
Finance — Credit Card | 0.4 | |||
Medical — Drugs | 0.3 | |||
Coatings/Paint | 0.3 | |||
SupraNational Banks | 0.3 | |||
Electronic Components — Semiconductors | 0.3 | |||
Medical — Biomedical/Gene | 0.3 | |||
Medical — HMO | 0.3 | |||
Multimedia | 0.3 | |||
Building Products — Wood | 0.3 | |||
Finance — Consumer Loans | 0.3 | |||
Finance — Auto Loans | 0.2 | |||
Finance — Leasing Companies | 0.2 | |||
Chemicals — Diversified | 0.2 | |||
Medical — Hospitals | 0.2 | |||
Gas — Distribution | 0.2 | |||
Medical Products | 0.2 | |||
Satellite Telecom | 0.2 | |||
Building & Construction Products — Misc. | 0.2 | |||
Banks — Fiduciary | 0.2 | |||
Insurance — Mutual | 0.2 | |||
Metal — Diversified | 0.2 | |||
Auto — Heavy Duty Trucks | 0.2 | |||
Gambling (Non-Hotel) | 0.2 | |||
Building — Residential/Commercial | 0.2 | |||
Food — Retail | 0.2 | |||
Transport — Rail | 0.2 | |||
Machinery — Construction & Mining | 0.2 | |||
Semiconductor Components — Integrated Circuits | 0.2 | |||
Computer Services | 0.2 | |||
Oil — Field Services | 0.2 | |||
Gold Mining | 0.2 | |||
Real Estate Management/Services | 0.2 | |||
Tools — Hand Held | 0.2 | |||
Finance — Investment Banker/Broker | 0.2 |
Containers — Paper/Plastic | 0.2 | |||
Airlines | 0.2 | |||
Energy — Alternate Sources | 0.2 | |||
Semiconductor Equipment | 0.2 | |||
Telecom Services | 0.2 | |||
Food — Misc./Diversified | 0.1 | |||
Commercial Services | 0.1 | |||
Retail — Drug Store | 0.1 | |||
Oil Refining & Marketing | 0.1 | |||
Internet Connectivity Services | 0.1 | |||
Independent Power Producers | 0.1 | |||
Power Converter/Supply Equipment | 0.1 | |||
Cruise Lines | 0.1 | |||
Transport — Services | 0.1 | |||
Cosmetics & Toiletries | 0.1 | |||
Retail — Discount | 0.1 | |||
Metal — Iron | 0.1 | |||
Beverages — Wine/Spirits | 0.1 | |||
Applications Software | 0.1 | |||
Retail — Restaurants | 0.1 | |||
Medical — Generic Drugs | 0.1 | |||
Metal Processors & Fabrication | 0.1 | |||
Printing — Commercial | 0.1 | |||
Pharmacy Services | 0.1 | |||
Transport — Equipment & Leasing | 0.1 | |||
Rental Auto/Equipment | 0.1 | |||
Advertising Agencies | 0.1 | |||
Metal — Copper | 0.1 | |||
Containers — Metal/Glass | 0.1 | |||
Central Bank | 0.1 | |||
Radio | 0.1 | |||
Retail — Office Supplies | 0.1 | |||
E-Commerce/Products | 0.1 | |||
Computers — Memory Devices | 0.1 | |||
Agricultural Chemicals | 0.1 | |||
Insurance — Reinsurance | 0.1 | |||
Retail — Appliances | 0.1 | |||
Retail — Auto Parts | 0.1 | |||
Steel — Producers | 0.1 | |||
Marine Services | 0.1 | |||
Finance — Mortgage Loan/Banker | 0.1 | |||
Beverages — Non-alcoholic | 0.1 | |||
Machinery — Farming | 0.1 | |||
Distribution/Wholesale | 0.1 | |||
Soap & Cleaning Preparation | 0.1 | |||
Coal | 0.1 | |||
Building — Heavy Construction | 0.1 | |||
Chemicals — Specialty | 0.1 | |||
Food — Dairy Products | 0.1 | |||
Internet Content — Entertainment | 0.1 | |||
Building Products — Air & Heating | 0.1 | |||
Diversified Minerals | 0.1 | |||
Appliances | 0.1 | |||
Electronic Components — Misc. | 0.1 | |||
Wire & Cable Products | 0.1 | |||
Building & Construction — Misc. | 0.1 | |||
Batteries/Battery Systems | 0.1 | |||
Retail — Apparel/Shoe | 0.1 | |||
Hotels/Motels | 0.1 | |||
Auction Houses/Art Dealers | 0.1 | |||
Retail — Automobile | 0.1 | |||
Oil Field Machinery & Equipment | 0.1 | |||
Tennessee Valley Authority | 0.1 | |||
Data Processing/Management | 0.1 | |||
Precious Metals | 0.1 | |||
Resorts/Theme Parks | 0.1 | |||
Electronic Parts Distribution | 0.1 | |||
Casino Hotels | 0.1 | |||
Broadcast Services/Program | 0.1 | |||
105.7 | % | |||
* | Calculated as a percentage of net assets |
11 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO PROFILE — August 31, 2017 (unaudited) — (continued)
Credit Quality†#
Aaa | 43.7 | % | ||
Aa | 2.9 | |||
A | 14.3 | |||
Baa | 19.9 | |||
Ba | 8.9 | |||
B | 6.0 | |||
Caa | 1.2 | |||
Not Rated@ | 3.1 | |||
100.0 | % | |||
† | Source: Moody’s |
# | Calculated as a percentage of total debt issues |
@ | Represents debt issues that either have no rating, or the rating is unavailable from the data source. |
12 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017
Security Description | Principal Amount | Value (Note 2) | ||||||
ASSET BACKED SECURITIES — 3.7% |
| |||||||
Diversified Financial Services — 3.7% |
| |||||||
American Express Credit Account Master Trust FRS | $ | 239,000 | $ | 240,013 | ||||
Avis Budget Rental Car Funding AESOP LLC | 550,000 | 552,065 | ||||||
BA Credit Card Trust | 1,200,000 | 1,199,668 | ||||||
BMW Vehicle Lease Trust | 1,000,000 | 1,005,022 | ||||||
Capital One Multi-Asset Execution Trust | 725,000 | 721,358 | ||||||
CarMax Auto Owner Trust | 1,042,000 | 1,034,065 | ||||||
CarMax Auto Owner Trust | 1,000,000 | 1,006,703 | ||||||
CGGS Commercial Mtg. Trust | 2,429,849 | 2,441,318 | ||||||
Chase Mtg. Trust VRS | 1,882,936 | 1,940,755 | ||||||
Citibank Credit Card Issuance Trust | 1,554,000 | 1,562,273 | ||||||
Citigroup Commercial Mtg. Trust | 1,753,000 | 1,747,936 | ||||||
Citigroup Commercial Mtg. Trust | 1,478,000 | 1,494,767 | ||||||
Citigroup Commercial Mtg. Trust | 1,304,720 | 1,322,618 | ||||||
COMM Mtg. Trust | 1,778,000 | 1,817,226 | ||||||
COMM Mtg. Trust | 1,786,000 | 1,866,799 | ||||||
COMM Mtg. Trust VRS | 754,000 | 793,644 | ||||||
Core Industrial Trust | 6,000 | 6,196 | ||||||
CSAIL Commercial Mtg. Trust | 1,770,000 | 1,827,601 | ||||||
CSAIL Commercial Mtg. Trust | 2,200,000 | 2,293,393 | ||||||
CSMC Trust | 1,500,000 | 1,607,854 | ||||||
DBCG Mtg. Trust FRS | 300,000 | 300,000 |
Security Description | Principal Amount | Value (Note 2) | ||||||
Diversified Financial Services (continued) |
| |||||||
Discover Card Execution Note Trust | $ | 1,556,000 | $ | 1,576,522 | ||||
Ford Credit Auto Owner Trust | 1,023,000 | 1,025,650 | ||||||
GS Mtg. Securities Trust | 61,000 | 62,189 | ||||||
Honda Auto Receivables Owner Trust | 512,000 | 511,255 | ||||||
Morgan Stanley Bank of America Merrill Lynch Trust | 1,000,000 | 1,026,254 | ||||||
Morgan Stanley Capital Barclays Bank Trust | 2,397,000 | 2,394,359 | ||||||
MSDB Trust VRS | 4,520,000 | 4,644,541 | ||||||
Nissan Auto Receivables Owner Trust | 1,000,000 | 994,219 | ||||||
Synchrony Credit Card Master Note Trust | 350,000 | 352,101 | ||||||
Synchrony Credit Card Master Note Trust | 850,000 | 856,450 | ||||||
World Financial Network Credit Card Master Trust | 446,000 | 444,497 | ||||||
Total Asset Backed Securities | ||||||||
(cost $40,419,342) | 40,669,311 | |||||||
U.S. CORPORATE BONDS & NOTES — 35.3% |
| |||||||
Advertising Agencies — 0.1% |
| |||||||
Interpublic Group of Cos., Inc. | 611,000 | 648,075 | ||||||
Omnicom Group, Inc. | 572,000 | 582,013 | ||||||
1,230,088 | ||||||||
Aerospace/Defense - Equipment — 0.3% |
| |||||||
Moog, Inc. | 459,000 | 476,213 | ||||||
Orbital ATK, Inc. | 90,000 | 94,725 | ||||||
Triumph Group, Inc. | 705,000 | 673,275 | ||||||
United Technologies Corp. | 1,106,000 | 1,106,489 | ||||||
United Technologies Corp. | 804,000 | 816,250 | ||||||
3,166,952 | ||||||||
13 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Agricultural Chemicals — 0.0% |
| |||||||
Mosaic Co. | $ | 440,000 | $ | 416,227 | ||||
Airlines — 0.2% |
| |||||||
Atlas Air, Inc. | 45,115 | 45,277 | ||||||
Delta Air Lines, Inc. | 1,109,000 | 1,126,805 | ||||||
United Airlines Pass-Through Trust | 574,610 | 593,285 | ||||||
1,765,367 | ||||||||
Appliances — 0.1% |
| |||||||
Whirlpool Corp. | 634,000 | 671,698 | ||||||
Applications Software — 0.1% |
| |||||||
Microsoft Corp. | 815,000 | 890,564 | ||||||
Nuance Communications, Inc. | 390,000 | 407,062 | ||||||
1,297,626 | ||||||||
Auction Houses/Art Dealers — 0.1% |
| |||||||
KAR Auction Services, Inc. | 555,000 | 573,981 | ||||||
Auto - Cars/Light Trucks — 1.4% |
| |||||||
American Honda Finance Corp. | 1,383,000 | 1,371,179 | ||||||
BMW US Capital LLC | 1,015,000 | 1,012,632 | ||||||
Daimler Finance North America LLC | 1,497,000 | 1,485,338 | ||||||
Daimler Finance North America LLC | 911,000 | 899,941 | ||||||
Daimler Finance North America LLC | 834,000 | 838,463 | ||||||
Daimler Finance North America LLC | 1,839,000 | 1,855,289 | ||||||
Ford Motor Co. | 863,000 | 886,020 | ||||||
Ford Motor Credit Co. LLC | 1,314,000 | 1,313,472 | ||||||
General Motors Co. | 628,000 | 635,605 |
Security Description | Principal Amount | Value (Note 2) | ||||||
Auto - Cars/Light Trucks (continued) |
| |||||||
Nissan Motor Acceptance Corp. | $ | 1,757,000 | $ | 1,775,288 | ||||
Toyota Motor Credit Corp. | 2,371,000 | 2,375,900 | ||||||
Toyota Motor Credit Corp. | 738,000 | 742,355 | ||||||
15,191,482 | ||||||||
Auto - Heavy Duty Trucks — 0.2% |
| |||||||
JB Poindexter & Co., Inc. | 597,000 | 625,357 | ||||||
PACCAR Financial Corp. | 1,620,000 | 1,634,247 | ||||||
2,259,604 | ||||||||
Auto/Truck Parts & Equipment - Original — 0.0% |
| |||||||
Lear Corp. | 536,000 | 537,217 | ||||||
Banks - Commercial — 1.8% |
| |||||||
BankUnited, Inc. | 2,256,000 | 2,366,808 | ||||||
Citizens Bank NA | 514,000 | 518,458 | ||||||
Fifth Third Bank | 700,000 | 697,050 | ||||||
First Horizon National Corp. | 3,712,000 | 3,833,144 | ||||||
First Tennessee Bank NA | 979,000 | 991,577 | ||||||
PNC Bank NA | 1,514,000 | 1,520,334 | ||||||
Regions Financial Corp. | 1,610,000 | 1,620,666 | ||||||
Regions Financial Corp. | 4,456,000 | 6,079,909 | ||||||
Santander Holdings USA, Inc. | 1,560,000 | 1,590,697 | ||||||
Santander Holdings USA, Inc. | 752,000 | 774,430 | ||||||
19,993,073 | ||||||||
Banks - Fiduciary — 0.2% |
| |||||||
Bank of New York Mellon Corp. | 706,000 | 713,235 | ||||||
Citizens Financial Group, Inc. | 1,570,000 | 1,653,670 | ||||||
2,366,905 | ||||||||
14 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Banks - Super Regional — 1.0% |
| |||||||
Capital One Financial Corp. | $ | 1,040,000 | $ | 1,072,820 | ||||
Huntington National Bank | 1,255,000 | 1,266,768 | ||||||
Wells Fargo & Co. | 3,623,000 | 3,648,689 | ||||||
Wells Fargo & Co. | 2,309,000 | 2,359,828 | ||||||
Wells Fargo & Co. | 133,000 | 137,996 | ||||||
Wells Fargo & Co. | 1,795,000 | 1,949,663 | ||||||
Wells Fargo & Co. | 194,000 | 214,103 | ||||||
10,649,867 | ||||||||
Batteries/Battery Systems — 0.1% |
| |||||||
EnerSys | 605,000 | 622,394 | ||||||
Brewery — 0.5% |
| |||||||
Anheuser-Busch InBev Finance, Inc. | 753,000 | 754,834 | ||||||
Anheuser-Busch InBev Finance, Inc. | 1,408,000 | 1,436,607 | ||||||
Anheuser-Busch InBev Finance, Inc. | 680,000 | 707,279 | ||||||
Anheuser-Busch InBev Finance, Inc. | 1,481,000 | 1,648,848 | ||||||
Anheuser-Busch InBev Finance, Inc. | 835,000 | 951,916 | ||||||
5,499,484 | ||||||||
Broadcast Services/Program — 0.1% |
| |||||||
Clear Channel Worldwide Holdings, Inc. | 540,000 | 556,200 | ||||||
Building & Construction Products - Misc. — 0.2% |
| |||||||
Owens Corning | 2,088,000 | 2,027,241 | ||||||
Standard Industries, Inc. | 381,000 | 390,525 | ||||||
2,417,766 | ||||||||
Building & Construction - Misc. — 0.1% |
| |||||||
Weekley Homes LLC/Weekley Finance Corp. | 650,000 | 633,750 | ||||||
Security Description | Principal Amount | Value (Note 2) | ||||||
Building Products - Air & Heating — 0.1% |
| |||||||
Lennox International, Inc. | $ | 710,000 | $ | 718,603 | ||||
Building Products - Wood — 0.3% |
| |||||||
Boise Cascade Co. | 625,000 | 654,687 | ||||||
Masco Corp. | 1,336,000 | 1,440,342 | ||||||
Masco Corp. | 766,000 | 781,577 | ||||||
2,876,606 | ||||||||
Building-Heavy Construction — 0.1% |
| |||||||
Tutor Perini Corp. | 695,000 | 747,125 | ||||||
Building-Residential/Commercial — 0.2% |
| |||||||
Lennar Corp. | 1,144,000 | 1,178,320 | ||||||
Lennar Corp. | 436,000 | 451,260 | ||||||
Toll Brothers Finance Corp. | 550,000 | 565,125 | ||||||
2,194,705 | ||||||||
Cable/Satellite TV — 0.6% |
| |||||||
Block Communications, Inc. | 679,000 | 727,379 | ||||||
Charter Communications Operating LLC/Charter Communications Operating Capital | 2,378,000 | 2,323,060 | ||||||
Charter Communications Operating LLC/Charter Communications Operating Capital | 635,000 | 680,257 | ||||||
Charter Communications Operating LLC/Charter Communications Operating Capital | 514,000 | 524,953 | ||||||
Charter Communications Operating LLC/Charter Communications Operating Capital | 857,000 | 980,856 | ||||||
Charter Communications Operating LLC/Charter Communications Operating Capital | 217,000 | 249,299 | ||||||
CSC Holdings LLC | 800,000 | 821,000 | ||||||
DISH DBS Corp. | 478,000 | 527,592 | ||||||
DISH DBS Corp. | 182,000 | 213,622 | ||||||
7,048,018 | ||||||||
15 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Casino Hotels — 0.1% |
| |||||||
Caesars Growth Properties Holdings LLC/Caesars Growth Properties Finance, Inc. | $ | 520,000 | $ | 559,650 | ||||
Cellular Telecom — 0.4% |
| |||||||
Sprint Corp. | 1,489,000 | 1,641,622 | ||||||
Sprint Corp. | 2,147,000 | 2,453,227 | ||||||
4,094,849 | ||||||||
Chemicals-Diversified — 0.0% |
| |||||||
Hexion, Inc. | 570,000 | 518,700 | ||||||
Chemicals-Specialty — 0.1% |
| |||||||
Lubrizol Corp. | 550,000 | 740,085 | ||||||
Coal — 0.1% |
| |||||||
SunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp. | 735,000 | 749,700 | ||||||
Coatings/Paint — 0.3% |
| |||||||
RPM International, Inc. | 484,000 | 497,379 | ||||||
Sherwin-Williams Co. | 1,518,000 | 1,525,417 | ||||||
Sherwin-Williams Co. | 1,214,000 | 1,223,216 | ||||||
Sherwin-Williams Co. | 395,000 | 415,654 | ||||||
3,661,666 | ||||||||
Commercial Services — 0.1% |
| |||||||
Ecolab, Inc. | 1,532,000 | 1,541,094 | ||||||
Commercial Services-Finance — 0.0% |
| |||||||
Automatic Data Processing, Inc. | 547,000 | 554,473 | ||||||
Computer Services — 0.2% |
| |||||||
Harland Clarke Holdings Corp. | 675,000 | 721,406 | ||||||
Harland Clarke Holdings Corp. | 752,000 | 762,626 | ||||||
Leidos Holdings, Inc. | 525,000 | 551,250 | ||||||
2,035,282 | ||||||||
Security Description | Principal Amount | Value (Note 2) | ||||||
Computers — 0.9% |
| |||||||
Apple, Inc. | $ | 1,080,000 | $ | 1,115,712 | ||||
Apple, Inc. | 1,130,000 | 1,161,511 | ||||||
Diamond 1 Finance Corp./Diamond 2 Finance Corp. | 1,265,000 | 1,413,210 | ||||||
Diamond 1 Finance Corp./Diamond 2 Finance Corp. | 2,838,000 | 3,572,600 | ||||||
Diamond 1 Finance Corp./Diamond 2 Finance Corp. | 825,000 | 1,064,358 | ||||||
Hewlett Packard Enterprise Co. | 1,900,000 | 2,049,611 | ||||||
10,377,002 | ||||||||
Computers-Integrated Systems — 0.0% |
| |||||||
NCR Corp. | 125,000 | 127,500 | ||||||
Computers-Memory Devices — 0.0% |
| |||||||
Western Digital Corp. | 330,000 | 391,875 | ||||||
Containers-Metal/Glass — 0.1% |
| |||||||
Crown Cork & Seal Co., Inc. | 483,000 | 565,110 | ||||||
Owens-Brockway Glass Container, Inc. | 600,000 | 642,000 | ||||||
1,207,110 | ||||||||
Containers-Paper/Plastic — 0.2% |
| |||||||
Multi-Color Corp. | 650,000 | 679,250 | ||||||
WestRock Co. | 1,100,000 | 1,106,601 | ||||||
1,785,851 | ||||||||
Cosmetics & Toiletries — 0.1% |
| |||||||
First Quality Finance Co., Inc. | 434,000 | 441,595 | ||||||
Procter & Gamble Co. | 895,000 | 890,332 | ||||||
1,331,927 | ||||||||
Data Processing/Management — 0.1% |
| |||||||
Fidelity National Information Services, Inc. | 541,000 | 564,942 | ||||||
Distribution/Wholesale — 0.1% |
| |||||||
H&E Equipment Services, Inc. | 750,000 | 774,375 | ||||||
16 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Diversified Banking Institutions — 4.1% |
| |||||||
Bank of America Corp. | $ | 1,015,000 | $ | 1,017,730 | ||||
Bank of America Corp. | 1,016,000 | 1,027,979 | ||||||
Bank of America Corp. | 4,545,000 | 4,706,645 | ||||||
Bank of America Corp. | 1,681,000 | 2,095,859 | ||||||
Citigroup, Inc. | 1,591,000 | 1,597,373 | ||||||
Citigroup, Inc. | 894,000 | 907,751 | ||||||
Citigroup, Inc. | 2,412,000 | 2,550,594 | ||||||
Citigroup, Inc. | 4,053,000 | 4,294,706 | ||||||
Citigroup, Inc. | 622,000 | 758,254 | ||||||
Goldman Sachs Group, Inc. | 1,526,000 | 1,530,086 | ||||||
Goldman Sachs Group, Inc. | 1,286,000 | 1,336,682 | ||||||
Goldman Sachs Group, Inc. | 1,627,000 | 2,050,067 | ||||||
Goldman Sachs Group, Inc. | 1,174,000 | 1,548,391 | ||||||
JPMorgan Chase & Co. | 1,507,000 | 1,521,311 | ||||||
JPMorgan Chase & Co. | 1,250,000 | 1,265,984 | ||||||
JPMorgan Chase & Co. | 472,000 | 473,329 | ||||||
JPMorgan Chase & Co. | 2,064,000 | 2,106,973 | ||||||
JPMorgan Chase & Co. | 2,135,000 | 2,196,632 | ||||||
JPMorgan Chase & Co. | 2,997,000 | 3,029,343 | ||||||
Morgan Stanley | 2,694,000 | 2,716,593 | ||||||
Morgan Stanley | 974,000 | 986,990 |
Security Description | Principal Amount | Value (Note 2) | ||||||
Diversified Banking Institutions (continued) |
| |||||||
Morgan Stanley | $ | 749,000 | $ | 758,020 | ||||
Morgan Stanley | 2,125,000 | 2,232,324 | ||||||
Morgan Stanley | 3,220,000 | 3,544,053 | ||||||
46,253,669 | ||||||||
Diversified Financial Services — 0.1% |
| |||||||
USAA Capital Corp. | 1,623,000 | 1,629,874 | ||||||
Diversified Manufacturing Operations — 0.3% |
| |||||||
Illinois Tool Works, Inc. | 1,115,000 | 1,105,125 | ||||||
Textron, Inc. | 1,001,000 | 1,053,508 | ||||||
Trinity Industries, Inc. | 777,000 | 787,114 | ||||||
2,945,747 | ||||||||
E-Commerce/Products — 0.1% |
| |||||||
Amazon.com, Inc. | 1,065,000 | 1,098,350 | ||||||
Electric Products - Misc. — 0.0% |
| |||||||
WESCO Distribution, Inc. | 348,000 | 363,660 | ||||||
Electric - Generation — 0.2% |
| |||||||
Basin Electric Power Cooperative | 2,403,000 | 2,629,914 | ||||||
Electric - Integrated — 1.4% |
| |||||||
Dominion Energy, Inc. | 707,000 | 713,764 | ||||||
Dominion Resources, Inc. | 412,000 | 418,365 | ||||||
Dominion Resources, Inc. | 1,459,000 | 1,694,349 | ||||||
Duke Energy Progress LLC | 1,018,000 | 1,046,163 | ||||||
Exelon Corp. | 1,455,000 | �� | 1,508,250 | |||||
Exelon Generation Co. LLC | 785,000 | 799,465 | ||||||
FirstEnergy Corp. | 1,501,000 | 1,533,443 |
17 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Electric - Integrated (continued) |
| |||||||
FirstEnergy Corp. | $ | 770,000 | $ | 803,638 | ||||
FirstEnergy Corp. | 2,066,000 | 2,789,569 | ||||||
Georgia Power Co. | 938,000 | 940,011 | ||||||
Massachusetts Electric Co. | 1,670,000 | 1,735,189 | ||||||
Pacific Gas & Electric Co. | 1,125,000 | 1,185,457 | ||||||
South Carolina Electric & Gas Co. | 606,000 | 729,286 | ||||||
15,896,949 | ||||||||
Electronic Components - Misc. — 0.1% |
| |||||||
Corning, Inc. | 667,000 | 666,415 | ||||||
Electronic Components - Semiconductors — 0.3% |
| |||||||
Intel Corp. | 552,000 | 551,978 | ||||||
Intel Corp. | 3,021,000 | 3,054,160 | ||||||
3,606,138 | ||||||||
Electronic Parts Distribution — 0.1% |
| |||||||
Ingram Micro, Inc. | 550,000 | 559,697 | ||||||
Energy - Alternate Sources — 0.2% |
| |||||||
Pattern Energy Group, Inc. | 803,000 | 841,142 | ||||||
TerraForm Power Operating LLC | 820,000 | 848,700 | ||||||
1,689,842 | ||||||||
Enterprise Software/Service — 0.5% |
| |||||||
Donnelley Financial Solutions, Inc. | 1,057,000 | 1,136,275 | ||||||
Oracle Corp. | 2,231,000 | 2,225,403 | ||||||
Oracle Corp. | 1,862,000 | 1,938,605 | ||||||
Oracle Corp. | 309,000 | 323,034 | ||||||
5,623,317 | ||||||||
Security Description | Principal Amount | Value (Note 2) | ||||||
Finance - Auto Loans — 0.2% |
| |||||||
Ally Financial, Inc. | $ | 1,600,000 | $ | 1,727,520 | ||||
Credit Acceptance Corp. | 946,000 | 1,000,395 | ||||||
2,727,915 | ||||||||
Finance - Consumer Loans — 0.3% |
| |||||||
Enova International, Inc. | 880,000 | 880,000 | ||||||
Enova International, Inc. | 354,000 | 375,240 | ||||||
Navient Corp. | 883,000 | 739,513 | ||||||
Springleaf Finance Corp. | 775,000 | 811,812 | ||||||
2,806,565 | ||||||||
Finance - Credit Card — 0.4% |
| |||||||
Alliance Data Systems Corp. | 600,000 | 616,500 | ||||||
American Express Co. | 3,432,000 | 3,448,135 | ||||||
4,064,635 | ||||||||
Finance - Investment Banker/Broker — 0.2% |
| |||||||
E*TRADE Financial Corp. | 383,000 | 390,053 | ||||||
Lehman Brothers Holdings, Inc. | 179,000 | 18 | ||||||
Lehman Brothers Holdings, Inc. | 230,000 | 23 | ||||||
LPL Holdings, Inc. | 570,000 | 597,075 | ||||||
TD Ameritrade Holding Corp. | 794,000 | 813,730 | ||||||
1,800,899 | ||||||||
Finance - Leasing Companies — 0.1% |
| |||||||
International Lease Finance Corp. | 795,000 | 898,997 | ||||||
Washington Prime Group LP | 715,000 | 731,628 | ||||||
1,630,625 | ||||||||
Finance - Mortgage Loan/Banker — 0.1% |
| |||||||
Quicken Loans, Inc. | 800,000 | 838,000 | ||||||
18 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Finance - Other Services — 0.3% |
| |||||||
National Rural Utilities Cooperative Finance Corp. | $ | 1,116,000 | $ | 1,122,817 | ||||
National Rural Utilities Cooperative Finance Corp. | 531,000 | 535,662 | ||||||
National Rural Utilities Cooperative Finance Corp. | 1,032,000 | 1,034,540 | ||||||
National Rural Utilities Cooperative Finance Corp. | 769,000 | 778,287 | ||||||
3,471,306 | ||||||||
Food - Meat Products — 0.0% |
| |||||||
Smithfield Foods, Inc. | 414,000 | 434,881 | ||||||
Food - Misc./Diversified — 0.1% |
| |||||||
Kraft Heinz Foods Co. | 1,441,000 | 1,548,090 | ||||||
Food - Retail — 0.2% |
| |||||||
Albertsons Cos. LLC/Safeway, Inc./New Albertson’s, Inc./Albertson’s LLC | 740,000 | 666,925 | ||||||
Kroger Co. | 1,522,000 | 1,502,660 | ||||||
2,169,585 | ||||||||
Food - Wholesale/Distribution — 0.0% |
| |||||||
C&S Group Enterprises LLC | 370,000 | 363,063 | ||||||
Gambling (Non-Hotel) — 0.1% |
| |||||||
Mohegan Gaming & Entertainment | 650,000 | 682,500 | ||||||
Scientific Games International, Inc. | 625,000 | 695,313 | ||||||
Waterford Gaming LLC/Waterford Gaming Financial Corp. | 5,223 | 74 | ||||||
1,377,887 | ||||||||
Gas - Distribution — 0.2% |
| |||||||
Dominion Gas Holdings LLC | 546,000 | 597,942 | ||||||
NiSource Finance Corp. | 1,022,000 | 1,045,725 | ||||||
NiSource Finance Corp. | 488,000 | 520,050 | ||||||
Sempra Energy | 382,000 | 381,053 | ||||||
2,544,770 | ||||||||
Security Description | Principal Amount | Value (Note 2) | ||||||
Hazardous Waste Disposal — 0.0% |
| |||||||
Clean Harbors, Inc. | $ | 534,000 | $ | 543,345 | ||||
Hotels/Motels — 0.1% |
| |||||||
Hilton Grand Vacations Borrower LLC/Hilton Grand Vacations Borrower, Inc. | 529,000 | 580,577 | ||||||
Independent Power Producers — 0.1% |
| |||||||
Calpine Corp. | 575,000 | 563,500 | ||||||
NRG Yield Operating LLC | 860,000 | 879,350 | ||||||
1,442,850 | ||||||||
Industrial Gases — 0.0% |
| |||||||
Airgas, Inc. | 372,000 | 381,990 | ||||||
Insurance - Life/Health — 0.5% |
| |||||||
Aflac, Inc. | 712,000 | 722,950 | ||||||
Brighthouse Financial, Inc. | 1,838,000 | 1,808,510 | ||||||
Pacific LifeCorp | 582,000 | 631,927 | ||||||
Pricoa Global Funding I | 2,643,000 | 2,643,298 | ||||||
5,806,685 | ||||||||
Insurance - Multi-line — 0.5% |
| |||||||
Assurant, Inc. | 862,000 | 1,088,886 | ||||||
MetLife, Inc. | 592,000 | 656,015 | ||||||
Metropolitan Life Global Funding I | 3,856,000 | 3,892,036 | ||||||
5,636,937 | ||||||||
Insurance-Mutual — 0.2% |
| |||||||
Massachusetts Mutual Life Insurance Co. | 391,000 | 409,087 | ||||||
Massachusetts Mutual Life Insurance Co. | 251,000 | 277,854 | ||||||
MassMutual Global Funding II | 483,000 | 486,078 | ||||||
New York Life Global Funding | 1,136,000 | 1,144,185 | ||||||
2,317,204 | ||||||||
19 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Insurance - Reinsurance — 0.1% |
| |||||||
Berkshire Hathaway, Inc. | $ | 976,000 | $ | 973,142 | ||||
Internet Connectivity Services — 0.1% |
| |||||||
Cogent Communications Group, Inc. | 800,000 | 836,000 | ||||||
Zayo Group LLC/Zayo Capital, Inc. | 565,000 | 607,200 | ||||||
1,443,200 | ||||||||
Internet Content - Entertainment — 0.1% |
| |||||||
Netflix, Inc. | 675,000 | 730,687 | ||||||
Investment Management/Advisor Services — 0.0% |
| |||||||
Drawbridge Special Opportunities Fund LP/Drawbridge Special Opportunities Finance | 343,000 | 349,561 | ||||||
Machinery - Construction & Mining — 0.2% |
| |||||||
Caterpillar Financial Services Corp. | 1,481,000 | 1,543,914 | ||||||
Terex Corp. | 546,000 | 571,935 | ||||||
2,115,849 | ||||||||
Machinery - Farming — 0.1% |
| |||||||
CNH Industrial Capital LLC | 754,000 | 787,915 | ||||||
Machinery - General Industrial — 0.0% |
| |||||||
Roper Technologies, Inc. | 378,000 | 393,807 | ||||||
Marine Services — 0.1% |
| |||||||
Great Lakes Dredge & Dock Corp. | 830,000 | 842,450 | ||||||
Medical Labs & Testing Services — 0.5% |
| |||||||
Laboratory Corp. of America Holdings | 312,000 | 320,651 | ||||||
Laboratory Corp. of America Holdings | 650,000 | 658,370 | ||||||
Roche Holdings, Inc. | 1,811,000 | 1,777,976 | ||||||
Roche Holdings, Inc. | 1,595,000 | 1,609,341 | ||||||
Roche Holdings, Inc. | 1,240,000 | 1,277,984 | ||||||
5,644,322 | ||||||||
Security Description | Principal Amount | Value (Note 2) | ||||||
Medical Products — 0.2% |
| |||||||
Becton Dickinson and Co. | $ | 2,507,000 | $ | 2,538,184 | ||||
Medical - Biomedical/Gene — 0.3% |
| |||||||
Amgen, Inc. | 1,289,000 | 1,299,314 | ||||||
Baxalta, Inc. | 950,000 | 987,003 | ||||||
Celgene Corp. | 1,057,000 | 1,103,973 | ||||||
3,390,290 | ||||||||
Medical - Drugs — 0.1% |
| |||||||
Endo Finance LLC/Endo Finco, Inc. | 675,000 | 565,312 | ||||||
Forest Laboratories LLC | 530,000 | 571,406 | ||||||
Johnson & Johnson | 470,000 | 491,515 | ||||||
1,628,233 | ||||||||
Medical - Generic Drugs — 0.1% |
| |||||||
Actavis, Inc. | 1,260,000 | 1,294,320 | ||||||
Medical - HMO — 0.3% |
| |||||||
Centene Corp. | 570,000 | 588,525 | ||||||
UnitedHealth Group, Inc. | 944,000 | 943,897 | ||||||
UnitedHealth Group, Inc. | 971,000 | 975,348 | ||||||
UnitedHealth Group, Inc. | 663,000 | 696,495 | ||||||
3,204,265 | ||||||||
Medical-Hospitals — 0.2% |
| |||||||
CHS/Community Health Systems, Inc. | 530,000 | 533,975 | ||||||
HCA, Inc. | 513,000 | 552,116 | ||||||
HCA, Inc. | 650,000 | 671,125 | ||||||
Tenet Healthcare Corp. | 806,000 | 805,839 | ||||||
2,563,055 | ||||||||
Metal Processors & Fabrication — 0.1% |
| |||||||
Grinding Media, Inc./Moly-Cop AltaSteel, Ltd. | 600,000 | 645,000 |
20 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Metal Processors & Fabrication (continued) |
| |||||||
Novelis Corp. | $ | 220,000 | $ | 229,350 | ||||
Novelis Corp. | 389,000 | 410,881 | ||||||
1,285,231 | ||||||||
Metal - Diversified — 0.1% |
| |||||||
Glencore Funding LLC | 1,106,000 | 1,119,944 | ||||||
Multimedia — 0.3% |
| |||||||
Time Warner, Inc. | 710,000 | 716,277 | ||||||
Viacom, Inc. | 387,000 | 374,175 | ||||||
Walt Disney Co. | 1,965,000 | 1,969,215 | ||||||
3,059,667 | ||||||||
Networking Products — 0.4% |
| |||||||
Cisco Systems, Inc. | 1,222,000 | 1,231,971 | ||||||
Cisco Systems, Inc. | 3,390,000 | 3,426,146 | ||||||
4,658,117 | ||||||||
Oil Companies - Exploration & Production — 1.7% |
| |||||||
Anadarko Petroleum Corp. | 1,565,000 | 1,829,598 | ||||||
Carrizo Oil & Gas, Inc. | 650,000 | 630,500 | ||||||
Cimarex Energy Co. | 580,000 | 588,776 | ||||||
Concho Resources, Inc. | 1,476,000 | 1,535,040 | ||||||
Continental Resources, Inc. | 465,000 | 467,325 | ||||||
Denbury Resources, Inc. | 1,050,000 | 939,750 | ||||||
Devon Energy Corp. | 518,000 | 525,509 | ||||||
Devon Energy Corp. | 517,000 | 551,888 | ||||||
EP Energy LLC/Everest Acquisition Finance, Inc. | 890,000 | 869,975 | ||||||
Hess Corp. | 695,000 | 681,458 |
Security Description | Principal Amount | Value (Note 2) | ||||||
Oil Companies - Exploration & Production (continued) |
| |||||||
Hess Corp. | $ | 1,336,000 | $ | 1,304,985 | ||||
Hilcorp Energy I LP/Hilcorp Finance Co. | 786,000 | 742,770 | ||||||
Marathon Oil Corp. | 1,523,000 | 1,540,772 | ||||||
Marathon Oil Corp. | 1,390,000 | 1,534,506 | ||||||
Newfield Exploration Co. | 509,000 | 531,905 | ||||||
Noble Energy, Inc. | 1,372,000 | 1,375,734 | ||||||
Noble Energy, Inc. | 791,000 | 795,845 | ||||||
Noble Energy, Inc. | 484,000 | 489,536 | ||||||
RSP Permian, Inc. | 600,000 | 601,500 | ||||||
Sanchez Energy Corp. | 716,000 | 545,950 | ||||||
SM Energy Co. | 681,000 | 616,305 | ||||||
WPX Energy, Inc. | 419,000 | 452,520 | ||||||
19,152,147 | ||||||||
Oil Companies - Integrated — 0.5% |
| |||||||
Chevron Corp. | 686,000 | 690,626 | ||||||
Chevron Corp. | 2,196,000 | 2,217,583 | ||||||
Chevron Corp. | 1,200,000 | 1,206,893 | ||||||
Chevron Corp. | 651,000 | 662,961 | ||||||
Exxon Mobil Corp. | 649,000 | 648,795 | ||||||
5,426,858 | ||||||||
Oil Field Machinery & Equipment — 0.1% |
| |||||||
Forum Energy Technologies, Inc. | 580,000 | 571,300 | ||||||
Oil Refining & Marketing — 0.1% |
| |||||||
Murphy Oil USA, Inc. | 560,000 | 599,900 |
21 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Oil Refining & Marketing (continued) |
| |||||||
PBF Holding Co LLC/PBF Finance Corp. | $ | 895,000 | $ | 886,050 | ||||
1,485,950 | ||||||||
Oil - Field Services — 0.1% |
| |||||||
Bristow Group, Inc. | 883,000 | 549,668 | ||||||
Halliburton Co. | 380,000 | 412,146 | ||||||
961,814 | ||||||||
Paper & Related Products — 0.8% |
| |||||||
Domtar Corp. | $ | 1,445,000 | $ | 1,621,490 | ||||
Georgia-Pacific LLC | 2,262,000 | 2,358,162 | ||||||
Georgia-Pacific LLC | 2,930,000 | 3,116,787 | ||||||
Georgia-Pacific LLC | 737,000 | 810,866 | ||||||
International Paper Co. | 263,000 | 267,389 | ||||||
International Paper Co. | 551,000 | 616,181 | ||||||
P.H. Glatfelter Co. | 540,000 | 548,100 | ||||||
9,338,975 | ||||||||
Pharmacy Services — 0.1% |
| |||||||
Express Scripts Holding Co. | 510,000 | 513,498 | ||||||
Express Scripts Holding Co. | 732,000 | 770,346 | ||||||
1,283,844 | ||||||||
Pipelines — 2.0% |
| |||||||
Antero Midstream Partners LP/Antero Midstream Finance Corp. | 583,000 | 594,660 | ||||||
Cheniere Corpus Christi Holdings LLC | 850,000 | 879,750 | ||||||
Cheniere Corpus Christi Holdings LLC | 231,000 | 262,763 | ||||||
Columbia Pipeline Group, Inc. | 245,000 | 245,858 | ||||||
Enable Midstream Partners LP | 1,296,000 | 1,251,147 | ||||||
Enbridge Energy Partners LP | 784,000 | 1,015,871 |
Security Description | Principal Amount | Value (Note 2) | ||||||
Pipelines (continued) |
| |||||||
Energy Transfer Partners LP | $ | 301,000 | $ | 298,267 | ||||
Energy Transfer Partners LP | 111,000 | 118,749 | ||||||
Energy Transfer Partners LP | 1,894,000 | 2,162,953 | ||||||
EnLink Midstream Partners LP | 910,000 | 952,621 | ||||||
EnLink Midstream Partners LP | 1,043,000 | 987,804 | ||||||
Genesis Energy LP/Genesis Energy Finance Corp. | 250,000 | 235,000 | ||||||
Genesis Energy LP/Genesis Energy Finance Corp. | 500,000 | 490,000 | ||||||
Holly Energy Partners LP/Holly Energy Finance Corp. | 672,000 | 698,880 | ||||||
Kinder Morgan Energy Partners LP | 479,000 | 451,872 | ||||||
Kinder Morgan Energy Partners LP | 473,000 | 487,745 | ||||||
Kinder Morgan, Inc. | 647,000 | 694,141 | ||||||
Kinder Morgan, Inc. | 217,000 | 230,217 | ||||||
NGPL PipeCo LLC | 1,201,000 | 1,234,027 | ||||||
ONEOK, Inc. | 1,237,000 | 1,251,511 | ||||||
Phillips 66 Partners LP | 452,000 | 456,735 | ||||||
Sabine Pass Liquefaction LLC | 767,000 | 813,790 | ||||||
SemGroup Corp./Rose Rock Finance Corp. | 487,000 | 478,477 | ||||||
Summit Midstream Holdings LLC/Summit Midstream Finance Corp. | 540,000 | 541,350 | ||||||
Tallgrass Energy Partners LP/Tallgrass Energy Finance Corp. | 865,000 | 865,000 | ||||||
Tesoro Logistics LP/Tesoro Logistics Finance Corp. | 579,000 | 588,409 | ||||||
Western Gas Partners LP | 966,000 | 1,004,544 |
22 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Pipelines (continued) |
| |||||||
Williams Partners LP | $ | 831,000 | $ | 831,422 | ||||
Williams Partners LP | 1,863,000 | 1,947,339 | ||||||
22,070,902 | ||||||||
Power Converter/Supply Equipment — 0.1% |
| |||||||
Hubbell, Inc. | 529,000 | 534,724 | ||||||
Hubbell, Inc. | 864,000 | 885,110 | ||||||
1,419,834 | ||||||||
Precious Metals — 0.1% |
| |||||||
Coeur Mining, Inc. | 560,000 | 560,000 | ||||||
Racetracks — 0.0% |
| |||||||
GLP Capital LP/GLP Financing II, Inc. | 370,000 | 401,450 | ||||||
Radio — 0.1% |
| |||||||
Sirius XM Radio, Inc. | 1,075,000 | 1,128,750 | ||||||
Real Estate Investment Trusts — 0.4% |
| |||||||
CTR Partnership LP/CareTrust Capital Corp. | 668,000 | 689,710 | ||||||
ESH Hospitality, Inc. | 550,000 | 566,500 | ||||||
GEO Group, Inc. | 545,000 | 561,350 | ||||||
iStar, Inc. | 789,000 | 810,698 | ||||||
Simon Property Group LP | 687,000 | 714,964 | ||||||
Starwood Property Trust, Inc. | 804,000 | 833,145 | ||||||
4,176,367 | ||||||||
Real Estate Management/Services — 0.2% |
| |||||||
Kennedy-Wilson, Inc. | 1,000,000 | 1,027,500 | ||||||
Realogy Group LLC/Realogy Co-Issuer Corp. | 860,000 | 877,200 | ||||||
1,904,700 | ||||||||
Rental Auto/Equipment — 0.1% |
| |||||||
Herc Rentals, Inc. | 530,000 | 580,350 |
Security Description | Principal Amount | Value (Note 2) | ||||||
Rental Auto/Equipment (continued) |
| |||||||
United Rentals North America, Inc. | $ | 680,000 | $ | 686,800 | ||||
1,267,150 | ||||||||
Resort/Theme Parks — 0.1% |
| |||||||
Six Flags Entertainment Corp. | 555,000 | 559,884 | ||||||
Retail-Apparel/Shoe — 0.1% |
| |||||||
Coach, Inc. | 616,000 | 615,809 | ||||||
Retail-Appliances — 0.1% |
| |||||||
Conn’s, Inc. | 1,002,000 | 971,940 | ||||||
Retail-Auto Parts — 0.1% |
| |||||||
O’Reilly Automotive, Inc. | 916,000 | 919,492 | ||||||
Retail-Automobile — 0.1% |
| |||||||
Lithia Motors, Inc. | 561,000 | 573,622 | ||||||
Retail-Discount — 0.1% |
| |||||||
Costco Wholesale Corp. | 1,308,000 | 1,319,958 | ||||||
Retail-Drug Store — 0.1% |
| |||||||
CVS Pass-Through Trust | 561,705 | 599,676 | ||||||
CVS Pass-Through Trust | 286,283 | 326,907 | ||||||
CVS Pass-Through Trust | 498,427 | 579,899 | ||||||
1,506,482 | ||||||||
Retail-Misc./Diversified — 0.0% |
| |||||||
FirstCash, Inc. | 362,000 | 381,457 | ||||||
Retail-Office Supplies — 0.1% |
| |||||||
Arch Merger Sub, Inc. | 1,135,000 | 1,099,531 | ||||||
Retail-Restaurants — 0.1% |
| |||||||
Brinker International, Inc. | 720,000 | 711,000 | ||||||
KFC Holding Co./Pizza Hut Holdings LLC/Taco Bell of America LLC | 570,000 | 584,962 | ||||||
1,295,962 | ||||||||
23 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Satellite Telecom — 0.1% |
| |||||||
Hughes Satellite Systems Corp. | $ | 785,000 | $ | 856,631 | ||||
Savings & Loans/Thrifts — 0.7% |
| |||||||
Astoria Financial Corp. | 1,092,000 | 1,106,625 | ||||||
First Niagara Financial Group, Inc. | 4,035,000 | 4,486,679 | ||||||
First Niagara Financial Group, Inc. | 2,210,000 | 2,618,804 | ||||||
8,212,108 | ||||||||
Semiconductor Components-Integrated Circuits — 0.2% |
| |||||||
QUALCOMM, Inc. | 1,127,000 | 1,135,345 | ||||||
QUALCOMM, Inc. | 523,000 | 540,624 | ||||||
1,675,969 | ||||||||
Semiconductor Equipment — 0.1% |
| |||||||
Applied Materials, Inc. | 715,000 | 766,640 | ||||||
Telecom Services — 0.1% |
| |||||||
Embarq Corp. | 635,000 | 644,525 | ||||||
Telecommunication Equipment — 0.0% |
| |||||||
Plantronics, Inc. | 519,000 | 537,165 | ||||||
Telephone-Integrated — 1.6% |
| |||||||
AT&T, Inc. | 938,000 | 935,453 | ||||||
AT&T, Inc. | 2,285,000 | 2,310,331 | ||||||
AT&T, Inc. | 1,230,000 | 1,115,854 | ||||||
AT&T, Inc. | 1,747,000 | 1,710,848 | ||||||
AT&T, Inc. | 822,000 | 787,863 | ||||||
AT&T, Inc. | 2,828,000 | 2,856,947 | ||||||
AT&T, Inc. | 2,338,000 | 2,374,414 | ||||||
CenturyLink, Inc. | 510,000 | 485,138 | ||||||
Verizon Communications, Inc. | 659,000 | 661,800 |
Security Description | Principal Amount | Value (Note 2) | ||||||
Telephone-Integrated (continued) |
| |||||||
Verizon Communications, Inc. | $ | 489,000 | $ | 489,697 | ||||
Verizon Communications, Inc. | 2,608,000 | 2,423,797 | ||||||
Verizon Communications, Inc. | 1,988,000 | 2,144,622 | ||||||
18,296,764 | ||||||||
Television — 0.0% |
| |||||||
Belo Corp. | 464,000 | 522,000 | ||||||
Transport-Equipment & Leasing — 0.1% |
| |||||||
GATX Corp. | 479,000 | 475,180 | ||||||
GATX Corp. | 765,000 | 792,751 | ||||||
1,267,931 | ||||||||
Transport-Services — 0.1% |
| |||||||
United Parcel Service, Inc. | 1,330,000 | 1,348,433 | ||||||
Travel Services — 0.0% |
| |||||||
Sabre GLBL, Inc. | 534,000 | 549,352 | ||||||
Trucking/Leasing — 0.0% |
| |||||||
Penske Truck Leasing Co. LP/PTL Finance Corp. | 420,000 | 435,186 | ||||||
Wire & Cable Products — 0.1% |
| |||||||
General Cable Corp. | 631,000 | 645,197 | ||||||
Total U.S. Corporate Bonds & Notes |
| |||||||
(cost $383,539,697) | 394,076,518 | |||||||
FOREIGN CORPORATE BONDS & NOTES — 10.1% |
| |||||||
Aerospace/Defense-Equipment — 0.1% |
| |||||||
EADS Finance BV | 1,099,000 | 1,118,274 | ||||||
Agricultural Chemicals — 0.1% |
| |||||||
Consolidated Energy Finance SA | 560,000 | 582,400 | ||||||
Auto-Cars/Light Trucks — 0.1% |
| |||||||
Hyundai Capital Services, Inc. | 1,283,000 | 1,280,855 | ||||||
Banks-Commercial — 1.4% |
| |||||||
Australia & New Zealand Banking Group, Ltd. | 728,000 | 725,745 | ||||||
BPCE SA | 1,573,000 | 1,586,810 |
24 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
FOREIGN CORPORATE BONDS & NOTES (continued) |
| |||||||
Banks-Commercial (continued) |
| |||||||
Credit Suisse AG | $ | 1,094,000 | $ | 1,123,358 | ||||
DBS Group Holdings, Ltd. | 1,529,000 | 1,534,992 | ||||||
Dexia Credit Local SA | 1,161,000 | 1,168,366 | ||||||
ICICI Bank, Ltd. | 1,100,000 | 1,202,566 | ||||||
Intesa Sanpaolo SpA | 1,662,000 | 1,756,450 | ||||||
Mizuho Bank, Ltd. | 533,000 | 535,206 | ||||||
Mizuho Bank, Ltd. | 3,260,000 | 3,284,551 | ||||||
National Bank of Canada | 887,000 | 890,047 | ||||||
Rabobank Nederland NY | 377,000 | 377,549 | ||||||
Toronto-Dominion Bank | 1,383,000 | 1,371,459 | ||||||
Westpac Banking Corp. | 695,000 | 722,020 | ||||||
16,279,119 | ||||||||
Beverages - Non-alcoholic — 0.1% |
| |||||||
Coca-Cola Femsa SAB de CV | 818,000 | 823,600 | ||||||
Beverages - Wine/Spirits — 0.1% |
| |||||||
Diageo Capital PLC | 1,303,000 | 1,310,549 | ||||||
Cable/Satellite TV — 0.5% |
| |||||||
Altice Financing SA | 1,060,000 | 1,160,912 | ||||||
Altice Luxembourg SA | 1,045,000 | 1,130,899 | ||||||
Numericable-SFR SA | 1,643,000 | 1,774,473 | ||||||
UPCB Finance IV, Ltd. | 580,000 | 601,750 | ||||||
Ziggo Secured Finance BV | 575,000 | 592,969 | ||||||
5,261,003 | ||||||||
Security Description | Principal Amount | Value (Note 2) | ||||||
Cellular Telecom — 0.1% |
| |||||||
C&W Senior Financing Designated Activity Co. | $ | 617,000 | $ | 640,137 | ||||
Chemicals - Diversified — 0.2% |
| |||||||
LYB International Finance II BV | 1,074,000 | 1,077,178 | ||||||
NOVA Chemicals Corp. | 425,000 | 423,938 | ||||||
Trinseo Materials Operating SCA/Trinseo Materials Finance, Inc. | 565,000 | 577,712 | ||||||
2,078,828 | ||||||||
Computers - Memory Devices — 0.1% |
| |||||||
Seagate HDD Cayman | 725,000 | 706,399 | ||||||
Cruise Lines — 0.1% |
| |||||||
NCL Corp., Ltd. | 550,000 | 569,938 | ||||||
Silversea Cruise Finance, Ltd. | 775,000 | 835,062 | ||||||
1,405,000 | ||||||||
Diversified Banking Institutions — 1.8% |
| |||||||
Barclays PLC | 998,000 | 1,038,212 | ||||||
Barclays PLC | 767,000 | 841,063 | ||||||
BNP Paribas SA | 1,576,000 | 1,640,067 | ||||||
Credit Agricole SA | 1,129,000 | 1,190,734 | ||||||
Credit Suisse Group AG | 2,346,000 | 2,462,055 | ||||||
Credit Suisse Group Funding Guernsey, Ltd. | 539,000 | 579,383 | ||||||
HSBC Holdings PLC | 1,176,000 | 1,206,808 | ||||||
HSBC Holdings PLC | 974,000 | 1,024,906 | ||||||
Lloyds Banking Group PLC | 1,168,000 | 1,230,300 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 1,275,000 | 1,283,864 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 1,135,000 | 1,159,737 |
25 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
FOREIGN CORPORATE BONDS & NOTES (continued) |
| |||||||
Diversified Banking Institutions (continued) |
| |||||||
Mizuho Financial Group, Inc. | $ | 935,000 | $ | 927,134 | ||||
Royal Bank of Scotland Group PLC | 587,000 | 593,349 | ||||||
Royal Bank of Scotland Group PLC | 454,000 | 464,777 | ||||||
UBS AG | 723,000 | 726,118 | ||||||
UBS Group Funding Switzerland AG | 702,000 | 722,357 | ||||||
UBS Group Funding Switzerland AG | 269,000 | 285,342 | ||||||
UBS Group Funding Switzerland AG | 779,000 | 826,696 | ||||||
UniCredit SpA | 1,622,000 | 1,698,833 | ||||||
19,901,735 | ||||||||
Diversified Financial Services — 0.1% |
| |||||||
GE Capital International Funding Co. ULC | 1,144,000 | 1,246,663 | ||||||
Diversified Manufacturing Operations — 0.2% |
| |||||||
Siemens Financieringsmaatschappij NV | 2,165,000 | 2,190,770 | ||||||
Diversified Minerals — 0.1% |
| |||||||
FMG Resources August 2006 Pty, Ltd. | 660,000 | 681,450 | ||||||
Electric - Generation — 0.2% |
| |||||||
Electricite de France SA | 1,442,000 | 1,462,475 | ||||||
Electricite de France SA | 339,000 | 386,801 | ||||||
1,849,276 | ||||||||
Electric - Integrated — 0.6% |
| |||||||
EDP Finance BV | 2,031,000 | 2,057,789 | ||||||
Enel Finance International NV | 2,632,000 | 2,664,642 | ||||||
Enel Finance International NV | 1,718,000 | 1,843,361 | ||||||
6,565,792 | ||||||||
Electronic Connectors — 0.0% |
| |||||||
Tyco Electronics Group SA | 529,000 | 533,412 | ||||||
Security Description | Principal Amount | Value (Note 2) | ||||||
Finance - Leasing Companies — 0.1% |
| |||||||
Aircastle, Ltd. | $ | 670,000 | $ | 712,545 | ||||
Aircastle, Ltd. | 323,000 | 348,032 | ||||||
1,060,577 | ||||||||
Gambling (Non-Hotel) — 0.1% |
| |||||||
International Game Technology PLC | 750,000 | 841,875 | ||||||
Gold Mining — 0.2% |
| |||||||
Goldcorp, Inc. | 501,000 | 565,863 | ||||||
Kinross Gold Corp. | 1,390,000 | 1,390,000 | ||||||
1,955,863 | ||||||||
Insurance - Life/Health — 0.1% |
| |||||||
AIA Group, Ltd. | 495,000 | 543,494 | ||||||
Manulife Financial Corp. | 798,000 | 812,316 | ||||||
1,355,810 | ||||||||
Insurance - Multi-line — 0.1% |
| |||||||
XLIT, Ltd. | 593,000 | 622,275 | ||||||
XLIT, Ltd. | 632,000 | 692,824 | ||||||
1,315,099 | ||||||||
Insurance - Property/Casualty — 0.0% |
| |||||||
Enstar Group, Ltd. | 533,000 | 555,437 | ||||||
Medical - Drugs — 0.2% |
| |||||||
Teva Pharmaceutical Finance Netherlands III BV | 800,000 | 735,795 | ||||||
Valeant Pharmaceuticals International, Inc. | 785,000 | 669,212 | ||||||
Valeant Pharmaceuticals International, Inc. | 636,000 | 674,955 | ||||||
2,079,962 | ||||||||
Metal - Copper — 0.1% |
| |||||||
First Quantum Minerals, Ltd. | 615,000 | 631,912 | ||||||
HudBay Minerals, Inc. | 525,000 | 578,813 | ||||||
1,210,725 | ||||||||
26 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
FOREIGN CORPORATE BONDS & NOTES (continued) |
| |||||||
Metal - Diversified — 0.1% |
| |||||||
Rio Tinto Finance USA, Ltd. | $ | 1,073,000 | $ | 1,143,025 | ||||
Metal - Iron — 0.1% |
| |||||||
Vale Overseas, Ltd. | 1,158,000 | 1,315,488 | ||||||
Oil Companies - Exploration & Production — 0.4% |
| |||||||
Anadarko Finance Co. | 681,000 | 855,450 | ||||||
Canadian Natural Resources, Ltd. | 518,000 | 518,264 | ||||||
CNOOC Curtis Funding No. 1 Pty, Ltd. | 1,200,000 | 1,302,432 | ||||||
MEG Energy Corp. | 1,272,000 | 1,016,010 | ||||||
MEG Energy Corp. | 789,000 | 732,784 | ||||||
4,424,940 | ||||||||
Oil Companies - Integrated — 1.1% |
| |||||||
BP Capital Markets PLC | 1,793,000 | 1,792,913 | ||||||
BP Capital Markets PLC | 1,130,000 | 1,176,362 | ||||||
Petroleos Mexicanos | 85,000 | 79,985 | ||||||
Petroleos Mexicanos | 700,000 | 763,000 | ||||||
Petroleos Mexicanos | 1,454,000 | 1,555,121 | ||||||
Petroleos Mexicanos | 3,360,000 | 3,612,336 | ||||||
Petronas Capital, Ltd. | 500,000 | 529,134 | ||||||
Shell International Finance BV | 888,000 | 888,001 | ||||||
Shell International Finance BV | 902,000 | 911,510 | ||||||
Shell International Finance BV | 1,024,000 | 1,035,787 | ||||||
12,344,149 | ||||||||
Oil - Field Services — 0.1% |
| |||||||
KCA Deutag UK Finance PLC | 679,000 | 672,210 |
Security Description | Principal Amount | Value (Note 2) | ||||||
Oil - Field Services (continued) |
| |||||||
Weatherford International, Ltd. | $ | 350,000 | $ | 357,875 | ||||
1,030,085 | ||||||||
Paper & Related Products — 0.1% |
| |||||||
Cascades, Inc. | 650,000 | 672,750 | ||||||
Cascades, Inc. | 350,000 | 364,000 | ||||||
1,036,750 | ||||||||
Printing - Commercial — 0.1% |
| |||||||
Cimpress NV | 1,240,000 | 1,284,950 | ||||||
Satellite Telecom — 0.1% |
| |||||||
Intelsat Jackson Holdings SA | 800,000 | 668,000 | ||||||
Intelsat Luxembourg SA | 455,000 | 277,777 | ||||||
Telesat Canada/Telesat LLC | 655,000 | 733,600 | ||||||
1,679,377 | ||||||||
Semiconductor Components - Integrated Circuits — 0.0% |
| |||||||
NXP BV/NXP Funding LLC | 395,000 | 422,275 | ||||||
Semiconductor Equipment — 0.1% |
| |||||||
Sensata Technologies BV | 380,000 | 396,150 | ||||||
Sensata Technologies BV | 236,000 | 247,210 | ||||||
643,360 | ||||||||
Soap & Cleaning Preparation — 0.1% |
| |||||||
Reckitt Benckiser Treasury Services PLC | 769,000 | 772,324 | ||||||
Steel - Producers — 0.1% |
| |||||||
ArcelorMittal | 785,000 | 900,787 | ||||||
SupraNational Banks — 0.3% |
| |||||||
European Investment Bank | 2,603,000 | 2,603,172 | ||||||
North American Development Bank | 1,002,000 | 1,008,303 | ||||||
3,611,475 | ||||||||
Telephone - Integrated — 0.4% |
| |||||||
Deutsche Telekom International Finance BV | 1,124,000 | 1,101,600 |
27 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
FOREIGN CORPORATE BONDS & NOTES (continued) |
| |||||||
Telephone - Integrated (continued) |
| |||||||
Telecom Italia Capital SA | $ | 1,327,000 | $ | 1,704,929 | ||||
Telefonica Emisiones SAU | 730,000 | 762,726 | ||||||
Telefonica Emisiones SAU | 1,107,000 | 1,231,672 | ||||||
4,800,927 | ||||||||
Transport - Rail — 0.2% |
| |||||||
Canadian Pacific Railway Co. | 623,000 | 796,510 | ||||||
Kazakhstan Temir Zholy Finance BV | 1,200,000 | 1,338,000 | ||||||
2,134,510 | ||||||||
Total Foreign Corporate Bonds & Notes |
| |||||||
(cost $109,212,527) | 112,375,032 | |||||||
FOREIGN GOVERNMENT OBLIGATIONS — 4.5% |
| |||||||
Banks - Special Purpose — 0.5% |
| |||||||
Brazilian Development Bank | 1,615,000 | 1,619,845 | ||||||
Brazilian Development Bank | 1,300,000 | 1,370,850 | ||||||
Brazilian Development Bank | 1,200,000 | 1,276,644 | ||||||
China Development Bank Corp. | 1,200,000 | 1,202,457 | ||||||
5,469,796 | ||||||||
Central Bank — 0.1% |
| |||||||
Central Bank of Tunisia | 1,200,000 | 1,179,000 | ||||||
Sovereign — 3.9% |
| |||||||
Dominican Republic | 900,000 | 976,500 | ||||||
Dominican Republic | 1,050,000 | 1,257,375 | ||||||
Government of Egypt | 1,150,000 | 1,288,000 | ||||||
Government of Jamaica | 900,000 | 1,107,063 | ||||||
Kingdom of Morocco | 1,200,000 | 1,278,000 | ||||||
Republic of Argentina | 750,000 | 815,250 | ||||||
Republic of Argentina | 1,682,446 | 1,947,431 |
Security Description | Principal Amount | Value (Note 2) | ||||||
Sovereign (continued) |
| |||||||
Republic of Chile | $ | 800,000 | $ | 837,000 | ||||
Republic of Colombia | 1,200,000 | 1,590,000 | ||||||
Republic of Colombia | 600,000 | 768,600 | ||||||
Republic of El Salvador | 1,200,000 | 1,315,500 | ||||||
Republic of Guatemala | 340,000 | 336,600 | ||||||
Republic of Guatemala | 1,000,000 | 1,032,500 | ||||||
Republic of Honduras | 950,000 | 1,022,694 | ||||||
Republic of Hungary | 700,000 | 793,695 | ||||||
Republic of Indonesia | 1,000,000 | 1,155,466 | ||||||
Republic of Iraq | 350,000 | 356,125 | ||||||
Republic of Ivory Coast | 579,000 | 574,727 | ||||||
Republic of Ivory Coast | 600,000 | 598,620 | ||||||
Republic of Lebanon | 1,500,000 | 1,503,627 | ||||||
Republic of Lithuania | 400,000 | 450,442 | ||||||
Republic of Panama | 1,500,000 | 1,610,250 | ||||||
Republic of Peru | 650,000 | 822,250 | ||||||
Republic of Peru | 500,000 | 788,750 | ||||||
Republic of Poland | 1,600,000 | 1,646,800 | ||||||
Republic of Poland | 850,000 | 939,250 | ||||||
Republic of Serbia | 1,200,000 | 1,260,384 | ||||||
Republic of South Africa | 1,400,000 | 1,447,813 |
28 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
FOREIGN GOVERNMENT OBLIGATIONS (continued) |
| |||||||
Sovereign (continued) |
| |||||||
Republic of South Africa | $ | 700,000 | $ | 777,890 | ||||
Republic of Sri Lanka | 1,500,000 | 1,646,550 | ||||||
Republic of the Philippines | 950,000 | 1,011,756 | ||||||
Republic of Turkey | 1,100,000 | 1,213,791 | ||||||
Republic of Turkey | 1,200,000 | 1,454,400 | ||||||
Republic of Turkey | 350,000 | 447,538 | ||||||
Russian Federation | 1,200,000 | 1,312,200 | ||||||
Russian Federation | 1,200,000 | 1,272,492 | ||||||
United Mexican States | 1,012,000 | 1,063,106 | ||||||
United Mexican States | 1,400,000 | 1,470,000 | ||||||
United Mexican States | 890,000 | 942,065 | ||||||
United Mexican States | 1,128,000 | 1,109,952 | ||||||
United Mexican States | 86,000 | 89,870 | ||||||
United Mexican States | 600,000 | 697,200 | ||||||
44,029,522 | ||||||||
Total Foreign Government Obligations |
| |||||||
(cost $49,728,049) | 50,678,318 | |||||||
U.S. GOVERNMENT AGENCIES — 34.1% |
| |||||||
Federal Home Loan Mtg. Corp. — 12.3% |
| |||||||
2.50% due 01/01/2028 | 802,416 | 819,040 | ||||||
2.50% due 04/01/2028 | 1,732,111 | 1,767,467 | ||||||
2.50% due 03/01/2031 | 987,081 | 1,001,434 | ||||||
3.00% due 08/01/2027 | 328,785 | 339,967 | ||||||
3.00% due 10/01/2042 | 1,618,012 | 1,648,615 | ||||||
3.00% due 11/01/2042 | 1,296,865 | 1,318,500 | ||||||
3.00% due 02/01/2043 | 1,867,425 | 1,890,144 | ||||||
3.00% due 04/01/2043 | 1,898,492 | 1,931,939 | ||||||
3.00% due 05/01/2043 | 672,165 | 684,880 | ||||||
3.00% due 08/01/2043 | 6,788,723 | 6,894,918 | ||||||
3.00% due 07/01/2045 | 11,843,728 | 11,983,579 | ||||||
3.00% due 10/01/2045 | 7,020,775 | 7,104,496 | ||||||
3.00% due 12/01/2045 | 2,093,998 | 2,119,130 | ||||||
3.00% due 05/01/2046 | 5,481,105 | 5,546,961 | ||||||
3.00% due 08/01/2046 | 3,727,983 | 3,772,776 | ||||||
3.00% due September 30 TBA | 8,385,000 | 8,478,339 | ||||||
3.50% due 03/01/2042 | 4,631,519 | 4,823,335 |
Security Description | Principal Amount | Value (Note 2) | ||||||
Federal Home Loan Mtg. Corp. (continued) |
| |||||||
3.50% due 04/01/2042 | $ | 1,880,334 | $ | 1,958,199 | ||||
3.50% due 08/01/2042 | 1,632,690 | 1,704,208 | ||||||
3.50% due 09/01/2043 | 1,562,765 | 1,628,441 | ||||||
3.50% due 03/01/2045 | 1,398,140 | 1,449,997 | ||||||
3.50% due 07/01/2045 | 9,487,964 | 9,861,794 | ||||||
3.50% due 08/01/2045 | 2,727,601 | 2,841,897 | ||||||
3.50% due 11/01/2045 | 5,154,919 | 5,346,114 | ||||||
3.50% due 01/01/2046 | 3,148,323 | 3,265,094 | ||||||
4.00% due 03/01/2023 | 268,840 | 278,160 | ||||||
4.00% due 09/01/2040 | 1,659,273 | 1,759,891 | ||||||
4.00% due 07/01/2044 | 120,037 | 126,903 | ||||||
4.00% due 10/01/2045 | 4,443,418 | 4,697,579 | ||||||
4.00% due 11/01/2045 | 10,073,585 | 10,649,788 | ||||||
4.00% due 01/01/2046 | 913,872 | 973,870 | ||||||
4.50% due 11/01/2018 | 7,393 | 7,558 | ||||||
4.50% due 02/01/2019 | 11,464 | 11,719 | ||||||
4.50% due 12/01/2039 | 653,949 | 713,779 | ||||||
4.50% due 07/01/2044 | 1,614,928 | 1,742,845 | ||||||
4.50% due 09/01/2044 | 6,697,619 | 7,194,410 | ||||||
5.00% due 10/01/2033 | 1,854 | 2,028 | ||||||
5.00% due 07/01/2040 | 882,484 | 964,532 | ||||||
5.00% due 11/01/2043 | 3,719,314 | 4,066,918 | ||||||
5.50% due 11/01/2018 | 4,020 | 4,063 | ||||||
5.50% due 11/01/2032 | 10,437 | 11,609 | ||||||
5.50% due 07/01/2034 | 31,714 | 35,324 | ||||||
5.50% due 02/01/2035 | 52,028 | 57,146 | ||||||
5.50% due 07/01/2035 | 1,271 | 1,422 | ||||||
5.50% due 01/01/2036 | 225,225 | 251,649 | ||||||
5.50% due 05/01/2037 | 38,548 | 42,743 | ||||||
6.00% due 07/01/2035 | 86,968 | 97,585 | ||||||
6.00% due 03/01/2040 | 194,407 | 219,770 | ||||||
6.50% due 12/01/2032 | 22,114 | 24,504 | ||||||
6.50% due 02/01/2036 | 15,996 | 18,097 | ||||||
6.50% due 09/01/2036 | 327 | 362 | ||||||
6.50% due 05/01/2037 | 56,696 | 64,954 | ||||||
Federal Home Loan Mtg. Corp. FRS | 278,973 | 288,499 | ||||||
Federal Home Loan Mtg. Corp. FRS | 1,932,338 | 2,041,958 | ||||||
Federal Home Loan Mtg. Corp. REMIC FRS | 1,324,635 | 185,343 | ||||||
Federal Home Loan Mtg. Corp. Structured Agency Credit Risk FRS | 2,693,919 | 2,716,418 | ||||||
Federal Home Loan Mtg. Corp. Structured Agency Credit Risk FRS | 1,000,000 | 1,023,286 | ||||||
Federal Home Loan Mtg. Corp. Structured Agency Credit Risk FRS | 1,738,652 | 1,796,404 | ||||||
Federal Home Loan Mtg. Corp. Structured Agency Credit Risk FRS | 2,900,000 | 2,988,774 |
29 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
U.S. GOVERNMENT AGENCIES (continued) |
| |||||||
Federal Home Loan Mtg. Corp. (continued) |
| |||||||
Federal Home Loan Mtg. Corp. Structured Agency Credit Risk FRS | $ | 12,653 | $ | 12,781 | ||||
Federal Home Loan Mtg. Corp. Structured Agency Credit Risk FRS | 34,370 | 34,539 | ||||||
Federal Home Loan Mtg. Corp. Structured Agency Credit Risk FRS | 849,369 | 870,733 | ||||||
Federal Home Loan Mtg. Corp. Structured Agency Credit Risk FRS | 1,314,000 | 1,359,464 | ||||||
137,518,671 | ||||||||
Federal National Mtg. Assoc. — 18.9% |
| |||||||
2.50% due 09/01/2027 | 521,397 | 532,123 | ||||||
2.50% due 02/01/2028 | 1,746,041 | 1,781,988 | ||||||
2.50% due 04/01/2028 | 441,489 | 450,425 | ||||||
2.50% due 01/01/2032 | 2,935,312 | 2,979,287 | ||||||
3.00% due 04/01/2027 | 1,259,611 | 1,303,973 | ||||||
3.00% due 10/01/2027 | 206,470 | 213,451 | ||||||
3.00% due 11/01/2027 | 1,404,421 | 1,453,722 | ||||||
3.00% due 01/01/2028 | 1,677,458 | 1,736,316 | ||||||
3.00% due 10/01/2030 | 3,281,738 | 3,394,674 | ||||||
3.00% due 07/01/2032 | 7,934,924 | 8,197,603 | ||||||
3.00% due 10/01/2032 | 11,037,000 | 11,402,370 | ||||||
3.00% due 03/01/2042 | 3,178,236 | 3,231,890 | ||||||
3.00% due 12/01/2042 | 3,065,296 | 3,118,046 | ||||||
3.00% due 05/01/2043 | 3,565,827 | 3,625,748 | ||||||
3.00% due 06/01/2045 | 1,736,466 | 1,766,281 | ||||||
3.00% due 05/01/2046 | 4,171,789 | 4,222,240 | ||||||
3.00% due 09/01/2046 | 1,870,035 | 1,892,650 | ||||||
3.50% due 08/01/2026 | 1,396,315 | 1,457,708 | ||||||
3.50% due 09/01/2026 | 1,251,791 | 1,309,217 | ||||||
3.50% due 08/01/2027 | 153,438 | 160,184 | ||||||
3.50% due 10/01/2028 | 2,878,000 | 3,007,639 | ||||||
3.50% due 12/01/2041 | 467,022 | 487,316 | ||||||
3.50% due 03/01/2042 | 663,455 | 690,490 | ||||||
3.50% due 08/01/2042 | 4,280,164 | 4,457,744 | ||||||
3.50% due 09/01/2042 | 616,826 | 641,265 | ||||||
3.50% due 02/01/2043 | 3,117,280 | 3,263,410 | ||||||
3.50% due 04/01/2045 | 668,487 | 695,060 | ||||||
3.50% due 07/01/2045 | 2,111,536 | 2,189,274 | ||||||
3.50% due 08/01/2045 | 2,711,286 | 2,818,975 | ||||||
3.50% due 09/01/2045 | 609,472 | 631,910 | ||||||
3.50% due 10/01/2045 | 3,406,630 | 3,546,616 | ||||||
3.50% due 11/01/2045 | 5,500,962 | 5,703,484 | ||||||
3.50% due 12/01/2045 | 14,411,706 | 14,942,283 | ||||||
3.50% due 02/01/2046 | 2,489,933 | 2,581,601 | ||||||
3.50% due 03/01/2046 | 11,567,544 | 11,993,411 | ||||||
3.50% due 07/01/2046 | 7,713,550 | 8,031,828 | ||||||
3.50% due September 15 TBA | 1,968,000 | 2,054,331 | ||||||
3.50% due September 30 TBA | 5,000,000 | 5,180,664 | ||||||
4.00% due 11/01/2025 | 112,200 | 118,002 | ||||||
4.00% due 09/01/2040 | 132,904 | 141,076 | ||||||
4.00% due 10/01/2040 | 267,719 | 284,069 | ||||||
4.00% due 12/01/2040 | 2,289,197 | 2,429,568 |
Security Description | Principal Amount | Value (Note 2) | ||||||
Federal National Mtg. Assoc. (continued) |
| |||||||
4.00% due 10/01/2041 | $ | 1,370,409 | $ | 1,453,998 | ||||
4.00% due 11/01/2041 | 1,481,309 | 1,571,637 | ||||||
4.00% due 01/01/2043 | 2,568,437 | 2,748,840 | ||||||
4.00% due 10/01/2043 | 3,326,284 | 3,550,869 | ||||||
4.00% due 10/01/2044 | 4,540,552 | 4,801,720 | ||||||
4.00% due 02/01/2045 | 5,009,797 | 5,341,335 | ||||||
4.00% due 02/01/2046 | 3,716,363 | 3,927,347 | ||||||
4.00% due 06/01/2046 | 335,280 | 354,334 | ||||||
4.00% due 01/01/2047 | 5,641,562 | 5,962,995 | ||||||
4.00% due September 30 TBA | 2,500,000 | 2,641,601 | ||||||
4.50% due 06/01/2018 | 787 | 806 | ||||||
4.50% due 10/01/2024 | 485,065 | 511,391 | ||||||
4.50% due 03/01/2025 | 696,458 | 734,391 | ||||||
4.50% due 06/01/2039 | 186,157 | 202,013 | ||||||
4.50% due 01/01/2040 | 443,836 | 480,701 | ||||||
4.50% due 02/01/2040 | 1,159,683 | 1,273,620 | ||||||
4.50% due 05/01/2040 | 381,716 | 417,970 | ||||||
4.50% due 11/01/2040 | 367,600 | 397,918 | ||||||
4.50% due 12/01/2040 | 367,930 | 399,024 | ||||||
4.50% due 05/01/2041 | 779,780 | 845,155 | ||||||
4.50% due 03/01/2042 | 3,834,643 | 4,151,863 | ||||||
4.50% due 08/01/2045 | 10,155,000 | 11,175,635 | ||||||
4.50% due 04/01/2047 | 2,735,203 | 2,943,099 | ||||||
5.00% due 09/01/2018 | 779 | 797 | ||||||
5.00% due 10/01/2018 | 594 | 608 | ||||||
5.00% due 03/01/2020 | 2,462 | 2,535 | ||||||
5.00% due 06/01/2022 | 61,227 | 62,875 | ||||||
5.00% due 10/01/2024 | 260,688 | 269,313 | ||||||
5.00% due 09/01/2033 | 706,211 | 779,247 | ||||||
5.00% due 04/01/2040 | 429,330 | 468,755 | ||||||
5.00% due 05/01/2040 | 781,186 | 855,209 | ||||||
5.00% due 06/01/2040 | 3,501,043 | 3,828,264 | ||||||
5.00% due 07/01/2040 | 810,183 | 885,747 | ||||||
5.00% due 02/01/2045 | 2,097,250 | 2,321,824 | ||||||
5.50% due 12/01/2029 | 186,207 | 205,746 | ||||||
5.50% due 12/01/2033 | 33,992 | 37,942 | ||||||
5.50% due 07/01/2037 | 39,632 | 43,946 | ||||||
5.50% due 08/01/2037 | 1,720,494 | 1,919,877 | ||||||
5.50% due 06/01/2038 | 198,359 | 221,150 | ||||||
5.50% due 09/01/2039 | 661,606 | 738,296 | ||||||
6.00% due 08/01/2034 | 32,712 | 37,318 | ||||||
6.00% due 11/01/2035 | 60,872 | 69,297 | ||||||
6.00% due 06/01/2036 | 75,401 | 85,881 | ||||||
6.00% due 12/01/2036 | 130,351 | 147,982 | ||||||
6.00% due 07/01/2038 | 619,578 | 702,444 | ||||||
6.00% due 09/01/2038 | 340,261 | 386,330 | ||||||
6.00% due 11/01/2038 | 202,087 | 228,661 | ||||||
Federal National Mtg. Assoc. FRS | 1,548,868 | 1,603,289 | ||||||
Federal National Mtg. Assoc. FRS | 1,884,041 | 1,984,645 | ||||||
Federal National Mtg. Assoc. FRS | 474,169 | 498,025 | ||||||
Federal National Mtg. Assoc. FRS | 713,102 | 751,409 | ||||||
Federal National Mtg. Assoc. FRS | 414,598 | 433,565 | ||||||
Federal National Mtg. Assoc. FRS | 883,284 | 926,331 |
30 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
U.S. GOVERNMENT AGENCIES (continued) |
| |||||||
Federal National Mtg. Assoc. (continued) |
| |||||||
Federal National Mtg. Assoc. FRS | $ | 1,799,646 | $ | 1,887,537 | ||||
Federal National Mtg. Assoc. FRS | 1,210,404 | 1,273,233 | ||||||
Federal National Mtg. Assoc. FRS | 1,051,280 | 1,118,607 | ||||||
Fannie Mae Connecticut Avenue Securities FRS | 525,894 | 531,567 | ||||||
Fannie Mae Connecticut Avenue Securities FRS | 28,835 | 29,124 | ||||||
211,345,550 | ||||||||
Government National Mtg. Assoc. — 2.8% |
| |||||||
3.00% due 02/20/2045 | 2,406,432 | 2,458,584 | ||||||
3.00% due 05/20/2045 | 1,872,151 | 1,912,687 | ||||||
3.00% due 07/20/2045 | 459,250 | 469,194 | ||||||
3.00% due 11/20/2045 | 3,894,380 | 3,978,702 | ||||||
3.00% due 12/20/2045 | 3,121,306 | 3,188,889 | ||||||
3.00% due September 30 TBA | 8,000,000 | 8,165,938 | ||||||
3.50% due 03/20/2045 | 1,702,638 | 1,778,109 | ||||||
3.50% due 07/20/2045 | 820,749 | 857,131 | ||||||
4.00% due 03/20/2044 | 1,045,028 | 1,109,527 | ||||||
4.00% due 07/20/2045 | 3,002,025 | 3,184,814 | ||||||
4.00% due 10/20/2045 | 1,100,094 | 1,165,228 | ||||||
4.50% due 05/15/2039 | 631,969 | 691,066 | ||||||
5.00% due 05/15/2034 | 241,090 | 264,828 | ||||||
5.00% due 01/15/2040 | 579,565 | 645,411 | ||||||
5.50% due 12/15/2039 | 721,068 | 809,510 | ||||||
6.00% due 10/15/2039 | 471,134 | 532,638 | ||||||
7.00% due 09/15/2028 | 3,706 | 3,781 | ||||||
31,216,037 | ||||||||
Tennessee Valley Authority — 0.1% |
| |||||||
1.75% due 10/15/2018 | 565,000 | 567,769 | ||||||
Total U.S. Government Agencies | ||||||||
(cost $380,740,463) | 380,648,027 | |||||||
U.S. GOVERNMENT TREASURIES — 7.6% |
| |||||||
United States Treasury Bonds — 3.7% |
| |||||||
0.13% due 04/15/2018 TIPS(7) | 579,629 | 578,278 | ||||||
2.25% due 08/15/2027 | 2,500,000 | 2,528,320 | ||||||
2.50% due 02/15/2045 | 1,189,000 | 1,138,514 | ||||||
2.50% due 02/15/2046 | 1,783,000 | 1,702,347 | ||||||
2.50% due 05/15/2046 | 1,426,000 | 1,360,660 | ||||||
2.88% due 11/15/2046 | 1,630,000 | 1,678,645 | ||||||
3.00% due 05/15/2045 | 595,000 | 628,538 | ||||||
3.00% due 11/15/2045 | 3,499,000 | 3,693,632 | ||||||
3.00% due 02/15/2047 | 2,832,000 | 2,990,304 | ||||||
3.00% due 05/15/2047 | 13,750,000 | 14,525,586 | ||||||
3.13% due 11/15/2041 | 815,000 | 884,148 | ||||||
3.13% due 02/15/2042 | 1,908,000 | 2,069,286 | ||||||
3.13% due 08/15/2044 | 310,000 | 335,539 | ||||||
3.63% due 08/15/2043 | 476,000 | 559,969 | ||||||
3.63% due 02/15/2044 | 523,000 | 616,241 | ||||||
3.75% due 08/15/2041 | 37,000 | 44,341 | ||||||
3.88% due 08/15/2040 | 140,000 | 170,505 | ||||||
4.25% due 11/15/2040 | 713,000 | 916,316 | ||||||
4.38% due 05/15/2041 | 452,000 | 592,138 |
Security Description | Shares/ Principal Amount | Value (Note 2) | ||||||
United States Treasury Bonds (continued) |
| |||||||
4.50% due 02/15/2036# | $ | 2,986,000 | $ | 3,929,972 | ||||
4.63% due 02/15/2040 | 68,000 | 91,670 | ||||||
5.25% due 11/15/2028 | 375,000 | 489,976 | ||||||
40,946,647 | ||||||||
United States Treasury Notes — 3.9% |
| |||||||
0.75% due 01/31/2018 | 1,173,000 | 1,171,212 | ||||||
0.88% due 01/31/2018# | 1,295,000 | 1,293,638 | ||||||
1.00% due 05/31/2018 | 3,279,000 | 3,273,364 | ||||||
1.13% due 07/31/2021 | 2,819,000 | 2,769,117 | ||||||
1.25% due 11/30/2018 | 3,865,000 | 3,863,641 | ||||||
1.25% due 01/31/2020 | 1,000,000 | 997,227 | ||||||
1.38% due 06/30/2018 | 951,000 | 952,040 | ||||||
1.38% due 07/31/2018 | 1,141,000 | 1,142,159 | ||||||
1.38% due 12/31/2018 | 476,000 | 476,539 | ||||||
1.38% due 09/30/2020 | 1,984,000 | 1,978,807 | ||||||
1.50% due 08/31/2018 | 1,664,000 | 1,667,835 | ||||||
1.63% due 12/31/2019 | 584,000 | 587,468 | ||||||
1.63% due 08/31/2022 | 5,000,000 | 4,980,080 | ||||||
1.75% due 12/31/2020 | 480,000 | 483,750 | ||||||
1.75% due 09/30/2022 | 6,148,000 | 6,151,362 | ||||||
1.88% due 02/28/2022 | 2,541,000 | 2,563,829 | ||||||
2.00% due 11/15/2021 | 238,000 | 241,682 | ||||||
2.00% due 07/31/2022 | 492,000 | 498,438 | ||||||
2.00% due 11/15/2026 | 6,000,000 | 5,944,687 | ||||||
2.13% due 12/31/2021 | 473,000 | 482,275 | ||||||
2.13% due 07/31/2024 | 440,000 | 445,208 | ||||||
2.38% due 05/31/2018 | 1,338,000 | 1,349,185 | ||||||
3.38% due 11/15/2019 | 262,000 | 273,514 | ||||||
44,165,335 | ||||||||
Total U.S. Government Treasuries | ||||||||
(cost $83,782,787) |
| 85,111,982 | ||||||
COMMON STOCKS — 0.0% |
| |||||||
Television — 0.0% |
| |||||||
ION Media Networks, Inc.†(3)(4) | 79 | 58,656 | ||||||
PREFERRED SECURITIES — 0.1% |
| |||||||
Electric-Distribution — 0.0% |
| |||||||
Entergy Louisiana LLC | 22,875 | 570,274 | ||||||
Sovereign Agency — 0.0% |
| |||||||
Federal Home Loan Mtg. Corp. | 6,900 | 43,470 | ||||||
Telecom Services — 0.1% |
| |||||||
Qwest Corp. | 27,125 | 681,922 | ||||||
Total Preferred Securities | ||||||||
(cost $1,356,414) | 1,295,666 | |||||||
PREFERRED SECURITIES/CAPITAL SECURITIES — 2.1% |
| |||||||
Banks - Commercial — 0.1% |
| |||||||
Rabobank Nederland | 1,033,000 | 1,185,368 | ||||||
Standard Chartered PLC | 354,000 | 383,311 | ||||||
1,568,679 | ||||||||
Banks - Super Regional — 0.2% |
| |||||||
SunTrust Banks, Inc. | 1,949,000 | 1,980,061 |
31 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
PREFERRED SECURITIES/CAPITAL SECURITIES (continued) |
| |||||||
Banks - Super Regional (continued) |
| |||||||
Wells Fargo Capital X | $ | 413,000 | $ | 467,723 | ||||
2,447,784 | ||||||||
Diversified Banking Institutions — 0.5% |
| |||||||
BAC Capital Trust XIII FRS | 862,000 | 765,025 | ||||||
HSBC Holdings PLC | 1,763,000 | 1,853,795 | ||||||
JPMorgan Chase & Co. | 1,759,000 | 1,932,701 | ||||||
Royal Bank of Scotland Group PLC | 425,000 | 470,552 | ||||||
Societe Generale SA | 993,000 | 1,113,401 | ||||||
6,135,474 | ||||||||
Electric - Integrated — 0.2% |
| |||||||
Dominion Resources, Inc. | 754,000 | 812,435 | ||||||
Southern Co. | 892,000 | 944,745 | ||||||
1,757,180 | ||||||||
Finance - Investment Banker/Broker — 0.0% |
| |||||||
Lehman Brothers Holdings Capital Trust VII | 148,000 | 15 | ||||||
Finance - Other Services — 0.1% |
| |||||||
National Rural Utilities Cooperative Finance Corp. | 817,000 | 848,649 | ||||||
Food - Dairy Products — 0.1% |
| |||||||
Land O’Lakes Capital Trust I | 644,000 | 734,160 | ||||||
Insurance - Life/Health — 0.1% |
| |||||||
Prudential Financial, Inc. | 407,000 | 436,508 | ||||||
Prudential Financial, Inc. | 921,000 | 996,982 | ||||||
1,433,490 | ||||||||
Insurance - Multi-line — 0.1% |
| |||||||
MetLife, Inc. | 1,052,000 | 1,212,430 | ||||||
Pipelines — 0.5% |
| |||||||
Enbridge, Inc. | 2,790,000 | 2,800,463 | ||||||
Enterprise Products Operating LLC | 842,000 | 842,589 | ||||||
Enterprise Products Operating LLC | 740,000 | 740,555 | ||||||
TransCanada Trust | 767,000 | 790,163 | ||||||
TransCanada Trust | 490,000 | 519,400 | ||||||
5,693,170 | ||||||||
Security Description | Shares/ Principal Amount | Value (Note 2) | ||||||
Tools - Hand Held — 0.2% |
| |||||||
Stanley Black & Decker, Inc. | $ | 1,817,000 | $ | 1,898,765 | ||||
Total Preferred Securities/Capital Securities | ||||||||
(cost $22,267,271) | 23,729,796 | |||||||
Total Long-Term Investment Securities | ||||||||
(cost $1,071,046,551) | 1,088,643,306 | |||||||
SHORT-TERM INVESTMENT SECURITIES — 8.2% |
| |||||||
Registered Investment Companies — 2.9% |
| |||||||
State Street Navigator Securities Lending Government Money Market Portfolio | 31,760,071 | 31,760,071 | ||||||
Time Deposits — 5.3% |
| |||||||
Euro Time Deposit with State Street Bank and Trust Co. | 59,293,000 | 59,293,000 | ||||||
Total Short-Term Investment Securities | ||||||||
(cost $91,053,071) | 91,053,071 | |||||||
TOTAL INVESTMENTS | ||||||||
(cost $1,162,099,622)(11) | 105.7 | % | 1,179,696,377 | |||||
Liabilities in excess of other assets | (5.7 | ) | (63,760,185 | ) | ||||
NET ASSETS | 100.0 | % | $ | 1,115,936,192 | ||||
* | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in transactions exempt from registration, normally to qualified institutional buyers. The Fund has no right to demand registration of these securities. At August 31, 2017, the aggregate value of these securities was $180,279,788 representing 16.2% of net assets. Unless otherwise indicated, these securities are not considered to be illiquid. |
# | The security or a portion thereof is out on loan (see Note 2). |
† | Non-income producing security |
(1) | Commercial Mortgage Backed Security |
(2) | Collateralized Mortgage Obligation |
(3) | Security classified as Level 3 (see Note 2). |
(4) | Illiquid security. At August 31, 2017, the aggregate value of these securities was $58,786 representing 0.0% of net assets. |
(5) | Interest Only |
(6) | Inverse Floating Rate Security that pays interest that varies inversely to changes in the market interest rates. The interest rate shown is the current interest rate at August 31, 2017. |
(7) | Principal amount of security is adjusted for inflation. |
(8) | Perpetual maturity — maturity date reflects the next call date. |
(9) | At August 31, 2017, the Fund had loaned securities with a total value of $44,074,943. This was secured by collateral of $31,760,071, which was received in cash and subsequently invested in short-term investments currently valued at $31,760,071 as reported in the portfolio of investments. Additional collateral of $13,255,075 was received in the form of short-term pooled securities, which the Fund cannot sell or repledge and accordingly are not reflected in the Fund’s other assets and liabilities. |
The components of the fixed income pooled securities referenced above are as follows:
Securities | Coupon Range | Maturity Date Range | Value as of August 31, 2017 | |||||
Federal Home Loan Mtg. Corp. | 1.50% to 30.38% | 05/15/2018 to 09/01/2047 | $ | 2,545,659 | ||||
Federal National Mtg. Assoc. | zero coupon to 23.66% | 11/01/2017 to 09/01/2047 | 1,812,699 | |||||
Government National Mtg. Assoc. | 1.58% to 11.94% | 12/16/2024 to 12/20/2060 | 495,796 | |||||
United States Treasury Bills | 0.00% | 01/04/2018 to 01/04/2018 | 81,167 | |||||
United States Treasury Notes/Bonds | 0.13% to 3.75% | 09/15/2018 to 05/15/2046 | 8,319,754 |
32 |
Table of Contents
VALIC Company II Core Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
(10) | The rate shown is the 7-day yield as of August 31, 2017. |
(11) | See Note 5 for cost of investments on a tax basis. |
(12) | Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above. |
REMIC—Real Estate Mortgage Investment Conduit
TBA—Securities purchased on a forward commitment basis with an approximate principal amount and no definite maturity date. The actual principal and maturity date will be determined upon settlement date.
TIPS—Treasury Inflation Protected Securities
ULC—Unlimited Liability Corp.
FRS—Floating Rate Security
VRS—Variable Rate Security
The rates shown on FRS and VRS are the current interest rates at August 31, 2017 and unless noted otherwise, the dates are the original maturity dates.
Index Legend
1 ML—1 Month USD LIBOR
3 ML—3 Month USD LIBOR
6 ML—6 Month USD LIBOR
12 ML—12 Month USD LIBOR
1 Yr USTYCR—1 Year US Treasury Yield Curve Rate
5 Yr USR—5 Year USD Swap Rate
5 Yr UIRS—5 Year USD Interest Rate Swap
The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2017 (see Note 2):
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at Value:* | ||||||||||||||||
Asset Backed Securities | $ | — | $ | 40,669,311 | $ | — | $ | 40,669,311 | ||||||||
U.S. Corporate Bonds & Notes: | ||||||||||||||||
Airlines | — | 1,720,090 | 45,277 | 1,765,367 | ||||||||||||
Finance - Investment Banker/Broker | — | 1,800,858 | 41 | 1,800,899 | ||||||||||||
Gambling (Non-Hotel) | — | 1,377,813 | 74 | 1,377,887 | ||||||||||||
Other Industries | — | 389,132,365 | — | 389,132,365 | ||||||||||||
Foreign Corporate Bonds & Notes | — | 112,375,032 | — | 112,375,032 | ||||||||||||
Foreign Government Obligations | — | 50,678,318 | — | 50,678,318 | ||||||||||||
U.S. Government Agencies | — | 380,648,027 | — | 380,648,027 | ||||||||||||
U.S. Government Treasuries | — | 85,111,982 | — | 85,111,982 | ||||||||||||
Common Stocks | — | — | 58,656 | 58,656 | ||||||||||||
Preferred Securities | 1,295,666 | — | — | 1,295,666 | ||||||||||||
Preferred Securities/Capital Securities | ||||||||||||||||
Finance - Investment Banker/Broker | — | — | 15 | 15 | ||||||||||||
Other Industries | — | 23,729,781 | — | 23,729,781 | ||||||||||||
Short-Term Investment Securities: | ||||||||||||||||
Registered Investment Companies | 31,760,071 | — | — | 31,760,071 | ||||||||||||
Time Deposits | — | 59,293,000 | — | 59,293,000 | ||||||||||||
Total Investments at Value | $ | 33,055,737 | $ | 1,146,536,577 | $ | 104,063 | $ | 1,179,696,377 | ||||||||
* | For a detailed presentation of investments, please refer to the Portfolio of Investments. |
The Fund’s policy is to recognize transfers between Levels as of the end of the reporting period. There were no transfers between Levels during the reporting period.
At the beginning and end of the reporting period, Level 3 investments were not considered a material portion of the Fund.
See Notes to Financial Statements
33 |
Table of Contents
VALIC Company II Government Money Market II Fund†
PORTFOLIO PROFILE — August 31, 2017 (unaudited)
Industry Allocation*
U.S. Government Agencies | 58.7 | % | ||
U.S. Government Treasuries | 38.4 | |||
Repurchase Agreements | 3.1 | |||
100.2 | % | |||
Credit Quality@#
A-1+ | 96.9 | % | ||
A-1 | 3.1 | |||
100.0 | % | |||
* | Calculated as a percentage of net assets |
@ | Source: Standard & Poor’s |
# | Calculated as a percentage of total debt issues |
† | See Note 1 |
Weighted Average days to Maturity — 25.9 days
34 |
Table of Contents
VALIC Company II Government Money Market II Fund†
PORTFOLIO OF INVESTMENTS — August 31, 2017
Security Description | Principal Amount | Value (Note 2) | ||||||
SHORT-TERM INVESTMENT SECURITIES — 97.1% |
| |||||||
U.S. Government Agencies — 58.7% |
| |||||||
Federal Farm Credit Bank | $ | 955,000 | $ | 954,876 | ||||
Federal Farm Credit Bank FRS | 5,750,000 | 5,752,258 | ||||||
Federal Farm Credit Bank FRS | 1,200,000 | 1,200,094 | ||||||
Federal Home Loan Bank | 2,700,000 | 2,699,666 | ||||||
0.93% due 09/20/2017 | 2,250,000 | 2,248,911 | ||||||
1.01% due 09/18/2017 | 5,000,000 | 4,997,639 | ||||||
1.02% due 09/18/2017 | 6,000,000 | 5,997,150 | ||||||
1.02% due 09/22/2017 | 10,000,000 | 9,994,108 | ||||||
1.03% due 10/16/2017 | 3,000,000 | 2,996,213 | ||||||
1.04% due 09/20/2017 | 10,000,000 | 9,994,580 | ||||||
1.05% due 10/11/2017 | 2,600,000 | 2,597,027 | ||||||
1.07% due 11/10/2017 | 7,000,000 | 6,985,708 | ||||||
Federal Home Loan Bank FRS | 7,000,000 | 7,000,000 | ||||||
Federal Home Loan Bank FRS | 755,000 | 755,231 | ||||||
Federal Home Loan Bank FRS | 1,500,000 | 1,500,408 | ||||||
Federal National Mtg. Assoc. | 11,000,000 | 10,996,627 | ||||||
Federal National Mtg. Assoc. FRS | 700,000 | 700,033 | ||||||
Federal National Mtg. Assoc. FRS | 600,000 | 600,041 | ||||||
Total U.S. Government Agencies |
| |||||||
(amortized cost $77,970,570) | 77,970,570 | |||||||
Security Description | Principal Amount | Value (Note 2) | ||||||
U.S. Government Treasuries — 38.4% |
| |||||||
United States Treasury Bills | $ | 10,000,000 | $ | 9,992,912 | ||||
0.98% due 09/21/2017 | �� | 10,000,000 | 9,994,556 | |||||
1.05% due 10/05/2017 | 6,000,000 | 5,994,078 | ||||||
1.05% due 10/19/2017 | 8,000,000 | 7,988,800 | ||||||
1.06% due 10/05/2017 | 4,600,000 | 4,595,386 | ||||||
1.14% due 10/19/2017 | 7,500,000 | 7,488,650 | ||||||
United States Treasury Notes | 5,000,000 | 5,002,909 | ||||||
Total U.S. Government Treasuries | ||||||||
(amortized cost $51,057,291) | 51,057,291 | |||||||
Total Short-Term Investment Securities — 97.1% | ||||||||
(amortized cost $129,027,861) | 129,027,861 | |||||||
REPURCHASE AGREEMENTS — 3.1% | ||||||||
Agreement with Fixed Income Clearing Corp., bearing interest at 0.12%, dated 08/31/2017, to be repurchased 09/01/2017 in the amount of $4,116,014 and collateralized by $3,480,000 of United States Treasury Bonds, bearing interest at 3.75%, due 11/15/2043 and having an approximate value of $4,203,134 (cost $4,116,000) | 4,116,000 | 4,116,000 | ||||||
TOTAL INVESTMENTS | ||||||||
(amortized cost $133,143,861)(1) | 100.2 | % | 133,143,861 | |||||
Liabilities in excess of other assets | (0.2 | ) | (199,713 | ) | ||||
NET ASSETS | 100.0 | % | $ | 132,944,148 | ||||
† | See Note 1 |
(1) | See Note 5 for cost of investments on a tax basis. |
FRS—Floating Rate Security
The rates shown on FRS are the current interest rates at August 31, 2017 and unless noted otherwise, the dates shown are the original maturity dates.
Index Legend
1 ML—1 Month USD LIBOR
USFRBPLR—US Federal Reserve Bank Prime Loan Rate
The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2017 (see Note 2):
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at Value:* | ||||||||||||||||
Short-Term Investment Securities | $ | — | $ | 129,027,861 | $ | — | $ | 129,027,861 | ||||||||
Repurchase Agreements | — | 4,116,000 | — | 4,116,000 | ||||||||||||
Total Investments at Value | $ | — | $ | 133,143,861 | $ | — | $ | 133,143,861 | ||||||||
* | For a detailed presentation of investments, please refer to the Portfolio of Investments. |
The Fund’s policy is to recognize transfers between Levels as of the end of the reporting period. There were no transfers between Levels during the reporting period.
See Notes to Financial Statesments
35 |
Table of Contents
VALIC Company II High Yield Bond Fund
PORTFOLIO PROFILE — August 31, 2017 (unaudited)
Industry Allocation*
Registered Investment Companies | 8.5 | % | ||
Oil Companies — Exploration & Production | 7.3 | |||
Cable/Satellite TV | 6.7 | |||
Medical — Drugs | 4.3 | |||
Repurchase Agreements | 4.1 | |||
Medical — Hospitals | 4.1 | |||
Rental Auto/Equipment | 3.9 | |||
Television | 3.5 | |||
Finance — Consumer Loans | 3.2 | |||
Cellular Telecom | 2.8 | |||
Gambling (Non-Hotel) | 2.5 | |||
Building — Residential/Commercial | 2.5 | |||
Containers — Paper/Plastic | 2.2 | |||
Security Services | 2.1 | |||
Diversified Banking Institutions | 2.0 | |||
Pipelines | 2.0 | |||
Data Processing/Management | 1.7 | |||
Chemicals — Specialty | 1.6 | |||
Diagnostic Kits | 1.5 | |||
Banks — Commercial | 1.5 | |||
Retail — Restaurants | 1.5 | |||
Casino Hotels | 1.4 | |||
Steel — Producers | 1.3 | |||
Containers — Metal/Glass | 1.2 | |||
Metal — Aluminum | 1.2 | |||
Food — Flour & Grain | 1.1 | |||
Finance — Other Services | 1.1 | |||
Coal | 1.1 | |||
Diversified Manufacturing Operations | 1.0 | |||
Broadcast Services/Program | 1.0 | |||
Electronic Components — Semiconductors | 1.0 | |||
Medical Labs & Testing Services | 1.0 | |||
Oil & Gas Drilling | 1.0 | |||
Commercial Services | 0.9 | |||
Enterprise Software/Service | 0.9 | |||
Semiconductor Equipment | 0.9 | |||
Diversified Minerals | 0.9 | |||
Housewares | 0.8 | |||
Internet Content — Entertainment | 0.8 | |||
Electric — Integrated | 0.8 | |||
Independent Power Producers | 0.8 | |||
Real Estate Investment Trusts | 0.8 | |||
Internet Connectivity Services | 0.7 | |||
Disposable Medical Products | 0.7 | |||
Building Products — Cement | 0.7 | |||
Food — Canned | 0.7 | |||
Machinery — Material Handling | 0.7 | |||
Cosmetics & Toiletries | 0.7 | |||
Insurance Brokers | 0.6 | |||
Racetracks | 0.6 | |||
Machinery — Construction & Mining | 0.6 | |||
Computer Services | 0.6 | |||
Metal Processors & Fabrication | 0.6 | |||
Building & Construction Products — Misc. | 0.6 | |||
Insurance — Multi-line | 0.6 | |||
Retail — Leisure Products | 0.5 | |||
Metal — Copper | 0.5 | |||
Soap & Cleaning Preparation | 0.5 | |||
Retail — Propane Distribution | 0.5 | |||
Oil — Field Services | 0.4 | |||
Financial Guarantee Insurance | 0.4 | |||
Casino Services | 0.4 | |||
Transport — Equipment & Leasing | 0.4 | |||
Computer Software | 0.4 | |||
Medical Information Systems | 0.4 | |||
Hazardous Waste Disposal | 0.3 | |||
Gold Mining | 0.3 | |||
Wire & Cable Products | 0.3 | |||
Electric — Generation | 0.3 |
Finance — Credit Card | 0.3 | |||
E-Commerce/Services | 0.3 | |||
Office Automation & Equipment | 0.3 | |||
Telephone — Integrated | 0.2 | |||
Retail — Office Supplies | 0.2 | |||
Machinery — General Industrial | 0.2 | |||
Commercial Services — Finance | 0.2 | |||
Steel — Specialty | 0.2 | |||
Multimedia | 0.2 | |||
Insurance — Property/Casualty | 0.2 | |||
Consumer Products — Misc. | 0.2 | |||
E-Commerce/Products | 0.1 | |||
Medical — Biomedical/Gene | 0.1 | |||
Applications Software | 0.1 | |||
Wireless Equipment | 0.1 | |||
Medical — HMO | 0.1 | |||
Music | 0.1 | |||
Retail — Consumer Discretionary | 0.1 | |||
Chemicals — Diversified | 0.1 | |||
Water Treatment Systems | 0.1 | |||
107.9 | % | |||
Credit Quality†#
Ba | 20.4 | % | ||
B | 53.2 | |||
Caa | 23.6 | |||
Not Rated@ | 2.8 | |||
100.0 | % | |||
* | Calculated as a percentage of net assets |
† | Source: Moody’s |
# | Calculated as a percentage of total debt issues, excluding short-term securities. |
@ | Represents debt issues that either have no rating, or the rating is unavailable from the data source. |
36 |
Table of Contents
VALIC Company II High Yield Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017
Security Description | Principal Amount(13) | Value (Note 2) | ||||||
CONVERTIBLE BONDS & NOTES — 2.0% |
| |||||||
Applications Software — 0.1% |
| |||||||
ServiceNow, Inc. | $ | 674,000 | $ | 719,495 | ||||
Cable/Satellite TV — 0.3% |
| |||||||
DISH Network Corp. | 1,320,000 | 1,529,550 | ||||||
Commercial Services - Finance — 0.2% |
| |||||||
Cardtronics, Inc. | 1,360,000 | 1,255,450 | ||||||
E-Commerce/Services — 0.3% |
| |||||||
Priceline Group, Inc. | 1,490,000 | 1,697,669 | ||||||
Electronic Components - Semiconductors — 0.5% |
| |||||||
Microchip Technology, Inc. | 1,068,000 | 1,270,920 | ||||||
Microchip Technology, Inc. | 1,113,000 | 1,314,731 | ||||||
2,585,651 | ||||||||
Finance - Credit Card — 0.3% |
| |||||||
Blackhawk Network Holdings, Inc. | 1,520,000 | 1,724,250 | ||||||
Multimedia — 0.2% |
| |||||||
Liberty Media Corp.-Liberty Formula One | 800,000 | 966,000 | ||||||
Oil Companies - Exploration & Production — 0.1% |
| |||||||
Cobalt International Energy, Inc. | 1,465,000 | 388,225 | ||||||
PDC Energy, Inc. | 223,000 | 200,979 | ||||||
589,204 | ||||||||
Total Convertible Bonds & Notes | ||||||||
(cost $11,816,395) | 11,067,269 | |||||||
U.S. CORPORATE BONDS & NOTES — 70.5% |
| |||||||
Broadcast Services/Program — 1.0% |
| |||||||
Clear Channel Worldwide Holdings, Inc. | 1,260,000 | 1,255,275 | ||||||
Liberty Interactive LLC | 4,055,000 | 4,511,187 | ||||||
�� | ||||||||
5,766,462 | ||||||||
Building & Construction Products - Misc. — 0.6% |
| |||||||
Standard Industries, Inc. | 550,000 | 569,250 | ||||||
Standard Industries, Inc. | 2,465,000 | 2,575,925 | ||||||
3,145,175 | ||||||||
Security Description | Principal Amount(13) | Value (Note 2) | ||||||
Building Products - Cement — 0.5% |
| |||||||
CEMEX Finance LLC | $ | 2,755,000 | $ | 2,916,994 | ||||
Building - Residential/Commercial — 2.5% |
| |||||||
AV Homes, Inc. | 3,215,000 | 3,323,506 | ||||||
Beazer Homes USA, Inc. | 1,145,000 | 1,205,113 | ||||||
KB Home | 2,905,000 | 3,246,337 | ||||||
KB Home | 620,000 | 711,450 | ||||||
KB Home | 1,461,000 | 1,632,668 | ||||||
M/I Homes, Inc. | 690,000 | 701,537 | ||||||
M/I Homes, Inc. | 3,295,000 | 3,443,275 | ||||||
14,263,886 | ||||||||
Cable/Satellite TV — 4.9% |
| |||||||
CCO Holdings LLC/CCO Holdings Capital Corp. | 150,000 | 155,063 | ||||||
CCO Holdings LLC/CCO Holdings Capital Corp. | 3,695,000 | 3,865,450 | ||||||
CCO Holdings LLC/CCO Holdings Capital Corp. | 715,000 | 743,600 | ||||||
CCO Holdings LLC/CCO Holdings Capital Corp. | 360,000 | 377,658 | ||||||
CCO Holdings LLC/CCO Holdings Capital Corp. | 1,815,000 | 1,918,800 | ||||||
CCO Holdings LLC/CCO Holdings Capital Corp. | 1,490,000 | 1,583,125 | ||||||
Cequel Communications Holdings I LLC/Cequel Capital Corp. | 1,730,000 | 1,760,275 | ||||||
CSC Holdings LLC | 1,900,000 | 1,949,875 | ||||||
CSC Holdings LLC | 2,445,000 | 2,832,410 | ||||||
CSC Holdings LLC | 886,000 | 1,089,780 | ||||||
DISH DBS Corp. | 3,120,000 | 3,222,336 | ||||||
DISH DBS Corp. | 5,951,000 | 6,568,416 |
37 |
Table of Contents
VALIC Company II High Yield Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(13) | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Cable/Satellite TV (continued) |
| |||||||
DISH DBS Corp. | $ | 1,325,000 | $ | 1,455,844 | ||||
27,522,632 | ||||||||
Casino Hotels — 1.4% |
| |||||||
Boyd Gaming Corp. | 2,695,000 | 2,927,444 | ||||||
Jack Ohio Finance LLC/Jack Ohio Finance 1 Corp. | 3,015,000 | 3,135,600 | ||||||
Sugarhouse HSP Gaming Prop Mezz LP/Sugarhouse HSP Gaming Finance Corp. | 2,040,000 | 1,999,200 | ||||||
8,062,244 | ||||||||
Casino Services — 0.4% |
| |||||||
Eldorado Resorts, Inc. | 765,000 | 812,813 | ||||||
Rivers Pittsburgh Borrower LP/Rivers Pittsburgh Finance Corp. | 1,300,000 | 1,313,000 | ||||||
2,125,813 | ||||||||
Cellular Telecom — 2.8% |
| |||||||
Sprint Corp. | 4,544,000 | 4,998,400 | ||||||
Sprint Corp. | 4,340,000 | 4,784,850 | ||||||
Sprint Corp. | 165,000 | 186,450 | ||||||
Sprint Corp. | 5,051,000 | 5,771,424 | ||||||
15,741,124 | ||||||||
Chemicals - Diversified — 0.1% |
| |||||||
Hexion, Inc. | 525,000 | 433,125 | ||||||
Chemicals - Specialty — 1.6% |
| |||||||
Chemours Co. | 4,370,000 | 4,637,662 | ||||||
Chemours Co. | 455,000 | 501,638 | ||||||
Platform Specialty Products Corp. | 3,940,000 | 4,087,750 | ||||||
9,227,050 | ||||||||
Coal — 1.1% |
| |||||||
Cloud Peak Energy Resources LLC/Cloud Peak Energy Finance Corp. | 1,270,000 | 1,314,450 |
Security Description | Principal Amount(13) | Value (Note 2) | ||||||
Coal (continued) |
| |||||||
Foresight Energy LLC/Foresight Energy Finance Corp. | $ | 4,270,000 | $ | 3,821,650 | ||||
Peabody Energy Corp. | 380,000 | 389,500 | ||||||
Peabody Energy Corp. | 410,000 | 418,200 | ||||||
5,943,800 | ||||||||
Commercial Services — 0.9% |
| |||||||
Brand Energy & Infrastructure Services, Inc. | 4,647,000 | 5,007,142 | ||||||
Computer Services — 0.6% |
| |||||||
Conduent Finance, Inc./Xerox Business Services LLC | 2,815,000 | 3,321,700 | ||||||
Containers - Paper/Plastic — 2.2% |
| |||||||
Berry Plastics Corp. | 2,760,000 | 2,922,150 | ||||||
Flex Acquisition Co, Inc. | 3,720,000 | 3,868,800 | ||||||
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC | 3,080,000 | 3,209,945 | ||||||
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC | 2,320,000 | 2,485,300 | ||||||
12,486,195 | ||||||||
Cosmetics & Toiletries — 0.7% |
| |||||||
Revlon Consumer Products Corp. | 4,530,000 | 3,657,658 | ||||||
Data Processing/Management — 1.7% |
| |||||||
First Data Corp. | 3,305,000 | 3,478,512 | ||||||
First Data Corp. | 2,415,000 | 2,541,788 | ||||||
First Data Corp. | 3,245,000 | 3,496,487 | ||||||
9,516,787 | ||||||||
Diagnostic Kits — 1.5% |
| |||||||
Alere, Inc. | 5,409,000 | 5,787,630 | ||||||
Alere, Inc. | 2,555,000 | 2,590,131 | ||||||
8,377,761 | ||||||||
Disposable Medical Products — 0.7% |
| |||||||
Sterigenics-Nordion Holdings LLC | 3,815,000 | 3,929,450 | ||||||
38 |
Table of Contents
VALIC Company II High Yield Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(13) | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Electric - Integrated — 0.8% |
| |||||||
AES Corp. | $ | 4,355,000 | $ | 4,431,213 | ||||
Texas Competitive Electric Holdings Co. LLC/TCEH Finance, Inc. | 5,553,748 | 13,884 | ||||||
4,445,097 | ||||||||
Electronic Components-Semiconductors — 0.5% |
| |||||||
Micron Technology, Inc. | 2,800,000 | 2,957,360 | ||||||
Enterprise Software/Service — 0.9% |
| |||||||
Infor Software Parent LLC/Infor Software Parent, Inc. | 595,000 | 606,900 | ||||||
Infor US, Inc. | 165,000 | 169,331 | ||||||
Infor US, Inc. | 4,140,000 | 4,222,800 | ||||||
4,999,031 | ||||||||
Finance - Consumer Loans — 3.2% |
| |||||||
Navient Corp. | 350,000 | 293,125 | ||||||
Navient Corp. | 4,481,000 | 4,528,050 | ||||||
Navient Corp. | 1,575,000 | 1,663,594 | ||||||
SLM Corp. | 1,707,000 | 1,724,070 | ||||||
SLM Corp. | 3,270,000 | 3,335,400 | ||||||
Springleaf Finance Corp. | 970,000 | 1,006,375 | ||||||
Springleaf Finance Corp. | 165,000 | 172,838 | ||||||
Springleaf Finance Corp. | 2,585,000 | 2,908,125 | ||||||
Springleaf Finance Corp. | 1,845,000 | 2,075,625 | ||||||
17,707,202 | ||||||||
Finance - Other Services — 1.1% |
| |||||||
FBM Finance, Inc. | 1,080,000 | 1,152,900 | ||||||
Nationstar Mtg. LLC/Nationstar Capital Corp. | 2,400,000 | 2,403,000 | ||||||
Nationstar Mtg. LLC/Nationstar Capital Corp. | 955,000 | 974,444 |
Security Description | Principal Amount(13) | Value (Note 2) | ||||||
Finance - Other Services (continued) |
| |||||||
Nationstar Mtg. LLC/Nationstar Capital Corp. | $ | 1,425,000 | $ | 1,453,927 | ||||
5,984,271 | ||||||||
Financial Guarantee Insurance — 0.1% |
| |||||||
MGIC Investment Corp. | 680,000 | 743,750 | ||||||
Food - Canned — 0.7% |
| |||||||
TreeHouse Foods, Inc. | 2,405,000 | 2,483,162 | ||||||
TreeHouse Foods, Inc. | 1,230,000 | 1,300,725 | ||||||
3,783,887 | ||||||||
Food - Flour & Grain — 1.1% |
| |||||||
Post Holdings, Inc. | 4,040,000 | 4,040,000 | ||||||
Post Holdings, Inc. | 1,440,000 | 1,490,400 | ||||||
Post Holdings, Inc. | 740,000 | 778,850 | ||||||
6,309,250 | ||||||||
Gambling (Non-Hotel) — 1.9% |
| |||||||
Jacobs Entertainment, Inc. | 3,020,000 | 3,254,050 | ||||||
Pinnacle Entertainment, Inc. | 3,165,000 | 3,252,037 | ||||||
Scientific Games International, Inc. | 2,265,000 | 2,344,275 | ||||||
Scientific Games International, Inc. | 1,740,000 | 1,935,750 | ||||||
10,786,112 | ||||||||
Hazardous Waste Disposal — 0.2% |
| |||||||
Clean Harbors, Inc. | 1,320,000 | 1,343,100 | ||||||
Housewares — 0.8% |
| |||||||
American Greetings Corp. | 4,260,000 | 4,622,100 | ||||||
Independent Power Producers — 0.8% |
| |||||||
Dynegy, Inc. | 470,000 | 484,687 | ||||||
Dynegy, Inc. | 3,840,000 | 3,950,400 | ||||||
4,435,087 | ||||||||
39 |
Table of Contents
VALIC Company II High Yield Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(13) | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Insurance Brokers — 0.6% |
| |||||||
USIS Merger Sub, Inc. | $ | 3,495,000 | $ | 3,560,531 | ||||
Insurance - Multi-line — 0.6% |
| |||||||
Genworth Holdings, Inc. | 260,000 | 217,100 | ||||||
Genworth Holdings, Inc. | 1,215,000 | 1,032,750 | ||||||
Genworth Holdings, Inc. | 990,000 | 957,825 | ||||||
Genworth Holdings, Inc. | 539,000 | 526,495 | ||||||
Genworth Holdings, Inc. | 341,000 | 341,000 | ||||||
3,075,170 | ||||||||
Internet Connectivity Services — 0.7% |
| |||||||
Zayo Group LLC/Zayo Capital, Inc. | 3,765,000 | 3,985,064 | ||||||
Internet Content - Entertainment — 0.8% |
| |||||||
Netflix, Inc. | 4,190,000 | 4,535,675 | ||||||
Machinery - Construction & Mining — 0.6% |
| |||||||
BlueLine Rental Finance Corp./BlueLine Rental LLC | 3,165,000 | 3,455,864 | ||||||
Machinery - Material Handling — 0.7% |
| |||||||
Cloud Crane LLC | 3,300,000 | 3,696,000 | ||||||
Medical Information Systems — 0.4% |
| |||||||
Change Healthcare Holdings LLC/Change Healthcare Finance, Inc. | 1,890,000 | 1,944,338 | ||||||
Medical Labs & Testing Services — 0.6% |
| |||||||
West Street Merger Sub, Inc. | 3,110,000 | 3,098,338 | ||||||
Medical - Biomedical/Gene — 0.1% |
| |||||||
Sterigenics-Nordion Topco LLC | 745,000 | 759,900 | ||||||
Medical - Drugs — 0.4% |
| |||||||
PRA Holdings, Inc. | 2,104,000 | 2,293,360 | ||||||
Medical - HMO — 0.1% |
| |||||||
MPH Acquisition Holdings LLC | 540,000 | 579,150 | ||||||
Security Description | Principal Amount(13) | Value (Note 2) | ||||||
Medical - Hospitals — 4.1% |
| |||||||
Amsurg Corp. | $ | 2,995,000 | $ | 3,114,800 | ||||
CHS/Community Health Systems, Inc. | 610,000 | 614,575 | ||||||
CHS/Community Health Systems, Inc. | 2,720,000 | 2,254,200 | ||||||
CHS/Community Health Systems, Inc. | 440,000 | 413,875 | ||||||
Envision Healthcare Corp. | 1,680,000 | 1,745,100 | ||||||
HCA Healthcare, Inc. | 5,000,000 | 5,400,000 | ||||||
HCA, Inc. | 2,140,000 | 2,257,700 | ||||||
HCA, Inc. | 1,820,000 | 1,879,150 | ||||||
Tenet Healthcare Corp. | 2,365,000 | 2,438,906 | ||||||
Tenet Healthcare Corp. | 505,000 | 501,011 | ||||||
Tenet Healthcare Corp. | 2,395,000 | 2,514,750 | ||||||
23,134,067 | ||||||||
Metal Processors & Fabrication — 0.6% |
| |||||||
Novelis Corp. | 1,145,000 | 1,193,662 | ||||||
Novelis Corp. | 1,995,000 | 2,107,219 | ||||||
3,300,881 | ||||||||
Metal - Aluminum — 0.4% |
| |||||||
Kaiser Aluminum Corp. | 1,940,000 | 2,075,800 | ||||||
Mining — 0.0% |
| |||||||
Renco Metals, Inc. | 210,000 | 47,250 | ||||||
Music — 0.1% |
| |||||||
WMG Acquisition Corp. | 555,000 | 573,038 | ||||||
Office Automation & Equipment — 0.3% |
| |||||||
CDW LLC/CDW Finance Corp. | 1,410,000 | 1,468,163 | ||||||
Oil & Gas Drilling — 0.3% |
| |||||||
Rowan Cos., Inc. | 1,850,000 | 1,373,625 | ||||||
40 |
Table of Contents
VALIC Company II High Yield Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(13) | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Oil Companies - Exploration & Production — 5.8% |
| |||||||
California Resources Corp. | $ | 4,730,000 | $ | 2,607,412 | ||||
Chesapeake Energy Corp. | 810,000 | 769,500 | ||||||
Continental Resources, Inc. | 665,000 | 618,450 | ||||||
Continental Resources, Inc. | 415,000 | 408,775 | ||||||
Continental Resources, Inc. | 4,470,000 | 3,779,832 | ||||||
Continental Resources, Inc. | 1,425,000 | 1,432,125 | ||||||
Denbury Resources, Inc. | 4,165,000 | 3,727,675 | ||||||
Energen Corp. | 2,170,000 | 2,180,850 | ||||||
Laredo Petroleum, Inc. | 3,216,000 | 3,203,940 | ||||||
Laredo Petroleum, Inc. | 315,000 | 323,662 | ||||||
PDC Energy, Inc. | 700,000 | 717,500 | ||||||
QEP Resources, Inc. | 3,656,000 | 3,473,200 | ||||||
QEP Resources, Inc. | 206,000 | 198,275 | ||||||
QEP Resources, Inc. | 245,000 | 256,638 | ||||||
SM Energy Co. | 3,150,000 | 2,803,500 | ||||||
SM Energy Co. | 365,000 | 344,925 | ||||||
SM Energy Co. | 170,000 | 164,263 | ||||||
WPX Energy, Inc. | 1,420,000 | 1,391,600 | ||||||
WPX Energy, Inc. | 3,110,000 | 3,207,187 | ||||||
WPX Energy, Inc. | 970,000 | 1,064,575 | ||||||
32,673,884 | ||||||||
Security Description | Principal Amount(13) | Value (Note 2) | ||||||
Pipelines — 2.0% |
| |||||||
Blue Racer Midstream LLC/Blue Racer Finance Corp. | $ | 4,060,000 | $ | 4,171,650 | ||||
Energy Transfer Equity LP | 3,605,000 | 3,839,325 | ||||||
Energy Transfer Equity LP | 1,350,000 | 1,523,812 | ||||||
Targa Resources Partners LP/Targa Resources Partners Finance Corp. | 1,650,000 | 1,786,125 | ||||||
11,320,912 | ||||||||
Racetracks — 0.6% |
| |||||||
Penn National Gaming, Inc. | 3,415,000 | 3,543,063 | ||||||
Real Estate Investment Trusts — 0.8% |
| |||||||
FelCor Lodging LP | 3,985,000 | 4,263,950 | ||||||
Rental Auto/Equipment — 3.9% |
| |||||||
Avis Budget Car Rental LLC/Avis Budget Finance, Inc. | 3,570,000 | 3,488,568 | ||||||
Avis Budget Car Rental LLC/Avis Budget Finance, Inc. | 1,570,000 | 1,583,266 | ||||||
Herc Rentals, Inc. | 1,764,000 | 1,931,580 | ||||||
Herc Rentals, Inc. | 2,631,000 | 2,880,945 | ||||||
Hertz Corp. | 4,595,000 | 3,905,750 | ||||||
Hertz Corp. | 650,000 | 604,500 | ||||||
Hertz Corp. | 1,560,000 | 1,573,650 | ||||||
United Rentals North America, Inc. | 4,755,000 | 4,802,550 | ||||||
United Rentals North America, Inc. | 1,025,000 | 1,115,713 | ||||||
21,886,522 | ||||||||
Retail - Leisure Products — 0.5% |
| |||||||
Party City Holdings, Inc. | 2,830,000 | 2,957,350 | ||||||
Retail - Office Supplies — 0.2% |
| |||||||
Arch Merger Sub, Inc. | 1,390,000 | 1,346,563 | ||||||
41 |
Table of Contents
VALIC Company II High Yield Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(13) | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Retail - Propane Distribution — 0.5% |
| |||||||
Ferrellgas LP/Ferrellgas Finance Corp. | $ | 513,000 | $ | 488,633 | ||||
Ferrellgas LP/Ferrellgas Finance Corp. | 1,271,000 | 1,210,627 | ||||||
Ferrellgas LP/Ferrellgas Finance Corp. | 1,242,000 | 1,176,795 | ||||||
2,876,055 | ||||||||
Retail - Restaurants — 0.6% |
| |||||||
CEC Entertainment, Inc. | 3,065,000 | 3,202,925 | ||||||
Rubber/Plastic Products — 0.0% |
| |||||||
Venture Holdings Co. LLC | 50,000 | 0 | ||||||
Security Services — 1.2% |
| |||||||
APX Group, Inc. | 2,155,000 | 2,181,937 | ||||||
APX Group, Inc. | 4,390,000 | 4,763,150 | ||||||
6,945,087 | ||||||||
Semiconductor Equipment — 0.3% |
| |||||||
Entegris, Inc. | 1,715,000 | 1,787,888 | ||||||
Steel - Producers — 1.3% |
| |||||||
AK Steel Corp. | 1,130,000 | 1,175,200 | ||||||
Steel Dynamics, Inc. | 915,000 | 938,973 | ||||||
Steel Dynamics, Inc. | 1,130,000 | 1,213,337 | ||||||
United States Steel Corp. | 286,000 | 298,693 | ||||||
United States Steel Corp. | 475,000 | 492,575 | ||||||
United States Steel Corp. | 3,019,000 | 3,335,995 | ||||||
7,454,773 | ||||||||
Steel - Specialty — 0.2% |
| |||||||
Signode Industrial Group Lux SA/Signode Industrial Group US, Inc. | 975,000 | 1,006,688 | ||||||
Telephone - Integrated — 0.2% |
| |||||||
Sprint Capital Corp. | 1,240,000 | 1,364,000 | ||||||
Security Description | Principal Amount(13) | Value (Note 2) | ||||||
Television — 2.9% |
| |||||||
Gray Television, Inc. | $ | 2,490,000 | $ | 2,524,238 | ||||
Gray Television, Inc. | 640,000 | 659,200 | ||||||
Sinclair Television Group, Inc. | 1,015,000 | 984,550 | ||||||
Sinclair Television Group, Inc. | 1,585,000 | 1,614,719 | ||||||
Sinclair Television Group, Inc. | 600,000 | 619,500 | ||||||
TEGNA, Inc. | 2,990,000 | 3,061,012 | ||||||
TEGNA, Inc. | 3,685,000 | 3,740,275 | ||||||
Tribune Media Co. | 3,153,000 | 3,271,237 | ||||||
16,474,731 | ||||||||
Transport - Equipment & Leasing — 0.4% |
| |||||||
DAE Funding LLC | 675,000 | 688,500 | ||||||
DAE Funding LLC | 1,345,000 | 1,375,263 | ||||||
2,063,763 | ||||||||
Water Treatment Systems — 0.1% |
| |||||||
CD&R Waterworks Merger Sub LLC | 390,000 | 397,800 | ||||||
Wire & Cable Products — 0.3% |
| |||||||
General Cable Corp. | 1,750,000 | 1,789,375 | ||||||
Total U.S. Corporate Bonds & Notes | ||||||||
(cost $381,828,479) | 395,872,788 | |||||||
FOREIGN CORPORATE BONDS & NOTES — 16.8% |
| |||||||
Building Products - Cement — 0.2% |
| |||||||
Cemex SAB de CV | 890,000 | 954,080 | ||||||
Cable/Satellite TV — 1.5% |
| |||||||
Altice Financing SA | 600,000 | 634,500 | ||||||
Altice Financing SA | 3,075,000 | 3,367,740 | ||||||
Numericable-SFR SA | 2,705,000 | 2,921,454 |
42 |
Table of Contents
VALIC Company II High Yield Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(13) | Value (Note 2) | ||||||
FOREIGN CORPORATE BONDS & NOTES (continued) |
| |||||||
Cable/Satellite TV (continued) |
| |||||||
Quebecor Media, Inc. | $ | 1,415,000 | $ | 1,514,050 | ||||
8,437,744 | ||||||||
Computer Software — 0.4% |
| |||||||
Camelot Finance SA | 1,885,000 | 2,045,225 | ||||||
Containers - Metal/Glass — 1.2% |
| |||||||
ARD Finance SA | 2,305,000 | 2,443,300 | ||||||
Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc. | 3,375,000 | 3,465,281 | ||||||
Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc. | 845,000 | 932,120 | ||||||
6,840,701 | ||||||||
Diversified Manufacturing Operations — 1.0% |
| |||||||
Bombardier, Inc. | 5,635,000 | 5,781,172 | ||||||
Diversified Minerals — 0.9% |
| |||||||
Anglo American Capital PLC | 590,000 | 610,650 | ||||||
Anglo American Capital PLC | 745,000 | 772,937 | ||||||
Anglo American Capital PLC | 490,000 | 519,988 | ||||||
Anglo American Capital PLC | 890,000 | 988,167 | ||||||
Teck Resources, Ltd. | 1,630,000 | 1,878,575 | ||||||
4,770,317 | ||||||||
Gold Mining — 0.3% |
| |||||||
New Gold, Inc. | 160,000 | 166,000 | ||||||
New Gold, Inc. | 1,620,000 | 1,676,700 | ||||||
1,842,700 | ||||||||
Hazardous Waste Disposal — 0.1% |
| |||||||
Tervita Escrow Corp. | 785,000 | 788,925 | ||||||
Medical - Drugs — 3.9% |
| |||||||
Endo, Ltd./Endo Finance LLC/Endo Finco, Inc. | 4,910,000 | 4,124,400 | ||||||
Endo, Ltd./Endo Finance LLC/Endo Finco, Inc. | 3,860,000 | 3,174,850 |
Security Description | Principal Amount(13) | Value (Note 2) | ||||||
Medical - Drugs (continued) |
| |||||||
Valeant Pharmaceuticals International, Inc. | $ | 1,910,000 | $ | 1,604,400 | ||||
Valeant Pharmaceuticals International, Inc. | 12,885,000 | 10,984,462 | ||||||
Valeant Pharmaceuticals International, Inc. | 2,035,000 | 1,717,031 | ||||||
Valeant Pharmaceuticals International, Inc. | 455,000 | 482,869 | ||||||
22,088,012 | ||||||||
Metal - Aluminum — 0.8% |
| |||||||
Constellium NV | 3,430,000 | 3,644,375 | ||||||
Constellium NV | 700,000 | 745,500 | ||||||
4,389,875 | ||||||||
Metal - Copper — 0.5% |
| |||||||
First Quantum Minerals, Ltd. | 1,600,000 | 1,647,000 | ||||||
First Quantum Minerals, Ltd. | 390,000 | 400,725 | ||||||
First Quantum Minerals, Ltd. | 850,000 | 870,188 | ||||||
2,917,913 | ||||||||
Oil & Gas Drilling — 0.7% |
| |||||||
Noble Holding International, Ltd. | 2,375,000 | 1,834,640 | ||||||
Transocean, Inc. | 860,000 | 657,900 | ||||||
Transocean, Inc. | 255,000 | 215,475 | ||||||
Transocean, Inc. | 1,035,000 | 949,613 | ||||||
3,657,628 | ||||||||
Oil Companies - Exploration & Production — 1.4% |
| |||||||
MEG Energy Corp. | 2,615,000 | 2,088,731 | ||||||
MEG Energy Corp. | 1,490,000 | 1,383,838 | ||||||
MEG Energy Corp. | 2,145,000 | 1,705,275 | ||||||
Tullow Oil PLC | 1,220,000 | 1,178,825 |
43 |
Table of Contents
VALIC Company II High Yield Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(13) | Value (Note 2) | ||||||
FOREIGN CORPORATE BONDS & NOTES (continued) |
| |||||||
Oil Companies - Exploration & Production (continued) |
| |||||||
Tullow Oil PLC | $ | 1,745,000 | $ | 1,640,300 | ||||
7,996,969 | ||||||||
Oil - Field Services — 0.4% |
| |||||||
Weatherford International, Ltd. | 640,000 | 508,800 | ||||||
Weatherford International, Ltd. | 1,700,000 | 1,411,000 | ||||||
Weatherford International, Ltd. | 640,000 | 540,800 | ||||||
2,460,600 | ||||||||
Retail - Restaurants — 0.9% |
| |||||||
1011778 BC ULC/New Red Finance, Inc. | 4,705,000 | 4,828,506 | ||||||
Security Services — 0.9% |
| |||||||
GW Honos Security Corp. | 4,540,000 | 4,847,494 | ||||||
Semiconductor Equipment — 0.6% |
| |||||||
Sensata Technologies BV | 1,435,000 | 1,503,163 | ||||||
Sensata Technologies BV | 1,430,000 | 1,558,700 | ||||||
3,061,863 | ||||||||
Soap & Cleaning Preparation — 0.5% |
| |||||||
Diamond (BC) B.V. | EUR | 2,385,000 | 2,878,264 | |||||
Special Purpose Entity — 0.0% |
| |||||||
Hellas Telecommunications Luxembourg II SCA | 925,000 | 0 | ||||||
Television — 0.5% |
| |||||||
Videotron, Ltd. | 2,720,000 | 2,910,400 | ||||||
Wireless Equipment — 0.1% |
| |||||||
Nokia OYJ | 290,000 | 292,900 | ||||||
Nokia OYJ | 305,000 | 313,293 | ||||||
606,193 | ||||||||
Total Foreign Corporate Bonds & Notes | ||||||||
(cost $94,025,162) | 94,104,581 | |||||||
LOANS(1)(5)(6)(7) — 1.8% |
| |||||||
Building - Residential/Commercial — 0.0% |
| |||||||
TOUSA, Inc. | 2,037,810 | 0 | ||||||
Security Description | Shares/ Principal Amount(13) | Value (Note 2) | ||||||
Distribution/Wholesale — 0.0% |
| |||||||
HD Supply Waterworks, Ltd. FRS | $ | 225,000 | $ | 225,900 | ||||
E-Commerce/Products — 0.1% |
| |||||||
Lands’ End, Inc. FRS | 1,005,516 | 822,953 | ||||||
Gambling (Non-Hotel) — 0.6% |
| |||||||
Golden Entertainment, Inc. FRS | 3,550,000 | 3,536,688 | ||||||
Insurance - Property/Casualty — 0.2% |
| |||||||
Asurion LLC FRS | 165,000 | 165,677 | ||||||
Asurion LLC FRS | 710,000 | 724,644 | ||||||
890,321 | ||||||||
Machinery - General Industrial — 0.2% |
| |||||||
Gardner Denver, Inc. FRS | 1,279,748 | 1,277,235 | ||||||
Medical Labs & Testing Services — 0.4% |
| |||||||
INC Research LLC FRS | 2,190,000 | 2,194,106 | ||||||
Retail - Consumer Discretionary — 0.1% |
| |||||||
Hayward Acquisition, Inc. FRS | 475,000 | 477,177 | ||||||
Soap & Cleaning Preparation — 0.2% |
| |||||||
Diamond (BC) B.V. FRS | 865,000 | 860,134 | ||||||
Total Loans | ||||||||
(cost $10,434,279) | 10,284,514 | |||||||
COMMON STOCKS — 0.7% |
| |||||||
Electric-Generation — 0.3% |
| |||||||
Vistra Energy Corp†. | 93,359 | 1,652,454 | ||||||
Vistra Energy Corp. CVR† | 93,359 | 98,027 | ||||||
1,750,481 | ||||||||
Financial Guarantee Insurance — 0.3% |
| |||||||
MGIC Investment Corp.† | 145,272 | 1,663,364 | ||||||
Multimedia — 0.0% |
| |||||||
Haights Cross Communication, Inc†(1)(8) | 10,439 | 0 | ||||||
Television — 0.1% |
| |||||||
ION Media Networks, Inc.†(1)(8)(12) | 616 | 457,370 | ||||||
Total Common Stocks | ||||||||
(cost $6,466,642) | 3,871,215 | |||||||
44 |
Table of Contents
VALIC Company II High Yield Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(13) | Value (Note 2) | ||||||
PREFERRED SECURITIES — 0.1% |
| |||||||
Diversified Banking Institutions — 0.1% |
| |||||||
GMAC Capital Trust I FRS | $ | 21,725 | $ | 567,457 | ||||
PREFERRED SECURITIES/CAPITAL SECURITIES — 3.4% |
| |||||||
Banks - Commercial — 1.5% |
| |||||||
Banco Bilbao Vizcaya Argentaria SA | EUR | 1,000,000 | 1,234,155 | |||||
Banco Bilbao Vizcaya Argentaria SA | EUR | 1,800,000 | 2,491,018 | |||||
Banco de Sabadell SA | EUR | 2,600,000 | 3,114,671 | |||||
Intesa Sanpaolo SpA | 1,435,000 | 1,501,369 | ||||||
8,341,213 | ||||||||
Diversified Banking Institutions — 1.9% |
| |||||||
Barclays PLC | 879,000 | 955,912 | ||||||
Barclays PLC | EUR | 1,000,000 | 1,322,848 | |||||
BNP Paribas SA | 1,040,000 | 1,137,500 | ||||||
Credit Agricole SA | 2,520,000 | 2,986,200 | ||||||
Credit Suisse Group AG | 2,700,000 | 2,862,000 | ||||||
Royal Bank of Scotland Group PLC | 1,800,000 | 1,728,900 | ||||||
10,993,360 | ||||||||
Total Preferred Securities/Capital Securities |
| |||||||
(cost $17,428,847) | 19,334,573 | |||||||
Total Long-Term Investment Securities | ||||||||
(cost $522,570,440) | 535,102,397 | |||||||
SHORT-TERM INVESTMENT SECURITIES — 8.5% |
| |||||||
Registered Investment Companies — 8.5% |
| |||||||
State Street Navigator Securities Lending Government Money Market Portfolio | 47,646,600 | 47,646,600 | ||||||
REPURCHASE AGREEMENTS — 4.1% |
| |||||||
Agreement with Fixed Income Clearing Corp., bearing interest at 0.12%, dated 08/31/2017, to be repurchased 09/01/2017 in the amount of $23,224,077 and collateralized by $22,340,000 of United States Treasury Bonds, bearing interest at 3.00%, due 05/15/2045 and having an approximate value of $23,688,487 | 23,224,000 | 23,224,000 | ||||||
TOTAL INVESTMENTS | ||||||||
(cost $593,441,040)(14) | 107.9 | % | 605,972,997 | |||||
Liabilities in excess of other assets | (7.9 | ) | (44,493,362 | ) | ||||
NET ASSETS | 100.0 | % | $ | 561,479,635 | ||||
* | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in transactions exempt from registration, normally to qualified institutional buyers. The Fund has no right to demand registration of these securities. At August 31, 2017, the aggregate value of these securities was $262,558,102 representing 46.8% of net assets. Unless otherwise indicated, these securities are not considered to be illiquid. |
# | The security or a portion thereof is out on loan (see Note 2). |
† | Non-income producing security |
(1) | Illiquid security. At August 31, 2017, the aggregate value of these securities was $20,309,278 representing 3.6% of net assets. |
(2) | PIK (“Payment-in-Kind”) security — Income may be paid in additional securities or cash at the discretion of the issuer. The security is currently paying interest in cash at the coupon rate listed. |
(3) | Company has filed for bankruptcy protection. |
(4) | Security in default of interest and principal at maturity. |
(5) | The Fund invests in senior loans which generally pay interest at rates which are periodically re-determined by reference to a base lending rate plus a premium. These base lending rates are generally either the lending rate offered by one or more major European banks, such as the London Inter-Bank Offer Rate (“LIBOR”) or the prime rate offered by one or more major United States banks, or the certificate of deposit rate. Senior loans are generally considered to be restrictive in that the Fund is ordinarily contractually obligated to receive approval from the Agent Bank and/or borrower prior to the disposition of a senior loan. |
(6) | All loans in the Fund were purchased through assignment agreements unless otherwise indicated. |
(7) | Senior loans in the Fund are generally subject to mandatory and/or optional prepayment. Because of these mandatory prepayment conditions and because there may be significant economic incentives for a borrower to prepay, prepayments may occur. As a result, the actual remaining maturity may be substantially less than the stated maturities shown. |
(8) | Security classified as Level 3 (see Note 2). |
(9) | Perpetual maturity — maturity date reflects the next call date. |
(10) | At August 31, 2017, the Fund had loaned securities with a total value of $46,833,337. This was secured by collateral of $47,646,600, which was received in cash and subsequently invested in short-term investments currently valued at $47,646,600 as reported in the Portfolio of Investments. |
(11) | The rate shown is the 7-day yield as of August 31, 2017. |
(12) | Denotes a restricted security that: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933, as amended (the “1933 Act”); (b) is subject to a contractual restriction on public sales; or (c) is otherwise subject to a restriction on sales by operation of applicable law. Restricted securities are valued pursuant to Note 2. Certain restricted securities held by the Fund may not be sold except in exempt transactions or in a public offering registered under the 1933 Act. The Fund has no right to demand registration of these securities. The risk of investing in certain restricted securities is greater than the risk of investing in the securities of widely held, publicly traded companies. To the extent applicable, lack of a secondary market and resale restrictions may result in the inability of a Fund to sell a security at a fair price and may substantially delay the sale of the security. In addition, certain restricted securities may exhibit greater price volatility than securities for which secondary markets exist. As of August 31, 2017, the Fund held the following restricted securities: |
Description | Acquisition Date | Shares | Acquisition Cost | Value | Value Per Share | % of Net Assets | ||||||||||||||||||
Common Stocks | ||||||||||||||||||||||||
ION Media Networks, Inc. | 12/16/2016 | 616 | $ | 6 | $ | 457,370 | $ | 742.48 | 0.08 | % |
(13) | Denominated in United States dollars unless otherwise indicated. |
(14) | See Note 5 for cost of investments on a tax basis. |
BTL—Bank Term Loan
CVR—Contingent Value Rights
ULC—Unlimited Liability Corp.
FRS—Floating Rate Security
The rates shown on FRS are the current interest rates at August 31, 2017 and unless noted otherwise, the dates shown are the original maturity dates.
Currency Legend
EUR—Euro Currency
45 |
Table of Contents
VALIC Company II High Yield Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Index Legend
3 ML—3 Month USD LIBOR
5 Yr ES—5 Year EUR Swap
5 Yr UIRS—5 Year USD Interest Rate Swap
Forward Foreign Currency Contracts | ||||||||||||||||||||||||||||
Counterparty | Contract to Deliver | In Exchange For | Delivery Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||||||
Barclays Bank PLC | EUR | 4,764,000 | USD | 5,636,622 | 09/29/2017 | $ | — | $ | (42,024 | ) | ||||||||||||||||||
UBS AG | EUR | 4,763,000 | USD | 5,634,820 | 09/29/2017 | — | (42,634 | ) | ||||||||||||||||||||
Net Unrealized Appreciation/(Depreciation) | $ | — | $ | (84,658 | ) | |||||||||||||||||||||||
EUR—Euro Dollar
USD—United States Dollar
Centrally Cleared Credit Default Swaps on Credit Indicies — Sell Protection(1) | ||||||||||||||||||||||||||||
Value(4) | ||||||||||||||||||||||||||||
Reference Obligation | Financing Rate Received | Payment Frequency | Maturity Date | Implied Credit Spread at August 31, 2017(2) | Notional Amount(3) (000) | Upfront Premiums Paid/ (Received) | Unrealized Appreciation/ (Depreciation) | |||||||||||||||||||||
Markit CDX North America High Yield Index | 5.00 | % | Quarterly | 06/20/2022 | 3.2657 | % | $ | 7,770 | $ | 499,977 | $ | 64,506 | ||||||||||||||||
(1) | If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation. |
(2) | Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate issues or sovereign issues of an emerging market country as of period end serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. A credit spread identified as “Defaulted” indicates a credit event has occurred for the referenced entity or obligation. |
(3) | The maximum potential amount the Fund could be required to make as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement. |
(4) | The quoted market prices and resulting values for credit default swap agreements on asset-backed securities and credit indices serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement have been closed/sold as of the period end. Increasing market values, in absolute terms when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. |
46 |
Table of Contents
VALIC Company II High Yield Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2017 (see Note 2):
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at Value:* | ||||||||||||||||
Convertible Bonds & Notes | $ | — | $ | 11,067,269 | $ | — | $ | 11,067,269 | ||||||||
U.S. Corporate Bonds & Notes: | ||||||||||||||||
Mining | — | — | 47,250 | 47,250 | ||||||||||||
Rubber/Plastic Products | — | — | 0 | 0 | ||||||||||||
Other Industries | — | 395,825,538 | — | 395,825,538 | ||||||||||||
Foreign Corporate Bonds & Notes: | ||||||||||||||||
Special Purpose Entity | — | — | 0 | 0 | ||||||||||||
Other Industries | — | 94,104,581 | — | 94,104,581 | ||||||||||||
Loans: | ||||||||||||||||
Building - Residential/Commercial | — | — | 0 | 0 | ||||||||||||
Other Industries | — | 10,284,514 | — | 10,284,514 | ||||||||||||
Common Stocks: | ||||||||||||||||
Electric - Generation | 1,652,454 | 98,027 | — | 1,750,481 | ||||||||||||
Financial Guarantee Insurance | 1,663,364 | — | — | 1,663,364 | ||||||||||||
Other Industries | — | — | 457,370 | 457,370 | ||||||||||||
Preferred Securities | 567,457 | — | — | 567,457 | ||||||||||||
Preferred Securities/Capital Securities | — | 19,334,573 | — | 19,334,573 | ||||||||||||
Short-Term Investment Securities | 47,646,600 | — | — | 47,646,600 | ||||||||||||
Repurchase Agreements | — | 23,224,000 | — | 23,224,000 | ||||||||||||
Total Investments at Value | $ | 51,529,875 | $ | 553,938,502 | $ | 504,620 | $ | 605,972,997 | ||||||||
Other Financial Instruments:+ | ||||||||||||||||
Centrally Cleared Credit Default Swaps on Credit Indicies — Sell Protection | $ | — | $ | 64,506 | $ | — | $ | 64,506 | ||||||||
LIABILITIES: | ||||||||||||||||
Other Financial Instruments:+ | ||||||||||||||||
Forward Foreign Currency Contracts | $ | — | $ | 84,658 | $ | — | $ | 84,658 | ||||||||
* | For a detailed presentation of investments, please refer to the Portfolio of Investments. |
+ | Other financial instruments are derivative instruments, not reflected in the Portfolio of Investments, such as futures, forward, swap and written option contracts, which are valued at the unrealized appreciation (depreciation) on the instrument. |
The Fund’s policy is to recognize transfers between Levels as of the end of the reporting period. There were no transfers between Levels during the reporting period.
At the beginning and end of the reporting period, Level 3 investments were not considered a material portion of the Fund.
See Notes to Financial Statements
47 |
Table of Contents
VALIC Company II International Opportunities Fund
PORTFOLIO PROFILE — August 31, 2017 (unaudited)
Industry Allocation*
Banks — Commercial | 3.8 | % | ||
Auto/Truck Parts & Equipment — Original | 3.4 | |||
Retail — Discount | 2.6 | |||
Diversified Financial Services | 2.6 | |||
Machinery — General Industrial | 2.6 | |||
Registered Investment Companies | 2.4 | |||
Real Estate Operations & Development | 2.1 | |||
E-Commerce/Products | 2.0 | |||
Gambling (Non-Hotel) | 1.8 | |||
Food — Catering | 1.7 | |||
Retail — Restaurants | 1.7 | |||
Building Products — Cement | 1.7 | |||
Machine Tools & Related Products | 1.7 | |||
Beverages — Non-alcoholic | 1.7 | |||
Commercial Services | 1.6 | |||
Food — Misc./Diversified | 1.6 | |||
Computer Services | 1.6 | |||
Distribution/Wholesale | 1.6 | |||
Electronic Components — Misc. | 1.5 | |||
Hotels/Motels | 1.5 | |||
Chemicals — Diversified | 1.5 | |||
E-Commerce/Services | 1.5 | |||
Building & Construction Products — Misc. | 1.4 | |||
Medical — Drugs | 1.4 | |||
Containers — Paper/Plastic | 1.4 | |||
Apparel Manufacturers | 1.3 | |||
Beverages — Wine/Spirits | 1.3 | |||
Brewery | 1.2 | |||
Human Resources | 1.1 | |||
Enterprise Software/Service | 1.1 | |||
Applications Software | 1.1 | |||
Consulting Services | 1.0 | |||
Repurchase Agreements | 1.0 | |||
Retail — Drug Store | 1.0 | |||
Medical — Biomedical/Gene | 0.9 | |||
Metal — Copper | 0.9 | |||
Building & Construction — Misc. | 0.9 | |||
Computers — Integrated Systems | 0.9 | |||
U.S. Government Agencies | 0.9 | |||
Insurance — Property/Casualty | 0.9 | |||
Building — Residential/Commercial | 0.8 | |||
Cosmetics & Toiletries | 0.8 | |||
E-Services/Consulting | 0.8 | |||
Transactional Software | 0.8 | |||
Retail — Home Furnishings | 0.8 | |||
Investment Management/Advisor Services | 0.8 | |||
Forestry | 0.8 | |||
Wireless Equipment | 0.8 | |||
Schools | 0.7 | |||
Miscellaneous Manufacturing | 0.7 | |||
Semiconductor Equipment | 0.7 | |||
Medical Products | 0.7 | |||
Research & Development | 0.7 | |||
Machinery — Material Handling | 0.7 | |||
Computers — Periphery Equipment | 0.7 | |||
Transport — Marine | 0.6 | |||
Diversified Operations | 0.6 | |||
Internet Gambling | 0.6 | |||
Transport — Services | 0.6 | |||
Food — Wholesale/Distribution | 0.6 | |||
Chemicals — Specialty | 0.6 | |||
Shipbuilding | 0.6 | |||
Building Products — Wood | 0.6 | |||
Metal — Diversified | 0.6 | |||
Food — Retail | 0.6 | |||
Engineering/R&D Services | 0.5 | |||
Fisheries | 0.5 | |||
Retail — Misc./Diversified | 0.5 |
Exchange — Traded Funds | 0.5 | |||
Veterinary Diagnostics | 0.5 | |||
Multimedia | 0.5 | |||
Wire & Cable Products | 0.5 | |||
Steel — Producers | 0.5 | |||
Oil — Field Services | 0.5 | |||
Electric — Distribution | 0.5 | |||
Aerospace/Defense | 0.5 | |||
Transport — Rail | 0.4 | |||
Steel — Specialty | 0.4 | |||
Respiratory Products | 0.4 | |||
Insurance Brokers | 0.4 | |||
Gas — Distribution | 0.4 | |||
Appliances | 0.4 | |||
Oil Companies — Exploration & Production | 0.4 | |||
Real Estate Management/Services | 0.4 | |||
Medical Instruments | 0.4 | |||
Food — Confectionery | 0.4 | |||
Retail — Apparel/Shoe | 0.4 | |||
Coatings/Paint | 0.3 | |||
Electronic Components — Semiconductors | 0.3 | |||
Oil Refining & Marketing | 0.3 | |||
Leisure Products | 0.3 | |||
Satellite Telecom | 0.3 | |||
Funeral Services & Related Items | 0.3 | |||
Electronic Measurement Instruments | 0.3 | |||
Explosives | 0.3 | |||
Power Converter/Supply Equipment | 0.2 | |||
Real Estate Investment Trusts | 0.2 | |||
Telecommunication Equipment | 0.2 | |||
Building — Maintenance & Services | 0.2 | |||
Electric — Generation | 0.2 | |||
Electronic Connectors | 0.2 | |||
Gold Mining | 0.2 | |||
Textile — Products | 0.2 | |||
Electric Products — Misc. | 0.2 | |||
Telephone — Integrated | 0.2 | |||
Advertising Services | 0.2 | |||
Diversified Minerals | 0.2 | |||
Rubber/Plastic Products | 0.2 | |||
Metal — Iron | 0.2 | |||
Soap & Cleaning Preparation | 0.2 | |||
Rental Auto/Equipment | 0.2 | |||
Retail — Automobile | 0.2 | |||
Insurance — Life/Health | 0.2 | |||
Dental Supplies & Equipment | 0.2 | |||
Food — Meat Products | 0.2 | |||
Diversified Manufacturing Operations | 0.2 | |||
Hazardous Waste Disposal | 0.2 | |||
Agricultural Operations | 0.2 | |||
Airport Development/Maintenance | 0.2 | |||
Food — Flour & Grain | 0.1 | |||
Female Health Care Products | 0.1 | |||
Tobacco | 0.1 | |||
Veterinary Products | 0.1 | |||
Web Portals/ISP | 0.1 | |||
Finance — Credit Card | 0.1 | |||
Medical Labs & Testing Services | 0.1 | |||
E-Marketing/Info | 0.1 | |||
Finance — Other Services | 0.1 | |||
Internet Content — Information/News | 0.1 | |||
Home Furnishings | 0.1 | |||
Finance — Investment Banker/Broker | 0.1 | |||
Footwear & Related Apparel | 0.1 | |||
Cable/Satellite TV | 0.1 | |||
MRI/Medical Diagnostic Imaging | 0.1 | |||
Medical — Hospitals | 0.1 | |||
Television | 0.1 | |||
Retail — Sporting Goods | 0.1 |
48 |
Table of Contents
VALIC Company II International Opportunities Fund
PORTFOLIO PROFILE — August 31, 2017 (unaudited) — (continued)
Industry Allocation* (continued)
Auto — Heavy Duty Trucks | 0.1 | % | ||
Retail — Convenience Store | 0.1 | |||
Aerospace/Defense — Equipment | 0.1 | |||
Machinery — Thermal Process | 0.1 | |||
Resorts/Theme Parks | 0.1 | |||
Office Supplies & Forms | 0.1 | |||
Finance — Consumer Loans | 0.1 | |||
Auto — Cars/Light Trucks | 0.1 | |||
Electric — Transmission | 0.1 | |||
Chemicals — Plastics | 0.1 | |||
Building Products — Air & Heating | 0.1 | |||
Metal Processors & Fabrication | 0.1 | |||
Computers | 0.1 | |||
Diagnostic Equipment | 0.1 | |||
Industrial Gases | 0.1 | |||
Medical Information Systems | 0.1 | |||
Paper & Related Products | 0.1 | |||
Machinery — Pumps | 0.1 | |||
101.9 | % | |||
Country Allocation*
Japan | 21.1 | % | ||
United Kingdom | 14.8 | |||
United States | 5.6 | |||
France | 4.9 | |||
Canada | 4.9 | |||
Switzerland | 4.4 | |||
Germany | 4.2 | |||
Cayman Islands | 3.9 | |||
Brazil | 3.4 | |||
Italy | 3.3 | |||
Denmark | 3.3 | |||
Sweden | 3.0 | |||
Bermuda | 2.0 | |||
Ireland | 1.9 | |||
Spain | 1.8 | |||
Australia | 1.7 | |||
Netherlands | 1.7 | |||
South Korea | 1.4 | |||
Israel | 1.3 | |||
Thailand | 1.2 | |||
Austria | 1.2 | |||
Hong Kong | 1.1 | |||
Jersey | 1.0 | |||
Finland | 0.9 | |||
Curacao | 0.9 | |||
Taiwan | 0.9 | |||
Guernsey | 0.8 | |||
Singapore | 0.8 | |||
Mexico | 0.7 | |||
Norway | 0.7 | |||
Philippines | 0.6 | |||
South Africa | 0.6 | |||
New Zealand | 0.4 | |||
Faroe Islands | 0.3 | |||
Indonesia | 0.3 | |||
Luxembourg | 0.2 | |||
Malaysia | 0.2 | |||
Mauritius | 0.2 | |||
Portugal | 0.1 | |||
India | 0.1 | |||
Turkey | 0.1 | |||
101.9 | % | |||
* | Calculated as a percentage of net assets |
49 |
Table of Contents
VALIC Company II International Opportunities Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS — 96.0% |
| |||||||
Australia — 1.7% |
| |||||||
Ansell, Ltd. | 75,132 | $ | 1,307,932 | |||||
AUB Group, Ltd. | 157,092 | 1,593,438 | ||||||
Computershare, Ltd. | 84,026 | 940,267 | ||||||
Domino’s Pizza Enterprises, Ltd.# | 13,855 | 475,881 | ||||||
DuluxGroup, Ltd. | 149,768 | 793,628 | ||||||
Iluka Resources, Ltd. | 173,919 | 1,311,199 | ||||||
Orica, Ltd. | 100,259 | 1,623,248 | ||||||
Ramsay Health Care, Ltd. | 12,203 | 663,784 | ||||||
Reliance Worldwide Corp., Ltd.# | 378,476 | 1,099,836 | ||||||
Sonic Healthcare, Ltd. | 38,130 | 664,886 | ||||||
Super Retail Group, Ltd. | 139,774 | 901,544 | ||||||
11,375,643 | ||||||||
Austria — 1.2% |
| |||||||
BUWOG AG | 219,752 | 6,765,166 | ||||||
Mayr-Melnhof Karton AG | 7,045 | 958,904 | ||||||
7,724,070 | ||||||||
Bermuda — 2.0% |
| |||||||
Cafe de Coral Holdings, Ltd. | 554,000 | 1,762,717 | ||||||
China Resources Gas Group, Ltd. | 520,000 | 1,840,460 | ||||||
Credicorp, Ltd. | 6,509 | 1,320,285 | ||||||
Dairy Farm International Holdings, Ltd. | 219,900 | 1,782,724 | ||||||
Esprit Holdings, Ltd.† | 348,050 | 201,503 | ||||||
Global Brands Group Holding, Ltd.† | 1,944,000 | 173,923 | ||||||
Hiscox, Ltd. | 195,363 | 3,229,875 | ||||||
Midland Holdings, Ltd.† | 2,426,000 | 713,142 | ||||||
Pacific Basin Shipping, Ltd.† | 995,049 | 227,145 | ||||||
Peace Mark Holdings, Ltd.†(1)(2) | 686,000 | 0 | ||||||
Shangri-La Asia, Ltd. | 210,000 | 351,713 | ||||||
VTech Holdings, Ltd. | 118,149 | 1,661,107 | ||||||
XL Group, Ltd. | 9,500 | 389,120 | ||||||
13,653,714 | ||||||||
Brazil — 3.4% |
| |||||||
BR Properties SA† | 855,900 | 2,988,180 | ||||||
BRF SA† | 45,400 | 613,246 | ||||||
Embraer SA ADR | 16,488 | 374,278 | ||||||
Equatorial Energia SA | 21,100 | 409,687 | ||||||
Fibria Celulose SA | 32,300 | 428,806 | ||||||
GAEC Educacao SA | 77,661 | 461,350 | ||||||
Hypermarcas SA | 35,869 | 336,259 | ||||||
Instituto Hermes Pardini SA | 62,800 | 606,484 | ||||||
Kroton Educacional SA | 126,888 | 724,360 | ||||||
Linx SA | 104,400 | 607,923 | ||||||
Localiza Rent a Car SA | 34,311 | 649,084 | ||||||
Lojas Renner SA | 43,500 | 422,860 | ||||||
Magazine Luiza SA | 26,100 | 4,709,500 | ||||||
Odontoprev SA | 102,314 | 481,692 | ||||||
Qualicorp SA | 22,537 | 249,508 | ||||||
Raia Drogasil SA | 15,018 | 330,860 | ||||||
Rumo SA† | 1,029,200 | 3,377,428 | ||||||
Ser Educacional SA* | 411,800 | 3,818,620 | ||||||
Suzano Papel e Celulose SA, Class A (Preference Shares) | 64,800 | 360,246 | ||||||
Transmissora Alianca de Energia Eletrica SA | 62,352 | 445,676 | ||||||
Usinas Siderurgicas de Minas Gerais SA, Class A (Preference Shares)† | 259,900 | 568,868 | ||||||
22,964,915 | ||||||||
Canada — 4.9% |
| |||||||
Agnico Eagle Mines, Ltd.# | 28,521 | 1,461,965 | ||||||
Descartes Systems Group, Inc.† | 182,197 | 5,115,377 | ||||||
Dollarama, Inc. | 42,976 | 4,235,481 | ||||||
Enerplus Corp.# | 216,800 | 1,925,375 | ||||||
Interfor Corp.† | 343,600 | 4,828,973 |
Security Description | Shares | Value (Note 2) | ||||||
Canada (continued) |
| |||||||
Norbord, Inc. | 107,900 | $ | 3,715,475 | |||||
Quebecor, Inc., Class B | 92,200 | 3,528,519 | ||||||
Sleep Country Canada Holdings, Inc.* | 144,700 | 3,944,415 | ||||||
TORC Oil & Gas, Ltd.# | 42,570 | 173,859 | ||||||
Trevali Mining Corp† | 3,155,100 | 3,638,314 | ||||||
32,567,753 | ||||||||
Cayman Islands — 3.9% |
| |||||||
51job, Inc. ADR†# | 31,931 | 1,896,702 | ||||||
Airtac International Group | 199,535 | 2,785,991 | ||||||
Ajisen China Holdings, Ltd. | 696,000 | 293,878 | ||||||
China Lodging Group, Ltd. ADR† | 26,139 | 2,967,038 | ||||||
China Resources Cement Holdings, Ltd. | 5,640,000 | 3,101,773 | ||||||
Gourmet Master Co., Ltd. | 281,000 | 3,344,964 | ||||||
Hengan International Group Co., Ltd. | 113,500 | 948,622 | ||||||
Lee & Man Paper Manufacturing, Ltd. | 3,854,000 | 4,499,788 | ||||||
Microport Scientific Corp. | 1,962,000 | 1,765,144 | ||||||
Midland IC&I, Ltd.† | 1,216,000 | 58,263 | ||||||
Pacific Textiles Holdings, Ltd. | 1,404,000 | 1,428,178 | ||||||
Shenguan Holdings Group, Ltd. | 744,000 | 42,373 | ||||||
Silicon Motion Technology Corp. ADR# | 24,600 | 1,122,006 | ||||||
Stella International Holdings, Ltd. | 399,000 | 705,427 | ||||||
Tingyi Cayman Islands Holding Corp. | 676,000 | 900,636 | ||||||
25,860,783 | ||||||||
Denmark — 3.3% |
| |||||||
Carlsberg A/S, Class B | 8,126 | 933,242 | ||||||
Chr. Hansen Holding A/S | 2,407 | 207,168 | ||||||
Dfds A/S | 74,365 | 4,288,784 | ||||||
DSV A/S | 25,733 | 1,825,429 | ||||||
GN Store Nord A/S | 133,787 | 4,439,069 | ||||||
Jyske Bank A/S | 34,350 | 2,067,515 | ||||||
Royal Unibrew A/S | 67,856 | 3,721,559 | ||||||
Spar Nord Bank A/S | 145,251 | 1,872,682 | ||||||
Sydbank A/S | 43,014 | 1,679,126 | ||||||
TDC A/S | 147,191 | 877,199 | ||||||
William Demant Holding A/S† | 16,666 | 441,224 | ||||||
22,352,997 | ||||||||
Faroe Islands — 0.3% |
| |||||||
Bakkafrost P/F | 44,785 | 2,090,862 | ||||||
Finland — 0.9% |
| |||||||
Outokumpu Oyj | 294,817 | 3,047,270 | ||||||
Tikkurila Oyj | 8,059 | 149,681 | ||||||
Valmet Oyj | 162,977 | 3,093,393 | ||||||
6,290,344 | ||||||||
France — 4.9% |
| |||||||
Alten SA | 30,454 | 2,595,032 | ||||||
Direct Energie | 43,319 | 2,532,637 | ||||||
Edenred | 11,201 | 303,163 | ||||||
Elior Group SA* | 232,222 | 6,167,522 | ||||||
Elis SA# | 27,232 | 637,208 | ||||||
Eutelsat Communications SA | 11,116 | 323,169 | ||||||
Havas SA | 121,411 | 1,335,311 | ||||||
Legrand SA | 13,139 | 921,267 | ||||||
Plastic Omnium SA | 11,237 | 426,318 | ||||||
Remy Cointreau SA | 67,582 | 7,722,305 | ||||||
SEB SA | 5,103 | 927,436 | ||||||
Societe BIC SA | 2,734 | 328,743 | ||||||
Sodexo SA | 18,772 | 2,192,136 | ||||||
Somfy SA | 3,580 | 336,240 | ||||||
Teleperformance | 36,241 | 4,995,669 | ||||||
Virbac SA† | 5,620 | 939,707 | ||||||
32,683,863 | ||||||||
50 |
Table of Contents
VALIC Company II International Opportunities Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS (continued) |
| |||||||
Germany — 4.0% |
| |||||||
Amadeus Fire AG | 10,143 | $ | 887,478 | |||||
Beiersdorf AG | 10,720 | 1,144,731 | ||||||
Brenntag AG | 24,573 | 1,304,394 | ||||||
CTS Eventim AG & Co. KGaA | 45,133 | 1,990,226 | ||||||
Deutsche Wohnen AG | 43,911 | 1,865,149 | ||||||
ElringKlinger AG# | 14,936 | 259,634 | ||||||
Evotec AG† | 233,979 | 4,503,940 | ||||||
FUCHS PETROLUB SE (Preference Shares) | 33,370 | 1,856,810 | ||||||
GEA Group AG# | 45,912 | 2,023,933 | ||||||
Hella KGaA Hueck & Co. | 16,297 | 901,031 | ||||||
Henkel AG & Co. KGaA (Preference Shares) | 9,504 | 1,273,792 | ||||||
Infineon Technologies AG | 41,430 | 955,717 | ||||||
LEG Immobilien AG | 26,443 | 2,673,422 | ||||||
MTU Aero Engines AG | 8,606 | 1,205,285 | ||||||
Pfeiffer Vacuum Technology AG | 1,969 | 322,630 | ||||||
Scout24 AG* | 1,161 | 46,776 | ||||||
Symrise AG# | 48,870 | 3,572,702 | ||||||
TAG Immobilien AG | 13,113 | 218,836 | ||||||
27,006,486 | ||||||||
Guernsey — 0.8% |
| |||||||
Burford Capital, Ltd. | 372,607 | 5,575,709 | ||||||
Hong Kong — 1.1% |
| |||||||
China Resources Beer Holdings Co., Ltd. | 786,000 | 1,973,617 | ||||||
Melco International Development, Ltd. | 1,409,000 | 3,319,527 | ||||||
Techtronic Industries Co., Ltd. | 389,500 | 2,016,300 | ||||||
7,309,444 | ||||||||
India — 0.1% |
| |||||||
Mahindra & Mahindra, Ltd. GDR | 27,498 | 573,333 | ||||||
Indonesia — 0.3% |
| |||||||
Astra Agro Lestari Tbk PT | 908,800 | 1,005,501 | ||||||
Indocement Tunggal Prakarsa Tbk PT | 321,600 | 476,811 | ||||||
PT Semen Indonesia Persero Tbk | 236,500 | 185,578 | ||||||
XL Axiata Tbk PT† | 530,500 | 143,200 | ||||||
1,811,090 | ||||||||
Ireland — 1.9% |
| |||||||
Bank of Ireland Group PLC† | 25,503 | 212,521 | ||||||
Cairn Homes PLC† | 2,504,123 | 5,135,620 | ||||||
DCC PLC | 22,602 | 2,059,910 | ||||||
Greencore Group PLC | 326,779 | 866,829 | ||||||
Hibernia REIT PLC | 199,397 | 338,979 | ||||||
Kerry Group PLC, Class A | 12,681 | 1,180,629 | ||||||
Paddy Power Betfair PLC | 35,869 | 3,163,095 | ||||||
12,957,583 | ||||||||
Israel — 1.3% |
| |||||||
Bezeq The Israeli Telecommunication Corp., Ltd. | 335,295 | 494,075 | ||||||
Israel Discount Bank, Ltd., Class A† | 2,076,591 | 5,178,404 | ||||||
Mizrahi Tefahot Bank, Ltd. | 180,486 | 3,216,718 | ||||||
8,889,197 | ||||||||
Italy — 3.3% |
| |||||||
Brembo SpA | 265,084 | 4,140,218 | ||||||
Buzzi Unicem SpA# | 146,636 | 3,597,800 | ||||||
Cerved Information Solutions SpA | 244,004 | 2,752,535 | ||||||
Davide Campari-Milano SpA | 137,146 | 993,714 | ||||||
Fincantieri SpA† | 3,528,797 | 4,032,698 | ||||||
FinecoBank Banca Fineco SpA | 125,203 | 1,076,258 | ||||||
Infrastrutture Wireless Italiane SpA* | 76,615 | 507,101 | ||||||
Italgas SpA | 164,353 | 929,642 | ||||||
Moncler SpA | 155,639 | 4,428,622 | ||||||
22,458,588 | ||||||||
Security Description | Shares | Value (Note 2) | ||||||
Japan — 21.1% |
| |||||||
ABC-Mart, Inc. | 20,000 | $ | 1,029,026 | |||||
Aeon Delight Co., Ltd. | 15,900 | 566,581 | ||||||
AEON Financial Service Co., Ltd. | 40,200 | 854,139 | ||||||
Air Water, Inc. | 21,000 | 388,360 | ||||||
Asante, Inc. | 9,300 | 157,939 | ||||||
Brother Industries, Ltd. | 5,800 | 138,398 | ||||||
Chiba Bank, Ltd.# | 140,000 | 940,154 | ||||||
CMK Corp. | 493,060 | 4,843,759 | ||||||
Coca-Cola Bottlers Japan, Inc. | 7,200 | 247,295 | ||||||
Cosmos Pharmaceutical Corp. | 3,800 | 862,510 | ||||||
Daifuku Co., Ltd. | 102,900 | 4,499,901 | ||||||
Daiseki Co., Ltd. | 43,700 | 1,044,560 | ||||||
Daiwa Securities Group, Inc. | 132,000 | 724,117 | ||||||
Doshisha Co., Ltd. | 7,800 | 161,053 | ||||||
Ezaki Glico Co., Ltd. | 21,000 | 1,118,228 | ||||||
Fuji Seal International, Inc. | 111,500 | 3,391,384 | ||||||
Fujikura, Ltd. | 422,900 | 3,447,970 | ||||||
Fujitsu General, Ltd. | 7,600 | 159,314 | ||||||
Fukuoka Financial Group, Inc. | 945,000 | 4,163,276 | ||||||
Harmonic Drive Systems, Inc.# | 224,100 | 9,922,279 | ||||||
Heian Ceremony Service Co., Ltd. | 16,300 | 142,627 | ||||||
Hirose Electric Co., Ltd.# | 4,600 | 638,000 | ||||||
Hogy Medical Co., Ltd. | 2,200 | 155,848 | ||||||
Iriso Electronics Co., Ltd. | 16,900 | 833,453 | ||||||
Japan Exchange Group, Inc. | 8,000 | 136,652 | ||||||
Japan Pure Chemical Co., Ltd. | 2,300 | 56,734 | ||||||
Jeol, Ltd. | 55,000 | 260,511 | ||||||
JGC Corp.# | 14,060 | 226,079 | ||||||
Kakaku.com, Inc.# | 15,900 | 198,260 | ||||||
Kansai Paint Co., Ltd. | 57,200 | 1,453,443 | ||||||
Kintetsu World Express, Inc. | 15,300 | 248,608 | ||||||
Kobayashi Pharmaceutical Co., Ltd. | 41,600 | 2,588,810 | ||||||
Koito Manufacturing Co., Ltd.# | 39,500 | 2,476,435 | ||||||
Lawson, Inc.# | 8,500 | 571,830 | ||||||
Maeda Corp. | 478,000 | 5,845,930 | ||||||
Matsumotokiyoshi Holdings Co., Ltd. | 34,200 | 2,333,346 | ||||||
Meitec Corp. | 11,500 | 532,342 | ||||||
Milbon Co., Ltd. | 13,300 | 805,677 | ||||||
Miraca Holdings, Inc. | 5,400 | 245,785 | ||||||
Mitsubishi Pencil Co., Ltd. | 5,800 | 152,610 | ||||||
MonotaRO Co., Ltd.# | 10,100 | 309,640 | ||||||
Nakanishi, Inc. | 25,700 | 1,111,597 | ||||||
NGK Spark Plug Co., Ltd. | 46,200 | 883,406 | ||||||
Nihon Kohden Corp. | 28,800 | 669,074 | ||||||
Nihon Parkerizing Co., Ltd. | 40,600 | 594,409 | ||||||
Nippon Gas Co., Ltd. | 7,000 | 235,410 | ||||||
Nippon Television Holdings, Inc. | 33,600 | 611,287 | ||||||
Nissei ASB Machine Co., Ltd. | 13,100 | 528,044 | ||||||
Nitori Holdings Co., Ltd. | 9,600 | 1,484,942 | ||||||
Nomura Research Institute, Ltd. | 49,500 | 1,930,752 | ||||||
Obara Group, Inc. | 4,600 | 255,250 | ||||||
OBIC Business Consultants Co., Ltd. | 18,900 | 970,354 | ||||||
OBIC Co., Ltd. | 93,000 | 5,837,247 | ||||||
Omron Corp. | 5,700 | 286,728 | ||||||
Persol Holdings Co., Ltd. | 308,500 | 6,277,391 | ||||||
Proto Corp. | 31,400 | 558,778 | ||||||
Rakuten, Inc. | 6,600 | 78,681 | ||||||
Rinnai Corp. | 4,900 | 426,097 | ||||||
Ryohin Keikaku Co., Ltd. | 2,800 | 777,776 | ||||||
S Foods, Inc. | 11,300 | 434,453 | ||||||
San-A Co, Ltd. | 8,200 | 361,161 | ||||||
Santen Pharmaceutical Co., Ltd.# | 111,400 | 1,731,927 | ||||||
SCREEN Holdings Co., Ltd. | 45,400 | 2,958,007 | ||||||
Seria Co., Ltd.# | 161,934 | 8,890,590 | ||||||
Shima Seiki Manufacturing, Ltd.# | 9,300 | 474,399 |
51 |
Table of Contents
VALIC Company II International Opportunities Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS (continued) |
| |||||||
Japan (continued) |
| |||||||
Shimamura Co., Ltd. | 3,000 | $ | 366,187 | |||||
Shimano, Inc. | 1,900 | 257,142 | ||||||
Shizuoka Bank, Ltd. | 56,000 | 490,679 | ||||||
SK Kaken Co., Ltd. | 3,000 | 267,431 | ||||||
SMS Co., Ltd.# | 173,100 | 5,608,002 | ||||||
Sony Financial Holdings, Inc.# | 48,300 | 767,114 | ||||||
Stanley Electric Co., Ltd.# | 50,800 | 1,690,705 | ||||||
Start Today Co., Ltd. | 413,300 | 12,887,788 | ||||||
Sundrug Co., Ltd. | 30,900 | 1,286,597 | ||||||
Taiko Pharmaceutical Co., Ltd.# | 9,200 | 198,697 | ||||||
TechnoPro Holdings, Inc. | 106,000 | 4,847,962 | ||||||
Terumo Corp. | 20,200 | 781,768 | ||||||
THK Co., Ltd. | 272,000 | 9,144,400 | ||||||
Toshiba Plant Systems & Services Corp. | 16,000 | 275,532 | ||||||
TOTO, Ltd. | 7,900 | 301,665 | ||||||
Unicharm Corp. | 64,500 | 1,520,477 | ||||||
USS Co., Ltd. | 64,100 | 1,264,485 | ||||||
Yamato Holdings Co., Ltd. | 88,900 | 1,902,944 | ||||||
Zojirushi Corp.# | 40,100 | 400,149 | ||||||
141,500,347 | ||||||||
Jersey — 1.0% |
| |||||||
boohoo.com plc† | 1,201,898 | 3,524,833 | ||||||
Sanne Group PLC# | 357,996 | 3,507,459 | ||||||
7,032,292 | ||||||||
Luxembourg — 0.2% |
| |||||||
B&M European Value Retail SA | 180,772 | 870,327 | ||||||
Globant SA†# | 10,103 | 392,905 | ||||||
1,263,232 | ||||||||
Malaysia — 0.2% |
| |||||||
Public Bank Bhd | 254,000 | 1,226,646 | ||||||
Mauritius — 0.2% |
| |||||||
MakeMyTrip, Ltd.†# | 29,618 | 1,009,974 | ||||||
Mexico — 0.7% |
| |||||||
Alsea SAB de CV | 79,559 | 289,237 | ||||||
Arca Continental SAB de CV | 50,138 | 365,899 | ||||||
Concentradora Fibra Danhos SA de CV | 148,835 | 263,719 | ||||||
Concentradora Fibra Hotelera Mexicana SA de CV | 398,203 | 328,064 | ||||||
Elementia SAB de CV†*# | 12,614 | 17,708 | ||||||
Fibra Uno Administracion SA de CV | 241,093 | 429,077 | ||||||
Genomma Lab Internacional SAB de CV, Class B†# | 352,664 | 453,078 | ||||||
Gruma SAB de CV, Class B | 24,668 | 361,826 | ||||||
Grupo Aeroportuario del Centro Norte SAB de CV | 64,777 | 391,867 | ||||||
Grupo Aeroportuario del Sureste SAB de CV ADR | 2,587 | 526,868 | ||||||
Grupo Financiero Inbursa SAB de CV, Class O | 236,277 | 395,794 | ||||||
Mexichem SAB de CV | 161,319 | 429,480 | ||||||
PLA Administradora Industrial S de RL de CV | 201,069 | 342,664 | ||||||
4,595,281 | ||||||||
Netherlands — 1.7% |
| |||||||
Aalberts Industries NV | 13,368 | 595,674 | ||||||
ASM International NV | 28,727 | 1,692,391 | ||||||
Corbion NV | 71,532 | 2,158,679 | ||||||
IMCD Group NV | 12,052 | 709,210 | ||||||
Takeaway.com Holding BV†* | 10,063 | 467,356 | ||||||
Wessanen | 327,766 | 5,729,357 | ||||||
11,352,667 | ||||||||
New Zealand — 0.4% |
| |||||||
Fisher & Paykel Healthcare Corp., Ltd. | 352,223 | 2,981,007 | ||||||
Security Description | Shares | Value (Note 2) | ||||||
Norway — 0.7% |
| |||||||
Aker Solutions ASA†# | 161,994 | $ | 757,648 | |||||
Marine Harvest ASA | 80,556 | 1,600,265 | ||||||
TGS NOPEC Geophysical Co. ASA | 74,691 | 1,601,248 | ||||||
XXL ASA* | 57,662 | 577,877 | ||||||
4,537,038 | ||||||||
Philippines — 0.6% |
| |||||||
Bloomberry Resorts Corp.† | 16,952,900 | 3,716,589 | ||||||
Jollibee Foods Corp. | 94,880 | 442,140 | ||||||
4,158,729 | ||||||||
Portugal — 0.1% |
| |||||||
NOS SGPS SA | 104,718 | 670,768 | ||||||
Singapore — 0.8% |
| |||||||
Ascendas India Trust# | 1,796,800 | 1,530,754 | ||||||
City Developments, Ltd. | 170,900 | 1,478,526 | ||||||
Singapore Technologies Engineering, Ltd. | 311,800 | 840,821 | ||||||
Venture Corp., Ltd. | 115,763 | 1,350,466 | ||||||
5,200,567 | ||||||||
South Africa — 0.6% |
| |||||||
AVI, Ltd. | 132,530 | 1,007,182 | ||||||
Clicks Group, Ltd. | 117,324 | 1,342,531 | ||||||
Dis-Chem Pharmacies, Ltd.* | 755,958 | 1,715,195 | ||||||
4,064,908 | ||||||||
South Korea — 1.4% |
| |||||||
Coway Co., Ltd. | 15,866 | 1,391,596 | ||||||
LS Industrial Systems Co., Ltd. | 22,759 | 1,179,235 | ||||||
Mando Corp. | 3,036 | 645,114 | ||||||
Orion Corp.† | 15,997 | 1,238,505 | ||||||
Orion Holdings Corp. | 326 | 7,967 | ||||||
Samsung Fire & Marine Insurance Co., Ltd. | 4,950 | 1,216,657 | ||||||
Tera Semicon Co., Ltd. | 115,205 | 3,251,290 | ||||||
TK Corp. | 46,609 | 407,684 | ||||||
9,338,048 | ||||||||
Spain — 1.8% |
| |||||||
Amadeus IT Group SA | 89,723 | 5,566,422 | ||||||
Cellnex Telecom SA*# | 69,905 | 1,561,858 | ||||||
CEMEX Latam Holdings SA† | 77,444 | 294,094 | ||||||
CIE Automotive SA | 152,657 | 3,828,444 | ||||||
Viscofan SA | 13,486 | 814,419 | ||||||
12,065,237 | ||||||||
Sweden — 3.0% |
| |||||||
Ahlsell AB* | 158,359 | 1,107,085 | ||||||
Essity AB, Class B† | 25,611 | 711,521 | ||||||
Evolution Gaming Group AB* | 83,860 | 5,082,600 | ||||||
LeoVegas AB* | 486,905 | 4,291,575 | ||||||
Saab AB, Series B | 11,010 | 502,599 | ||||||
Scandic Hotels Group AB* | 356,616 | 4,916,066 | ||||||
SSAB AB, Class A† | 527,616 | 2,684,353 | ||||||
Swedish Match AB | 26,593 | 948,461 | ||||||
20,244,260 | ||||||||
Switzerland — 4.4% |
| |||||||
Coca-Cola HBC AG | 17,679 | 604,908 | ||||||
DKSH Holding AG | 2,812 | 230,592 | ||||||
Dufry AG† | 2,993 | 461,515 | ||||||
Forbo Holding AG | 2,328 | 3,541,121 | ||||||
Geberit AG | 1,979 | 904,516 | ||||||
Georg Fischer AG | 5,334 | 6,147,061 | ||||||
Julius Baer Group, Ltd. | 15,204 | 850,759 | ||||||
Logitech International SA | 124,646 | 4,446,114 |
52 |
Table of Contents
VALIC Company II International Opportunities Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS (continued) |
| |||||||
Switzerland (continued) |
| |||||||
Lonza Group AG | 1,605 | $ | 406,769 | |||||
Sika AG | 449 | 3,184,794 | ||||||
Sonova Holding AG | 8,735 | 1,477,030 | ||||||
Temenos Group AG | 70,761 | 6,994,105 | ||||||
29,249,284 | ||||||||
Taiwan — 0.9% |
| |||||||
Advantech Co., Ltd. | 57,256 | 423,441 | ||||||
Chroma ATE, Inc. | 182,000 | 625,204 | ||||||
E.Sun Financial Holding Co., Ltd. | 3,176,152 | 1,959,490 | ||||||
PChome Online, Inc. | 152,932 | 914,558 | ||||||
Voltronic Power Technology Corp. | 36,950 | 667,550 | ||||||
Yuanta Financial Holding Co., Ltd. | 2,936,807 | 1,277,097 | ||||||
5,867,340 | ||||||||
Thailand — 1.2% |
| |||||||
AEON Thana Sinsap Thailand PCL | 150,500 | 471,375 | ||||||
Precious Shipping PCL† | 746,050 | 229,174 | ||||||
PTT Global Chemical PCL | 745,100 | 1,716,613 | ||||||
Taokaenoi Food & Marketing PCL, Class F | 1,408,700 | 827,274 | ||||||
Thai Beverage PCL | 1,675,700 | 1,150,223 | ||||||
Tisco Financial Group PCL | 1,585,100 | 3,568,325 | ||||||
7,962,984 | ||||||||
Turkey — 0.1% |
| |||||||
Ford Otomotiv Sanayi AS | 16,035 | 220,910 | ||||||
Tofas Turk Otomobil Fabrikasi AS | 27,255 | 249,469 | ||||||
470,379 | ||||||||
United Kingdom — 14.8% |
| |||||||
Abcam PLC | 456,873 | 6,286,827 | ||||||
Admiral Group PLC | 19,594 | 489,466 | ||||||
Ashtead Group PLC | 28,800 | 618,788 | ||||||
Auto Trader Group PLC* | 306,039 | 1,399,868 | ||||||
Babcock International Group PLC | 85,507 | 897,976 | ||||||
Bellway PLC | 18,424 | 762,992 | ||||||
Booker Group PLC | 1,305,209 | 3,375,884 | ||||||
Britvic PLC | 40,210 | 392,999 | ||||||
Bunzl PLC | 286,977 | 8,575,543 | ||||||
Burberry Group PLC | 27,976 | 650,877 | ||||||
Card Factory PLC | 38,914 | 167,395 | ||||||
Cobham PLC | 302,613 | 537,448 | ||||||
Compass Group PLC | 154,147 | 3,291,041 | ||||||
Croda International PLC | 81,336 | 4,038,953 | ||||||
CVS Group PLC | 202,326 | 3,538,678 | ||||||
Dignity PLC | 59,720 | 1,743,564 | ||||||
Domino’s Pizza Group PLC# | 896,895 | 3,138,288 | ||||||
Elementis PLC | 51,486 | 179,392 | ||||||
EMIS Group PLC | 30,008 | 381,353 | ||||||
Fevertree Drinks PLC | 289,008 | 9,219,801 | ||||||
Forterra PLC* | 46,578 | 164,986 | ||||||
GKN PLC | 132,355 | 546,136 | ||||||
Greggs PLC | 37,859 | 589,376 | ||||||
Halma PLC | 76,451 | 1,080,889 | ||||||
Hargreaves Lansdown PLC | 47,250 | 855,841 | ||||||
Howden Joinery Group PLC | 135,054 | 743,653 | ||||||
Ibstock PLC* | 1,191,821 | 3,623,767 | ||||||
IG Group Holdings PLC | 76,181 | 635,640 | ||||||
IMI PLC | 32,874 | 481,967 | ||||||
Indivior PLC† | 659,435 | 3,562,300 | ||||||
Intertek Group PLC | 38,282 | 2,531,266 | ||||||
Jardine Lloyd Thompson Group PLC | 81,620 | 1,218,536 | ||||||
Just Eat PLC† | 139,187 | 1,200,379 | ||||||
KAZ Minerals PLC†# | 577,037 | 6,278,795 | ||||||
Keywords Studios PLC | 378,832 | 6,981,557 | ||||||
Meggitt PLC | 88,652 | 594,611 |
Security Description | Shares/ Principal Amount | Value (Note 2) | ||||||
United Kingdom (continued) |
| |||||||
Merlin Entertainments PLC* | 88,030 | $ | 525,292 | |||||
Moneysupermarket.com Group PLC | 195,402 | 807,731 | ||||||
PZ Cussons PLC | 22,353 | 99,114 | ||||||
Rathbone Brothers PLC | 48,315 | 1,736,174 | ||||||
Rightmove PLC | 49,504 | 2,639,590 | ||||||
Rotork PLC | 105,557 | 312,567 | ||||||
Scapa Group PLC | 378,223 | 2,199,473 | ||||||
Schroders PLC | 63,872 | 2,780,570 | ||||||
Smith & Nephew PLC | 99,929 | 1,806,360 | ||||||
Spectris PLC | 33,177 | 993,181 | ||||||
Spirax-Sarco Engineering PLC | 15,381 | 1,117,201 | ||||||
Stagecoach Group PLC | 140,822 | 304,505 | ||||||
Tate & Lyle PLC | 26,979 | 238,354 | ||||||
TechnipFMC PLC† | 25,240 | 647,588 | ||||||
Travis Perkins PLC | 18,283 | 355,712 | ||||||
Whitbread PLC | 16,803 | 816,175 | ||||||
ZPG PLC* | 299,514 | 1,364,873 | ||||||
99,521,292 | ||||||||
United States — 0.8% |
| |||||||
Autoliv, Inc. SDR | 4,456 | 483,187 | ||||||
EPAM Systems, Inc.† | 34,363 | 2,794,743 | ||||||
Gran Tierra Energy, Inc.† | 269,185 | 551,842 | ||||||
Yum China Holdings, Inc.† | 50,597 | 1,789,110 | ||||||
5,618,882 | ||||||||
Total Common Stocks | ||||||||
(cost $484,303,294) | 644,077,536 | |||||||
EQUITY CERTIFICATES — 1.1% |
| |||||||
Deutsche Bank AG - MOIL, Ltd.† | 229,293 | 1,295,565 | ||||||
Merrill Lynch - CESC, Ltd.† | 94,159 | 1,496,057 | ||||||
Merrill Lynch - Dabur India, Ltd. | 276,493 | 1,362,867 | ||||||
Merrill Lynch - Federal Bank, Ltd. | 1,059,008 | 1,794,936 | ||||||
Merrill Lynch - Shriram Transport Finance Co., Ltd.† | 97,970 | 1,509,559 | ||||||
Total Equity Certificates | ||||||||
(cost $4,359,959) | 7,458,984 | |||||||
EXCHANGE-TRADED FUNDS — 0.5% |
| |||||||
iShares MSCI EAFE Small-Cap ETF | 54,216 | 3,265,972 | ||||||
WisdomTree India Earnings Fund | 12,874 | 338,328 | ||||||
Total Exchange-Traded Funds | ||||||||
(cost $3,408,241) | 3,604,300 | |||||||
WARRANTS — 0.0% |
| |||||||
Precious Shipping PCL | 27,795 | 1,557 | ||||||
Total Long-Term Investment Securities | ||||||||
(cost $492,071,494) | 655,142,377 | |||||||
SHORT-TERM INVESTMENT SECURITIES — 3.3% |
| |||||||
Registered Investment Companies — 2.4% |
| |||||||
State Street Navigator Securities Lending Government Money Market Portfolio | 16,275,171 | 16,275,171 | ||||||
U.S. Government Agencies — 0.9% |
| |||||||
Federal Home Loan Bank | ||||||||
0.51% due 09/01/2017 | $ | 2,289,000 | 2,289,000 | |||||
0.91% due 09/01/2017 | 3,366,000 | 3,366,000 | ||||||
5,655,000 | ||||||||
Total Short-Term Investment Securities | ||||||||
(cost $21,930,171) | 21,930,171 | |||||||
53 |
Table of Contents
VALIC Company II International Opportunities Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal | Value (Note 2) | ||||||
REPURCHASE AGREEMENTS — 1.0% |
| |||||||
Agreement with Fixed Income Clearing Corp., bearing interest at 0.12%, dated 08/31/2017, to be repurchased 09/01/2017 in the amount of $7,020,023, and collateralized by $6,755,000 of United States Treasury Bonds, bearing interest at 3.00%, due 05/15/2045 and having an approximate value of $7,162,745 | $ | 7,020,000 | $ | 7,020,000 | ||||
TOTAL INVESTMENTS | ||||||||
(cost $521,021,665)(5) | 101.9 | % | 684,092,548 | |||||
Liabilities in excess of other assets | (1.9 | ) | (12,995,106 | ) | ||||
NET ASSETS | 100.0 | % | $ | 671,097,442 | ||||
† | Non-income producing security |
* | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in transactions exempt from registration, normally to qualified institutional buyers. The Fund has no right to demand registration of these securities. At August 31, 2017, the aggregate value of these securities was $41,300,540 representing 6.2% of net assets. Unless otherwise indicated, these securities are not considered to be illiquid. |
# | The security or a portion thereof is on loan (see Note 2). |
(1) | Illiquid Security. At August 31, 2017 the aggregate value of these securities was $0, representing 0.0% of net assets. |
(2) | Security classified as Level 3 (see Note 2). |
(3) | At August 31, 2017, the Fund had loaned securities with a total value of $31,801,959. This was secured by collateral of $16,275,171, which was received in cash and subsequently invested in short-term investments currently valued at $16,275,171 as reported in the Portfolio of Investments. Additional collateral of $16,957,639 was received in the form of fixed income pooled securities, which the Fund cannot sell or repledge and accordingly are not reflected in the Fund’s assets and liabilities. |
The components of the fixed income pooled securities referenced above are as follows:
Securities | Coupon Range | Maturity Date Range | Value as of August 31, 2017 | |||||
Federal Home Loan Mtg. Corp. | 2.50% to 4.50% | 08/01/2027 to 01/01/2047 | $ | 2,855,943 | ||||
Federal National Mtg. Assoc. | 2.50% to 4.40% | 10/25/2029 to 11/01/2046 | 3,286,758 | |||||
Government National Mtg. Assoc. | 2.50% to 3.50% | 01/20/2043 to 05/16/2053 | 2,239,361 | |||||
United States Treasury Bills | 0.00% | 09/07/2017 to 03/01/2018 | 213,152 | |||||
United States Treasury Notes/Bonds | 0.13% to 5.50% | 09/30/2017 to 02/15/2047 | 8,362,425 |
(4) | The rate shown is the 7-day yield as of August 31, 2017. |
(5) | See Note 5 for cost of investments on a tax basis. |
ADR—American Depositary Receipt
ETF—Exchange-Traded Fund
GDR—Global Depositary Receipt
SDR—Swedish Depositary Receipt
THB—Thai Baht
The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2017 (see Note 2):
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at Value:* | ||||||||||||||||
Common Stocks: | ||||||||||||||||
Bermuda | $ | 1,709,405 | $ | 11,944,309 | ** | $ | 0 | $ | 13,653,714 | |||||||
Other Countries | 82,050,913 | 548,372,909 | ** | — | 630,423,822 | |||||||||||
Equity Certificates | — | 7,458,984 | — | 7,458,984 | ||||||||||||
Exchange-Traded Funds | 3,604,300 | — | — | 3,604,300 | ||||||||||||
Warrants | 1,557 | — | — | 1,557 | ||||||||||||
Short Term Investment Securities: | ||||||||||||||||
Registered Investment Companies | 16,275,171 | — | — | 16,275,171 | ||||||||||||
U.S. Government Agencies | — | 5,655,000 | — | 5,655,000 | ||||||||||||
Repurchase Agreements | — | 7,020,000 | — | 7,020,000 | ||||||||||||
Total Investments at Value | $ | 103,641,346 | $ | 580,451,202 | $ | 0 | $ | 684,092,548 | ||||||||
* | For a detailed presentation of investments, please refer to the Portfolio of Investments. |
** | Represents foreign equity securities that have been fair valued in accordance with pricing procedures approved by the Board (see Note 2). |
The Portfolio’s policy is to recognize transfers between Levels as of the end of the reporting period. Securities currently valued at $351,804,126 were transferred from Level 1 to Level 2 due to foreign equity securities whose values were adjusted for fair value pricing procedures for foreign equity securities. There were no additional transfers between Levels during the reporting period.
At the beginning and the end of the reporting period, Level 3 investments in securities were not considered a material portion of the Fund.
See Notes to Financial Statements
54 |
Table of Contents
VALIC Company II Large Cap Value Fund
PORTFOLIO PROFILE — August 31, 2017 (unaudited)
Industry Allocation*
Diversified Banking Institutions | 7.7 | % | ||
Medical — Drugs | 6.9 | |||
Oil Companies — Exploration & Production | 6.6 | |||
Insurance — Reinsurance | 4.3 | |||
Banks — Super Regional | 4.0 | |||
Aerospace/Defense — Equipment | 3.9 | |||
Insurance — Multi-line | 3.8 | |||
Food — Misc./Diversified | 3.6 | |||
Medical — HMO | 2.5 | |||
Aerospace/Defense | 2.4 | |||
Telephone — Integrated | 2.3 | |||
Enterprise Software/Service | 2.2 | |||
Insurance — Life/Health | 2.0 | |||
Networking Products | 2.0 | |||
Beverages — Non-alcoholic | 1.9 | |||
Electric — Integrated | 1.7 | |||
Electronic Components — Semiconductors | 1.4 | |||
Real Estate Investment Trusts | 1.4 | |||
Building Products — Cement | 1.4 | |||
Chemicals — Diversified | 1.4 | |||
Finance — Credit Card | 1.4 | |||
Cosmetics & Toiletries | 1.4 | |||
Instruments — Controls | 1.3 | |||
Oil Refining & Marketing | 1.3 | |||
Containers — Paper/Plastic | 1.2 | |||
Medical — Biomedical/Gene | 1.2 | |||
Agricultural Chemicals | 1.2 | |||
Finance — Consumer Loans | 1.1 | |||
Cable/Satellite TV | 1.1 | |||
Gold Mining | 1.1 | |||
Computers | 1.1 | |||
Oil — Field Services | 1.1 | |||
Banks — Commercial | 1.1 | |||
Investment Management/Advisor Services | 1.0 | |||
Diagnostic Equipment | 1.0 | |||
Commercial Paper | 1.0 | |||
Web Portals/ISP | 0.9 | |||
Advertising Agencies | 0.8 | |||
Containers — Metal/Glass | 0.8 | |||
Electric — Distribution | 0.8 | |||
Commercial Services | 0.8 | |||
Multimedia | 0.8 | |||
Brewery | 0.8 | |||
Rubber — Tires | 0.7 | |||
Exchange — Traded Funds | 0.7 | |||
Electronic Components — Misc. | 0.7 | |||
Medical — Wholesale Drug Distribution | 0.7 | |||
Insurance — Property/Casualty | 0.7 | |||
Banks — Fiduciary | 0.6 | |||
Applications Software | 0.5 | |||
Airlines | 0.5 | |||
Casino Hotels | 0.5 | |||
Finance — Investment Banker/Broker | 0.5 | |||
Medical Labs & Testing Services | 0.5 | |||
Commercial Services-Finance | 0.5 | |||
Cellular Telecom | 0.4 | |||
Computer Data Security | 0.4 | |||
Computer Services | 0.4 | |||
Distribution/Wholesale | 0.4 | |||
Electric Products — Misc. | 0.4 | |||
E-Commerce/Products | 0.4 | |||
Diversified Manufacturing Operations | 0.4 | |||
Medical Instruments | 0.4 | |||
Non-Hazardous Waste Disposal | 0.3 | |||
Food — Confectionery | 0.3 | |||
Oil Companies — Integrated | 0.3 | |||
Retail — Major Department Stores | 0.3 | |||
Internet Infrastructure Software | 0.3 | |||
Metal — Aluminum | 0.2 |
Metal — Copper | 0.2 | |||
Time Deposits | 0.1 | |||
100.0 | % | |||
* | Calculated as a percentage of net assets |
55 |
Table of Contents
VALIC Company II Large Cap Value Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS — 98.2% |
| |||||||
Advertising Agencies — 0.8% |
| |||||||
Omnicom Group, Inc.# | 26,564 | $ | 1,922,702 | |||||
Aerospace/Defense — 2.4% |
| |||||||
General Dynamics Corp. | 10,239 | 2,061,623 | ||||||
Raytheon Co. | 18,639 | 3,392,484 | ||||||
5,454,107 | ||||||||
Aerospace/Defense - Equipment — 3.9% |
| |||||||
Harris Corp. | 14,501 | 1,782,173 | ||||||
L3 Technologies, Inc. | 12,316 | 2,235,107 | ||||||
United Technologies Corp. | 41,015 | 4,910,316 | ||||||
8,927,596 | ||||||||
Agricultural Chemicals — 1.2% |
| |||||||
CF Industries Holdings, Inc.# | 68,415 | 1,983,351 | ||||||
Potash Corp. of Saskatchewan, Inc. | 38,743 | 673,741 | ||||||
2,657,092 | ||||||||
Airlines — 0.5% |
| |||||||
Delta Air Lines, Inc. | 25,836 | 1,219,201 | ||||||
Applications Software — 0.5% |
| |||||||
Citrix Systems, Inc.† | 9,976 | 780,223 | ||||||
Microsoft Corp. | 5,968 | 446,227 | ||||||
1,226,450 | ||||||||
Banks - Commercial — 1.1% |
| |||||||
BB&T Corp. | 51,673 | 2,381,609 | ||||||
Banks - Fiduciary — 0.6% |
| |||||||
Bank of New York Mellon Corp. | 24,987 | 1,306,320 | ||||||
Banks - Super Regional — 4.0% |
| |||||||
Capital One Financial Corp. | 10,209 | 812,738 | ||||||
PNC Financial Services Group, Inc. | 20,119 | 2,523,124 | ||||||
SunTrust Banks, Inc. | 30,392 | 1,674,599 | ||||||
US Bancorp | 39,879 | 2,043,799 | ||||||
Wells Fargo & Co. | 37,810 | 1,930,957 | ||||||
8,985,217 | ||||||||
Beverages - Non-alcoholic — 1.9% |
| |||||||
Coca-Cola Co. | 40,058 | 1,824,642 | ||||||
Coca-Cola European Partners PLC | 33,434 | 1,437,662 | ||||||
PepsiCo, Inc. | 8,591 | 994,236 | ||||||
4,256,540 | ||||||||
Brewery — 0.8% |
| |||||||
Molson Coors Brewing Co., Class B | 19,316 | 1,733,611 | ||||||
Building Products - Cement — 1.4% |
| |||||||
Martin Marietta Materials, Inc. | 5,865 | 1,243,321 | ||||||
Vulcan Materials Co. | 16,611 | 2,014,250 | ||||||
3,257,571 | ||||||||
Cable/Satellite TV — 1.1% |
| |||||||
Comcast Corp., Class A | 60,362 | 2,451,301 | ||||||
Casino Hotels — 0.5% |
| |||||||
Las Vegas Sands Corp. | 19,574 | 1,217,699 | ||||||
Cellular Telecom — 0.4% |
| |||||||
Vodafone Group PLC ADR# | 33,039 | 959,122 | ||||||
Chemicals - Diversified — 1.4% |
| |||||||
Dow Chemical Co. | 32,117 | 2,140,598 | ||||||
Westlake Chemical Corp. | 13,440 | 1,033,670 | ||||||
3,174,268 | ||||||||
Security Description | Shares | Value (Note 2) | ||||||
Commercial Services — 0.8% |
| |||||||
Quanta Services, Inc.† | 49,883 | $ | 1,792,296 | |||||
Commercial Services - Finance — 0.5% |
| |||||||
Total System Services, Inc. | 15,689 | 1,084,424 | ||||||
Computer Data Security — 0.4% |
| |||||||
Check Point Software Technologies, Ltd.† | 8,341 | 933,108 | ||||||
Computer Services — 0.4% |
| |||||||
Teradata Corp.†# | 28,466 | 908,635 | ||||||
Computers — 1.1% |
| |||||||
Apple, Inc. | 14,720 | 2,414,080 | ||||||
Containers - Metal/Glass — 0.8% |
| |||||||
Crown Holdings, Inc.† | 32,040 | 1,891,321 | ||||||
Containers - Paper/Plastic — 1.2% |
| |||||||
Packaging Corp. of America | 25,061 | 2,817,107 | ||||||
Cosmetics & Toiletries — 1.4% |
| |||||||
Colgate-Palmolive Co. | 14,490 | 1,038,063 | ||||||
Procter & Gamble Co. | 14,325 | 1,321,768 | ||||||
Unilever PLC ADR# | 12,133 | 706,262 | ||||||
3,066,093 | ||||||||
Diagnostic Equipment — 1.0% |
| |||||||
Abbott Laboratories | 43,926 | 2,237,590 | ||||||
Distribution/Wholesale — 0.4% |
| |||||||
Fastenal Co. | 20,973 | 894,918 | ||||||
Diversified Banking Institutions — 7.7% |
| |||||||
Citigroup, Inc. | 108,291 | 7,367,037 | ||||||
Goldman Sachs Group, Inc. | 9,893 | 2,213,460 | ||||||
JPMorgan Chase & Co. | 85,832 | 7,801,270 | ||||||
17,381,767 | ||||||||
Diversified Manufacturing Operations — 0.4% |
| |||||||
Carlisle Cos., Inc. | 8,679 | 821,815 | ||||||
E-Commerce/Products — 0.4% |
| |||||||
eBay, Inc.† | 23,513 | 849,525 | ||||||
Electric Products - Misc. — 0.4% |
| |||||||
AMETEK, Inc. | 13,917 | 880,250 | ||||||
Electric - Distribution — 0.8% |
| |||||||
PPL Corp. | 45,889 | 1,800,684 | ||||||
Electric - Integrated — 1.7% |
| |||||||
FirstEnergy Corp.# | 64,816 | 2,111,705 | ||||||
Great Plains Energy, Inc. | 58,146 | 1,784,501 | ||||||
3,896,206 | ||||||||
Electronic Components - Misc. — 0.7% |
| |||||||
Corning, Inc. | 56,745 | 1,631,986 | ||||||
Electronic Components - Semiconductors — 1.4% |
| |||||||
Intel Corp. | 33,957 | 1,190,872 | ||||||
Texas Instruments, Inc. | 25,200 | 2,087,064 | ||||||
3,277,936 | ||||||||
Enterprise Software/Service — 2.2% |
| |||||||
Oracle Corp. | 100,284 | 5,047,294 | ||||||
Finance - Consumer Loans — 1.1% |
| |||||||
Synchrony Financial | 82,532 | 2,541,160 | ||||||
Finance - Credit Card — 1.4% |
| |||||||
American Express Co. | 35,770 | 3,079,797 | ||||||
Finance - Investment Banker/Broker — 0.5% |
| |||||||
Raymond James Financial, Inc. | 15,175 | 1,188,506 | ||||||
56 |
Table of Contents
VALIC Company II Large Cap Value Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS (continued) | ||||||||
Food - Confectionery — 0.3% |
| |||||||
J.M. Smucker Co. | 6,917 | $ | 724,625 | |||||
Food - Misc./Diversified — 3.6% |
| |||||||
Conagra Brands, Inc. | 79,302 | 2,574,143 | ||||||
General Mills, Inc. | 8,822 | 469,859 | ||||||
Kellogg Co.# | 29,354 | 1,921,513 | ||||||
Kraft Heinz Co. | 19,136 | 1,545,232 | ||||||
Mondelez International, Inc., Class A | 40,121 | 1,631,320 | ||||||
8,142,067 | ||||||||
Gold Mining — 1.1% |
| |||||||
Newmont Mining Corp. | 63,045 | 2,417,145 | ||||||
Instruments - Controls — 1.3% |
| |||||||
Honeywell International, Inc. | 21,130 | 2,921,645 | ||||||
Insurance - Life/Health — 2.0% |
| |||||||
Athene Holding, Ltd., Class A† | 36,531 | 1,954,774 | ||||||
Prudential Financial, Inc. | 26,265 | 2,681,131 | ||||||
4,635,905 | ||||||||
Insurance - Multi-line — 3.8% |
| |||||||
Allstate Corp. | 17,579 | 1,590,899 | ||||||
Chubb, Ltd. | 9,249 | 1,307,994 | ||||||
Hartford Financial Services Group, Inc. | 63,941 | 3,457,290 | ||||||
Voya Financial, Inc. | �� | 60,464 | 2,311,539 | |||||
8,667,722 | ||||||||
Insurance - Property/Casualty — 0.7% |
| |||||||
XL Group, Ltd. | 37,414 | 1,532,477 | ||||||
Insurance - Reinsurance — 4.3% |
| |||||||
Berkshire Hathaway, Inc., Class B† | 53,774 | 9,741,698 | ||||||
Internet Infrastructure Software — 0.3% |
| |||||||
F5 Networks, Inc.† | 4,888 | 583,529 | ||||||
Investment Management/Advisor Services — 1.0% |
| |||||||
Affiliated Managers Group, Inc. | 5,990 | 1,058,373 | ||||||
Ameriprise Financial, Inc. | 8,716 | 1,207,253 | ||||||
2,265,626 | ||||||||
Medical Instruments — 0.4% |
| |||||||
Boston Scientific Corp.† | 29,577 | 814,846 | ||||||
Medical Labs & Testing Services — 0.5% |
| |||||||
Laboratory Corp. of America Holdings† | 7,333 | 1,150,328 | ||||||
Medical - Biomedical/Gene — 1.2% |
| |||||||
Biogen, Inc.† | 1,597 | 505,546 | ||||||
Gilead Sciences, Inc. | 25,854 | 2,164,239 | ||||||
2,669,785 | ||||||||
Medical - Drugs — 6.9% |
| |||||||
Bristol-Myers Squibb Co. | 14,346 | 867,646 | ||||||
Eli Lilly & Co. | 10,235 | 832,003 | ||||||
Johnson & Johnson | 54,899 | 7,266,981 | ||||||
Merck & Co., Inc. | 48,425 | 3,092,420 | ||||||
Novartis AG ADR | 17,524 | 1,477,098 | ||||||
Pfizer, Inc. | 63,836 | 2,165,317 | ||||||
15,701,465 | ||||||||
Medical - HMO — 2.5% |
| |||||||
Aetna, Inc. | 16,524 | 2,605,835 | ||||||
Humana, Inc. | 4,833 | 1,245,077 | ||||||
UnitedHealth Group, Inc. | 8,765 | 1,743,359 | ||||||
5,594,271 | ||||||||
Medical - Wholesale Drug Distribution — 0.7% |
| |||||||
AmerisourceBergen Corp. | 19,494 | 1,564,394 | ||||||
Security Description | Shares/ Principal Amount | Value (Note 2) | ||||||
Metal - Aluminum — 0.2% |
| |||||||
Alcoa Corp. | 11,333 | $ | 497,292 | |||||
Metal - Copper — 0.2% |
| |||||||
Freeport-McMoRan, Inc.† | 32,993 | 487,637 | ||||||
Multimedia — 0.8% |
| |||||||
Time Warner, Inc. | 6,916 | 699,208 | ||||||
Twenty-First Century Fox, Inc., Class B | 38,829 | 1,052,266 | ||||||
1,751,474 | ||||||||
Networking Products — 2.0% |
| |||||||
Cisco Systems, Inc. | 141,315 | 4,551,756 | ||||||
Non-Hazardous Waste Disposal — 0.3% |
| |||||||
Republic Services, Inc. | 12,044 | 785,751 | ||||||
Oil Companies - Exploration & Production — 6.6% |
| |||||||
Anadarko Petroleum Corp. | 47,172 | 1,930,750 | ||||||
Cimarex Energy Co. | 4,522 | 450,798 | ||||||
EOG Resources, Inc. | 44,503 | 3,782,310 | ||||||
Hess Corp. | 61,754 | 2,402,231 | ||||||
Noble Energy, Inc. | 38,831 | 923,013 | ||||||
Occidental Petroleum Corp. | 92,025 | 5,493,892 | ||||||
14,982,994 | ||||||||
Oil Companies - Integrated — 0.3% |
| |||||||
Chevron Corp. | 6,241 | 671,656 | ||||||
Oil Refining & Marketing — 1.3% |
| |||||||
Phillips 66 | 34,184 | 2,864,961 | ||||||
Oil - Field Services — 1.1% |
| |||||||
Halliburton Co. | 39,460 | 1,537,756 | ||||||
Schlumberger, Ltd. | 13,387 | 850,209 | ||||||
2,387,965 | ||||||||
Real Estate Investment Trusts — 1.4% |
| |||||||
Equity Residential | 27,339 | 1,835,814 | ||||||
Uniti Group, Inc. | 74,751 | 1,439,704 | ||||||
3,275,518 | ||||||||
Retail - Major Department Stores — 0.3% |
| |||||||
Nordstrom, Inc.# | 14,734 | 657,431 | ||||||
Rubber - Tires — 0.7% |
| |||||||
Goodyear Tire & Rubber Co. | 54,673 | 1,656,592 | ||||||
Telephone - Integrated — 2.3% |
| |||||||
AT&T, Inc. | 139,160 | 5,212,934 | ||||||
Web Portals/ISP — 0.9% |
| |||||||
Alphabet, Inc., Class A† | 2,121 | 2,026,064 | ||||||
Total Common Stocks | ||||||||
(cost $203,485,139) | 222,504,457 | |||||||
EXCHANGE - TRADED FUNDS — 0.7% | ||||||||
iShares Russell 1000 Value ETF | 14,274 | 1,652,787 | ||||||
Total Long-Term Investment Securities | ||||||||
(cost $205,129,571) | 224,157,244 | |||||||
SHORT-TERM INVESTMENT SECURITIES — 1.1% |
| |||||||
Commercial Paper — 1.0% |
| |||||||
Credit Agricole Corporate and Investment Bank | $ | 2,200,000 | 2,200,000 | |||||
Time Deposits — 0.1% |
| |||||||
Euro Time Deposit with State Street Bank and Trust Co. 0.12% due 09/01/2017 | 260,000 | 260,000 | ||||||
Total Short-Term Investment Securities | ||||||||
(cost $2,460,000) | 2,460,000 | |||||||
57 |
Table of Contents
VALIC Company II Large Cap Value Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
TOTAL INVESTMENTS | ||||||||
(cost $207,589,571)(1) | 100.0 | % | $ | 226,617,244 | ||||
Other assets less liabilities | 0.0 | 9,173 | ||||||
NET ASSETS | 100.0 | % | $ | 226,626,417 | ||||
† | Non-income producing security |
# | The security or a portion thereof is out on loan (see Note 2). |
At August 31, 2017, the Fund had loaned securities with a total value of $11,205,482. This was secured by collateral of $11,444,562 received in the form of fixed income pooled securities, which the Fund cannot sell or repledge and accordingly are not reflected in the Fund’s assets and liabilities.
The components of the fixed income pooled securities referenced above are as follows:
Securities | Coupon Range | Maturity Date Range | Value as of August 31, 2017 | |||||
Federal Home Loan Mtg. Corp. | 2.50% to 4.50% | 08/01/2027 to 01/01/2047 | $ | 1,477,326 | ||||
Federal National Mtg. Assoc. | 2.63% to 4.25% | 10/25/2029 to 11/01/2046 | 1,213,918 | |||||
Government National Mtg. Assoc. | 2.50% to 3.50% | 01/20/2043 to 05/16/2053 | 2,536,101 | |||||
United States Treasury Bills | 0.00% | 09/07/2017 to 03/01/2018 | 274,605 | |||||
United States Treasury Notes/Bonds | zero coupon to 5.50% | 09/30/2017 to 02/15/2047 | 5,942,612 |
(1) | See Note 5 for cost of investments on a tax basis. |
ADR—American Depositary Receipt
ETF —Exchange-Traded Funds
The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2017 (see Note 2):
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at Value:* | ||||||||||||||||
Common Stocks | $ | 222,504,457 | $ | — | $ | — | $ | 222,504,457 | ||||||||
Exchange-Traded Funds | 1,652,787 | — | — | 1,652,787 | ||||||||||||
Short-Term Investment Securities | — | 2,460,000 | — | 2,460,000 | ||||||||||||
Total Investments at Value | $ | 224,157,244 | $ | 2,460,000 | $ | — | $ | 226,617,244 | ||||||||
* | For a detailed presentation of investments, please refer to the Portfolio of Investments. |
The Fund’s policy is to recognize transfers between Levels as of the end of the reporting period. There were no transfers between Levels during the reporting period.
See Notes to Financial Statements
58 |
Table of Contents
VALIC Company II Mid Cap Growth Fund
PORTFOLIO PROFILE — August 31, 2017 (unaudited)
Industry Allocation*
Commercial Services — Finance | 10.8 | % | ||
Medical — Biomedical/Gene | 5.4 | |||
Insurance — Property/Casualty | 5.2 | |||
Banks — Commercial | 5.0 | |||
Electronic Measurement Instruments | 4.6 | |||
Medical — Drugs | 3.6 | |||
Computer Services | 3.1 | |||
Machinery — General Industrial | 2.7 | |||
Airlines | 2.5 | |||
Web Hosting/Design | 2.2 | |||
Computer Software | 2.1 | |||
Commercial Services | 2.1 | |||
Therapeutics | 1.9 | |||
Building — Residential/Commercial | 1.9 | |||
Enterprise Software/Service | 1.8 | |||
E-Services/Consulting | 1.8 | |||
Gas — Distribution | 1.7 | |||
Building Products — Air & Heating | 1.7 | |||
E-Commerce/Services | 1.6 | |||
Containers — Metal/Glass | 1.6 | |||
Containers — Paper/Plastic | 1.6 | |||
Instruments — Controls | 1.5 | |||
Retail — Automobile | 1.3 | |||
Computer Aided Design | 1.3 | |||
Medical Instruments | 1.2 | |||
Decision Support Software | 1.2 | |||
Disposable Medical Products | 1.2 | |||
Semiconductor Equipment | 1.2 | |||
Transport — Rail | 1.1 | |||
Medical Products | 1.1 | |||
Registered Investment Companies | 1.1 | |||
Motorcycle/Motor Scooter | 1.1 | |||
Banks — Fiduciary | 1.1 | |||
Multimedia | 1.0 | |||
Applications Software | 1.0 | |||
Finance — Mortgage Loan/Banker | 1.0 | |||
Non-Hazardous Waste Disposal | 1.0 | |||
Hotels/Motels | 1.0 | |||
Auto/Truck Parts & Equipment — Original | 1.0 | |||
Instruments — Scientific | 1.0 | |||
Oil Companies — Exploration & Production | 1.0 | |||
Rental Auto/Equipment | 1.0 | |||
Aerospace/Defense — Equipment | 0.9 | |||
Human Resources | 0.9 | |||
Finance — Auto Loans | 0.9 | |||
Data Processing/Management | 0.9 | |||
Auto — Heavy Duty Trucks | 0.9 | |||
Electronic Components — Semiconductors | 0.8 | |||
Lasers — System/Components | 0.8 | |||
Telecommunication Equipment | 0.7 | |||
Telecom Equipment — Fiber Optics | 0.7 | |||
Time Deposits | 0.7 | |||
Distribution/Wholesale | 0.7 | |||
Retail — Misc./Diversified | 0.7 | |||
Linen Supply & Related Items | 0.5 | |||
Electric — Integrated | 0.5 | |||
Retail — Auto Parts | 0.4 | |||
Apparel Manufacturers | 0.4 | |||
Investment Management/Advisor Services | 0.4 | |||
Casino Hotels | 0.3 | |||
Finance — Credit Card | 0.2 | |||
Transactional Software | 0.2 | |||
Oil & Gas Drilling | 0.2 | |||
Auction Houses/Art Dealers | 0.2 | |||
101.2 | % | |||
* | Calculated as a percentage of net assets |
59 |
Table of Contents
VALIC Company II Mid Cap Growth Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017
Security Description | Shares | Value | ||||||
COMMON STOCKS — 99.4% |
| |||||||
Aerospace/Defense - Equipment — 0.9% |
| |||||||
HEICO Corp., Class A | 17,135 | $ | 1,244,858 | |||||
Airlines — 2.5% |
| |||||||
Alaska Air Group, Inc. | 16,542 | 1,235,026 | ||||||
JetBlue Airways Corp.† | 66,051 | 1,308,470 | ||||||
Spirit Airlines, Inc.† | 25,171 | 857,073 | ||||||
3,400,569 | ||||||||
Apparel Manufacturers — 0.4% |
| |||||||
Under Armour, Inc., Class C†# | 36,082 | 544,838 | ||||||
Applications Software — 1.0% |
| |||||||
ServiceNow, Inc.† | 11,918 | 1,384,752 | ||||||
Auction Houses/Art Dealers — 0.2% |
| |||||||
KAR Auction Services, Inc. | 5,045 | 227,479 | ||||||
Auto - Heavy Duty Trucks — 0.9% |
| |||||||
PACCAR, Inc. | 17,686 | 1,173,112 | ||||||
Auto/Truck Parts & Equipment-Original — 1.0% |
| |||||||
Allison Transmission Holdings, Inc. | 37,907 | 1,316,510 | ||||||
Banks - Commercial — 5.0% |
| |||||||
Cullen/Frost Bankers, Inc. | 7,265 | 611,713 | ||||||
East West Bancorp, Inc. | 10,821 | 599,159 | ||||||
First Citizens BancShares, Inc., Class A | 2,131 | 725,627 | ||||||
First Republic Bank | 18,831 | 1,827,548 | ||||||
M&T Bank Corp. | 14,651 | 2,166,297 | ||||||
Prosperity Bancshares, Inc. | 4,667 | 278,853 | ||||||
South State Corp.# | 6,400 | 526,400 | ||||||
6,735,597 | ||||||||
Banks - Fiduciary — 1.1% |
| |||||||
Northern Trust Corp. | 15,885 | 1,405,822 | ||||||
Building Products - Air & Heating — 1.7% |
| |||||||
Lennox International, Inc. | 13,718 | 2,273,484 | ||||||
Building - Residential/Commercial — 1.9% |
| |||||||
NVR, Inc.† | 923 | 2,511,345 | ||||||
Casino Hotels — 0.3% |
| |||||||
Wynn Resorts, Ltd.# | 3,072 | 426,977 | ||||||
Commercial Services — 2.1% |
| |||||||
Cintas Corp. | 8,715 | 1,176,612 | ||||||
CoStar Group, Inc.†# | 5,539 | 1,587,588 | ||||||
2,764,200 | ||||||||
Commercial Services - Finance — 10.8% |
| |||||||
Equifax, Inc. | 11,880 | 1,692,544 | ||||||
Global Payments, Inc. | 30,502 | 2,912,636 | ||||||
Moody’s Corp. | 8,429 | 1,129,739 | ||||||
Total System Services, Inc. | 28,509 | 1,970,542 | ||||||
TransUnion† | 67,810 | 3,245,387 | ||||||
Vantiv, Inc., Class A† | 20,696 | 1,463,000 | ||||||
WEX, Inc.† | 18,910 | 2,063,837 | ||||||
14,477,685 | ||||||||
Computer Aided Design — 1.3% |
| |||||||
Cadence Design Systems, Inc.† | 42,787 | 1,681,101 | ||||||
Computer Services — 3.1% |
| |||||||
Genpact, Ltd. | 103,102 | 2,933,252 | ||||||
Teradata Corp.†# | 35,862 | 1,144,715 | ||||||
4,077,967 | ||||||||
Computer Software — 2.1% |
| |||||||
Akamai Technologies, Inc.† | 29,426 | 1,387,436 | ||||||
Blackbaud, Inc.# | 17,064 | 1,440,372 | ||||||
2,827,808 | ||||||||
Security Description | Shares | Value | ||||||
Containers - Metal/Glass — 1.6% |
| |||||||
Ball Corp.# | 33,776 | $ | 1,350,702 | |||||
Silgan Holdings, Inc. | 27,423 | 825,158 | ||||||
2,175,860 | ||||||||
Containers - Paper/Plastic — 1.6% |
| |||||||
Packaging Corp. of America | 18,956 | 2,130,844 | ||||||
Data Processing/Management — 0.9% |
| |||||||
Dun & Bradstreet Corp. | 10,654 | 1,187,282 | ||||||
Decision Support Software — 1.2% |
| |||||||
MSCI, Inc. | 14,057 | 1,611,073 | ||||||
Disposable Medical Products — 1.2% |
| |||||||
STERIS PLC | 18,344 | 1,598,863 | ||||||
Distribution/Wholesale — 0.7% |
| |||||||
Fastenal Co.# | 20,943 | 893,638 | ||||||
E-Commerce/Services — 1.6% |
| |||||||
TripAdvisor, Inc.†# | 6,310 | 269,626 | ||||||
Zillow Group, Inc., Class A† | 17,256 | 688,859 | ||||||
Zillow Group, Inc., Class C†# | 30,835 | 1,221,683 | ||||||
2,180,168 | ||||||||
E-Services/Consulting — 1.8% |
| |||||||
CDW Corp. | 37,137 | 2,355,229 | ||||||
Electric - Integrated — 0.5% |
| |||||||
Black Hills Corp.# | 9,080 | 639,050 | ||||||
Electronic Components - Semiconductors — 0.8% |
| |||||||
Silicon Laboratories, Inc.† | 14,400 | 1,092,960 | ||||||
Electronic Measurement Instruments — 4.6% |
| |||||||
Keysight Technologies, Inc.† | 29,050 | 1,186,983 | ||||||
National Instruments Corp.# | 59,958 | 2,421,704 | ||||||
Trimble, Inc.† | 67,059 | 2,593,842 | ||||||
6,202,529 | ||||||||
Enterprise Software/Service — 1.8% |
| |||||||
Guidewire Software, Inc.†# | 18,478 | 1,398,969 | ||||||
Veeva Systems, Inc., Class A† | 16,312 | 970,564 | ||||||
2,369,533 | ||||||||
Finance - Auto Loans — 0.9% |
| |||||||
Credit Acceptance Corp.†# | 4,459 | 1,214,186 | ||||||
Finance - Credit Card — 0.2% |
| |||||||
Blackhawk Network Holdings, Inc.† | 6,782 | 303,834 | ||||||
Finance - Mortgage Loan/Banker — 1.0% |
| |||||||
FNF Group | 28,369 | 1,368,521 | ||||||
Gas - Distribution — 1.7% |
| |||||||
NiSource, Inc. | 16,443 | 441,824 | ||||||
UGI Corp. | 38,003 | 1,877,728 | ||||||
2,319,552 | ||||||||
Hotels/Motels — 1.0% |
| |||||||
Choice Hotels International, Inc. | 21,749 | 1,349,525 | ||||||
Human Resources — 0.9% |
| |||||||
Robert Half International, Inc. | 26,927 | 1,219,793 | ||||||
Instruments - Controls — 1.5% |
| |||||||
Mettler-Toledo International, Inc.† | 3,350 | 2,027,051 | ||||||
Instruments - Scientific — 1.0% |
| |||||||
Waters Corp.† | 7,112 | 1,304,910 | ||||||
Insurance - Property/Casualty — 5.2% |
| |||||||
Alleghany Corp.† | 1,887 | 1,061,947 | ||||||
Fairfax Financial Holdings, Ltd. | 2,447 | 1,271,911 |
60 |
Table of Contents
VALIC Company II Mid Cap Growth Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares | Value | ||||||
COMMON STOCKS (continued) |
| |||||||
Insurance - Property/Casualty (continued) |
| |||||||
Markel Corp.†# | 2,557 | $ | 2,689,939 | |||||
White Mountains Insurance Group, Ltd. | 1,058 | 921,592 | ||||||
WR Berkley Corp. | 14,366 | 957,350 | ||||||
6,902,739 | ||||||||
Investment Management/Advisor Services — 0.4% |
| |||||||
Financial Engines, Inc.# | 16,272 | 537,790 | ||||||
Lasers - System/Components — 0.8% |
| |||||||
II-VI, Inc.† | 28,868 | 1,034,918 | ||||||
Linen Supply & Related Items — 0.5% |
| |||||||
UniFirst Corp. | 4,625 | 664,150 | ||||||
Machinery - General Industrial — 2.7% |
| |||||||
IDEX Corp. | 22,922 | 2,695,169 | ||||||
Middleby Corp.†# | 7,919 | 963,742 | ||||||
3,658,911 | ||||||||
Medical Instruments — 1.2% |
| |||||||
Integra LifeSciences Holdings Corp.† | 6,511 | 331,996 | ||||||
Teleflex, Inc. | 6,298 | 1,333,601 | ||||||
1,665,597 | ||||||||
Medical Products — 1.1% |
| |||||||
Varian Medical Systems, Inc.†# | 13,730 | 1,458,812 | ||||||
Medical - Biomedical/Gene — 5.4% |
| |||||||
Alnylam Pharmaceuticals, Inc.†# | 12,799 | 1,097,258 | ||||||
Bluebird Bio, Inc.†# | 14,517 | 1,812,447 | ||||||
Ionis Pharmaceuticals, Inc.† | 38,022 | 2,038,740 | ||||||
Sage Therapeutics, Inc.†# | 15,286 | 1,257,274 | ||||||
Ultragenyx Pharmaceutical, Inc.† | 18,812 | 1,073,413 | ||||||
7,279,132 | ||||||||
Medical - Drugs — 3.6% |
| |||||||
Aerie Pharmaceuticals, Inc.†# | 12,625 | 724,044 | ||||||
Alkermes PLC†# | 31,232 | 1,585,961 | ||||||
Ironwood Pharmaceuticals, Inc.†# | 37,557 | 599,034 | ||||||
TESARO, Inc.†# | 15,115 | 1,951,951 | ||||||
4,860,990 | ||||||||
Motorcycle/Motor Scooter — 1.1% |
| |||||||
Harley-Davidson, Inc.# | 30,091 | 1,414,578 | ||||||
Multimedia — 1.0% |
| |||||||
FactSet Research Systems, Inc.# | 8,855 | 1,391,829 | ||||||
Non-Hazardous Waste Disposal — 1.0% |
| |||||||
Waste Connections, Inc. | 20,443 | 1,363,344 | ||||||
Oil & Gas Drilling — 0.2% |
| |||||||
Patterson-UTI Energy, Inc. | 16,717 | 266,970 | ||||||
Oil Companies - Exploration & Production — 1.0% |
| |||||||
Diamondback Energy, Inc.† | 3,653 | 331,656 | ||||||
Newfield Exploration Co.† | 11,919 | 311,443 | ||||||
Parsley Energy, Inc., Class A† | 13,231 | 331,436 | ||||||
WPX Energy, Inc.† | 32,942 | 329,091 | ||||||
1,303,626 | ||||||||
Security Description | Shares/ Principal Amount | Value (Note 2) | ||||||
Rental Auto/Equipment — 1.0% |
| |||||||
AMERCO# | 3,489 | $ | 1,302,130 | |||||
Retail - Auto Parts — 0.4% |
| |||||||
Advance Auto Parts, Inc. | 5,658 | 553,918 | ||||||
Retail - Automobile — 1.3% |
| |||||||
CarMax, Inc.†# | 26,077 | 1,751,071 | ||||||
Retail - Misc./Diversified — 0.7% |
| |||||||
PriceSmart, Inc.# | 10,961 | 890,581 | ||||||
Semiconductor Equipment — 1.2% |
| |||||||
MKS Instruments, Inc. | 18,940 | 1,559,709 | ||||||
Telecom Equipment - Fiber Optics — 0.7% |
| |||||||
Finisar Corp.† | 40,230 | 971,554 | ||||||
Telecommunication Equipment — 0.7% |
| |||||||
CommScope Holding Co., Inc.† | 29,879 | 987,800 | ||||||
Therapeutics — 1.9% |
| |||||||
Agios Pharmaceuticals, Inc.† | 13,227 | 836,740 | ||||||
Neurocrine Biosciences, Inc.†# | 30,856 | 1,746,450 | ||||||
2,583,190 | ||||||||
Transactional Software — 0.2% |
| |||||||
Black Knight Financial Services, Inc., Class A†# | 6,856 | 292,066 | ||||||
Transport - Rail — 1.1% |
| |||||||
Genesee & Wyoming, Inc., Class A† | 22,037 | 1,510,857 | ||||||
Web Hosting/Design — 2.2% |
| |||||||
VeriSign, Inc.†# | 28,704 | 2,978,040 | ||||||
Total Long-Term Investment Securities | ||||||||
(cost $127,718,452) | 133,202,807 | |||||||
SHORT-TERM INVESTMENT SECURITIES — 1.8% |
| |||||||
Registered Investment Companies — 1.1% |
| |||||||
State Street Navigator Securities Lending Government Money Market Portfolio | 1,423,179 | 1,423,179 | ||||||
Time Deposits — 0.7% |
| |||||||
Euro Time Deposit with State Street Bank and Trust Co. 0.12% due 09/01/2017 | $ | 919,000 | 919,000 | |||||
Total Short-Term Investment Securities | ||||||||
(cost $2,342,179) | 2,342,179 | |||||||
TOTAL INVESTMENTS | ||||||||
(cost $130,060,631)(3) | 101.2 | % | 135,544,986 | |||||
Liabilities in excess of other assets | (1.2 | ) | (1,556,539 | ) | ||||
NET ASSETS | 100.0 | % | $ | 133,988,447 | ||||
† Non-income | producing security |
# The | security or a portion thereof is out on loan (see Note 2). |
(1) | At August 31, 2017, the Fund had loaned securities with a total value of $28,964,978. This was secured by collateral of $1,423,179, which was received in cash and subsequently invested in short-term investments currently valued at $1,423,179 as reported in the portfolio of investments. Additional collateral of $27,721,613 was received in the form of short-term pooled securities, which the Fund cannot sell or repledge and accordingly are not reflected in the Fund’s other assets and liabilities. |
61 |
Table of Contents
VALIC Company II Mid Cap Growth Fund
PORTFOLIO OF INVESTMENTS —August 31, 2017 — (continued)
The components of the fixed income pooled securities referenced above are as follows:
Securities | Coupon Range | Maturity Date Range | Value as of August 31, 2017 | |||
Federal Home Loan Mtg. Corp. | 2.50% to 4.50% | 08/01/2027 to 01/01/2047 | $ 3,753,627 | |||
Federal National Mtg. Assoc. | 2.63% to 4.25% | 10/25/2029 to 11/01/2046 | 3,084,352 | |||
Government National Mtg. Assoc. | 2.50% to 3.50% | 01/20/2043 to 05/16/2053 | 6,443,788 | |||
United States Treasury Bills | 0.00% | 09/07/2017 to 03/01/2018 | 624,233 | |||
United States Treasury Notes/Bonds | zero coupon to 8.00% | 09/30/2017 to 02/15/2047 | 13,815,613 |
(2) | The rate shown is the 7-day yield as of August 31, 2017. |
(3) | See Note 5 for cost of investments on a tax basis. |
The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2017 (see Note 2):
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at Value:* | ||||||||||||||||
Common Stocks | $ | 133,202,807 | $ | — | $ | — | $ | 133,202,807 | ||||||||
Short-Term Investment Securities: | ||||||||||||||||
Registered Investment Companies | 1,423,179 | — | — | 1,423,179 | ||||||||||||
Time Deposits | — | 919,000 | — | 919,000 | ||||||||||||
Total Investments at Value | $ | 134,625,986 | $ | 919,000 | $ | — | $ | 135,544,986 | ||||||||
* | For a detailed presentation of investments, please refer to the Portfolio of Investments. |
The Fund’s policy is to recognize transfers between Levels as of the end of the reporting period. There were no transfers between Levels during the reporting period.
See Notes to Financial Statements
62 |
Table of Contents
VALIC Company II Mid Cap Value Fund
PORTFOLIO PROFILE — August 31, 2017 (unaudited)
Industry Allocation*
Real Estate Investment Trusts | 7.9 | % | ||
Oil Companies — Exploration & Production | 5.7 | |||
Banks — Commercial | 4.9 | �� | ||
Electric — Integrated | 4.8 | |||
Banks — Super Regional | 3.6 | |||
Aerospace/Defense — Equipment | 3.0 | |||
Electronic Components — Semiconductors | 2.7 | |||
Registered Investment Companies | 2.7 | |||
Insurance — Property/Casualty | 2.6 | |||
Insurance — Life/Health | 2.3 | |||
Computer Services | 2.2 | |||
Electronic Parts Distribution | 2.0 | |||
Chemicals — Diversified | 2.0 | |||
Insurance — Reinsurance | 1.9 | |||
Medical — Hospitals | 1.7 | |||
Containers — Paper/Plastic | 1.5 | |||
Finance — Investment Banker/Broker | 1.5 | |||
Insurance — Multi-line | 1.5 | |||
Human Resources | 1.4 | |||
Building — Residential/Commercial | 1.4 | |||
Entertainment Software | 1.3 | |||
Auto/Truck Parts & Equipment — Original | 1.3 | |||
Oil Refining & Marketing | 1.2 | |||
Transport — Truck | 1.2 | |||
Gas — Distribution | 1.2 | |||
Diversified Manufacturing Operations | 1.2 | |||
Insurance Brokers | 1.2 | |||
Steel — Producers | 1.1 | |||
Power Converter/Supply Equipment | 1.1 | |||
Finance — Consumer Loans | 1.1 | |||
Airlines | 1.1 | |||
E-Commerce/Services | 1.0 | |||
Containers — Metal/Glass | 0.9 | |||
Repurchase Agreements | 0.9 | |||
Electronic Components — Misc. | 0.9 | |||
Medical Labs & Testing Services | 0.9 | |||
Data Processing/Management | 0.8 | |||
Rubber — Tires | 0.8 | |||
Disposable Medical Products | 0.8 | |||
Recreational Vehicles | 0.8 | |||
Finance — Credit Card | 0.8 | |||
Cruise Lines | 0.8 | |||
Tools — Hand Held | 0.7 | |||
Computers | 0.7 | |||
Medical Instruments | 0.7 | |||
Transport — Rail | 0.7 | |||
Electronic Measurement Instruments | 0.7 | |||
Food — Flour & Grain | 0.7 | |||
Building Products — Doors & Windows | 0.7 | |||
Savings & Loans/Thrifts | 0.7 | |||
Chemicals — Specialty | 0.7 | |||
Telecommunication Equipment | 0.7 | |||
Building Products — Wood | 0.7 | |||
Computer Software | 0.6 | |||
Distribution/Wholesale | 0.6 | |||
Telecom Equipment — Fiber Optics | 0.6 | |||
Hazardous Waste Disposal | 0.6 | |||
Consulting Services | 0.6 | |||
Electric Products — Misc. | 0.6 | |||
Web Hosting/Design | 0.6 | |||
Publishing — Books | 0.6 | |||
Cellular Telecom | 0.5 | |||
Electronic Connectors | 0.5 | |||
E-Commerce/Products | 0.5 | |||
Instruments — Controls | 0.5 | |||
Food — Misc./Diversified | 0.4 | |||
Machine Tools & Related Products | 0.4 | |||
Banks — Fiduciary | 0.4 |
Retirement/Aged Care | 0.4 | |||
Advertising Agencies | 0.3 | |||
Beverages — Non-alcoholic | 0.3 | |||
Metal Processors & Fabrication | 0.3 | |||
Building & Construction Products — Misc. | 0.3 | |||
Metal — Aluminum | 0.3 | |||
Aerospace/Defense | 0.3 | |||
Semiconductor Components — Integrated Circuits | 0.3 | |||
Medical — Wholesale Drug Distribution | 0.3 | |||
Shipbuilding | 0.3 | |||
Apparel Manufacturers | 0.3 | |||
Television | 0.3 | |||
Finance — Leasing Companies | 0.3 | |||
Dialysis Centers | 0.2 | |||
Computers — Memory Devices | 0.2 | |||
Medical Products | 0.2 | |||
Building — Heavy Construction | 0.2 | |||
Commercial Services — Finance | 0.2 | |||
Toys | 0.2 | |||
Building Products — Cement | 0.2 | |||
Commercial Services | 0.2 | |||
Retail — Auto Parts | 0.2 | |||
Batteries/Battery Systems | 0.2 | |||
Engineering/R&D Services | 0.2 | |||
Retail — Consumer Electronics | 0.1 | |||
Oil — Field Services | 0.1 | |||
101.8 | % | |||
* | Calculated as a percentage of net assets |
63 |
Table of Contents
VALIC Company II Mid Cap Value Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS — 98.2% |
| |||||||
Advertising Agencies — 0.3% |
| |||||||
Interpublic Group of Cos., Inc. | 127,370 | $ | 2,565,232 | |||||
Omnicom Group, Inc.# | 15,245 | 1,103,433 | ||||||
3,668,665 | ||||||||
Aerospace/Defense — 0.3% |
| |||||||
Spirit AeroSystems Holdings, Inc., Class A | 44,214 | 3,293,943 | ||||||
Aerospace/Defense - Equipment — 3.0% |
| |||||||
Curtiss-Wright Corp. | 31,696 | 3,068,807 | ||||||
Harris Corp. | 156,585 | 19,244,296 | ||||||
L3 Technologies, Inc. | 12,670 | 2,299,352 | ||||||
Moog, Inc., Class A† | 92,001 | 7,061,997 | ||||||
31,674,452 | ||||||||
Airlines — 1.1% |
| |||||||
American Airlines Group, Inc. | 64,943 | 2,905,550 | ||||||
Delta Air Lines, Inc. | 52,867 | 2,494,793 | ||||||
Southwest Airlines Co. | 54,727 | 2,853,466 | ||||||
United Continental Holdings, Inc.†# | 45,625 | 2,826,925 | ||||||
11,080,734 | ||||||||
Apparel Manufacturers — 0.3% |
| |||||||
Global Brands Group Holding, Ltd.† | 34,182,663 | 3,058,201 | ||||||
Auto/Truck Parts & Equipment - Original — 1.3% |
| |||||||
BorgWarner, Inc.# | 104,616 | 4,855,229 | ||||||
Lear Corp. | 11,673 | 1,745,580 | ||||||
Tenneco, Inc.# | 32,166 | 1,743,397 | ||||||
WABCO Holdings, Inc.† | 33,023 | 4,742,763 | ||||||
13,086,969 | ||||||||
Banks - Commercial — 4.9% |
| |||||||
Bank of the Ozarks, Inc. | 108,060 | 4,642,257 | ||||||
BB&T Corp. | 61,432 | 2,831,401 | ||||||
East West Bancorp, Inc.# | 135,729 | 7,515,315 | ||||||
FNB Corp.# | 310,636 | 3,941,971 | ||||||
IBERIABANK Corp. | 85,098 | 6,518,507 | ||||||
MB Financial, Inc. | 130,513 | 5,190,502 | ||||||
Regions Financial Corp.# | 295,892 | 4,175,036 | ||||||
South State Corp.# | 54,550 | 4,486,737 | ||||||
Western Alliance Bancorp† | 88,844 | 4,284,946 | ||||||
Zions Bancorporation# | 176,533 | 7,707,431 | ||||||
51,294,103 | ||||||||
Banks - Fiduciary — 0.4% |
| |||||||
State Street Corp. | 44,849 | 4,148,084 | ||||||
Banks - Super Regional — 3.6% |
| |||||||
Comerica, Inc. | 184,785 | 12,611,576 | ||||||
Fifth Third Bancorp | 232,580 | 6,077,315 | ||||||
Huntington Bancshares, Inc.# | 626,510 | 7,887,761 | ||||||
KeyCorp | 160,637 | 2,764,563 | ||||||
SunTrust Banks, Inc. | 142,579 | 7,856,103 | ||||||
37,197,318 | ||||||||
Batteries/Battery Systems — 0.2% |
| |||||||
EnerSys | 30,116 | 1,930,436 | ||||||
Beverages - Non-alcoholic — 0.3% |
| |||||||
Coca-Cola European Partners PLC | 83,007 | 3,569,301 | ||||||
Building & Construction Products - Misc. — 0.3% |
| |||||||
Louisiana-Pacific Corp.† | 131,502 | 3,350,671 | ||||||
Building Products - Cement — 0.2% |
| |||||||
Cemex SAB de CV ADR†# | 244,134 | 2,272,888 | ||||||
Building Products - Doors & Windows — 0.7% |
| |||||||
Sanwa Holdings Corp. | 634,531 | 7,089,466 | ||||||
Security Description | Shares | Value (Note 2) | ||||||
Building Products - Wood — 0.7% |
| |||||||
Masco Corp.# | 186,241 | $ | 6,848,082 | |||||
Building - Heavy Construction — 0.2% |
| |||||||
Granite Construction, Inc. | 43,900 | 2,424,597 | ||||||
Building - Residential/Commercial — 1.4% |
| |||||||
D.R. Horton, Inc.# | 172,168 | 6,223,873 | ||||||
Lennar Corp., Class A | 87,222 | 4,514,611 | ||||||
Toll Brothers, Inc.# | 97,629 | 3,803,626 | ||||||
14,542,110 | ||||||||
Cellular Telecom — 0.5% |
| |||||||
Millicom International Cellular SA SDR | 89,467 | 5,583,642 | ||||||
Chemicals - Diversified — 2.0% |
| |||||||
Celanese Corp., Series A | 87,486 | 8,487,892 | ||||||
FMC Corp.# | 27,793 | 2,396,312 | ||||||
PPG Industries, Inc.# | 15,512 | 1,618,212 | ||||||
Westlake Chemical Corp.# | 103,367 | 7,949,956 | ||||||
20,452,372 | ||||||||
Chemicals - Specialty — 0.7% |
| |||||||
Cabot Corp. | 75,581 | 3,981,607 | ||||||
Valvoline, Inc. | 139,337 | 2,966,485 | ||||||
6,948,092 | ||||||||
Commercial Services — 0.2% |
| |||||||
Nielsen Holdings PLC | 57,165 | 2,220,860 | ||||||
Commercial Services - Finance — 0.2% |
| |||||||
Moody’s Corp.# | 17,995 | 2,411,870 | ||||||
Computer Services — 2.2% |
| |||||||
Amdocs, Ltd. | 146,280 | 9,477,481 | ||||||
Cognizant Technology Solutions Corp., Class A | 30,083 | 2,128,974 | ||||||
DXC Technology Co. | 91,152 | 7,747,920 | ||||||
Leidos Holdings, Inc. | 55,769 | 3,252,448 | ||||||
22,606,823 | ||||||||
Computer Software — 0.6% |
| |||||||
SS&C Technologies Holdings, Inc. | 173,807 | 6,728,069 | ||||||
Computers — 0.7% |
| |||||||
Hewlett Packard Enterprise Co. | 169,669 | 3,064,222 | ||||||
HP, Inc.# | 240,992 | 4,598,127 | ||||||
7,662,349 | ||||||||
Computers - Memory Devices — 0.2% |
| |||||||
Western Digital Corp. | 28,356 | 2,502,984 | ||||||
Consulting Services — 0.6% |
| |||||||
Booz Allen Hamilton Holding Corp. | 180,276 | 6,149,214 | ||||||
Containers - Metal/Glass — 0.9% |
| |||||||
Crown Holdings, Inc.†# | 162,587 | 9,597,511 | ||||||
Containers - Paper/Plastic — 1.5% |
| |||||||
Bemis Co., Inc. | 51,223 | 2,182,612 | ||||||
Berry Global Group, Inc.†# | 102,349 | 5,756,108 | ||||||
Graphic Packaging Holding Co.# | 291,882 | 3,809,060 | ||||||
WestRock Co. | 65,120 | 3,705,979 | ||||||
15,453,759 | ||||||||
Cruise Lines — 0.8% |
| |||||||
Norwegian Cruise Line Holdings, Ltd.† | 133,377 | 7,930,596 | ||||||
Data Processing/Management — 0.8% |
| |||||||
Fidelity National Information Services, Inc. | 89,688 | 8,333,809 | ||||||
Dialysis Centers — 0.2% |
| |||||||
DaVita, Inc.† | 44,313 | 2,594,969 | ||||||
64 |
Table of Contents
VALIC Company II Mid Cap Value Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS (continued) |
| |||||||
Disposable Medical Products — 0.8% |
| |||||||
STERIS PLC# | 94,560 | $ | 8,241,850 | |||||
Distribution/Wholesale — 0.6% |
| |||||||
WESCO International, Inc.† | 127,039 | 6,409,118 | ||||||
Diversified Manufacturing Operations — 1.2% |
| |||||||
Eaton Corp. PLC | 59,843 | 4,294,334 | ||||||
Ingersoll-Rand PLC | 56,182 | 4,797,381 | ||||||
Textron, Inc. | 71,473 | 3,508,609 | ||||||
12,600,324 | ||||||||
E-Commerce/Products — 0.5% |
| |||||||
eBay, Inc.† | 137,127 | 4,954,398 | ||||||
E-Commerce/Services — 1.0% |
| |||||||
Expedia, Inc. | 29,952 | 4,443,679 | ||||||
IAC/InterActiveCorp†# | 56,940 | 6,463,259 | ||||||
10,906,938 | ||||||||
Electric Products - Misc. — 0.6% |
| |||||||
AMETEK, Inc. | 95,841 | 6,061,943 | ||||||
Electric - Integrated — 4.8% |
| |||||||
Alliant Energy Corp.# | 353,105 | 15,091,708 | ||||||
Edison International | 78,785 | 6,316,981 | ||||||
Great Plains Energy, Inc. | 213,397 | 6,549,154 | ||||||
PG&E Corp. | 99,207 | 6,982,189 | ||||||
Pinnacle West Capital Corp.# | 76,546 | 6,886,844 | ||||||
Portland General Electric Co. | 76,910 | 3,653,994 | ||||||
Xcel Energy, Inc. | 96,719 | 4,787,590 | ||||||
50,268,460 | ||||||||
Electronic Components - Misc. — 0.9% |
| |||||||
Flex, Ltd.†# | 390,932 | 6,360,464 | ||||||
Jabil, Inc. | 94,466 | 2,961,509 | ||||||
9,321,973 | ||||||||
Electronic Components - Semiconductors — 2.7% |
| |||||||
Microsemi Corp.† | 258,946 | 13,045,700 | ||||||
ON Semiconductor Corp.† | 252,580 | 4,314,066 | ||||||
Silicon Motion Technology Corp. ADR | 172,382 | 7,862,343 | ||||||
Skyworks Solutions, Inc.# | 24,227 | 2,552,557 | ||||||
27,774,666 | ||||||||
Electronic Connectors — 0.5% |
| |||||||
TE Connectivity, Ltd. | 68,841 | 5,479,744 | ||||||
Electronic Measurement Instruments — 0.7% |
| |||||||
Keysight Technologies, Inc.† | 177,267 | 7,243,130 | ||||||
Electronic Parts Distribution — 2.0% |
| |||||||
Arrow Electronics, Inc.† | 263,297 | 20,913,681 | ||||||
Engineering/R&D Services — 0.2% |
| |||||||
Fluor Corp.# | 46,120 | 1,778,848 | ||||||
Engines - Internal Combustion — 0.0% |
| |||||||
Cummins, Inc. | 2,829 | 450,886 | ||||||
Entertainment Software — 1.3% |
| |||||||
Activision Blizzard, Inc. | 152,013 | 9,965,972 | ||||||
NetEase, Inc. ADR | 14,377 | 3,965,752 | ||||||
13,931,724 | ||||||||
Finance - Consumer Loans — 1.1% |
| |||||||
Navient Corp. | 228,653 | 3,018,219 | ||||||
SLM Corp.† | 466,434 | 4,743,634 | ||||||
Synchrony Financial# | 130,501 | 4,018,126 | ||||||
11,779,979 | ||||||||
Security Description | Shares | Value (Note 2) | ||||||
Finance - Credit Card — 0.8% |
| |||||||
Discover Financial Services | 136,749 | $ | 8,061,354 | |||||
Finance - Investment Banker/Broker — 1.5% |
| |||||||
E*TRADE Financial Corp.†# | 76,210 | 3,125,372 | ||||||
Raymond James Financial, Inc. | 120,499 | 9,437,482 | ||||||
TD Ameritrade Holding Corp.# | 65,729 | 2,847,380 | ||||||
15,410,234 | ||||||||
Finance - Leasing Companies — 0.3% |
| |||||||
Air Lease Corp.# | 66,881 | 2,718,044 | ||||||
Food - Flour & Grain — 0.7% |
| |||||||
Post Holdings, Inc.†# | 84,185 | 7,166,669 | ||||||
Food - Misc./Diversified — 0.4% |
| |||||||
Ingredion, Inc.# | 35,578 | 4,405,268 | ||||||
Gas - Distribution — 1.2% |
| |||||||
UGI Corp. | 260,632 | 12,877,827 | ||||||
Hazardous Waste Disposal — 0.6% |
| |||||||
Clean Harbors, Inc.†# | 115,087 | 6,225,056 | ||||||
Human Resources — 1.4% |
| |||||||
ManpowerGroup, Inc.# | 77,931 | 8,690,086 | ||||||
Robert Half International, Inc. | 135,345 | 6,131,128 | ||||||
14,821,214 | ||||||||
Instruments - Controls — 0.5% |
| |||||||
Sensata Technologies Holding NV†# | 105,632 | 4,717,525 | ||||||
Insurance Brokers — 1.2% |
| |||||||
Aon PLC# | 52,344 | 7,284,191 | ||||||
Marsh & McLennan Cos., Inc.# | 67,235 | 5,249,709 | ||||||
12,533,900 | ||||||||
Insurance - Life/Health — 2.3% |
| |||||||
CNO Financial Group, Inc. | 248,466 | 5,553,215 | ||||||
Torchmark Corp.# | 31,051 | 2,389,996 | ||||||
Unum Group# | 327,506 | 15,779,239 | ||||||
23,722,450 | ||||||||
Insurance - Multi-line — 1.5% |
| |||||||
Allstate Corp. | 66,407 | 6,009,833 | ||||||
Assurant, Inc.# | 43,982 | 4,164,656 | ||||||
Loews Corp. | 107,459 | 5,005,440 | ||||||
15,179,929 | ||||||||
Insurance - Property/Casualty — 2.6% |
| |||||||
Alleghany Corp.† | 12,791 | 7,198,391 | ||||||
Hanover Insurance Group, Inc. | 45,491 | 4,466,306 | ||||||
WR Berkley Corp.# | 64,621 | 4,306,343 | ||||||
XL Group, Ltd. | 278,360 | 11,401,626 | ||||||
27,372,666 | ||||||||
Insurance - Reinsurance — 1.9% |
| |||||||
Reinsurance Group of America, Inc. | 145,575 | 19,572,559 | ||||||
Machine Tools & Related Products — 0.4% |
| |||||||
Milacron Holdings Corp.† | 272,869 | 4,352,261 | ||||||
Medical Instruments — 0.7% |
| |||||||
Boston Scientific Corp.†# | 195,435 | 5,384,234 | ||||||
Bruker Corp. | 75,320 | 2,191,059 | ||||||
7,575,293 | ||||||||
Medical Labs & Testing Services — 0.9% |
| |||||||
ICON PLC†# | 19,373 | 2,196,705 | ||||||
Laboratory Corp. of America Holdings† | 44,829 | 7,032,325 | ||||||
9,229,030 | ||||||||
65 |
Table of Contents
VALIC Company II Mid Cap Value Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS (continued) |
| |||||||
Medical Products — 0.2% |
| |||||||
Zimmer Biomet Holdings, Inc. | 21,776 | $ | 2,488,343 | |||||
Medical - Hospitals — 1.7% |
| |||||||
Acadia Healthcare Co., Inc.†# | 161,967 | 7,602,731 | ||||||
Envision Healthcare Corp.†# | 122,029 | 6,395,540 | ||||||
Universal Health Services, Inc., Class B | 35,545 | 3,843,481 | ||||||
17,841,752 | ||||||||
Medical - Wholesale Drug Distribution — 0.3% |
| |||||||
Cardinal Health, Inc. | 46,025 | 3,104,846 | ||||||
Metal Processors & Fabrication — 0.3% |
| |||||||
Timken Co. | 76,951 | 3,451,252 | ||||||
Metal - Aluminum — 0.3% |
| |||||||
Alcoa Corp. | 75,867 | 3,329,044 | ||||||
Oil Companies - Exploration & Production — 5.7% |
| |||||||
Anadarko Petroleum Corp. | 60,225 | 2,465,009 | ||||||
Cimarex Energy Co. | 15,252 | 1,520,472 | ||||||
Diamondback Energy, Inc.†# | 211,668 | 19,217,338 | ||||||
Energen Corp.† | 170,090 | 8,722,215 | ||||||
EQT Corp.# | 86,360 | 5,383,683 | ||||||
Laredo Petroleum, Inc.† | 138,900 | 1,725,138 | ||||||
Newfield Exploration Co.† | 380,356 | 9,938,702 | ||||||
Parsley Energy, Inc., Class A† | 186,217 | 4,664,736 | ||||||
Pioneer Natural Resources Co.# | 18,419 | 2,388,023 | ||||||
QEP Resources, Inc.†# | 24,158 | 182,393 | ||||||
RSP Permian, Inc.†# | 96,179 | 3,018,097 | ||||||
59,225,806 | ||||||||
Oil Refining & Marketing — 1.2% |
| |||||||
Andeavor | 55,686 | 5,576,953 | ||||||
Delek US Holdings, Inc.# | 136,135 | 3,365,257 | ||||||
Marathon Petroleum Corp. | 78,279 | 4,105,734 | ||||||
13,047,944 | ||||||||
Oil - Field Services — 0.1% |
| |||||||
Trican Well Service, Ltd.†# | 352,909 | 1,045,656 | ||||||
Power Converter/Supply Equipment — 1.1% | ||||||||
Generac Holdings, Inc.†# | 87,129 | 3,518,269 | ||||||
Hubbell, Inc. | 73,888 | 8,333,827 | ||||||
11,852,096 | ||||||||
Publishing - Books — 0.6% |
| |||||||
John Wiley & Sons, Inc., Class A | 107,883 | 5,820,288 | ||||||
Real Estate Investment Trusts — 7.9% |
| |||||||
American Assets Trust, Inc. | 129,153 | 5,246,195 | ||||||
American Homes 4 Rent, Class A | 92,435 | 2,048,360 | ||||||
Boston Properties, Inc. | 69,796 | 8,417,398 | ||||||
Corporate Office Properties Trust | 102,500 | 3,419,400 | ||||||
Douglas Emmett, Inc. | 109,883 | 4,281,042 | ||||||
Duke Realty Corp. | 87,663 | 2,605,344 | ||||||
Equity LifeStyle Properties, Inc. | 78,945 | 7,037,947 | ||||||
Equity Residential | 51,364 | 3,449,093 | ||||||
Essex Property Trust, Inc. | 9,880 | 2,627,784 | ||||||
Extra Space Storage, Inc.# | 51,820 | 4,022,787 | ||||||
Forest City Realty Trust, Inc., Class A | 98,974 | 2,371,417 | ||||||
Kilroy Realty Corp. | 25,793 | 1,785,649 | ||||||
Kimco Realty Corp.# | 104,717 | 2,054,547 | ||||||
LaSalle Hotel Properties# | 18,670 | 529,855 | ||||||
Life Storage, Inc.# | 43,482 | 3,199,840 | ||||||
PS Business Parks, Inc. | 60,732 | 8,205,500 | ||||||
Regency Centers Corp.# | 70,645 | 4,543,886 | ||||||
SL Green Realty Corp.# | 80,989 | 7,805,720 | ||||||
STORE Capital Corp.# | 370,251 | 9,396,970 | ||||||
83,048,734 | ||||||||
Security Description | Shares | Value (Note 2) | ||||||
Recreational Vehicles — 0.8% |
| |||||||
Brunswick Corp. | 132,854 | $ | 6,972,178 | |||||
Camping World Holdings, Inc., Class A# | 30,900 | 1,135,575 | ||||||
8,107,753 | ||||||||
Retail - Auto Parts — 0.2% |
| |||||||
Advance Auto Parts, Inc.# | 20,035 | 1,961,426 | ||||||
Retail - Consumer Electronics — 0.1% |
| |||||||
Best Buy Co., Inc.# | 24,580 | 1,333,711 | ||||||
Retirement/Aged Care — 0.4% |
| |||||||
Brookdale Senior Living, Inc.†# | 302,664 | 3,671,314 | ||||||
Rubber - Tires — 0.8% | ||||||||
Goodyear Tire & Rubber Co.# | 272,013 | 8,241,994 | ||||||
Savings & Loans/Thrifts — 0.7% |
| |||||||
Provident Financial Services, Inc. | 118,812 | 2,952,478 | ||||||
Sterling Bancorp# | 183,363 | 4,116,500 | ||||||
7,068,978 | ||||||||
Semiconductor Components - Integrated Circuits — 0.3% |
| |||||||
Marvell Technology Group, Ltd. | 178,983 | 3,205,585 | ||||||
Shipbuilding — 0.3% |
| |||||||
Huntington Ingalls Industries, Inc. | 14,497 | 3,101,778 | ||||||
Steel - Producers — 1.1% |
| |||||||
Reliance Steel & Aluminum Co. | 83,404 | 6,040,118 | ||||||
Steel Dynamics, Inc. | 172,509 | 5,942,935 | ||||||
11,983,053 | ||||||||
Telecom Equipment - Fiber Optics — 0.6% |
| |||||||
Acacia Communications, Inc.†# | 130,636 | 6,378,956 | ||||||
Telecommunication Equipment — 0.7% |
| |||||||
CommScope Holding Co., Inc.†# | 207,536 | 6,861,140 | ||||||
Television — 0.3% |
| |||||||
CBS Corp., Class B | 44,193 | 2,831,004 | ||||||
Tools - Hand Held — 0.7% |
| |||||||
Stanley Black & Decker, Inc. | 53,513 | 7,705,872 | ||||||
Toys — 0.2% |
| |||||||
Hasbro, Inc.# | 23,465 | 2,305,436 | ||||||
Transport - Rail — 0.7% |
| |||||||
Genesee & Wyoming, Inc., Class A† | 107,642 | 7,379,935 | ||||||
Transport - Truck — 1.2% |
| |||||||
Knight Transportation, Inc.# | 245,432 | 9,584,120 | ||||||
Schneider National, Inc., Class B | 104,433 | 2,323,634 | ||||||
Swift Transportation Co.†# | 38,400 | 1,077,120 | ||||||
12,984,874 | ||||||||
Web Hosting/Design — 0.6% |
| |||||||
VeriSign, Inc.†# | 58,406 | 6,059,622 | ||||||
Wire & Cable Products — 0.0% |
| |||||||
Belden, Inc. | 2,885 | 222,346 | ||||||
Total Long-Term Investment Securities | ||||||||
(cost $880,147,297) | 1,027,426,418 | |||||||
SHORT-TERM INVESTMENT SECURITIES — 2.7% |
| |||||||
Registered Investment Companies — 2.7% |
| |||||||
State Street Institutional Liquid Reserves Fund, Administration Class | 5,783,029 | 5,783,608 | ||||||
State Street Navigator Securities Lending Government Money Market Portfolio | 21,784,347 | 21,784,347 | ||||||
Total Short-Term Investment Securities | ||||||||
(cost $27,567,955) | 27,567,955 | |||||||
66 |
Table of Contents
VALIC Company II Mid Cap Value Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares | Value (Note 2) | ||||||
REPURCHASE AGREEMENTS — 0.9% |
| |||||||
Agreement with Fixed Income Clearing Corp., bearing interest at 0.12%, dated 08/31/2017, to be repurchased 09/01/2017 in the amount of $9,418,031 collateralized by $9,150,000 of United States Treasury Notes, bearing interest at 3.00% due 05/15/2045 and having an approximate value of $9,702,312 | ||||||||
(cost $9,418,000) | 9,418,000 | $ | 9,418,000 | |||||
TOTAL INVESTMENTS | ||||||||
(cost $917,133,252)(3) | 101.8 | % | 1,064,412,373 | |||||
Liabilities in excess of other assets | (1.8 | ) | (18,366,785 | ) | ||||
NET ASSETS | 100.0 | % | $ | 1,046,045,588 | ||||
# | The security or a portion thereof is out on loan (see Note 2). |
† | Non-income producing security |
(1) | At August 31, 2017, the Fund had loaned securities with a total value of $187,925,484. This was secured by collateral of $21,784,347, which was received in cash and subsequently invested in short-term investments currently valued at $21,784,347 as reported in the portfolio of investments. Additional collateral of $168,857,186 was received in the form of short-term pooled securities, which the Fund cannot sell or repledge and accordingly are not reflected in the Fund’s other assets and liabilities. |
The components of the fixed income pooled securities referenced above are as follows:
Securities | Coupon Range | Maturity Date Range | Value as of August 31, 2017 | |||
Federal Home Loan Mtg. Corp. | 2.50% to 4.50% | 08/01/2027 to 01/01/2047 | $19,632,441 | |||
Federal National Mtg. Assoc. | 2.63% to 4.25% | 10/25/2029 to 11/01/2046 | 16,131,962 | |||
Government National Mtg. Assoc. | 2.50% to 3.50% | 01/20/2043 to 05/16/2053 | 33,702,683 | |||
United States Treasury Bills | 0.00% | 09/07/2017 to 03/01/2018 | 6,262,814 | |||
United States Treasury Notes/Bonds | zero coupon to 5.50% | 09/30/2017 to 02/15/2047 | 93,127,286 |
(2) | The rate shown is the 7-day yield as of August 31, 2017. |
(3) | See Note 5 for cost of investments on a tax basis. |
ADR—American Depository Receipt
SDR—Swedish Depositary Receipt
The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2017 (see Note 2):
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at Value:* | ||||||||||||||||
Common Stocks | $ | 1,011,695,109 | $ | 15,731,309 | ** | $ | — | $ | 1,027,426,418 | |||||||
Short-Term Investment Securities | 27,567,955 | — | — | 27,567,955 | ||||||||||||
Repurchase Agreements | — | 9,418,000 | — | 9,418,000 | ||||||||||||
Total Investments at Value | $ | 1,039,263,064 | $ | 25,149,309 | $ | — | $ | 1,064,412,373 | ||||||||
* | For a detailed presentation of investments, please refer to the Portfolio of Investments. |
** | Represents foreign equity securities that have been fair valued in accordance with pricing procedures approved by the Board (see Note 2). |
The Portfolio’s policy is to recognize transfers between Levels as of the end of the reporting period. Securities currently valued at $15,731,309 were transferred from Level 1 to Level 2 due to foreign equity securities whose values were adjusted for fair value pricing procedures for foreign equity securities. There were no additional transfers between Levels during the reporting period.
See Notes to Financial Statements
67 |
Table of Contents
VALIC Company II Moderate Growth Lifestyle Fund
PORTFOLIO PROFILE — August 31, 2017 (unaudited)
Industry Allocation*
Domestic Equity Investment Companies | 50.4 | % | ||
Domestic Fixed Income Investment Companies | 35.5 | |||
International Equity Investment Companies | 9.7 | |||
Real Estate Investment Companies | 3.8 | |||
International Fixed Income Investment Companies | 0.6 | |||
100.0 | % | |||
* | Calculated as a percentage of net assets |
68 |
Table of Contents
VALIC Company II Moderate Growth Lifestyle Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017
Security Description | Shares | Value (Note 2) | ||||||
AFFILIATED REGISTERED INVESTMENT COMPANIES#(1) —100.0% |
| |||||||
Domestic Equity Investment Companies — 50.4% | ||||||||
VALIC Co. I Blue Chip Growth Fund | 1,054,172 | $ | 19,386,223 | |||||
VALIC Co. I Dividend Value Fund | 2,112,194 | 26,043,347 | ||||||
VALIC Co. I Large Cap Core Fund | 388,405 | 4,571,525 | ||||||
VALIC Co. I Mid Cap Index Fund | 2,353,139 | 62,734,673 | ||||||
VALIC Co. I Mid Cap Strategic Growth Fund | 422,145 | 6,099,996 | ||||||
VALIC Co. I Nasdaq-100 Index Fund | 742,225 | 9,314,923 | ||||||
VALIC Co. I Science & Technology Fund | 324,061 | 8,931,132 | ||||||
VALIC Co. I Small Cap Index Fund | 3,834,090 | 79,710,727 | ||||||
VALIC Co. I Small Cap Special Values Fund | 2,669,070 | 35,071,582 | ||||||
VALIC Co. I Stock Index Fund | 71,100 | 2,667,687 | ||||||
VALIC Co. I Value Fund | 281,213 | 4,696,249 | ||||||
VALIC Co. II Capital Appreciation Fund | 1,355,256 | 22,429,483 | ||||||
VALIC Co. II Large Cap Value Fund | 728,782 | 15,056,629 | ||||||
VALIC Co. II Mid Cap Growth Fund† | 656,033 | 6,599,696 | ||||||
VALIC Co. II Mid Cap Value Fund | 3,634,492 | 77,160,262 | ||||||
VALIC Co. II Small Cap Growth Fund | 695,220 | 11,804,840 | ||||||
VALIC Co. II Small Cap Value Fund | 4,072,912 | 58,935,035 | ||||||
Total Domestic Equity Investment Companies | ||||||||
(cost $412,614,290) | 451,214,009 | |||||||
Domestic Fixed Income Investment Companies — 35.5% |
| |||||||
VALIC Co. I Capital Conservation Fund | 3,747,707 | 37,327,158 | ||||||
VALIC Co. I Government Securities Fund | 1,203,546 | 12,902,011 | ||||||
VALIC Co. I Inflation Protected Fund | 7,119,843 | 79,813,437 | ||||||
VALIC Co. II Core Bond Fund | 7,732,372 | 86,215,945 | ||||||
VALIC Co. II High Yield Bond Fund | 5,348,425 | 41,450,293 | ||||||
VALIC Co. II Strategic Bond Fund | 5,331,353 | 60,670,802 | ||||||
Total Domestic Fixed Income Investment Companies | ||||||||
(cost $312,083,430) | 318,379,646 | |||||||
Security Description | Shares | Value (Note 2) | ||||||
International Equity Investment Companies — 9.7% | ||||||||
VALIC Co. I Foreign Value Fund | 2,802,707 | $ | 29,680,670 | |||||
VALIC Co. I International Equities Index Fund | 3,495,329 | 25,271,227 | ||||||
VALIC Co. I International Growth Fund | 761,811 | 10,314,923 | ||||||
VALIC Co. II International Opportunities Fund | 1,124,449 | 21,791,826 | ||||||
Total International Equity Investment Companies | ||||||||
(cost $78,346,442) | 87,058,646 | |||||||
International Fixed Income Investment Companies — 0.6% |
| |||||||
VALIC Co. I International Government Bond Fund† | ||||||||
(cost $5,362,493) | 453,276 | 5,480,105 | ||||||
Real Estate Investment Companies — 3.8% | ||||||||
VALIC Co. I Global Real Estate Fund | ||||||||
(cost $34,871,920) | 4,365,068 | 34,353,087 | ||||||
TOTAL INVESTMENTS | ||||||||
(cost $843,278,575)(2) | 100.0 | % | 896,485,493 | |||||
Liabilities in excess of other assets | (0.0 | ) | (139,985 | ) | ||||
NET ASSETS | 100.0 | % | $ | 896,345,508 | ||||
# | The Moderate Growth Lifestyle Fund invests in various VALIC Company I or VALIC II Funds, some of which are not presented in this report. Additional information on the underlying funds including such fund’s prospectuses and shareholder reports is available at our website, www.valic.com |
† | Non-income producing security |
(1) | See Note 3. |
(2) | See Note 5 for cost of investments on a tax basis. |
The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2017 (see Note 2):
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at Value:* | ||||||||||||||||
Affiliated Registered Investment Companies | $ | 896,485,493 | $ | — | $ | — | $ | 896,485,493 | ||||||||
* | For a detailed presentation of investments, please refer to the Portfolio of Investments. |
The Fund’s policy is to recognize transfers between Levels as of the end of the reporting period. There were no transfers between Levels during the reporting period.
See Notes to Financial Statements
69 |
Table of Contents
VALIC Company II Small Cap Growth Fund
PORTFOLIO PROFILE — August 31, 2017 (unaudited)
Industry Allocation*
Medical — Biomedical/Gene | 8.7 | % | ||
Registered Investment Companies | 7.3 | |||
Enterprise Software/Service | 6.2 | |||
Electronic Components — Semiconductors | 4.2 | |||
Medical — Drugs | 3.3 | |||
Building & Construction Products — Misc. | 2.9 | |||
E-Commerce/Services | 2.6 | |||
Retail — Automobile | 2.2 | |||
Medical Products | 2.2 | |||
Banks — Commercial | 2.2 | |||
Computer Software | 2.0 | |||
Casino Hotels | 1.7 | |||
Miscellaneous Manufacturing | 1.6 | |||
Transport — Truck | 1.6 | |||
Electric Products — Misc. | 1.6 | |||
Internet Application Software | 1.6 | |||
Educational Software | 1.5 | |||
Building Products — Doors & Windows | 1.5 | |||
Web Hosting/Design | 1.5 | |||
Drug Delivery Systems | 1.4 | |||
Time Deposits | 1.4 | |||
Machinery — Pumps | 1.3 | |||
Distribution/Wholesale | 1.3 | |||
Footwear & Related Apparel | 1.3 | |||
Oil Companies — Exploration & Production | 1.3 | |||
Finance — Investment Banker/Broker | 1.3 | |||
Chemicals — Specialty | 1.3 | |||
Medical Labs & Testing Services | 1.2 | |||
Internet Telephone | 1.2 | |||
Building Products — Cement | 1.2 | |||
Medical — Hospitals | 1.2 | |||
Aerospace/Defense — Equipment | 1.2 | |||
Non-Hazardous Waste Disposal | 1.1 | |||
Machinery — Construction & Mining | 1.1 | |||
Semiconductor Equipment | 1.1 | |||
Building Products — Air & Heating | 1.1 | |||
Internet Security | 1.1 | |||
Entertainment Software | 1.1 | |||
Medical — HMO | 1.1 | |||
Real Estate Investment Trusts | 1.1 | |||
Food — Wholesale/Distribution | 1.1 | |||
Real Estate Management/Services | 1.1 | |||
Therapeutics | 1.1 | |||
Resorts/Theme Parks | 1.1 | |||
Schools | 1.0 | |||
Applications Software | 1.0 | |||
Retail — Restaurants | 1.0 | |||
Cosmetics & Toiletries | 1.0 | |||
Steel Pipe & Tube | 0.9 | |||
Patient Monitoring Equipment | 0.9 | |||
Retail — Discount | 0.9 | |||
Investment Management/Advisor Services | 0.9 | |||
Wireless Equipment | 0.9 | |||
Machinery — General Industrial | 0.8 | |||
E-Commerce/Products | 0.8 | |||
Diagnostic Equipment | 0.8 | |||
Diversified Manufacturing Operations | 0.8 | |||
Commercial Services | 0.8 | |||
Building — Mobile Home/Manufactured Housing | 0.7 | |||
Retail — Pet Food & Supplies | 0.7 | |||
Retail — Apparel/Shoe | 0.7 | |||
Advanced Materials | 0.6 | |||
Computers | 0.6 | |||
Building — Residential/Commercial | 0.6 | |||
Food — Misc./Diversified | 0.6 | |||
Investment Companies | 0.6 | |||
Retail — Convenience Store | 0.5 | |||
Savings & Loans/Thrifts | 0.5 | |||
Food — Retail | 0.5 |
Transport — Marine | 0.5 | |||
Retail — Building Products | 0.5 | |||
Telecom Equipment — Fiber Optics | 0.5 | |||
Medical Instruments | 0.3 | |||
107.1 | % | |||
* | Calculated as a percentage of net assets |
70 |
Table of Contents
VALIC Company II Small Cap Growth Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS — 98.4% |
| |||||||
Advanced Materials — 0.6% |
| |||||||
Hexcel Corp. | 16,703 | $ | 898,120 | |||||
Aerospace/Defense - Equipment — 1.2% |
| |||||||
HEICO Corp. | 18,840 | 1,615,907 | ||||||
Applications Software — 1.0% |
| |||||||
HubSpot, Inc.†# | 18,999 | 1,393,577 | ||||||
Banks - Commercial — 2.2% | ||||||||
Bank of the Ozarks# | 16,743 | 719,279 | ||||||
Signature Bank† | 4,461 | 572,525 | ||||||
Texas Capital Bancshares, Inc.† | 22,589 | 1,677,233 | ||||||
2,969,037 | ||||||||
Building & Construction Products - Misc. — 2.9% |
| |||||||
Fortune Brands Home & Security, Inc. | 6,373 | 398,504 | ||||||
Summit Materials, Inc., Class A† | 70,336 | 2,077,725 | ||||||
Trex Co., Inc.† | 20,733 | 1,575,708 | ||||||
4,051,937 | ||||||||
Building Products - Air & Heating — 1.1% |
| |||||||
Lennox International, Inc. | 9,123 | 1,511,955 | ||||||
Building Products - Cement — 1.2% |
| |||||||
Eagle Materials, Inc. | 16,721 | 1,626,117 | ||||||
Building Products - Doors & Windows — 1.5% |
| |||||||
JELD-WEN Holding, Inc.† | 33,532 | 1,023,397 | ||||||
Masonite International Corp.† | 16,560 | 1,048,248 | ||||||
2,071,645 | ||||||||
Building - Mobile Home/Manufactured Housing — 0.7% |
| |||||||
Winnebago Industries, Inc. | 27,365 | 989,245 | ||||||
Building - Residential/Commercial — 0.6% |
| |||||||
TRI Pointe Group, Inc.†# | 66,280 | 844,407 | ||||||
Casino Hotels — 1.7% |
| |||||||
Boyd Gaming Corp.# | 88,435 | 2,338,221 | ||||||
Chemicals - Specialty — 1.3% |
| |||||||
Ferro Corp.† | 89,979 | 1,733,895 | ||||||
Commercial Services — 0.8% |
| |||||||
CoStar Group, Inc.†# | 3,676 | 1,053,615 | ||||||
Computer Software — 2.0% |
| |||||||
Cloudera, Inc.†# | 44,528 | 863,843 | ||||||
Envestnet, Inc.† | 41,160 | 1,829,562 | ||||||
2,693,405 | ||||||||
Computers — 0.6% |
| |||||||
Nutanix, Inc., Class A†# | 40,614 | 893,508 | ||||||
Cosmetics & Toiletries — 1.0% |
| |||||||
elf Beauty, Inc.†# | 64,675 | 1,338,126 | ||||||
Diagnostic Equipment — 0.8% |
| |||||||
GenMark Diagnostics, Inc.† | 113,385 | 1,104,370 | ||||||
Distribution/Wholesale — 1.3% |
| |||||||
H&E Equipment Services, Inc. | 39,945 | 940,305 | ||||||
Pool Corp. | 9,024 | 899,603 | ||||||
1,839,908 | ||||||||
Diversified Manufacturing Operations — 0.8% |
| |||||||
ITT, Inc. | 27,099 | 1,093,716 | ||||||
Drug Delivery Systems — 1.4% |
| |||||||
Nektar Therapeutics† | 48,988 | 1,030,217 | ||||||
Revance Therapeutics, Inc.†# | 35,054 | 860,576 | ||||||
1,890,793 | ||||||||
Security Description | Shares | Value (Note 2) | ||||||
E-Commerce/Products — 0.8% |
| |||||||
Wayfair, Inc., Class A†# | 16,259 | $ | 1,154,552 | |||||
E-Commerce/Services — 2.6% |
| |||||||
GrubHub, Inc.†# | 31,406 | 1,792,968 | ||||||
Trade Desk, Inc., Class A† | 34,171 | 1,810,038 | ||||||
3,603,006 | ||||||||
Educational Software — 1.5% |
| |||||||
2U, Inc.†# | 19,433 | 973,593 | ||||||
Instructure, Inc.†# | 38,081 | 1,127,198 | ||||||
2,100,791 | ||||||||
Electric Products - Misc. — 1.6% |
| |||||||
Littelfuse, Inc. | 11,877 | 2,211,022 | ||||||
Electronic Components - Semiconductors — 4.2% |
| |||||||
Cavium, Inc.†# | 25,110 | 1,589,714 | ||||||
Inphi Corp.†# | 37,621 | 1,440,508 | ||||||
MACOM Technology Solutions Holdings, Inc.†# | 23,987 | 1,092,368 | ||||||
Monolithic Power Systems, Inc. | 16,192 | 1,640,574 | ||||||
5,763,164 | ||||||||
Enterprise Software/Service — 6.2% |
| |||||||
Appian Corp.†# | 33,276 | 761,688 | ||||||
Atlassian Corp. PLC, Class A† | 23,470 | 835,532 | ||||||
Evolent Health, Inc., Class A† | 82,740 | 1,381,758 | ||||||
Guidewire Software, Inc.† | 17,450 | 1,321,139 | ||||||
MuleSoft, Inc., Class A†# | 23,441 | 511,014 | ||||||
Paycom Software, Inc.†# | 23,187 | 1,729,982 | ||||||
Tyler Technologies, Inc.† | 7,320 | 1,264,896 | ||||||
Veeva Systems, Inc., Class A† | 10,891 | 648,014 | ||||||
8,454,023 | ||||||||
Entertainment Software — 1.1% |
| |||||||
Take-Two Interactive Software, Inc.† | 15,049 | 1,471,642 | ||||||
Finance - Investment Banker/Broker — 1.3% |
| |||||||
Evercore, Inc., Class A | 23,360 | 1,762,512 | ||||||
Food - Misc./Diversified — 0.6% |
| |||||||
Snyder’s-Lance, Inc. | 22,531 | 800,301 | ||||||
Food - Retail — 0.5% | ||||||||
Sprouts Farmers Market, Inc.† | 35,011 | 698,119 | ||||||
Food - Wholesale/Distribution — 1.1% |
| |||||||
Performance Food Group Co.† | 52,603 | 1,462,363 | ||||||
Footwear & Related Apparel — 1.3% |
| |||||||
Wolverine World Wide, Inc. | 67,720 | 1,781,036 | ||||||
Internet Application Software — 1.6% |
| |||||||
Okta, Inc.† | 31,194 | 841,926 | ||||||
Zendesk, Inc.†# | 48,515 | 1,329,311 | ||||||
2,171,237 | ||||||||
Internet Security — 1.1% |
| |||||||
Proofpoint, Inc.†# | 16,123 | 1,479,446 | ||||||
Internet Telephone — 1.2% |
| |||||||
RingCentral, Inc., Class A† | 39,078 | 1,654,953 | ||||||
Investment Companies — 0.6% |
| |||||||
PennantPark Investment Corp. | 102,452 | 769,414 | ||||||
Investment Management/Advisor Services — 0.9% |
| |||||||
Financial Engines, Inc. | 26,801 | 885,773 | ||||||
WisdomTree Investments, Inc.# | 33,524 | 307,415 | ||||||
1,193,188 | ||||||||
Machinery - Construction & Mining — 1.1% |
| |||||||
Oshkosh Corp. | 21,023 | 1,568,316 | ||||||
71 |
Table of Contents
VALIC Company II Small Cap Growth Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS (continued) |
| |||||||
Machinery - General Industrial — 0.8% |
| |||||||
Middleby Corp.† | 9,546 | $ | 1,161,748 | |||||
Machinery - Pumps — 1.3% |
| |||||||
Graco, Inc. | 15,954 | 1,842,847 | ||||||
Medical Instruments — 0.3% |
| |||||||
iRhythm Technologies, Inc.† | 9,555 | 456,156 | ||||||
Medical Labs & Testing Services — 1.2% |
| |||||||
Teladoc, Inc.†# | 50,885 | 1,707,192 | ||||||
Medical Products — 2.2% |
| |||||||
K2M Group Holdings, Inc.† | 58,421 | 1,365,883 | ||||||
Nevro Corp.†# | 18,620 | 1,604,672 | ||||||
2,970,555 | ||||||||
Medical - Biomedical/Gene — 8.7% |
| |||||||
Axovant Sciences, Ltd.† | 16,143 | 322,860 | ||||||
Bellicum Pharmaceuticals, Inc.†# | 43,476 | 470,845 | ||||||
Biohaven Pharmaceutical Holding Co., Ltd.†# | 24,269 | 867,617 | ||||||
Exact Sciences Corp.†# | 46,705 | 1,956,472 | ||||||
FibroGen, Inc.† | 23,774 | 1,145,907 | ||||||
Halozyme Therapeutics, Inc.† | 66,560 | 865,946 | ||||||
Insmed, Inc.†# | 21,481 | 266,794 | ||||||
Kite Pharma, Inc.†# | 14,971 | 2,664,688 | ||||||
REGENXBIO, Inc.† | 26,892 | 611,793 | ||||||
Sage Therapeutics, Inc.†# | 11,305 | 929,836 | ||||||
Spark Therapeutics, Inc.† | 16,123 | 1,327,407 | ||||||
Versartis, Inc.†# | 25,486 | 484,234 | ||||||
11,914,399 | ||||||||
Medical - Drugs — 3.3% |
| |||||||
ACADIA Pharmaceuticals, Inc.†# | 15,693 | 558,828 | ||||||
Clementia Pharmaceuticals, Inc.† | 37,179 | 607,133 | ||||||
Clovis Oncology, Inc.† | 3,711 | 282,296 | ||||||
Coherus Biosciences, Inc.† | 33,278 | 480,867 | ||||||
Horizon Pharma PLC† | 67,230 | 919,706 | ||||||
Ignyta, Inc.† | 52,780 | 606,970 | ||||||
TherapeuticsMD, Inc.†# | 180,898 | 1,085,388 | ||||||
4,541,188 | ||||||||
Medical - HMO — 1.1% |
| |||||||
WellCare Health Plans, Inc.† | 8,416 | 1,470,107 | ||||||
Medical - Hospitals — 1.2% | ||||||||
Acadia Healthcare Co., Inc.†# | 34,436 | 1,616,426 | ||||||
Miscellaneous Manufacturing — 1.6% | ||||||||
John Bean Technologies Corp. | 25,361 | 2,249,521 | ||||||
Non - Hazardous Waste Disposal — 1.1% | ||||||||
Advanced Disposal Services, Inc.† | 66,051 | 1,574,656 | ||||||
Oil Companies - Exploration & Production — 1.3% | ||||||||
Diamondback Energy, Inc.† | 5,405 | 490,720 | ||||||
Jagged Peak Energy, Inc.†# | 49,708 | 636,760 | ||||||
RSP Permian, Inc.† | 20,569 | 645,455 | ||||||
1,772,935 | ||||||||
Patient Monitoring Equipment — 0.9% |
| |||||||
Insulet Corp.†# | 21,662 | 1,257,696 | ||||||
Real Estate Investment Trusts — 1.1% |
| |||||||
CubeSmart | 25,365 | 625,247 | ||||||
Highwoods Properties, Inc. | 16,039 | 837,717 | ||||||
1,462,964 | ||||||||
Real Estate Management/Services — 1.1% |
| |||||||
RE/MAX Holdings, Inc., Class A | 23,856 | 1,461,180 | ||||||
Security Description | Shares | Value (Note 2) | ||||||
Resort/Theme Parks — 1.1% |
| |||||||
Vail Resorts, Inc. | 6,379 | $ | 1,454,093 | |||||
Retail - Apparel/Shoe — 0.7% |
| |||||||
Burlington Stores, Inc.† | 10,321 | 899,269 | ||||||
Retail - Automobile — 2.2% |
| |||||||
Lithia Motors, Inc., Class A# | 16,401 | 1,771,308 | ||||||
Rush Enterprises, Inc., Class A† | 30,339 | 1,243,596 | ||||||
3,014,904 | ||||||||
Retail - Building Products — 0.5% |
| |||||||
Tile Shop Holdings, Inc. | 45,581 | 685,994 | ||||||
Retail - Convenience Store — 0.5% |
| |||||||
Casey’s General Stores, Inc.# | 7,161 | 754,913 | ||||||
Retail - Discount — 0.9% |
| |||||||
Ollie’s Bargain Outlet Holdings, Inc.†# | 29,558 | 1,237,002 | ||||||
Retail - Pet Food & Supplies — 0.7% |
| |||||||
Freshpet, Inc.†# | 59,130 | 937,210 | ||||||
Retail - Restaurants — 1.0% |
| |||||||
Texas Roadhouse, Inc. | 29,284 | 1,389,526 | ||||||
Savings & Loans/Thrifts — 0.5% |
| |||||||
BofI Holding, Inc.†# | 27,779 | 736,421 | ||||||
Schools — 1.0% |
| |||||||
Bright Horizons Family Solutions, Inc.† | 17,625 | 1,408,766 | ||||||
Semiconductor Equipment — 1.1% |
| |||||||
MKS Instruments, Inc. | 18,652 | 1,535,992 | ||||||
Steel Pipe & Tube — 0.9% |
| |||||||
Advanced Drainage Systems, Inc.# | 64,907 | 1,262,441 | ||||||
Telecom Equipment-Fiber Optics — 0.5% |
| |||||||
Ciena Corp.† | 30,207 | 652,773 | ||||||
Therapeutics — 1.1% |
| |||||||
Neurocrine Biosciences, Inc.†# | 9,725 | 550,435 | ||||||
Portola Pharmaceuticals, Inc.† | 14,317 | 908,414 | ||||||
1,458,849 | ||||||||
Transport - Marine — 0.5% |
| |||||||
Kirby Corp.† | 11,134 | 696,988 | ||||||
Transport - Truck — 1.6% |
| |||||||
Old Dominion Freight Line, Inc. | 15,114 | 1,509,889 | ||||||
XPO Logistics, Inc.† | 11,814 | 723,017 | ||||||
2,232,906 | ||||||||
Web Hosting/Design — 1.5% |
| |||||||
GoDaddy, Inc., Class A† | 24,647 | 1,104,679 | ||||||
Shopify, Inc., Class A† | 8,235 | 913,426 | ||||||
2,018,105 | ||||||||
Wireless Equipment — 0.9% |
| |||||||
Quantenna Communications, Inc.†# | 64,020 | 1,189,492 | ||||||
Total Long-Term Investment Securities | ||||||||
(cost $105,301,062) | 135,075,803 | |||||||
SHORT-TERM INVESTMENT SECURITIES — 8.7% |
| |||||||
Registered Investment Companies — 7.3% |
| |||||||
State Street Navigator Securities Lending Government Money Market Portfolio | 10,090,697 | 10,090,697 | ||||||
72 |
Table of Contents
VALIC Company II Small Cap Growth Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
SHORT-TERM INVESTMENT SECURITIES (continued) |
| |||||||
Time Deposits — 1.4% |
| |||||||
Euro Time Deposit with State Street Bank and Trust Co. 0.12% due 09/01/2017 | $ | 1,858,000 | $ | 1,858,000 | ||||
Total Short-Term Investment Securities | ||||||||
(cost $11,948,697) | 11,948,697 | |||||||
TOTAL INVESTMENTS | ||||||||
(cost $117,249,759)(3) | 107.1 | % | 147,024,500 | |||||
Liabilities in excess of other assets | (7.1 | ) | (9,694,150 | ) | ||||
NET ASSETS | 100.0 | % | $ | 137,330,350 | ||||
# | The security or a portion thereof is out on loan (see Note 2). |
† | Non-income producing security |
(1) | At August 31, 2017, the Fund had loaned securities with a total value of $28,231,108. This was secured by collateral of $10,090,697, which was received in cash and subsequently invested in short-term investments currently valued at $10,090,697 as reported in the portfolio of investments. The remaining collateral of $18,514,258 was received in the form of short-term pooled securities, which the Fund cannot sell or repledge and accordingly are not reflected in the Fund’s other assets and liabilities. |
Securities | Coupon Range | Maturity Date Range | Value as of August 31, 2017 | |||||
Federal Home Loan Mtg. Corp. | 2.50% to 4.50% | 08/01/2027 to 01/01/2047 | $ | 854,825 | ||||
Federal National Mtg. Assoc. | 2.63% to 4.25% | 10/25/2029 to 11/01/2046 | 702,409 | |||||
Government National Mtg. Assoc. | 2.50% to 3.50% | 01/20/2043 to 05/16/2053 | 1,467,464 | |||||
United States Treasury Bills | 0.00% | 09/07/2017 to 03/01/2018 | 941,428 | |||||
United States Treasury Notes/Bonds | zero coupon to 8.00% | 09/30/2017 to 02/15/2047 | 14,548,132 |
(2) | The rate shown is the 7-day yield as of August 31, 2017. |
(3) | See Note 5 for cost of investments on a tax basis. |
The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2017 (see Note 2):
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at Value:* | ||||||||||||||||
Common Stocks | $ | 135,075,803 | $ | — | $ | — | $ | 135,075,803 | ||||||||
Short-Term Investment Securities: | ||||||||||||||||
Registered Investment Companies | 10,090,697 | — | — | 10,090,697 | ||||||||||||
Time Deposits | — | 1,858,000 | — | 1,858,000 | ||||||||||||
Total Investments at Value | $ | 145,166,500 | $ | 1,858,000 | $ | — | $ | 147,024,500 | ||||||||
* | For a detailed presentation of investments, please refer to the Portfolio of Investments. |
The Fund’s policy is to recognize transfers between Levels as of the end of the reporting period. There were no transfers between Levels during the reporting period.
See Notes to Financial Statements
73 |
Table of Contents
VALIC Company II Small Cap Value Fund
PORTFOLIO PROFILE — August 31, 2017 (unaudited)
Industry Allocation*
Banks — Commercial | 17.1 | % | ||
Real Estate Investment Trusts | 12.2 | |||
Registered Investment Companies | 3.5 | |||
Electric — Integrated | 2.8 | |||
Savings & Loans/Thrifts | 2.8 | |||
Electronic Components — Misc. | 2.1 | |||
Insurance — Life/Health | 2.1 | |||
Medical — Biomedical/Gene | 2.0 | |||
Gas — Distribution | 2.0 | |||
Oil — Field Services | 1.4 | |||
Transport — Truck | 1.4 | |||
Engineering/R&D Services | 1.3 | |||
Computer Services | 1.3 | |||
Insurance — Property/Casualty | 1.3 | |||
Oil Companies — Exploration & Production | 1.2 | |||
Retail — Apparel/Shoe | 1.1 | |||
Energy — Alternate Sources | 1.1 | |||
Consulting Services | 1.1 | |||
Auto/Truck Parts & Equipment — Original | 1.1 | |||
Repurchase Agreements | 1.0 | |||
Entertainment Software | 1.0 | |||
Building — Residential/Commercial | 1.0 | |||
Human Resources | 0.9 | |||
Office Supplies & Forms | 0.9 | |||
Medical — Drugs | 0.9 | |||
Steel — Producers | 0.9 | |||
Aerospace/Defense — Equipment | 0.9 | |||
Electronic Parts Distribution | 0.8 | |||
Independent Power Producers | 0.8 | |||
Oil Refining & Marketing | 0.7 | |||
Medical — HMO | 0.7 | |||
Auto — Truck Trailers | 0.7 | |||
Financial Guarantee Insurance | 0.7 | |||
Machinery — General Industrial | 0.7 | |||
Consumer Products — Misc. | 0.6 | |||
Printing — Commercial | 0.6 | |||
Oil & Gas Drilling | 0.6 | |||
Commercial Services — Finance | 0.6 | |||
Telecom Services | 0.6 | |||
Medical Products | 0.6 | |||
Electronic Components — Semiconductors | 0.6 | |||
Real Estate Operations & Development | 0.6 | |||
Retail — Office Supplies | 0.6 | |||
Banks — Mortgage | 0.6 | |||
Medical — Hospitals | 0.6 | |||
Distribution/Wholesale | 0.6 | |||
Chemicals — Specialty | 0.5 | |||
Retail — Regional Department Stores | 0.5 | |||
Rubber/Plastic Products | 0.5 | |||
Networking Products | 0.5 | |||
Paper & Related Products | 0.5 | |||
Rental Auto/Equipment | 0.5 | |||
Tobacco | 0.5 | |||
Finance — Investment Banker/Broker | 0.4 | |||
Broadcast Services/Program | 0.4 | |||
Water | 0.4 | |||
Commercial Services | 0.4 | |||
Gambling (Non-Hotel) | 0.4 | |||
Metal Processors & Fabrication | 0.4 | |||
Circuit Boards | 0.4 | |||
Applications Software | 0.4 | |||
Food — Wholesale/Distribution | 0.4 | |||
Metal Products — Distribution | 0.4 | |||
Wire & Cable Products | 0.4 | |||
Semiconductor Components — Integrated Circuits | 0.4 | |||
Medical — Wholesale Drug Distribution | 0.4 | |||
Hotels/Motels | 0.4 | |||
Retail — Jewelry | 0.4 | |||
Transport — Marine | 0.3 | |||
Coal | 0.3 | |||
Medical Instruments | 0.3 | |||
Electric — Distribution | 0.3 |
Rubber — Tires | 0.3 | % | ||
Food — Misc./Diversified | 0.3 | |||
Racetracks | 0.3 | |||
Investment Management/Advisor Services | 0.3 | |||
Footwear & Related Apparel | 0.3 | |||
Auto/Truck Parts & Equipment — Replacement | 0.3 | |||
Schools | 0.3 | |||
Finance — Mortgage Loan/Banker | 0.3 | |||
Telecommunication Equipment | 0.3 | |||
Housewares | 0.3 | |||
Insurance — Multi-line | 0.3 | |||
Medical — Nursing Homes | 0.3 | |||
Data Processing/Management | 0.3 | |||
Multimedia | 0.3 | |||
Airlines | 0.3 | |||
Chemicals — Fibers | 0.3 | |||
Chemicals — Diversified | 0.2 | |||
Retail — Home Furnishings | 0.2 | |||
Building — Maintenance & Services | 0.2 | |||
Telephone — Integrated | 0.2 | |||
Oil Field Machinery & Equipment | 0.2 | |||
Finance — Consumer Loans | 0.2 | |||
Insurance — Reinsurance | 0.2 | |||
Retail — Hair Salons | 0.2 | |||
Retail — Pawn Shops | 0.2 | |||
Containers — Paper/Plastic | 0.2 | |||
Metal — Iron | 0.2 | |||
Machinery — Farming | 0.2 | |||
Travel Services | 0.2 | |||
Retail — Restaurants | 0.2 | |||
Pharmacy Services | 0.2 | |||
Television | 0.2 | |||
Building Products — Wood | 0.2 | |||
Electric — Generation | 0.2 | |||
Telecom Equipment — Fiber Optics | 0.2 | |||
Food — Canned | 0.2 | |||
Building & Construction Products — Misc. | 0.2 | |||
Wireless Equipment | 0.2 | |||
Semiconductor Equipment | 0.2 | |||
Electronic Measurement Instruments | 0.2 | |||
Building & Construction — Misc. | 0.1 | |||
Pipelines | 0.1 | |||
Retail — Misc./Diversified | 0.1 | |||
Building — Heavy Construction | 0.1 | |||
Diversified Manufacturing Operations | 0.1 | |||
Satellite Telecom | 0.1 | |||
E-Services/Consulting | 0.1 | |||
Chemicals — Other | 0.1 | |||
Finance — Other Services | 0.1 | |||
Food — Dairy Products | 0.1 | |||
Engines — Internal Combustion | 0.1 | |||
Home Furnishings | 0.1 | |||
Textile — Apparel | 0.1 | |||
Publishing — Newspapers | 0.1 | |||
Pollution Control | 0.1 | |||
Security Services | 0.1 | |||
Internet Content — Entertainment | 0.1 | |||
Machinery — Construction & Mining | 0.1 | |||
Poultry | 0.1 | |||
Medical — Generic Drugs | 0.1 | |||
Power Converter/Supply Equipment | 0.1 | |||
Finance — Leasing Companies | 0.1 | |||
Publishing — Books | 0.1 | |||
Industrial Automated/Robotic | 0.1 | |||
Motion Pictures & Services | 0.1 | |||
Decision Support Software | 0.1 | |||
Retail — Building Products | 0.1 | |||
Food — Retail | 0.1 | |||
E-Marketing/Info | 0.1 | |||
101.9 | % | |||
* | Calculated as a percentage of net assets |
74 |
Table of Contents
VALIC Company II Small Cap Value Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS — 97.4% |
| |||||||
Aerospace/Defense - Equipment — 0.9% |
| |||||||
AAR Corp. | 23,000 | $ | 829,380 | |||||
Curtiss-Wright Corp. | 13,800 | 1,336,116 | ||||||
Moog, Inc., Class A† | 30,800 | 2,364,208 | ||||||
4,529,704 | ||||||||
Airlines — 0.3% |
| |||||||
JetBlue Airways Corp.† | 5,900 | 116,879 | ||||||
SkyWest, Inc. | 39,000 | 1,353,300 | ||||||
1,470,179 | ||||||||
Applications Software — 0.4% |
| |||||||
Progress Software Corp. | 61,700 | 2,071,886 | ||||||
Auto - Truck Trailers — 0.7% |
| |||||||
Wabash National Corp.# | 179,300 | 3,768,886 | ||||||
Auto/Truck Parts & Equipment - Original — 1.1% |
| |||||||
Cooper-Standard Holding, Inc.† | 19,900 | 2,001,542 | ||||||
Dana, Inc. | 74,200 | 1,785,994 | ||||||
Meritor, Inc.† | 92,600 | 1,839,036 | ||||||
5,626,572 | ||||||||
�� | ||||||||
Auto/Truck Parts & Equipment - Replacement — 0.3% |
| |||||||
Douglas Dynamics, Inc. | 46,100 | 1,608,890 | ||||||
B2B/E-Commerce — 0.0% |
| |||||||
TechTarget, Inc.† | 6,100 | 60,634 | ||||||
Banks - Commercial — 17.1% |
| |||||||
1st Source Corp. | 20,620 | 962,335 | ||||||
Allegiance Bancshares, Inc.†# | 5,700 | 194,085 | ||||||
American National Bankshares, Inc. | 1,100 | 40,150 | ||||||
BancFirst Corp. | 21,980 | 1,107,792 | ||||||
BancorpSouth, Inc. | 63,900 | 1,856,295 | ||||||
Bank of Hawaii Corp.# | 27,980 | 2,186,078 | ||||||
Bank of Marin Bancorp | 600 | 39,270 | ||||||
Banner Corp. | 4,900 | 270,088 | ||||||
Bryn Mawr Bank Corp. | 5,300 | 217,035 | ||||||
Cadence BanCorp† | 7,600 | 158,384 | ||||||
Capital Bank Financial Corp., Class A | 9,700 | 364,720 | ||||||
Cathay General Bancorp, Class B | 44,890 | 1,583,270 | ||||||
Central Pacific Financial Corp. | 78,200 | 2,267,800 | ||||||
Central Valley Community Bancorp | 8,700 | 171,129 | ||||||
Century Bancorp, Inc., Class A | 1,418 | 94,722 | ||||||
Chemung Financial Corp. | 900 | 36,351 | ||||||
Citizens & Northern Corp. | 3,300 | 74,052 | ||||||
City Holding Co. | 24,800 | 1,570,584 | ||||||
Columbia Banking System, Inc. | 9,373 | 348,395 | ||||||
Community Bank System, Inc.# | 23,180 | 1,192,843 | ||||||
Community Trust Bancorp, Inc. | 28,518 | 1,213,441 | ||||||
CU Bancorp† | 4,500 | 160,425 | ||||||
Customers Bancorp, Inc.† | 13,500 | 380,430 | ||||||
East West Bancorp, Inc. | 9,573 | 530,057 | ||||||
Enterprise Financial Services Corp. | 33,200 | 1,268,240 | ||||||
Farmers National Banc Corp. | 16,200 | 221,940 | ||||||
FCB Financial Holdings, Inc., Class A† | 42,100 | 1,835,560 | ||||||
Fidelity Southern Corp. | 44,800 | 979,328 | ||||||
Financial Institutions, Inc. | 38,100 | 1,036,320 | ||||||
First BanCorp† | 502,100 | 2,851,928 | ||||||
First BanCorp | 5,200 | 160,888 | ||||||
First Business Financial Services, Inc. | 9,800 | 208,838 | ||||||
First Citizens BancShares, Inc., Class A | 2,340 | 796,793 | ||||||
First Commonwealth Financial Corp. | 225,100 | 2,838,511 | ||||||
First Community Bancshares, Inc. | 21,900 | 563,706 | ||||||
First Financial Bancorp | 30,298 | 725,637 | ||||||
First Financial Bankshares, Inc.# | 12,960 | 519,048 | ||||||
First Financial Corp. | 6,100 | 264,740 |
Security Description | Shares | Value (Note 2) | ||||||
Banks - Commercial (continued) |
| |||||||
First Hawaiian, Inc. | 25,600 | $ | 693,504 | |||||
First Interstate BancSystem, Inc., Class A | 30,537 | 1,074,903 | ||||||
First Merchants Corp. | 30,400 | 1,193,808 | ||||||
First Midwest Bancorp, Inc. | 16,200 | 341,496 | ||||||
Franklin Financial Network, Inc.† | 6,600 | 215,820 | ||||||
Fulton Financial Corp.# | 119,200 | 2,080,040 | ||||||
Glacier Bancorp, Inc. | 36,300 | 1,205,523 | ||||||
Great Southern Bancorp, Inc. | 17,000 | 846,600 | ||||||
Great Western Bancorp, Inc. | 17,900 | 642,968 | ||||||
Green Bancorp, Inc.† | 41,800 | 838,090 | ||||||
Hancock Holding Co. | 123,521 | 5,428,748 | ||||||
Hanmi Financial Corp. | 75,800 | 2,023,860 | ||||||
Heartland Financial USA, Inc. | 14,600 | 664,300 | ||||||
Heritage Commerce Corp. | 9,700 | 129,980 | ||||||
Heritage Financial Corp. | 43,739 | 1,143,775 | ||||||
Hilltop Holdings, Inc. | 36,400 | 861,588 | ||||||
HomeStreet, Inc.† | 11,600 | 292,900 | ||||||
Hope Bancorp, Inc. | 147,527 | 2,381,086 | ||||||
IBERIABANK Corp. | 38,100 | 2,918,460 | ||||||
Independent Bank Corp. | 7,200 | 498,960 | ||||||
Independent Bank Corp. | 34,400 | 701,760 | ||||||
Kearny Financial Corp. | 22,327 | 315,927 | ||||||
Lakeland Financial Corp. | 7,170 | 311,608 | ||||||
MainSource Financial Group, Inc. | 35,900 | 1,175,007 | ||||||
MB Financial, Inc. | 2,900 | 115,333 | ||||||
Mercantile Bank Corp. | 3,300 | 100,287 | ||||||
Midland States Bancorp, Inc. | 5,300 | 161,862 | ||||||
OFG Bancorp# | 121,700 | 1,058,790 | ||||||
Old Line Bancshares, Inc. | 1,700 | 46,750 | ||||||
Pacific Continental Corp. | 13,400 | 318,250 | ||||||
Pacific Mercantile Bancorp† | 6,300 | 53,550 | ||||||
PacWest Bancorp | 32,800 | 1,480,920 | ||||||
Park Sterling Corp. | 9,075 | 103,183 | ||||||
Peoples Bancorp, Inc. | 14,100 | 437,946 | ||||||
Pinnacle Financial Partners, Inc. | 16,800 | 1,044,960 | ||||||
Preferred Bank | 23,600 | 1,269,680 | ||||||
Premier Financial Bancorp, Inc. | 2,640 | 49,896 | ||||||
Republic Bancorp, Inc., Class A | 7,200 | 256,176 | ||||||
S&T Bancorp, Inc. | 3,780 | 135,853 | ||||||
Sandy Spring Bancorp, Inc. | 4,600 | 177,422 | ||||||
Shore Bancshares, Inc. | 4,200 | 69,258 | ||||||
Sierra Bancorp | 6,300 | 159,453 | ||||||
South State Corp. | 2,000 | 164,500 | ||||||
Southern National Bancorp of Virginia, Inc. | 4,600 | 77,050 | ||||||
Southside Bancshares, Inc. | 13,279 | 433,825 | ||||||
Southwest Bancorp, Inc. | 32,880 | 830,220 | ||||||
State Bank Financial Corp. | 9,900 | 266,013 | ||||||
Stock Yards Bancorp, Inc. | 3,250 | 113,100 | ||||||
Stonegate Bank | 7,200 | 347,112 | ||||||
Texas Capital Bancshares, Inc.† | 9,100 | 675,675 | ||||||
Tompkins Financial Corp. | 3,848 | 292,140 | ||||||
Towne Bank | 3,500 | 107,450 | ||||||
TriCo Bancshares | 38,000 | 1,352,040 | ||||||
TriState Capital Holdings, Inc.† | 17,000 | 355,300 | ||||||
Triumph Bancorp, Inc.† | 8,900 | 250,980 | ||||||
TrustCo Bank Corp. | 42,200 | 333,380 | ||||||
Trustmark Corp. | 66,200 | 1,960,844 | ||||||
UMB Financial Corp. | 38,060 | 2,554,587 | ||||||
Umpqua Holdings Corp. | 107,214 | 1,876,245 | ||||||
Union Bankshares Corp. | 63,119 | 1,977,518 | ||||||
United Community Banks, Inc. | 88,400 | 2,308,124 | ||||||
Valley National Bancorp | 13,016 | 145,649 | ||||||
Washington Trust Bancorp, Inc. | 6,480 | 332,100 | ||||||
Webster Financial Corp. | 19,100 | 891,588 | ||||||
West Bancorporation, Inc. | 6,830 | 149,919 |
75 |
Table of Contents
VALIC Company II Small Cap Value Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS (continued) |
| |||||||
Banks - Commercial (continued) |
| |||||||
Westamerica Bancorporation | 58,824 | $ | 3,032,377 | |||||
Wintrust Financial Corp. | 43,300 | 3,152,673 | ||||||
90,291,897 | ||||||||
Banks - Fiduciary — 0.0% |
| |||||||
Boston Private Financial Holdings, Inc. | 7,500 | 110,250 | ||||||
Banks - Mortgage — 0.6% |
| |||||||
Walker & Dunlop, Inc.† | 62,900 | 3,031,151 | ||||||
Broadcast Services/Program — 0.4% |
| |||||||
TiVo Corp. | 122,800 | 2,247,240 | ||||||
Building & Construction Products - Misc. — 0.2% |
| |||||||
Gibraltar Industries, Inc.† | 4,180 | 122,265 | ||||||
Louisiana-Pacific Corp.† | 28,200 | 718,536 | ||||||
840,801 | ||||||||
Building & Construction - Misc. — 0.1% |
| |||||||
MYR Group, Inc.† | 29,600 | 763,976 | ||||||
Building Products - Doors & Windows — 0.0% |
| |||||||
JELD-WEN Holding, Inc.† | 3,300 | 100,716 | ||||||
Building Products - Wood — 0.2% |
| |||||||
Boise Cascade Co.† | 9,000 | 270,000 | ||||||
Universal Forest Products, Inc. | 8,900 | 776,169 | ||||||
1,046,169 | ||||||||
Building - Heavy Construction — 0.1% |
| |||||||
Tutor Perini Corp.† | 27,400 | 716,510 | ||||||
Building - Maintenance & Services — 0.2% |
| |||||||
ABM Industries, Inc. | 27,600 | 1,226,268 | ||||||
Building - Residential/Commercial — 1.0% |
| |||||||
AV Homes, Inc.† | 5,100 | 78,795 | ||||||
Beazer Homes USA, Inc.† | 134,300 | 2,002,413 | ||||||
Hovnanian Enterprises, Inc., Class A† | 42,100 | 76,622 | ||||||
KB Home | 115,100 | 2,463,140 | ||||||
MDC Holdings, Inc. | 15,707 | 490,844 | ||||||
5,111,814 | ||||||||
Chemicals - Diversified — 0.2% | ||||||||
Innophos Holdings, Inc.# | 18,400 | 840,144 | ||||||
Olin Corp. | 14,000 | 451,220 | ||||||
1,291,364 | ||||||||
Chemicals - Fibers — 0.3% | ||||||||
Rayonier Advanced Materials, Inc.# | 101,500 | 1,392,580 | ||||||
Chemicals - Other — 0.1% | ||||||||
American Vanguard Corp. | 28,200 | 571,050 | ||||||
Chemicals - Specialty — 0.5% |
| |||||||
Chemours Co. | 13,300 | 652,631 | ||||||
Minerals Technologies, Inc. | 26,260 | 1,680,640 | ||||||
OMNOVA Solutions, Inc.† | 5,400 | 46,980 | ||||||
Venator Materials PLC† | 22,900 | 464,870 | ||||||
2,845,121 | ||||||||
Circuit Boards — 0.4% |
| |||||||
TTM Technologies, Inc.† | 147,000 | 2,093,280 | ||||||
Coal — 0.3% |
| |||||||
Arch Coal, Inc., Class A# | 3,400 | 271,558 | ||||||
Peabody Energy Corp.† | 4,800 | 139,200 | ||||||
SunCoke Energy, Inc.† | 145,100 | 1,352,332 | ||||||
1,763,090 | ||||||||
Security Description | Shares | Value (Note 2) | ||||||
Commercial Services — 0.4% |
| |||||||
Acacia Research Corp.† | 202,500 | $ | 658,125 | |||||
RPX Corp.† | 119,200 | 1,556,752 | ||||||
2,214,877 | ||||||||
Commercial Services - Finance — 0.6% |
| |||||||
EVERTEC, Inc. | 5,900 | 108,560 | ||||||
Green Dot Corp., Class A† | 8,800 | 423,984 | ||||||
Travelport Worldwide, Ltd. | 178,893 | 2,708,440 | ||||||
3,240,984 | ||||||||
Computer Aided Design — 0.0% |
| |||||||
Aspen Technology, Inc.† | 800 | 50,600 | ||||||
Computer Services — 1.3% |
| |||||||
Convergys Corp. | 3,300 | 77,550 | ||||||
Engility Holdings, Inc.† | 15,600 | 484,692 | ||||||
Insight Enterprises, Inc.†# | 76,200 | 3,054,096 | ||||||
Sykes Enterprises, Inc.† | 34,200 | 911,772 | ||||||
Unisys Corp.†# | 307,700 | 2,384,675 | ||||||
6,912,785 | ||||||||
Consulting Services — 1.1% |
| |||||||
CRA International, Inc. | 4,700 | 176,391 | ||||||
Franklin Covey Co.† | 4,475 | 84,130 | ||||||
FTI Consulting, Inc.† | 67,100 | 2,275,361 | ||||||
Huron Consulting Group, Inc.† | 37,500 | 1,134,375 | ||||||
ICF International, Inc.† | 1,616 | 77,649 | ||||||
Vectrus, Inc.† | 66,100 | 1,889,138 | ||||||
5,637,044 | ||||||||
Consumer Products - Misc. — 0.6% |
| |||||||
Central Garden & Pet Co., Class A† | 88,060 | 3,001,965 | ||||||
Helen of Troy, Ltd.† | 4,700 | 424,410 | ||||||
3,426,375 | ||||||||
Containers - Paper/Plastic — 0.2% |
| |||||||
Berry Global Group, Inc.† | 2,400 | 134,976 | ||||||
Graphic Packaging Holding Co. | 62,710 | 818,366 | ||||||
KapStone Paper and Packaging Corp. | 8,700 | 194,619 | ||||||
1,147,961 | ||||||||
Data Processing/Management — 0.3% |
| |||||||
Fair Isaac Corp. | 10,920 | 1,537,099 | ||||||
Decision Support Software — 0.1% |
| |||||||
QAD, Inc., Class A | 8,500 | 286,450 | ||||||
Dialysis Centers — 0.0% |
| |||||||
American Renal Associates Holdings, Inc.†# | 6,700 | 96,011 | ||||||
Distribution/Wholesale — 0.6% |
| |||||||
Anixter International, Inc.† | 2,500 | 184,500 | ||||||
Essendant, Inc. | 25,100 | 297,686 | ||||||
Fossil Group, Inc.†# | 119,026 | 986,726 | ||||||
Titan Machinery, Inc.† | 85,800 | 1,106,820 | ||||||
Veritiv Corp.† | 12,000 | 336,000 | ||||||
2,911,732 | ||||||||
Diversified Manufacturing Operations — 0.1% |
| |||||||
Harsco Corp.† | 37,500 | 641,250 | ||||||
Diversified Operations/Commercial Services — 0.0% |
| |||||||
Viad Corp. | 1,900 | 104,405 | ||||||
Drug Delivery Systems — 0.0% |
| |||||||
Revance Therapeutics, Inc.†# | 9,700 | 238,135 | ||||||
E-Commerce/Services — 0.0% |
| |||||||
Bankrate, Inc.† | 16,300 | 225,755 | ||||||
76 |
Table of Contents
VALIC Company II Small Cap Value Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS (continued) |
| |||||||
E-Marketing/Info — 0.1% |
| |||||||
Liquidity Services, Inc.† | 6,500 | $ | 37,050 | |||||
Rubicon Project, Inc.† | 60,300 | 226,728 | ||||||
263,778 | ||||||||
E-Services/Consulting — 0.1% |
| |||||||
Perficient, Inc.† | 34,423 | 629,941 | ||||||
Electric Products - Misc. — 0.0% |
| |||||||
Graham Corp. | 4,400 | 88,132 | ||||||
Electric - Distribution — 0.3% |
| |||||||
Genie Energy, Ltd., Class B | 30,900 | 190,035 | ||||||
Spark Energy, Inc., Class A# | 54,900 | 870,165 | ||||||
Unitil Corp. | 13,500 | 673,110 | ||||||
1,733,310 | ||||||||
Electric - Generation — 0.2% |
| |||||||
Atlantic Power Corp.†# | 421,600 | 1,032,920 | ||||||
Electric - Integrated — 2.8% |
| |||||||
Avista Corp.# | 42,380 | 2,178,332 | ||||||
El Paso Electric Co. | 56,300 | 3,127,465 | ||||||
IDACORP, Inc. | 17,700 | 1,574,946 | ||||||
MGE Energy, Inc. | 5,600 | 356,160 | ||||||
NorthWestern Corp. | 34,918 | 2,106,254 | ||||||
Portland General Electric Co. | 104,700 | 4,974,297 | ||||||
Westar Energy, Inc. | 10,100 | 518,231 | ||||||
14,835,685 | ||||||||
Electronic Components - Misc. — 2.1% |
| |||||||
Bel Fuse, Inc., Class B | 34,500 | 879,750 | ||||||
Benchmark Electronics, Inc.† | 151,021 | 4,908,182 | ||||||
Kimball Electronics, Inc.† | 29,600 | 563,880 | ||||||
Plexus Corp.† | 6,900 | 359,352 | ||||||
Sanmina Corp.† | 32,900 | 1,232,105 | ||||||
Stoneridge, Inc.† | 69,300 | 1,147,608 | ||||||
Vishay Intertechnology, Inc.# | 110,600 | 1,957,620 | ||||||
Vishay Precision Group, Inc.†# | 8,900 | 194,465 | ||||||
11,242,962 | ||||||||
Electronic Components - Semiconductors — 0.6% |
| |||||||
Alpha & Omega Semiconductor, Ltd.† | 40,200 | 638,376 | ||||||
Amkor Technology, Inc.† | 251,400 | 2,207,292 | ||||||
Xperi Corp. | 11,600 | 316,100 | ||||||
3,161,768 | ||||||||
Electronic Measurement Instruments — 0.2% |
| |||||||
Fitbit, Inc., Class A†# | 130,000 | 783,900 | ||||||
Electronic Parts Distribution — 0.8% |
| |||||||
Tech Data Corp.†# | 39,900 | 4,400,571 | ||||||
Energy - Alternate Sources — 1.1% |
| |||||||
First Solar, Inc.†# | 6,500 | 305,240 | ||||||
FutureFuel Corp. | 47,900 | 645,692 | ||||||
Green Plains, Inc. | 7,900 | 146,545 | ||||||
Pacific Ethanol, Inc.† | 56,300 | 281,500 | ||||||
Pattern Energy Group, Inc. | 47,300 | 1,188,176 | ||||||
Renewable Energy Group, Inc.†# | 66,400 | 803,440 | ||||||
REX American Resources Corp.† | 26,600 | 2,304,092 | ||||||
5,674,685 | ||||||||
Engineering/R&D Services — 1.3% |
| |||||||
Argan, Inc. | 6,100 | 386,435 | ||||||
EMCOR Group, Inc. | 73,098 | 4,827,392 | ||||||
VSE Corp. | 34,500 | 1,799,175 | ||||||
7,013,002 | ||||||||
Security Description | Shares | Value (Note 2) | ||||||
Engines - Internal Combustion — 0.1% |
| |||||||
Briggs & Stratton Corp. | 26,200 | $ | 548,628 | |||||
Entertainment Software — 1.0% |
| |||||||
Take-Two Interactive Software, Inc.† | 55,300 | 5,407,787 | ||||||
Finance - Consumer Loans — 0.2% |
| |||||||
Enova International, Inc.† | 21,400 | 254,660 | ||||||
Nelnet, Inc., Class A | 15,500 | 735,165 | ||||||
Regional Management Corp.† | 9,700 | 212,915 | ||||||
1,202,740 | ||||||||
Finance - Investment Banker/Broker — 0.4% |
| |||||||
Houlihan Lokey, Inc. | 5,600 | 201,880 | ||||||
INTL. FCStone, Inc.† | 6,900 | 244,881 | ||||||
Investment Technology Group, Inc. | 8,700 | 174,783 | ||||||
Oppenheimer Holdings, Inc., Class A | 11,900 | 193,375 | ||||||
Piper Jaffray Cos. | 14,600 | 809,570 | ||||||
Stifel Financial Corp. | 13,300 | 635,075 | ||||||
2,259,564 | ||||||||
Finance - Leasing Companies — 0.1% |
| |||||||
Marlin Business Services Corp. | 13,100 | 341,910 | ||||||
Finance - Mortgage Loan/Banker — 0.3% |
| |||||||
Arlington Asset Investment Corp., Class A# | 7,500 | 96,900 | ||||||
FNFV Group† | 41,600 | 700,960 | ||||||
PennyMac Financial Services, Inc., Class A† | 47,100 | 800,700 | ||||||
1,598,560 | ||||||||
Finance - Other Services — 0.1% |
| |||||||
BGC Partners, Inc., Class A | 45,100 | 585,849 | ||||||
Financial Guarantee Insurance — 0.7% |
| |||||||
MBIA, Inc.† | 221,500 | 2,228,290 | ||||||
MGIC Investment Corp.† | 116,400 | 1,332,780 | ||||||
Radian Group, Inc. | 8,200 | 143,500 | ||||||
3,704,570 | ||||||||
Food - Canned — 0.2% |
| |||||||
Bob Evans Farms, Inc. | 12,500 | 859,750 | ||||||
Food - Dairy Products — 0.1% |
| |||||||
Dean Foods Co. | 51,700 | 568,700 | ||||||
Food - Misc./Diversified — 0.3% |
| |||||||
Darling Ingredients, Inc.† | 95,800 | 1,666,920 | ||||||
Food - Retail — 0.1% |
| |||||||
SUPERVALU, Inc.† | 10,442 | 208,736 | ||||||
Village Super Market, Inc., Class A | 2,700 | 62,451 | ||||||
271,187 | ||||||||
Food - Wholesale/Distribution — 0.4% |
| |||||||
Fresh Del Monte Produce, Inc. | 7,300 | 343,027 | ||||||
SpartanNash Co. | 69,300 | 1,707,552 | ||||||
2,050,579 | ||||||||
Footwear & Related Apparel — 0.3% |
| |||||||
Deckers Outdoor Corp.† | 5,300 | 338,670 | ||||||
Iconix Brand Group, Inc.† | 231,900 | 1,296,321 | ||||||
1,634,991 | ||||||||
Gambling (Non-Hotel) — 0.4% |
| |||||||
Pinnacle Entertainment, Inc.† | 113,300 | 2,209,350 | ||||||
Gas - Distribution — 2.0% |
| |||||||
New Jersey Resources Corp. | 35,000 | 1,527,750 | ||||||
Northwest Natural Gas Co. | 38,100 | 2,526,030 | ||||||
Southwest Gas Holdings, Inc. | 45,940 | 3,653,149 |
77 |
Table of Contents
VALIC Company II Small Cap Value Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS (continued) |
| |||||||
Gas - Distribution (continued) |
| |||||||
Spire, Inc. | 30,500 | $ | 2,333,250 | |||||
WGL Holdings, Inc. | 6,600 | 556,116 | ||||||
10,596,295 | ||||||||
Home Furnishings — 0.1% |
| |||||||
Hooker Furniture Corp. | 12,300 | 495,075 | ||||||
Hotels/Motels — 0.4% |
| |||||||
La Quinta Holdings, Inc.† | 116,700 | 1,843,860 | ||||||
Housewares — 0.3% |
| |||||||
Libbey, Inc. | 22,600 | 184,642 | ||||||
Lifetime Brands, Inc. | 36,700 | 638,580 | ||||||
NACCO Industries, Inc., Class A | 10,300 | 746,750 | ||||||
1,569,972 | ||||||||
Human Resources — 0.9% |
| |||||||
Barrett Business Services, Inc. | 19,100 | 985,178 | ||||||
Cross Country Healthcare, Inc.† | 64,000 | 792,320 | ||||||
Heidrick & Struggles International, Inc. | 9,600 | 175,200 | ||||||
Kelly Services, Inc., Class A | 37,300 | 806,799 | ||||||
TriNet Group, Inc.† | 25,200 | 900,396 | ||||||
TrueBlue, Inc.† | 64,400 | 1,316,980 | ||||||
4,976,873 | ||||||||
Independent Power Producers — 0.8% |
| |||||||
Dynegy, Inc.† | 310,700 | 2,926,794 | ||||||
Ormat Technologies, Inc.# | 23,600 | 1,355,584 | ||||||
4,282,378 | ||||||||
Industrial Automated/Robotic — 0.1% |
| |||||||
Hurco Cos., Inc. | 9,600 | 337,440 | ||||||
Insurance - Life/Health — 2.1% |
| |||||||
American Equity Investment Life Holding Co. | 96,600 | 2,681,616 | ||||||
CNO Financial Group, Inc. | 251,809 | 5,627,931 | ||||||
Primerica, Inc. | 36,400 | 2,786,420 | ||||||
11,095,967 | ||||||||
Insurance - Multi-line — 0.3% |
| |||||||
Horace Mann Educators Corp. | 41,580 | 1,461,537 | ||||||
United Fire Group, Inc. | 2,500 | 105,150 | ||||||
1,566,687 | ||||||||
Insurance - Property/Casualty — 1.3% |
| |||||||
Federated National Holding Co. | 14,500 | 225,330 | ||||||
First American Financial Corp. | 20,200 | 991,012 | ||||||
Global Indemnity, Ltd.†# | 2,000 | 80,840 | ||||||
Hallmark Financial Services, Inc.† | 12,600 | 129,150 | ||||||
Heritage Insurance Holdings, Inc.# | 53,599 | 609,957 | ||||||
Kinsale Capital Group, Inc. | 11,300 | 427,705 | ||||||
Navigators Group, Inc. | 10,000 | 558,000 | ||||||
ProAssurance Corp. | 22,380 | 1,191,735 | ||||||
Selective Insurance Group, Inc. | 13,400 | 675,360 | ||||||
Stewart Information Services Corp. | 21,200 | 764,896 | ||||||
Third Point Reinsurance, Ltd.† | 67,200 | 944,160 | ||||||
Universal Insurance Holdings, Inc.# | 8,900 | 190,905 | ||||||
6,789,050 | ||||||||
Insurance - Reinsurance — 0.2% |
| |||||||
Argo Group International Holdings, Ltd. | 11,100 | 668,220 | ||||||
Aspen Insurance Holdings, Ltd. | 10,600 | 479,120 | ||||||
Maiden Holdings, Ltd. | 5,400 | 39,150 | ||||||
1,186,490 | ||||||||
Internet Content - Entertainment — 0.1% |
| |||||||
Limelight Networks, Inc.† | 120,600 | 432,954 | ||||||
Security Description | Shares | Value (Note 2) | ||||||
Investment Management/Advisor Services — 0.3% |
| |||||||
OM Asset Management PLC | 29,700 | $ | 419,661 | |||||
Virtus Investment Partners, Inc.# | 11,473 | 1,216,138 | ||||||
1,635,799 | ||||||||
Machinery - Construction & Mining — 0.1% |
| |||||||
Hyster-Yale Materials Handling, Inc.# | 5,900 | 419,962 | ||||||
Machinery - Farming — 0.2% |
| |||||||
AGCO Corp. | 16,260 | 1,112,997 | ||||||
Machinery - General Industrial — 0.7% |
| |||||||
Applied Industrial Technologies, Inc. | 1,500 | 85,500 | ||||||
DXP Enterprises, Inc.† | 38,500 | 1,042,965 | ||||||
Kadant, Inc. | 27,800 | 2,414,430 | ||||||
3,542,895 | ||||||||
Medical Imaging Systems — 0.0% |
| |||||||
Lantheus Holdings, Inc.† | 11,800 | 206,500 | ||||||
Medical Instruments — 0.3% |
| |||||||
Halyard Health, Inc.† | 38,800 | 1,757,252 | ||||||
Medical Products — 0.6% |
| |||||||
Invacare Corp.# | 73,600 | 993,600 | ||||||
Wright Medical Group NV†# | 73,400 | 2,172,640 | ||||||
3,166,240 | ||||||||
Medical - Biomedical/Gene — 2.0% |
| |||||||
Acceleron Pharma, Inc.†# | 14,600 | 565,896 | ||||||
Acorda Therapeutics, Inc.†# | 41,100 | 854,880 | ||||||
AMAG Pharmaceuticals, Inc.†# | 50,100 | 836,670 | ||||||
BioCryst Pharmaceuticals, Inc.†# | 24,090 | 122,859 | ||||||
Corvus Pharmaceuticals, Inc.†# | 39,200 | 633,864 | ||||||
Dermira, Inc.†# | 22,900 | 540,211 | ||||||
Five Prime Therapeutics, Inc.† | 29,000 | 983,680 | ||||||
Idera Pharmaceuticals, Inc.†# | 344,400 | 681,912 | ||||||
Iovance Biotherapeutics, Inc.†# | 167,603 | 963,717 | ||||||
Lexicon Pharmaceuticals, Inc.†# | 16,200 | 245,268 | ||||||
MacroGenics, Inc.†# | 2,000 | 37,820 | ||||||
Medicines Co.†# | 13,200 | 484,308 | ||||||
Momenta Pharmaceuticals, Inc.†# | 28,100 | 473,485 | ||||||
Retrophin, Inc.† | 20,900 | 509,960 | ||||||
Rigel Pharmaceuticals, Inc.†# | 176,600 | 450,330 | ||||||
Sage Therapeutics, Inc.† | 1,900 | 156,275 | ||||||
Syndax Pharmaceuticals, Inc.†# | 42,820 | 496,712 | ||||||
Tocagen, Inc.† | 62,603 | 870,808 | ||||||
Ultragenyx Pharmaceutical, Inc.† | 1,900 | 108,414 | ||||||
Versartis, Inc.†# | 37,800 | 718,200 | ||||||
10,735,269 | ||||||||
Medical - Drugs — 0.9% |
| |||||||
Enanta Pharmaceuticals, Inc.† | 11,200 | 480,032 | ||||||
Immune Design Corp.† | 72,100 | 782,285 | ||||||
Kala Pharmaceuticals, Inc.† | 22,900 | 579,370 | ||||||
Lannett Co., Inc.†# | 34,600 | 607,230 | ||||||
MyoKardia, Inc.† | 10,000 | 433,500 | ||||||
Radius Health, Inc.†# | 8,700 | 327,381 | ||||||
Tetraphase Pharmaceuticals, Inc.† | 122,000 | 851,560 | ||||||
Vanda Pharmaceuticals, Inc.† | 9,100 | 156,520 | ||||||
Zogenix, Inc.† | 39,900 | 472,815 | ||||||
4,690,693 | ||||||||
Medical - Generic Drugs — 0.1% |
| |||||||
Amphastar Pharmaceuticals, Inc.† | 23,800 | 381,038 | ||||||
Medical - HMO — 0.7% |
| |||||||
Molina Healthcare, Inc.†# | 31,700 | 2,028,800 | ||||||
Tivity Health, Inc.†# | 14,300 | 560,560 |
78 |
Table of Contents
VALIC Company II Small Cap Value Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS (continued) |
| |||||||
Medical - HMO (continued) |
| |||||||
Triple-S Management Corp., Class B† | 15,000 | $ | 370,650 | |||||
WellCare Health Plans, Inc.† | 5,500 | 960,740 | ||||||
3,920,750 | ||||||||
Medical - Hospitals — 0.6% |
| |||||||
Community Health Systems, Inc.†# | 391,000 | 2,987,240 | ||||||
Medical - Nursing Homes — 0.3% | ||||||||
Genesis Healthcare, Inc.†# | 35,900 | 37,336 | ||||||
Kindred Healthcare, Inc. | 188,500 | 1,526,850 | ||||||
1,564,186 | ||||||||
Medical - Wholesale Drug Distribution — 0.4% |
| |||||||
Owens & Minor, Inc. | 68,400 | 1,911,096 | ||||||
Metal Processors & Fabrication — 0.4% |
| |||||||
Global Brass & Copper Holdings, Inc. | 70,400 | 2,101,440 | ||||||
LB Foster Co., Class A | 4,700 | 89,770 | ||||||
2,191,210 | ||||||||
Metal Products - Distribution — 0.4% |
| |||||||
Worthington Industries, Inc. | 39,840 | 1,990,406 | ||||||
Metal - Iron — 0.2% |
| |||||||
Cleveland-Cliffs, Inc.†# | 134,600 | 1,125,256 | ||||||
Miscellaneous Manufacturing — 0.0% |
| |||||||
FreightCar America, Inc. | 6,600 | 119,856 | ||||||
Motion Pictures & Services — 0.1% |
| |||||||
Eros International PLC†# | 32,400 | 315,900 | ||||||
Multimedia — 0.3% |
| |||||||
E.W. Scripps Co., Class A† | 84,700 | 1,514,436 | ||||||
Networking Products — 0.5% |
| |||||||
Extreme Networks, Inc.† | 144,500 | 1,651,635 | ||||||
Infinera Corp.†# | 118,100 | 999,126 | ||||||
2,650,761 | ||||||||
Office Furnishings - Original — 0.0% |
| |||||||
Kimball International, Inc., Class B | 10,000 | 169,600 | ||||||
Office Supplies & Forms — 0.9% |
| |||||||
ACCO Brands Corp.† | 440,600 | 4,824,570 | ||||||
Oil & Gas Drilling — 0.6% |
| |||||||
Noble Corp. PLC†# | 389,500 | 1,269,770 | ||||||
Parker Drilling Co.† | 53,600 | 58,960 | ||||||
Rowan Cos. PLC, Class A† | 201,975 | 1,969,256 | ||||||
3,297,986 | ||||||||
Oil Companies - Exploration & Production — 1.2% |
| |||||||
Abraxas Petroleum Corp.† | 415,600 | 706,520 | ||||||
Bill Barrett Corp.† | 328,200 | 981,318 | ||||||
Denbury Resources, Inc.†# | 1,036,500 | 1,098,690 | ||||||
Eclipse Resources Corp.† | 113,500 | 264,455 | ||||||
EP Energy Corp., Class A†# | 381,928 | 1,122,868 | ||||||
Midstates Petroleum Co., Inc.† | 15,300 | 221,697 | ||||||
Sanchez Energy Corp.†# | 66,800 | 292,584 | ||||||
SRC Energy, Inc.† | 46,100 | 363,729 | ||||||
Unit Corp.† | 63,700 | 1,014,104 | ||||||
W&T Offshore, Inc.†# | 236,200 | 451,142 | ||||||
6,517,107 | ||||||||
Oil Field Machinery & Equipment — 0.2% |
| |||||||
Exterran Corp.† | 37,200 | 1,031,928 | ||||||
Natural Gas Services Group, Inc.† | 7,300 | 172,280 | ||||||
1,204,208 | ||||||||
Security Description | Shares | Value (Note 2) | ||||||
Oil Refining & Marketing — 0.7% |
| |||||||
Delek US Holdings, Inc. | 151,300 | $ | 3,740,136 | |||||
Par Pacific Holdings, Inc.† | 12,000 | 213,720 | ||||||
3,953,856 | ||||||||
Oil - Field Services — 1.4% |
| |||||||
Archrock, Inc. | 150,100 | 1,531,020 | ||||||
Mammoth Energy Services, Inc.† | 2,800 | 38,584 | ||||||
McDermott International, Inc.† | 215,400 | 1,322,556 | ||||||
MRC Global, Inc.† | 206,100 | 3,250,197 | ||||||
NOW, Inc.† | 107,900 | 1,258,114 | ||||||
7,400,471 | ||||||||
Paper & Related Products — 0.5% |
| |||||||
Domtar Corp. | 16,940 | 685,054 | ||||||
Schweitzer-Mauduit International, Inc. | 47,200 | 1,790,296 | ||||||
2,475,350 | ||||||||
Pharmacy Services — 0.2% |
| |||||||
Diplomat Pharmacy, Inc.† | 64,800 | 1,085,400 | ||||||
Pipelines — 0.1% |
| |||||||
SemGroup Corp., Class A | 29,400 | 755,580 | ||||||
Pollution Control — 0.1% |
| |||||||
CECO Environmental Corp. | 59,400 | 443,718 | ||||||
Poultry — 0.1% |
| |||||||
Sanderson Farms, Inc. | 2,700 | 398,304 | ||||||
Power Converter/Supply Equipment — 0.1% |
| |||||||
Powell Industries, Inc. | 12,300 | 350,181 | ||||||
Printing - Commercial — 0.6% |
| |||||||
ARC Document Solutions, Inc.† | 144,493 | 510,060 | ||||||
Ennis, Inc. | 14,300 | 273,130 | ||||||
LSC Communications, Inc. | 1,200 | 19,332 | ||||||
Quad/Graphics, Inc.# | 130,800 | 2,493,048 | ||||||
RR Donnelley & Sons Co. | 3,200 | 29,536 | ||||||
3,325,106 | ||||||||
Publishing - Books — 0.1% |
| |||||||
Houghton Mifflin Harcourt Co.† | 33,200 | 338,640 | ||||||
Publishing - Newspapers — 0.1% |
| |||||||
tronc, Inc.† | 31,400 | 455,614 | ||||||
Racetracks — 0.3% |
| |||||||
Penn National Gaming, Inc.†# | 67,700 | 1,502,263 | ||||||
Speedway Motorsports, Inc. | 7,000 | 145,670 | ||||||
1,647,933 | ||||||||
Radio — 0.0% |
| |||||||
Salem Media Group, Inc. | 38,800 | 234,740 | ||||||
Real Estate Investment Trusts — 12.2% |
| |||||||
AG Mtg. Investment Trust, Inc. | 21,600 | 416,232 | ||||||
Agree Realty Corp. | 3,700 | 185,444 | ||||||
American Assets Trust, Inc. | 7,100 | 288,402 | ||||||
American Campus Communities, Inc. | 15,200 | 723,368 | ||||||
Apartment Investment & Management Co., Class A | 33,579 | 1,522,136 | ||||||
Ashford Hospitality Prime, Inc. | 50,400 | 484,848 | ||||||
Ashford Hospitality Trust, Inc. | 362,780 | 2,252,864 | ||||||
Bluerock Residential Growth REIT, Inc. | 20,000 | 202,600 | ||||||
Capstead Mtg. Corp. | 314,900 | 3,045,083 | ||||||
CBL & Associates Properties, Inc.# | 61,840 | 494,720 | ||||||
Cedar Realty Trust, Inc. | 66,800 | 336,672 | ||||||
Chatham Lodging Trust | 3,300 | 66,924 | ||||||
Chesapeake Lodging Trust | 16,900 | 432,471 | ||||||
CorEnergy Infrastructure Trust, Inc.# | 2,500 | 81,575 | ||||||
CoreSite Realty Corp.# | 22,800 | 2,707,728 |
79 |
Table of Contents
VALIC Company II Small Cap Value Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS (continued) |
| |||||||
Real Estate Investment Trusts (continued) |
| |||||||
Cousins Properties, Inc. | 123,860 | $ | 1,158,091 | |||||
CyrusOne, Inc. | 3,100 | 195,393 | ||||||
CYS Investments, Inc. | 342,800 | 3,013,212 | ||||||
DCT Industrial Trust, Inc. | 62,460 | 3,644,541 | ||||||
DiamondRock Hospitality Co. | 195,034 | 2,143,424 | ||||||
DuPont Fabros Technology, Inc. | 11,900 | 765,884 | ||||||
EastGroup Properties, Inc. | 1,700 | 151,062 | ||||||
Education Realty Trust, Inc.# | 10,700 | 413,448 | ||||||
Ellington Residential Mortgage REIT# | 33,000 | 482,790 | ||||||
EPR Properties | 11,300 | 787,158 | ||||||
FelCor Lodging Trust, Inc. | 133,500 | 974,550 | ||||||
First Industrial Realty Trust, Inc. | 62,718 | 1,943,004 | ||||||
First Potomac Realty Trust | 83,300 | 927,129 | ||||||
Franklin Street Properties Corp.# | 12,700 | 126,619 | ||||||
GEO Group, Inc. | 89,250 | 2,466,870 | ||||||
Getty Realty Corp. | 24,946 | 687,512 | ||||||
Gladstone Commercial Corp. | 12,500 | 267,500 | ||||||
Government Properties Income Trust# | 81,700 | 1,515,535 | ||||||
Highwoods Properties, Inc. | 17,700 | 924,471 | ||||||
Hospitality Properties Trust | 27,140 | 742,550 | ||||||
Hudson Pacific Properties, Inc. | 8,300 | 273,900 | ||||||
InfraREIT, Inc. | 89,200 | 2,006,108 | ||||||
Invesco Mtg. Capital, Inc. | 113,900 | 1,934,022 | ||||||
Kite Realty Group Trust | 48,200 | 969,784 | ||||||
LaSalle Hotel Properties# | 13,578 | 385,344 | ||||||
LTC Properties, Inc. | 16,820 | 817,957 | ||||||
Mack-Cali Realty Corp. | 21,700 | 496,713 | ||||||
Monogram Residential Trust, Inc. | 39,900 | 478,800 | ||||||
National Storage Affiliates Trust | 13,400 | 299,088 | ||||||
NexPoint Residential Trust, Inc. | 11,377 | 265,084 | ||||||
Parkway, Inc. | 15,870 | 364,375 | ||||||
Pebblebrook Hotel Trust# | 34,300 | 1,152,137 | ||||||
Pennsylvania Real Estate Investment Trust | 61,680 | 618,650 | ||||||
Potlatch Corp. | 31,300 | 1,496,140 | ||||||
Preferred Apartment Communities, Inc., Class A# | 32,900 | 598,451 | ||||||
PS Business Parks, Inc. | 14,400 | 1,945,584 | ||||||
QTS Realty Trust, Inc., Class A | 4,700 | 254,646 | ||||||
Ramco-Gershenson Properties Trust | 28,500 | 374,775 | ||||||
Redwood Trust, Inc. | 86,800 | 1,447,824 | ||||||
Retail Opportunity Investments Corp. | 60,700 | 1,204,288 | ||||||
Rexford Industrial Realty, Inc. | 24,000 | 721,200 | ||||||
RLJ Lodging Trust | 71,700 | 1,446,906 | ||||||
Saul Centers, Inc. | 2,000 | 121,200 | ||||||
Starwood Waypoint Homes# | 5,800 | 215,934 | ||||||
Summit Hotel Properties, Inc. | 103,900 | 1,541,876 | ||||||
Sun Communities, Inc. | 5,600 | 505,736 | ||||||
Sunstone Hotel Investors, Inc. | 166,272 | 2,627,097 | ||||||
Taubman Centers, Inc. | 2,400 | 125,376 | ||||||
Urstadt Biddle Properties, Inc., Class A | 25,700 | 531,476 | ||||||
Washington Prime Group, Inc. | 87,740 | 732,629 | ||||||
Washington Real Estate Investment Trust# | 1,600 | 52,576 | ||||||
Xenia Hotels & Resorts, Inc. | 100,400 | 2,003,984 | ||||||
64,581,470 | ||||||||
Real Estate Management/Services — 0.0% | ||||||||
Redfin Corp.†# | 6,600 | 147,114 | ||||||
Real Estate Operations & Development — 0.6% | ||||||||
Alexander & Baldwin, Inc. | 23,500 | 1,019,900 | ||||||
Forestar Group, Inc.† | 85,300 | 1,467,160 | ||||||
St. Joe Co.† | 31,900 | 601,315 | ||||||
3,088,375 | ||||||||
Rental Auto/Equipment — 0.5% |
| |||||||
Aaron’s, Inc. | 43,200 | 1,912,464 | ||||||
CAI International, Inc.† | 10,200 | 316,098 |
Security Description | Shares | Value (Note 2) | ||||||
Rental Auto/Equipment (continued) |
| |||||||
Neff Corp., Class A† | 9,345 | $ | 233,158 | |||||
2,461,720 | ||||||||
Retail - Apparel/Shoe — 1.1% |
| |||||||
Caleres, Inc. | 20,100 | 542,298 | ||||||
Chico’s FAS, Inc. | 32,100 | 246,528 | ||||||
Children’s Place, Inc.# | 37,850 | 4,017,777 | ||||||
Tailored Brands, Inc.# | 75,800 | 895,956 | ||||||
5,702,559 | ||||||||
Retail - Building Products — 0.1% |
| |||||||
Floor & Decor Holdings, Inc., Class A† | 7,600 | 273,144 | ||||||
Retail - Hair Salons — 0.2% |
| |||||||
Regis Corp.† | 89,200 | 1,184,576 | ||||||
Retail - Home Furnishings — 0.2% |
| |||||||
Pier 1 Imports, Inc. | 300,800 | 1,260,352 | ||||||
Retail - Jewelry — 0.4% |
| |||||||
Movado Group, Inc.# | 66,400 | 1,842,600 | ||||||
Retail - Misc./Diversified — 0.1% |
| |||||||
FirstCash, Inc. | 12,500 | 733,750 | ||||||
Retail - Office Supplies — 0.6% |
| |||||||
Office Depot, Inc. | 718,900 | 3,084,081 | ||||||
Retail - Pawn Shops — 0.2% |
| |||||||
EZCORP, Inc., Class A† | 127,100 | 1,150,255 | ||||||
Retail - Petroleum Products — 0.0% |
| |||||||
World Fuel Services Corp. | 4,000 | 138,160 | ||||||
Retail - Regional Department Stores — 0.5% |
| |||||||
Dillard’s, Inc., Class A# | 45,590 | 2,771,872 | ||||||
Retail - Restaurants — 0.2% |
| |||||||
Brinker International, Inc. | 6,000 | 187,320 | ||||||
Ruth’s Hospitality Group, Inc. | 46,572 | 910,483 | ||||||
1,097,803 | ||||||||
Rubber - Tires — 0.3% |
| |||||||
Cooper Tire & Rubber Co.# | 49,800 | 1,673,280 | ||||||
Rubber/Plastic Products — 0.5% |
| |||||||
Myers Industries, Inc. | 9,358 | 175,930 | ||||||
Trinseo SA | 37,000 | 2,475,300 | ||||||
2,651,230 | ||||||||
Satellite Telecom — 0.1% |
| |||||||
DigitalGlobe, Inc.† | 18,600 | 639,840 | ||||||
Savings & Loans/Thrifts — 2.8% |
| |||||||
BankFinancial Corp. | 7,567 | 121,375 | ||||||
Beneficial Bancorp, Inc. | 187,058 | 2,796,517 | ||||||
Berkshire Hills Bancorp, Inc. | 3,900 | 131,820 | ||||||
Brookline Bancorp, Inc. | 12,900 | 185,115 | ||||||
Charter Financial Corp. | 56,300 | 915,438 | ||||||
Dime Community Bancshares, Inc. | 26,300 | 498,385 | ||||||
First Defiance Financial Corp. | 11,300 | 553,248 | ||||||
Flagstar Bancorp, Inc.† | 15,700 | 515,274 | ||||||
Flushing Financial Corp. | 32,600 | 891,284 | ||||||
HomeTrust Bancshares, Inc.† | 5,500 | 127,600 | ||||||
Investors Bancorp, Inc. | 166,500 | 2,179,485 | ||||||
Meridian Bancorp, Inc. | 53,000 | 932,800 | ||||||
Meta Financial Group, Inc. | 11,700 | 822,510 | ||||||
Northfield Bancorp, Inc. | 95,200 | 1,533,672 | ||||||
Oritani Financial Corp. | 4,800 | 77,040 | ||||||
Provident Financial Holdings, Inc. | 3,564 | 67,502 | ||||||
Sterling Bancorp# | 54,000 | 1,212,300 | ||||||
Territorial Bancorp, Inc. | 2,700 | 81,621 |
80 |
Table of Contents
VALIC Company II Small Cap Value Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS (continued) |
| |||||||
Savings & Loans/Thrifts (continued) |
| |||||||
United Community Financial Corp. | 21,400 | $ | 194,526 | |||||
United Financial Bancorp, Inc. | 16,600 | 287,512 | ||||||
Waterstone Financial, Inc. | 15,200 | 268,280 | ||||||
WSFS Financial Corp. | 5,174 | 231,278 | ||||||
14,624,582 | ||||||||
Schools — 0.3% |
| |||||||
American Public Education, Inc.† | 11,700 | 215,865 | ||||||
K12, Inc.† | 77,200 | 1,383,424 | ||||||
1,599,289 | ||||||||
Security Services — 0.1% |
| |||||||
Ascent Capital Group, Inc., Class A† | 44,400 | 440,892 | ||||||
Semiconductor Components - Integrated Circuits — 0.4% |
| |||||||
Cypress Semiconductor Corp. | 142,422 | 1,949,757 | ||||||
Semiconductor Equipment — 0.2% |
| |||||||
Nanometrics, Inc.† | 23,400 | 603,486 | ||||||
Xcerra Corp.† | 19,300 | 189,526 | ||||||
793,012 | ||||||||
Steel - Producers — 0.9% |
| |||||||
AK Steel Holding Corp.†# | 270,700 | 1,515,920 | ||||||
Carpenter Technology Corp.# | 42,600 | 1,726,578 | ||||||
Commercial Metals Co. | 27,900 | 527,031 | ||||||
Ryerson Holding Corp.† | 3,874 | 33,316 | ||||||
Schnitzer Steel Industries, Inc., Class A | 28,900 | 777,410 | ||||||
4,580,255 | ||||||||
Telecom Equipment - Fiber Optics — 0.2% |
| |||||||
Finisar Corp.† | 33,200 | 801,780 | ||||||
Oclaro, Inc.†# | 25,500 | 214,455 | ||||||
1,016,235 | ||||||||
Telecom Services — 0.6% |
| |||||||
Consolidated Communications Holdings, Inc. | 23,300 | 429,885 | ||||||
HC2 Holdings, Inc.† | 115,700 | 527,592 | ||||||
West Corp. | 96,600 | 2,257,542 | ||||||
3,215,019 | ||||||||
Telecommunication Equipment — 0.3% |
| |||||||
ADTRAN, Inc. | 12,400 | 274,040 | ||||||
Sonus Networks, Inc.† | 190,000 | 1,312,900 | ||||||
1,586,940 | ||||||||
Telephone - Integrated — 0.2% |
| |||||||
IDT Corp., Class B | 31,200 | 458,952 | ||||||
Windstream Holdings, Inc.# | 363,800 | 753,066 | ||||||
1,212,018 | ||||||||
Television — 0.2% |
| |||||||
Gray Television, Inc.† | 20,900 | 298,870 | ||||||
Sinclair Broadcast Group, Inc., Class A | 25,000 | 756,250 | ||||||
1,055,120 | ||||||||
Textile - Apparel — 0.1% |
| |||||||
Perry Ellis International, Inc.† | 21,800 | 475,894 | ||||||
Tobacco — 0.5% |
| |||||||
Universal Corp.# | 41,900 | 2,396,680 | ||||||
Transport - Marine — 0.3% |
| |||||||
Costamare, Inc. | 245,698 | 1,540,526 | ||||||
International Seaways, Inc.† | 16,000 | 295,040 | ||||||
1,835,566 | ||||||||
Security Description | Shares | Value (Note 2) | ||||||
Transport - Truck — 1.4% |
| |||||||
ArcBest Corp. | 136,320 | $ | 4,048,704 | |||||
Roadrunner Transportation Systems, Inc.† | 58,600 | 437,742 | ||||||
Schneider National, Inc., Class B | 22,100 | 491,725 | ||||||
YRC Worldwide, Inc.† | 165,800 | 2,220,062 | ||||||
7,198,233 | ||||||||
Travel Services — 0.2% |
| |||||||
Liberty TripAdvisor Holdings, Inc., Class A† | 82,600 | 1,102,710 | ||||||
Water — 0.4% |
| |||||||
American States Water Co. | 24,200 | 1,193,060 | ||||||
Artesian Resources Corp., Class A | 2,200 | 81,598 | ||||||
California Water Service Group | 19,060 | 713,797 | ||||||
Consolidated Water Co., Ltd. | 19,100 | 228,245 | ||||||
2,216,700 | ||||||||
Wire & Cable Products — 0.4% |
| |||||||
General Cable Corp.# | 117,400 | 1,989,930 | ||||||
Wireless Equipment — 0.2% |
| |||||||
InterDigital, Inc. | 11,500 | 820,525 | ||||||
Total Common Stock | ||||||||
(cost $449,409,982) | 515,605,915 | |||||||
WARRANTS — 0.0% | ||||||||
Finance other services — 0.0% | ||||||||
Emergent Capital, Inc. | ||||||||
Expires 10/01/2019 | ||||||||
(strike price $10.75) | ||||||||
(cost $0)†(4) | 994 | 0 | ||||||
Total Long-Term Investment Securities | ||||||||
(cost $449,409,982) | 515,605,915 | |||||||
SHORT-TERM INVESTMENT SECURITIES — 3.5% |
| |||||||
Registered Investment Companies — 3.5% | ||||||||
State Street Navigator Securities Lending Government Money Market Portfolio | ||||||||
(cost $18,481,316) | 18,481,316 | 18,481,316 | ||||||
REPURCHASE AGREEMENTS — 1.0% |
| |||||||
Agreement with Fixed Income Clearing Corp., bearing interest at 0.12%, dated 08/31/2017, to be repurchased 09/01/2017 in the amount of $5,660,019 and collateralized by $1,395,000 of United States Treasury Bonds, bearing interest at 0.75% due 02/15/2045 and by $3,635,000 United States Treasury Bonds bearing interest at 3.75% due 11/15/2043 and having an approximate aggregate value of $5,781,509 | ||||||||
(cost $5,660,000) | 5,660,000 | 5,660,000 | ||||||
TOTAL INVESTMENTS | ||||||||
(cost $473,551,298)(3) | 101.9 | % | 539,747,231 | |||||
Liabilities in excess of other assets | (1.9 | ) | (10,242,458 | ) | ||||
NET ASSETS | 100.0 | % | $ | 529,504,773 | ||||
# | The security or a portion thereof is out on loan (see Note 2). |
† | Non-income producing security |
(1) | At August 31, 2017, the Fund had loaned securities with a total value of $66,226,276. This was secured by collateral of $18,481,316, which was received in cash and subsequently invested in short-term investments currently valued at $18,481,316 as reported in the portfolio of investments. Additional collateral of $49,238,140 was received in the form of short-term pooled securities, which the Fund cannot sell or repledge and accordingly are not reflected in the Fund’s other assets and liabilities. |
81 |
Table of Contents
VALIC Company II Small Cap Value Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
The components of the fixed income pooled securities referenced above are as follows:
Securities | Coupon Range | Maturity Date Range | Value as of August 31, 2017 | |||||||
Federal Home Loan Mtg. Corp. | 2.50% to 4.50% | 08/01/2027 to 01/01/2047 | $ | 5,653,572 | ||||||
Federal National Mtg. Assoc. | 2.63% to 4.25% | 10/25/2029 to 11/01/2046 | 4,645,536 | |||||||
Government National Mtg. Assoc. | 2.50% to 3.50% | 01/20/2043 to 05/16/2053 | 9,705,392 | |||||||
United States Treasury Bills | 0.00% | 09/07/2017 to 03/01/2018 | 3,576,201 | |||||||
United States Treasury Notes/Bonds | zero coupon to 8.00% | 09/30/2017 to 02/15/2047 | 25,657,439 |
(2) | The rate shown is the 7-day yield as of August 31, 2017. |
(3) | See Note 5 for cost of investments on a tax basis. |
(4) | Illiquid security. At August 31, 2017, the aggregate value of these securities was $0 representing 0.0% of net assets. |
Futures Contracts | ||||||||||||||||||||||
Number of Contracts | Type | Description | Expiration Month | Notional | Notional | Unrealized Appreciation (Depreciation) | ||||||||||||||||
194 | Long | Russell 2000 E-Mini Index | September 2017 | $ | 13,553,862 | $ | 13,622,680 | $ | 68,818 | |||||||||||||
# | Notional basis refers to the contractual amount agreed upon at inception of the open contract; notional value represents the current value of the open contract. |
The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2017 (see Note 2):
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at Value:* | ||||||||||||||||
Common Stocks | $ | 515,605,915 | $ | — | $ | — | $ | 515,605,915 | ||||||||
Warrants | — | 0 | — | 0 | ||||||||||||
Short-Term Investment Securities | 18,481,316 | — | — | 18,481,316 | ||||||||||||
Repurchase Agreements | — | 5,660,000 | — | 5,660,000 | ||||||||||||
Total Investments at Value | $ | 534,087,231 | $ | 5,660,000 | $ | — | $ | 539,747,231 | ||||||||
Other Financial Instruments:+ | ||||||||||||||||
Futures Contracts | $ | 68,818 | $ | — | $ | — | $ | 68,818 | ||||||||
* | For a detailed presentation of investments, please refer to the Portfolio of Investments. |
+ | Other financial instruments are derivative instruments, not reflected in the Portfolio of Investments, such as futures, forward, swap and written option contracts, which are valued at the unrealized appreciation (depreciation) on the instrument. |
The Fund’s policy is to recognize transfers between Levels as of the end of the reporting period. There were no transfers between Levels during the reporting period.
See Notes to Financial Statements
82 |
Table of Contents
VALIC Company II Socially Responsible Fund
PORTFOLIO PROFILE — August 31, 2017 (unaudited)
Industry Allocation*
Real Estate Investment Trusts | 5.6 | % | ||
Banks — Super Regional | 4.5 | |||
Medical — Biomedical/Gene | 4.5 | |||
Applications Software | 4.2 | |||
Finance — Credit Card | 3.7 | |||
Electronic Components — Semiconductors | 3.7 | |||
Web Portals/ISP | 3.5 | |||
Cosmetics & Toiletries | 3.3 | |||
Beverages — Non-alcoholic | 2.8 | |||
Diagnostic Equipment | 2.7 | |||
Internet Content — Entertainment | 2.5 | |||
Insurance — Reinsurance | 2.4 | |||
Repurchase Agreements | 2.3 | |||
Oil Companies — Exploration & Production | 2.1 | |||
Computer Services | 2.1 | |||
Medical — Drugs | 1.9 | |||
Insurance — Multi-line | 1.8 | |||
Medical Products | 1.7 | |||
Enterprise Software/Service | 1.6 | |||
Commercial Services — Finance | 1.5 | |||
Cable/Satellite TV | 1.5 | |||
Multimedia | 1.5 | |||
Banks — Commercial | 1.5 | |||
Transport — Rail | 1.3 | |||
Insurance — Life/Health | 1.3 | |||
Retail — Restaurants | 1.2 | |||
Networking Products | 1.2 | |||
Diversified Manufacturing Operations | 1.2 | |||
Electric — Integrated | 1.2 | |||
Food — Misc./Diversified | 1.1 | |||
Investment Management/Advisor Services | 1.1 | |||
Electric — Distribution | 1.1 | |||
Transport — Services | 1.0 | |||
Semiconductor Components — Integrated Circuits | 1.0 | |||
Oil — Field Services | 0.9 | |||
Retail — Major Department Stores | 0.8 | |||
Machinery — Construction & Mining | 0.8 | |||
Commercial Services | 0.7 | |||
Finance — Other Services | 0.7 | |||
Electronic Forms | 0.6 | |||
Retail — Drug Store | 0.6 | |||
E-Commerce/Services | 0.6 | |||
Retail — Building Products | 0.6 | |||
Semiconductor Equipment | 0.6 | |||
Airlines | 0.6 | |||
Data Processing/Management | 0.5 | |||
Consumer Products — Misc. | 0.5 | |||
Retail — Apparel/Shoe | 0.5 | |||
Electric Products — Misc. | 0.5 | |||
Auto — Cars/Light Trucks | 0.5 | |||
Hotels/Motels | 0.5 | |||
Industrial Gases | 0.5 | |||
Medical — Wholesale Drug Distribution | 0.4 | |||
Pipelines | 0.4 | |||
U.S. Government Treasuries | 0.4 | |||
Computers | 0.4 | |||
Machinery — Farming | 0.4 | |||
Electronic Measurement Instruments | 0.4 | |||
Building Products — Air & Heating | 0.4 | |||
Electronic Components — Misc. | 0.4 | |||
Non-Hazardous Waste Disposal | 0.3 | |||
Pharmacy Services | 0.3 | |||
Banks — Fiduciary | 0.3 | |||
Entertainment Software | 0.3 | |||
Finance — Investment Banker/Broker | 0.3 | |||
Medical — HMO | 0.3 | |||
Insurance — Property/Casualty | 0.3 | |||
Chemicals — Diversified | 0.3 | |||
Insurance Brokers | 0.3 |
Home Decoration Products | 0.3 | |||
Paper & Related Products | 0.3 | |||
Food — Retail | 0.3 | |||
Registered Investment Companies | 0.3 | |||
Telephone — Integrated | 0.2 | |||
Diversified Operations | 0.2 | |||
Auto — Heavy Duty Trucks | 0.2 | |||
Computers — Memory Devices | 0.2 | |||
Industrial Automated/Robotic | 0.2 | |||
Medical Labs & Testing Services | 0.2 | |||
Medical Instruments | 0.2 | |||
Engines — Internal Combustion | 0.2 | |||
E-Commerce/Products | 0.2 | |||
Medical — Hospitals | 0.2 | |||
Oil Field Machinery & Equipment | 0.2 | |||
Apparel Manufacturers | 0.2 | |||
Auto/Truck Parts & Equipment — Original | 0.2 | |||
Tools — Hand Held | 0.2 | |||
Dental Supplies & Equipment | 0.2 | |||
Advertising Agencies | 0.2 | |||
Textile — Home Furnishings | 0.2 | |||
Building Products — Cement | 0.2 | |||
Retail — Discount | 0.2 | |||
Retail — Regional Department Stores | 0.2 | |||
Television | 0.2 | |||
Finance — Consumer Loans | 0.2 | |||
Medical Information Systems | 0.1 | |||
Gas — Distribution | 0.1 | |||
Agricultural Chemicals | 0.1 | |||
Retail — Auto Parts | 0.1 | |||
Containers — Paper/Plastic | 0.1 | |||
Steel — Producers | 0.1 | |||
Aerospace/Defense | 0.1 | |||
Oil Companies — Integrated | 0.1 | |||
Appliances | 0.1 | |||
Water | 0.1 | |||
Electronic Connectors | 0.1 | |||
Cruise Lines | 0.1 | |||
Medical — Generic Drugs | 0.1 | |||
Distribution/Wholesale | 0.1 | |||
Telecom Services | 0.1 | |||
Computer Aided Design | 0.1 | |||
Retail — Perfume & Cosmetics | 0.1 | |||
Office Automation & Equipment | 0.1 | |||
Wireless Equipment | 0.1 | |||
Food — Confectionery | 0.1 | |||
Building Products — Wood | 0.1 | |||
100.2 | % | |||
* | Calculated as a percentage of net assets |
83 |
Table of Contents
VALIC Company II Socially Responsible Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS — 97.2% |
| |||||||
Advertising Agencies — 0.2% |
| |||||||
Omnicom Group, Inc.# | 19,110 | $ | 1,383,182 | |||||
Aerospace/Defense — 0.1% |
| |||||||
TransDigm Group, Inc.# | 3,484 | 908,139 | ||||||
Agricultural Chemicals — 0.1% |
| |||||||
CF Industries Holdings, Inc. | 17,081 | 495,178 | ||||||
Mosaic Co. | 24,573 | 490,969 | ||||||
986,147 | ||||||||
Airlines — 0.6% |
| |||||||
American Airlines Group, Inc. | 23,983 | 1,073,000 | ||||||
Delta Air Lines, Inc. | 28,016 | 1,322,075 | ||||||
Southwest Airlines Co. | 30,771 | 1,604,400 | ||||||
United Continental Holdings, Inc.†# | 7,821 | 484,589 | ||||||
4,484,064 | ||||||||
Apparel Manufacturers — 0.2% |
| |||||||
Hanesbrands, Inc.# | 41,403 | 1,004,437 | ||||||
Michael Kors Holdings, Ltd.† | 4,294 | 181,293 | ||||||
Under Armour, Inc., Class C†# | 20,491 | 309,414 | ||||||
1,495,144 | ||||||||
Appliances — 0.1% |
| |||||||
Whirlpool Corp. | 4,351 | 746,719 | ||||||
Applications Software — 4.2% |
| |||||||
Citrix Systems, Inc.† | 3,558 | 278,271 | ||||||
Intuit, Inc. | 12,501 | 1,768,267 | ||||||
Microsoft Corp. | 382,582 | 28,605,656 | ||||||
Red Hat, Inc.† | 1,310 | 140,825 | ||||||
salesforce.com, Inc.† | 30,739 | 2,935,267 | ||||||
33,728,286 | ||||||||
Auto - Cars/Light Trucks — 0.5% |
| |||||||
Ford Motor Co. | 341,193 | 3,763,359 | ||||||
Auto - Heavy Duty Trucks — 0.2% |
| |||||||
PACCAR, Inc. | 29,524 | 1,958,327 | ||||||
Auto/Truck Parts & Equipment - Original — 0.2% |
| |||||||
Delphi Automotive PLC | 15,439 | 1,488,320 | ||||||
Banks - Commercial — 1.5% |
| |||||||
BB&T Corp. | 137,108 | 6,319,308 | ||||||
M&T Bank Corp. | 30,038 | 4,441,419 | ||||||
Regions Financial Corp. | 74,610 | 1,052,747 | ||||||
11,813,474 | ||||||||
Banks - Fiduciary — 0.3% |
| |||||||
Citizens Financial Group, Inc. | 28,688 | 950,433 | ||||||
Northern Trust Corp. | 18,835 | 1,666,898 | ||||||
2,617,331 | ||||||||
Banks - Super Regional — 4.5% |
| |||||||
Capital One Financial Corp. | 61,326 | 4,882,163 | ||||||
Comerica, Inc. | 14,387 | 981,913 | ||||||
Fifth Third Bancorp | 155,600 | 4,065,828 | ||||||
Huntington Bancshares, Inc. | 42,795 | 538,789 | ||||||
KeyCorp | 51,718 | 890,067 | ||||||
PNC Financial Services Group, Inc. | 78,821 | 9,884,942 | ||||||
SunTrust Banks, Inc. | 46,114 | 2,540,881 | ||||||
US Bancorp | 241,162 | 12,359,552 | ||||||
36,144,135 | ||||||||
Beverages - Non-alcoholic — 2.8% |
| |||||||
Dr Pepper Snapple Group, Inc.# | 15,893 | 1,447,058 | ||||||
Monster Beverage Corp.† | 16,188 | 903,614 | ||||||
PepsiCo, Inc. | 174,856 | 20,236,085 | ||||||
22,586,757 | ||||||||
Security Description | Shares | Value (Note 2) | ||||||
Building Products - Air & Heating — 0.4% |
| |||||||
Johnson Controls International PLC | 76,651 | $ | 3,034,613 | |||||
Building Products - Cement — 0.2% |
| |||||||
Martin Marietta Materials, Inc. | 1,296 | 274,739 | ||||||
Vulcan Materials Co. | 8,500 | 1,030,710 | ||||||
1,305,449 | ||||||||
Building Products - Wood — 0.1% |
| |||||||
Masco Corp. | 12,078 | 444,108 | ||||||
Cable/Satellite TV — 1.5% |
| |||||||
Comcast Corp., Class A | 297,426 | 12,078,470 | ||||||
Chemicals - Diversified — 0.3% |
| |||||||
Eastman Chemical Co. | 19,559 | 1,685,986 | ||||||
LyondellBasell Industries NV, Class A | 7,556 | 684,498 | ||||||
2,370,484 | ||||||||
Chemicals - Specialty — 0.0% |
| |||||||
International Flavors & Fragrances, Inc. | 451 | 61,719 | ||||||
Commercial Services — 0.7% |
| |||||||
Cintas Corp.# | 7,876 | 1,063,339 | ||||||
Ecolab, Inc. | 29,042 | 3,871,299 | ||||||
Nielsen Holdings PLC | 22,844 | 887,489 | ||||||
5,822,127 | ||||||||
Commercial Services - Finance — 1.5% |
| |||||||
Automatic Data Processing, Inc. | 44,099 | 4,695,220 | ||||||
H&R Block, Inc. | 2,355 | 62,973 | ||||||
PayPal Holdings, Inc.† | 77,368 | 4,772,058 | ||||||
S&P Global, Inc. | 17,393 | 2,684,262 | ||||||
12,214,513 | ||||||||
Computer Aided Design — 0.1% |
| |||||||
Autodesk, Inc.† | 4,946 | 566,119 | ||||||
Computer Services — 2.1% |
| |||||||
Accenture PLC, Class A | 39,908 | 5,218,370 | ||||||
Cognizant Technology Solutions Corp., Class A | 24,122 | 1,707,114 | ||||||
DXC Technology Co. | 6,930 | 589,050 | ||||||
International Business Machines Corp. | 63,003 | 9,011,319 | ||||||
16,525,853 | ||||||||
Computers — 0.4% |
| |||||||
Hewlett Packard Enterprise Co. | 80,682 | 1,457,117 | ||||||
HP, Inc. | 106,712 | 2,036,065 | ||||||
3,493,182 | ||||||||
Computers - Memory Devices — 0.2% |
| |||||||
NetApp, Inc. | 7,026 | 271,625 | ||||||
Seagate Technology PLC# | 19,573 | 617,137 | ||||||
Western Digital Corp. | 11,717 | 1,034,259 | ||||||
1,923,021 | ||||||||
Consumer Products - Misc. — 0.5% |
| |||||||
Kimberly-Clark Corp. | 33,770 | 4,163,503 | ||||||
Containers - Paper/Plastic — 0.1% |
| |||||||
Sealed Air Corp. | 7,872 | 349,359 | ||||||
WestRock Co. | 9,939 | 565,629 | ||||||
914,988 | ||||||||
Cosmetics & Toiletries — 3.3% |
| |||||||
Colgate-Palmolive Co. | 108,412 | 7,766,636 | ||||||
Procter & Gamble Co. | 201,049 | 18,550,791 | ||||||
26,317,427 | ||||||||
84 |
Table of Contents
VALIC Company II Socially Responsible Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS (continued) |
| |||||||
Cruise Lines — 0.1% |
| |||||||
Royal Caribbean Cruises, Ltd. | 5,489 | $ | 683,161 | |||||
Data Processing/Management — 0.5% |
| |||||||
Fidelity National Information Services, Inc. | 22,615 | 2,101,386 | ||||||
Fiserv, Inc.† | 16,641 | 2,058,658 | ||||||
Paychex, Inc. | 4,220 | 240,667 | ||||||
4,400,711 | ||||||||
Dental Supplies & Equipment — 0.2% |
| |||||||
DENTSPLY SIRONA, Inc. | 25,202 | 1,425,677 | ||||||
Diagnostic Equipment — 2.7% |
| |||||||
Abbott Laboratories | 184,383 | 9,392,470 | ||||||
Danaher Corp. | 75,896 | 6,331,244 | ||||||
Thermo Fisher Scientific, Inc. | 29,715 | 5,560,865 | ||||||
21,284,579 | ||||||||
Distribution/Wholesale — 0.1% |
| |||||||
Fastenal Co. | 15,084 | 643,634 | ||||||
Diversified Manufacturing Operations — 1.2% |
| |||||||
Eaton Corp. PLC | 41,717 | 2,993,612 | ||||||
Illinois Tool Works, Inc. | 34,689 | 4,770,084 | ||||||
Parker-Hannifin Corp. | 7,312 | 1,176,428 | ||||||
Pentair PLC | 14,110 | 875,526 | ||||||
9,815,650 | ||||||||
Diversified Operations — 0.2% |
| |||||||
Leucadia National Corp. | 83,380 | 1,974,438 | ||||||
E-Commerce/Products — 0.2% |
| |||||||
eBay, Inc.† | 44,453 | 1,606,087 | ||||||
E-Commerce/Services — 0.6% |
| |||||||
Expedia, Inc. | 2,780 | 412,441 | ||||||
Priceline Group, Inc.† | 2,304 | 4,267,192 | ||||||
4,679,633 | ||||||||
Electric Products - Misc. — 0.5% |
| |||||||
Emerson Electric Co. | 64,491 | 3,807,549 | ||||||
Electric - Distribution — 1.1% |
| |||||||
CenterPoint Energy, Inc. | 107,674 | 3,189,304 | ||||||
PPL Corp. | 138,095 | 5,418,848 | ||||||
8,608,152 | ||||||||
Electric - Integrated — 1.2% |
| |||||||
CMS Energy Corp. | 58,662 | 2,847,453 | ||||||
Eversource Energy# | 62,210 | 3,919,230 | ||||||
WEC Energy Group, Inc.# | 45,949 | 2,996,794 | ||||||
9,763,477 | ||||||||
Electronic Components - Misc. — 0.4% |
| |||||||
Corning, Inc. | 75,556 | 2,172,991 | ||||||
Garmin, Ltd.# | 15,409 | 793,563 | ||||||
2,966,554 | ||||||||
Electronic Components - Semiconductors — 3.7% |
| |||||||
Broadcom, Ltd. | 19,562 | 4,930,993 | ||||||
Intel Corp. | 298,411 | 10,465,274 | ||||||
Microchip Technology, Inc.# | 7,483 | 649,525 | ||||||
Micron Technology, Inc.† | 39,222 | 1,253,927 | ||||||
NVIDIA Corp. | 23,771 | 4,027,758 | ||||||
Qorvo, Inc.† | 3,633 | 266,008 | ||||||
Skyworks Solutions, Inc.# | 4,213 | 443,882 | ||||||
Texas Instruments, Inc. | 86,464 | 7,160,949 | ||||||
29,198,316 | ||||||||
Security Description | Shares | Value (Note 2) | ||||||
Electronic Connectors — 0.1% |
| |||||||
TE Connectivity, Ltd. | 9,019 | $ | 717,912 | |||||
Electronic Forms — 0.6% |
| |||||||
Adobe Systems, Inc.† | 31,442 | 4,878,541 | ||||||
Electronic Measurement Instruments — 0.4% |
| |||||||
Agilent Technologies, Inc. | 10,958 | 709,202 | ||||||
Fortive Corp. | 37,948 | 2,465,481 | ||||||
3,174,683 | ||||||||
Engines - Internal Combustion — 0.2% |
| |||||||
Cummins, Inc. | 10,180 | 1,622,488 | ||||||
Enterprise Software/Service — 1.6% |
| |||||||
CA, Inc. | 12,277 | 407,351 | ||||||
Oracle Corp. | 239,851 | 12,071,701 | ||||||
12,479,052 | ||||||||
Entertainment Software — 0.3% |
| |||||||
Activision Blizzard, Inc. | 18,813 | 1,233,380 | ||||||
Electronic Arts, Inc.† | 10,628 | 1,291,302 | ||||||
2,524,682 | ||||||||
Finance - Consumer Loans — 0.2% |
| |||||||
Synchrony Financial | 40,161 | 1,236,557 | ||||||
Finance - Credit Card — 3.7% |
| |||||||
American Express Co. | 57,742 | 4,971,586 | ||||||
Discover Financial Services | 32,069 | 1,890,468 | ||||||
MasterCard, Inc., Class A | 69,605 | 9,278,347 | ||||||
Visa, Inc., Class A# | 130,424 | 13,501,492 | ||||||
29,641,893 | ||||||||
Finance - Investment Banker/Broker — 0.3% |
| |||||||
Charles Schwab Corp. | 62,836 | 2,507,156 | ||||||
Finance - Other Services — 0.7% |
| |||||||
CME Group, Inc. | 24,376 | 3,066,501 | ||||||
Intercontinental Exchange, Inc. | 33,070 | 2,138,637 | ||||||
5,205,138 | ||||||||
Food - Confectionery — 0.1% |
| |||||||
J.M. Smucker Co. | 4,413 | 462,306 | ||||||
Food - Misc./Diversified — 1.1% |
| |||||||
Campbell Soup Co. | 19,737 | 911,849 | ||||||
General Mills, Inc. | 81,087 | 4,318,694 | ||||||
Kraft Heinz Co. | 47,217 | 3,812,773 | ||||||
9,043,316 | ||||||||
Food - Retail — 0.3% |
| |||||||
Kroger Co. | 102,481 | 2,241,259 | ||||||
Gas - Distribution — 0.1% |
| |||||||
NiSource, Inc. | 36,845 | 990,025 | ||||||
Home Decoration Products — 0.3% |
| |||||||
Newell Brands, Inc. | 46,592 | 2,249,462 | ||||||
Hotels/Motels — 0.5% |
| |||||||
Marriott International, Inc., Class A | 24,363 | 2,523,519 | ||||||
Wyndham Worldwide Corp. | 12,248 | 1,220,881 | ||||||
3,744,400 | ||||||||
Industrial Automated/Robotic — 0.2% |
| |||||||
Rockwell Automation, Inc. | 11,351 | 1,862,245 | ||||||
Industrial Gases — 0.5% |
| |||||||
Air Products & Chemicals, Inc. | 25,402 | 3,692,689 | ||||||
85 |
Table of Contents
VALIC Company II Socially Responsible Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS (continued) |
| |||||||
Insurance Brokers — 0.3% |
| |||||||
Aon PLC | 4,393 | $ | 611,330 | |||||
Marsh & McLennan Cos., Inc. | 16,907 | 1,320,098 | ||||||
Willis Towers Watson PLC | 2,553 | 379,044 | ||||||
2,310,472 | ||||||||
Insurance - Life/Health — 1.3% |
| |||||||
Aflac, Inc. | 35,412 | 2,923,261 | ||||||
Lincoln National Corp. | 8,769 | 595,064 | ||||||
Principal Financial Group, Inc. | 11,542 | 721,606 | ||||||
Prudential Financial, Inc. | 59,207 | 6,043,850 | ||||||
10,283,781 | ||||||||
Insurance - Multi-line — 1.8% |
| |||||||
Allstate Corp. | 37,523 | 3,395,831 | ||||||
Chubb, Ltd. | 57,899 | 8,188,077 | ||||||
Cincinnati Financial Corp. | 6,024 | 462,884 | ||||||
Loews Corp. | 55,265 | 2,574,244 | ||||||
14,621,036 | ||||||||
Insurance - Property/Casualty — 0.3% |
| |||||||
Travelers Cos., Inc. | 20,300 | 2,459,954 | ||||||
Insurance - Reinsurance — 2.4% |
| |||||||
Berkshire Hathaway, Inc., Class B† | 107,368 | 19,450,787 | ||||||
Internet Content - Entertainment — 2.5% |
| |||||||
Facebook, Inc., Class A† | 98,706 | 16,974,471 | ||||||
Netflix, Inc.† | 16,809 | 2,936,700 | ||||||
19,911,171 | ||||||||
Investment Management/Advisor Services — 1.1% |
| |||||||
Ameriprise Financial, Inc. | 12,211 | 1,691,346 | ||||||
BlackRock, Inc. | 11,861 | 4,969,878 | ||||||
Franklin Resources, Inc. | 20,511 | 886,690 | ||||||
Invesco, Ltd. | 13,676 | 448,299 | ||||||
T. Rowe Price Group, Inc.# | 7,505 | 633,122 | ||||||
8,629,335 | ||||||||
Machinery - Construction & Mining — 0.8% |
| |||||||
Caterpillar, Inc. | 52,057 | 6,116,177 | ||||||
Machinery - Farming — 0.4% |
| |||||||
Deere & Co. | 30,086 | 3,487,870 | ||||||
Machinery - General Industrial — 0.0% |
| |||||||
Roper Technologies, Inc. | 1,163 | 268,258 | ||||||
Medical Information Systems — 0.1% |
| |||||||
Cerner Corp.† | 16,416 | 1,112,676 | ||||||
Medical Instruments — 0.2% |
| |||||||
Edwards Lifesciences Corp.† | 15,364 | 1,746,272 | ||||||
Medical Labs & Testing Services — 0.2% |
| |||||||
Laboratory Corp. of America Holdings† | 7,191 | 1,128,052 | ||||||
Quest Diagnostics, Inc. | 5,800 | 628,430 | ||||||
1,756,482 | ||||||||
Medical Products — 1.7% |
| |||||||
Becton Dickinson and Co. | 38,867 | 7,751,635 | ||||||
Stryker Corp. | 39,963 | 5,649,569 | ||||||
13,401,204 | ||||||||
Medical - Biomedical/Gene — 4.5% |
| |||||||
Alexion Pharmaceuticals, Inc.† | 16,295 | 2,320,571 | ||||||
Amgen, Inc. | 56,037 | 9,961,697 | ||||||
Biogen, Inc.† | 12,242 | 3,875,327 | ||||||
Celgene Corp.† | 53,531 | 7,437,062 | ||||||
Gilead Sciences, Inc. | 76,845 | 6,432,695 | ||||||
Illumina, Inc.† | 6,349 | 1,298,117 |
Security Description | Shares | Value (Note 2) | ||||||
Medical - Biomedical/Gene (continued) |
| |||||||
Regeneron Pharmaceuticals, Inc.† | 4,165 | $ | 2,069,588 | |||||
Vertex Pharmaceuticals, Inc.† | 14,151 | 2,271,802 | ||||||
35,666,859 | ||||||||
Medical - Drugs — 1.9% |
| |||||||
AbbVie, Inc. | 153,802 | 11,581,290 | ||||||
Zoetis, Inc. | 62,084 | 3,892,667 | ||||||
15,473,957 | ||||||||
Medical - Generic Drugs — 0.1% |
| |||||||
Perrigo Co. PLC# | 8,279 | 653,710 | ||||||
Medical - HMO — 0.3% |
| |||||||
Humana, Inc. | 9,726 | 2,505,612 | ||||||
Medical - Hospitals — 0.2% |
| |||||||
HCA Healthcare, Inc.† | 19,984 | 1,571,941 | ||||||
Medical - Wholesale Drug Distribution — 0.4% |
| |||||||
AmerisourceBergen Corp. | 17,803 | 1,428,691 | ||||||
Cardinal Health, Inc. | 31,658 | 2,135,648 | ||||||
3,564,339 | ||||||||
Multimedia — 1.5% |
| |||||||
Twenty-First Century Fox, Inc., Class B | 49,618 | 1,344,648 | ||||||
Viacom, Inc., Class B | 17,767 | 508,136 | ||||||
Walt Disney Co. | 100,359 | 10,156,331 | ||||||
12,009,115 | ||||||||
Networking Products — 1.2% |
| |||||||
Cisco Systems, Inc. | 305,307 | 9,833,938 | ||||||
Non-Hazardous Waste Disposal — 0.3% |
| |||||||
Republic Services, Inc. | 42,928 | 2,800,623 | ||||||
Office Automation & Equipment — 0.1% |
| |||||||
Xerox Corp. | 17,277 | 557,529 | ||||||
Oil Companies - Exploration & Production — 2.1% |
| |||||||
Anadarko Petroleum Corp. | 35,536 | 1,454,489 | ||||||
Apache Corp.# | 24,537 | 953,017 | ||||||
Cabot Oil & Gas Corp. | 16,625 | 424,769 | ||||||
Devon Energy Corp. | 34,331 | 1,077,993 | ||||||
EOG Resources, Inc. | 30,897 | 2,625,936 | ||||||
EQT Corp. | 7,872 | 490,740 | ||||||
Hess Corp. | 47,123 | 1,833,085 | ||||||
Marathon Oil Corp. | 165,552 | 1,840,938 | ||||||
Noble Energy, Inc. | 20,412 | 485,193 | ||||||
Occidental Petroleum Corp. | 86,573 | 5,168,408 | ||||||
Pioneer Natural Resources Co. | 6,458 | 837,280 | ||||||
17,191,848 | ||||||||
Oil Companies - Integrated — 0.1% |
| |||||||
Murphy Oil Corp.# | 34,888 | 790,562 | ||||||
Oil Field Machinery & Equipment — 0.2% |
| |||||||
National Oilwell Varco, Inc.# | 51,004 | 1,564,293 | ||||||
Oil Refining & Marketing — 0.0% |
| |||||||
Valero Energy Corp. | 5,183 | 352,962 | ||||||
Oil-Field Services — 0.9% |
| |||||||
Baker Hughes, a GE Company | 31,181 | 1,057,036 | ||||||
Schlumberger, Ltd. | 94,538 | 6,004,108 | ||||||
7,061,144 | ||||||||
Paper & Related Products — 0.3% |
| |||||||
International Paper Co. | 41,685 | 2,245,571 | ||||||
Pharmacy Services — 0.3% | ||||||||
Express Scripts Holding Co.† | 42,087 | 2,643,905 | ||||||
86 |
Table of Contents
VALIC Company II Socially Responsible Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Shares | Value (Note 2) | ||||||
COMMON STOCKS (continued) |
| |||||||
Pipelines — 0.4% |
| |||||||
Kinder Morgan, Inc. | 109,565 | $ | 2,117,891 | |||||
ONEOK, Inc. | 25,861 | 1,400,632 | ||||||
3,518,523 | ||||||||
Real Estate Investment Trusts — 5.6% |
| |||||||
American Tower Corp. | 59,738 | 8,844,211 | ||||||
AvalonBay Communities, Inc. | 8,787 | 1,649,583 | ||||||
Boston Properties, Inc. | 4,161 | 501,817 | ||||||
Crown Castle International Corp. | 46,061 | 4,994,855 | ||||||
Digital Realty Trust, Inc. | 5,391 | 637,971 | ||||||
Equinix, Inc. | 4,741 | 2,220,732 | ||||||
Equity Residential | 15,787 | 1,060,097 | ||||||
Essex Property Trust, Inc. | 799 | 212,510 | ||||||
GGP, Inc. | 35,364 | 733,803 | ||||||
HCP, Inc. | 63,567 | 1,894,932 | ||||||
Host Hotels & Resorts, Inc. | 83,156 | 1,506,787 | ||||||
JBG SMITH Properties† | 6,384 | 208,948 | ||||||
Prologis, Inc. | 35,578 | 2,254,222 | ||||||
Public Storage | 11,458 | 2,352,786 | ||||||
Realty Income Corp.# | 11,177 | 643,348 | ||||||
Simon Property Group, Inc. | 35,226 | 5,525,198 | ||||||
Ventas, Inc. | 39,584 | 2,709,129 | ||||||
Vornado Realty Trust | 12,768 | 951,088 | ||||||
Welltower, Inc. | 31,049 | 2,273,408 | ||||||
Weyerhaeuser Co. | 106,431 | 3,470,715 | ||||||
44,646,140 | ||||||||
Retail - Apparel/Shoe — 0.5% |
| |||||||
Coach, Inc. | 24,099 | 1,004,928 | ||||||
L Brands, Inc.# | 26,870 | 973,231 | ||||||
Ross Stores, Inc. | 35,761 | 2,090,231 | ||||||
4,068,390 | ||||||||
Retail - Auto Parts — 0.1% |
| |||||||
O’Reilly Automotive, Inc.† | 5,028 | 986,142 | ||||||
Retail - Automobile — 0.0% |
| |||||||
CarMax, Inc.†# | 3,681 | 247,179 | ||||||
Retail - Building Products — 0.6% |
| |||||||
Lowe’s Cos., Inc. | 62,390 | 4,609,997 | ||||||
Retail - Consumer Electronics — 0.0% |
| |||||||
Best Buy Co., Inc.# | 7,266 | 394,253 | ||||||
Retail - Discount — 0.2% |
| |||||||
Dollar Tree, Inc.† | 16,210 | 1,290,964 | ||||||
Retail - Drug Store — 0.6% |
| |||||||
Walgreens Boots Alliance, Inc. | 58,672 | 4,781,768 | ||||||
Retail - Jewelry — 0.0% |
| |||||||
Tiffany & Co. | 1,850 | 169,090 | ||||||
Retail - Major Department Stores — 0.8% |
| |||||||
TJX Cos., Inc. | 87,621 | 6,334,998 | ||||||
Retail - Office Supplies — 0.0% |
| |||||||
Staples, Inc. | 30,753 | 314,142 | ||||||
Retail - Perfume & Cosmetics — 0.1% | ||||||||
Ulta Beauty, Inc.† | 2,547 | 562,912 | ||||||
Retail - Regional Department Stores — 0.2% |
| |||||||
Kohl’s Corp.# | 19,822 | 788,519 | ||||||
Macy’s, Inc. | 23,549 | 489,113 | ||||||
1,277,632 | ||||||||
Retail - Restaurants — 1.2% |
| |||||||
Chipotle Mexican Grill, Inc.†# | 725 | 229,615 | ||||||
Darden Restaurants, Inc. | 6,709 | 550,742 |
Security Description | Shares/ Principal Amount | Value (Note 2) | ||||||
Retail - Restaurants (continued) |
| |||||||
Starbucks Corp. | 113,005 | $ | 6,199,454 | |||||
Yum! Brands, Inc. | 37,577 | 2,886,665 | ||||||
9,866,476 | ||||||||
Semiconductor Components - Integrated Circuits — 1.0% |
| |||||||
Analog Devices, Inc. | 29,212 | 2,444,168 | ||||||
QUALCOMM, Inc. | 100,398 | 5,247,804 | ||||||
7,691,972 | ||||||||
Semiconductor Equipment — 0.6% |
| |||||||
Applied Materials, Inc. | 64,853 | 2,926,167 | ||||||
KLA-Tencor Corp. | 17,343 | 1,624,866 | ||||||
4,551,033 | ||||||||
Steel - Producers — 0.1% |
| |||||||
Nucor Corp. | 16,480 | 908,213 | ||||||
Telecom Services — 0.1% |
| |||||||
Level 3 Communications, Inc.† | 10,841 | 590,076 | ||||||
Telephone - Integrated — 0.2% |
| |||||||
CenturyLink, Inc.# | 101,001 | 1,991,740 | ||||||
Television — 0.2% |
| |||||||
CBS Corp., Class B | 19,927 | 1,276,524 | ||||||
Textile - Home Furnishings — 0.2% |
| |||||||
Mohawk Industries, Inc.† | 5,332 | 1,349,636 | ||||||
Tools - Hand Held — 0.2% |
| |||||||
Stanley Black & Decker, Inc. | 10,046 | 1,446,624 | ||||||
Toys — 0.0% |
| |||||||
Mattel, Inc.# | 13,206 | 214,201 | ||||||
Transport-Rail — 1.3% |
| |||||||
CSX Corp. | 52,381 | 2,629,526 | ||||||
Norfolk Southern Corp. | 17,912 | 2,158,754 | ||||||
Union Pacific Corp. | 53,201 | 5,602,066 | ||||||
10,390,346 | ||||||||
Transport-Services — 1.0% |
| |||||||
United Parcel Service, Inc., Class B | 68,007 | 7,777,281 | ||||||
Water — 0.1% |
| |||||||
American Water Works Co., Inc. | 9,183 | 742,905 | ||||||
Web Portals/ISP — 3.5% |
| |||||||
Alphabet, Inc., Class A† | 16,446 | 15,709,877 | ||||||
Alphabet, Inc., Class C† | 13,440 | 12,624,595 | ||||||
28,334,472 | ||||||||
Wireless Equipment — 0.1% |
| |||||||
Motorola Solutions, Inc. | 6,303 | 555,420 | ||||||
Total Long-Term Investment Securities | ||||||||
(cost $559,475,738) | 777,402,814 | |||||||
SHORT-TERM INVESTMENT SECURITIES — 0.7% |
| |||||||
Registered Investment Companies — 0.3% |
| |||||||
State Street Navigator Securities Lending Government Money Market Portfolio | 2,165,286 | 2,165,286 | ||||||
U.S. Government Treasuries — 0.4% |
| |||||||
United States Treasury Bills | $ | 3,500,000 | 3,499,480 | |||||
Total Short-Term Investment Securities | ||||||||
(cost $5,664,720) | 5,664,766 | |||||||
87 |
Table of Contents
VALIC Company II Socially Responsible Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount | Value (Note 2) | ||||||
REPURCHASE AGREEMENTS — 2.3% | ||||||||
Agreement with Fixed Income Clearing Corp., bearing interest at 0.12%, dated 08/31/2017, to be repurchased 09/01/2017 in the amount of $18,211,061, and collateralized by $18,630,000 of United States Treasury Bonds, bearing interest at 0.75%, due 02/15/2045 and having an approximate value of $18,578,805 | 18,211,000 | $ | 18,211,000 | |||||
TOTAL INVESTMENTS | ||||||||
(cost $583,351,458)(3) | 100.2 | % | 801,278,580 | |||||
Liabilities in excess of other assets | (0.2 | ) | (1,380,732 | ) | ||||
NET ASSETS | 100.0 | % | $ | 799,897,848 | ||||
† | Non-income producing security |
# | The security or a portion thereof is on loan (see Note 2). |
(1) | The rate shown is the 7-day yield as of August 31, 2017. |
(2) | At August 31, 2017, the Fund had loaned securities with a total value of $38,213,853. This was secured by collateral of $2,165,286, which was received in cash and subsequently invested in short-term investments currently valued at $2,165,286 as reported in the Portfolio of Investments. Additional collateral of $37,010,786 was received in the form of fixed income pooled securities, which the Fund cannot sell or repledge and accordingly are not reflected in the Fund’s assets and liabilities. |
The components of the fixed income pooled securities referenced above are as follows:
Securities | Coupon Range | Maturity Date Range | Value as of August 31, 2017 | |||||
Federal Home Loan Mtg. Corp. | 2.50% to 4.50% | 08/01/2027 to 01/01/2047 | $ | 3,679,764 | ||||
Federal National Mtg. Assoc. | 2.63% to 4.25% | 10/25/2029 to 11/01/2046 | 3,023,659 | |||||
Government National Mtg. Assoc. | 2.50% to 3.50% | 01/20/2043 to 05/16/2053 | 6,316,989 | |||||
United States Treasury Bills | 0.00% | 09/07/2017 to 03/01/2018 | 472,396 | |||||
United States Treasury Notes/Bonds | zero coupon to 8.00% | 09/30/2017 to 02/15/2047 | 23,517,978 |
(3) | See Note 5 for cost of investments on a tax basis. |
(4) | The security or a portion thereof was pledged as collateral to cover margin requirements for open futures contracts. |
Futures Contracts | ||||||||||||||||||||||
Number of Contracts | Type | Description | Expiration Month | Notional | Notional Value# | Unrealized Appreciation (Depreciation) | ||||||||||||||||
187 | Long | S&P 500 E-Mini Index | September 2017 | $ | 22,769,681 | $ | 23,095,435 | $ | 325,754 | |||||||||||||
# | Notional basis refers to the Contractual amount agreed upon at inception of the open Contract; Notional Value represents the Current Value of the open Contract. |
The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2017 (see Note 2):
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at Value:* | ||||||||||||||||
Common Stocks | $ | 777,402,814 | $ | — | $ | — | $ | 777,402,814 | ||||||||
Short Term Investment Securities: | ||||||||||||||||
Registered Investment Companies | 2,165,286 | — | — | 2,165,286 | ||||||||||||
U.S. Government Treasuries | — | 3,499,480 | — | 3,499,480 | ||||||||||||
Repurchase Agreements | — | 18,211,000 | — | 18,211,000 | ||||||||||||
Total Investments at Value | $ | 779,568,100 | $ | 21,710,480 | $ | — | $ | 801,278,580 | ||||||||
Other Financial Instruments:+ | ||||||||||||||||
Futures Contracts | $ | 325,754 | $ | — | $ | — | $ | 325,754 | ||||||||
* | For a detailed presentation of investments, please refer to the Portfolio of Investments. |
+ | Other financial instruments are derivative instruments, not reflected in the Portfolio of Investments, such as futures, forward, swap and written option contracts, which are valued at the unrealized appreciation (depreciation) on the instrument. |
The Fund’s policy is to recognize transfers between Levels as of the end of the reporting period. There were no transfers between Levels during the reporting period.
See Notes to Financial Statements
88 |
Table of Contents
VALIC Company II Strategic Bond Fund
PORTFOLIO PROFILE — August 31, 2017 (unaudited)
Industry Allocation*
Sovereign | 14.4 | % | ||
Registered Investment Companies | 7.1 | |||
Diversified Financial Services | 6.2 | |||
Federal National Mtg. Assoc. | 5.0 | |||
Diversified Banking Institutions | 4.8 | |||
Time Deposits | 4.7 | |||
Banks — Commercial | 4.2 | |||
United States Treasury Notes | 3.5 | |||
Federal Home Loan Mtg. Corp. | 3.4 | |||
Oil Companies — Exploration & Production | 3.3 | |||
Cable/Satellite TV | 2.7 | |||
Pipelines | 2.6 | |||
Oil Companies — Integrated | 1.8 | |||
Cellular Telecom | 1.7 | |||
Telephone — Integrated | 1.3 | |||
Electric — Integrated | 1.3 | |||
Real Estate Investment Trusts | 1.1 | |||
Computers | 1.0 | |||
Medical — Hospitals | 1.0 | |||
United States Treasury Bonds | 0.9 | |||
Auto — Cars/Light Trucks | 0.9 | |||
Medical — Drugs | 0.9 | |||
Oil Refining & Marketing | 0.8 | |||
Paper & Related Products | 0.8 | |||
Finance — Consumer Loans | 0.8 | |||
Chemicals — Diversified | 0.8 | |||
Satellite Telecom | 0.7 | |||
Finance — Auto Loans | 0.7 | |||
Computer Services | 0.7 | |||
Gambling (Non-Hotel) | 0.7 | |||
Insurance — Multi-line | 0.6 | |||
Oil — Field Services | 0.6 | |||
Enterprise Software/Service | 0.5 | |||
Energy — Alternate Sources | 0.5 | |||
Banks — Super Regional | 0.5 | |||
Aerospace/Defense — Equipment | 0.5 | |||
Banks — Special Purpose | 0.5 | |||
Metal — Copper | 0.5 | |||
Real Estate Management/Services | 0.5 | |||
Savings & Loans/Thrifts | 0.5 | |||
Metal Processors & Fabrication | 0.4 | |||
Printing — Commercial | 0.4 | |||
Computers — Memory Devices | 0.4 | |||
Containers — Metal/Glass | 0.4 | |||
Independent Power Producers | 0.4 | |||
Investment Management/Advisor Services | 0.4 | |||
Retail — Restaurants | 0.4 | |||
Finance — Credit Card | 0.4 | |||
Building Products — Wood | 0.4 | |||
Cruise Lines | 0.4 | |||
Rental Auto/Equipment | 0.4 | |||
Electric — Generation | 0.4 | |||
Finance — Leasing Companies | 0.4 | |||
Airlines | 0.3 | |||
Insurance — Life/Health | 0.3 | |||
Transport — Rail | 0.3 | |||
Internet Connectivity Services | 0.3 | |||
Central Bank | 0.3 | |||
Retail — Office Supplies | 0.3 | |||
Building & Construction — Misc. | 0.3 | |||
Gas — Distribution | 0.3 | |||
Medical Products | 0.3 | |||
Wire & Cable Products | 0.3 | |||
Steel — Producers | 0.3 | |||
Brewery | 0.3 | |||
Food — Retail | 0.3 | |||
Retail — Appliances | 0.3 | |||
Finance — Investment Banker/Broker | 0.3 | |||
Batteries/Battery Systems | 0.3 |
E-Commerce/Services | 0.3 | |||
Telecom Services | 0.3 | |||
Building — Heavy Construction | 0.3 | |||
Marine Services | 0.3 | |||
Diversified Operations | 0.3 | |||
Machinery — Construction & Mining | 0.3 | |||
Internet Content — Entertainment | 0.3 | |||
Diversified Manufacturing Operations | 0.2 | |||
Semiconductor Equipment | 0.2 | |||
Diversified Minerals | 0.2 | |||
Finance — Mortgage Loan/Banker | 0.2 | |||
Auto — Heavy Duty Trucks | 0.2 | |||
Containers — Paper/Plastic | 0.2 | |||
Building & Construction Products — Misc. | 0.2 | |||
Sovereign Agency | 0.2 | |||
Agricultural Chemicals | 0.2 | |||
Radio | 0.2 | |||
Coal | 0.2 | |||
Food — Dairy Products | 0.2 | |||
Building — Residential/Commercial | 0.2 | |||
Auction Houses/Art Dealers | 0.2 | |||
Metal — Iron | 0.2 | |||
Broadcast Services/Program | 0.2 | |||
Networking Products | 0.2 | |||
Precious Metals | 0.2 | |||
Finance — Other Services | 0.2 | |||
Resorts/Theme Parks | 0.2 | |||
Cosmetics & Toiletries | 0.2 | |||
Travel Services | 0.2 | |||
Auto/Truck Parts & Equipment — Original | 0.2 | |||
Oil Field Machinery & Equipment | 0.2 | |||
Television | 0.2 | |||
Publishing — Books | 0.2 | |||
Retail — Automobile | 0.2 | |||
Electronic Parts Distribution | 0.2 | |||
Hotels/Motels | 0.2 | |||
Data Processing/Management | 0.2 | |||
SupraNational Banks | 0.2 | |||
Investment Companies | 0.2 | |||
Racetracks | 0.2 | |||
Platinum | 0.2 | |||
Transport — Services | 0.2 | |||
Coatings/Paint | 0.2 | |||
Food — Misc./Diversified | 0.2 | |||
Medical — Generic Drugs | 0.2 | |||
Building Products — Cement | 0.2 | |||
Metal — Diversified | 0.1 | |||
Medical — Biomedical/Gene | 0.1 | |||
Commercial Services | 0.1 | |||
Retail — Misc./Diversified | 0.1 | |||
Electric Products — Misc. | 0.1 | |||
Food — Wholesale/Distribution | 0.1 | |||
Gold Mining | 0.1 | |||
Electronic Components — Semiconductors | 0.1 | |||
Distribution/Wholesale | 0.1 | |||
Banks — Fiduciary | 0.1 | |||
Insurance — Mutual | 0.1 | |||
Medical — HMO | 0.1 | |||
Casino Hotels | 0.1 | |||
Telecommunication Equipment | 0.1 | |||
E-Commerce/Products | 0.1 | |||
Appliances | 0.1 | |||
Real Estate Operations & Development | 0.1 | |||
Airport Development/Maintenance | 0.1 | |||
Government National Mtg. Assoc. | 0.1 | |||
Petrochemicals | 0.1 | |||
Retail — Drug Store | 0.1 | |||
Food — Meat Products | 0.1 | |||
Banks — Money Center | 0.1 |
89 |
Table of Contents
VALIC Company II Strategic Bond Fund
PORTFOLIO PROFILE — August 31, 2017 (unaudited) — (continued)
Industry Allocation* (continued)
Tools — Hand Held | 0.1 | % | ||
Medical Labs & Testing Services | 0.1 | |||
Oil & Gas Drilling | 0.1 | |||
Semiconductor Components — Integrated Circuits | 0.1 | |||
Multimedia | 0.1 | |||
Beverages — Wine/Spirits | 0.1 | |||
Transport — Marine | 0.1 | |||
Retail — Discount | 0.1 | |||
Power Converter/Supply Equipment | 0.1 | |||
Advertising Agencies | 0.1 | |||
Pharmacy Services | 0.1 | |||
Transport — Equipment & Leasing | 0.1 | |||
108.4 | % | |||
Credit Quality†#
Aaa | 16.6 | % | ||
Aa | 1.8 | |||
A | 10.2 | |||
Baa | 17.8 | |||
Ba | 18.2 | |||
B | 21.8 | |||
Caa | 5.2 | |||
Not Rated@ | 8.4 | |||
100.0 | % | |||
* | Calculated as a percentage of net assets. |
† | Source: Moody’s |
# | Calculated as a percentage of total debt issues, excluding short-term securities |
@ | Represents debt issues that either have no rating, or the rating is unavailable from the data source. |
90 |
Table of Contents
VALIC Company II Strategic Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
ASSET BACKED SECURITIES — 6.0% |
| |||||||
Diversified Financial Services — 6.0% |
| |||||||
Ally Auto Receivables Trust | $ | 2,200,000 | $ | 2,203,305 | ||||
American Express Credit Account Master Trust FRS | 84,000 | 84,357 | ||||||
American Express Credit Account Master Trust | 1,030,000 | 1,031,955 | ||||||
American Express Credit Account Master Trust | 3,000,000 | 3,019,367 | ||||||
Avis Budget Rental Car Funding AESOP LLC | 150,000 | 150,563 | ||||||
BMW Vehicle Lease Trust | 200,000 | 201,004 | ||||||
Capital One Multi-Asset Execution Trust | 2,364,000 | 2,352,125 | ||||||
CarMax Auto Owner Trust | 500,000 | 496,921 | ||||||
CGGS Commercial Mtg. Trust | 433,902 | 435,950 | ||||||
Chase Issuance Trust | 300,000 | 298,788 | ||||||
Chase Issuance Trust | 3,100,000 | 3,110,699 | ||||||
Chase Mtg. Trust VRS | 922,186 | 950,504 | ||||||
Citibank Credit Card Issuance Trust | 2,666,000 | 2,680,194 | ||||||
Citibank Credit Card Issuance Trust | 1,447,000 | 1,460,794 | ||||||
Citibank Credit Card Issuance Trust | 142,000 | 146,867 | ||||||
Citigroup Commercial Mtg. Trust | 584,000 | 582,313 | ||||||
Citigroup Commercial Mtg. Trust | 226,000 | 228,564 | ||||||
Citigroup Commercial Mtg. Trust | 153,707 | 155,815 | ||||||
COMM Mtg. Trust VRS | 3,126,292 | 157,126 | ||||||
COMM Mtg. Trust | 80,000 | 81,765 | ||||||
COMM Mtg. Trust | 100,000 | 104,524 |
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Diversified Financial Services (continued) |
| |||||||
Discover Card Execution Note Trust | $ | 2,100,000 | $ | 2,107,688 | ||||
Ford Credit Auto Owner Trust | 2,000,000 | 1,997,897 | ||||||
Ford Credit Auto Owner Trust | 115,000 | 114,256 | ||||||
Ford Credit Auto Owner Trust | 129,000 | 129,334 | ||||||
Ford Credit Auto Owner Trust | 120,000 | 121,861 | ||||||
GM Financial Automobile Leasing Trust | 1,580,000 | 1,580,315 | ||||||
GM Financial Automobile Leasing Trust | 100,000 | 100,084 | ||||||
GS Mtg. Securities Trust | 75,000 | 76,462 | ||||||
Honda Auto Receivables Owner Trust | 168,000 | 167,756 | ||||||
Honda Auto Receivables Owner Trust | 2,000,000 | 2,003,568 | ||||||
Hudson Yards Mtg. Trust | 2,280,000 | 2,250,039 | ||||||
Hyundai Auto Receivables Trust | 2,260,000 | 2,259,608 | ||||||
JPMDB Commercial Mtg Securities Trust | 833,000 | 848,432 | ||||||
Nissan Auto Receivables Owner Trust | 3,000,000 | 3,008,176 | ||||||
Synchrony Credit Card Master Note Trust | 100,000 | 100,600 | ||||||
Synchrony Credit Card Master Note Trust | 3,100,000 | 3,123,522 | ||||||
Toyota Auto Receivables | 2,863,000 | 2,849,003 | ||||||
Toyota Auto Receivables Owner Trust | 300,000 | 299,135 | ||||||
Verizon Owner Trust | 2,000,000 | 1,999,340 | ||||||
World Financial Network Credit Card Master Trust | 270,000 | 269,090 | ||||||
Total Asset Backed Securities |
| |||||||
(cost $45,372,121) | 45,339,666 | |||||||
91 |
Table of Contents
VALIC Company II Strategic Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES — 39.2% |
| |||||||
Advertising Agencies — 0.1% |
| |||||||
Interpublic Group of Cos., Inc. | $ | 217,000 | $ | 230,167 | ||||
Omnicom Group, Inc. | 180,000 | 183,151 | ||||||
413,318 | ||||||||
Aerospace/Defense - Equipment — 0.5% |
| |||||||
Moog, Inc. | 1,343,000 | 1,393,362 | ||||||
Triumph Group, Inc. | 1,605,000 | 1,532,775 | ||||||
United Technologies Corp. | 325,000 | 325,144 | ||||||
United Technologies Corp. | 236,000 | 239,596 | ||||||
3,490,877 | ||||||||
Agricultural Chemicals — 0.0% |
| |||||||
Mosaic Co. | 138,000 | 130,544 | ||||||
Airlines — 0.3% |
| |||||||
Atlas Air, Inc. | 57,228 | 57,434 | ||||||
Delta Air Lines, Inc. | 334,000 | 339,362 | ||||||
United Airlines Pass-Through Trust | 1,029,152 | 1,062,599 | ||||||
United Airlines Pass-Through Trust | 1,001,598 | 1,051,678 | ||||||
2,511,073 | ||||||||
Appliances — 0.0% |
| |||||||
Whirlpool Corp. | 202,000 | 214,011 | ||||||
Applications Software — 0.0% |
| |||||||
Microsoft Corp. | 277,000 | 302,682 | ||||||
Auction Houses/Art Dealers — 0.2% |
| |||||||
KAR Auction Services, Inc. | 1,520,000 | 1,571,984 | ||||||
Auto - Cars/Light Trucks — 0.6% |
| |||||||
American Honda Finance Corp. | 442,000 | 438,222 | ||||||
BMW US Capital LLC | 318,000 | 317,258 |
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Auto - Cars/Light Trucks (continued) |
| |||||||
Daimler Finance North America LLC | $ | 485,000 | $ | 481,222 | ||||
Daimler Finance North America LLC | 153,000 | 151,143 | ||||||
Daimler Finance North America LLC | 357,000 | 358,910 | ||||||
Daimler Finance North America LLC | 639,000 | 644,660 | ||||||
Ford Motor Co. | 259,000 | 265,909 | ||||||
Ford Motor Credit Co. LLC | 458,000 | 457,816 | ||||||
General Motors Co. | 188,000 | 190,277 | ||||||
Nissan Motor Acceptance Corp. | 514,000 | 519,350 | ||||||
Toyota Motor Credit Corp. | 759,000 | 760,568 | ||||||
Toyota Motor Credit Corp. | 243,000 | 244,434 | ||||||
4,829,769 | ||||||||
Auto - Heavy Duty Trucks — 0.2% |
| |||||||
JB Poindexter & Co., Inc. | 1,675,000 | 1,754,563 | ||||||
Auto/Truck Parts & Equipment - Original — 0.0% |
| |||||||
Lear Corp. | 161,000 | 161,366 | ||||||
Banks - Commercial — 0.8% |
| |||||||
BankUnited, Inc. | 719,000 | 754,315 | ||||||
Citizens Bank NA | 268,000 | 270,324 | ||||||
Fifth Third Bank | 299,000 | 297,740 | ||||||
First Horizon National Corp. | 888,000 | 916,981 | ||||||
PNC Bank NA | 470,000 | 471,966 | ||||||
Regions Financial Corp. | 481,000 | 484,187 | ||||||
Regions Financial Corp. | 1,495,000 | 2,039,826 |
92 |
Table of Contents
VALIC Company II Strategic Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Banks - Commercial (continued) |
| |||||||
Santander Holdings USA, Inc. | $ | 465,000 | $ | 474,150 | ||||
Santander Holdings USA, Inc. | 223,000 | 229,651 | ||||||
5,939,140 | ||||||||
Banks - Fiduciary — 0.1% |
| |||||||
Bank of New York Mellon Corp. | 229,000 | 231,347 | ||||||
Citizens Financial Group, Inc. | 638,000 | 672,001 | ||||||
903,348 | ||||||||
Banks - Super Regional — 0.4% |
| |||||||
Capital One Financial Corp. | 308,000 | 317,720 | ||||||
Huntington National Bank | 268,000 | 270,513 | ||||||
Wells Fargo & Co. | 562,000 | 565,985 | ||||||
Wells Fargo & Co. | 631,000 | 644,890 | ||||||
Wells Fargo & Co. | 553,000 | 573,771 | ||||||
Wells Fargo & Co. | 582,000 | 632,147 | ||||||
Wells Fargo & Co. | 60,000 | 66,218 | ||||||
3,071,244 | ||||||||
Batteries/Battery Systems — 0.3% |
| |||||||
EnerSys | 2,028,000 | 2,086,305 | ||||||
Brewery — 0.2% |
| |||||||
Anheuser-Busch InBev Finance, Inc. | 239,000 | 239,582 | ||||||
Anheuser-Busch InBev Finance, Inc. | 446,000 | 455,062 | ||||||
Anheuser-Busch InBev Finance, Inc. | 216,000 | 224,665 | ||||||
Anheuser-Busch InBev Finance, Inc. | 470,000 | 523,267 | ||||||
Anheuser-Busch InBev Finance, Inc. | 126,000 | 143,642 | ||||||
1,586,218 | ||||||||
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Broadcast Services/Program — 0.2% |
| |||||||
Clear Channel Worldwide Holdings, Inc. | $ | 1,498,000 | $ | 1,542,940 | ||||
Building & Construction Products - Misc. — 0.2% |
| |||||||
Owens Corning | 622,000 | 603,900 | ||||||
Standard Industries, Inc. | 1,104,000 | 1,131,600 | ||||||
1,735,500 | ||||||||
Building & Construction - Misc. — 0.3% |
| |||||||
Weekley Homes LLC/Weekley Finance Corp. | 2,446,000 | 2,384,850 | ||||||
Building Products - Air & Heating — 0.0% |
| |||||||
Lennox International, Inc. | 223,000 | 225,702 | ||||||
Building Products - Cement — 0.1% |
| |||||||
CEMEX Finance LLC | 400,000 | 423,520 | ||||||
Building Products - Wood — 0.4% |
| |||||||
Boise Cascade Co. | 1,890,000 | 1,979,775 | ||||||
Masco Corp. | 477,000 | 514,254 | ||||||
Masco Corp. | 227,000 | 231,616 | ||||||
2,725,645 | ||||||||
Building - Heavy Construction — 0.3% |
| |||||||
Tutor Perini Corp. | 1,815,000 | 1,951,125 | ||||||
Building - Residential/Commercial — 0.2% |
| |||||||
Lennar Corp. | 146,000 | 150,380 | ||||||
Lennar Corp. | 1,212,000 | 1,254,420 | ||||||
Toll Brothers Finance Corp. | 170,000 | 174,675 | ||||||
1,579,475 | ||||||||
Cable/Satellite TV — 1.2% |
| |||||||
Block Communications, Inc. | 1,577,000 | 1,689,361 | ||||||
Charter Communications Operating LLC/Charter Communications Operating Capital | 707,000 | 690,666 | ||||||
Charter Communications Operating LLC/Charter Communications Operating Capital | 1,850,000 | 1,981,852 |
93 |
Table of Contents
VALIC Company II Strategic Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Cable/Satellite TV (continued) |
| |||||||
Charter Communications Operating LLC/Charter Communications Operating Capital | $ | 148,000 | $ | 151,154 | ||||
Charter Communications Operating LLC/Charter Communications Operating Capital | 257,000 | 294,142 | ||||||
Charter Communications Operating LLC/Charter Communications Operating Capital | 69,000 | 79,270 | ||||||
CSC Holdings LLC | 2,265,000 | 2,324,456 | ||||||
DISH DBS Corp. | 1,352,000 | 1,492,270 | ||||||
DISH DBS Corp. | 534,000 | 626,783 | ||||||
9,329,954 | ||||||||
Casino Hotels — 0.1% |
| |||||||
Caesars Growth Properties Holdings LLC/Caesars Growth Properties Finance, Inc. | 829,000 | 892,211 | ||||||
Cellular Telecom — 1.3% |
| |||||||
Sprint Corp. | 2,993,000 | 3,299,782 | ||||||
Sprint Corp. | 5,352,000 | 6,115,356 | ||||||
9,415,138 | ||||||||
Chemicals - Diversified — 0.3% |
| |||||||
Eastman Chemical Co. | EUR | 590,000 | 732,089 | |||||
Hexion, Inc. | 1,413,000 | 1,285,830 | ||||||
2,017,919 | ||||||||
Chemicals - Specialty — 0.0% |
| |||||||
Lubrizol Corp. | 193,000 | 259,703 | ||||||
Coal — 0.2% |
| |||||||
SunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp. | 1,610,000 | 1,642,200 | ||||||
Coatings/Paint — 0.2% |
| |||||||
RPM International, Inc. | 151,000 | 155,174 | ||||||
Sherwin-Williams Co. | 447,000 | 449,184 |
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Coatings/Paint (continued) |
| |||||||
Sherwin-Williams Co. | $ | 379,000 | $ | 381,877 | ||||
Sherwin-Williams Co. | 114,000 | 119,961 | ||||||
1,106,196 | ||||||||
Commercial Services — 0.1% |
| |||||||
Ecolab, Inc. | EUR | 500,000 | 602,702 | |||||
Ecolab, Inc. | 458,000 | 460,719 | ||||||
1,063,421 | ||||||||
Commercial Services - Finance — 0.0% |
| |||||||
Automatic Data Processing, Inc. | 178,000 | 180,432 | ||||||
Computer Services — 0.7% |
| |||||||
Harland Clarke Holdings Corp. | 1,215,000 | 1,298,531 | ||||||
Harland Clarke Holdings Corp. | 2,074,000 | 2,103,306 | ||||||
Leidos Holdings, Inc. | 1,559,000 | 1,636,950 | ||||||
5,038,787 | ||||||||
Computers — 1.0% |
| |||||||
Apple, Inc. | EUR | 890,000 | 1,071,060 | |||||
Apple, Inc. | 367,000 | 379,136 | ||||||
Apple, Inc. | 352,000 | 361,816 | ||||||
Diamond 1 Finance Corp./Diamond 2 Finance Corp. | 2,995,000 | 3,345,899 | ||||||
Diamond 1 Finance Corp./Diamond 2 Finance Corp. | 916,000 | 1,153,101 | ||||||
Diamond 1 Finance Corp./Diamond 2 Finance Corp. | 262,000 | 338,014 | ||||||
Hewlett Packard Enterprise Co. | 643,000 | 693,632 | ||||||
7,342,658 | ||||||||
Computers - Memory Devices — 0.1% |
| |||||||
Western Digital Corp. | 900,000 | 1,068,750 | ||||||
94 |
Table of Contents
VALIC Company II Strategic Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Containers - Metal/Glass — 0.4% |
| |||||||
Crown Cork & Seal Co., Inc. | $ | 1,523,000 | $ | 1,781,910 | ||||
Owens-Brockway Glass Container, Inc. | 1,190,000 | 1,273,300 | ||||||
3,055,210 | ||||||||
Containers - Paper/Plastic — 0.2% |
| |||||||
Multi-Color Corp. | 1,354,000 | 1,414,930 | ||||||
WestRock Co. | 330,000 | 331,980 | ||||||
1,746,910 | ||||||||
Cosmetics & Toiletries — 0.2% |
| |||||||
First Quality Finance Co., Inc. | 1,133,000 | 1,152,828 | ||||||
Procter & Gamble Co. | 299,000 | 297,440 | ||||||
1,450,268 | ||||||||
Data Processing/Management — 0.2% |
| |||||||
Fidelity National Information Services, Inc. | EUR | 900,000 | 1,073,248 | |||||
Fidelity National Information Services, Inc. | 175,000 | 182,745 | ||||||
1,255,993 | ||||||||
Distribution/Wholesale — 0.1% |
| |||||||
H&E Equipment Services, Inc. | 880,000 | 908,600 | ||||||
Diversified Banking Institutions — 2.5% |
| |||||||
Bank of America Corp. | 297,000 | 297,799 | ||||||
Bank of America Corp. | EUR | 1,100,000 | 1,402,981 | |||||
Bank of America Corp. | 297,000 | 300,502 | ||||||
Bank of America Corp. | 1,735,000 | 1,796,706 | ||||||
Bank of America Corp. | 415,000 | 517,419 | ||||||
Citigroup, Inc. | 466,000 | 467,867 | ||||||
Citigroup, Inc. | 263,000 | 267,045 | ||||||
Citigroup, Inc. | 1,816,000 | 1,924,299 |
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Diversified Banking Institutions (continued) |
| |||||||
Citigroup, Inc. | $ | 209,000 | $ | 254,783 | ||||
Goldman Sachs Group, Inc. | EUR | 825,000 | 1,047,828 | |||||
Goldman Sachs Group, Inc. | EUR | 550,000 | 703,584 | |||||
Goldman Sachs Group, Inc. | 472,000 | 473,264 | ||||||
Goldman Sachs Group, Inc. | 431,000 | 447,986 | ||||||
Goldman Sachs Group, Inc. | 569,000 | 716,957 | ||||||
Goldman Sachs Group, Inc. | 366,000 | 482,718 | ||||||
JPMorgan Chase & Co. | 314,000 | 316,982 | ||||||
JPMorgan Chase & Co. | 850,000 | 867,697 | ||||||
JPMorgan Chase & Co. | 636,000 | 654,360 | ||||||
JPMorgan Chase & Co. | 879,000 | 888,486 | ||||||
Morgan Stanley | EUR | 600,000 | 747,901 | |||||
Morgan Stanley | EUR | 725,000 | 929,504 | |||||
Morgan Stanley | 857,000 | 864,187 | ||||||
Morgan Stanley | 285,000 | 288,801 | ||||||
Morgan Stanley | 219,000 | 221,637 | ||||||
Morgan Stanley | 439,000 | 461,172 | ||||||
Morgan Stanley | 946,000 | 1,041,203 | ||||||
18,383,668 | ||||||||
Diversified Financial Services — 0.1% |
| |||||||
USAA Capital Corp. | 421,000 | 422,783 | ||||||
Diversified Manufacturing Operations — 0.1% |
| |||||||
Illinois Tool Works, Inc. | 355,000 | 351,856 |
95 |
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PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Diversified Manufacturing Operations (continued) |
| |||||||
Textron, Inc. | $ | 315,000 | $ | 331,524 | ||||
Trinity Industries, Inc. | 305,000 | 308,970 | ||||||
992,350 | ||||||||
E-Commerce/Products — 0.0% |
| |||||||
Amazon.com, Inc. | 320,000 | 330,021 | ||||||
Electric Products - Misc. — 0.1% |
| |||||||
WESCO Distribution, Inc. | 977,000 | 1,020,965 | ||||||
Electric - Generation — 0.1% |
| |||||||
Basin Electric Power Cooperative | 691,000 | 756,251 | ||||||
Electric - Integrated — 0.6% |
| |||||||
Dominion Energy, Inc. | 221,000 | 223,114 | ||||||
Dominion Resources, Inc. | 131,000 | 133,024 | ||||||
Dominion Resources, Inc. | 545,000 | 632,913 | ||||||
Duke Energy Progress LLC | 322,000 | 330,908 | ||||||
Exelon Corp. | 431,000 | 446,774 | ||||||
FirstEnergy Corp. | 444,000 | 453,597 | ||||||
FirstEnergy Corp. | 230,000 | 240,048 | ||||||
FirstEnergy Corp. | 612,000 | 826,339 | ||||||
Georgia Power Co. | 280,000 | 280,600 | ||||||
Massachusetts Electric Co. | 539,000 | 560,040 | ||||||
Pacific Gas & Electric Co. | 367,000 | 386,722 | ||||||
South Carolina Electric & Gas Co. | 215,000 | 258,740 | ||||||
4,772,819 | ||||||||
Electronic Components - Misc. — 0.0% |
| |||||||
Corning, Inc. | 237,000 | 236,792 | ||||||
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Electronic Components - Semiconductors — 0.1% |
| |||||||
Intel Corp. | $ | 980,000 | $ | 990,757 | ||||
Electronic Parts Distribution — 0.2% |
| |||||||
Ingram Micro, Inc. | 1,270,000 | 1,292,390 | ||||||
Energy - Alternate Sources — 0.5% |
| |||||||
Pattern Energy Group, Inc. | 1,941,000 | 2,033,197 | ||||||
TerraForm Power Operating LLC | 1,844,000 | 1,908,540 | ||||||
3,941,737 | ||||||||
Enterprise Software/Service — 0.5% |
| |||||||
Donnelley Financial Solutions, Inc. | 2,492,000 | 2,678,900 | ||||||
Oracle Corp. | 642,000 | 640,389 | ||||||
Oracle Corp. | 573,000 | 596,574 | ||||||
Oracle Corp. | 105,000 | 109,769 | ||||||
4,025,632 | ||||||||
Finance - Auto Loans — 0.7% |
| |||||||
Ally Financial, Inc. | 2,805,000 | 3,028,558 | ||||||
Credit Acceptance Corp. | 1,933,000 | 2,044,148 | ||||||
5,072,706 | ||||||||
Finance - Consumer Loans — 0.8% |
| |||||||
Enova International, Inc. | 1,925,000 | 1,925,000 | ||||||
Enova International, Inc. | 774,000 | 820,440 | ||||||
Navient Corp. | 1,439,000 | 1,205,163 | ||||||
Springleaf Finance Corp. | 1,715,000 | 1,796,462 | ||||||
5,747,065 | ||||||||
Finance - Credit Card — 0.4% |
| |||||||
Alliance Data Systems Corp. | 1,650,000 | 1,695,375 | ||||||
American Express Co. | 1,062,000 | 1,066,993 | ||||||
2,762,368 | ||||||||
96 |
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PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Finance - Investment Banker/Broker — 0.3% |
| |||||||
E*TRADE Financial Corp. | $ | 115,000 | $ | 117,118 | ||||
Lehman Brothers Holdings, Inc. | 97,000 | 5,820 | ||||||
Lehman Brothers Holdings, Inc. | 111,000 | 11 | ||||||
Lehman Brothers Holdings, Inc. | 143,000 | 14 | ||||||
LPL Holdings, Inc. | 1,660,000 | 1,738,850 | ||||||
TD Ameritrade Holding Corp. | 279,000 | 285,933 | ||||||
2,147,746 | ||||||||
Finance - Leasing Companies — 0.1% |
| |||||||
International Lease Finance Corp. | 296,000 | 334,721 | ||||||
Washington Prime Group LP | 214,000 | 218,977 | ||||||
553,698 | ||||||||
Finance - Mortgage Loan/Banker — 0.2% |
| |||||||
Quicken Loans, Inc. | 1,725,000 | 1,806,937 | ||||||
Finance - Other Services — 0.1% |
| |||||||
National Rural Utilities Cooperative Finance Corp. | 397,000 | 399,425 | ||||||
National Rural Utilities Cooperative Finance Corp. | 173,000 | 174,519 | ||||||
National Rural Utilities Cooperative Finance Corp. | 309,000 | 309,761 | ||||||
National Rural Utilities Cooperative Finance Corp. | 209,000 | 211,524 | ||||||
1,095,229 | ||||||||
Food - Meat Products — 0.0% |
| |||||||
Smithfield Foods, Inc. | 131,000 | 137,607 | ||||||
Food - Misc./Diversified — 0.1% |
| |||||||
Kraft Heinz Foods Co. | 436,000 | 468,402 | ||||||
Food - Retail — 0.3% |
| |||||||
Albertsons Cos. LLC/Safeway, Inc./New Albertson’s, Inc./Albertson’s LLC | 1,935,000 | 1,743,919 |
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Food - Retail (continued) |
| |||||||
Kroger Co. | $ | 446,000 | $ | 440,332 | ||||
2,184,251 | ||||||||
Food - Wholesale/Distribution — 0.1% |
| |||||||
C&S Group Enterprises LLC | 1,020,000 | 1,000,875 | ||||||
Gambling (Non-Hotel) — 0.4% |
| |||||||
Mohegan Gaming & Entertainment | 1,277,000 | 1,340,850 | ||||||
Scientific Games International, Inc. | 1,385,000 | 1,540,813 | ||||||
Waterford Gaming LLC/Waterford Gaming Financial Corp. | 272,905 | 3,875 | ||||||
2,885,538 | ||||||||
Gas - Distribution — 0.1% |
| |||||||
Dominion Gas Holdings LLC | 189,000 | 206,980 | ||||||
NiSource Finance Corp. | 320,000 | 327,428 | ||||||
NiSource Finance Corp. | 152,000 | 161,983 | ||||||
Sempra Energy | 121,000 | 120,700 | ||||||
817,091 | ||||||||
Hotels/Motels — 0.2% |
| |||||||
Hilton Grand Vacations Borrower LLC/Hilton Grand Vacations Borrower, Inc. | 1,145,000 | 1,256,638 | ||||||
Independent Power Producers — 0.4% |
| |||||||
Calpine Corp. | 1,325,000 | 1,298,500 | ||||||
NRG Yield Operating LLC | 1,650,000 | 1,687,125 | ||||||
2,985,625 | ||||||||
Industrial Gases — 0.0% |
| |||||||
Airgas, Inc. | 122,000 | 125,276 | ||||||
Insurance - Life/Health — 0.1% |
| |||||||
Aflac, Inc. | 231,000 | 234,553 | ||||||
Brighthouse Financial, Inc. | 549,000 | 540,191 |
97 |
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PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Insurance - Life/Health (continued) |
| |||||||
Pacific LifeCorp | $ | 184,000 | $ | 199,784 | ||||
974,528 | ||||||||
Insurance - Multi-line — 0.3% |
| |||||||
Assurant, Inc. | 288,000 | 363,804 | ||||||
MetLife, Inc. | 195,000 | 216,086 | ||||||
Metropolitan Life Global Funding I | 1,291,000 | 1,303,065 | ||||||
1,882,955 | ||||||||
Insurance - Mutual — 0.1% |
| |||||||
Massachusetts Mutual Life Insurance Co. | 147,000 | 153,800 | ||||||
Massachusetts Mutual Life Insurance Co. | 75,000 | 83,024 | ||||||
MassMutual Global Funding II | 287,000 | 288,829 | ||||||
New York Life Global Funding | 371,000 | 373,673 | ||||||
899,326 | ||||||||
Insurance - Reinsurance — 0.0% |
| |||||||
Berkshire Hathaway, Inc. | 308,000 | 307,098 | ||||||
Internet Connectivity Services — 0.3% |
| |||||||
Cogent Communications Group, Inc. | 1,494,000 | 1,561,230 | ||||||
Zayo Group LLC/Zayo Capital, Inc. | 855,000 | 918,860 | ||||||
2,480,090 | ||||||||
Internet Content - Entertainment — 0.3% |
| |||||||
Netflix, Inc. | 1,737,000 | 1,880,302 | ||||||
Investment Management/Advisor Services — 0.3% |
| |||||||
Drawbridge Special Opportunities Fund LP/Drawbridge Special Opportunities Finance | 2,270,000 | 2,313,422 | ||||||
Machinery - Construction & Mining — 0.3% |
| |||||||
Caterpillar Financial Services Corp. | 547,000 | 570,237 | ||||||
Terex Corp. | 1,261,000 | 1,320,897 | ||||||
1,891,134 | ||||||||
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Machinery - Farming — 0.0% |
| |||||||
CNH Industrial Capital LLC | $ | 225,000 | $ | 235,121 | ||||
Machinery - General Industrial — 0.0% |
| |||||||
Roper Technologies, Inc. | 123,000 | 128,144 | ||||||
Marine Services — 0.3% |
| |||||||
Great Lakes Dredge & Dock Corp. | 1,880,000 | 1,908,200 | ||||||
Medical Labs & Testing Services — 0.1% |
| |||||||
Laboratory Corp. of America Holdings | 113,000 | 116,133 | ||||||
Laboratory Corp. of America Holdings | 196,000 | 198,524 | ||||||
Roche Holdings, Inc. | 226,000 | 221,879 | ||||||
536,536 | ||||||||
Medical Products — 0.3% |
| |||||||
Becton Dickinson and Co. | EUR | 715,000 | 855,062 | |||||
Becton Dickinson and Co. | EUR | 600,000 | 723,152 | |||||
Becton Dickinson and Co. | 766,000 | 775,528 | ||||||
2,353,742 | ||||||||
Medical - Biomedical/Gene — 0.1% |
| |||||||
Amgen, Inc. | 418,000 | 421,344 | ||||||
Baxalta, Inc. | 314,000 | 326,231 | ||||||
Celgene Corp. | 336,000 | 350,932 | ||||||
1,098,507 | ||||||||
Medical - Drugs — 0.2% |
| |||||||
Endo Finance LLC/Endo Finco, Inc. | 1,000,000 | 837,500 | ||||||
Forest Laboratories LLC | 198,000 | 213,469 | ||||||
Johnson & Johnson | 151,000 | 157,912 | ||||||
1,208,881 | ||||||||
Medical - Generic Drugs — 0.1% |
| |||||||
Actavis, Inc. | 423,000 | 434,522 | ||||||
98 |
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PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) |
| |||||||
Medical - HMO — 0.1% |
| |||||||
UnitedHealth Group, Inc. | $ | 362,000 | $ | 361,961 | ||||
UnitedHealth Group, Inc. | 302,000 | 303,352 | ||||||
UnitedHealth Group, Inc. | 219,000 | 230,064 | ||||||
895,377 | ||||||||
Medical - Hospitals — 1.0% |
| |||||||
CHS/Community Health Systems, Inc. | 1,135,000 | 1,143,512 | ||||||
HCA, Inc. | 1,639,000 | 1,763,974 | ||||||
HCA, Inc. | 2,332,000 | 2,407,790 | ||||||
Tenet Healthcare Corp. | 1,862,000 | 1,861,628 | ||||||
7,176,904 | ||||||||
Metal Processors & Fabrication — 0.4% |
| |||||||
Grinding Media, Inc./Moly-Cop AltaSteel, Ltd. | 1,799,000 | 1,933,925 | ||||||
Novelis Corp. | 1,218,000 | 1,286,512 | ||||||
3,220,437 | ||||||||
Metal - Diversified — 0.0% |
| |||||||
Glencore Funding LLC | 330,000 | 334,161 | ||||||
Multimedia — 0.1% |
| |||||||
Time Warner, Inc. | 231,000 | 233,042 | ||||||
Viacom, Inc. | 122,000 | 117,957 | ||||||
Walt Disney Co. | 153,000 | 153,328 | ||||||
504,327 | ||||||||
Networking Products — 0.2% |
| |||||||
Cisco Systems, Inc. | 781,000 | 787,373 | ||||||
Cisco Systems, Inc. | 743,000 | 750,922 | ||||||
1,538,295 | ||||||||
Oil Companies - Exploration & Production — 2.4% |
| |||||||
Anadarko Petroleum Corp. | 348,000 | 406,837 |
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Oil Companies - Exploration & Production (continued) |
| |||||||
Carrizo Oil & Gas, Inc. | $ | 1,850,000 | $ | 1,794,500 | ||||
Cimarex Energy Co. | 174,000 | 176,633 | ||||||
Concho Resources, Inc. | 471,000 | 489,840 | ||||||
Continental Resources, Inc. | 1,210,000 | 1,216,050 | ||||||
Denbury Resources, Inc. | 1,550,000 | 1,387,250 | ||||||
Devon Energy Corp. | 154,000 | 156,232 | ||||||
Devon Energy Corp. | 153,000 | 163,325 | ||||||
EP Energy LLC/Everest Acquisition Finance, Inc. | 1,725,000 | 1,686,187 | ||||||
Hess Corp. | 222,000 | 217,674 | ||||||
Hess Corp. | 429,000 | 419,041 | ||||||
Hilcorp Energy I LP/Hilcorp Finance Co. | 2,339,000 | 2,210,355 | ||||||
Marathon Oil Corp. | 447,000 | 452,216 | ||||||
Marathon Oil Corp. | 436,000 | 481,327 | ||||||
Newfield Exploration Co. | 1,588,000 | 1,659,460 | ||||||
Noble Energy, Inc. | 410,000 | 411,116 | ||||||
Noble Energy, Inc. | 235,000 | 236,440 | ||||||
Noble Energy, Inc. | 103,000 | 104,178 | ||||||
RSP Permian, Inc. | 1,190,000 | 1,192,975 | ||||||
Sanchez Energy Corp. | 1,430,000 | 1,090,375 | ||||||
SM Energy Co. | 1,317,000 | 1,191,885 | ||||||
WPX Energy, Inc. | 737,000 | 795,960 | ||||||
17,939,856 | ||||||||
99 |
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PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) | ||||||||
Oil Companies - Integrated — 0.1% |
| |||||||
Chevron Corp. | $ | 249,000 | $ | 250,679 | ||||
Chevron Corp. | 274,000 | 276,693 | ||||||
Chevron Corp. | 201,000 | 204,693 | ||||||
Exxon Mobil Corp. | 252,000 | 251,921 | ||||||
983,986 | ||||||||
Oil Field Machinery & Equipment — 0.2% |
| |||||||
Forum Energy Technologies, Inc. | 1,399,000 | 1,378,015 | ||||||
Oil Refining & Marketing — 0.5% |
| |||||||
Murphy Oil USA, Inc. | 1,265,000 | 1,355,131 | ||||||
PBF Holding Co LLC/PBF Finance Corp. | 2,434,000 | 2,409,660 | ||||||
3,764,791 | ||||||||
Oil-Field Services — 0.2% |
| |||||||
Bristow Group, Inc. | 1,946,000 | 1,211,385 | ||||||
Halliburton Co. | 119,000 | 129,067 | ||||||
1,340,452 | ||||||||
Paper & Related Products — 0.4% |
| |||||||
Domtar Corp. | 530,000 | 594,733 | ||||||
Georgia-Pacific LLC | 872,000 | 909,071 | ||||||
Georgia-Pacific LLC | 949,000 | 1,009,498 | ||||||
Georgia-Pacific LLC | 271,000 | 298,161 | ||||||
International Paper Co. | 81,000 | 82,352 | ||||||
International Paper Co. | 170,000 | 190,110 | ||||||
3,083,925 | ||||||||
Pharmacy Services — 0.1% |
| |||||||
Express Scripts Holding Co. | 163,000 | 164,118 | ||||||
Express Scripts Holding Co. | 234,000 | 246,258 | ||||||
410,376 | ||||||||
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Pipelines — 2.4% |
| |||||||
Antero Midstream Partners LP/Antero Midstream Finance Corp. | $ | 1,279,000 | $ | 1,304,580 | ||||
Cheniere Corpus Christi Holdings LLC | 2,655,000 | 3,020,062 | ||||||
Columbia Pipeline Group, Inc. | 88,000 | 88,308 | ||||||
Enable Midstream Partners LP | 397,000 | 383,260 | ||||||
Enbridge Energy Partners LP | 230,000 | 298,023 | ||||||
Energy Transfer Partners LP | 141,000 | 139,720 | ||||||
Energy Transfer Partners LP | 35,000 | 37,443 | ||||||
Energy Transfer Partners LP | 634,000 | 724,030 | ||||||
EnLink Midstream Partners LP | 290,000 | 303,582 | ||||||
EnLink Midstream Partners LP | 351,000 | 332,425 | ||||||
Genesis Energy LP/Genesis Energy Finance Corp. | 1,213,000 | 1,140,220 | ||||||
Genesis Energy LP/Genesis Energy Finance Corp. | 678,000 | 664,440 | ||||||
Holly Energy Partners LP/Holly Energy Finance Corp. | 1,407,000 | 1,463,280 | ||||||
Kinder Morgan Energy Partners LP | 164,000 | 154,712 | ||||||
Kinder Morgan Energy Partners LP | 134,000 | 138,177 | ||||||
Kinder Morgan, Inc. | 305,000 | 327,223 | ||||||
NGPL PipeCo LLC | 359,000 | 368,873 | ||||||
ONEOK, Inc. | 367,000 | 371,305 | ||||||
Phillips 66 Partners LP | 144,000 | 145,509 | ||||||
Sabine Pass Liquefaction LLC | 229,000 | 242,970 | ||||||
SemGroup Corp./Rose Rock Finance Corp. | 1,529,000 | 1,502,243 |
100 |
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PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) | ||||||||
Pipelines (continued) | ||||||||
Summit Midstream Holdings LLC/Summit Midstream Finance Corp. | $ | 1,678,000 | $ | 1,682,195 | ||||
Tallgrass Energy Partners LP/Tallgrass Energy Finance Corp. | 1,685,000 | 1,685,000 | ||||||
Western Gas Partners LP | 309,000 | 321,329 | ||||||
Williams Partners LP | 257,000 | 257,131 | ||||||
Williams Partners LP | 553,000 | 578,034 | ||||||
17,674,074 | ||||||||
Platinum — 0.2% |
| |||||||
Stillwater Mining Co. | 1,125,000 | 1,151,145 | ||||||
Power Converter/Supply Equipment — 0.1% |
| |||||||
Hubbell, Inc. | 158,000 | 159,710 | ||||||
Hubbell, Inc. | 269,000 | 275,572 | ||||||
435,282 | ||||||||
Precious Metals — 0.2% |
| |||||||
Coeur Mining, Inc. | 1,535,000 | 1,535,000 | ||||||
Racetracks — 0.2% |
| |||||||
GLP Capital LP/GLP Financing II, Inc. | 1,090,000 | 1,182,650 | ||||||
Radio — 0.2% |
| |||||||
Sirius XM Radio, Inc. | 1,605,000 | 1,685,250 | ||||||
Real Estate Investment Trusts — 1.1% |
| |||||||
CTR Partnership LP/CareTrust Capital Corp. | 1,826,000 | 1,885,345 | ||||||
ESH Hospitality, Inc. | 1,280,000 | 1,318,400 | ||||||
GEO Group, Inc. | 1,205,000 | 1,241,150 | ||||||
iStar, Inc. | 1,856,000 | 1,907,040 | ||||||
Simon Property Group LP | 219,000 | 227,914 | ||||||
Starwood Property Trust, Inc. | 1,666,000 | 1,726,393 | ||||||
8,306,242 | ||||||||
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Real Estate Management/Services — 0.5% |
| |||||||
Kennedy-Wilson, Inc. | $ | 1,826,000 | $ | 1,876,215 | ||||
Realogy Group LLC/Realogy Co-Issuer Corp. | 1,595,000 | 1,626,900 | ||||||
3,503,115 | ||||||||
Rental Auto/Equipment — 0.4% |
| |||||||
Herc Rentals, Inc. | 1,185,000 | 1,297,575 | ||||||
United Rentals North America, Inc. | 1,295,000 | 1,307,950 | ||||||
2,605,525 | ||||||||
Resort/Theme Parks — 0.2% |
| |||||||
Six Flags Entertainment Corp. | 1,455,000 | 1,467,804 | ||||||
Retail - Apparel/Shoe — 0.0% |
| |||||||
Coach, Inc. | 190,000 | 189,941 | ||||||
Retail - Appliances — 0.3% |
| |||||||
Conn’s, Inc. | 2,236,000 | 2,168,920 | ||||||
Retail - Auto Parts — 0.0% |
| |||||||
O’Reilly Automotive, Inc. | 276,000 | 277,052 | ||||||
Retail - Automobile — 0.2% |
| |||||||
Lithia Motors, Inc. | 1,268,000 | 1,296,530 | ||||||
Retail - Discount — 0.1% |
| |||||||
Costco Wholesale Corp. | 468,000 | 472,279 | ||||||
Retail - Drug Store — 0.1% |
| |||||||
CVS Pass-Through Trust | 210,302 | 224,518 | ||||||
CVS Pass-Through Trust | 134,144 | 153,179 | ||||||
CVS Pass-Through Trust | 286,767 | 333,641 | ||||||
711,338 | ||||||||
Retail - Misc./Diversified — 0.1% |
| |||||||
FirstCash, Inc. | 988,000 | 1,041,105 | ||||||
Retail - Office Supplies — 0.3% |
| |||||||
Arch Merger Sub, Inc. | 2,480,000 | 2,402,500 | ||||||
101 |
Table of Contents
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PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
U.S. CORPORATE BONDS & NOTES (continued) | ||||||||
Retail - Restaurants — 0.4% |
| |||||||
Brinker International, Inc. | $ | 2,045,000 | $ | 2,019,437 | ||||
KFC Holding Co./Pizza Hut Holdings LLC/Taco Bell of America LLC | 875,000 | 897,969 | ||||||
2,917,406 | ||||||||
Rubber/Plastic Products — 0.0% |
| |||||||
Venture Holdings Co. LLC | 25,000 | 0 | ||||||
Satellite Telecom — 0.2% |
| |||||||
Hughes Satellite Systems Corp. | 1,450,000 | 1,582,313 | ||||||
Savings & Loans/Thrifts — 0.5% |
| |||||||
Astoria Financial Corp. | 337,000 | 341,513 | ||||||
First Niagara Financial Group, Inc. | 1,662,000 | 1,848,045 | ||||||
First Niagara Financial Group, Inc. | 1,028,000 | 1,218,159 | ||||||
3,407,717 | ||||||||
Semiconductor Components-Integrated Circuits — 0.1% |
| |||||||
QUALCOMM, Inc. | 348,000 | 350,577 | ||||||
QUALCOMM, Inc. | 162,000 | 167,459 | ||||||
518,036 | ||||||||
Semiconductor Equipment — 0.0% |
| |||||||
Applied Materials, Inc. | 206,000 | 220,878 | ||||||
Telecom Services — 0.2% |
| |||||||
Embarq Corp. | 1,430,000 | 1,451,450 | ||||||
Telecommunication Equipment — 0.1% |
| |||||||
Plantronics, Inc. | 841,000 | 870,435 | ||||||
Telephone - Integrated — 1.0% |
| |||||||
AT&T, Inc. | 281,000 | 280,237 | ||||||
AT&T, Inc. | 771,000 | 779,547 | ||||||
AT&T, Inc. | EUR | 875,000 | 1,050,228 | |||||
AT&T, Inc. | 424,000 | 384,652 |
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Telephone - Integrated (continued) |
| |||||||
AT&T, Inc. | $ | 533,000 | $ | 521,970 | ||||
AT&T, Inc. | 139,000 | 133,228 | ||||||
AT&T, Inc. | 863,000 | 871,834 | ||||||
AT&T, Inc. | 700,000 | 710,902 | ||||||
CenturyLink, Inc. | 1,386,000 | 1,318,432 | ||||||
Verizon Communications, Inc. | 258,000 | 259,096 | ||||||
Verizon Communications, Inc. | 190,000 | 190,271 | ||||||
Verizon Communications, Inc. | 675,000 | 627,325 | ||||||
Verizon Communications, Inc. | 597,000 | 644,034 | ||||||
7,771,756 | ||||||||
Television — 0.2% |
| |||||||
Belo Corp. | 982,000 | 1,104,750 | ||||||
Transport - Equipment & Leasing — 0.1% |
| |||||||
GATX Corp. | 152,000 | 150,788 | ||||||
GATX Corp. | 245,000 | 253,887 | ||||||
404,675 | ||||||||
Transport - Services — 0.1% |
| |||||||
United Parcel Service, Inc. | 416,000 | 421,766 | ||||||
Travel Services — 0.2% |
| |||||||
Sabre GLBL, Inc. | 1,400,000 | 1,440,250 | ||||||
Trucking/Leasing — 0.0% |
| |||||||
Penske Truck Leasing Co. LP/PTL Finance Corp. | 162,000 | 167,857 | ||||||
Wire & Cable Products — 0.3% |
| |||||||
General Cable Corp. | 2,257,000 | 2,307,782 | ||||||
Total U.S. Corporate Bonds & Notes |
| |||||||
(cost $285,927,388) | 293,318,999 | |||||||
102 |
Table of Contents
VALIC Company II Strategic Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
FOREIGN CORPORATE BONDS & NOTES — 20.9% |
| |||||||
Aerospace/Defense-Equipment — 0.0% |
| |||||||
EADS Finance BV | $ | 329,000 | $ | 334,770 | ||||
Agricultural Chemicals — 0.2% |
| |||||||
Consolidated Energy Finance SA | 1,540,000 | 1,601,600 | ||||||
Airlines — 0.0% | ||||||||
Latam Airlines Group SA | 300,000 | 320,640 | ||||||
Airport Development/Maintenance — 0.1% |
| |||||||
Heathrow Funding, Ltd. | EUR | 620,000 | 791,812 | |||||
Appliances — 0.1% |
| |||||||
Arcelik AS | 605,000 | 621,446 | ||||||
Auto - Cars/Light Trucks — 0.3% |
| |||||||
Hyundai Capital Services, Inc. | 386,000 | 385,355 | ||||||
RCI Banque SA | EUR | 700,000 | 891,409 | |||||
Volkswagen International Finance NV | EUR | 600,000 | 717,892 | |||||
1,994,656 | ||||||||
Auto/Truck Parts & Equipment-Original — 0.2% |
| |||||||
Tenedora Nemak SA de CV | 1,200,000 | 1,230,000 | ||||||
Banks - Commercial — 3.3% |
| |||||||
ABN AMRO Bank NV | EUR | 425,000 | 569,317 | |||||
ABN AMRO Bank NV | EUR | 675,000 | 1,039,487 | |||||
ADCB Finance Cayman, Ltd. | 325,000 | 338,471 | ||||||
Akbank Turk AS | 870,000 | 867,425 | ||||||
Banco de Credito del Peru | 450,000 | 491,063 | ||||||
Banco Macro SA | 330,000 | 344,035 | ||||||
Bangkok Bank PCL | 350,000 | 369,518 | ||||||
Bank of China, Ltd. | 1,045,000 | 1,138,596 |
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Banks - Commercial (continued) | ||||||||
Barclays Bank PLC | EUR | 400,000 | $ | 592,838 | ||||
BPCE SA | EUR | 400,000 | 547,812 | |||||
BPCE SA | EUR | 400,000 | 516,818 | |||||
BPCE SA | 570,000 | 575,004 | ||||||
Credit Suisse AG | 675,000 | 693,114 | ||||||
Credit Suisse AG | EUR | 1,100,000 | 1,473,183 | |||||
Danske Bank A/S | EUR | 625,000 | 773,278 | |||||
DBS Group Holdings, Ltd. | 398,000 | 399,560 | ||||||
Dexia Credit Local SA | 485,000 | 488,077 | ||||||
HBOS PLC | EUR | 1,200,000 | 1,669,527 | |||||
HSBC Bank PLC | GBP | 800,000 | 1,055,253 | |||||
ICICI Bank, Ltd. | 350,000 | 382,635 | ||||||
ING Groep NV | EUR | 600,000 | 723,637 | |||||
Intesa Sanpaolo SpA | EUR | 1,000,000 | 1,219,022 | |||||
Intesa Sanpaolo SpA | 507,000 | 535,812 | ||||||
Intesa Sanpaolo SpA | EUR | 600,000 | 885,910 | |||||
Mizuho Bank, Ltd. | 314,000 | 315,300 | ||||||
Mizuho Bank, Ltd. | 1,083,000 | 1,091,156 | ||||||
National Bank of Canada | 474,000 | 475,628 | ||||||
PKO Bank Polski SA Via PKO Finance AB | 235,000 | 252,505 | ||||||
Santander Issuances SAU | EUR | 600,000 | 772,076 |
103 |
Table of Contents
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PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
FOREIGN CORPORATE BONDS & NOTES (continued) | ||||||||
Banks - Commercial (continued) | ||||||||
Shinhan Bank | $ | 200,000 | $ | 204,169 | ||||
Standard Chartered PLC | EUR | 700,000 | 911,483 | |||||
Swedbank AB | EUR | 1,200,000 | 1,426,972 | |||||
Toronto-Dominion Bank | 442,000 | 438,312 | ||||||
Turkiye Is Bankasi | 350,000 | 358,271 | ||||||
Turkiye Is Bankasi AS | 200,000 | 204,726 | ||||||
Union National Bank PJSC | 340,000 | 336,668 | ||||||
Westpac Banking Corp. | 221,000 | 229,592 | ||||||
24,706,250 | ||||||||
Banks - Money Center — 0.1% |
| |||||||
Lloyds Bank PLC | GBP | 325,000 | 580,568 | |||||
Banks - Special Purpose — 0.1% |
| |||||||
Development Bank of Kazakhstan | 425,000 | 431,481 | ||||||
Nederlandse Waterschapsbank NV | EUR | 400,000 | 486,846 | |||||
918,327 | ||||||||
Beverages - Non-alcoholic — 0.0% |
| |||||||
Coca-Cola Femsa SAB de CV | 276,000 | 277,890 | ||||||
Beverages - Wine/Spirits — 0.1% |
| |||||||
Diageo Capital PLC | 498,000 | 500,885 | ||||||
Brewery — 0.1% |
| |||||||
Anheuser-Busch InBev SA/NV | EUR | 500,000 | 650,622 | |||||
Building Products-Cement — 0.1% |
| |||||||
St Marys Cement, Inc. | 350,000 | 368,813 | ||||||
Cable/Satellite TV — 1.5% |
| |||||||
Altice Financing SA | 3,080,000 | 3,373,216 | ||||||
Altice Luxembourg SA | 1,975,000 | 2,137,345 |
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Cable/Satellite TV (continued) |
| |||||||
Numericable-SFR SA | $ | 3,717,000 | $ | 4,014,435 | ||||
Ziggo Secured Finance BV | 1,625,000 | 1,675,781 | ||||||
11,200,777 | ||||||||
Cellular Telecom — 0.4% |
| |||||||
C&W Senior Financing Designated Activity Co. | 1,354,000 | 1,404,775 | ||||||
Empresa Nacional de Telecomunicaciones SA | 350,000 | 370,817 | ||||||
GTH Finance BV | 325,000 | 367,711 | ||||||
GTH Finance BV | 225,000 | 254,570 | ||||||
VimpelCom Holdings BV | 200,000 | 216,102 | ||||||
2,613,975 | ||||||||
Chemicals - Diversified — 0.5% |
| |||||||
Israel Chemicals, Ltd. | 310,000 | 320,850 | ||||||
LYB International Finance II BV | 336,000 | 336,994 | ||||||
NOVA Chemicals Corp. | 1,555,000 | 1,551,112 | ||||||
Trinseo Materials Operating SCA/Trinseo Materials Finance, Inc. | 1,255,000 | 1,283,238 | ||||||
3,492,194 | ||||||||
Computers - Memory Devices — 0.3% |
| |||||||
Seagate HDD Cayman | 2,050,000 | 1,997,405 | ||||||
Cruise Lines — 0.4% | ||||||||
NCL Corp., Ltd. | 905,000 | 937,806 | ||||||
Silversea Cruise Finance, Ltd. | 1,650,000 | 1,777,875 | ||||||
2,715,681 | ||||||||
Diversified Banking Institutions — 2.1% |
| |||||||
Banco Santander SA | EUR | 600,000 | 733,750 | |||||
Barclays PLC | 270,000 | 280,879 | ||||||
BNP Paribas SA | EUR | 850,000 | 1,026,675 |
104 |
Table of Contents
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PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
FOREIGN CORPORATE BONDS & NOTES (continued) | ||||||||
Diversified Banking Institutions (continued) |
| |||||||
BNP Paribas SA | $ | 671,000 | $ | 698,277 | ||||
Credit Agricole SA | EUR | 800,000 | 986,558 | |||||
Credit Agricole SA | 485,000 | 511,520 | ||||||
Credit Suisse Group AG | 747,000 | 783,954 | ||||||
HSBC Holdings PLC | EUR | 600,000 | 716,304 | |||||
HSBC Holdings PLC | EUR | 600,000 | 797,249 | |||||
HSBC Holdings PLC | 361,000 | 370,457 | ||||||
HSBC Holdings PLC | 401,000 | 421,958 | ||||||
Lloyds Banking Group PLC | 652,000 | 686,777 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 374,000 | 376,600 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 386,000 | 394,413 | ||||||
Mizuho Financial Group, Inc. | 396,000 | 392,669 | ||||||
Royal Bank of Scotland Group PLC | EUR | 1,125,000 | 1,396,194 | |||||
Royal Bank of Scotland Group PLC | 200,000 | 202,163 | ||||||
Royal Bank of Scotland Group PLC | 201,000 | 205,771 | ||||||
UBS AG | 230,000 | 230,992 | ||||||
UBS AG | EUR | 700,000 | 916,647 | |||||
UBS Group Funding Switzerland AG | EUR | 700,000 | 832,424 | |||||
UBS Group Funding Switzerland AG | 276,000 | 284,004 | ||||||
UBS Group Funding Switzerland AG | 311,000 | 330,042 | ||||||
UniCredit SpA | EUR | 900,000 | 1,127,288 |
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Diversified Banking Institutions (continued) |
| |||||||
UniCredit SpA | $ | 483,000 | $ | 505,879 | ||||
UniCredit SpA | EUR | 600,000 | 867,426 | |||||
16,076,870 | ||||||||
Diversified Financial Services — 0.1% |
| |||||||
GE Capital International Funding Co. ULC | 515,000 | 561,216 | ||||||
Diversified Manufacturing Operations — 0.1% |
| |||||||
Siemens Financieringsmaatschappij NV | 893,000 | 903,629 | ||||||
Diversified Minerals — 0.2% |
| |||||||
FMG Resources August 2006 Pty, Ltd. | 1,795,000 | 1,853,338 | ||||||
Diversified Operations — 0.3% |
| |||||||
Grupo KUO SAB De CV | 735,000 | 766,605 | ||||||
KOC Holding AS | 1,070,000 | 1,134,371 | ||||||
1,900,976 | ||||||||
E-Commerce/Products — 0.1% |
| |||||||
Alibaba Group Holding, Ltd. | 500,000 | 522,928 | ||||||
Electric - Distribution — 0.0% |
| |||||||
State Grid Overseas Investment, Ltd. | 300,000 | 323,047 | ||||||
Electric - Generation — 0.2% |
| |||||||
Abu Dhabi National Energy Co. PJSC | 200,000 | 208,000 | ||||||
Comision Federal de Electricidad | 200,000 | 207,500 | ||||||
Electricite de France SA | 419,000 | 424,950 | ||||||
Electricite de France SA | 41,000 | 46,781 | ||||||
Genneia SA | 325,000 | 348,803 | ||||||
1,236,034 | ||||||||
Electric - Integrated — 0.6% |
| |||||||
EDP Finance BV | EUR | 800,000 | 988,170 | |||||
EDP Finance BV | 607,000 | 615,006 |
105 |
Table of Contents
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PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
FOREIGN CORPORATE BONDS & NOTES (continued) | ||||||||
Electric - Integrated (continued) |
| |||||||
Enel Finance International NV | EUR | 700,000 | $ | 888,098 | ||||
Enel Finance International NV | 825,000 | 835,232 | ||||||
Enel Finance International NV | 404,000 | 433,479 | ||||||
Pampa Energia SA | 810,000 | 866,700 | ||||||
4,626,685 | ||||||||
Electronic Connectors — 0.0% |
| |||||||
Tyco Electronics Group SA | 158,000 | 159,318 | ||||||
Finance - Leasing Companies — 0.3% |
| |||||||
Aircastle, Ltd. | 1,825,000 | 1,940,888 | ||||||
Food - Meat Products — 0.1% |
| |||||||
BRF SA | BRL | 1,000,000 | 312,912 | |||||
Minerva Luxembourg SA | 200,000 | 200,610 | ||||||
513,522 | ||||||||
Food - Misc./Diversified — 0.1% |
| |||||||
BRF GmbH | 200,000 | 194,254 | ||||||
BRF GmbH | 400,000 | 388,508 | ||||||
582,762 | ||||||||
Gambling (Non-Hotel) — 0.3% |
| |||||||
International Game Technology PLC | 1,715,000 | 1,925,088 | ||||||
Gas - Distribution — 0.1% |
| |||||||
China Resources Gas Group, Ltd. | 780,000 | 832,255 | ||||||
Gas - Transportation — 0.0% |
| |||||||
Transportadora de Gas del Peru SA | 320,000 | 332,800 | ||||||
Gold Mining — 0.1% |
| |||||||
Goldcorp, Inc. | 174,000 | 196,527 | ||||||
Kinross Gold Corp. | 450,000 | 450,000 |
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Gold Mining (continued) |
| |||||||
Polyus Finance PLC | $ | 340,000 | $ | 352,750 | ||||
999,277 | ||||||||
Insurance - Life/Health — 0.0% |
| |||||||
Manulife Financial Corp. | 245,000 | 249,395 | ||||||
Insurance - Multi-line — 0.1% |
| |||||||
Willow No 2 Ireland PLC for Zurich Insurance Co., Ltd. | EUR | 400,000 | 547,164 | |||||
XLIT, Ltd. | 200,000 | 209,874 | ||||||
XLIT, Ltd. | 217,000 | 237,884 | ||||||
994,922 | ||||||||
Insurance - Property/Casualty — 0.0% |
| |||||||
Enstar Group, Ltd. | 166,000 | 172,988 | ||||||
Investment Companies — 0.2% |
| |||||||
Huarong Finance II Co., Ltd. | 350,000 | 350,435 | ||||||
Huarong Finance II Co., Ltd. | 790,000 | 836,164 | ||||||
1,186,599 | ||||||||
Investment Management/Advisor Services — 0.1% |
| |||||||
China Cinda Finance 2015 I, Ltd. | 600,000 | 616,177 | ||||||
Medical - Drugs — 0.7% |
| |||||||
Endo, Ltd./Endo Finance LLC/Endo Finco, Inc. | 575,000 | 472,938 | ||||||
Teva Pharmaceutical Finance Netherlands II BV | EUR | 600,000 | 657,792 | |||||
Teva Pharmaceutical Finance Netherlands III BV | 240,000 | 220,738 | ||||||
Valeant Pharmaceuticals International, Inc. | 1,790,000 | 1,525,975 | ||||||
Valeant Pharmaceuticals International, Inc. | 1,884,000 | 1,999,395 | ||||||
4,876,838 | ||||||||
Medical - Generic Drugs — 0.1% |
| |||||||
Allergan Funding SCS | EUR | 500,000 | 606,971 | |||||
106 |
Table of Contents
VALIC Company II Strategic Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
FOREIGN CORPORATE BONDS & NOTES (continued) | ||||||||
Metal - Copper — 0.5% |
| |||||||
First Quantum Minerals, Ltd. | $ | 2,355,000 | $ | 2,419,762 | ||||
HudBay Minerals, Inc. | 992,000 | 1,093,680 | ||||||
3,513,442 | ||||||||
Metal - Diversified — 0.1% |
| |||||||
Glencore Canada Financial Corp. | GBP | 200,000 | 299,776 | |||||
Rio Tinto Finance USA, Ltd. | 334,000 | 355,797 | ||||||
Vedanta Resources PLC | 330,000 | 343,200 | ||||||
998,773 | ||||||||
Metal - Iron — 0.2% |
| |||||||
NLMK Group | 350,000 | 359,181 | ||||||
Vale Overseas, Ltd. | 370,000 | 420,320 | ||||||
Vale SA | EUR | 600,000 | 779,010 | |||||
1,558,511 | ||||||||
Oil & Gas Drilling — 0.1% |
| |||||||
Pacific Drilling SA | 1,472,000 | 529,920 | ||||||
Oil Companies - Exploration & Production — 0.9% |
| |||||||
Anadarko Finance Co. | 389,000 | 488,649 | ||||||
Canadian Natural Resources, Ltd. | 160,000 | 160,082 | ||||||
Empresa Nacional del Petroleo | 400,000 | 399,995 | ||||||
MEG Energy Corp. | 3,360,000 | 2,683,800 | ||||||
MEG Energy Corp. | 2,214,000 | 2,056,252 | ||||||
Novatek OAO via Novatek Finance, Ltd. | 350,000 | 386,715 | ||||||
Tengizchevroil Finance Co. International, Ltd. | 500,000 | 499,856 | ||||||
6,675,349 | ||||||||
Oil Companies - Integrated — 1.6% |
| |||||||
BP Capital Markets PLC | EUR | 500,000 | 606,732 |
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Oil Companies - Integrated (continued) |
| |||||||
BP Capital Markets PLC | $ | 515,000 | $ | 536,130 | ||||
Ecopetrol SA | 300,000 | 300,750 | ||||||
Ecopetrol SA | 325,000 | 360,588 | ||||||
Lukoil International Finance BV | 350,000 | 362,824 | ||||||
Lukoil International Finance BV | 330,000 | 343,424 | ||||||
Pertamina Persero PT | 600,000 | 644,402 | ||||||
Petrobras Global Finance BV | 620,000 | 612,250 | ||||||
Petrobras Global Finance BV | 330,000 | 364,729 | ||||||
Petrobras Global Finance BV | 320,000 | 383,040 | ||||||
Petroleos de Venezuela SA | 2,150,000 | 642,850 | ||||||
Petroleos de Venezuela SA | 3,600,000 | 1,080,000 | ||||||
Petroleos Mexicanos | 82,000 | 77,162 | ||||||
Petroleos Mexicanos | 432,000 | 462,044 | ||||||
Petroleos Mexicanos | 2,252,000 | 2,421,125 | ||||||
Petronas Capital, Ltd. | 500,000 | 520,738 | ||||||
Petronas Capital, Ltd. | 1,000,000 | 1,058,267 | ||||||
Sasol Financing International PLC | 300,000 | 309,750 | ||||||
Shell International Finance BV | 293,000 | 293,000 | ||||||
Shell International Finance BV | 320,000 | 323,374 | ||||||
Shell International Finance BV | 338,000 | 341,891 | ||||||
12,045,070 | ||||||||
107 |
Table of Contents
VALIC Company II Strategic Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
FOREIGN CORPORATE BONDS & NOTES (continued) | ||||||||
Oil Refining & Marketing — 0.3% |
| |||||||
Cosan Luxembourg SA | $ | 1,110,000 | $ | 1,198,911 | ||||
Raizen Fuels Finance SA | 230,000 | 241,500 | ||||||
Raizen Fuels Finance SA | 200,000 | 210,000 | ||||||
Reliance Industries, Ltd. | 500,000 | 524,697 | ||||||
Thai Oil PCL | 200,000 | 207,383 | ||||||
Ultrapar International SA | 200,000 | 206,000 | ||||||
2,588,491 | ||||||||
Oil - Field Services — 0.4% |
| |||||||
KCA Deutag UK Finance PLC | 1,793,000 | 1,775,070 | ||||||
Weatherford International, Ltd. | 900,000 | 920,250 | ||||||
2,695,320 | ||||||||
Paper & Related Products — 0.4% |
| |||||||
Cascades, Inc. | 250,000 | 258,750 | ||||||
Cascades, Inc. | 1,703,000 | 1,771,120 | ||||||
Fibria Overseas Finance, Ltd. | 250,000 | 265,312 | ||||||
Klabin Finance SA | 200,000 | 209,900 | ||||||
Suzano Austria GmbH | 400,000 | 433,000 | ||||||
2,938,082 | ||||||||
Petrochemicals — 0.1% |
| |||||||
Alpek SAB de CV | 350,000 | 379,750 | ||||||
Equate Petrochemical BV | 340,000 | 351,050 | ||||||
730,800 | ||||||||
Printing-Commercial — 0.4% |
| |||||||
Cimpress NV | 3,100,000 | 3,212,375 | ||||||
Real Estate Investment Trusts — 0.0% |
| |||||||
Trust F/1401 | 200,000 | 211,000 | ||||||
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Real Estate Operations & Development — 0.1% |
| |||||||
Yuzhou Properties Co., Ltd. | $ | 800,000 | $ | 829,250 | ||||
Retail - Major Department Stores — 0.0% |
| |||||||
El Puerto de Liverpool SAB de CV | 200,000 | 200,300 | ||||||
Satellite Telecom — 0.5% |
| |||||||
Intelsat Jackson Holdings SA | 1,795,000 | 1,498,825 | ||||||
Intelsat Luxembourg SA | 1,015,000 | 619,657 | ||||||
Telesat Canada/Telesat LLC | 1,721,000 | 1,927,520 | ||||||
4,046,002 | ||||||||
Semiconductor Equipment — 0.2% |
| |||||||
Sensata Technologies BV | 929,000 | 968,482 | ||||||
Sensata Technologies BV | 637,000 | 667,258 | ||||||
1,635,740 | ||||||||
Soap & Cleaning Preparation — 0.0% |
| |||||||
Reckitt Benckiser Treasury Services PLC | 235,000 | 236,016 | ||||||
Sovereign Agency — 0.2% |
| |||||||
European Stability Mechanism | EUR | 1,400,000 | 1,714,747 | |||||
Special Purpose Entity — 0.0% |
| |||||||
Hellas Telecommunications | 560,000 | 0 | ||||||
Steel - Producers — 0.3% |
| |||||||
ArcelorMittal | 1,665,000 | 1,910,587 | ||||||
Evraz Group SA | 350,000 | 359,625 | ||||||
2,270,212 | ||||||||
SupraNational Banks — 0.2% |
| |||||||
European Investment Bank | 813,000 | 813,054 | ||||||
North American Development Bank | 411,000 | 413,585 | ||||||
1,226,639 | ||||||||
Telecom Services — 0.0% |
| |||||||
Bharti Airtel International Netherlands BV | 300,000 | 321,603 | ||||||
108 |
Table of Contents
VALIC Company II Strategic Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
FOREIGN CORPORATE BONDS & NOTES (continued) | ||||||||
Telephone - Integrated — 0.2% |
| |||||||
Deutsche Telekom International Finance BV | $ | 196,000 | $ | 192,094 | ||||
Oi SA | BRL | 530,000 | 47,564 | |||||
Telecom Italia Capital SA | 440,000 | 565,312 | ||||||
Telefonica Emisiones SAU | 301,000 | 314,494 | ||||||
Telefonica Emisiones SAU | 457,000 | 508,468 | ||||||
1,627,932 | ||||||||
Transport - Marine — 0.1% |
| |||||||
PT Pelabuhan Indonesia II | 475,000 | 487,303 | ||||||
Transport - Rail — 0.3% |
| |||||||
Canadian Pacific Railway Co. | 215,000 | 274,879 | ||||||
Kazakhstan Temir Zholy Finance BV | 2,000,000 | 2,230,000 | ||||||
2,504,879 | ||||||||
Transport - Services — 0.1% |
| |||||||
Transnet SOC, Ltd. | 700,000 | 689,500 | ||||||
Total Foreign Corporate Bonds & Notes | ||||||||
(cost $153,035,617) | 156,400,090 | |||||||
FOREIGN GOVERNMENT OBLIGATIONS — 15.1% |
| |||||||
Banks - Special Purpose — 0.4% |
| |||||||
Brazilian Development Bank | 480,000 | 481,440 | ||||||
Corp Financiera de Desarrollo SA | 1,100,000 | 1,177,000 | ||||||
Hungarian Development Bank | 900,000 | 993,729 | ||||||
2,652,169 | ||||||||
Central Bank — 0.3% |
| |||||||
Central Bank of Tunisia | 2,500,000 | 2,456,250 | ||||||
Sovereign — 14.4% |
| |||||||
Dominican Republic | 495,000 | 537,075 | ||||||
Dominican Republic | 1,700,000 | 1,844,500 | ||||||
Dominican Republic | 1,700,000 | 1,912,500 |
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Sovereign (continued) |
| |||||||
Dominican Republic | $ | 400,000 | $ | 460,000 | ||||
Dominican Republic | 1,100,000 | 1,317,250 | ||||||
Dominican Republic | 600,000 | 733,500 | ||||||
Federal Republic of Germany | EUR | 310,000 | 494,092 | |||||
Government of Egypt | 850,000 | 887,128 | ||||||
Government of Egypt | 750,000 | 780,752 | ||||||
Government of Egypt | 450,000 | 441,900 | ||||||
Government of Egypt | 1,520,000 | 1,702,400 | ||||||
Government of Jamaica | 400,000 | 464,000 | ||||||
Government of Jamaica | 1,000,000 | 1,230,070 | ||||||
Government of Japan | JPY | 120,000,000 | 1,102,339 | |||||
Government of Romania | 380,000 | 486,913 | ||||||
Government of Ukraine | 1,600,000 | 1,640,000 | ||||||
Kingdom of Jordan | 900,000 | 896,461 | ||||||
Kingdom of Jordan | 900,000 | 896,461 | ||||||
Republic of Argentina | 1,600,000 | 1,673,600 | ||||||
Republic of Argentina | 750,000 | 815,250 | ||||||
Republic of Argentina | 930,000 | 1,018,350 | ||||||
Republic of Argentina | 2,453,567 | 2,840,003 | ||||||
Republic of Belarus | 1,000,000 | 1,101,200 | ||||||
Republic of Colombia | 500,000 | 533,750 |
109 |
Table of Contents
VALIC Company II Strategic Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
FOREIGN GOVERNMENT OBLIGATIONS (continued) | ||||||||
Sovereign (continued) |
| |||||||
Republic of Colombia | $ | 800,000 | $ | 1,060,000 | ||||
Republic of Colombia | 900,000 | 1,152,900 | ||||||
Republic of Costa Rica | 700,000 | 748,125 | ||||||
Republic of Ecuador | 1,700,000 | 1,782,875 | ||||||
Republic of El Salvador | 3,700,000 | 4,056,125 | ||||||
Republic of Ghana | 800,000 | 850,160 | ||||||
Republic of Ghana | 900,000 | 955,026 | ||||||
Republic of Guatemala | 980,000 | 970,200 | ||||||
Republic of Guatemala | 1,500,000 | 1,548,750 | ||||||
Republic of Guatemala | 1,300,000 | 1,420,250 | ||||||
Republic of Honduras | 1,750,000 | 1,883,910 | ||||||
Republic of Hungary | 1,200,000 | 1,360,620 | ||||||
Republic of Indonesia | 1,500,000 | 1,556,086 | ||||||
Republic of Indonesia | 600,000 | 693,279 | ||||||
Republic of Iraq | 950,000 | 966,625 | ||||||
Republic of Italy | EUR | 250,000 | 381,635 | |||||
Republic of Italy | EUR | 125,000 | 209,028 | |||||
Republic of Ivory Coast | 3,300,000 | 3,292,410 | ||||||
Republic of Lebanon | 780,000 | 781,886 | ||||||
Republic of Lebanon | 1,700,000 | 1,684,272 | ||||||
Republic of Lebanon | 1,300,000 | 1,303,461 |
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Sovereign (continued) |
| |||||||
Republic of Lebanon | $ | 340,000 | $ | 363,970 | ||||
Republic of Lithuania | 800,000 | 940,000 | ||||||
Republic of Lithuania | 1,275,000 | 1,433,100 | ||||||
Republic of Namibia | 1,200,000 | 1,229,400 | ||||||
Republic of Panama | 500,000 | 527,250 | ||||||
Republic of Panama | 750,000 | 811,875 | ||||||
Republic of Paraguay | 1,400,000 | 1,606,500 | ||||||
Republic of Peru | 377,000 | 417,905 | ||||||
Republic of Peru | 650,000 | 822,250 | ||||||
Republic of Peru | 560,000 | 760,200 | ||||||
Republic of Peru | 1,500,000 | 2,366,250 | ||||||
Republic of Poland | 3,150,000 | 3,242,137 | ||||||
Republic of Poland | 300,000 | 335,100 | ||||||
Republic of Poland | 1,000,000 | 1,105,000 | ||||||
Republic of Serbia | 2,100,000 | 2,433,375 | ||||||
Republic of South Africa | 2,000,000 | 2,068,304 | ||||||
Republic of South Africa | 2,700,000 | 3,000,434 | ||||||
Republic of Sri Lanka | 2,130,000 | 2,338,101 | ||||||
Republic of Sri Lanka | 550,000 | 603,735 | ||||||
Republic of Sri Lanka | 700,000 | 768,485 | ||||||
Republic of Sri Lanka | 1,200,000 | 1,317,402 |
110 |
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VALIC Company II Strategic Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
FOREIGN GOVERNMENT OBLIGATIONS (continued) | ||||||||
Sovereign (continued) |
| |||||||
Republic of the Philippines | $ | 2,900,000 | $ | 3,088,517 | ||||
Republic of Turkey | 2,130,000 | 2,042,176 | ||||||
Republic of Turkey | 800,000 | 876,000 | ||||||
Republic of Turkey | 550,000 | 606,895 | ||||||
Republic of Turkey | 550,000 | 666,600 | ||||||
Republic of Turkey | 900,000 | 1,150,812 | ||||||
Republic of Turkey | 450,000 | 729,045 | ||||||
Republic of Venezuela | 2,100,000 | 745,500 | ||||||
Republic of Venezuela | 1,600,000 | 564,000 | ||||||
Republic of Venezuela | 1,700,000 | 641,750 | ||||||
Russian Federation | 1,400,000 | 1,530,900 | ||||||
Russian Federation | 2,000,000 | 2,120,820 | ||||||
Russian Federation | 1,600,000 | 1,664,973 | ||||||
Russian Federation | 400,000 | 466,000 | ||||||
United Kingdom Gilt Treasury | GBP | 250,000 | 446,960 | |||||
United Kingdom Gilt Treasury | GBP | 375,000 | 700,214 | |||||
United Mexican States | 1,750,000 | 1,854,125 | ||||||
United Mexican States | 1,087,000 | 1,150,590 | ||||||
United Mexican States | 1,621,000 | 1,595,064 | ||||||
United Mexican States | 171,000 | 178,695 | ||||||
United Mexican States | 1,550,000 | 1,877,825 | ||||||
107,655,351 | ||||||||
Total Foreign Government Obligations | ||||||||
(cost $110,291,067) | 112,763,770 | |||||||
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
U.S. GOVERNMENT AGENCIES — 8.5% |
| |||||||
Federal Home Loan Mtg. Corp. — 3.4% |
| |||||||
2.50% due 01/01/2028 | $ | 249,165 | $ | 254,327 | ||||
2.50% due 04/01/2028 | 557,859 | 569,246 | ||||||
2.50% due 03/01/2031 | 339,684 | 344,623 | ||||||
3.00% September 15 TBA | 1,800,000 | 1,859,388 | ||||||
3.00% September 30 TBA | 3,759,000 | 3,800,844 | ||||||
3.00% due 04/01/2043 | 508,918 | 517,884 | ||||||
3.00% due 07/01/2045 | 4,523,801 | 4,577,218 | ||||||
3.00% due 05/01/2046 | 1,302,886 | 1,318,540 | ||||||
3.00% due 08/01/2046 | 1,863,991 | 1,886,388 | ||||||
3.50% due 03/01/2042 | 331,183 | 344,899 | ||||||
3.50% due 04/01/2042 | 599,004 | 623,809 | ||||||
3.50% due 08/01/2042 | 583,312 | 608,863 | ||||||
3.50% due 09/01/2043 | 54,702 | 57,001 | ||||||
3.50% due 07/01/2045 | 5,882,763 | 6,120,290 | ||||||
4.00% due 01/01/2046 | 400,821 | 427,136 | ||||||
4.00% due 01/01/2047 | 93,330 | 99,856 | ||||||
4.50% due 02/01/2020 | 7,964 | 8,141 | ||||||
4.50% due 08/01/2020 | 4,043 | 4,133 | ||||||
4.50% due 03/01/2023 | 20,946 | 21,413 | ||||||
5.00% due 05/01/2034 | 75,644 | 83,626 | ||||||
5.00% due 11/01/2043 | 60,579 | 66,240 | ||||||
5.50% due 06/01/2022 | 23,993 | 25,310 | ||||||
5.50% due 07/01/2035 | 21,503 | 24,050 | ||||||
6.00% due 03/01/2040 | 62,297 | 70,424 | ||||||
6.50% due 02/01/2036 | 11,843 | 13,399 | ||||||
Federal Home Loan Mtg. Corp. FRS | 30,588 | 31,633 | ||||||
3.57% (12 ML+1.89%) | 207,147 | 218,899 | ||||||
Federal Home Loan Mtg. Corp. REMIC FRS | 220,161 | 30,805 | ||||||
Federal Home Loan Mtg. Corp. Structured Agency Credit Risk FRS | 288,634 | 291,045 | ||||||
Federal Home Loan Mtg. Corp. Structured Agency Credit Risk FRS | 450,000 | 460,479 | ||||||
Federal Home Loan Mtg. Corp. Structured Agency Credit Risk FRS | 100,000 | 103,061 | ||||||
Federal Home Loan Mtg. Corp. Structured Agency Credit Risk FRS | 220,674 | 221,758 | ||||||
Federal Home Loan Mtg. Corp. Structured Agency Credit Risk FRS | 282,677 | 289,787 | ||||||
25,374,515 | ||||||||
Federal National Mtg. Assoc. — 5.0% |
| |||||||
2.50% due 12/01/2026 | 885,868 | 905,855 | ||||||
2.50% due 09/01/2027 | 1,374,592 | 1,402,869 | ||||||
3.00% due 10/01/2027 | 276,668 | 286,415 |
111 |
Table of Contents
VALIC Company II Strategic Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
U.S. GOVERNMENT AGENCIES (continued) | ||||||||
Federal National Mtg. Assoc. (continued) |
| |||||||
3.00% due 12/01/2027 | $ | 256,885 | $ | 265,775 | ||||
3.00% due 10/01/2030 | 439,225 | 454,340 | ||||||
3.00% due 10/01/2032 | 540,000 | 557,876 | ||||||
3.00% due 12/01/2042 | 184,118 | 187,311 | ||||||
3.00% due 06/01/2045 | 347,293 | 353,256 | ||||||
3.50% due 09/01/2026 | 250,358 | 261,843 | ||||||
3.50% due 08/01/2027 | 65,940 | 68,839 | ||||||
3.50% due 10/01/2028 | 265,531 | 278,174 | ||||||
3.50% due 08/01/2042 | 266,402 | 273,307 | ||||||
3.50% due 04/01/2045 | 2,420,232 | 2,516,439 | ||||||
3.50% due 10/01/2045 | 540,779 | 563,000 | ||||||
3.50% due 11/01/2045 | 493,717 | 511,893 | ||||||
3.50% due 07/01/2046 | 6,254,471 | 6,512,544 | ||||||
3.50% September 15 TBA | 1,039,000 | 1,084,578 | ||||||
4.00% due 11/01/2025 | 145,714 | 153,249 | ||||||
4.00% due 12/01/2040 | 40,697 | 43,192 | ||||||
4.00% due 01/01/2043 | 2,441,353 | 2,612,830 | ||||||
4.00% due 10/01/2043 | 622,686 | 664,729 | ||||||
4.00% due 10/01/2044 | 329,161 | 348,094 | ||||||
4.00% due 02/01/2045 | 3,767,490 | 4,031,092 | ||||||
4.00% due 06/01/2046 | 838,201 | 885,834 | ||||||
4.00% due 01/01/2047 | 31,642 | 33,445 | ||||||
4.00% September 30 TBA | 2,000,000 | 2,113,281 | ||||||
4.50% due 06/01/2019 | 7,214 | 7,385 | ||||||
4.50% due 03/01/2042 | 321,401 | 347,989 | ||||||
4.50% due 08/01/2045 | 5,134,551 | 5,650,602 | ||||||
4.50% September 30 TBA | 1,000,000 | 1,075,781 | ||||||
5.00% due 01/01/2023 | 48,184 | 50,655 | ||||||
5.00% due 04/01/2023 | 35,382 | 37,500 | ||||||
5.00% due 03/01/2037 | 7,322 | 7,992 | ||||||
5.00% due 05/01/2040 | 235,822 | 258,161 | ||||||
5.00% due 06/01/2040 | 76,727 | 83,898 | ||||||
5.00% due 07/01/2040 | 26,258 | 28,711 | ||||||
5.00% due 02/01/2045 | 719,057 | 796,054 | ||||||
5.50% due 08/01/2037 | 294,588 | 328,727 | ||||||
5.50% due 06/01/2038 | 37,000 | 41,251 | ||||||
6.00% due 02/01/2032 | 3,359 | 3,774 | ||||||
6.00% due 10/01/2034 | 131 | 147 | ||||||
6.00% due 09/01/2038 | 74,795 | 85,002 | ||||||
6.00% due 11/01/2038 | 21,966 | 24,855 | ||||||
6.00% due 06/01/2040 | 18,482 | 20,933 | ||||||
6.50% due 11/01/2037 | 57,574 | 67,243 | ||||||
Federal National Mtg. Assoc. FRS | 162,515 | 168,225 | ||||||
Federal National Mtg. Assoc. FRS | 197,115 | 207,640 | ||||||
Federal National Mtg. Assoc. FRS | 51,916 | 54,528 | ||||||
Federal National Mtg. Assoc. FRS | 83,766 | 88,266 | ||||||
Federal National Mtg. Assoc. FRS | 45,546 | 47,630 | ||||||
Federal National Mtg. Assoc. FRS | 97,212 | 101,950 | ||||||
Federal National Mtg. Assoc. FRS | 192,928 | 202,351 |
Security Description | Shares/ Principal Amount(17) | Value (Note 2) | ||||||
Federal National Mtg. Assoc. (continued) | ||||||||
Federal National Mtg. Assoc. FRS | $ | 140,585 | $ | 147,883 | ||||
Federal National Mtg. Assoc. FRS | 119,401 | 127,048 | ||||||
37,432,241 | ||||||||
Government National Mtg. Assoc. — 0.1% |
| |||||||
3.00% due 03/20/2046 | 484,528 | 495,019 | ||||||
3.00% September 30 TBA | 281,000 | 286,828 | ||||||
781,847 | ||||||||
Tennessee Valley Authority — 0.0% |
| |||||||
1.75% due 10/15/2018 | 316,000 | 317,548 | ||||||
Total U.S. Government Agencies |
| |||||||
(cost $64,353,981) | 63,906,151 | |||||||
U.S. GOVERNMENT TREASURIES — 4.4% |
| |||||||
United States Treasury Bonds — 0.9% |
| |||||||
2.25% due 08/15/2027 | 2,000,000 | 2,022,656 | ||||||
2.25% due 08/15/2046 | 2,500,000 | 2,258,008 | ||||||
3.00% due 05/15/2047 | 2,750,000 | 2,905,117 | ||||||
7,185,781 | ||||||||
United States Treasury Notes — 3.5% |
| |||||||
1.13% due 07/31/2021 | 1,023,000 | 1,004,898 | ||||||
1.38% due 07/31/2019# | 15,000,000 | 15,014,063 | ||||||
1.75% due 09/30/2022 | 1,675,000 | 1,675,916 | ||||||
2.13% due 07/31/2024 | 138,000 | 139,633 | ||||||
3.50% due 02/15/2018 | 7,000,000 | 7,074,524 | ||||||
0.13% due 04/15/2018 TIPS(9) | 1,239,791 | 1,236,901 | ||||||
26,145,935 | ||||||||
Total U.S. Government Treasuries | ||||||||
(cost $33,142,816) | 33,331,716 | |||||||
LOANS(11)(12)(13) — 0.5% |
| |||||||
E-Commerce/Services — 0.3% |
| |||||||
RentPath LLC FRS | 2,178,597 | 2,069,667 | ||||||
Publishing - Books — 0.2% |
| |||||||
Houghton Mifflin Harcourt Publishers, Inc. FRS | 1,391,450 | 1,339,271 | ||||||
Total Loans | ||||||||
(cost $3,432,761) | 3,408,938 | |||||||
COMMON STOCKS — 0.0% |
| |||||||
Television — 0.0% |
| |||||||
ION Media Networks, Inc.†(4)(5) | 316 | 234,625 | ||||||
PREFERRED SECURITIES — 0.1% |
| |||||||
Electric - Distribution — 0.0% |
| |||||||
Entergy Louisiana LLC | 8,875 | 221,254 | ||||||
Sovereign Agency — 0.0% |
| |||||||
Federal Home Loan Mtg. Corp. | 3,292 | 20,740 | ||||||
112 |
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VALIC Company II Strategic Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
PREFERRED SECURITIES (continued) |
| |||||||
Telecom Services — 0.1% |
| |||||||
Qwest Corp. | $ | 10,575 | $ | 265,855 | ||||
Total Preferred Securities | ||||||||
(cost $537,079) | 507,849 | |||||||
PREFERRED SECURITIES/CAPITAL SECURITIES — 1.9% |
| |||||||
Banks - Commercial — 0.1% |
| |||||||
Rabobank Nederland | 311,000 | 356,873 | ||||||
Standard Chartered PLC | 223,000 | 241,464 | ||||||
598,337 | ||||||||
Banks - Super Regional — 0.1% |
| |||||||
SunTrust Banks, Inc. | 575,000 | 584,164 | ||||||
Wells Fargo Capital X | 167,000 | 189,127 | ||||||
773,291 | ||||||||
Diversified Banking Institutions — 0.2% |
| |||||||
HSBC Holdings PLC | 561,000 | 589,891 | ||||||
JPMorgan Chase & Co. | 608,000 | 668,040 | ||||||
Royal Bank of Scotland Group PLC | 245,000 | 271,259 | ||||||
Societe Generale SA | 551,000 | 617,809 | ||||||
2,146,999 | ||||||||
Electric - Generation — 0.1% |
| |||||||
Electricite de France SA | EUR | 400,000 | 530,941 | |||||
Electric - Integrated — 0.1% |
| |||||||
Dominion Resources, Inc. | 280,000 | 301,700 | ||||||
Southern Co. | 290,000 | 307,148 | ||||||
608,848 | ||||||||
Finance - Investment Banker/Broker — 0.0% |
| |||||||
Lehman Brothers Holdings Capital Trust VII | 101,000 | 10 | ||||||
Finance - Other Services — 0.1% |
| |||||||
National Rural Utilities Cooperative Finance Corp. | 413,000 | 428,999 | ||||||
Food - Dairy Products — 0.2% |
| |||||||
Land O’Lakes Capital Trust I | 1,429,000 | 1,629,060 | ||||||
Gas - Distribution — 0.1% |
| |||||||
Centrica PLC | EUR | 600,000 | 734,734 | |||||
Insurance - Life/Health — 0.2% |
| |||||||
Prudential Financial, Inc. | 137,000 | 146,933 | ||||||
Prudential Financial, Inc. | 1,162,000 | 1,257,865 | ||||||
1,404,798 | ||||||||
Security Description | Principal Amount(17) | Value (Note 2) | ||||||
Insurance - Multi-line — 0.2% |
| |||||||
MetLife, Inc. | $ | 457,000 | $ | 526,693 | ||||
Zurich Finance UK PLC | GBP | 660,000 | 1,017,735 | |||||
1,544,428 | ||||||||
Oil Companies - Integrated — 0.1% |
| |||||||
TOTAL SA | EUR | 625,000 | 805,176 | |||||
Pipelines — 0.2% |
| |||||||
Enbridge, Inc. | 873,000 | 876,274 | ||||||
Enterprise Products Operating LLC | 252,000 | 252,176 | ||||||
Enterprise Products Operating LLC | 221,000 | 221,166 | ||||||
TransCanada Trust | 240,000 | 247,248 | ||||||
TransCanada Trust | 174,000 | 184,440 | ||||||
1,781,304 | ||||||||
Telephone - Integrated — 0.1% |
| |||||||
Orange SA | EUR | 500,000 | 684,008 | |||||
Tools - Hand Held — 0.1% |
| |||||||
Stanley Black & Decker, Inc. | 550,000 | 574,750 | ||||||
Total Preferred Securities/Capital Securities | ||||||||
(cost $13,232,437) | 14,245,683 | |||||||
Total Long-Term Investment Securities | ||||||||
(cost $709,325,270) | 723,457,487 | |||||||
SHORT-TERM INVESTMENT SECURITIES — 11.8% |
| |||||||
Registered Investment Companies — 7.1% |
| |||||||
State Street Navigator Securities Lending Government Money Market Portfolio | $ | 52,868,939 | 52,868,939 | |||||
Time Deposits — 4.7% |
| |||||||
Euro Time Deposit with State Street Bank and Trust Co. | 35,518,000 | 35,518,000 | ||||||
Total Short-Term Investment Securities | ||||||||
(cost $88,386,939) | 88,386,939 | |||||||
TOTAL INVESTMENTS | ||||||||
(cost $797,712,209)(16) | 108.4 | % | 811,844,426 | |||||
Liabilities in excess of other assets | (8.4 | ) | (62,789,474 | ) | ||||
NET ASSETS | 100.0 | % | $ | 749,054,952 | ||||
* | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in transactions exempt from registration, normally to qualified institutional buyers. The Fund has no right to demand registration of these securities. At August 31, 2017, the aggregate value of these securities was $207,888,079 representing 27.8% of net assets. Unless otherwise indicated, these securities are not considered to be illiquid. |
# | The security or a portion thereof is out on loan (see Note 2). |
† | Non-income producing security |
(1) | Commercial Mortgage Backed Security |
(2) | Collateralized Mortgage Obligation |
(3) | Interest Only |
(4) | Security classified as level 3 (see Note 2). |
113 |
Table of Contents
VALIC Company II Strategic Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
(5) | Illiquid security. At August 31, 2017, the aggregate value of these securities was $656,445 representing 0.1% of net assets. |
(6) | Company has filed for bankruptcy protection. |
(7) | Security in default of interest and principal at maturity. |
(8) | The rate shown is a 7-day yield as of August 31, 2017. |
(9) | Principal Amount of security is adjusted for inflation. |
(10) | Inverse Floating Rate Security that pays interest that varies inversely to changes in the market interest rates. The interest rate shown is the current interest rate at August 31, 2017. |
(11) | Senior loans in the Fund are generally subject to mandatory and/or optional prepayment. Because of these mandatory prepayment conditions and because there may be significant economic incentives for a borrower to prepay, prepayments may occur. As a result, the actual remaining maturity may be substantially less than the stated maturities shown. |
(12) | The Fund invests in senior loans which generally pay interest at rates which are periodically re-determined by reference to a base lending rate plus a premium. These base lending rates are generally either the lending rate offered by one or more major European banks, such as the London Inter-Bank Offer Rate (“LIBOR”) or the prime rate offered by one or more major United States banks, or the certificate of deposit rate. Senior loans are generally considered to be restrictive in that the Fund is ordinarily contractually obligated to receive approval from the Agent Bank and/or borrower prior to the disposition of a senior loan. |
(13) | All loans in the Fund were purchased through assignment agreements unless otherwise indicated. |
(14) | Perpetual maturity — maturity date reflects the next call date. |
(15) | At August 31, 2017, the Fund had loaned securities with a total value of $72,214,331. This was secured by collateral of $52,868,939, which was received in cash and subsequently invested in short-term investments currently valued at $52,868,939 as reported in the portfolio of investments. Additional collateral of $20,700,610 was received in the form of short-term pooled securities, which the Fund cannot sell or repledge and accordingly is not reflected in the Fund’s assets and liabilities. |
The components of the fixed income pooled secutities referenced above are as follows:
Securities | Coupon Range | Maturity Date Range | Value as of August 31, 2017 | |||||
United States Treasury Bills | 0.00% | 01/04/2018 to 01/04/2018 | $ | 116,891 | ||||
United States Treasury Notes/Bonds | 0.13% to 8.13% | 09/30/2017 to 05/15/2046 | 20,583,719 |
(16) | See Note 5 for cost of investments on a tax basis. |
(17) | Denominated in United States Dollars unless otherwise indicated. |
(18) | Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above. |
REMIC—Real Estate Mortgage Investment Conduit
TBA—Securities purchased on a forward commitment basis with an approximate principal Amount and no definite maturity date. The actual principal and maturity date will be determined upon settlement date.
TIPS—Treasury Inflation Protected Securities
ULC—Unlimited Liability Corp.
FRS—Floating Rate Security
VRS—Variable Rate Security
The rates shown on FRS and VRS are the current interest rates at August 31, 2017 and unless noted otherwise, the dates are the original maturity dates.
Currency Legend
BRL—Brazilian Real
COP—Columbian Peso
EUR—Euro Currency
GBP—British Pound
Index Legend
1 ML—1 Month USD LIBOR
1 Yr USTYCR—1 Year US Treasury Yield Curve Rate
12 ML—12 Month USD LIBOR
12 Yr ES—12 Year EUR Swap
3 ME—3 Month Euribor
3 ML—3 Month USD LIBOR
5 Yr ES—5 Year EUR Swap
5 Yr UIRS—5 Year USD Interest Rate Swap
5 Yr UKGB—5 Year UK Government Bonds
5 Yr USR—5 Year USD Swap Rate
6 ML—6 Month USD LIBOR
Forward Foreign Currency Contracts | ||||||||||||||||||||||||||||
Counterparty | Contract to Deliver | In Exchange For | Delivery Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||||||
JPMorgan Chase Bank N.A | EUR | 11,899,500 | USD | 13,605,881 | 09/14/2017 | $ | – | $ | (566,347 | ) | ||||||||||||||||||
EUR | 30,062,000 | USD | 35,583,908 | 10/20/2017 | – | (289,476 | ) | |||||||||||||||||||||
GBP | 3,240,000 | USD | 4,228,803 | 10/20/2017 | 32,760 | – | ||||||||||||||||||||||
JPY | 119,988,680 | USD | 1,086,324 | 10/20/2017 | – | (7,410 | ) | |||||||||||||||||||||
USD | 1,809,387 | EUR | 1,530,000 | 09/14/2017 | 12,833 | – | ||||||||||||||||||||||
Net Unrealized Appreciation/(Depreciation) | $ | 45,593 | $ | (863,233 | ) | |||||||||||||||||||||||
EUR—Eur Currency
GBP—British Pound
JPY—Japanese yen
USD—United States Dollar
114 |
Table of Contents
VALIC Company II Strategic Bond Fund
PORTFOLIO OF INVESTMENTS — August 31, 2017 — (continued)
The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2017 (see Note 2):
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at Value:* | ||||||||||||||||
Asset Backed Securities: | ||||||||||||||||
Diversified Financial Services | $ | — | $ | 43,080,058 | $ | 2,259,608 | $ | 45,339,666 | ||||||||
U.S. Corporate Bonds & Notes: | ||||||||||||||||
Airlines | — | 2,453,639 | 57,434 | 2,511,073 | ||||||||||||
Finance - Investment Banker/Broker | — | 2,147,721 | 25 | 2,147,746 | ||||||||||||
Gambling (Non-Hotel) . . . . . . . . . . . . . . . . . . . . . . | — | 2,881,663 | 3,875 | 2,885,538 | ||||||||||||
Rubber/Plastic Products . . . . . . . . . . . . . . . . . . . . | — | — | 0 | 0 | ||||||||||||
Other Industries . . . . . . . . . . . . . . . . . . . . . . . . . . | — | 285,774,642 | — | 285,774,642 | ||||||||||||
Foreign Corporate Bonds & Notes: | ||||||||||||||||
Special Purpose Entity . . . . . . . . . . . . . . . . . . . . . . | — | — | 0 | 0 | ||||||||||||
Other Industries . . . . . . . . . . . . . . . . . . . . . . . . . . | — | 156,400,090 | — | 156,400,090 | ||||||||||||
Foreign Government Obligations . . . . . . . . . . . . . . . . | — | 112,763,770 | — | 112,763,770 | ||||||||||||
U.S. Government Agencies . . . . . . . . . . . . . . . . . . . . . | — | 63,906,151 | — | 63,906,151 | ||||||||||||
U.S. Government Treasuries . . . . . . . . . . . . . . . . . . . . | — | 33,331,716 | — | 33,331,716 | ||||||||||||
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | — | 3,408,938 | — | 3,408,938 | ||||||||||||
Common Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . | — | — | 234,625 | 234,625 | ||||||||||||
Preferred Securities . . . . . . . . . . . . . . . . . . . . . . . . . . | 507,849 | — | — | 507,849 | ||||||||||||
Preferred Securities/Capital Securities : | ||||||||||||||||
Finance Investment Banker/Broker | — | — | 10 | 10 | ||||||||||||
Other Industries . . . . . . . . . . . . . . . . . . . . . . . . . . | — | 14,245,673 | — | 14,245,673 | ||||||||||||
Short-Term Investment Securities: | ||||||||||||||||
Registered Investment Companies . . . . . . . . . . . . . | 52,868,939 | — | — | 52,868,939 | ||||||||||||
Time Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . | — | 35,518,000 | — | 35,518,000 | ||||||||||||
Total Investments at Value | $ | 53,376,788 | $ | 755,912,061 | $ | 2,555,577 | $ | 811,844,426 | ||||||||
Other Financial Instruments:+ | ||||||||||||||||
Forward Foreign Currency Contracts . . . . . . . . . . . . . . | $ | — | $ | 45,593 | $ | — | $ | 45,593 | ||||||||
LIABILITIES: | ||||||||||||||||
Other Financial Instruments:+ | ||||||||||||||||
Forward Foreign Currency Contracts . . . . . . . . . . . . . . | $ | — | $ | 863,233 | $ | — | $ | 863,233 | ||||||||
* | For a detailed presentation of investments, please refer to the Portfolio of Investments. |
+ | Other financial instruments are derivative instruments, not reflected in the Portfolio of Investments, such as futures, forward, swap and written option contracts, which are valued at the unrealized appreciation (depreciation) on the instrument. |
The Fund’s policy is to recognize transfers between Levels as of the end of the reporting period. There were no transfers between Levels during the reporting period.
At the beginning and end of the reporting period, Level 3 investments were not considered a material portion of the Fund.
See Notes to Financial Statements
115 |
Table of Contents
STATEMENTS OF ASSETS AND LIABILITIES — August 31, 2017
AGGRESSIVE GROWTH LIFESTYLE FUND | CAPITAL APPRECIATION FUND | CONSERVATIVE GROWTH LIFESTYLE FUND | CORE BOND FUND | GOVERNMENT MONEY MARKET II FUND# | ||||||||||||||||
ASSETS: | ||||||||||||||||||||
Investments at value (unaffiliated)*† | $ | – | $ | 92,064,005 | $ | – | $ | 1,179,696,377 | $ | 129,027,861 | ||||||||||
Investments at value (affiliated)* | 567,933,839 | 333,943,378 | – | – | ||||||||||||||||
Repurchase agreements (cost approximates value) | – | – | – | – | 4,116,000 | |||||||||||||||
Cash | 10,848 | 141 | 35,161 | 136 | 429 | |||||||||||||||
Foreign cash* | – | – | – | – | – | |||||||||||||||
Cash collateral for futures contracts | – | – | – | – | – | |||||||||||||||
Cash collateral for centrally cleared swap contracts | – | – | – | – | – | |||||||||||||||
Due from broker | – | – | – | – | – | |||||||||||||||
Receivable for: | ||||||||||||||||||||
Fund shares sold | 8,211 | 6,442 | 160,585 | 625,151 | 28,655 | |||||||||||||||
Dividends and interest | – | 126,270 | – | 7,973,863 | 54,301 | |||||||||||||||
Investments sold | 69,383 | – | – | 3,004,930 | – | |||||||||||||||
Investments sold on an extended settlement basis | – | – | – | 9,042,953 | – | |||||||||||||||
Payments on swap contracts | – | – | – | – | – | |||||||||||||||
Securities lending income | – | 2,037 | – | 17,436 | – | |||||||||||||||
Prepaid expenses and other assets | 19,106 | 13,395 | 14,600 | 34,898 | 23,287 | |||||||||||||||
Due from investment adviser for expense reimbursements/fee waivers | 41,120 | 16,144 | 29,085 | 45,708 | 17,001 | |||||||||||||||
Variation margin on futures contracts | – | – | – | – | – | |||||||||||||||
Unrealized appreciation on forward foreign currency contracts | – | – | – | – | – | |||||||||||||||
Swap premiums paid | – | – | – | – | – | |||||||||||||||
Unrealized appreciation on swap contracts | – | – | – | – | – | |||||||||||||||
TOTAL ASSETS | 568,082,507 | 92,228,434 | 334,182,809 | 1,200,441,452 | 133,267,534 | |||||||||||||||
LIABILITIES: | ||||||||||||||||||||
Payable for: | ||||||||||||||||||||
Fund shares reaquired | 77,594 | 2,009 | 6,757 | 21,711 | 174,155 | |||||||||||||||
Investments purchased | – | – | 153,829 | 11,965,734 | – | |||||||||||||||
Investments purchased on an extended settlement basis | – | – | – | 39,819,162 | – | |||||||||||||||
Payments on swap contracts | – | – | – | – | – | |||||||||||||||
Investment advisory and management fees | 47,824 | 42,150 | 28,302 | 404,506 | 28,094 | |||||||||||||||
Shareholder services | – | 19,159 | – | 234,237 | 28,094 | |||||||||||||||
Administrative service fees | – | 5,173 | – | 63,244 | 7,585 | |||||||||||||||
Transfer agent fees and expenses | 249 | 497 | 249 | 497 | 187 | |||||||||||||||
Trustees’ fees and expenses | 22,180 | 7,008 | 14,182 | 45,069 | 18,040 | |||||||||||||||
Other accrued expenses | 91,432 | 58,177 | 72,501 | 191,029 | 67,231 | |||||||||||||||
Accrued foreign tax on capital gains | – | – | – | – | – | |||||||||||||||
Collateral upon return of securities loaned | – | 515,081 | – | 31,760,071 | – | |||||||||||||||
Due to custodian | – | – | – | – | – | |||||||||||||||
Due to broker | – | – | – | – | – | |||||||||||||||
Unrealized depreciation on forward foreign currency contracts | – | – | – | – | – | |||||||||||||||
TOTAL LIABILITIES | 239,279 | 649,254 | 275,820 | 84,505,260 | 323,386 | |||||||||||||||
NET ASSETS | $ | 567,843,228 | $ | 91,579,180 | $ | 333,906,989 | $ | 1,115,936,192 | $ | 132,944,148 | ||||||||||
NET ASSETS REPRESENTED BY: | ||||||||||||||||||||
Trust shares at par value of $0.01 per share | $ | 531,675 | $ | 55,346 | $ | 276,742 | $ | 1,000,517 | $ | 1,329,158 | ||||||||||
Additional paid in capital | 502,460,402 | 66,721,337 | 316,579,005 | 1,069,822,817 | 131,615,830 | |||||||||||||||
Accumulated undistributed net investment income (loss) | 8,091,596 | 454,627 | 7,640,570 | 29,326,047 | (1,675 | ) | ||||||||||||||
Accumulated undistributed net realized gain (loss) on investments, swap contracts, futures contracts, options contracts, securities sold short, foreign exchange transactions and capital gain distributions from underlying funds | 17,159,303 | 4,454,498 | 605,645 | (1,809,944 | ) | 835 | ||||||||||||||
Unrealized appreciation (depreciation) on investments | 39,600,252 | 19,893,372 | 8,805,027 | 17,596,755 | – | |||||||||||||||
Unrealized appreciation (depreciation) on swap contracts, futures contracts and options contracts | – | – | – | – | – | |||||||||||||||
Unrealized foreign exchange gain (loss) on other assets and liabilities | – | – | – | – | – | |||||||||||||||
Accrued capital gains tax on unrealized appreciation (depreciation) | – | – | – | – | – | |||||||||||||||
NET ASSETS | $ | 567,843,228 | $ | 91,579,180 | $ | 333,906,989 | $ | 1,115,936,192 | 132,944,148 | |||||||||||
SHARES OF BENEFICIAL INTEREST: | ||||||||||||||||||||
Authorized (Par value $0.01 per share) | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |||||||||||||||
Outstanding | 53,167,507 | 5,534,619 | 27,674,230 | 100,051,703 | 132,915,767 | |||||||||||||||
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE | 10.68 | 16.55 | 12.07 | 11.15 | 1.00 | |||||||||||||||
* Cost | ||||||||||||||||||||
Investments (unaffiliated) | $ | – | $ | 72,170,633 | $ | – | $ | 1,162,099,622 | $ | 129,027,861 | ||||||||||
Investments (affiliated) | $ | 528,333,587 | $ | – | $ | 325,138,351 | $ | – | $ | – | ||||||||||
Foreign cash | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||||
† Including securities on loan | $ | – | $ | 8,180,169 | $ | – | $ | 44,074,943 | $ | – | ||||||||||
# See Note 1 |
See Notes to Financial Statements
116 |
Table of Contents
VALIC Company II
STATEMENTS OF ASSETS AND LIABILITIES — August 31, 2017 — (continued)
HIGH YIELD BOND FUND | INTERNATIONAL OPPORTUNITIES FUND | LARGE CAP VALUE FUND | MID CAP GROWTH FUND | MID CAP VALUE FUND | ||||||||||||||||
ASSETS: | ||||||||||||||||||||
Investments at value (unaffiliated)*† | $ | 582,748,997 | $ | 677,072,548 | $ | 226,617,244 | $ | 135,544,986 | $ | 1,054,994,373 | ||||||||||
Investments at value (affiliated)* | – | – | – | – | – | |||||||||||||||
Repurchase agreements (cost approximates value) | 23,224,000 | 7,020,000 | – | – | 9,418,000 | |||||||||||||||
Cash | 9,268 | 7,286 | 88,558 | 34 | 448 | |||||||||||||||
Foreign cash* | 163,244 | 201,772 | – | 160 | 32 | |||||||||||||||
Cash collateral for futures contracts | – | – | – | – | – | |||||||||||||||
Cash collateral for centrally cleared swap contracts | 520,736 | – | – | – | – | |||||||||||||||
Due from broker | – | – | – | – | – | |||||||||||||||
Receivable for: | ||||||||||||||||||||
Fund shares sold | 205,588 | 9,895 | 2,360 | 10,341 | 97,751 | |||||||||||||||
Dividends and interest | 8,153,275 | 1,291,700 | 433,102 | 96,775 | 1,041,061 | |||||||||||||||
Investments sold | 1,051,994 | 5,573,327 | 1,165,305 | 158,902 | 6,175,520 | |||||||||||||||
Investments sold on an extended settlement basis | – | – | – | – | – | |||||||||||||||
Payments on swap contracts | 375,791 | – | – | – | – | |||||||||||||||
Securities lending income | 50,634 | 64,242 | 1,560 | 4,253 | 74,174 | |||||||||||||||
Prepaid expenses and other assets | 24,422 | 41,651 | 36,087 | 16,735 | 50,341 | |||||||||||||||
Due from investment adviser for expense reimbursements/fee waivers | 34,865 | 139,189 | 28,195 | 54,927 | – | |||||||||||||||
Variation margin on futures contracts | – | – | – | – | – | |||||||||||||||
Unrealized appreciation on forward foreign currency contracts | – | – | – | – | – | |||||||||||||||
Swap premiums paid | 499,977 | – | – | – | – | |||||||||||||||
Unrealized appreciation on swap contracts | 64,506 | – | – | – | – | |||||||||||||||
TOTAL ASSETS | 617,127,297 | 691,421,610 | 228,372,411 | 135,887,113 | 1,071,851,700 | |||||||||||||||
LIABILITIES: | ||||||||||||||||||||
Payable for: | ||||||||||||||||||||
Fund shares reaquired | 9,938 | 266,239 | 119,676 | 2,829 | 20,800 | |||||||||||||||
Investments purchased | 648,779 | 2,802,010 | 1,375,103 | 279,667 | 2,879,466 | |||||||||||||||
Investments purchased on an extended settlement basis | 5,743,900 | – | – | – | – | |||||||||||||||
Payments on swap contracts | – | – | – | – | – | |||||||||||||||
Investment advisory and management fees | 289,417 | 458,746 | 96,786 | 84,586 | 609,337 | |||||||||||||||
Shareholder services | 119,007 | 140,704 | 48,393 | 27,934 | 221,294 | |||||||||||||||
Administrative service fees | 32,132 | 37,990 | 13,066 | 7,542 | 59,749 | |||||||||||||||
Transfer agent fees and expenses | 497 | 373 | 373 | 435 | 559 | |||||||||||||||
Trustees’ fees and expenses | 28,157 | 42,501 | 17,506 | 11,598 | 60,055 | |||||||||||||||
Other accrued expenses | 124,062 | 180,369 | 75,091 | 60,896 | 170,505 | |||||||||||||||
Accrued foreign tax on capital gains | – | 120,065 | – | – | – | |||||||||||||||
Collateral upon return of securities loaned | 47,646,600 | 16,275,171 | – | 1,423,179 | 21,784,347 | |||||||||||||||
Due to custodian | – | – | – | – | – | |||||||||||||||
Due to broker | 920,515 | – | – | – | – | |||||||||||||||
Unrealized depreciation on forward foreign currency contracts | 84,658 | – | – | – | – | |||||||||||||||
TOTAL LIABILITIES | 55,647,662 | 20,324,168 | 1,745,994 | 1,898,666 | 25,806,112 | |||||||||||||||
NET ASSETS | $ | 561,479,635 | $ | 671,097,442 | $ | 226,626,417 | $ | 133,988,447 | $ | 1,046,045,588 | ||||||||||
NET ASSETS REPRESENTED BY: | ||||||||||||||||||||
Trust shares at par value of $0.01 per share | $ | 724,609 | 346,370 | $ | 109,691 | $ | 133,133 | $ | 492,617 | |||||||||||
Additional paid in capital | 557,551,314 | 564,242,320 | 197,418,664 | 102,255,634 | 833,506,287 | |||||||||||||||
Accumulated undistributed net investment income (loss) | 31,058,600 | 1,700,178 | 2,936,487 | 65,304 | 3,847,744 | |||||||||||||||
Accumulated undistributed net realized gain (loss) on investments, swap contracts, futures contracts, options contracts, securities sold short, foreign exchange transactions and capital gain distributions from underlying funds | (40,367,949 | ) | (58,151,046 | ) | 7,133,902 | 26,050,011 | 60,919,761 | |||||||||||||
Unrealized appreciation (depreciation) on investments | 12,531,957 | 163,070,883 | 19,027,673 | 5,484,355 | 147,279,121 | |||||||||||||||
Unrealized appreciation (depreciation) on swap contracts, futures contracts and options contracts | 64,506 | – | – | – | – | |||||||||||||||
Unrealized foreign exchange gain (loss) on other assets and liabilities | (83,402 | ) | 8,802 | – | 10 | 58 | ||||||||||||||
Accrued capital gains tax on unrealized appreciation (depreciation) | – | (120,065 | ) | – | – | – | ||||||||||||||
NET ASSETS | $ | 561,479,635 | $ | 671,097,442 | $ | 226,626,417 | $ | 133,988,447 | $ | 1,046,045,588 | ||||||||||
SHARES OF BENEFICIAL INTEREST: |
| |||||||||||||||||||
Authorized (Par value $0.01 per share) | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |||||||||||||||
Outstanding | 72,460,917 | 34,637,025 | 10,969,057 | 13,313,304 | 49,261,694 | |||||||||||||||
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE | 7.75 | 19.38 | 20.66 | 10.06 | 21.23 | |||||||||||||||
* Cost | ||||||||||||||||||||
Investments (unaffiliated) | $ | 570,217,040 | $ | 514,001,665 | $ | 207,589,571 | $ | 130,060,631 | $ | 907,715,252 | ||||||||||
Investments (affiliated) | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||||
Foreign cash | $ | 163,107 | $ | 201,656 | $ | – | $ | 150 | $ | 30 | ||||||||||
† Including securities on loan | $ | 46,833,337 | $ | 31,801,959 | $ | 11,205,482 | $ | 28,964,978 | $ | 187,925,484 | ||||||||||
See Notes to Financial Statements
117 |
Table of Contents
VALIC Company II
STATEMENTS OF ASSETS AND LIABILITIES — August 31, 2017 — (continued)
MODERATE GROWTH LIFESTYLE FUND | SMALL CAP GROWTH FUND | SMALL CAP VALUE FUND | SOCIALLY RESPONSIBLE FUND | STRATEGIC BOND FUND | ||||||||||||||||
ASSETS: | ||||||||||||||||||||
Investments at value (unaffiliated)*† | $ | – | $ | 147,024,500 | $ | 534,087,231 | $ | 783,067,580 | $ | 811,844,426 | ||||||||||
Investments at value (affiliated)* | 896,485,493 | – | – | – | – | |||||||||||||||
Repurchase agreements (cost approximates value) | – | – | 5,660,000 | 18,211,000 | – | |||||||||||||||
Cash | – | 20,744 | 760 | – | 1,658,497 | |||||||||||||||
Foreign cash* | – | – | – | – | 1,707 | |||||||||||||||
Cash collateral for futures contracts | – | – | 814,000 | – | – | |||||||||||||||
Cash collateral for centrally cleared swap contracts | – | – | – | – | – | |||||||||||||||
Due from broker | – | – | 53 | – | – | |||||||||||||||
Receivable for: | ||||||||||||||||||||
Fund shares sold | 73,613 | 30,985 | 3,868 | 47,176 | 187,057 | |||||||||||||||
Dividends and interest | – | 46,664 | 441,487 | 1,463,355 | 8,429,941 | |||||||||||||||
Investments sold | – | 533,275 | 12,097,350 | – | 1,832,045 | |||||||||||||||
Investments sold on an extended settlement basis | – | – | – | – | 3,541,011 | |||||||||||||||
Payments on swap contracts | – | – | – | – | – | |||||||||||||||
Securities lending income | – | 23,548 | 52,739 | 4,272 | 28,784 | |||||||||||||||
Prepaid expenses and other assets | 26,436 | 13,181 | 32,617 | 45,419 | 35,102 | |||||||||||||||
Due from investment adviser for expense reimbursements/fee waivers | 64,023 | 15,241 | 84,329 | 66,437 | – | |||||||||||||||
Variation margin on futures contracts | – | – | 130,950 | 133,705 | – | |||||||||||||||
Unrealized appreciation on forward foreign currency contracts | – | – | – | – | 45,593 | |||||||||||||||
Swap premiums paid | – | – | – | – | – | |||||||||||||||
Unrealized appreciation on swap contracts | – | – | – | – | – | |||||||||||||||
TOTAL ASSETS | 896,649,565 | 147,708,138 | 553,405,384 | 803,038,944 | 827,604,163 | |||||||||||||||
LIABILITIES: | ||||||||||||||||||||
Payable for: | ||||||||||||||||||||
Fund shares reaquired | 62,007 | 3,093 | 88,479 | 396,423 | 12,992 | |||||||||||||||
Investments purchased | 11,606 | 84,678 | 4,719,547 | – | 8,275,951 | |||||||||||||||
Investments purchased on an extended settlement basis | – | – | – | – | 15,786,369 | |||||||||||||||
Payments on swap contracts | – | – | – | – | – | |||||||||||||||
Investment advisory and management fees | 75,661 | 95,394 | 298,830 | 169,791 | 323,890 | |||||||||||||||
Shareholder services | – | 28,483 | 113,301 | 169,791 | 158,706 | |||||||||||||||
Administrative service fees | – | 7,691 | 30,591 | 45,844 | 42,851 | |||||||||||||||
Transfer agent fees and expenses | 249 | 497 | 435 | 249 | 684 | |||||||||||||||
Trustees’ fees and expenses | 34,804 | 7,551 | 31,845 | 50,675 | 43,674 | |||||||||||||||
Other accrued expenses | 119,730 | 59,704 | 136,267 | 137,302 | 171,922 | |||||||||||||||
Accrued foreign tax on capital gains | – | – | – | – | – | |||||||||||||||
Collateral upon return of securities loaned | – | 10,090,697 | 18,481,316 | 2,165,286 | 52,868,939 | |||||||||||||||
Due to custodian | – | – | – | 5,735 | – | |||||||||||||||
Due to broker | – | – | – | – | – | |||||||||||||||
Unrealized depreciation on forward foreign currency contracts | – | – | – | – | 863,233 | |||||||||||||||
TOTAL LIABILITIES | 304,057 | 10,377,788 | 23,900,611 | 3,141,096 | 78,549,211 | |||||||||||||||
NET ASSETS | $ | 896,345,508 | $ | 137,330,350 | $ | 529,504,773 | $ | 799,897,848 | $ | 749,054,952 | ||||||||||
NET ASSETS REPRESENTED BY: | ||||||||||||||||||||
Trust shares at par value of $0.01 per share | $ | 630,032 | $ | 80,881 | $ | 365,819 | $ | 397,014 | $ | 658,447 | ||||||||||
Additional paid in capital | 813,044,455 | 102,149,959 | 424,180,214 | 556,772,717 | 725,429,128 | |||||||||||||||
Accumulated undistributed net investment income (loss) | 14,661,865 | (471,542 | ) | 3,833,697 | 12,348,644 | 25,906,780 | ||||||||||||||
Accumulated undistributed net realized gain (loss) on investments, swap contracts, futures contracts, options contracts, securities sold short, foreign exchange transactions and capital gain distributions from underlying funds | 14,802,238 | 5,796,311 | 34,860,292 | 12,126,597 | (16,289,639 | ) | ||||||||||||||
Unrealized appreciation (depreciation) on investments | 53,206,918 | 29,774,741 | 66,195,933 | 217,927,122 | 14,132,217 | |||||||||||||||
Unrealized appreciation (depreciation) on swap contracts, futures contracts and options contracts | – | – | 68,818 | 325,754 | – | |||||||||||||||
Unrealized foreign exchange gain (loss) on other assets and liabilities | – | – | – | – | (781,981 | ) | ||||||||||||||
Accrued capital gains tax on unrealized appreciation (depreciation) | – | – | – | – | – | |||||||||||||||
NET ASSETS | $ | 896,345,508 | $ | 137,330,350 | $ | 529,504,773 | $ | 799,897,848 | $ | 749,054,952 | ||||||||||
SHARES OF BENEFICIAL INTEREST: |
| |||||||||||||||||||
Authorized (Par value $0.01 per share) | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |||||||||||||||
Outstanding | 63,003,161 | 8,088,143 | 36,581,881 | 39,701,412 | 65,844,711 | |||||||||||||||
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE | 14.23 | 16.98 | 14.47 | 20.15 | 11.38 | |||||||||||||||
* Cost | ||||||||||||||||||||
Investments (unaffiliated) | $ | – | $ | 117,249,759 | $ | 467,891,298 | $ | 565,140,458 | $ | 797,712,209 | ||||||||||
Investments (affiliated) | $ | 843,278,575 | $ | – | $ | – | $ | – | $ | – | ||||||||||
Foreign cash | $ | – | $ | – | $ | – | $ | – | $ | 1,941 | ||||||||||
† Including securities on loan | $ | – | $ | 28,231,108 | $ | 66,226,276 | $ | 38,213,853 | $ | 72,214,331 | ||||||||||
See Notes to Financial Statements
118 |
Table of Contents
STATEMENTS OF OPERATIONS — For the Year Ended August 31, 2017
AGGRESSIVE GROWTH LIFESTYLE FUND | CAPITAL APPRECIATION FUND | CONSERVATIVE GROWTH LIFESTYLE FUND | CORE BOND FUND | GOVERNMENT MONEY MARKET II FUND# | ||||||||||||||||
INVESTMENT INCOME: | ||||||||||||||||||||
Dividends (unaffiliated) | $ | – | $ | 1,144,523 | $ | – | $ | 89,541 | $ | – | ||||||||||
Dividends (affiliated) | 8,585,970 | – | 7,956,904 | – | – | |||||||||||||||
Securities lending income | – | 22,403 | – | 190,127 | – | |||||||||||||||
Interest (unaffiliated) | – | 1,046 | – | 33,688,849 | 898,037 | |||||||||||||||
Total investment income* | 8,585,970 | 1,167,972 | 7,956,904 | 33,968,517 | 898,037 | |||||||||||||||
EXPENSES: | ||||||||||||||||||||
Investment advisory and management fees | 546,008 | 476,625 | 329,580 | 4,641,129 | 338,970 | |||||||||||||||
Administrative service fee | – | 58,495 | – | 724,128 | 91,522 | |||||||||||||||
Shareholder services fee | – | 216,648 | – | 2,681,956 | 338,970 | |||||||||||||||
Transfer agent fees and expenses | 1,495 | 2,990 | 1,495 | 2,990 | 1,121 | |||||||||||||||
Custodian and accounting fees | 12,000 | 18,520 | 12,000 | 84,030 | 15,617 | |||||||||||||||
Reports to Shareholders | 57,684 | 11,412 | 43,500 | 162,821 | 37,275 | |||||||||||||||
Audit and tax fees | 30,583 | 33,933 | 30,583 | 44,993 | 52,183 | |||||||||||||||
Legal fees | 34,461 | 16,947 | 26,338 | 54,610 | 56,060 | |||||||||||||||
Trustees’ fees and expenses | 52,782 | 8,376 | 31,909 | 104,168 | 13,080 | |||||||||||||||
Interest expense | – | – | – | – | – | |||||||||||||||
Other expenses | 13,483 | 12,298 | 12,832 | 32,422 | 10,699 | |||||||||||||||
Total expenses before fee waivers, expense reimbursements, fees paid indirectly | 748,496 | 856,244 | 488,237 | 8,533,247 | 955,497 | |||||||||||||||
Fees waived and expenses reimbursed by investment adviser (Note 3) | (202,487 | ) | (119,643 | ) | (158,657 | ) | (272,824 | ) | (272,577 | ) | ||||||||||
Fees paid indirectly (Note 7) | – | (8,508 | ) | – | – | – | ||||||||||||||
Net expenses | 546,009 | 728,093 | 329,580 | 8,260,423 | 682,920 | |||||||||||||||
Net investment income (loss) | 8,039,961 | 439,879 | 7,627,324 | 25,708,094 | 215,117 | |||||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES: |
| |||||||||||||||||||
Net realized gain (loss) on: | ||||||||||||||||||||
Investments (unaffiliated)** | – | 6,860,463 | – | 5,729,800 | 835 | |||||||||||||||
Investments (affiliated) | 796,307 | – | (2,849,611 | ) | – | – | ||||||||||||||
Capital gain distributions from underlying funds (affiliated) | 19,491,349 | – | 5,314,328 | – | – | |||||||||||||||
Futures contracts | – | – | – | – | – | |||||||||||||||
Forward contracts | – | – | – | – | – | |||||||||||||||
Swap contracts | – | – | – | – | – | |||||||||||||||
Net realized foreign exchange gain (loss) on other assets and liabilities | – | – | – | – | – | |||||||||||||||
Net realized gain (loss) on investments and foreign currencies | 20,287,656 | 6,860,463 | 2,464,717 | 5,729,800 | 835 | |||||||||||||||
Change in unrealized appreciation (depreciation) on: | ||||||||||||||||||||
Investments (unaffiliated) | – | 4,264,888 | – | (19,018,763 | ) | – | ||||||||||||||
Investments (affiliated) | 26,787,375 | – | 8,295,447 | – | – | |||||||||||||||
Futures contracts | – | – | – | – | – | |||||||||||||||
Forward contracts | – | – | – | – | – | |||||||||||||||
Swap contracts | – | – | – | – | – | |||||||||||||||
Change in net unrealized foreign exchange gain (loss) on other assets and liabilities | – | – | – | – | – | |||||||||||||||
Change in accrued capital gains tax on unrealized appreciation (depreciation) | – | – | – | – | – | |||||||||||||||
Net unrealized gain (loss) on investments and foreign currencies | 26,787,375 | 4,264,888 | 8,295,447 | (19,018,763 | ) | – | ||||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currencies | 47,075,031 | 11,125,351 | 10,760,164 | (13,288,963 | ) | 835 | ||||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 55,114,992 | $ | 11,565,230 | $ | 18,387,488 | $ | 12,419,131 | $ | 215,952 | ||||||||||
* Net of foreign withholding taxes on interest and dividends of | $ | – | $ | – | $ | – | $ | 409 | $ | – | ||||||||||
** Net of foreign withholding taxes on capital gains of | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||||
# See Note 1 |
See Notes to Financial Statements
119 |
Table of Contents
VALIC Company II
STATEMENTS OF OPERATIONS — For the Year Ended August 31, 2017 — (continued)
HIGH YIELD BOND FUND | INTERNATIONAL OPPORTUNITIES FUND | LARGE CAP VALUE FUND | MID CAP GROWTH FUND | MID CAP VALUE FUND | ||||||||||||||||
INVESTMENT INCOME: | ||||||||||||||||||||
Dividends (unaffiliated) | $ | 226,263 | $ | 10,307,910 | $ | 4,737,212 | $ | 1,065,938 | $ | 13,766,690 | ||||||||||
Dividends (affiliated) | – | – | – | – | – | |||||||||||||||
Securities lending income | 423,787 | 407,948 | 18,982 | 20,019 | 466,006 | |||||||||||||||
Interest (unaffiliated) | 36,701,241 | 57,889 | 17,903 | 551 | 1,256 | |||||||||||||||
Total investment income* | 37,351,291 | 10,773,747 | 4,774,097 | 1,086,508 | 14,233,952 | |||||||||||||||
EXPENSES: | ||||||||||||||||||||
Investment advisory and management fees | 3,620,845 | 4,838,713 | 1,184,417 | 933,015 | 7,153,421 | |||||||||||||||
Administrative service fee | 404,490 | 399,829 | 159,896 | 82,737 | 701,317 | |||||||||||||||
Shareholder services fee | 1,498,111 | 1,480,848 | 592,209 | 306,434 | 2,597,469 | |||||||||||||||
Transfer agent fees and expenses | 2,990 | 2,242 | 2,242 | 2,616 | 3,364 | |||||||||||||||
Custodian and accounting fees | 45,757 | 194,040 | 16,081 | 18,371 | 70,669 | |||||||||||||||
Reports to Shareholders | 90,074 | 79,568 | 32,017 | 16,512 | 125,759 | |||||||||||||||
Audit and tax fees | 40,815 | 64,434 | 34,005 | 34,026 | 34,648 | |||||||||||||||
Legal fees | 35,720 | 61,651 | 22,331 | 18,333 | 51,662 | |||||||||||||||
Trustees’ fees and expenses | 59,652 | 55,745 | 23,536 | 11,486 | 101,418 | |||||||||||||||
Interest expense | – | 667 | 1,159 | 9 | – | |||||||||||||||
Other expenses | 32,942 | 41,886 | 15,968 | 12,290 | 28,892 | |||||||||||||||
Total expenses before fee waivers, expense reimbursements, fees paid indirectly | 5,831,396 | 7,219,623 | 2,083,861 | 1,435,829 | 10,868,619 | |||||||||||||||
Fees waived and expenses reimbursed by investment adviser (Note 3) | (78,648 | ) | (1,296,232 | ) | (165,105 | ) | (393,954 | ) | – | |||||||||||
Fees paid indirectly (Note 7) | – | – | (27,078 | ) | (6,030 | ) | (6,637 | ) | ||||||||||||
Net expenses | 5,752,748 | 5,923,391 | 1,891,678 | 1,035,845 | 10,861,982 | |||||||||||||||
Net investment income (loss) | 31,598,543 | 4,850,356 | 2,882,419 | 50,663 | 3,371,970 | |||||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES: |
| |||||||||||||||||||
Net realized gain (loss) on: | ||||||||||||||||||||
Investments (unaffiliated)** | 5,810,770 | 50,919,764 | 28,034,986 | 29,157,005 | 75,014,824 | |||||||||||||||
Investments (affiliated) | – | – | – | – | – | |||||||||||||||
Capital gain distributions from underlying funds (affiliated) | – | – | – | – | – | |||||||||||||||
Futures contracts | – | – | – | – | – | |||||||||||||||
Forward contracts | 2,365 | – | – | – | – | |||||||||||||||
Swap contracts | 1,936,825 | – | – | – | – | |||||||||||||||
Net realized foreign exchange gain (loss) on other assets and liabilities | 21,376 | (737,162 | ) | 134 | 5,128 | (10,728 | ) | |||||||||||||
Net realized gain (loss) on investments and foreign currencies | 7,771,336 | 50,182,602 | 28,035,120 | 29,162,133 | 75,004,096 | |||||||||||||||
Change in unrealized appreciation (depreciation) on: | ||||||||||||||||||||
Investments (unaffiliated) | 5,288,204 | 69,253,064 | (669,760 | ) | (7,436,242 | ) | 29,953,208 | |||||||||||||
Investments (affiliated) | – | – | – | – | – | |||||||||||||||
Futures contracts | – | – | – | – | – | |||||||||||||||
Forward contracts | (180,730 | ) | – | – | – | – | ||||||||||||||
Swap contracts | (494,673 | ) | – | – | – | – | ||||||||||||||
Change in net unrealized foreign exchange gain (loss) on other assets and liabilities | 1,483 | 53,566 | – | 10 | 108 | |||||||||||||||
Change in accrued capital gains tax on unrealized appreciation (depreciation) | – | (93,060 | ) | – | – | – | ||||||||||||||
Net unrealized gain (loss) on investments and foreign currencies | 4,614,284 | 69,213,570 | (669,760 | ) | (7,436,232 | ) | 29,953,316 | |||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currencies | 12,385,620 | 119,396,172 | 27,365,360 | 21,725,901 | 104,957,412 | |||||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 43,984,163 | $ | 124,246,528 | $ | 30,247,779 | $ | 21,776,564 | $ | 108,329,382 | ||||||||||
* Net of foreign withholding taxes on interest and dividends of | $ | – | $ | 265,350 | $ | 9,321 | $ | 5,614 | $ | 68,253 | ||||||||||
** Net of foreign withholding taxes on capital gains of | $ | – | $ | 3,983 | $ | – | $ | – | $ | – | ||||||||||
See Notes to Financial Statements
120 |
Table of Contents
VALIC Company II
STATEMENTS OF OPERATIONS — For the Year Ended August 31, 2017 — (continued)
MODERATE GROWTH LIFESTYLE FUND | SMALL CAP GROWTH FUND | SMALL CAP VALUE FUND | SOCIALLY RESPONSIBLE FUND | STRATEGIC BOND FUND | ||||||||||||||||
INVESTMENT INCOME: | ||||||||||||||||||||
Dividends (unaffiliated) | $ | – | $ | 495,167 | $ | 8,216,128 | $ | 15,704,475 | $ | 115,304 | ||||||||||
Dividends (affiliated) | 15,455,908 | – | – | – | – | |||||||||||||||
Securities lending income | – | 223,760 | 769,839 | 96,903 | 250,758 | |||||||||||||||
Interest (unaffiliated) | – | 1,812 | 10,645 | 66,222 | 34,518,219 | |||||||||||||||
Total investment income* | 15,455,908 | 720,739 | 8,996,612 | 15,867,600 | 34,884,281 | |||||||||||||||
EXPENSES: | ||||||||||||||||||||
Investment advisory and management fees | 867,506 | 960,017 | 3,580,788 | 1,962,360 | 4,049,588 | |||||||||||||||
Administrative service fee | – | 76,802 | 366,659 | 529,837 | 539,938 | |||||||||||||||
Shareholder services fee | – | 284,451 | 1,357,995 | 1,962,360 | 1,999,771 | |||||||||||||||
Transfer agent fees and expenses | 1,495 | 2,990 | 2,616 | 1,495 | 4,111 | |||||||||||||||
Custodian and accounting fees | 12,124 | 17,528 | 104,085 | 34,992 | 108,437 | |||||||||||||||
Reports to Shareholders | 116,153 | 7,470 | 51,158 | 116,981 | 124,167 | |||||||||||||||
Audit and tax fees | 30,583 | 33,966 | 35,907 | 36,387 | 45,001 | |||||||||||||||
Legal fees | 46,568 | 17,880 | 33,547 | 42,513 | 44,307 | |||||||||||||||
Trustees’ fees and expenses | 83,882 | 10,625 | 52,277 | 76,201 | 79,540 | |||||||||||||||
Interest expense | – | – | – | – | – | |||||||||||||||
Other expenses | 22,990 | 12,766 | 24,602 | 29,976 | 32,627 | |||||||||||||||
Total expenses before fee waivers, expense reimbursements, fees paid indirectly | 1,181,301 | 1,424,495 | 5,609,634 | 4,793,102 | 7,027,487 | |||||||||||||||
Fees waived and expenses reimbursed by investment adviser (Note 3) | (313,795 | ) | (104,640 | ) | (449,252 | ) | (397,414 | ) | – | |||||||||||
Fees paid indirectly (Note 7) | – | (3,238 | ) | (18,694 | ) | – | – | |||||||||||||
Net expenses | 867,506 | 1,316,617 | 5,141,688 | 4,395,688 | 7,027,487 | |||||||||||||||
Net investment income (loss) | 14,588,402 | (595,878 | ) | 3,854,924 | 11,471,912 | 27,856,794 | ||||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES: |
| |||||||||||||||||||
Net realized gain (loss) on: | ||||||||||||||||||||
Investments (unaffiliated)** | – | 8,062,842 | 46,937,566 | 10,667,027 | 12,800,663 | |||||||||||||||
Investments (affiliated) | (5,814,328 | ) | – | – | – | – | ||||||||||||||
Capital gain distributions from underlying funds (affiliated) | 25,415,071 | – | – | – | – | |||||||||||||||
Futures contracts | – | – | 1,481,506 | 4,691,137 | – | |||||||||||||||
Forward contracts | – | – | – | – | (1,340,685 | ) | ||||||||||||||
Swap contracts | – | – | – | – | – | |||||||||||||||
Net realized foreign exchange gain (loss) on other assets and liabilities | – | – | 1,004 | – | (32,529 | ) | ||||||||||||||
Net realized gain (loss) on investments and foreign currencies | 19,600,743 | 8,062,842 | 48,420,076 | 15,358,164 | 11,427,449 | |||||||||||||||
Change in unrealized appreciation (depreciation) on: | ||||||||||||||||||||
Investments (unaffiliated) | – | 19,389,509 | 6,887,365 | 76,496,108 | (3,192,951 | ) | ||||||||||||||
Investments (affiliated) | 36,118,299 | – | – | – | – | |||||||||||||||
Futures contracts | – | – | 1,340 | (902,091 | ) | – | ||||||||||||||
Forward contracts | – | – | – | – | (396,575 | ) | ||||||||||||||
Swap contracts | – | – | – | – | – | |||||||||||||||
Change in net unrealized foreign exchange gain (loss) on other assets and liabilities | – | – | – | – | 44,197 | |||||||||||||||
Change in accrued capital gains tax on unrealized appreciation (depreciation) | – | – | – | – | – | |||||||||||||||
Net unrealized gain (loss) on investments and foreign currencies | 36,118,299 | 19,389,509 | 6,888,705 | 75,594,017 | (3,545,329 | ) | ||||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currencies | 55,719,042 | 27,452,351 | 55,308,781 | 90,952,181 | 7,882,120 | |||||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 70,307,444 | $ | 26,856,473 | $ | 59,163,705 | $ | 102,424,093 | $ | 35,738,914 | ||||||||||
* Net of foreign withholding taxes on interest and dividends of | $ | – | $ | – | $ | 3,029 | $ | – | $ | 125 | ||||||||||
** Net of foreign withholding taxes on capital gains of | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||||
See Notes to Financial Statements
121 |
Table of Contents
STATEMENTS OF CHANGES IN NET ASSETS
AGGRESSIVE GROWTH LIFESTYLE FUND | CAPITAL APPRECIATION FUND | CONSERVATIVE GROWTH LIFESTYLE FUND | CORE BOND FUND | |||||||||||||||||||||||||||||
For the Year Ended August 31, 2017 | For the Year Ended August 31, 2016 | For the Year Ended August 31, 2017 | For the Year Ended August 31, 2016 | For the Year Ended August 31, 2017 | For the Year Ended August 31, 2016 | For the Year Ended August 31, 2017 | For the Year Ended August 31, 2016 | |||||||||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
| |||||||||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||||||||||
Net investment income (loss) | $ | 8,039,961 | $ | 9,089,582 | $ | 439,879 | $ | 440,586 | $ | 7,627,324 | $ | 8,058,767 | $ | 25,708,094 | $ | 25,157,030 | ||||||||||||||||
Net realized gain (loss) on investments and foreign currencies | 20,287,656 | 30,832,484 | 6,860,463 | 6,271,006 | 2,464,717 | 3,139,083 | 5,729,800 | 757,680 | ||||||||||||||||||||||||
Net unrealized gain (loss) on investments and foreign currencies | 26,787,375 | (1,861,057 | ) | 4,264,888 | (29,046 | ) | 8,295,447 | 8,283,408 | (19,018,763 | ) | 40,587,643 | |||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 55,114,992 | 38,061,009 | 11,565,230 | 6,682,546 | 18,387,488 | 19,481,258 | 12,419,131 | 66,502,353 | ||||||||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: |
| |||||||||||||||||||||||||||||||
Net investment income | (10,175,052 | ) | (10,738,936 | ) | (426,761 | ) | (312,016 | ) | (8,581,634 | ) | (8,954,028 | ) | (27,768,658 | ) | (23,425,991 | ) | ||||||||||||||||
Net realized gain on securities | (30,381,170 | ) | (36,862,555 | ) | (7,982,648 | ) | (7,803,191 | ) | (2,821,833 | ) | (13,000,997 | ) | – | (3,247,585 | ) | |||||||||||||||||
Total distributions to shareholders | (40,556,222 | ) | (47,601,491 | ) | (8,409,409 | ) | (8,115,207 | ) | (11,403,467 | ) | (21,955,025 | ) | (27,768,658 | ) | (26,673,576 | ) | ||||||||||||||||
Net increase (decrease) in net assets resulting from capital share transactions (Note 6) | 18,039,259 | 35,895,629 | 3,477,697 | 4,417,592 | (1,466,664 | ) | 5,066,395 | (71,629,262 | ) | 97,283,313 | ||||||||||||||||||||||
TOTAL INCREASE (DECREASE) IN NET ASSETS | 32,598,029 | 26,355,147 | 6,633,518 | 2,984,931 | 5,517,357 | 2,592,628 | (86,978,789 | ) | 137,112,090 | |||||||||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||||||||||
Beginning of period | 535,245,199 | 508,890,052 | 84,945,662 | 81,960,731 | 328,389,632 | 325,797,004 | 1,202,914,981 | 1,065,802,891 | ||||||||||||||||||||||||
End of period† | $ | 567,843,228 | $ | 535,245,199 | $ | 91,579,180 | $ | 84,945,662 | $ | 333,906,989 | $ | 328,389,632 | $ | 1,115,936,192 | $ | 1,202,914,981 | ||||||||||||||||
† Includes accumulated undistributed net investment income (loss) of | $ | 8,091,596 | $ | 10,167,140 | $ | 454,627 | $ | 441,490 | $ | 7,640,570 | $ | 8,576,387 | $ | 29,326,047 | $ | 27,742,291 | ||||||||||||||||
See Notes to Financial Statements
122 |
Table of Contents
VALIC Company II
STATEMENTS OF CHANGES IN NET ASSETS — (continued)
GOVERNMENT MONEY MARKET II FUND# | HIGH YIELD BOND FUND | INTERNATIONAL OPPORTUNITIES FUND | LARGE CAP VALUE FUND | |||||||||||||||||||||||||||||
For the Year Ended August 31, 2017 | For the Year Ended August 31, 2016 | For the Year Ended August 31, 2017 | For the Year Ended August 31, 2016 | For the Year Ended August 31, 2017 | For the Year Ended August 31, 2016 | For the Year Ended August 31, 2017 | For the Year Ended August 31, 2016 | |||||||||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||||||||||
Net investment income (loss) | $ | 215,117 | $ | 16,693 | $ | 31,598,543 | $ | 25,806,594 | $ | 4,850,356 | $ | 5,615,908 | $ | 2,882,419 | $ | 3,155,801 | ||||||||||||||||
Net realized gain (loss) on investments and foreign currencies | 835 | 4,513 | 7,771,336 | (14,000,137 | ) | 50,182,602 | 20,354,596 | 28,035,120 | 7,721,758 | |||||||||||||||||||||||
Net unrealized gain (loss) on investments and foreign currencies | – | – | 4,614,284 | 23,598,136 | 69,213,570 | 16,677,016 | (669,760 | ) | 7,417,784 | |||||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 215,952 | 21,206 | 43,984,163 | 35,404,593 | 124,246,528 | 42,647,520 | 30,247,779 | 18,295,343 | ||||||||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | ||||||||||||||||||||||||||||||||
Net investment income | (215,117 | ) | (16,693 | ) | (27,551,970 | ) | (23,145,260 | ) | (8,336,334 | ) | (6,570,282 | ) | (3,093,065 | ) | (2,372,082 | ) | ||||||||||||||||
Net realized gain on securities | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||
Total distributions to shareholders | (215,117 | ) | (16,693 | ) | (27,551,970 | ) | (23,145,260 | ) | (8,336,334 | ) | (6,570,282 | ) | (3,093,065 | ) | (2,372,082 | ) | ||||||||||||||||
Net increase (decrease) in net assets resulting from capital share transactions (Note 6) | (8,347,410 | ) | (18,619,160 | ) | (45,631,105 | ) | 109,564,711 | (40,867,899 | ) | (36,323,383 | ) | (31,372,481 | ) | 21,318,961 | ||||||||||||||||||
TOTAL INCREASE (DECREASE) IN NET ASSETS | (8,346,575 | ) | (18,614,647 | ) | (29,198,912 | ) | 121,824,044 | 75,042,295 | (246,145 | ) | (4,217,767 | ) | 37,242,222 | |||||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||||||||||
Beginning of period | 141,290,723 | 159,905,370 | 590,678,547 | 468,854,503 | 596,055,147 | 596,301,292 | 230,844,184 | 193,601,962 | ||||||||||||||||||||||||
End of period† | $ | 132,944,148 | $ | 141,290,723 | $ | 561,479,635 | $ | 590,678,547 | $ | 671,097,442 | $ | 596,055,147 | $ | 226,626,417 | $ | 230,844,184 | ||||||||||||||||
† Includes accumulated undistributed net investment income (loss) of | $ | (1,675 | ) | $ | (5,309 | ) | $ | 31,058,600 | $ | 26,295,089 | $ | 1,700,178 | $ | 4,071,181 | $ | 2,936,487 | $ | 3,042,318 | ||||||||||||||
# See Note 1 |
See Notes to Financial Statements
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VALIC Company II
STATEMENTS OF CHANGES IN NET ASSETS — (continued)
MID CAP GROWTH FUND | MID CAP VALUE FUND | MODERATE GROWTH LIFESTYLE FUND | SMALL CAP GROWTH FUND | |||||||||||||||||||||||||||||
For the Year Ended August 31, 2017 | For the Year Ended August 31, 2016 | For the Year Ended August 31, 2017 | For the Year Ended August 31, 2016 | For the Year Ended August 31, 2017 | For the Year Ended August 31, 2016 | For the Year Ended August 31, 2017 | For the Year Ended August 31, 2016 | |||||||||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||||||||||
Net investment income (loss) | $ | 50,663 | $ | (355,744 | ) | $ | 3,371,970 | $ | 5,960,483 | $ | 14,588,402 | $ | 17,343,033 | $ | (595,878 | ) | $ | (206,361 | ) | |||||||||||||
Net realized gain (loss) on investments and foreign currencies | 29,162,133 | (1,571,293 | ) | 75,004,096 | 53,912,204 | 19,600,743 | 35,180,140 | 8,062,842 | 4,867,921 | |||||||||||||||||||||||
Net unrealized gain (loss) on investments and foreign currencies | (7,436,232 | ) | 3,771,207 | 29,953,316 | 27,399,294 | 36,118,299 | 6,586,314 | 19,389,509 | (1,266,158 | ) | ||||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 21,776,564 | 1,844,170 | 108,329,382 | 87,271,981 | 70,307,444 | 59,109,487 | 26,856,473 | 3,395,402 | ||||||||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: |
| |||||||||||||||||||||||||||||||
Net investment income | – | – | (6,004,897 | ) | (2,541,034 | ) | (18,966,348 | ) | (18,174,605 | ) | – | – | ||||||||||||||||||||
Net realized gain on securities | – | (9,306,137 | ) | (62,435,557 | ) | (130,705,432 | ) | (34,930,260 | ) | (44,418,799 | ) | (6,507,357 | ) | (9,907,299 | ) | |||||||||||||||||
Total distributions to shareholders | – | (9,306,137 | ) | (68,440,454 | ) | (133,246,466 | ) | (53,896,608 | ) | (62,593,404 | ) | (6,507,357 | ) | (9,907,299 | ) | |||||||||||||||||
Net increase (decrease) in net assets resulting from capital share transactions (Note 6) | (8,561,660 | ) | (26,055,482 | ) | 8,580,475 | 116,970,362 | 32,960,768 | 52,013,742 | 17,097,650 | (3,633,641 | ) | |||||||||||||||||||||
TOTAL INCREASE (DECREASE) IN NET ASSETS | 13,214,904 | (33,517,449 | ) | 48,469,403 | 70,995,877 | 49,371,604 | 48,529,825 | 37,446,766 | (10,145,538 | ) | ||||||||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||||||||||
Beginning of period | 120,773,543 | 154,290,992 | 997,576,185 | 926,580,308 | 846,973,904 | 798,444,079 | 99,883,584 | 110,029,122 | ||||||||||||||||||||||||
End of period† | $ | 133,988,447 | $ | 120,773,543 | $ | 1,046,045,588 | $ | 997,576,185 | $ | 896,345,508 | $ | 846,973,904 | $ | 137,330,350 | $ | 99,883,584 | ||||||||||||||||
† Includes accumulated undistributed net investment income (loss) of | $ | 65,304 | $ | (188,572 | ) | $ | 3,847,744 | $ | 6,491,399 | $ | 14,661,865 | $ | 18,954,067 | $ | (471,542 | ) | $ | (143,661 | ) | |||||||||||||
See Notes to Financial Statements
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VALIC Company II
STATEMENTS OF CHANGES IN NET ASSETS — (continued)
SMALL CAP VALUE FUND | SOCIALLY RESPONSIBLE FUND | STRATEGIC BOND FUND | ||||||||||||||||||||||
For the Year Ended August 31, 2017 | For the Year Ended August 31, 2016 | For the Year Ended August 31, 2017 | For the Year Ended August 31, 2016 | For the Year Ended August 31, 2017 | For the Year Ended August 31, 2016 | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS OPERATIONS: | ||||||||||||||||||||||||
Net investment income (loss) | $ | 3,854,924 | $ | 4,755,127 | $ | 11,471,912 | $ | 10,817,578 | $ | 27,856,794 | $ | 27,224,356 | ||||||||||||
Net realized gain (loss) on investments and foreign currencies | 48,420,076 | 10,332,321 | 15,358,164 | 50,410,350 | 11,427,449 | (22,629,928 | ) | |||||||||||||||||
Net unrealized gain (loss) on investments and foreign currencies | 6,888,705 | 38,159,100 | 75,594,017 | 23,376,211 | (3,545,329 | ) | 49,458,576 | |||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 59,163,705 | 53,246,548 | 102,424,093 | 84,604,139 | 35,738,914 | 54,053,004 | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: |
| |||||||||||||||||||||||
Net investment income | (4,928,560 | ) | (5,703,783 | ) | (10,837,307 | ) | (10,420,982 | ) | (28,271,122 | ) | (30,733,820 | ) | ||||||||||||
Net realized gain on securities | (19,876,650 | ) | (57,354,654 | ) | (53,375,309 | ) | (45,692,358 | ) | – | (2,407,964 | ) | |||||||||||||
Total distributions to shareholders | (24,805,210 | ) | (63,058,437 | ) | (64,212,616 | ) | (56,113,340 | ) | (28,271,122 | ) | (33,141,784 | ) | ||||||||||||
Net increase (decrease) in net assets resulting from capital share transactions (Note 6) | (18,636,828 | ) | 36,438,081 | 4,865,815 | 1,869,743 | (81,877,029 | ) | 16,918,052 | ||||||||||||||||
TOTAL INCREASE (DECREASE) IN NET ASSETS | 15,721,667 | 26,626,192 | 43,077,292 | 30,360,542 | (74,409,237 | ) | 37,829,272 | |||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of period | 513,783,106 | 487,156,914 | 756,820,556 | 726,460,014 | 823,464,189 | 785,634,917 | ||||||||||||||||||
End of period† | $ | 529,504,773 | $ | 513,783,106 | $ | 799,897,848 | $ | 756,820,556 | $ | 749,054,952 | $ | 823,464,189 | ||||||||||||
† Includes accumulated undistributed net investment income (loss) of | $ | 3,833,697 | $ | 4,885,446 | $ | 12,348,644 | $ | 11,000,425 | $ | 25,906,780 | $ | 27,159,348 | ||||||||||||
See Notes to Financial Statements
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VALIC Company II
Note 1 — Organization
VALIC Company II (the “Series” or “VC II”) was organized as a Delaware statutory trust on May 6, 1998, by The Variable Annuity Life Insurance Company (“VALIC” or the “Adviser”). VALIC, the investment adviser to VC II, is an indirect wholly-owned subsidiary of American International Group, Inc. (“AIG”). VC II is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end, management investment company. The Series consists of 15 separate mutual funds (collectively, the “Funds,” or each, a “Fund”), each of which issues its own class of shares of beneficial interest:
Aggressive Growth Lifestyle Fund* | Mid Cap Growth Fund | |
Capital Appreciation Fund | Mid Cap Value Fund | |
Conservative Growth Lifestyle Fund* | Moderate Growth Lifestyle Fund* | |
Core Bond Fund | Small Cap Growth Fund | |
Government Money Market II Fund (formerly, Money Market II Fund)** | Small Cap Value Fund | |
High Yield Bond Fund | Socially Responsible Fund | |
International Opportunities Fund | Strategic Bond Fund | |
Large Cap Value Fund |
* | The Lifestyle Funds represent “Fund of Funds” which invest in either the VALIC Company I (“VC I”) or VC II mutual funds. |
** | Effective September 28, 2016, the Money Market II Fund was converted into a “government money market fund” as defined by Rule 2a-7 under the Investment Company Act of 1940, as amended. In connection with this conversion the name of Money Market II Fund was changed to Government Money Market II Fund. |
Each Fund is diversified as defined by the 1940 Act.
Indemnifications. Under VC II’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, VC II enters into contracts that contain the obligation to indemnify others. The Funds’ maximum exposure under these arrangements is unknown. Currently, however, VC II 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 following is a summary of significant accounting policies consistently followed by the Series in the preparation of its financial statements:
A. Security Valuation
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the Funds disclose the fair value of their 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 Funds would receive upon selling an asset or 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 Trustees (the “Board”) , etc.)
Level 3 — Significant unobservable inputs (includes inputs that reflect the Funds’ 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 Funds’ assets and liabilities classified in the fair value hierarchy as of August 31, 2017, is reported on a schedule following the Portfolio of Investments.
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NOTES TO FINANCIAL STATEMENTS — (continued)
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 Funds use the exchange that is the primary market for the security. Such securities are generally 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 a 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 a 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 Funds 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 Funds use 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.
Senior floating rate loans (“Loans”) are valued at the average of available bids in the market for such Loans, as provided by a Board-approved loan pricing service, and are generally categorized as Level 2.
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. Investments in registered investment companies are generally categorized as Level 1.
Futures contracts traded on national securities exchanges are valued at the quoted daily settlement price established by the exchange on which they trade reported by a Board-approved pricing service, and are generally categorized as Level 1. Swap contracts traded on national securities exchanges are valued at the closing price of the exchange on which they are traded or if a closing price of the exchange is not available, the swap will be valued using a mid valuation provided by a Board-approved pricing service, and are generally categorized as Level 2. Swap contracts traded in the over-the-counter (“OTC”) market are valued at a mid valuation provided by a Board-approved pricing service, and are generally categorized as Level 2. Forward foreign currency contracts (“forward contracts”) are valued at the 4:00 p.m. Eastern Time forward rate and are generally categorized as Level 2.
For the Government Money Market II Fund, securities are valued at amortized cost, which approximates market value and are generally categorized as Level 2. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of any discount or premium. In accordance with Rule 2a-7 under the 1940 Act, the Board has adopted procedures intended to stabilize the Government Money Market II Fund’s net asset value per share at $1.00. These procedures include the determination, at such intervals as the Board deems appropriate and reasonable in light of current market conditions, of the extent, if any, to which the Government Money Market II Fund market-based net asset value per share deviates from the Fund’s amortized cost per share. The calculation of such deviation is referred to as “shadow pricing.” For purposes of these market-based valuations, securities for which market quotations are not readily available are fair valued, as determined pursuant to procedures adopted in good faith by the Board.
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 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 Funds, 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 Series’ 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.
B. Derivative Instruments
Forward Foreign Currency Contracts: During the period, the High Yield Bond Fund and Strategic Bond Fund used forward contracts to attempt to protect the value of securities and related receivables and payables against changes in future foreign exchange rates.
A forward contract is an agreement between two parties to buy or sell currency at a set price on a future date. The market value of the contract will fluctuate with changes in currency exchange rates. The contract is marked-to-market daily using the forward rate and the cumulative change in market value is recorded by a Fund as unrealized appreciation or depreciation. On the settlement date, a Fund records either realized gains or losses equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
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NOTES TO FINANCIAL STATEMENTS — (continued)
Risks to the Funds of entering into forward contracts include counterparty risk, market risk and illiquidity risk. Counterparty risk arises upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts. If the counterparty defaults, a Fund’s loss will generally consist of the net amount of contractual payments that the Fund has not yet received though the Fund’s maximum exposure due to counterparty risk could extend to the notional amount of the contract. Market risk is the risk that the value of the forward contract will depreciate due to unfavorable changes in the exchange rates. These contracts may involve market risk in excess of the unrealized appreciation or depreciation reported on the Statements of Assets and Liabilities. Illiquidity risk arises because the secondary market for forwards may have less liquidity relative to markets for other securities. Currency transactions are also subject to risks different from those of other portfolio transactions. Because currency control is of great importance to the issuing governments and influences economic planning and policy, purchases and sales of currency and related instruments can be adversely affected by government exchange controls, limitations or restrictions on repatriation of currency, and manipulations or exchange restrictions imposed by governments.
Forward foreign currency contracts outstanding at the end of the period, if any, are reported on a schedule following the Fund’s Portfolio of Investments.
Futures: During the period, the Small Cap Value Fund and Socially Responsible Fund used equity futures contracts to equitize cash, providing exposure to equity markets.
A futures contract is an agreement between two parties to buy and sell a financial instrument at a set price on a future date. Upon entering into a futures transaction, a Fund will be required to segregate an initial margin payment of cash or other liquid securities with the futures commission merchant (the “broker”). Subsequent payments are made or received by the Fund as a result of changes in the value of the contract and/or changes in the value of the initial margin requirement. Such receipts or payments are recorded in the Statements of Assets and Liabilities as variation margin for changes in the value of the contracts and as cash collateral for futures contracts for the changes in the value of the initial margin requirement. When a contract is closed, the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
The primary risk to the Funds of entering into futures contracts is market risk. Market risk is the risk that there will be an unfavorable change in the interest rate, value or currency rate of the underlying security or securities. Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed on the Statements of Assets and Liabilities. There may also be trading restrictions or limitations imposed by an exchange, and government regulations may restrict trading in futures contracts. While the Funds will generally only purchase exchange-traded futures, due to market conditions, there may not always be a liquid secondary market for a futures contract and, as a result, a Fund may be unable to close out its futures contracts at a time which is advantageous. In addition, if a Fund has insufficient cash to meet margin requirements, the Fund may need to sell other investments, including at disadvantageous times. There is generally minimal counterparty risk to the Funds since the futures contracts are generally exchange-traded.
Futures contracts outstanding at the end of the period, if any, are reported on a schedule following the Fund’s Portfolio of Investments.
Swap Contracts: Certain Funds may enter into credit default, interest rate, equity and/or total return swap contracts. Swap contracts are privately negotiated in the OTC market and may be entered into as a bilateral contract or a centrally cleared contract (“centrally cleared swaps”). In a centrally cleared swap, immediately following execution of the swap contract, the swap contract is novated to a central counterparty (the “CCP”) and a Fund faces the CCP through a broker. Upon entering into a centrally cleared swap, the Funds are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on the size and risk profile of the particular swap. Securities deposited as initial margin are designated on the Portfolio of Investments and cash deposited is recorded on the Statements of Assets and Liabilities as cash collateral for centrally cleared swap contracts. Unlike a bilateral swap contract, for centrally cleared swaps, the Funds have no credit exposure to the counterparty as the CCP stands between the Funds and the counterparty. Swaps are marked-to-market daily and the changes in value are recorded as an unrealized gain (loss). The daily change in valuation of swap contracts, if any, is recorded as unrealized appreciation (depreciation) on swap contracts. When the swap is terminated, the Funds will record a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Funds’ basis in the contract, if any. Generally, the basis of the contracts is the premium received or paid. The Funds amortize upfront payments and receipts on the swap contracts on a daily basis. Net periodic payments made or received by the Funds are included as part of realized gain (loss).
Credit Default Swap Agreements: During the period, the High Yield Bond Fund used credit default swaps to manage credit risk (i.e., hedging), enhance returns, and as a substitute for physical securities.
Credit default swaps are generally contracts in which one party makes periodic fixed-rate payments or a one time premium payment (referred to as the buyer of protection) to another party (the seller of protection) in exchange for the right to receive a specified payment in the event of a default or other credit event for the referenced entity, obligation or index. As a seller of protection on credit default swaps, a Fund will generally receive from the buyer of protection a fixed rate of income throughout the term of the swap provided that there is no credit event. As the seller, a Fund would effectively add leverage to its Fund because, in addition to its total net assets, a Fund would be subject to investment exposure on the notional amount of the swap. If a Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, a Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. As a buyer of protection on credit default swaps, a Fund will make periodic payments, similar to an insurance premium and the seller of protection agrees to compensate the Fund for future potential losses as a result of a credit event on the reference bond or other asset. A Fund effectively transfers the credit event risk of the reference bond or asset from it to the seller of protection. If a Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and deliver the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. Recovery values are assumed by market makers considering either industry standard recovery rates or entity specific factors and considerations until a credit event occurs. If a credit event has occurred, the recovery value is determined by a facilitated auction whereby a minimum number of allowable broker bids, together with a specified valuation method, are used to calculate the settlement value.
Credit default swaps on corporate issues or sovereign issues of an emerging market country are contracts in which the buyer of protection makes periodic fixed payments or a one time premium payment to the seller of protection in exchange for the right to receive a specified payment in the event of a default or other credit event. If a credit event occurs and cash settlement is not elected, a variety of other deliverable obligations may be delivered in lieu of the specific referenced obligation. The ability to deliver other obligations
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NOTES TO FINANCIAL STATEMENTS — (continued)
may result in a cheapest-to deliver option (the buyer of protection’s right to choose the deliverable obligation with the lowest value following a credit event). A Fund may use credit default swaps on corporate issues or sovereign issues of an emerging market country to provide a measure of protection against defaults of the issuers (i.e., to reduce credit risk where a Fund owns or has exposure to the referenced obligation) or to take a speculative credit position with an active long or short position with respect to the likelihood of a particular issuer’s default.
Credit default swaps on asset-backed securities are contracts in which the buyer of protection makes periodic fixed-rate payments or a one time premium payment to the seller of protection in exchange for the right to receive a specified payment in the event of a default or other credit event. Unlike credit default swaps on corporate issues or sovereign issues of an emerging market country, deliverable obligations in most instances would be limited to the specific referenced obligation as performance for asset-backed securities can vary across deals. Prepayments, principal paydowns, and other writedown or loss events on the underlying mortgage loans will reduce the outstanding principal balance of the referenced obligation. These reductions may be temporary or permanent as defined under the terms of the swap agreement and the notional amount for the swap agreement will be adjusted by corresponding amounts. A Fund may use credit default swaps on asset-backed securities to provide a measure of protection against defaults of the referenced obligation or to take a speculative credit position with an active long or short position with respect to the likelihood of a particular referenced obligation’s default.
Credit default swaps on credit indices are generally contracts in which the buyer of protection makes periodic fixed-rate payments or a one time premium payment to the seller of protection in exchange for the right to receive a specified payment in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising the credit index. A credit index is a list of a basket of credit instruments or exposures designed to be representative of some part of the credit market as a whole. These indices are made up of reference credits that are judged by a poll of dealers to be the most liquid entities in the credit default swap market based on the sector of the index. Components of the indices may include, but are not limited to, investment grade securities, high yield securities, asset backed securities, emerging markets, and/or various credit ratings within each sector. Credit indices are traded using credit default swaps with standardized terms including a fixed spread and standard maturity dates. An index credit default swap references all the names in the index, and if there is a default, the credit event is settled based on that name’s weight in the index. The composition of the indices changes periodically, usually every six months, and for most indices, each name has an equal weight in the index. A Fund may use credit default swaps on credit indices to hedge a Fund of credit default swaps or bonds which is less expensive than it would be to enter into many credit default swaps to achieve a similar effect. Credit-default swaps on indices are used for protecting investors owning bonds against default, and also to speculate on changes in credit quality.
Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swaps on corporate issues or sovereign issues of an emerging market country as of period end are disclosed in the footnotes to the Portfolio of Investments and serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. For credit default swaps on asset-based securities and credit indices, the quoted market prices and resulting values serve as the indicator of the current status of the payment/performance risk. Wider credit spreads and increasing market values, in absolute terms when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. The maximum potential amount of future payments (undiscounted) that a Fund as a seller of protection could be required to make under a credit default swap would be an amount equal to the notional amount of the agreement. Notional amounts of all credit default swaps outstanding at the end of the period, for which a Fund is the seller of protection, if any, are disclosed on a schedule following the Fund’s Portfolio of Investments. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, or net amounts received from the settlement of buy protection credit default swaps entered into by a Fund for the same referenced entity or entities.
Credit default swap contracts outstanding at the end of the period, if any, are reported on a schedule following the Fund’s Portfolio of Investments.
Risks of Entering into Swap Agreements: Risks to a Fund of entering into credit default swaps, equity swaps and interest rate swaps, include credit risk, market risk, counterparty risk, liquidity risk and documentation risk. By entering into swap agreements, the Funds may be exposed to risk of potential loss due to unfavorable changes in interest rates, the price of the underlying security or index, or the underlying referenced asset’s perceived or actual credit, that the counterparty may default on its obligation to perform or the possibility that there is no liquid market for these agreements. There is also the risk that the parties may disagree as to the meaning of contractual terms in the swap agreement. In addition, to the extent that a subadviser does not accurately analyze and predict the underlying economic factors influencing the value of the swap, the Fund may suffer a loss.
Master Agreements: Certain Funds that hold derivative instruments and other financial instruments may be a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements or similar agreements (“Master Agreements”) with certain counterparties that govern such instruments. Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. Collateral can be in the form of cash or securities as agreed to by a Fund and applicable counterparty. Collateral requirements are generally determined based on a Fund’s net position with each counterparty. Master Agreements may also include certain provisions that require a Fund to post additional collateral upon the occurrence of certain events, such as when a Fund’s net assets fall below a specified level. In addition, Master Agreements typically specify certain standard termination events, such as failure of a party to pay or deliver, credit support defaults and other events of default. Termination events applicable to a Fund may also occur upon a decline in a Fund’s net assets below a specified level over a certain period of time. Additional termination events applicable to counterparties may occur upon a decline in a counterparty’s long-term and short-term credit ratings below a specified level, or upon a decline in the ratings of a counterparty’s credit support provider. Upon the occurrence of a termination event, the other party may elect to terminate early and cause settlement of all instruments outstanding pursuant to a particular Master Agreement, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of a Fund’s counterparties to elect early termination could cause a Fund to accelerate the payment of liabilities, which settlement amounts could be in excess of the amount of assets that are already posted as collateral. Typically, the Master Agreement will permit a single net payment in the event of default. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy, insolvency or other events. As a result, the early termination with respect to derivative instruments subject to Master Agreements that are in a net liability position could be material to a Fund’s financial statements. See additional information on specific types of derivative instruments and other financial instruments as disclosed in the Notes to Financial Statements. The Funds do not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statements of Assets and Liabilities.
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NOTES TO FINANCIAL STATEMENTS — (continued)
The following tables represent the value of derivatives held as of August 31, 2017, by their primary underlying risk exposure and the respective location on the Statement of Assets and Liabilities and the effect of derivatives on the Statement of Operations for the year ended August 31, 2017. For a detailed presentation of derivatives held as of August 31, 2017, please refer to the schedule following the Portfolio of Investments.
Asset Derivatives | ||||||||||||||||
Equity Contracts | Credit Contracts | Foreign Exchange Contracts | Total | |||||||||||||
Fund | Futures Contracts(1)(6) | Swap Contracts(2) | Foreign Exchange Contracts(3) | |||||||||||||
High Yield Bond | $ | — | $ | 64,506 | $ | — | $ | 64,506 | ||||||||
Small Cap Value | 130,950 | — | — | 130,950 | ||||||||||||
Socially Responsible | 133,705 | — | — | 133,705 | ||||||||||||
Strategic Bond | — | — | 45,593 | 45,593 | ||||||||||||
Liability Derivatives | ||||||||||||||||
Equity Contracts | Credit Contracts | Foreign Exchange Contracts | Total | |||||||||||||
Fund | Futures Contracts(1)(6) | Swap Contracts(4) | Foreign Exchange Contracts(5) | |||||||||||||
High Yield Bond | $ | — | $ | — | $ | 84,658 | $ | 84,658 | ||||||||
Small Cap Value | — | — | — | — | ||||||||||||
Socially Responsible | — | — | — | — | ||||||||||||
Strategic Bond | — | — | 863,233 | 863,233 |
Statement of Assets and Liabilities Location:
(1) | Variation Margin on futures contracts |
(2) | Unrealized appreciation on swap contracts |
(3) | Unrealized appreciation on forward foreign currency contracts |
(4) | Unrealized depreciation on swap contracts |
(5) | Unrealized depreciation on forward foreign currency contracts |
(6) | The variation margin on futures contracts is included in the cumulative unrealized appreciation (depreciation) as reported on each Fund’s Portfolio of Investments in the following amounts: |
Fund | Cumulative Unrealized Appreciation (Depreciation) | |||
Small Cap Value | $ | 68,818 | ||
Socially Responsible | 325,754 |
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NOTES TO FINANCIAL STATEMENTS — (continued)
Realized Gain (Loss) on Derivatives Recognized in Statement of Operations | ||||||||||||||||
Equity Contracts | Credit Contracts | Foreign Exchange Contracts | Total | |||||||||||||
Fund | Futures Contracts(1) | Swap Contracts(2) | Foreign Exchange Contracts(3) | |||||||||||||
High Yield Bond | $ | — | $ | 1,936,825 | $ | 2,365 | $ | 1,939,190 | ||||||||
Small Cap Value | 1,481,506 | — | — | 1,481,506 | ||||||||||||
Socially Responsible | 4,691,137 | — | — | 4,691,137 | ||||||||||||
Strategic Bond | — | — | (1,340,685 | ) | (1,340,685 | ) |
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Statement of Operations | ||||||||||||||||
Equity Contracts | Credit Contracts | Foreign Exchange Contracts | Total | |||||||||||||
Fund | Futures Contracts(4) | Swap Contracts(5) | Foreign Exchange Contracts(6) | |||||||||||||
High Yield Bond | $ | — | $ | (494,673 | ) | $ | (180,730 | ) | $ | (675,403 | ) | |||||
Small Cap Value | 1,340 | — | — | 1,340 | ||||||||||||
Socially Responsible | (902,091 | ) | — | — | (902,091 | ) | ||||||||||
Strategic Bond | — | — | (396,575 | ) | (396,575 | ) |
Statement of Operations Location:
(1) | Net realized gain (loss) on futures contracts |
(2) | Net realized gain (loss) on swap contracts |
(3) | Net realized gain (loss) on forward contracts |
(4) | Change in unrealized appreciation (depreciation) on futures contracts |
(5) | Change in unrealized appreciation (depreciation) on swap contracts |
(6) | Change in unrealized appreciation (depreciation) on forward contracts |
The following table represents the average monthly balances of derivatives held during the year ended August 31, 2017.
Average Amount Outstanding During the Year | ||||||||||||||||
Fund | Futures Contracts(1) | Credit Swap Contracts(1) | Foreign Exchange Contracts(1) | Total | ||||||||||||
High Yield Bond | $ | — | $ | 15,720,008 | $ | 7,674,112 | $ | 23,394,120 | ||||||||
Small Cap Value | 13,802,946 | — | — | 13,802,946 | ||||||||||||
Socially Responsible | 29,694,902 | — | — | 29,694,902 | ||||||||||||
Strategic Bond | — | — | 72,448,292 | 72,448,292 |
(1) | Amounts represent notional amounts in U.S. dollars. |
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NOTES TO FINANCIAL STATEMENTS — (continued)
The following tables set forth the Funds’ derivative assets and liabilities by counterparty, net of amounts available for offset under Master Agreements and net of the related collateral pledged/(received) as of August 31, 2017. The repurchase agreements held by the Funds and securities on loan as of August 31, 2017, are also subject to Master Agreements but are not included in the following tables. See the Portfolio of Investments of each Fund and the Notes to the Financial Statements for more information about the Funds’ holdings in repurchase agreements and securities on loan.
High Yield Bond Fund | ||||||||||||||||||||||||||||||||||||||||||||
Derivative Assets(1) | Derivative Liabilities(1) | |||||||||||||||||||||||||||||||||||||||||||
Counterparty | Forward Foreign Currency Contracts | OTC Swaps | Options Purchased | Total | Forward Foreign Currency Contracts | OTC Swaps | Options Written | Total | Net Derivative Assets (Liabilities) | Collateral Pledged/ (Received)(2) | Net Amount(3) | |||||||||||||||||||||||||||||||||
Barclays Bank PLC | $ | — | $ | — | $ | — | $ | — | $ | 42,024 | $ | — | $ | — | $ | 42,024 | $ | (42,024 | ) | $ | — | $ | (42,024 | ) | ||||||||||||||||||||
UBS AG | — | — | — | — | 42,634 | — | — | 42,634 | (42,634 | ) | — | (42,634 | ) | |||||||||||||||||||||||||||||||
Total | $ — | $ | — | $ | — | $ | — | $ | 84,658 | $ | — | $ | — | $ | 84,658 | $ | (84,658 | ) | $ | — | $ | (84,658 | ) | |||||||||||||||||||||
(1) | Gross amounts of recognized assets and liabilities not offset in the Statements of Assets and Liabilities. |
(2) | For each respective counterparty, collateral pledged or (received) is limited to an amount not to exceed 100% of the net amount of the derivative asset/liability in the table above. |
(3) | Net amount represents the net amount due (to)/from counterparty in the event of a default based on the contractual set-off rights under the agreement. |
C. Stripped Mortgage-Backed Securities
Stripped Mortgage-Backed Securities (“SMBS”) are multiple-class mortgage-backed securities. SMBS are often structured with two classes that receive different proportions of the interest and principal distributions on a pool of mortgage assets. SMBS have greater market volatility than other types of U.S. government securities in which a Fund invests. A common type of SMBS has one class receiving some of the interest and all or most of the principal (the “principal only” class) from the mortgage pool, while the other class will receive all or most of the interest (the “interest only” class). The yield to maturity on an interest only class is extremely sensitive not only to changes in prevailing interest rates, but also to the rate of principal payments, including principal prepayments, on the underlying pool of mortgage assets, and a rapid rate of principal payment may have a material adverse effect on a Fund‘s yield.
D. Mortgage-Backed Dollar Rolls
During the year ended August 31, 2017, the Core Bond Fund and the Strategic Bond Fund entered into dollar rolls using “to be announced” (“TBA”) mortgage-backed securities (“TBA Rolls”). TBA Roll transactions involve the sale of mortgage or other asset backed securities with the commitment to purchase substantially similar securities on a specified future date. The Funds’ policy is to record the components of TBA Rolls as purchase/sale transactions. Any difference between the purchase and sale price is recorded as a realized gain or loss on the date the transaction is entered into. TBA Roll transactions involve the risk that the market value of the securities held by a Fund may decline below the price of the securities that the Fund has sold but is obligated to repurchase under the agreement. In the event that the buyer of securities in a TBA Roll transaction files bankruptcy or becomes insolvent, a Fund‘s use of the proceeds from the sale of the securities may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund‘s obligation to repurchase the securities. The return earned by a Fund with the proceeds of the TBA Roll transaction may not exceed the transaction costs.
E. When-Issued Securities and Forward Commitments
Certain Funds may purchase or sell when-issued securities, including TBA securities that have been authorized, but not yet issued in the market. In addition, a Fund may purchase or sell securities on a forward commitment basis. A forward commitment involves entering into a contract to purchase or sell securities, typically on an extended settlement basis, for a fixed price at a future date. The Funds may engage in when-issued or forward commitment transactions in order to secure what is considered to be an advantageous price and yield at the time of entering into the obligation. The purchase of securities on a when-issued or forward commitment basis involves a risk of loss if the value of the security to be purchased declines before the settlement date. Conversely, the sale of securities on a when-issued or forward commitment basis involves the risk that the value of the securities sold may increase before the settlement date. For the year ended August 31, 2017, the Core Bond Fund and the Strategic Bond Fund purchased and/or sold when-issued securities.
F. Inflation-Indexed Bonds
Certain Funds may purchase inflation-indexed bonds. Inflation-indexed bonds are fixed income securities whose principal value is adjusted periodically according to the rate of inflation. Two structures are common. The U.S. Treasury and certain other issuers use a structure that reflects inflation in the principal value of the bond. Other issuers pay out any inflation related accruals as part of a semiannual coupon. The value of inflation-indexed bonds is expected to change in response to changes in real interest rates. Real interest rates, in turn, are tied to the relationship between nominal interest rates (i.e., stated interest rates) and the rate of inflation. Therefore, if the rate of inflation rises at a faster rate than nominal interest rates, real interest rates (i.e., nominal interest rates minus inflation) might decline, leading to an increase in value of inflation-indexed bonds. In contrast, if nominal interest rates increase at a faster rate than inflation, real interest rates might rise, leading to a decrease in value of inflation-indexed bonds. There can be no assurance, however, that the value of inflation-indexed bonds will be directly correlated to changes in nominal interest rates, and short-term increases in inflation may lead to a decline in their value. Coupon payments received from inflation-indexed bonds are recorded in the Statements of Operations as interest income. In addition, any increase or decrease in the principal amount of an inflation-indexed bond will be recorded in the Statements of Operations as an increase or decrease to interest income, even though principal is not paid until maturity.
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G. Repurchase Agreements
The Funds, along with other affiliated registered investment companies, pursuant to procedures adopted by the Board and applicable guidance from the Securities and Exchange Commission (“SEC”), may transfer uninvested cash balances into a single joint account, the daily aggregate balance of which is invested in one or more repurchase agreements collateralized by U.S. Treasury or federal agency obligations.
In a repurchase agreement, the seller of a security agrees to repurchase the security at a mutually agreed-upon time and price, which reflects the effective rate of return for the term of the agreement. For repurchase agreements and joint repurchase agreements, the Series’ custodian takes possession of the collateral pledged for investments in such repurchase agreements (“repo” or collectively “repos”). The underlying collateral is valued daily on a mark to market basis, plus accrued interest to ensure that the value, at the time the agreement is entered into, is equal to at least 102% of the repurchase price, including accrued interest. In the event of default of the obligation to repurchase, a Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by a Fund may be delayed or limited.
H. Investment Securities Loaned
To realize additional income, a Fund, except for Aggressive Growth Lifestyle Fund, Conservative Growth Lifestyle Fund, Moderate Growth Lifestyle Fund, and the Government Money Market II Fund, may lend portfolio securities with a value of up to 30% of its total assets. Securities lending arrangements are generally governed by master securities lending authorization agreements which typically provide the securities lending agent with the right to make loans of a Fund’s available securities to an approved list of borrowers. These master securities lending agreements are considered to be Master Agreements as discussed in the Notes to the Financial Statements. Loans made pursuant to these agreements will be continuously secured by collateral in an amount at least equal to the market value of the securities loaned. Such collateral will be cash, U.S. government securities, or other collateral as deemed appropriate. A Fund may use the cash collateral received to invest in short-term investments. The description of the short-term investments made with cash collateral from securities lending is included in the applicable Fund’s Portfolio of Investments. Loans by a Fund will only be made to broker-dealers deemed by the securities lending agent to be creditworthy and will not be made unless, in the judgment of VALIC, the consideration to be earned from such loans would justify the risk. It is the Series’ policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day. Therefore, the value of the collateral may be temporarily more or less than the value of the securities on loan. Each Fund receives income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower, less expenses associated with the loan. In the event of a borrower default, including if the borrower fails to maintain the requisite amount of collateral, the securities lending agent will terminate all outstanding loans to that particular borrower and the lending Fund is permitted to use the collateral to replace the securities while holding the borrower liable for any excess of replacement cost over collateral. The securities lending agent is also required to indemnify a Fund against certain losses resulting from a borrower default. Although risk is mitigated by the collateral and indemnification, the risks in lending fund securities, as with other extensions of secured credit, include possible delays in receiving additional collateral or in the recovery of the securities or possible loss of rights in the collateral should the borrower fail financially as well as risk of loss in the value of collateral or the value of the investments made with the collateral. Income and fees are recorded in the Statements of Operations as securities lending income. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.
I. 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. For financial statement purposes, the Funds amortize all premiums and accrete all discounts on fixed income securities.
Securities purchased or sold on a when-issued or forward commitment basis are included in investments purchased/sold on an extended settlement basis in the Statement of Assets and Liabilities.
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 a Fund is informed after the ex-dividend date. Paydown gains and losses on mortgage and asset-backed securities are recorded as components of interest income on the Statement of Operations. For the Lifestyle Funds, distributions from income from the Underlying Funds, if any, are recorded to income on the ex-dividend date. Distributions from net realized capital gains from the Underlying Funds, if any, are recorded to realized gains on the ex-dividend date.
Funds which earn foreign income and capital gains may be subject to foreign withholding taxes and capital gains taxes at various rates. Under applicable foreign law, a withholding of tax may be imposed on interest, dividends, and capital gains from the sale of foreign securities at various rates. India, Thailand, and certain other countries’ tax regulations require that taxes be paid on capital gains realized by a Fund.
In consideration of recent decisions rendered by the European courts, certain Funds filed reclaims to recover taxes withheld on dividends earned from certain European Union countries during calendar years 2007 through 2015. These filing are subject to various administrative and judicial proceedings within these countries. During the period, the International Opportunities Fund successfully recovered taxes withheld by Finland for the calendar years 2007 and 2008 in the amount of $418,765. Such amounts are disclosed in the Statement of Operations as Dividends, Interest income and Net realized foreign exchange gain (loss) on other assets and liabilities of $528,566, $20,444 and $(130,245), respectively. No other amounts for additional tax reclaims are disclosed in the financial statements due to the uncertainty as to the ultimate resolution of the proceedings, the likelihood of receipt of these reclaims, and the potential timing of payment.
Distributions received from Real Estate Investment Trusts (“REIT”) investments are recharacterized based on information provided by the REIT into the following categories: ordinary income, long-term and short-term capital gains, and return of capital. If information is not available on a timely basis from the REIT, the recharacterization will be based on available information which may include the previous year’s allocation. If new or additional information becomes available from the REIT at a later date, a recharacterization will be made in the following year. The amount recharacterized as ordinary income is recorded as dividend income and the amount recharacterized as capital gain is recorded as realized gain in the Statement of Operations. The amount recharacterized as return of capital is recorded as a reduction to the cost of investments in the Statement of Assets and Liabilities. These recharacterizations are reflected in the accompanying financial statements.
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NOTES TO FINANCIAL STATEMENTS — (continued)
Expenses common to all Funds are allocated among the Funds based upon relative net assets or other appropriate allocation methods. In all other respects, expenses are charged to each Fund as incurred on a specific identification basis. For the Lifestyle Funds, the expenses included in the accompanying financial statements reflect the expenses of the Lifestyle Funds and do not include any expenses associated with the Underlying Funds.
Dividends from net investment income, if any, are normally paid annually, except for the Government Money Market II Fund, which declares daily and pays monthly. Distributions from net realized capital gains, if any, are normally declared and paid annually. The Funds record 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.
Each 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. Each 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 Funds recognize 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 each 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 2014 — 2016 or expected to be taken in each Fund’s 2017 tax return. The Funds are 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 Funds file U.S. federal and certain state income tax returns. With few exceptions, the Funds are no longer subject to U.S. federal and state tax examinations by tax authorities for tax returns ending before 2014.
J. Foreign Currency Translation
The books and records of the Funds 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 Funds do 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 Funds do 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 Statements 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 Funds’ 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 and realized gains and losses on forward foreign currency contracts.
K. New Accounting Pronouncement
In October 2016, the SEC adopted amendments to rules under the 1940 Act (“final rules”) intended to modernize the reporting and disclosure of information by registered investment companies. The final rules amend Regulation S-X and require funds to provide standardized, enhanced derivative disclosure in fund financial statements in a format designed for individual investors. The amendments to Regulation S-X also update the disclosures for other investments and investments in and advances to affiliates and amend the rules regarding the general form and content of fund financial statements. The compliance date for the amendments to Regulation S-X is August 1, 2017. All required changes have been made in accordance with Regulation S-X.
Note 3 — Advisory Fees and Other Transactions with Affiliates
VALIC serves as investment adviser to VC II. Certain officers and trustees of VC II are officers and directors of VALIC or affiliates of VALIC. VALIC receives from VC II a monthly fee based on each Fund’s average daily net asset value at the following annual rates:
Aggressive Growth Lifestyle Fund | 0.10% | |
Capital Appreciation Fund | 0.55% on first $1 billion | |
0.525% on assets over $1 billion | ||
Conservative Growth Lifestyle Fund | 0.10% | |
Core Bond Fund | 0.50% on the first $200 million | |
0.45% on the next $300 million | ||
0.40% on assets over $500 million | ||
Government Money Market II Fund | 0.25% | |
High Yield Bond Fund | 0.65% on the first $150 million | |
0.60% on the next $350 million | ||
0.55% on assets over $500 million |
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International Opportunities Fund | 0.90% on the first $100 million | |
0.80% on the next $650 million | ||
0.75% on assets over $750 million | ||
Large Cap Value Fund | 0.50% on the first $500 million | |
0.475% on assets over $500 million | ||
Mid Cap Growth Fund | 0.80% on the first $50 million | |
0.75% on the next $50 million | ||
0.70% on the next $150 million | ||
0.65% on the next $250 million | ||
0.60% on assets over $500 million | ||
Mid Cap Value Fund | 0.75% on the first $100 million | |
0.725% on the next $150 million | ||
0.70% on the next $250 million | ||
0.675% on the next $250 million | ||
0.65% on assets over $750 million | ||
Moderate Growth Lifestyle Fund | 0.10% | |
Small Cap Growth Fund | 0.85% on the first $100 million | |
0.80% on assets over $100 million | ||
Small Cap Value Fund | 0.75% on the first $50 million | |
0.65% on assets over $50 million | ||
Socially Responsible Fund | 0.25% on the first $1 billion | |
0.24% on assets over $1 billion | ||
Strategic Bond Fund | 0.60% on the first $200 million | |
0.50% on the next $300 million | ||
0.45% on assets over $500 million |
VALIC has entered into subadvisory agreements with the following:
Delaware Investments Fund Advisers (“Delaware Investments”)—subadviser for a portion of the International Opportunities Fund.
J.P. Morgan Investment Management Inc. (“JPMIM”)—subadviser for the Small Cap Growth Fund and the Small Cap Value Fund.(1)
Janus Capital Management, LLC (“Janus”)—subadviser for a portion of the Large Cap Value Fund.
Massachusetts Financial Services Company (“MFS”)—subadviser for a portion of the International Opportunities Fund.
PineBridge Investments, LLC (“PineBridge”)—subadviser for the Strategic Bond Fund, Core Bond Fund, Aggressive, Moderate and Conservative Growth Lifestyle Funds.
Boston Partners Global Investors, Inc. d/b/a Boston Partners (“Boston Partners”)—subadviser for a portion of the Mid Cap Value Fund.
SunAmerica Asset Management, LLC (“SunAmerica”)—subadviser for the Government Money Market II Fund and the Socially Responsible Fund.
The Boston Company Asset Management, LLC (“The Boston Co.”)—subadviser for the Capital Appreciation Fund and a portion of the Large Cap Value Fund.
Wellington Management Company LLP—subadviser for the High Yield Bond Fund, Mid Cap Growth Fund and a portion of the Mid Cap Value Fund.(2)
(1) | Effective October 29, 2016, J.P. Morgan Investment Management Inc. replaced Wells Capital Management Incorporated as the subadvisor for the Small Cap Value Fund. |
(2) | Effective June 6, 2017, Wellington Management Company LLP replaced Wells Capital Management Incorporated as the subadvisor for the Mid Cap Growth Fund. |
The subadvisers are compensated for their services by VALIC.
VALIC has contractually agreed to waive fees and/or reimburse expenses, if necessary, to keep annual operating expenses at or below the following percentages of each Fund’s average daily net assets through December 31, 2018. 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/or 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 and 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 until December 31, 2018, subject to termination by the Board, including a majority of the Trustees who are not interested persons of the Fund or VALIC as defined by Section 2(a)(19) of the 1940 Act (the “Disinterested Trustees”).
Fund | Expense Limitation | |||
Aggressive Growth Lifestyle | 0.10 | % | ||
Capital Appreciation | 0.85 | % | ||
Conservative Growth Lifestyle | 0.10 | % | ||
Core Bond | 0.77 | % | ||
Government Money Market II | 0.55 | % | ||
High Yield Bond | 0.96 | % | ||
International Opportunities | 1.00 | % |
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NOTES TO FINANCIAL STATEMENTS — (continued)
Fund | Expense Limitation | |||
Large Cap Value | 0.81 | % | ||
Mid Cap Growth | 0.85 | % | ||
Mid Cap Value | 1.05 | % | ||
Moderate Growth Lifestyle | 0.10 | % | ||
Small Cap Growth | 1.16 | % | ||
Small Cap Value | 0.95 | % | ||
Socially Responsible | 0.56 | % | ||
Strategic Bond | 0.89 | % |
For the fiscal year ended August 31, 2017, pursuant to the contractual expense limitations in the above table, VALIC waived fees and/or reimbursed expenses as follows:
Fund | Amount | |||
Aggressive Growth Lifestyle | $ | 202,487 | ||
Capital Appreciation | 119,643 | |||
Conservative Growth Lifestyle | 158,657 | |||
Core Bond | 272,824 | |||
Government Money Market II | 209,761 | |||
High Yield Bond | 78,648 | |||
International Opportunities | 1,296,232 | |||
Large Cap Value | 165,105 | |||
Mid Cap Growth | 393,954 | |||
Moderate Growth Lifestyle | 313,795 | |||
Small Cap Growth | 104,640 | |||
Small Cap Value | 449,252 | |||
Socially Responsible | 397,414 |
VALIC may also voluntarily waive fees and/or reimburse expenses to avoid a negative yield on the Government Money Market II Fund. The voluntary waivers and/or reimbursements may be terminated at any time at the option of VALIC. The exact amount of the voluntary waivers and/or reimbursements may change on a day-to-day basis. There is no guarantee that the Government Money Market II Fund will be able to avoid a negative yield. For the fiscal year ended August 31, 2017, VALIC voluntarily waived fees and/or reimbursed expenses of $62,816 for the Government Money Market II Fund.
VC II, on behalf of each Fund, other than the Lifestyle Funds, has entered into an Administrative Services Agreement with SunAmerica (“Administrator”), an affiliate of VALIC. SunAmerica receives from each Fund in the Series, other than the Lifestyle Funds, an annual fee of 0.06% based upon each Fund’s average daily net assets, plus the following Accounting Basis Point Fee†: 0.0075% on the first $75 billion; 0.0060% on the next $25 billion; and 0.0050% in excess of $100 billion. Pursuant to the Administrative Services Agreement, SunAmerica provides administrative services to the Funds, regulatory reporting, internal legal and compliance services, fund accounting and related portfolio accounting services, all necessary office space, equipment, personnel, compensation and facilities for handling the affairs of the Funds and other services. Without limiting the generality of the foregoing, the Administrator (or its appointed service provider): assists with the preparation of prospectuses, statements of additional information, registration statements, and proxy materials; develops and prepares communications to shareholders, including the annual and semi-annual reports to shareholders; coordinates and supervises the preparation and filing of Fund tax returns; assists with the design, development, and operation of the Funds; prepares the Funds’ financial statements; determines the net asset value of the Funds’ shares; supervises the Funds’ transfer agent with respect to the payment of dividends and other distributions to shareholders; and calculates performance data of the Funds. For the fiscal year ended August 31, 2017, the Administrator earned fees as reflected in the Statements of Operations based upon the aforementioned rate.
VC II, on behalf of each Fund, entered into a Master Transfer Agency and Services Agreement with VALIC Retirement Services Company (“VRSCO”), an affiliate of VALIC. VRSCO receives from the Series and VC I an annual fee of $132,510, which is allocated to each Fund in the Series and VC I based on shareholder accounts. Under this agreement, VRSCO provides services which include the issuance and redemption of shares, acting as dividend disbursing agent, and certain shareholder reporting services including confirmation of transactions, statements of account and tax reporting. In addition to the above, VRSCO provides “Blue Sky” registration and reporting in applicable states for each Fund that is sold outside of a variable annuity or variable life contract in order to effect and maintain, as the case may be, including but not limited to, the qualification of shares for sale under the applicable securities laws of such jurisdictions to qualified plans. For the fiscal year ended August 31, 2017, VRSCO earned fees as reflected in the Statement of Operations based upon the aforementioned rate.
VC II, on behalf of each Fund, other than the Lifestyle Funds, has entered into a Shareholder Services Agreement with VALIC. Under the agreement, VALIC provides record keeping, account maintenance, and other administrative and shareholder services for contract owners and participants. VALIC receives from each Fund, other than the Lifestyle Funds, an annual fee of 0.25% based on average daily net assets of the Fund. For the fiscal year ended August 31, 2017, VALIC earned fees as reflected in the Statements of Operations based upon the aforementioned rate.
† | Accounting Basis Point Fee is calculated based upon all assets in all registered management investment companies managed and/or administered by the Administrator and VALIC, other than “funds-of-funds” and “feeder funds.” |
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NOTES TO FINANCIAL STATEMENTS — (continued)
On January 23, 2001, the Board ratified a Deferred Compensation Plan for its independent trustees who are not officers, directors, or employees of VALIC, or an affiliate of VALIC. The effective date of the plan was January 1, 2001. The first deferred payment was made in March of 2001. Under the deferred compensation plan, Trustees may elect to defer all or a portion of their compensation. Amounts deferred may be invested in up to three different affiliated mutual funds that are specified in the plan as selected by the trustees. Obligations under the deferred compensation plan represents unsecured claims against the general assets of the Funds. For the year ended August 31, 2017, VC II has deferred $17,663 of trustee compensation.
At August 31, 2017, the following affiliates owned outstanding shares of the following Funds:
Holder | ||||||||||||||||||||||||||||
Fund | American General Life Insurance Co. | The United States Life Insurance Co. | VALIC | VALIC Co. I Dynamic Allocation Fund | VC II Aggressive Growth Lifestyle | VC II Conservative Growth Lifestyle | VC II Moderate Growth Lifestyle | |||||||||||||||||||||
Aggressive Growth Lifestyle | 0.00 | % | 0.00 | % | 100.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||
Capital Appreciation | 0.00 | % | 0.00 | % | 42.13 | % | 7.98 | % | 20.97 | % | 4.44 | % | 24.48 | % | ||||||||||||||
Conservative Growth Lifestyle | 0.00 | % | 0.00 | % | 100.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||
Core Bond | 0.00 | % | 0.00 | % | 85.10 | % | 1.31 | % | 1.55 | % | 4.31 | % | 7.73 | % | ||||||||||||||
Government Money Market II | 0.00 | % | 0.00 | % | 100.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||
High Yield Bond | 0.02 | % | 0.00 | % | 84.21 | % | 0.52 | % | 2.03 | % | 5.84 | % | 7.38 | % | ||||||||||||||
International Opportunities | 0.00 | % | 0.00 | % | 93.42 | % | 0.00 | % | 2.64 | % | 0.69 | % | 3.25 | % | ||||||||||||||
Large Cap Value | 0.00 | % | 0.00 | % | 86.09 | % | 0.00 | % | 5.56 | % | 1.71 | % | 6.64 | % | ||||||||||||||
Mid Cap Growth | 0.00 | % | 0.00 | % | 88.17 | % | 1.59 | % | 4.72 | % | 0.59 | % | 4.93 | % | ||||||||||||||
Mid Cap Value | 0.24 | % | 0.00 | % | 84.99 | % | 0.18 | % | 5.20 | % | 2.01 | % | 7.38 | % | ||||||||||||||
Moderate Growth Lifestyle | 0.00 | % | 0.00 | % | 100.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||
Small Cap Growth | 0.00 | % | 0.00 | % | 76.41 | % | 3.29 | % | 10.55 | % | 1.15 | % | 8.60 | % | ||||||||||||||
Small Cap Value | 0.00 | % | 0.00 | % | 77.06 | % | 0.66 | % | 8.37 | % | 2.77 | % | 11.14 | % | ||||||||||||||
Socially Responsible | 0.00 | % | 0.00 | % | 100.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||
Strategic Bond | 0.06 | % | 0.01 | % | 80.34 | % | 0.67 | % | 1.94 | % | 8.89 | % | 8.09 | % |
As disclosed in the Portfolio of Investments, certain Funds own shares of various VC I or VC II Funds and securities issued by AIG or an affiliate thereof. During the fiscal year ended August 31, 2017, transactions in these securities were as follows:
Aggressive Growth Lifestyle Fund
Security | Income | Capital Gain Distribution Received | Value at 08/31/2016 | Cost of Purchases† | Proceeds from Sales | Realized Gain/(Loss) | Change in Unrealized Gain/(Loss) | Value at 08/31/2017 | ||||||||||||||||||||||||
VALIC Co. I Blue Chip Growth Fund | $ | — | $ | 1,378,148 | $ | 15,321,422 | $ | 1,378,148 | $ | 2,214,368 | $ | 172,281 | $ | 2,072,672 | $ | 16,730,155 | ||||||||||||||||
VALIC Co. I Capital Conservation Fund | 161,455 | 7,864 | 5,985,390 | 8,652,347 | 2,019,291 | (8,167 | ) | 22,471 | 12,632,750 | |||||||||||||||||||||||
VALIC Co. I Dividend Value Fund | 353,073 | 1,525,322 | 17,130,245 | 1,878,395 | — | — | 500,306 | 19,508,946 | ||||||||||||||||||||||||
VALIC Co. I Emerging Economies Fund | 222,924 | — | 9,933,574 | 19,212,466 | 30,848,328 | 1,592,411 | 109,877 | — | ||||||||||||||||||||||||
VALIC Co. I Foreign Value Fund | 532,274 | — | 26,622,335 | 532,274 | 3,655,628 | (207,836 | ) | 3,727,194 | 27,018,339 | |||||||||||||||||||||||
VALIC Co. I Global Real Estate Fund | 1,618,663 | 1,995,020 | 54,356,225 | 4,998,868 | 23,567,026 | (2,107,061 | ) | (1,864,073 | ) | 31,816,933 | ||||||||||||||||||||||
VALIC Co. I Government Securities Fund | 186,807 | — | 7,401,700 | 9,924,366 | 5,006,241 | (120,561 | ) | (1,725 | ) | 12,197,539 | ||||||||||||||||||||||
VALIC Co. I Inflation Protected Fund | 86,941 | 50,628 | 3,256,539 | 40,313,725 | — | — | 1,261,220 | 44,831,484 | ||||||||||||||||||||||||
VALIC Co. I International Equities Index Fund | 448,593 | — | 33,545,328 | 3,192,226 | 19,755,203 | (1,365,756 | ) | 3,723,926 | 19,340,521 | |||||||||||||||||||||||
VALIC Co. I International Government Bond Fund | — | — | 531,777 | 7,435,978 | 3,369,094 | (64,108 | ) | 98,361 | 4,632,914 | |||||||||||||||||||||||
VALIC Co. I International Growth Fund | 166,270 | — | 17,423,681 | 166,270 | 8,444,983 | (1,453,597 | ) | 3,034,766 | 10,726,137 | |||||||||||||||||||||||
VALIC Co. I Large Cap Core Fund | — | — | — | 3,297,072 | — | — | 169,196 | 3,466,268 | ||||||||||||||||||||||||
VALIC Co. I Mid Cap Index Fund | 377,158 | 2,582,696 | 26,564,486 | 13,358,529 | — | — | 386,247 | 40,309,262 | ||||||||||||||||||||||||
VALIC Co. I Mid Cap Strategic Growth Fund | — | 332,788 | 5,997,163 | 698,279 | 1,222,961 | (203,187 | ) | 691,408 | 5,960,702 | |||||||||||||||||||||||
VALIC Co. I Nasdaq-100 Index Fund | 52,150 | 325,415 | 12,357,276 | 377,565 | 5,978,855 | 2,669,000 | (1,253,226 | ) | 8,171,760 | |||||||||||||||||||||||
VALIC Co. I Science & Technology Fund | — | 420,758 | 7,961,730 | 420,758 | 2,808,422 | 602,542 | 593,529 | 6,770,137 | ||||||||||||||||||||||||
VALIC Co. I Small Cap Index Fund | 446,577 | 2,131,259 | 29,618,264 | 22,696,160 | 1,609,291 | 131,585 | 2,265,282 | 53,102,000 | ||||||||||||||||||||||||
VALIC Co. I Small Cap Special Values Fund | 153,242 | 984,341 | 14,152,320 | 9,384,125 | — | — | 92,119 | 23,628,564 | ||||||||||||||||||||||||
VALIC Co. I Stock Index Fund | 339,172 | 994,903 | 20,019,331 | 3,917,377 | 14,270,781 | 134,544 | 1,285,061 | 11,085,532 | ||||||||||||||||||||||||
VALIC Co. I Value Fund | 61,529 | — | 3,395,396 | 61,528 | — | — | 273,347 | 3,730,271 | ||||||||||||||||||||||||
VALIC Co. II Capital Appreciation Fund | 87,784 | 1,642,011 | 16,828,047 | 1,729,795 | — | — | 648,812 | 19,206,654 | ||||||||||||||||||||||||
VALIC Co. II Core Bond Fund | 366,064 | — | 31,650,665 | 11,231,990 | 25,211,288 | (163,527 | ) | (241,047 | ) | 17,266,793 | ||||||||||||||||||||||
VALIC Co. II High Yield Bond Fund | 998,065 | — | 41,823,055 | 998,064 | 32,555,984 | 736,047 | 431,215 | 11,432,397 |
† | Includes reinvestment of distributions paid. |
137 |
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VALIC Company II
NOTES TO FINANCIAL STATEMENTS — (continued)
Aggressive Growth Lifestyle Fund (continued)
Security | Income | Capital Gain Distribution Received | Value at 08/31/2016 | Cost of Purchases† | Proceeds from Sales | Realized Gain/(Loss) | Change in Unrealized Gain/(Loss) | Value at 08/31/2017 | ||||||||||||||||||||||||
VALIC Co. II International Opportunities Fund | $ | 222,174 | $ | — | $ | 18,032,426 | $ | 222,174 | $ | 3,712,203 | $ | 161,406 | $ | 3,025,999 | $ | 17,729,802 | ||||||||||||||||
VALIC Co. II Large Cap Value Fund | 156,897 | — | 9,847,452 | 1,527,313 | — | — | 1,221,179 | 12,595,944 | ||||||||||||||||||||||||
VALIC Co. II Mid Cap Growth Fund | — | — | 6,995,995 | — | 1,677,631 | 125,923 | 871,131 | 6,315,418 | ||||||||||||||||||||||||
VALIC Co. II Mid Cap Value Fund | 300,360 | 3,122,977 | 33,148,398 | 20,501,973 | — | — | 740,643 | 54,391,014 | ||||||||||||||||||||||||
VALIC Co. II Small Cap Growth Fund | — | 672,750 | 10,481,418 | 1,846,947 | — | — | 2,165,754 | 14,494,119 | ||||||||||||||||||||||||
VALIC Co. II Small Cap Value Fund | 328,412 | 1,324,469 | 21,141,495 | 22,595,610 | — | — | 589,469 | 44,326,574 | ||||||||||||||||||||||||
VALIC Co. II Strategic Bond Fund | 919,386 | — | 33,848,518 | 13,891,386 | 33,535,624 | 164,368 | 146,262 | 14,514,910 | ||||||||||||||||||||||||
$ | 8,585,970 | $ | 19,491,349 | $ | 535,371,651 | $ | 226,441,708 | $ | 221,463,202 | $ | 796,307 | $ | 26,787,375 | $ | 567,933,839 | |||||||||||||||||
Conservative Growth Lifestyle Fund
Security | Income | Capital Gain Distribution Received | Value at 08/31/2016 | Cost of Purchases† | Proceeds from Sales | Realized Gain/(Loss) | Change in Unrealized Gain/(Loss) | Value at 08/31/2017 | ||||||||||||||||||||||||
VALIC Co. I Blue Chip Growth Fund | $ | — | $ | 167,310 | $ | 2,326,865 | $ | 167,310 | $ | 745,512 | $ | (65,455 | ) | $ | 347,867 | $ | 2,031,075 | |||||||||||||||
VALIC Co. I Capital Conservation Fund | 287,081 | 13,983 | 13,460,918 | 8,823,726 | 5,219,249 | 47,901 | (164,482 | ) | 16,948,814 | |||||||||||||||||||||||
VALIC Co. I Dividend Value Fund | 146,531 | 633,033 | 7,109,322 | 779,563 | — | — | 207,635 | 8,096,520 | ||||||||||||||||||||||||
VALIC Co. I Emerging Economies Fund | 73,806 | — | 1,540,790 | 10,590,900 | 12,788,992 | 641,326 | 15,976 | — | ||||||||||||||||||||||||
VALIC Co. I Foreign Value Fund | 117,712 | — | 11,259,806 | 117,712 | 6,967,160 | (978,544 | ) | 2,020,931 | 5,452,745 | |||||||||||||||||||||||
VALIC Co. I Global Real Estate Fund | 534,116 | 658,304 | 19,440,502 | 1,192,420 | 10,499,174 | (1,316,758 | ) | (176,006 | ) | 8,640,984 | ||||||||||||||||||||||
VALIC Co. I Government Securities Fund | 144,952 | — | 11,452,787 | 6,919,766 | 16,839,861 | (443,670 | ) | 42,180 | 1,131,202 | |||||||||||||||||||||||
VALIC Co. I Inflation Protected Fund | 76,938 | 44,803 | 9,978,232 | 25,989,289 | — | — | 985,569 | 36,953,090 | ||||||||||||||||||||||||
VALIC Co. I International Equities Index Fund | 137,558 | — | 15,142,320 | 1,739,008 | 15,745,378 | (47,506 | ) | 766,978 | 1,855,422 | |||||||||||||||||||||||
VALIC Co. I International Government Bond Fund | — | — | 329,674 | 7,868,183 | 2,127,834 | (41,360 | ) | 153,375 | 6,182,038 | |||||||||||||||||||||||
VALIC Co. I International Growth Fund | 30,883 | — | 6,337,605 | 30,883 | 4,753,419 | (731,698 | ) | 954,604 | 1,837,975 | |||||||||||||||||||||||
VALIC Co. I Large Cap Core Fund | — | — | — | 1,314,816 | — | — | 63,694 | 1,378,510 | ||||||||||||||||||||||||
VALIC Co. I Mid Cap Index Fund | 111,021 | 760,248 | 2,386,633 | 11,651,504 | — | — | (332,330 | ) | 13,705,807 | |||||||||||||||||||||||
VALIC Co. I Mid Cap Strategic Growth Fund | — | 23,714 | 671,931 | 149,149 | 335,485 | (81,819 | ) | 126,263 | 530,039 | |||||||||||||||||||||||
VALIC Co. I Nasdaq-100 Index Fund | 5,481 | 34,202 | 679,983 | 39,683 | — | — | 139,208 | 858,874 | ||||||||||||||||||||||||
VALIC Co. I Science & Technology Fund | — | 55,747 | 689,268 | 55,747 | — | — | 151,970 | 896,985 | ||||||||||||||||||||||||
VALIC Co. I Small Cap Index Fund | 106,449 | 508,019 | 5,475,724 | 10,781,218 | — | — | 361,501 | 16,618,443 | ||||||||||||||||||||||||
VALIC Co. I Small Cap Special Values Fund | 62,060 | 398,637 | 5,731,386 | 6,043,700 | — | — | 2,961 | 11,778,047 | ||||||||||||||||||||||||
VALIC Co. I Stock Index Fund | 27,275 | 80,005 | 2,047,065 | 107,280 | 2,218,018 | 66,642 | (2,969 | ) | — | |||||||||||||||||||||||
VALIC Co. I Value Fund | 15,421 | — | 851,011 | 15,421 | — | — | 68,511 | 934,943 | ||||||||||||||||||||||||
VALIC Co. II Capital Appreciation Fund | 18,574 | 347,426 | 3,560,571 | 365,999 | — | — | 137,279 | 4,063,849 | ||||||||||||||||||||||||
VALIC Co. II Core Bond Fund | 1,229,999 | — | 66,368,944 | 4,224,586 | 21,667,586 | 340,331 | (1,175,108 | ) | 48,091,167 | |||||||||||||||||||||||
VALIC Co. II High Yield Bond Fund | 1,869,960 | — | 45,840,032 | 1,869,958 | 16,048,044 | 610,721 | 511,661 | 32,784,328 | ||||||||||||||||||||||||
VALIC Co. II International Opportunities Fund | 45,999 | — | 7,246,530 | 986,732 | 4,173,856 | 72,089 | 536,122 | 4,667,617 | ||||||||||||||||||||||||
VALIC Co. II Large Cap Value Fund | 48,166 | — | 3,402,227 | 48,166 | — | — | 416,493 | 3,866,886 | ||||||||||||||||||||||||
VALIC Co. II Mid Cap Growth Fund | — | — | 665,361 | — | — | — | 129,596 | 794,957 | ||||||||||||||||||||||||
VALIC Co. II Mid Cap Value Fund | 113,705 | 1,182,243 | 7,779,257 | 13,284,320 | — | — | (80,100 | ) | 20,983,477 | |||||||||||||||||||||||
VALIC Co. II Small Cap Growth Fund | — | 75,588 | 542,833 | 802,588 | — | — | 226,508 | 1,571,929 | ||||||||||||||||||||||||
VALIC Co. II Small Cap Value Fund | 82,090 | 331,066 | 7,065,831 | 7,280,508 | — | — | 329,658 | 14,675,997 | ||||||||||||||||||||||||
VALIC Co. II Strategic Bond Fund | 2,671,127 | — | 69,060,359 | 16,034,726 | 19,091,518 | (921,811 | ) | 1,529,902 | 66,611,658 | |||||||||||||||||||||||
$ | 7,956,904 | $ | 5,314,328 | $ | 328,443,767 | $ | 139,274,861 | $ | 139,221,086 | $ | (2,849,611 | ) | $ | 8,295,447 | $ | 333,943,378 | ||||||||||||||||
Moderate Growth Lifestyle Fund
Security | Income | Capital Gain Distribution Received | Value at 08/31/2016 | Cost of Purchases† | Proceeds from Sales | Realized Gain/(Loss) | Change in Unrealized Gain/(Loss) | Value at 08/31/2017 | ||||||||||||||||||||||||
VALIC Co. I Blue Chip Growth Fund | $ | — | $ | 1,596,942 | $ | 15,199,126 | $ | 1,596,943 | $ | — | $ | — | $ | 2,590,154 | $ | 19,386,223 | ||||||||||||||||
VALIC Co. I Capital Conservation Fund | 595,887 | 29,025 | 23,964,652 | 19,750,356 | 6,143,134 | (24,910 | ) | (219,806 | ) | 37,327,158 | ||||||||||||||||||||||
VALIC Co. I Dividend Value Fund | 471,333 | 2,036,219 | 22,867,915 | 2,507,551 | — | — | 667,881 | 26,043,347 |
† | Includes reinvestment of distributions paid. |
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Table of Contents
VALIC Company II
NOTES TO FINANCIAL STATEMENTS — (continued)
Moderate Growth Lifestyle Fund (continued)
Security | Income | Capital Gain Distribution Received | Value at 08/31/2016 | Cost of Purchases† | Proceeds from Sales | Realized Gain/(Loss) | Change in Unrealized Gain/(Loss) | Value at 08/31/2017 | ||||||||||||||||||||||||
VALIC Co. I Emerging Economies Fund | $ | 226,614 | $ | — | $ | 9,422,600 | $ | 23,141,922 | $ | 34,458,362 | $ | 1,798,162 | $ | 95,678 | $ | — | ||||||||||||||||
VALIC Co. I Foreign Value Fund | 529,911 | — | 29,489,789 | 529,911 | 4,186,055 | (334,113 | ) | 4,181,138 | 29,680,670 | |||||||||||||||||||||||
VALIC Co. I Global Real Estate Fund | 1,904,561 | 2,347,394 | 80,198,117 | 4,251,956 | 44,180,284 | (4,265,831 | ) | (1,650,871 | ) | 34,353,087 | ||||||||||||||||||||||
VALIC Co. I Government Securities Fund | 322,195 | — | 12,651,446 | 17,291,564 | 16,695,561 | (503,713 | ) | 158,275 | 12,902,011 | |||||||||||||||||||||||
VALIC Co. I Inflation Protected Fund | 158,741 | 92,439 | 8,429,373 | 69,105,600 | — | — | 2,278,464 | 79,813,437 | ||||||||||||||||||||||||
VALIC Co. I International Equities Index Fund | 478,653 | — | 38,077,630 | 5,610,532 | 21,314,996 | (1,209,850 | ) | 4,107,911 | 25,271,227 | |||||||||||||||||||||||
VALIC Co. I International Government Bond Fund | — | — | 840,378 | 9,735,408 | 5,100,006 | (94,752 | ) | 99,077 | 5,480,105 | |||||||||||||||||||||||
VALIC Co. I International Growth Fund | 132,857 | — | 23,502,940 | 132,857 | 14,585,645 | (2,637,740 | ) | 3,902,511 | 10,314,923 | |||||||||||||||||||||||
VALIC Co. I Large Cap Core Fund | — | — | — | 4,353,437 | — | — | 218,088 | 4,571,525 | ||||||||||||||||||||||||
VALIC Co. I Mid Cap Index Fund | 580,321 | 3,973,905 | 34,948,351 | 27,723,718 | — | — | 62,604 | 62,734,673 | ||||||||||||||||||||||||
VALIC Co. I Mid Cap Strategic Growth Fund | — | 331,256 | 4,731,566 | 852,462 | — | — | 515,968 | 6,099,996 | ||||||||||||||||||||||||
VALIC Co. I Nasdaq-100 Index Fund | 59,445 | 370,938 | 7,374,763 | 430,383 | — | — | 1,509,777 | 9,314,923 | ||||||||||||||||||||||||
VALIC Co. I Science & Technology Fund | — | 555,062 | 6,862,935 | 555,062 | — | — | 1,513,135 | 8,931,132 | ||||||||||||||||||||||||
VALIC Co. I Small Cap Index Fund | 658,094 | 3,140,711 | 43,777,211 | 32,523,038 | — | — | 3,410,478 | 79,710,727 | ||||||||||||||||||||||||
VALIC Co. I Small Cap Special Values Fund | 235,437 | 1,512,320 | 21,192,799 | 13,764,670 | — | — | 114,113 | 35,071,582 | ||||||||||||||||||||||||
VALIC Co. I Stock Index Fund | 253,946 | 744,907 | 21,075,631 | 5,307,565 | 24,803,360 | 939,571 | 148,280 | 2,667,687 | ||||||||||||||||||||||||
VALIC Co. I Value Fund | 77,462 | — | 4,274,657 | 77,462 | — | — | 344,130 | 4,696,249 | ||||||||||||||||||||||||
VALIC Co. II Capital Appreciation Fund | 102,514 | 1,917,536 | 19,651,753 | 2,020,050 | — | — | 757,680 | 22,429,483 | ||||||||||||||||||||||||
VALIC Co. II Core Bond Fund | 2,144,950 | — | 93,570,680 | 27,093,028 | 33,165,495 | 110,055 | (1,392,323 | ) | 86,215,945 | |||||||||||||||||||||||
VALIC Co. II High Yield Bond Fund | 2,605,456 | — | 91,118,805 | 2,605,453 | 54,822,322 | 1,645,381 | 902,976 | 41,450,293 | ||||||||||||||||||||||||
VALIC Co. II International Opportunities Fund | 273,076 | — | 19,079,039 | 273,076 | 1,296,401 | (29,464 | ) | 3,765,576 | 21,791,826 | |||||||||||||||||||||||
VALIC Co. II Large Cap Value Fund | 187,547 | — | 13,077,261 | 376,319 | — | — | 1,603,049 | 15,056,629 | ||||||||||||||||||||||||
VALIC Co. II Mid Cap Growth Fund | — | — | 5,523,801 | — | — | — | 1,075,895 | 6,599,696 | ||||||||||||||||||||||||
VALIC Co. II Mid Cap Value Fund | 425,258 | 4,421,590 | 48,763,345 | 27,242,778 | — | — | 1,154,139 | 77,160,262 | ||||||||||||||||||||||||
VALIC Co. II Small Cap Growth Fund | — | 567,651 | 7,824,110 | 2,258,185 | — | — | 1,722,545 | 11,804,840 | ||||||||||||||||||||||||
VALIC Co. II Small Cap Value Fund | 440,664 | 1,777,176 | 25,081,035 | 33,681,733 | — | — | 172,267 | 58,935,035 | ||||||||||||||||||||||||
VALIC Co. II Strategic Bond Fund | 2,590,986 | — | 113,109,023 | 18,431,027 | 71,971,634 | (1,207,124 | ) | 2,309,510 | 60,670,802 | |||||||||||||||||||||||
$ | 15,455,908 | $ | 25,415,071 | $ | 845,680,731 | $ | 353,224,046 | $ | 332,723,255 | $ | (5,814,328 | ) | $ | 36,118,299 | $ | 896,485,493 | ||||||||||||||||
† | Includes reinvestment of distributions paid. |
Note 4 — Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales and maturities of long-term investments during the year ended August 31, 2017 were as follows:
Fund | Purchases of Investment Securities (Excluding U.S. Government Securities) | Sales of Investment Securities (Excluding U.S. Government Securities) | Purchase of U.S. Government Securities | Sales of U.S. Government Securities | ||||||||||||
Aggressive Growth Lifestyle | $ | 198,364,389 | $ | 221,463,202 | $ | — | $ | — | ||||||||
Capital Appreciation | 56,400,077 | 62,302,794 | — | — | ||||||||||||
Conservative Growth Lifestyle | 126,003,629 | 139,221,086 | — | — | ||||||||||||
Core Bond | 624,814,722 | 498,099,459 | 177,826,008 | 349,436,758 | ||||||||||||
Government Money Market II | — | — | — | — | ||||||||||||
High Yield Bond | 291,613,095 | 294,438,365 | — | — | ||||||||||||
International Opportunities | 359,759,039 | 405,109,188 | — | — | ||||||||||||
Large Cap Value | 178,086,045 | 207,249,860 | — | — | ||||||||||||
Mid Cap Growth | 197,291,728 | 205,450,147 | — | — | ||||||||||||
Mid Cap Value | 455,023,054 | 510,936,324 | — | — | ||||||||||||
Moderate Growth Lifestyle | 312,353,067 | 332,723,255 | — | — | ||||||||||||
Small Cap Growth | | 54,096,686 | | 44,627,525 | — | — | ||||||||||
Small Cap Value | 411,052,322 | 415,907,422 | — | — | ||||||||||||
Socially Responsible | — | 34,933,416 | — | — | ||||||||||||
Strategic Bond | 794,750,483 | 738,734,758 | 121,111,616 | 223,962,404 |
139 |
Table of Contents
VALIC Company II
NOTES TO FINANCIAL STATEMENTS — (continued)
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 Statements of Assets and Liabilities by temporary book/tax differences primarily arising from wash sales, post October losses, investments in passive foreign investment companies, treatment of deferred compensation, late year ordinary losses, straddles, treatment of defaulted securities and derivative transactions.
The information in the following table is presented on the basis of cost for Federal Income Tax purposes at August 31, 2017.
Fund | Identified Cost of Investments Owned | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)@ | ||||||||||||
Aggressive Growth Lifestyle | $ | 531,491,736 | $ | 41,527,513 | $ | (5,085,410 | ) | $ | 36,442,103 | |||||||
Capital Appreciation | 72,170,680 | 20,127,303 | (233,978 | ) | 19,893,325 | |||||||||||
Conservative Growth Lifestyle | 326,459,847 | 9,289,960 | (1,806,429 | ) | 7,483,531 | |||||||||||
Core Bond | 1,162,561,653 | 22,283,466 | (5,148,742 | ) | 17,134,724 | |||||||||||
Government Money Market II | 133,143,861 | — | — | — | ||||||||||||
High Yield Bond | 594,223,075 | 25,146,486 | (12,832,081 | ) | 12,314,405 | |||||||||||
International Opportunities | 526,002,641 | 169,568,202 | (11,478,295 | ) | 158,089,907 | |||||||||||
Large Cap Value | 208,748,624 | 25,829,708 | (7,961,088 | ) | 17,868,620 | |||||||||||
Mid Cap Growth | 130,180,342 | 9,200,766 | (3,836,122 | ) | 5,364,644 | |||||||||||
Mid Cap Value | 921,113,830 | 178,637,258 | (35,338,715 | ) | 143,298,543 | |||||||||||
Moderate Growth Lifestyle | 848,864,411 | 54,542,149 | (6,921,067 | ) | 47,621,082 | |||||||||||
Small Cap Growth | 117,653,586 | 32,916,472 | (3,545,558 | ) | 29,370,914 | |||||||||||
Small Cap Value | 475,756,540 | 92,072,887 | (28,082,196 | ) | 63,990,691 | |||||||||||
Socially Responsible | 584,731,590 | 247,420,053 | (30,873,063 | ) | 216,546,990 | |||||||||||
Strategic Bond | 798,505,192 | 21,273,672 | (7,934,438 | ) | 13,339,234 |
@ | Unrealized appreciation (depreciation) includes amounts for derivatives. |
The tax character of distributions paid may differ from the Statement of Changes in Net Assets due to short-term gains treated as ordinary income distributions for tax purposes.
The tax basis distributable earnings at August 31, 2017 and the tax character of distributions paid during the year ended August 31, 2017 were as follows:
Distributable Earnings | Tax Distributions | |||||||||||||||||||
For the year ended August 31, 2017 | ||||||||||||||||||||
Fund | Ordinary Income | Long-term Capital Gains and Other Losses | Unrealized Appreciation (Depreciation)@ | Ordinary Income | Long-Term Capital Gains | |||||||||||||||
Aggressive Growth Lifestyle | $ | 9,804,295 | $ | 18,613,877 | $ | 36,442,103 | $ | 10,175,052 | $ | 30,381,170 | ||||||||||
Capital Appreciation | 457,970 | 4,650,345 | 19,893,325 | 426,761 | 7,982,648 | |||||||||||||||
Conservative Growth Lifestyle | 8,269,513 | 1,304,182 | 7,483,531 | 8,581,634 | 2,821,833 | |||||||||||||||
Core Bond | 29,745,347 | — | 17,134,724 | 27,768,658 | — | |||||||||||||||
Government Money Market II | 7,550 | 3 | — | 215,117 | — | |||||||||||||||
High Yield Bond | 32,204,893 | (40,168,756 | ) | 12,315,661 | 27,551,970 | — | ||||||||||||||
International Opportunities | 5,910,066 | (55,462,966 | ) | 157,978,624 | 8,336,334 | — | ||||||||||||||
Large Cap Value | 2,944,007 | 8,292,957 | 17,868,620 | 3,093,065 | — | |||||||||||||||
Mid Cap Growth | 3,368,041 | 23,021,560 | 5,364,654 | — | — | |||||||||||||||
Mid Cap Value | 3,883,376 | 67,966,499 | 143,298,541 | 6,004,897 | 62,435,557 | |||||||||||||||
Moderate Growth Lifestyle | 16,737,065 | 18,327,088 | 47,621,082 | 18,966,348 | 34,930,260 | |||||||||||||||
Small Cap Growth | — | 6,153,849 | 29,370,914 | — | 6,507,357 | |||||||||||||||
Small Cap Value | 17,850,669 | 23,131,727 | 63,990,691 | 4,928,560 | 19,876,650 | |||||||||||||||
Socially Responsible | 13,604,434 | 12,597,667 | 216,546,990 | 12,099,423 | 52,113,193 | |||||||||||||||
Strategic Bond | 30,340,988 | (15,490,447 | ) | 13,374,894 | 28,271,122 | — |
@ | Unrealized appreciation (depreciation) includes amounts for derivatives and other assets and liabilities denominated in foreign currency. |
140 |
Table of Contents
VALIC Company II
NOTES TO FINANCIAL STATEMENTS — (continued)
The tax character of distributions paid during the year ended August 31, 2016 were as follows:
Tax Distributions | ||||||||
Fund | Ordinary Income | Long-Term Capital Gains | ||||||
Aggressive Growth Lifestyle | $ | 13,270,729 | $ | 34,330,762 | ||||
Capital Appreciation | 312,016 | 7,803,191 | ||||||
Conservative Growth Lifestyle | 9,991,705 | 11,963,320 | ||||||
Core Bond | 26,673,576 | — | ||||||
Government Money Market II | 16,693 | — | ||||||
High Yield Bond | 23,145,260 | — | ||||||
International Opportunities | 6,570,282 | — | ||||||
Large Cap Value | 2,372,082 | — | ||||||
Mid Cap Growth | — | 9,306,137 | ||||||
Mid Cap Value | 2,541,034 | 130,705,432 | ||||||
Moderate Growth Lifestyle | 21,298,906 | 41,294,498 | ||||||
Small Cap Growth | 69,228 | 9,838,071 | ||||||
Small Cap Value | 10,495,948 | 52,562,489 | ||||||
Socially Responsible | 10,420,982 | 45,692,358 | ||||||
Strategic Bond | 32,224,009 | 917,775 |
As of August 31, 2017, for Federal income tax purposes, the Funds indicated below have capital loss carryforwards, which expire in the year indicated, which are available to offset future capital gains, if any:
Capital Loss Carryforward | Unlimited | |||||||||||
Fund | 2018 | ST | LT | |||||||||
Aggressive Growth Lifestyle | $ | — | $ | — | $ | — | ||||||
Capital Appreciation | — | — | — | |||||||||
Conservative Growth Lifestyle | — | — | — | |||||||||
Core Bond | — | — | — | |||||||||
Government Money Market II | — | — | — | |||||||||
High Yield Bond | 25,316,663 | 3,514,648 | 11,337,445 | |||||||||
International Opportunities | 55,462,966 | — | — | |||||||||
Large Cap Value | — | — | — | |||||||||
Mid Cap Growth | — | — | — | |||||||||
Mid Cap Value | — | — | — | |||||||||
Moderate Growth Lifestyle | — | — | — | |||||||||
Small Cap Growth | — | — | — | |||||||||
Small Cap Value | — | — | — | |||||||||
Socially Responsible | — | — | — | |||||||||
Strategic Bond | — | — | 15,490,447 |
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years beginning after the date of enactment. Under the Act, the fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term losses rather than being considered all short-term as under previous law. |
The Funds indicated below utilized capital loss carryforwards, which offset net taxable gains realized in the current year.
Fund | Capital Loss Carryforward Utilized | |||
Aggressive Growth Lifestyle | $ | — | ||
Capital Appreciation | — | |||
Conservative Growth Lifestyle | — | |||
Core Bond | 1,908,578 | |||
Government Money Market II | — | |||
High Yield Bond | 3,280,143 | |||
International Opportunities | 37,884,633 |
141 |
Table of Contents
VALIC Company II
NOTES TO FINANCIAL STATEMENTS — (continued)
Fund | Capital Loss Carryforward Utilized | |||
Large Cap Value | $ | 17,831,901 | ||
Mid Cap Growth | 2,327,330 | |||
Mid Cap Value | — | |||
Moderate Growth Lifestyle | — | |||
Small Cap Growth | — | |||
Small Cap Value | — | |||
Socially Responsible | — | |||
Strategic Bond | 3,364,943 |
Under the current tax law, capital losses realized after October 31 and late year ordinary losses may be deferred and treated as occurring on the first day of the following year. For the fiscal year ended August 31, 2017, the Funds elected to defer late year ordinary losses and post October capital losses as follows:
Fund | Deferred Late Year Ordinary Loss | Deferred Post-October Short-Term Capital Loss | Deferred Post-October Long-Term Capital Loss | |||||||||
Aggressive Growth Lifestyle | $ | — | $ | — | $ | — | ||||||
Capital Appreciation | — | 195,799 | — | |||||||||
Conservative Growth Lifestyle | — | — | — | |||||||||
Core Bond | — | 1,748,297 | — | |||||||||
Government Money Market II | — | — | — | |||||||||
High Yield Bond | 1,137,020 | — | — | |||||||||
International Opportunities | — | 1,873,079 | — | |||||||||
Large Cap Value | — | — | — | |||||||||
Mid Cap Growth | 148,850 | — | — | |||||||||
Mid Cap Value | 10,193 | 3,066,158 | — | |||||||||
Moderate Growth Lifestyle | — | — | — | |||||||||
Small Cap Growth | 421,447 | — | — | |||||||||
Small Cap Value | — | — | — | |||||||||
Socially Responsible | — | — | — | |||||||||
Strategic Bond | 5,043,362 | — | — |
For the period ended August 31, 2017, the reclassifications arising from book/tax differences resulted in increases (decreases) that were primarily due to tax treatment of net investment losses, principal paydown adjustments, disposition of passive foreign investment companies securities, and foreign currency transactions to the components of net assets as follows:
Fund | Accumulated Undistributed Net Investment Income (Loss) | Accumulated Undistributed Net Realized Gain (Loss) | Capital Paid-in | |||||||||
Aggressive Growth Lifestyle | $ | 59,547 | $ | (59,547 | ) | $ | — | |||||
Capital Appreciation | 19 | (19 | ) | — | ||||||||
Conservative Growth Lifestyle | 18,493 | (18,493 | ) | — | ||||||||
Core Bond | 3,644,320 | (3,644,320 | ) | — | ||||||||
Government Money Market II | 3,634 | (3,634 | ) | — | ||||||||
High Yield Bond | 716,938 | (716,938 | ) | — | ||||||||
International Opportunities | 1,114,975 | (1,114,975 | ) | — | ||||||||
Large Cap Value | �� | 104,815 | (104,815 | ) | — | |||||||
Mid Cap Growth | 203,213 | (203,213 | ) | — | ||||||||
Mid Cap Value | (10,728 | ) | 10,728 | — | ||||||||
Moderate Growth Lifestyle | 85,744 | (85,744 | ) | — | ||||||||
Small Cap Growth | 267,997 | (92,671 | ) | (175,326 | ) | |||||||
Small Cap Value | 21,887 | (21,887 | ) | — | ||||||||
Socially Responsible | 713,614 | (713,614 | ) | — | ||||||||
Strategic Bond | (838,240 | ) | 838,240 | — |
142 |
Table of Contents
VALIC Company II
NOTES TO FINANCIAL STATEMENTS — (continued)
Note 6 — Capital Share Transactions
Transactions in capital shares of each class of each Fund were as follows:
Aggressive Growth Lifestyle | Capital Appreciation | |||||||||||||||||||||||||||||||
For the year ended August 31, 2017 | For the year ended August 31, 2016 | For the year ended August 31, 2017 | For the year ended August 31, 2016 | |||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Shares sold | 2,288,345 | $ | 24,431,926 | 2,529,023 | $ | 26,519,694 | 160,693 | $ | 2,642,739 | 165,944 | $ | 2,726,232 | ||||||||||||||||||||
Reinvested dividends | 3,884,696 | 40,556,222 | 4,837,550 | 47,601,491 | 525,588 | 8,409,409 | 527,990 | 8,115,207 | ||||||||||||||||||||||||
Shares redeemed | (4,415,461 | ) | (46,948,889 | ) | (3,663,417 | ) | (38,225,556 | ) | (464,903 | ) | (7,574,451 | ) | (394,882 | ) | (6,423,847 | ) | ||||||||||||||||
Net increase (decrease) | 1,757,580 | $ | 18,039,259 | 3,703,156 | $ | 35,895,629 | 221,378 | $ | 3,477,697 | 299,052 | $ | 4,417,592 | ||||||||||||||||||||
Conservative Growth Lifestyle | Core Bond | |||||||||||||||||||||||||||||||
For the year ended August 31, 2017 | For the year ended August 31, 2016 | For the year ended August 31, 2017 | For the year ended August 31, 2016 | |||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Shares sold | 1,936,936 | $ | 23,049,619 | 1,704,814 | $ | 20,114,374 | 14,147,011 | $ | 156,951,575 | 29,384,378 | $ | 324,369,615 | ||||||||||||||||||||
Reinvested dividends | 965,577 | 11,403,467 | 1,934,363 | 21,955,025 | 2,552,266 | 27,768,658 | 2,420,470 | 26,673,576 | ||||||||||||||||||||||||
Shares redeemed | (3,007,486 | ) | (35,919,750 | ) | (3,130,108 | ) | (37,003,004 | ) | (23,081,613 | ) | (256,349,495 | ) | (22,860,308 | ) | (253,759,878 | ) | ||||||||||||||||
Net increase (decrease) | (104,973 | ) | $ | (1,466,664 | ) | 509,069 | $ | 5,066,395 | (6,382,336 | ) | $ | (71,629,262 | ) | 8,944,540 | $ | 97,283,313 | ||||||||||||||||
Government Money Market II | High Yield Bond | |||||||||||||||||||||||||||||||
For the year ended August 31, 2017 | For the year ended August 31, 2016 | For the year ended August 31, 2017 | For the year ended August 31, 2016 | |||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Shares sold | 55,580,362 | $ | 55,580,362 | 72,393,205 | $ | 72,393,205 | 11,605,187 | $ | 88,808,510 | 19,111,895 | $ | 140,865,271 | ||||||||||||||||||||
Reinvested dividends | 215,117 | 215,117 | 16,693 | 16,693 | 3,630,036 | 27,551,970 | 3,241,633 | 23,145,260 | ||||||||||||||||||||||||
Shares redeemed | (64,142,889 | ) | (64,142,889 | ) | (91,029,058 | ) | (91,029,058 | ) | (20,922,297 | ) | (161,991,585 | ) | (7,537,158 | ) | (54,445,820 | ) | ||||||||||||||||
Net increase (decrease) | (8,347,410 | ) | $ | (8,347,410 | ) | (18,619,160 | ) | $ | (18,619,160 | ) | (5,687,074 | ) | $ | (45,631,105 | ) | 14,816,370 | $ | 109,564,711 | ||||||||||||||
International Opportunities | Large Cap Value | |||||||||||||||||||||||||||||||
For the year ended August 31, 2017 | For the year ended August 31, 2016 | For the year ended August 31, 2017 | For the year ended August 31, 2016 | |||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Shares sold | 1,797,806 | $ | 31,899,280 | 2,689,365 | $ | 41,012,286 | 1,026,540 | $ | 20,768,454 | 2,348,522 | $ | 41,070,164 | ||||||||||||||||||||
Reinvested dividends | 471,512 | 8,336,334 | 426,088 | 6,570,282 | 151,844 | 3,093,065 | 136,483 | 2,372,082 | ||||||||||||||||||||||||
Shares redeemed | (4,892,126 | ) | (81,103,513 | ) | (5,403,603 | ) | (83,905,951 | ) | (2,748,947 | ) | (55,234,000 | ) | (1,278,767 | ) | (22,123,285 | ) | ||||||||||||||||
Net increase (decrease) | (2,622,808 | ) | $ | (40,867,899 | ) | (2,288,150 | ) | $ | (36,323,383 | ) | (1,570,563 | ) | $ | (31,372,481 | ) | 1,206,238 | $ | 21,318,961 | ||||||||||||||
Mid Cap Growth | Mid Cap Value | |||||||||||||||||||||||||||||||
For the year ended August 31, 2017 | For the year ended August 31, 2016 | For the year ended August 31, 2017 | For the year ended August 31, 2016 | |||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Shares sold | 643,016 | $ | 6,143,554 | 931,126 | $ | 7,915,190 | 3,113,074 | $ | 67,383,250 | 2,878,053 | $ | 58,872,960 | ||||||||||||||||||||
Reinvested dividends | — | — | 1,179,485 | 9,306,137 | 3,262,176 | 68,440,454 | 6,976,255 | 133,246,466 | ||||||||||||||||||||||||
Shares redeemed | (1,668,191 | ) | (14,705,214 | ) | (5,279,491 | ) | (43,276,809 | ) | (5,889,950 | ) | (127,243,229 | ) | (3,537,996 | ) | (75,149,064 | ) | ||||||||||||||||
Net increase (decrease) | (1,025,175 | ) | $ | (8,561,660 | ) | (3,168,880 | ) | $ | (26,055,482 | ) | 485,300 | $ | 8,580,475 | 6,316,312 | $ | 116,970,362 | ||||||||||||||||
Moderate Growth Lifestyle | Small Cap Growth | |||||||||||||||||||||||||||||||
For the year ended August 31, 2017 | For the year ended August 31, 2016 | For the year ended August 31, 2017 | For the year ended August 31, 2016 | |||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Shares sold | 3,618,038 | $ | 51,313,871 | 3,284,540 | $ | 45,784,397 | 1,617,443 | $ | 25,583,272 | 476,646 | $ | 6,587,220 | ||||||||||||||||||||
Reinvested dividends | 3,871,883 | 53,896,608 | 4,706,271 | 62,593,404 | 409,525 | 6,507,357 | 826,986 | 9,907,299 | ||||||||||||||||||||||||
Shares redeemed | (5,068,152 | ) | (72,249,711 | ) | (4,064,492 | ) | (56,364,059 | ) | (974,006 | ) | (14,992,979 | ) | (1,453,590 | ) | (20,128,160 | ) | ||||||||||||||||
Net increase (decrease) | 2,421,769 | $ | 32,960,768 | 3,926,319 | $ | 52,013,742 | 1,052,962 | $ | 17,097,650 | (149,958 | ) | $ | (3,633,641 | ) | ||||||||||||||||||
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VALIC Company II
NOTES TO FINANCIAL STATEMENTS — (continued)
Small Cap Value | Socially Responsible | |||||||||||||||||||||||||||||||
For the year ended August 31, 2017 | For the year ended August 31, 2016 | For the year ended August 31, 2017 | For the year ended August 31, 2016 | |||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Shares sold | 4,836,536 | $ | 72,821,109 | 4,061,698 | $ | 55,420,760 | 1,584,241 | $ | 31,264,582 | 1,163,692 | $ | 22,038,052 | ||||||||||||||||||||
Reinvested dividends | 1,687,429 | 24,805,210 | 5,101,815 | 63,058,437 | 3,292,955 | 64,212,616 | 3,084,846 | 56,113,340 | ||||||||||||||||||||||||
Shares redeemed | (7,807,916 | ) | (116,263,147 | ) | (6,081,367 | ) | (82,041,116 | ) | (4,535,980 | ) | (90,611,383 | ) | (4,041,692 | ) | (76,281,649 | ) | ||||||||||||||||
Net increase (decrease) | (1,283,951 | ) | $ | (18,636,828 | ) | 3,082,146 | $ | 36,438,081 | 341,216 | $ | 4,865,815 | 206,846 | $ | 1,869,743 | ||||||||||||||||||
Strategic Bond | ||||||||||||||||||||||||||||||||
For the year ended August 31, 2017 | For the year ended August 31, 2016 | |||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||
Shares sold | 5,464,340 | $ | 61,469,082 | 9,365,661 | $ | 102,893,415 | ||||||||||||||||||||||||||
Reinvested dividends | 2,551,545 | 28,271,122 | 3,063,011 | 33,141,784 | ||||||||||||||||||||||||||||
Shares redeemed | (15,154,000 | ) | (171,617,233 | ) | (10,873,519 | ) | (119,117,147 | ) | ||||||||||||||||||||||||
Net increase (decrease) | (7,138,115 | ) | $ | (81,877,029 | ) | 1,555,153 | $ | 16,918,052 | ||||||||||||||||||||||||
Note 7 — Expense Reductions
Through expense offset arrangements resulting from broker commission recapture, a portion of the expenses of certain Funds have been reduced. For the year ended August 31, 2017, the amount of expense reductions received by each Fund used to offset non-affiliated expenses are reflected as Fees paid indirectly in the Statement of Operations.
Note 8 — Investment Concentration
The High Yield Bond Fund’s investment in high yield securities, whether rated or unrated, may be considered speculative and subject to greater market fluctuations and risk of loss of income and principal than lower-yielding, higher-rated, fixed-income securities. The risk of loss due to default by the issuer may be significantly greater for the holders of high yield securities, because such securities are generally unsecured and are often subordinated to other creditors of the issuer.
The Funds may invest in obligations issued by agencies and instrumentalities of the U.S. Government that may vary in the level of support they receive from the government. The government may choose not to provide financial support to government sponsored agencies or instrumentalities if it is not legally obligated to do so, and if the issuer defaults, a fund holding securities of such issuer might not be able to recover its investments from the U.S. Government. As a result of the Core Bond Fund, Government Money Market II Fund and Strategic Bond Fund’s concentration in such investments, these funds may be subject to risks associated with the U.S. Government agencies or instrumentalities.
The International Opportunities Fund invests internationally, including in “emerging market” countries. Emerging market securities involve risks not typically associated with investing in securities of issuers in more developed markets. The markets of emerging market countries are typically more volatile and potentially less liquid than more developed countries. These securities may be denominated in currencies other than U.S. dollars. While investing internationally may reduce portfolio risk by increasing the diversification of portfolio investments, the value of the investment may be affected by fluctuating currency values, changing local and regional economic, political and social conditions, and greater market volatility.
Each Fund, except the Government Money Market II Fund, the Lifestyle Funds and the Small Cap Value Fund, may invest in international bonds, which include U.S. dollar-denominated bonds issued by foreign corporations for which the primary trading market is in the United States (“Yankee Bonds”), or for which the primary trading market is abroad (“Euro Bonds”). International bonds may involve special risks and considerations not typically associated with investing in U.S. companies, including differences in accounting, auditing and financial reporting standards; generally higher commission rates on foreign portfolio transactions; the possibility of nationalization, expropriation or confiscatory taxation; adverse changes in investment or exchange control regulations (which may include suspension of the ability to transfer currency from a country); and political instability which could affect U.S. investments in foreign countries. As a result of the Strategic Bond Fund’s concentration in such investments, it may be subject to risks associated with the international bonds.
Note 9 — Line of Credit
The Series, along with certain other funds managed by the Adviser, has access to a $85 million committed unsecured line of credit and a $40 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, the Series’ custodian. The interest payable under the committed line of credit is 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. In addition, the commitment fee on the daily unused portion of the committed line of credit is equal to 25 basis points per annum.
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NOTES TO FINANCIAL STATEMENTS — (continued)
The Series also paid a portion of an upfront fee in the amount of $50,000 at the closing of the committed and uncommitted lines of credit on October 7, 2016. Borrowings under the line of credit will commence when the respective Fund’s cash shortfall exceeds $100,000. For the year ended August 31, 2017, the following Funds had borrowings:
Fund | Days Outstanding | Interest Charges | Average Debt Utilized | Weighted Average Interest | ||||||||||||
International Opportunities | 8 | $ | 667 | $ | 1,535,678 | 1.90 | % | |||||||||
Large Cap Value | 12 | 1,159 | 1,759,650 | 2.06 | ||||||||||||
Mid Cap Growth | 1 | 9 | 179,408 | 1.79 |
At August 31, 2017, there were no borrowings outstanding.
Note 10 — Interfund Lending Agreement
Pursuant to the exemptive relief granted by the SEC, the Funds are permitted to participate in an interfund lending program among investment companies advised by VALIC or an affiliate. The interfund lending program allows the participating Funds 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 year ended August 31, 2017, none of the Funds participated in this program.
Note 11 — Security Transactions with Affiliated Portfolios
The Funds are permitted to transfer securities by purchasing from and/or selling to other affiliated funds under certain conditions approved by the Board. The affiliated funds involved in such transactions must have a common investment adviser or investment advisers which are affiliated persons of each other, common Trustees, and/or common officers in compliance with Rule 17a-7 of the 1940 Act. Pursuant to the Act, such a transaction must be either a purchase or a sale, for no consideration other than cash payment against prompt delivery of the security at the current market price. No brokerage commission or fee (except for customary transfer fees), or other remuneration is paid in connection with such transactions.
For the year ended August 31, 2017, the following Funds engaged in security transactions with affiliated Funds:
Fund | Cost of Purchases | Proceeds from Sales | Realized Gain/ (Loss) | |||||||||
International Opportunities | $ | 71,613 | $ | 484,000 | $ | 23,376 | ||||||
Mid Cap Value | 20,736 | 85,584 | 19,573 |
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VALIC Company II
Per share data is for a share of beneficial interest outstanding throughout the period. Total return includes reinvestment of distributions on the reinvestment date.
Aggressive Growth Lifestyle Fund | Capital Appreciation Fund | |||||||||||||||||||||||||||||||||||||||
Year Ended August 31, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||
PER SHARE DATA | ||||||||||||||||||||||||||||||||||||||||
Net asset value at beginning of period | $ | 10.41 | $ | 10.67 | $ | 12.04 | $ | 10.30 | $ | 9.22 | $ | 15.99 | $ | 16.35 | $ | 15.88 | $ | 12.82 | $ | 10.92 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment income (loss)(d) | 0.16 | 0.19 | 0.20 | 0.18 | 0.11 | 0.08 | 0.09 | 0.06 | 0.05 | 0.07 | ||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currencies | 0.93 | 0.56 | (0.52 | ) | 1.77 | 1.10 | 2.12 | 1.20 | 0.46 | 3.08 | 1.88 | |||||||||||||||||||||||||||||
Net increase from payments by affiliates | – | – | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 1.09 | 0.75 | (0.32 | ) | 1.95 | 1.21 | 2.20 | 1.29 | 0.52 | 3.13 | 1.95 | |||||||||||||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||||||||||||||
Net investment income | (0.21 | ) | (0.23 | ) | (0.19 | ) | (0.11 | ) | (0.13 | ) | (0.08 | ) | (0.06 | ) | (0.05 | ) | (0.07 | ) | (0.05 | ) | ||||||||||||||||||||
Net realized gain on securities | (0.61 | ) | (0.78 | ) | (0.86 | ) | (0.10 | ) | – | (1.56 | ) | (1.59 | ) | – | – | – | ||||||||||||||||||||||||
Total distributions | (0.82 | ) | (1.01 | ) | (1.05 | ) | (0.21 | ) | (0.13 | ) | (1.64 | ) | (1.65 | ) | (0.05 | ) | (0.07 | ) | (0.05 | ) | ||||||||||||||||||||
Net asset value at end of period | $ | 10.68 | $ | 10.41 | $ | 10.67 | $ | 12.04 | $ | 10.30 | $ | 16.55 | $ | 15.99 | $ | 16.35 | $ | 15.88 | $ | 12.82 | ||||||||||||||||||||
TOTAL RETURN(a) | 10.61 | % | 7.53 | % | (3.17 | )% | 19.03 | % | 13.21 | % | 14.13 | % | 8.33 | % | 3.28 | % | 24.43 | % | 17.93 | % | ||||||||||||||||||||
RATIOS/SUPPLEMENTAL DATA | ||||||||||||||||||||||||||||||||||||||||
Ratio of expenses to average net assets(b) | 0.10 | %(e) | 0.10 | %(e) | 0.10 | %(e) | 0.10 | %(e) | 0.10 | %(e) | 0.85 | % | 0.85 | % | 0.85 | % | 0.85 | % | 0.85 | % | ||||||||||||||||||||
Ratio of expenses to average net assets(c) | 0.14 | %(e) | 0.15 | %(e) | 0.14 | %(e) | 0.14 | %(e) | 0.15 | %(e) | 0.99 | % | 1.00 | % | 0.98 | % | 0.99 | % | 1.01 | % | ||||||||||||||||||||
Ratio of expense reductions to average net assets | – | – | – | – | – | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | |||||||||||||||||||||||||
Ratio of net investment income (loss) to average net assets(b) | 1.47 | %(e) | 1.78 | %(e) | 1.71 | %(e) | 1.56 | %(e) | 1.11 | %(e) | 0.50 | % | 0.52 | % | 0.36 | % | 0.31 | % | 0.58 | % | ||||||||||||||||||||
Ratio of net investment income (loss) to average net assets(c) | 1.44 | %(e) | 1.73 | %(e) | 1.67 | %(e) | 1.52 | %(e) | 1.06 | %(e) | 0.36 | % | 0.37 | % | 0.23 | % | 0.17 | % | 0.42 | % | ||||||||||||||||||||
Portfolio turnover rate | 36 | % | 24 | % | 31 | % | 32 | % | 41 | % | 66 | % | 54 | % | 44 | % | 44 | % | 44 | % | ||||||||||||||||||||
Number of shares outstanding at end of period (000’s) | 53,168 | 51,410 | 47,707 | 42,546 | 38,755 | 5,535 | 5,313 | 5,014 | 5,491 | 5,470 | ||||||||||||||||||||||||||||||
Net assets at the end of period (000’s) | $ | 567,843 | $ | 535,245 | $ | 508,890 | $ | 512,113 | $ | 399,133 | $ | 91,579 | $ | 84,946 | $ | 81,961 | $ | 87,214 | $ | 70,095 |
(a) | Total return includes, if any, expense reimbursements and expense reductions. The effect of fees and charges incurred at the separate account level are not reflected in these performance figures. If such expenses had been included, the total return would have been lower for each period presented. |
(b) | Includes expense reimbursements, but excludes expense reductions. |
(c) | Excludes expense reimbursements and expense reductions. |
(d) | The per share amounts are calculated using the average share method. |
(e) | Does not include underlying fund expenses that the Fund bears indirectly. |
See Notes to Financial Statements
146 |
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VALIC Company II
FINANCIAL HIGHLIGHTS — (continued)
Per share data is for a share of beneficial interest outstanding throughout the period. Total return includes reinvestment of distributions on the reinvestment date.
Conservative Growth Lifestyle Fund | Core Bond Fund | |||||||||||||||||||||||||||||||||||||||
Year Ended August 31, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||
PER SHARE DATA | ||||||||||||||||||||||||||||||||||||||||
Net asset value at beginning of period | $ | 11.82 | $ | 11.95 | $ | 13.12 | $ | 12.13 | $ | 12.02 | $ | 11.30 | $ | 10.93 | $ | 11.09 | $ | 10.69 | $ | 11.41 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment income (loss)(d) | 0.28 | 0.30 | 0.31 | 0.29 | 0.26 | 0.27 | 0.24 | 0.23 | 0.24 | 0.23 | ||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currencies | 0.39 | 0.41 | (0.62 | ) | 1.31 | 0.32 | (0.12 | ) | 0.38 | (0.16 | ) | 0.44 | (0.43 | ) | ||||||||||||||||||||||||||
Net increase from payments by affiliates | – | – | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.67 | 0.71 | (0.31 | ) | 1.60 | 0.58 | 0.15 | 0.62 | 0.07 | 0.68 | (0.20 | ) | ||||||||||||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||||||||||||||
Net investment income | (0.32 | ) | (0.34 | ) | (0.29 | ) | (0.26 | ) | (0.24 | ) | (0.30 | ) | (0.22 | ) | (0.23 | ) | (0.20 | ) | (0.32 | ) | ||||||||||||||||||||
Net realized gain on securities | (0.10 | ) | (0.50 | ) | (0.57 | ) | (0.35 | ) | (0.23 | ) | – | (0.03 | ) | – | (0.08 | ) | (0.20 | ) | ||||||||||||||||||||||
Total distributions | (0.42 | ) | (0.84 | ) | (0.86 | ) | (0.61 | ) | (0.47 | ) | (0.30 | ) | (0.25 | ) | (0.23 | ) | (0.28 | ) | (0.52 | ) | ||||||||||||||||||||
Net asset value at end of period | $ | 12.07 | $ | 11.82 | $ | 11.95 | $ | 13.12 | $ | 12.13 | $ | 11.15 | $ | 11.30 | $ | 10.93 | $ | 11.09 | $ | 10.69 | ||||||||||||||||||||
TOTAL RETURN(a) | 5.76 | % | 6.19 | % | (2.65 | )% | 13.34 | % | 4.93 | % | 1.37 | % | 5.78 | % | 0.62 | % | 6.44 | % | (1.95 | )% | ||||||||||||||||||||
RATIOS/SUPPLEMENTAL DATA | ||||||||||||||||||||||||||||||||||||||||
Ratio of expenses to average net assets(b) | 0.10 | %(e) | 0.10 | %(e) | 0.10 | %(e) | 0.10 | %(e) | 0.10 | %(e) | 0.77 | % | 0.77 | % | 0.77 | % | 0.77 | % | 0.77 | % | ||||||||||||||||||||
Ratio of expenses to average net assets(c) | 0.15 | %(e) | 0.15 | %(e) | 0.14 | %(e) | 0.15 | %(e) | 0.16 | %(e) | 0.80 | % | 0.79 | % | 0.79 | % | 0.80 | % | 0.84 | % | ||||||||||||||||||||
Ratio of expense reductions to average net assets | – | – | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
Ratio of net investment income (loss) to average net assets(b) | 2.31 | %(e) | 2.51 | %(e) | 2.45 | %(e) | 2.26 | %(e) | 2.12 | %(e) | 2.40 | % | 2.16 | % | 2.10 | % | 2.24 | % | 2.12 | % | ||||||||||||||||||||
Ratio of net investment income (loss) to average net assets(c) | 2.27 | %(e) | 2.46 | %(e) | 2.40 | %(e) | 2.22 | %(e) | 2.06 | %(e) | 2.37 | % | 2.15 | % | 2.08 | % | 2.21 | % | 2.05 | % | ||||||||||||||||||||
Portfolio turnover rate | 38 | % | 27 | % | 33 | % | 31 | % | 53 | % | 76 | % | 139 | % | 153 | % | 169 | % | 175 | % | ||||||||||||||||||||
Number of shares outstanding at end of period (000’s) | 27,674 | 27,779 | 27,270 | 24,601 | 21,622 | 100,052 | 106,434 | 97,489 | 85,364 | 72,290 | ||||||||||||||||||||||||||||||
Net assets at the end of period (000’s) | $ | 333,907 | $ | 328,390 | $ | 325,797 | $ | 322,764 | $ | 262,360 | $ | 1,115,936 | $ | 1,202,915 | $ | 1,065,803 | $ | 946,699 | $ | 772,784 |
(a) | Total return includes, if any, expense reimbursements and expense reductions. The effect of fees and charges incurred at the separate account level are not reflected in these performance figures. If such expenses had been included, the total return would have been lower for each period presented. |
(b) | Includes expense reimbursements, but excludes expense reductions. |
(c) | Excludes expense reimbursements and expense reductions. |
(d) | The per share amounts are calculated using the average share method. |
(e) | Does not include underlying fund expenses that the Fund bears indirectly. |
See Notes to Financial Statements
147 |
Table of Contents
VALIC Company II
FINANCIAL HIGHLIGHTS — (continued)
Per share data is for a share of beneficial interest outstanding throughout the period. Total return includes reinvestment of distributions on the reinvestment date.
Government Money Market II Fund | High Yield Bond Fund | |||||||||||||||||||||||||||||||||||||||
Year Ended August 31, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||
PER SHARE DATA | ||||||||||||||||||||||||||||||||||||||||
Net asset value at beginning of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 7.56 | $ | 7.40 | $ | 7.93 | $ | 7.63 | $ | 7.64 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment income (loss)(d) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.41 | 0.37 | 0.38 | 0.41 | 0.44 | ||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currencies | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.15 | 0.13 | (0.53 | ) | 0.28 | (0.03 | ) | ||||||||||||||||||||||||||||
Net increase from payments by affiliates | – | – | 0.00 | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.56 | 0.50 | (0.15 | ) | 0.69 | 0.41 | |||||||||||||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||||||||||||||
Net investment income | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.37 | ) | (0.34 | ) | (0.38 | ) | (0.39 | ) | (0.42 | ) | ||||||||||||||||||||
Net realized gain on securities | – | – | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
Total distributions | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.37 | ) | (0.34 | ) | (0.38 | ) | (0.39 | ) | (0.42 | ) | ||||||||||||||||||||
Net asset value at end of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 7.75 | $ | 7.56 | $ | 7.40 | $ | 7.93 | $ | 7.63 | ||||||||||||||||||||
TOTAL RETURN(a) | 0.16 | % | 0.01 | % | 0.01 | %(e) | 0.01 | % | 0.01 | % | 7.54 | % | 7.07 | % | (2.02 | )% | 9.10 | % | 5.46 | % | ||||||||||||||||||||
RATIOS/SUPPLEMENTAL DATA | ||||||||||||||||||||||||||||||||||||||||
Ratio of expenses to average net assets(b) | 0.50 | % | 0.32 | % | 0.15 | % | 0.15 | % | 0.20 | % | 0.96 | % | 0.96 | % | 0.96 | % | 0.96 | % | 0.96 | % | ||||||||||||||||||||
Ratio of expenses to average net assets(c) | 0.70 | % | 0.66 | % | 0.64 | % | 0.63 | % | 0.65 | % | 0.97 | % | 0.99 | % | 0.98 | % | 0.99 | % | 1.01 | % | ||||||||||||||||||||
Ratio of expense reductions to average net assets | – | – | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
Ratio of net investment income (loss) to average net assets(b) | 0.16 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 5.27 | % | 5.16 | % | 5.00 | % | 5.25 | % | 5.77 | % | ||||||||||||||||||||
Ratio of net investment income (loss) to average net assets(c) | (0.04 | )% | (0.33 | )% | (0.48 | )% | (0.47 | )% | (0.44 | )% | 5.26 | % | 5.13 | % | 4.97 | % | 5.22 | % | 5.73 | % | ||||||||||||||||||||
Portfolio turnover rate | N/A | N/A | N/A | N/A | N/A | 52 | % | 36 | % | 36 | % | 37 | % | 34 | % | |||||||||||||||||||||||||
Number of shares outstanding at end of period (000’s) | 132,916 | 141,263 | 159,882 | 170,830 | 186,069 | 72,461 | 78,148 | 63,332 | 53,018 | 44,801 | ||||||||||||||||||||||||||||||
Net assets at the end of period (000’s) | $ | 132,944 | $ | 141,291 | $ | 159,905 | $ | 170,575 | $ | 185,810 | $ | 561,480 | $ | 590,679 | $ | 468,855 | $ | 420,459 | $ | 341,751 |
(a) | Total return includes, if any, expense reimbursements and expense reductions. The effect of fees and charges incurred at the separate account level are not reflected in these performance figures. If such expenses had been included, the total return would have been lower for each period presented. |
(b) | Includes expense reimbursements, but excludes expense reductions. |
(c) | Excludes expense reimbursements and expense reductions. |
(d) | The per share amounts are calculated using the average share method. |
(e) | The Fund’s performance figure was increased by less than 0.01% from the effect of payments by an affiliate. |
See Notes to Financial Statements
148 |
Table of Contents
VALIC Company II
FINANCIAL HIGHLIGHTS — (continued)
Per share data is for a share of beneficial interest outstanding throughout the period. Total return includes reinvestment of distributions on the reinvestment date.
International Opportunities Fund | Large Cap Value Fund | |||||||||||||||||||||||||||||||||||||||
Year Ended August 31, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||
PER SHARE DATA | ||||||||||||||||||||||||||||||||||||||||
Net asset value at beginning of period | $ | 16.00 | $ | 15.08 | $ | 15.50 | $ | 13.78 | $ | 11.87 | $ | 18.41 | $ | 17.08 | $ | 17.58 | $ | 14.51 | $ | 11.67 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment income (loss)(d) | 0.14 | 0.14 | 0.16 | 0.16 | 0.14 | 0.24 | 0.27 | 0.20 | 0.22 | 0.19 | ||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currencies | 3.49 | 0.94 | (0.38 | ) | 1.75 | 2.04 | 2.27 | 1.27 | (0.46 | ) | 3.04 | 2.81 | ||||||||||||||||||||||||||||
Net increase from payments by affiliates | – | – | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 3.63 | 1.08 | (0.22 | ) | 1.91 | 2.18 | 2.51 | 1.54 | (0.26 | ) | 3.26 | 3.00 | ||||||||||||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||||||||||||||
Net investment income | (0.25 | ) | (0.16 | ) | (0.20 | ) | (0.19 | ) | (0.27 | ) | (0.26 | ) | (0.21 | ) | (0.24 | ) | (0.19 | ) | (0.16 | ) | ||||||||||||||||||||
Net realized gain on securities | – | – | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
Total distributions | (0.25 | ) | (0.16 | ) | (0.20 | ) | (0.19 | ) | (0.27 | ) | (0.26 | ) | (0.21 | ) | (0.24 | ) | (0.19 | ) | (0.16 | ) | ||||||||||||||||||||
Net asset value at end of period | $ | 19.38 | $ | 16.00 | $ | 15.08 | $ | 15.50 | $ | 13.78 | $ | 20.66 | $ | 18.41 | $ | 17.08 | $ | 17.58 | $ | 14.51 | ||||||||||||||||||||
TOTAL RETURN(a) | 22.81 | % | 7.23 | % | (1.50 | )% | 13.88 | % | 18.58 | % | 13.66 | % | 9.09 | % | (1.56 | )% | 22.55 | % | 26.02 | % | ||||||||||||||||||||
RATIOS/SUPPLEMENTAL DATA | ||||||||||||||||||||||||||||||||||||||||
Ratio of expenses to average net assets(b) | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 0.81 | % | 0.81 | % | 0.81 | % | 0.81 | % | 0.81 | % | ||||||||||||||||||||
Ratio of expenses to average net assets(c) | 1.22 | % | 1.21 | % | 1.21 | % | 1.21 | % | 1.31 | % | 0.88 | % | 0.89 | % | 0.88 | % | 0.88 | % | 0.91 | % | ||||||||||||||||||||
Ratio of expense reductions to average net assets | – | 0.00 | % | 0.01 | % | 0.00 | % | – | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | ||||||||||||||||||||||
Ratio of net investment income (loss) to average net assets(b) | 0.82 | % | 0.91 | % | 1.02 | % | 1.05 | % | 1.08 | % | 1.21 | % | 1.59 | % | 1.11 | % | 1.31 | % | 1.40 | % | ||||||||||||||||||||
Ratio of net investment income (loss) to average net assets(c) | 0.60 | % | 0.70 | % | 0.81 | % | 0.84 | % | 0.76 | % | 1.14 | % | 1.51 | % | 1.04 | % | 1.24 | % | 1.30 | % | ||||||||||||||||||||
Portfolio turnover rate | 62 | % | 58 | % | 59 | % | 72 | % | 62 | % | 77 | % | 71 | % | 72 | % | 54 | % | 53 | % | ||||||||||||||||||||
Number of shares outstanding at end of period (000’s) | 34,637 | 37,260 | 39,548 | 37,851 | 38,063 | 10,969 | 12,540 | 11,333 | 12,597 | 12,995 | ||||||||||||||||||||||||||||||
Net assets at the end of period (000’s) | $ | 671,097 | $ | 596,055 | $ | 596,301 | $ | 586,631 | $ | 524,503 | $ | 226,626 | $ | 230,844 | $ | 193,602 | $ | 221,453 | $ | 188,508 |
(a) | Total return includes, if any, expense reimbursements and expense reductions. The effect of fees and charges incurred at the separate account level are not reflected in these performance figures. If such expenses had been included, the total return would have been lower for each period presented. |
(b) | Includes expense reimbursements, but excludes expense reductions. |
(c) | Excludes expense reimbursements and expense reductions. |
(d) | The per share amounts are calculated using the average share method. |
See Notes to Financial Statements
149 |
Table of Contents
VALIC Company II
FINANCIAL HIGHLIGHTS — (continued)
Per share data is for a share of beneficial interest outstanding throughout the period. Total return includes reinvestment of distributions on the reinvestment date.
Mid Cap Growth Fund | Mid Cap Value Fund | |||||||||||||||||||||||||||||||||||||||
Year Ended August 31, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||
PER SHARE DATA | ||||||||||||||||||||||||||||||||||||||||
Net asset value at beginning of period | $ | 8.42 | $ | 8.81 | $ | 10.13 | $ | 9.76 | $ | 8.45 | $ | 20.45 | $ | 21.82 | $ | 25.15 | $ | 21.66 | $ | 17.31 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment income (loss)(d) | 0.00 | (0.02 | ) | (0.02 | ) | (0.05 | ) | 0.00 | 0.07 | 0.14 | �� | 0.07 | 0.05 | 0.07 | ||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currencies | 1.64 | 0.24 | 0.27 | 1.33 | 1.42 | 2.17 | 1.73 | (0.82 | ) | 5.06 | 4.35 | |||||||||||||||||||||||||||||
Net increase from payments by affiliates | – | – | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 1.64 | 0.22 | 0.25 | 1.28 | 1.42 | 2.24 | 1.87 | (0.75 | ) | 5.11 | 4.42 | |||||||||||||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||||||||||||||
Net investment income | – | – | – | (0.01 | ) | (0.01 | ) | (0.13 | ) | (0.06 | ) | (0.05 | ) | (0.08 | ) | (0.07 | ) | |||||||||||||||||||||||
Net realized gain on securities | – | (0.61 | ) | (1.57 | ) | (0.90 | ) | (0.10 | ) | (1.33 | ) | (3.18 | ) | (2.53 | ) | (1.54 | ) | – | ||||||||||||||||||||||
Total distributions | – | (0.61 | ) | (1.57 | ) | (0.91 | ) | (0.11 | ) | (1.46 | ) | (3.24 | ) | (2.58 | ) | (1.62 | ) | (0.07 | ) | |||||||||||||||||||||
Net asset value at end of period | $ | 10.06 | $ | 8.42 | $ | 8.81 | $ | 10.13 | $ | 9.76 | $ | 21.23 | $ | 20.45 | $ | 21.82 | $ | 25.15 | $ | 21.66 | ||||||||||||||||||||
TOTAL RETURN(a) | 19.48 | % | 3.01 | % | 1.66 | % | 13.86 | % | 17.06 | % | 11.02 | % | 9.62 | % | (3.61 | )% | 23.97 | % | 25.64 | % | ||||||||||||||||||||
RATIOS/SUPPLEMENTAL DATA | ||||||||||||||||||||||||||||||||||||||||
Ratio of expenses to average net assets(b) | 0.85 | % | 0.85 | % | 0.85 | % | 0.85 | % | 0.85 | % | 1.05 | % | 1.05 | % | 1.05 | % | 1.05 | % | 1.05 | % | ||||||||||||||||||||
Ratio of expenses to average net assets(c) | 1.17 | % | 1.17 | % | 1.14 | % | 1.17 | % | 1.18 | % | 1.05 | % | 1.06 | % | 1.06 | % | 1.05 | % | 1.08 | % | ||||||||||||||||||||
Ratio of expense reductions to average net assets | 0.00 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||||||||
Ratio of net investment income (loss) to average net assets(b) | 0.04 | % | (0.27 | )% | (0.26 | )% | (0.47 | )% | 0.02 | % | 0.32 | % | 0.65 | % | 0.28 | % | 0.22 | % | 0.37 | % | ||||||||||||||||||||
Ratio of net investment income (loss) to average net assets(c) | (0.28 | )% | (0.59 | )% | (0.54 | )% | (0.79 | )% | (0.30 | )% | 0.32 | % | 0.64 | % | 0.27 | % | 0.22 | % | 0.34 | % | ||||||||||||||||||||
Portfolio turnover rate | 162 | % | 92 | % | 102 | % | 175 | % | 112 | % | 44 | % | 44 | % | 56 | % | 29 | % | 46 | % | ||||||||||||||||||||
Number of shares outstanding at end of period (000’s) | 13,313 | 14,338 | 17,507 | 16,118 | 13,586 | 49,262 | 48,776 | 42,460 | 38,551 | 39,686 | ||||||||||||||||||||||||||||||
Net assets at the end of period (000’s) | $ | 133,988 | $ | 120,774 | $ | 154,291 | $ | 163,273 | $ | 132,584 | $ | 1,046,046 | $ | 997,576 | $ | 926,580 | $ | 969,591 | $ | 859,611 |
(a) | Total return includes, if any, expense reimbursements and expense reductions. The effect of fees and charges incurred at the separate account level are not reflected in these performance figures. If such expenses had been included, the total return would have been lower for each period presented. |
(b) | Includes expense reimbursements, but excludes expense reductions. |
(c) | Excludes expense reimbursements and expense reductions. |
(d) | The per share amounts are calculated using the average share method. |
See Notes to Financial Statements
150 |
Table of Contents
VALIC Company II
FINANCIAL HIGHLIGHTS — (continued)
Per share data is for a share of beneficial interest outstanding throughout the period. Total return includes reinvestment of distributions on the reinvestment date.
Moderate Growth Lifestyle Fund | Small Cap Growth Fund | |||||||||||||||||||||||||||||||||||||||
Year Ended August 31, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||
PER SHARE DATA | ||||||||||||||||||||||||||||||||||||||||
Net asset value at beginning of period | $ | 13.98 | $ | 14.09 | $ | 15.61 | $ | 13.93 | $ | 13.10 | $ | 14.20 | $ | 15.31 | $ | 16.27 | $ | 16.11 | $ | 13.47 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment income (loss)(d) | 0.24 | 0.30 | 0.29 | 0.28 | 0.21 | (0.08 | ) | (0.03 | ) | (0.04 | ) | (0.14 | ) | (0.09 | ) | |||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currencies | 0.92 | 0.70 | (0.65 | ) | 1.99 | 1.04 | 3.72 | 0.42 | 0.97 | 1.68 | 3.92 | |||||||||||||||||||||||||||||
Net increase from payments by affiliates | – | – | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 1.16 | 1.00 | (0.36 | ) | 2.27 | 1.25 | 3.64 | 0.39 | 0.93 | 1.54 | 3.83 | |||||||||||||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||||||||||||||
Net investment income | (0.32 | ) | (0.32 | ) | (0.28 | ) | (0.20 | ) | (0.21 | ) | – | – | – | – | – | |||||||||||||||||||||||||
Net realized gain on securities | (0.59 | ) | (0.79 | ) | (0.88 | ) | (0.39 | ) | (0.21 | ) | (0.86 | ) | (1.50 | ) | (1.89 | ) | (1.38 | ) | (1.19 | ) | ||||||||||||||||||||
Total distributions | (0.91 | ) | (1.11 | ) | (1.16 | ) | (0.59 | ) | (0.42 | ) | (0.86 | ) | (1.50 | ) | (1.89 | ) | (1.38 | ) | (1.19 | ) | ||||||||||||||||||||
Net asset value at end of period | $ | 14.23 | $ | 13.98 | $ | 14.09 | $ | 15.61 | $ | 13.93 | $ | 16.98 | $ | 14.20 | $ | 15.31 | $ | 16.27 | $ | 16.11 | ||||||||||||||||||||
TOTAL RETURN(a) | 8.42 | % | 7.48 | % | (2.68 | )% | 16.46 | % | 9.76 | % | 26.05 | % | 4.40 | % | 5.26 | % | 10.33 | % | 31.19 | % | ||||||||||||||||||||
RATIOS/SUPPLEMENTAL DATA | ||||||||||||||||||||||||||||||||||||||||
Ratio of expenses to average net assets(b) | 0.10 | %(e) | 0.10 | %(e) | 0.10 | %(e) | 0.10 | %(e) | 0.10 | %(e) | 1.16 | % | 1.16 | % | 1.16 | % | 1.16 | % | 1.16 | % | ||||||||||||||||||||
Ratio of expenses to average net assets(c) | 0.14 | %(e) | 0.14 | %(e) | 0.13 | %(e) | 0.13 | %(e) | 0.14 | %(e) | 1.25 | % | 1.29 | % | 1.25 | % | 1.26 | % | 1.31 | % | ||||||||||||||||||||
Ratio of expense reduction to average net assets | – | – | – | – | – | 0.00 | % | 0.01 | % | 0.01 | % | 0.00 | % | 0.01 | % | |||||||||||||||||||||||||
Ratio of net investment income (loss) to average net assets(b) | 1.68 | %(e) | 2.15 | %(e) | 1.92 | %(e) | 1.84 | %(e) | 1.55 | %(e) | (0.53 | )% | (0.22 | )% | (0.25 | )% | (0.83 | )% | (0.65 | )% | ||||||||||||||||||||
Ratio of net investment income (loss) to average net assets(c) | 1.65 | %(e) | 2.11 | %(e) | 1.89 | %(e) | 1.81 | %(e) | 1.50 | %(e) | (0.62 | )% | (0.35 | )% | (0.34 | )% | (0.93 | )% | (0.80 | )% | ||||||||||||||||||||
Portfolio turnover rate | 36 | % | 33 | % | 30 | % | 27 | % | 36 | % | 40 | % | 39 | % | 49 | % | 63 | % | 68 | % | ||||||||||||||||||||
Number of shares outstanding at end of period (000’s) | 63,003 | 60,581 | 56,655 | 51,152 | 43,504 | 8,088 | 7,035 | 7,185 | 7,001 | 6,333 | ||||||||||||||||||||||||||||||
Net assets at the end of period (000’s) | $ | 896,346 | $ | 846,974 | $ | 798,444 | $ | 798,521 | $ | 606,185 | $ | 137,330 | $ | 99,884 | $ | 110,029 | $ | 113,907 | $ | 102,025 |
(a) | Total return includes, if any, expense reimbursements and expense reductions. The effect of fees and charges incurred at the separate account level are not reflected in these performance figures. If such expenses had been included, the total return would have been lower for each period presented. |
(b) | Includes expense reimbursements, but excludes expense reductions. |
(c) | Excludes expense reimbursements and expense reductions. |
(d) | The per share amounts are calculated using the average share method. |
(e) | Does not include underlying fund expenses that the Fund bears indirectly. |
See Notes to Financial Statements
151 |
Table of Contents
VALIC Company II
FINANCIAL HIGHLIGHTS — (continued)
Per share data is for a share of beneficial interest outstanding throughout the period. Total return includes reinvestment of distributions on the reinvestment date.
Small Cap Value Fund | Socially Responsible Fund | |||||||||||||||||||||||||||||||||||||||
Year Ended August 31, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||
PER SHARE DATA | ||||||||||||||||||||||||||||||||||||||||
Net asset value at beginning of period | $ | 13.57 | $ | 14.01 | $ | 16.65 | $ | 15.83 | $ | 12.68 | $ | 19.23 | $ | 18.55 | $ | 18.56 | $ | 14.84 | $ | 12.53 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment income (loss)(d) | 0.11 | 0.13 | 0.17 | 0.09 | 0.13 | 0.29 | 0.28 | 0.26 | 0.22 | 0.21 | ||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currencies | 1.48 | 1.27 | (0.56 | ) | 2.70 | 3.33 | 2.33 | 1.89 | (0.05 | ) | 3.74 | 2.31 | ||||||||||||||||||||||||||||
Net increase from payments by affiliates | – | – | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 1.59 | 1.40 | (0.39 | ) | 2.79 | 3.46 | 2.62 | 2.17 | 0.21 | 3.96 | 2.52 | |||||||||||||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||||||||||||||
Net investment income | (0.14 | ) | (0.17 | ) | (0.10 | ) | (0.17 | ) | (0.07 | ) | (0.29 | ) | (0.28 | ) | (0.22 | ) | (0.24 | ) | (0.21 | ) | ||||||||||||||||||||
Net realized gain on securities | (0.55 | ) | (1.67 | ) | (2.15 | ) | (1.80 | ) | (0.24 | ) | (1.41 | ) | (1.21 | ) | – | – | – | |||||||||||||||||||||||
Total distributions | (0.69 | ) | (1.84 | ) | (2.25 | ) | (1.97 | ) | (0.31 | ) | (1.70 | ) | (1.49 | ) | (0.22 | ) | (0.24 | ) | (0.21 | ) | ||||||||||||||||||||
Net asset value at end of period | $ | 14.47 | $ | 13.57 | $ | 14.01 | $ | 16.65 | $ | 15.83 | $ | 20.15 | $ | 19.23 | $ | 18.55 | $ | 18.56 | $ | 14.84 | ||||||||||||||||||||
TOTAL RETURN(a) | 11.61 | % | 11.27 | % | (3.38 | )% | 18.39 | % | 27.78 | % | 13.90 | % | 12.16 | % | 1.06 | % | 26.82 | % | 20.40 | % | ||||||||||||||||||||
RATIOS/SUPPLEMENTAL DATA | ||||||||||||||||||||||||||||||||||||||||
Ratio of expenses to average net assets(b) | 0.95 | % | 0.95 | % | 0.95 | % | 0.95 | % | 0.95 | % | 0.56 | % | 0.56 | % | 0.56 | % | 0.56 | % | 0.56 | % | ||||||||||||||||||||
Ratio of expenses to average net assets(c) | 1.03 | % | 1.04 | % | 1.03 | % | 1.03 | % | 1.05 | % | 0.61 | % | 0.61 | % | 0.61 | % | 0.61 | % | 0.62 | % | ||||||||||||||||||||
Ratio of expense reductions to average net assets | 0.00 | % | 0.00 | % | 0.00 | % | 0.01 | % | 0.01 | % | – | – | – | – | – | |||||||||||||||||||||||||
Ratio of net investment income (loss) to average net assets(b) | 0.71 | % | 0.98 | % | 1.02 | % | 0.54 | % | 0.91 | % | 1.46 | % | 1.47 | % | 1.35 | % | 1.29 | % | 1.56 | % | ||||||||||||||||||||
Ratio of net investment income (loss) to average net assets(c) | 0.62 | % | 0.89 | % | 0.95 | % | 0.46 | % | 0.81 | % | 1.41 | % | 1.42 | % | 1.31 | % | 1.25 | % | 1.49 | % | ||||||||||||||||||||
Portfolio turnover rate | 79 | % | 59 | % | 50 | % | 47 | % | 81 | % | 0 | % | 25 | % | 31 | % | 26 | % | 39 | % | ||||||||||||||||||||
Number of shares outstanding at end of period (000’s) | 36,582 | 37,866 | 34,784 | 33,516 | 32,045 | 39,701 | 39,360 | 39,153 | 36,604 | 39,040 | ||||||||||||||||||||||||||||||
Net assets at the end of period (000’s) | $ | 529,505 | $ | 513,783 | $ | 487,157 | $ | 558,170 | $ | 507,366 | $ | 799,898 | $ | 756,821 | $ | 726,460 | $ | 679,235 | $ | 579,372 |
(a) | Total return includes, if any, expense reimbursements and expense reductions. The effect of fees and charges incurred at the separate account level are not reflected in these performance figures. If such expenses had been included, the total return would have been lower for each period presented. |
(b) | Includes expense reimbursements, but excludes expense reductions. |
(c) | Excludes expense reimbursements and expense reductions. |
(d) | The per share amounts are calculated using the average share method. |
See Notes to Financial Statements
152 |
Table of Contents
VALIC Company II
FINANCIAL HIGHLIGHTS — (continued)
Per share data is for a share of beneficial interest outstanding throughout the period. Total return includes reinvestment of distributions on the reinvestment date.
Strategic Bond Fund | ||||||||||||||||||||
Year Ended August 31, | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
PER SHARE DATA | ||||||||||||||||||||
Net asset value at beginning of period | $ | 11.28 | $ | 11.00 | $ | 11.77 | $ | 11.23 | $ | 11.78 | ||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss)(d) | 0.39 | 0.38 | 0.42 | 0.48 | 0.46 | |||||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currencies | 0.13 | 0.39 | (0.68 | ) | 0.62 | (0.44 | ) | |||||||||||||
Net increase from payments by affiliates | – | – | – | – | – | |||||||||||||||
Total income (loss) from investment operations | 0.52 | 0.77 | (0.26 | ) | 1.10 | 0.02 | ||||||||||||||
Distributions from: | ||||||||||||||||||||
Net investment income | (0.42 | ) | (0.45 | ) | (0.41 | ) | (0.44 | ) | (0.46 | ) | ||||||||||
Net realized gain on securities | – | (0.04 | ) | (0.10 | ) | (0.12 | ) | (0.11 | ) | |||||||||||
Total distributions | (0.42 | ) | (0.49 | ) | (0.51 | ) | (0.56 | ) | (0.57 | ) | ||||||||||
Net asset value at end of period | $ | 11.38 | $ | 11.28 | $ | 11.00 | $ | 11.77 | $ | 11.23 | ||||||||||
TOTAL RETURN(a) | 4.75 | % | 7.15 | % | (2.32 | )% | 9.89 | % | 0.03 | % | ||||||||||
RATIOS/SUPPLEMENTAL DATA | ||||||||||||||||||||
Ratio of expenses to average net assets | 0.88 | % | 0.88 | % | 0.87 | % | 0.88 | % | 0.89 | %(b) | ||||||||||
Ratio of expenses to average net assets | 0.88 | % | 0.88 | % | 0.87 | % | 0.88 | % | 0.91 | %(c) | ||||||||||
Ratio of expense reductions to average net assets | – | – | – | – | – | |||||||||||||||
Ratio of net investment income (loss) to average net assets | 3.48 | % | 3.51 | % | 3.67 | % | 4.11 | % | 4.00 | %(b) | ||||||||||
Ratio of net investment income (loss) to average net assets | 3.48 | % | 3.51 | % | 3.67 | % | 4.11 | % | 3.98 | %(c) | ||||||||||
Portfolio turnover rate | 118 | % | 162 | % | 132 | % | 150 | % | 164 | % | ||||||||||
Number of shares outstanding at end of period (000’s) | 65,845 | 72,983 | 71,428 | 64,149 | 61,398 | |||||||||||||||
Net assets at the end of period (000’s) | $ | 749,055 | $ | 823,464 | $ | 785,635 | $ | 755,092 | $ | 689,403 |
(a) | Total return includes, if any, expense reimbursements and expense reductions. The effect of fees and charges incurred at the separate account level are not reflected in these performance figures. If such expenses had been included, the total return would have been lower for each period presented. |
(b) | Includes expense reimbursements, but excludes expense reductions. |
(c) | Excludes expense reimbursements and expense reductions. |
(d) | The per share amounts are calculated using the average share method. |
See Notes to Financial Statements
153 |
Table of Contents
VALIC Company II
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of VALIC Company II and Shareholders of the Aggressive Growth Lifestyle Fund, Capital Appreciation Fund, Conservative Growth Lifestyle Fund, Core Bond Fund, Government Money Market II Fund, High Yield Bond Fund, International Opportunities Fund, Large Cap Value Fund, Mid Cap Growth Fund, Mid Cap Value Fund, Moderate Growth Lifestyle Fund, Small Cap Growth Fund, Small Cap Value Fund, Socially Responsible Fund and Strategic Bond Fund
In our opinion, the accompanying statements of assets and liabilities, including the portfolios of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of each of the Aggressive Growth Lifestyle Fund, Capital Appreciation Fund, Conservative Growth Lifestyle Fund, Core Bond Fund, Government Money Market II Fund, High Yield Bond Fund, International Opportunities Fund, Large Cap Value Fund, Mid Cap Growth Fund, Mid Cap Value Fund, Moderate Growth Lifestyle Fund, Small Cap Growth Fund, Small Cap Value Fund, Socially Responsible Fund and Strategic Bond Fund (fifteen funds constituting VALIC Company II, hereafter referred to as the “Series”) as of August 31, 2017, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Series’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of August 31, 2017 by correspondence with the custodian, transfer agent, brokers, and the application of alternative auditing procedures where securities purchased had not been received, provide a reasonable basis for our opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Houston, Texas
October 27, 2017
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VALIC Company II
APPROVAL OF ADVISORY AGREEMENTS (unaudited)
At an in-person meeting held on April 24, 2017 (the “Meeting”), the Board of Trustees (the “Board”) of VALIC Company II (“VC II”), including the Trustees that are not interested persons of VC II, as such term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Trustees”), approved an Investment Sub-Advisory Agreement (the “Sub-Advisory Agreement”) between The Variable Annuity Life Insurance Company (“VALIC”) and Wellington Management Company LLP (“Wellington”) with respect to the Mid Cap Growth Fund (the “Fund”). In connection with the approval of the Sub-Advisory Agreement with Wellington, the Board approved the termination of the existing Investment Sub-Advisory Agreement between VALIC and Wells Capital Management Incorporated (“WellsCap”) with respect to the Fund.
In connection with the approval of the Sub-Advisory Agreement, the Board, including the Independent Trustees, received materials relating to certain factors the Board considered in determining whether to approve the Sub-Advisory Agreement. Those factors included: (1) the nature, extent and quality of the services to be provided to the Fund by Wellington; (2) the sub-advisory fees proposed to be charged in connection with Wellington’s management of the Fund, compared to sub-advisory fee rates of a group of funds with similar investment objectives, as selected by an independent third-party provider of investment company data (“Subadvisory Expense Group/Universe”); (3) the investment performance of a composite of other accounts managed by Wellington using the same strategy that would be applied to the Fund, compared to the performance of comparable funds as selected by an independent third-party provider of investment company data (“Performance Group”), and against the Fund’s benchmark (“Benchmark”), and the performance of comparable funds managed by Wellington against the Benchmark; (4) the costs of services and the benefits potentially to be derived by Wellington; (5) whether the Fund will benefit from possible economies of scale from engaging Wellington; (6) information regarding Wellington’s brokerage and trading practices and compliance and regulatory history; and (7) the terms of the proposed Sub-Advisory Agreement.
In considering whether to approve the Sub-Advisory Agreement, the Board also took into account a presentation made at the Meeting by members of management as well as a presentation made by representatives from Wellington who responded to questions posed by the Board and management. The Independent Trustees were separately represented by counsel that is independent of VALIC in connection with their consideration of approval of the Sub-Advisory Agreement. The matters discussed below were also considered separately by the Independent Trustees in executive sessions with their independent legal counsel, at which no representatives of management were present.
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of services to be provided to the Fund by Wellington. The Board reviewed information provided by Wellington relating to its operations and personnel. The Board also took into account their knowledge of Wellington’s management, operations and the quality of their performance based on the Board’s experiences with Wellington, which also manages certain other series of VC II. The Board also noted that Wellington’s management of the Fund will be subject to the oversight of the VALIC and the Board, and must be made in accordance with the investment objectives, policies and restrictions set forth in the Fund’s prospectus and statement of additional information.
The Board considered information provided to them regarding the services to be provided by Wellington. The Board noted that Wellington will (i) manage the investment and reinvestment of the Fund’s assets; (ii) determine in its discretion the securities and other investments to be purchased or sold; (iii) maintain a trading desk and place orders for the purchase and sale of portfolio securities (or arrange for another entity to provide a trading desk and to place orders) with brokers or dealers selected by Wellington, subject to its control, direction, and supervision, which may include affiliated brokers or dealers; (iv) keep records adequately demonstrating compliance with its obligations under the Sub-Advisory Agreement; and (v) render regular reports to the Board as VALIC and the Board may reasonably request. The Board reviewed Wellington’s history and investment experience as well as information regarding the qualifications, background and responsibilities of Wellington’s investment personnel who would provide services to the Fund. The Board also reviewed Wellington’s brokerage practices. The Board also noted that it received information on Wellington’s financial condition and compliance function of Wellington. Based on information received throughout the year, the Board also considered Wellington’s risk management processes and regulatory history, including information regarding whether it was currently involved in any regulatory actions or investigations as well as material litigation that may affect its ability to service the Fund.
The Board concluded that the scope and quality of the sub-advisory services to be provided by Wellington were expected to be satisfactory and that there was a reasonable basis to conclude that Wellington would provide a high quality of investment services to the Fund.
Fees and Expenses; Investment Performance. The Board noted that there would be no change to the subadvisory fee rate payable by the Fund as a result of the change in subadviser. The Board considered information received in connection with the annual review and approval of the prior Investment Sub-Advisory Agreement between VALIC and WellsCap with respect to the Fund, regarding the subadvisory fees paid with respect to the Fund for sub-advisory services compared against the sub-advisory fees of the funds in the Fund’s Subadvisory Expense Group/Universe. The Board also considered expense information of comparable funds or accounts managed by Wellington that have comparable investment objectives and strategies to the Fund. The Board noted that VALIC negotiated the sub-advisory fee with Wellington at arm’s length. The Board also considered that the sub-advisory fees will be paid by VALIC out of the advisory fees it receives from the Fund, that the sub-advisory fees are not paid by the Fund, and that sub-advisory fees may vary widely for various reasons, including market pricing demands, existing relationships, experience and success, and individual client needs. Therefore, the Board considered that the appointment of Wellington will not result in any change to the management fee paid by the Fund to VALIC.
The Board considered that the subadvisory fees paid to WellsCap, which were paid at the same rate as the proposed sub-advisory fee payable to Wellington, were above the median of its Subadvisory Expense Universe. The Board considered that certain of Wellington’s comparable funds and accounts paid to Wellington lower fee rates, but noted that Wellington managed such funds as part of a multi-fund relationship with approximately $100 billion under management. The Board also considered that the sub-advisory fee rate payable to Wellington contains breakpoints. The Board also took account of management’s discussion of the Fund’s proposed sub-advisory fees and concluded in light of all factors considered that such fees were reasonable.
The Board also received and reviewed information prepared by an independent third-party provider of mutual fund data regarding the Fund’s investment performance compared against the Performance Group as of the period ended December 31, 2016. The Board also considered the performance of other funds managed by Wellington and a composite of Wellington accounts, each managed using a similar investment strategy as that which Wellington will use to manage the Fund. The Board noted that such comparable funds and accounts outperformed the Performance Group and Benchmark for the year-to-date, one- and three- and five-year periods ended December 31, 2016.
Cost of Services and Indirect Benefits/Profitability. The Board considered the cost of services and profits expected to be realized in connection with the Sub-Advisory Agreement. The Board was previously apprised that VALIC generally reviews a number of factors in determining appropriate sub-advisory fee levels. Such factors may include a
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VALIC Company II
APPROVAL OF ADVISORY AGREEMENTS (unaudited) — (continued)
review of (1) style class peers primarily within the variable annuity and qualified plan universe; (2) key competitor analysis; (3) analysis of the strategies managed by the subadvisers; (4) product suitability; and (5) special considerations such as competitor sub-account characteristics, uniqueness of the product and prestige of the manager.
The Board considered that the fee arrangement with respect to the Fund would not change as a result of the replacement of WellsCap with Wellington. The Board noted that, therefore, retaining Wellington was not expected to have any impact on VALIC’s profitability. The Board also considered that the sub-advisory fee rate was negotiated with Wellington at arm’s length. In considering the anticipated profitability to Wellington in connection with its relationship to the Fund, the Trustees noted that the fees under the Sub-Advisory Agreement will be paid by VALIC out of the advisory fees that VALIC will receive from the Fund.
In light of all the factors considered, the Trustees determined that the anticipated profitability to VALIC was reasonable. The Board also concluded that the anticipated profitability of Wellington from its relationship with the Fund was not material to their deliberations with respect to consideration of approval of the Sub-Advisory Agreement.
Economies of Scale. For similar reasons as stated above with respect to Wellington’s anticipated profitability and its costs of providing services, the Board concluded that the potential for economies of scale in Wellington’s management of the Fund are not a material factor to the approval of the Sub-Advisory Agreement, although the Board noted that the Fund has breakpoints at the sub-advisory fee level.
Terms of the Wellington Agreement. The Board reviewed the terms of the Sub-Advisory Agreement including the duties and responsibilities to be undertaken. The Board noted that the terms of the Wellington Agreement will not differ materially from the terms of the prior sub-advisory agreement with WellsCap except for: (i) the name of the subadviser; (ii) the effective date of the agreement; (iii) certain detail regarding an obligation to seek best execution of Fund transactions in the case of the prior sub-advisory agreement with WellsCap; (iv) express terms relating to VALIC’s voting of proxies in the case of the prior sub-advisory agreement with WellsCap; and (v) terms relating to the requisite notice period in the event of termination. The Board concluded that the terms of the Sub-Advisory Agreement were reasonable.
Conclusions. In reaching its decision to approve the Sub-Advisory Agreement, the Board did not identify any single factor as being controlling, but based its recommendation on each of the factors it considered. Each Trustee may have contributed different weight to the various factors. Based upon the materials reviewed, the representations made and the considerations described above, and as part of their deliberations, the Board, including the Independent Trustees, concluded that Wellington possesses the capability and resources to perform the duties required of it under the Sub-Advisory Agreement.
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VALIC Company II
APPROVAL OF ADVISORY AGREEMENTS (unaudited) — (continued)
At an in-person meeting held on April 24, 2017 (the “Meeting”), the Board of Trustees (the “Board”) of VALIC Company II (“VC II”), including the Trustees that are not interested persons of VC II, as such term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Trustees”), approved a new Investment Sub-Advisory Agreement (the “Sub-Advisory Agreement”) between The Variable Annuity Life Insurance Company (“VALIC”) and Janus Capital Management, LLC (“Janus”) and a new Sub-Subadvisory Agreement (collectively, with the Sub-Advisory Agreement, the “New Sub-Advisory Agreements”) between Janus and Perkins Investment Management, LLC (“Perkins”) with respect to the Large Cap Value Fund (the “Fund”). The prior Investment Sub-Advisory Agreement between VALIC and Janus and the prior Sub-Subadvisory Agreement between Janus and Perkins provided, consistent with Section 15(a)(4) of the Investment Company Act of 1940, as amended (the “1940 Act”), for automatic termination upon a change in control of Janus and Perkins, as applicable. On May 30, 2017, Janus Capital Group Inc. (JCGI), the ultimate parent entity of Janus, merged with Henderson Group plc into a newly formed entity, Janus Henderson Group plc (the “Transaction”). The closing of the Transaction constituted a change in control of Janus and Perkins. The Board approved the New Sub-Advisory Agreements with respect to the Fund the Meeting to be effective upon the closing of the Transaction.
In connection with the approval of the New Sub-Advisory Agreements, the Board, including the Independent Trustees, received materials relating to certain factors the Board considered in determining whether to approve the New Sub-Advisory Agreements. Those factors included: (1) the nature, extent and quality of the services to be provided to the Funds by Janus and Perkins; (2) the sub-advisory fees proposed to be charged in connection with Janus’ management of the Fund, compared to sub-advisory fee rates of a group of funds with similar investment objectives, as selected by an independent third-party provider of investment company data (“Subadvisory Expense Group/Universe”); (3) the investment performance of the Fund compared to the performance of comparable funds as selected by an independent third-party provider of investment company data (“Performance Group”), and against the Fund’s benchmark (“Benchmark”), and the performance of comparable funds managed by Janus against the Benchmark; (4) the costs of services and the benefits potentially to be derived by Janus and Perkins; (5) whether the Fund will benefit from possible economies of scale from engaging Janus; (6) information regarding Janus and Perkins’ brokerage and trading practices and compliance and regulatory history; and (7) the terms of the proposed New Sub-Advisory Agreements.
In considering whether to approve the New Sub-Advisory Agreements, the Board also took into account a presentation made at the Meeting by members of management as well as a presentation made by representatives from Janus and Henderson who responded to questions posed by the Board and management. The Board noted that in accordance with Section 15(c) of the 1940 Act, Janus furnished the Board with extensive information, both at this Meeting and throughout the prior year in connection with the annual consideration and renewal of the prior Investment Sub-Advisory Agreement and the prior Sub-Subadvisory Agreement. The Independent Trustees were separately represented by counsel that is independent of VALIC in connection with their consideration of approval of the New Sub-Advisory Agreements. The matters discussed below were also considered separately by the Independent Trustees in executive sessions with their independent legal counsel, at which no representatives of management were present.
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of services to be provided to the Fund by Janus and Perkins. The Board reviewed information provided by Janus relating to Janus’ and Perkins’ operations and personnel. The Board also took into account that the individuals at Janus and Perkins currently responsible for managing the Fund’s portfolio will continue to manage the Fund’s portfolio following the Transaction. The Board also noted that Janus’ management of the Fund will continue to be subject to the oversight of the VALIC and the Board, and must be done in accordance with the investment objectives, policies and restrictions set forth in the Fund’s prospectus and statement of additional information. The Board also noted that the Fund’s principal investment strategies and techniques were not expected to change in connection with the Transaction.
The Board considered information provided to them regarding the services that would continue to be provided by Janus and Perkins. The Board noted that Janus will (i) determine the securities to be purchased or sold on behalf of the Fund; (ii) provide VALIC with records concerning its activities, which VALIC or the Fund are required to maintain; and (iii) render regular reports to VALIC and to officers and Trustees of the Fund concerning its discharge of the foregoing responsibilities. The Board considered that the delegation of any of such duties to Perkins will in no way relieve Janus of its duties under the Sub-Advisory Agreement. The Board reviewed Janus’ and Perkins’ history and investment experience as well as information regarding the qualifications, background and responsibilities of Janus’ and Perkins’ investment and compliance personnel, as applicable, who would provide services to the Fund. The Board also took into account the financial condition of JCGI. The Board also reviewed Janus’ brokerage practices. The Board also considered Janus’ and Perkins’ risk management processes and regulatory history, including information regarding whether they were currently involved in any regulatory actions or investigations as well as material litigation that may affect their ability to service the Fund.
The Board concluded that the scope and quality of the services to be provided by Janus and Perkins were expected to be satisfactory and that there was a reasonable basis to conclude that Janus and Perkins would continue to provide a high quality of investment services to the Fund.
Fees and Expenses; Investment Performance. The Board received and reviewed information regarding the fees proposed to be charged by Janus and Perkins for sub-advisory services compared against the sub-advisory fees of the funds in the Fund’s Subadvisory Expense Group/Universe. The Board noted that VALIC negotiated the sub-advisory fee with Janus at arm’s length. The Board also noted that the sub-advisory fee rate to be payable to Janus pursuant to the Sub-Advisory Agreement is identical to the sub-advisory fee rate payable pursuant to the prior agreement. The Board considered that the sub-advisory fees will be paid by VALIC out of the advisory fees it receives from the Fund, that the sub-advisory fees are not paid by the Fund, and that sub-advisory fees may vary widely for various reasons, including market pricing demands, existing relationships, experience and success, and individual client needs. Therefore, the Board considered that the appointment of Janus will not result in any change to the management fee paid by the Fund to VALIC. The Board also considered expense information of comparable funds or accounts managed by Janus that have comparable investment objectives and strategies to the Fund.
The Board also considered that the fee payable to Perkins would not change as a result of the Transaction. The Board considered that the sub-sub-advisory fees will be paid by Janus out of the sub-advisory fees it receives from Fund, and that the sub-subadvisory fees are not paid by the Fund. Therefore, the Board considered that the appointment of Perkins will not result in any change to the fees paid by the Fund.
The Board took into account management’s discussion of the Fund’s expenses. The Board also considered that the Fund’s actual sub-advisory fees were below the median of its Subadvisory Expense Group/Universe. The Board also considered that the sub-advisory fee rates payable to Janus contain breakpoints. The Board also took account of management’s discussion of the Fund’s proposed sub-advisory fees and concluded in light of all factors considered that such fees were reasonable.
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VALIC Company II
APPROVAL OF ADVISORY AGREEMENTS (unaudited) — (continued)
The Board also received and reviewed information prepared in connection with the last annual renewal of the sub-advisory agreement and sub-sub-advisory agreement by an independent third-party provider of mutual fund data regarding each Fund’s investment performance compared against the Performance Group and Benchmark. The Board also noted that the Fund’s performance was above the median of its Performance Group for the one-, three- and five-year periods, and it underperformed its Benchmark for the one-, three and five-year periods.
Cost of Services and Indirect Benefits/Profitability. The Board considered the cost of services and profits expected to be realized in connection with the New Sub-Advisory Agreements. The Board was previously apprised that VALIC generally reviews a number of factors in determining appropriate sub-advisory fee levels. Such factors may include a review of (1) style class peers primarily within the variable annuity and qualified plan universe; (2) key competitor analysis; (3) analysis of the strategies managed by the sub-advisers; (4) product suitability; and (5) special considerations such as competitor sub-account characteristics, uniqueness of the product and prestige of the manager.
The Board noted that the sub-advisory fee rate proposed to be paid pursuant the New Sub-Advisory Agreements would not change as a result of the merger and that, as a result, the approval of the New Sub-Advisory Agreements were not expected to have any impact on VALIC’s profitability with respect to the Fund. The Board considered that the sub-advisory fee rates were negotiated with Janus at arm’s length. In considering the anticipated profitability to Janus in connection with its relationship to the Funds, the Trustees noted that the fees under the New Sub-Advisory Agreements will be paid by VALIC out of the advisory fees that VALIC will receive from the Funds or by Janus out of the sub-advisory fees it receives from VALIC.
In light of all the factors considered, the Trustees determined that the anticipated profitability to VALIC was reasonable. The Board also concluded that the anticipated profitability of Janus or Perkins from their relationship with the Funds was not material to their deliberations with respect to consideration of approval of the New Sub-Advisory Agreements.
Economies of Scale. For similar reasons as stated above with respect to Janus’ and Perkins’ anticipated profitability and its costs of providing services, the Board concluded that the potential for economies of scale in Janus’ management of the Fund and Perkins’ management of the Fund are not material factors to the approval of the New Sub-Advisory Agreements, although the Board noted that the Fund has breakpoints at the sub-advisory fee level.
Terms of the Sub-Advisory Agreement. The Board reviewed the terms of the New Sub-Advisory Agreements, including the duties and responsibilities to be undertaken. The Board noted that the terms of the New Sub-Advisory Agreements will not differ materially from the terms of the existing agreements with Janus and Perkins, except for the effective date and the term of each agreement. The Board concluded that the terms of the New Sub-Advisory Agreements were reasonable.
Conclusions. In reaching its decisions to approve the New Sub-Advisory Agreements, the Board did not identify any single factor as being controlling, but based its recommendation on each of the factors it considered. Each Trustee may have contributed different weight to the various factors. Based upon the materials reviewed, the representations made and the considerations described above, and as part of their deliberations, the Board, including the Independent Trustees, concluded that Janus and Perkins possess the capability and resources to perform the duties required under the New Sub-Advisory Agreements.
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VALIC Company II
APPROVAL OF ADVISORY AGREEMENTS (unaudited) — (continued)
At an in-person meeting held on August 7-8, 2017, the Board of Trustees (the “Board”) of VALIC Company II (“VC II”), including the Trustees that are not interested persons of VC II, as such term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Trustees”), approved the Investment Advisory Agreement with respect to each series of VC II (each a “Fund,” and collectively, the “Funds”) between The Variable Annuity Life Insurance Company (“VALIC”) and VC II (the “Advisory Agreement”) and the Investment Sub-Advisory Agreements between VALIC and each of the following sub-advisers of VC II (collectively, the “Sub-advisory Agreements”): Boston Partners Global Investors, Inc. (“Boston Bartners”), J.P. Morgan Investment Management, Inc. (“JPMIM”), Macquarie Investment Management (“MIM”), Massachusetts Financial Services Company (“MFS”), PineBridge Investments, LLC (“PineBridge”), SunAmerica Asset Management, LLC (“SunAmerica”), The Boston Company Asset Management, Inc. (“TBCAM”) and Wellington Management Company LLP (“Wellington”) (collectively referred to as the “Sub-advisers”). The Advisory Agreement and Sub-advisory Agreements are collectively referred to as the “Advisory Contracts.” Prior to the August 7-8, 2017 meeting at which the Advisory Contracts were approved, the Board also discussed and considered information regarding the proposed continuation of the Advisory Contracts at an in-person meeting held on July 10-11, 2017.
In connection with the approval of the Advisory Contracts, the Board received materials relating to certain factors the Board considered in determining to renew such Advisory Contracts. Those factors included: (1) the nature, extent and quality of services provided by VALIC and the Sub-advisers; (2) the advisory fee and sub-advisory fees charged in connection with VALIC’s and the Sub-advisers’ management of each Fund, compared to advisory fee rates and sub-advisory fee rates of a group of funds with similar investment objectives (respectively, the “Expense Group/Universe” and the “Subadvisory Expense Group/Universe”), as selected by an independent third-party provider of mutual fund data; (3) the investment performance of the Funds compared to performance of comparable funds as selected by an independent third-party provider of investment company data (“Performance Group/Universe”) and against each Fund’s benchmarks; (4) the costs of services and the benefits potentially derived by VALIC, the Sub-advisers and their respective affiliates; (5) a comparison of advisory fee schedules and performance with respect to other mutual funds and accounts with similar investment strategies and/or objectives to the Funds, as applicable, and which are advised or managed by VALIC or SunAmerica, an affiliated Sub-adviser; (6) whether the Funds will benefit from possible economies of scale from engaging VALIC and the Sub-advisers; (7) the profitability of VALIC, the Sub-advisers and their respective affiliates, including amounts retained by VALIC after payment of sub-advisory fees; (8) the terms of the Advisory Contracts; (9) information regarding VALIC’s and the Sub-advisers’ compliance and regulatory history; and (10) information about the services VALIC provides in connection with the oversight of the Sub-advisers.
The Independent Trustees were separately represented by counsel that is independent of VALIC in connection with their consideration of approval of the Advisory Contracts. The matters discussed below were also considered separately by the Independent Trustees in an executive session at an in-person special meeting held on July 10-11, 2017 and executive sessions held during the August 2017 meeting during which such independent counsel provided guidance to the Independent Trustees. Following the July 10-11, 2017 meeting, the Independent Trustees submitted questions and requests for additional information to management, and considered management’s responses thereto at the August 2017 meeting. The continuation of all Advisory Contracts was approved at the August 2017 meeting for a one-year term beginning September 1, 2017 and ending August 31, 2018.
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of services to be provided to the Funds by VALIC and the Sub-advisers. The Board reviewed information provided by VALIC relating to its operations and personnel. The Board also took into account their knowledge of VALIC’s management and the quality of the performance of VALIC’s duties, through Board meetings, discussions and reports during the preceding year and through VALIC’s long history of service to VC II. The Board considered that VALIC is responsible for the management of the day-to-day operations of VC II, including but not limited to, general supervision of and coordination of the services provided by the Sub-advisers, and is also responsible for monitoring and reviewing the activities of the Sub-advisers and other third-party service providers. The Board also noted that VALIC’s and the Sub-advisers’ management of VC II is subject to the oversight of the Board, and must be made in accordance with the investment objectives, policies and restrictions set forth in VC II’s prospectus and statement of additional information. The Board noted that VALIC monitors the performance of the Funds and from time-to-time recommends Sub-adviser changes and/or other changes designed to improve the performance of the Funds.
The Board noted that VALIC personnel meet on a regular basis to discuss the performance of VC II, as well as the positioning of the insurance products, employer-sponsored retirement plans and the Funds generally vis-à -vis competitors. The Board also considered VALIC’s financial condition and whether it had the financial wherewithal to provide the services under the Advisory Agreement with respect to each Fund. The Board also considered VALIC’s risk management processes.
With respect to the services provided by the Sub-advisers, the Board considered information provided to them regarding the services provided by each Sub-adviser, including information presented throughout the previous year. The Board noted that each Sub-adviser (i) determines the securities to be purchased or sold on behalf of the Funds it manages as may be necessary in connection therewith; (ii) provides VALIC with records concerning its activities, which VALIC or the Funds are required to maintain; and (iii) renders regular reports to VALIC and to officers and Trustees of VC II concerning its discharge of the foregoing responsibilities. The Board reviewed each Sub-adviser’s history and investment experience as well as information regarding the qualifications, background and responsibilities of the Sub-adviser’s investment and compliance personnel who provide services to the Funds. The Board also took into account the financial condition of each Sub-adviser. The Board also reviewed each Sub-adviser’s brokerage practices and considered each Sub-adviser’s risk management processes.
The Board reviewed VALIC’s and SunAmerica’s compliance program and personnel. The Board noted that SunAmerica is an affiliated company of VALIC and serves as the administrator to the Funds, as well as sub-advises certain VALIC Company I and VC II Funds. The Board also considered VALIC’s and each Sub-adviser’s regulatory history, including information regarding whether it was currently involved in any regulatory actions or investigations as well as material litigation.
The Board concluded that the scope and quality of the advisory services provided by VALIC and the Sub-advisers were satisfactory and that there was a reasonable basis on which to conclude that each would provide a high quality of investment services to the Funds.
Fees and Expenses; Investment Performance. The Board received and reviewed information regarding each Fund’s total expenses, advisory and sub-advisory fees, and other expenses compared against the expenses and fees of the funds in its Expense Group/Universe and Subadvisory Expense Universe and, in some cases as noted below, the Subadvisory Expense Group. The Board noted that VALIC negotiates the sub-advisory fees with each of the unaffiliated Sub-advisers at arms-length. The Board also considered that the sub-advisory fees are paid by VALIC out of its advisory fees it receives from the Funds and is not paid by the Funds, and that sub-advisory fees may vary widely within the Subadvisory Expense Group/Universe for various reasons, including market pricing demands, existing relationships, experience and success, and individual client needs. The
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VALIC Company II
APPROVAL OF ADVISORY AGREEMENTS (unaudited) — (continued)
Board noted the affiliation of SunAmerica with VALIC, noting any potential conflicts of interest. The Board also noted that VALIC annually waives a portion of its advisory fee and/or reimburses the expenses of each of the Funds.
The Sub-advisers provided and the Board also considered expense information of comparable accounts managed by the Sub-advisers, as applicable, which accounts may include one or more of the following types of accounts: retail mutual funds, mutual funds sold through variable annuity and variable insurance products, and other institutional-type accounts.
The total expense information, advisory fee information, and sub-advisory fee information considered by the Board, among other fee and expense data, is summarized below. Expense ratio data included in the independent third-party report was based on unaudited data from the semi-annual report dated February 28, 2017.
The Board received and reviewed information prepared by management and by an independent third-party regarding the Funds’ investment performance compared against their benchmarks and their respective Performance Groups/Universes. The Board noted that performance information provided by the independent third-party was for the period ended April 30, 2017, and that the benchmark information provided by management was for the period ended June 30, 2017. The Board also noted that it regularly reviews the performance of the Funds throughout the year. The Board further noted that, although it monitors the Funds’ performance closely, it generally attaches more importance to performance over relatively long periods of time, typically three to five years. The Board considered the following expense and performance information in its evaluation of each Fund:
• | Aggressive Growth Lifestyle Fund (PineBridge). The Fund’s actual management fees and actual sub-advisory fees were above the medians of its Expense Group/Universe and Subadvisory Expense Universe, as applicable. The Fund’s total net expenses were equal to the medians of its Expense Group/Universe. The Board took into account management’s discussion of the Fund’s expenses. The Board noted that the expense limitation on total expenses was extended contractually through December 31, 2018. |
The Fund outperformed its Lipper peer index and the median of its Performance Universe for the one-, three- and five-year periods. The Fund underperformed the median of its Performance Group for the one- and five-year periods and outperformed the median of its Performance Group for the three-year period. The Fund outperformed its blended benchmark for the one-year period and underperformed its blended benchmark for the three- and five-year periods. The Board took into account management’s discussion of the Fund’s performance.
• | Capital Appreciation Fund (TBCAM). The Fund’s total net expenses, actual management fees and actual sub-advisory fees were below the medians of its Expense Group/Universe and Subadvisory Expense Universe, as applicable. The Board noted that the expense limitation on total expenses was also extended contractually through December 31, 2018. |
The Fund underperformed its Lipper peer index and the medians of its Performance Group/Universe for the one-year period. The Fund outperformed its Lipper peer index and the medians of its Performance Group/Universe for the three- and five-year periods. The Fund underperformed its benchmark for the one-, three- and five-year periods. The Board took into account management’s discussion of the Fund’s performance, including the reasons for the Fund’s recent underperformance and management’s continued monitoring of the Fund.
• | Conservative Growth Lifestyle Fund (PineBridge). The Fund’s actual management fees and actual sub-advisory fees were above the medians of its Expense Group/Universe and Subadvisory Expense Universe, as applicable. The Fund’s total net expenses were above the median of its Expense Group and below the median of its Expense Universe. The Board took into account management’s discussion of the Fund’s expenses. The Board noted the expense limitation on total expenses was extended contractually through December 31, 2018. |
The Fund outperformed its Lipper peer index and the median of its Performance Universe for the one-, three- and five-year periods. The Fund underperformed the median of its Performance Group for the one-, three- and five-year periods. The Fund outperformed its blended benchmark for the one-year period and underperformed its blended benchmark for the three- and five-year periods. The Board took into account management’s discussion of the Fund’s performance.
• | Core Bond Fund (PineBridge). The Fund’s actual management fees and actual sub-advisory fees were above the medians of its Expense Group/Universe and Subadvisory Expense Group/Universe, as applicable. The Fund’s total net expenses were above the median of its Expense Group and equal to the median of its Expense Universe. The Board took into account management’s discussion of the Fund’s expenses. The Board noted that the expense limitation on total expenses was extended contractually through December 31, 2018. |
The Fund outperformed its Lipper peer index for the one- and five-year periods and underperformed its Lipper peer index for the three-year period. The Fund outperformed the medians of its Performance Group/Universe for the one- and five-year periods and equaled the performance of the medians of its Performance Group/Universe for the three year periods. The Fund outperformed its benchmark for the one- and five-year periods and underperformed its benchmark for the three-year period. The Board took into account management’s discussion of the Fund’s performance.
• | Government Money Market II Fund (SunAmerica). The Fund’s actual management fees and total net expenses were above the medians of its Expense Group/Universe. The Fund’s actual sub-advisory fees were below the median of its Subadvisory Expense Universe. The Board took into account management’s discussion of the Fund’s expenses. The Board noted that the expense limitation on total expenses was extended contractually through December 31, 2018. |
The Fund underperformed its Lipper peer index for the one- and three- year periods and equaled the performance of its Lipper peer index for the five-year period. The Fund outperformed the median of its Performance Group for the one-, three- and five-year periods. The Fund underperformed the median of its Performance Universe for the one-year period and equaled the median of its Performance Universe for the three- and five-year periods. The Fund underperformed its benchmark for the one-, three- and five-year periods. The Board took into account management’s discussion of the Fund’s performance.
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APPROVAL OF ADVISORY AGREEMENTS (unaudited) — (continued)
• | High Yield Bond Fund (Wellington). The Fund’s actual management fees and total net expenses were above the medians of its Expense Group/Universe. The Fund’s actual sub-advisory fees were below the median of its Subadvisory Expense Group and above the median of its Subadvisory Expense Universe. The Board took into account management’s discussion of the Fund’s expenses. The Board noted that the expense limitation on total expenses was extended contractually through December 31, 2018. |
The Fund underperformed its Lipper peer index for the one-, three- and five-year periods. The Fund’s performance was equal to the median of its Performance Group for the one-year period, above the median of its Performance Group for the three-year period, and was below the median of its Performance Group for the five-year period. The Fund underperformed the median of its Performance Universe for the one- and five-year periods and outperformed the median of its Performance Universe for the three-year period. The Fund underperformed its benchmark for the one-, three- and five-year periods. The Board took into account management’s discussion of the Fund’s performance.
• | International Opportunities Fund (MFS and MIM). The Fund’s actual management fees and actual sub-advisory fees were above the medians of its Expense Group/Universe and Subadvisory Expense Group/Universe, as applicable. The Fund’s total net expenses were below the medians of its Expense Group/Universe. The Board took into account management’s discussion of the Fund’s expenses. The Board noted that the expense limitation on total expenses was extended contractually through December 31, 2018. |
The Fund’s performance was above the medians of its Performance Group/Universe for the one- and three-year periods and below the medians of its Performance Group/Universe for the five-year period. The Fund underperformed its benchmark for the one- and five-year periods and outperformed its benchmark for the three-year period. The Board took into account management’s discussion of the Fund’s performance.
• | Large-Cap Value Fund (Janus Capital Management LLC (“Janus”)/Perkins Capital Management LLC (“Perkins”)1 and TBCAM). The Fund’s actual management fees, total net expenses and actual sub-advisory fees were below the medians of its Expense Group/Universe and Subadvisory Expense Group/Universe, as applicable. The Board noted that the expense limitation on total expenses was also extended contractually through December 31, 2018. |
The Fund outperformed its Lipper peer index and the median of its Performance Universe for the one-, three- and five-year periods. The Fund’s performance equaled the median of its Performance Group for the one-year period and outperformed the median of its Performance Group for the three- and five-year periods. The Fund outperformed its benchmark for the one-, three and five-year periods.
• | Mid-Cap Growth Fund (Wellington2). The Fund’s actual management fees and actual sub-advisory fees were above the medians of its Expense Group/Universe and Subadvisory Expense Universe, as applicable. The Fund’s total net expenses were below the medians of its Expense Group/Universe. The Board took into account management’s discussion of the Fund’s expenses. The Board noted that the expense limitation on total expenses was also extended contractually through December 31, 2018. |
The Fund outperformed its Lipper peer index and Performance Group/Universe for the one-year period and underperformed its Lipper peer index and Performance Group/Universe for the three- and five-year periods. The Fund outperformed its benchmark for the one-year period and underperformed its benchmark for the three- and five-year periods. The Board took into account management’s discussion of the Fund’s performance, including the fact that the Fund’s performance was attributable to the prior sub-adviser.
• | Mid-Cap Value Fund (Wellington and Boston Partners). The Fund’s actual management fees, total net expenses and actual sub-advisory fees were below the medians of its Expense Group/Universe and Subadvisory Expense Universe, as applicable. The expense limitation on total expenses was also extended contractually through December 31, 2018. |
The Fund underperformed its Lipper peer index for the one-, three- and five-year periods. The Fund outperformed the medians of its Performance Group/Universe for the one-year period and underperformed the medians of its Performance Group/Universe for the three- and five-year periods. The Fund outperformed its benchmark for the one-year period and underperformed its benchmark for the three- and five-year periods. The Board took into account management’s discussion of the Fund’s performance.
• | Moderate Growth Lifestyle Fund (PineBridge). The Fund’s actual management fees were equal to the median of its Expense Group and above the median of its Expense Universe. The Fund’s total net expenses were above the median of its Expense Group and below the median of its Expense Universe. The Fund’s actual sub-advisory fees were above the median of its Subadvisory Expense Universe. The Board took into account management’s discussion of the Fund’s expenses. The Board noted that the expense limitation on total expenses was extended contractually through December 31, 2018. |
The Fund outperformed its Lipper peer index and the median of its Performance Universe for the one-, three- and five-year periods. The Fund underperformed the median of its Performance Group for the one-year period and outperformed the median of its Performance Group for the three- and five-year periods. The Fund outperformed its blended benchmark for the one-year period and underperformed its blended benchmark for the three- and five-year periods. The Board took into account management’s discussion of the Fund’s performance.
1 | At an in-person meeting of the Board held on April 24-25, 2017, the Board approved a new Investment Sub-Advisory Agreement between VALIC, on behalf of the Large-Cap Value Fund, and Janus, as well as a Sub-Sub-Advisory Agreement between Janus and Perkins, each for an initial term of two year. Therefore, the Board did not consider such Sub-advisory Agreement or Sub-Sub-Advisory Agreement at its August 7-8, 2017 meeting. |
2 | At an in-person meeting of the Board held on April 24-25, 2017, the Board approved a new Investment Sub-Advisory Agreement between VALIC, on behalf of the Mid-Cap Growth Fund, and Wellington for an initial term of two years. Therefore, the Board did not consider such Sub-advisory Agreement with respect to the Mid-Cap Growth Fund at its August 7-8, 2017 meeting. |
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APPROVAL OF ADVISORY AGREEMENTS (unaudited) — (continued)
• | Small-Cap Growth Fund (JPMIM). The Fund’s actual management fees and actual sub-advisory fees were above the medians of its Expense Group/Universe and Subadvisory Expense Group/Universe, as applicable. The Fund’s total net expenses were below the median of its Expense Group and above the median of its Expense Universe. The Board took into account management’s discussion of the Fund’s expenses. The Board noted that the expense limitation on total expenses was extended contractually through December 31, 2018. |
The Fund outperformed its Lipper peer index and the medians of its Performance Group/Universe for the one-, three- and five-year periods. The Fund outperformed its benchmark for the one-, three- and five-year periods.
• | Small-Cap Value Fund (JPMIM). The Fund’s actual management fees and total net expenses were below the medians of its Expense Group/Universe. The Fund’s actual sub-advisory fees were above the median of its Subadvisory Expense Universe. The expense limitation on total expenses was also extended contractually through December 31, 2018. The Board noted the limited size of the Sub-advisory Expense Universe. |
The Fund outperformed its Lipper peer index for the one-, three- and five-year periods. The Fund outperformed the medians of its Performance Group/Universe for the one- and three-year periods and underperformed the medians of its Performance Group/Universe for the five-year period. The Fund underperformed its benchmark for the one- and three-year periods and outperformed its benchmark for the five-year period. The Board took into account management’s discussion of the Fund’s performance.
• | Socially Responsible Fund (SunAmerica). The Fund’s actual management fees, total net expenses and actual sub-advisory fees were below the medians of its Expense Group/Universe and Subadvisory Expense Group/Universe, as applicable. The expense limitation on total expenses was also extended contractually through December 31, 2018. |
The Fund underperformed its Lipper peer index and the median of its Performance Universe for the one-year period and outperformed its Lipper peer index and the median of its Performance Universe for the three- and five-year periods. The Fund’s performance was equal to the median of its Performance Group for the one-year period and outperformed the median of its Performance Group for the three- and five-year periods. The Fund underperformed its benchmark for the one- and three-year periods and outperformed its benchmark for the five-year period. The Board took into account management’s discussion of the Fund’s performance.
• | Strategic Bond Fund (PineBridge). The Fund’s actual management fees and actual sub-advisory fees were above the medians of its Expense Group/Universe and Subadvisory Expense Group/Universe, as applicable. The Fund’s total net expenses were below the medians of its Expense Group/Universe. The Board took into account management’s discussion of the Fund’s expenses. The Board noted that the expense limitation on total expenses was extended contractually through December 31, 2018. |
The Fund outperformed its Lipper peer index and the median of its Performance Universe for the one-, three- and five-year periods. The Fund’s performance underperformed the median of its Performance Group for the one-year period, equaled the median of its Performance Group for the three-year period and outperformed the median of its Performance Group for the five-year period. The Fund outperformed its benchmark for the one-, three- and five-year periods. The Board took into account management’s discussion of the Fund’s performance.
The Board considered management’s discussion of each Fund’s expenses and performance and concluded that each Fund’s overall performance was satisfactory in light of the circumstances or was being appropriately addressed by management. The Board further concluded that the advisory fee and sub-advisory fee for each Fund are fair and reasonable in light of the usual and customary charges made for services of the same nature and quality and the other factors considered.
Cost of Services and Indirect Benefits/Profitability. The Board was provided information related to the cost of services and profits realized in connection with the Advisory Agreement. The Board considered the costs that are borne by the Funds. For its services, VALIC receives a fee, payable monthly from each Fund in an amount that is calculated as a percentage of the average daily net assets of the respective Fund.
The Board was previously apprised that VALIC generally reviews a number of factors in determining appropriate sub-advisory fee levels. Such factors may include a review of (1) style class peers primarily within the variable annuity and qualified plan universe; (2) key competitor analysis; (3) analysis of the strategies managed by the sub-advisers; (4) product suitability; and (5) special considerations such as competitor sub-account characteristics, uniqueness of the product and prestige of the manager.
The Board considered that VALIC, or its affiliates, will receive benefits in addition to the advisory fee to be paid by the Funds, which include transfer agency fees, administrative services fees, and sub-advisory fees. The Board considered that the transfer agency fees are paid by the Funds for the provision of recordkeeping and shareholder services to contract owners and participants. The transfer agency services are provided at cost, and the payment for such services is allocated to each Fund based on the number of accounts serviced. The Board also noted that VC II pays SunAmerica, an affiliate of VALIC, an annual fee based on each Fund’s average daily net assets, for the provision of certain accounting and administrative services. Out of the fee SunAmerica receives from the Funds, SunAmerica compensates VALIC for certain administrative services, and the Funds’ custodian, State Street Bank and Trust Company, for calculation of the daily net asset value. The Board also noted that SunAmerica receives sub-advisory fees for those Funds for which it serves as sub-adviser. The Board also considered that VC II pays VALIC an annual fee of 0.25% on average daily net assets of each Fund (other than the Lifestyle Funds) pursuant to a Shareholder Services Agreement.
The Board also considered that VALIC may exclude from its taxable income a portion of the ordinary dividends paid by underlying U.S. equities in the Funds to the same extent the Funds receive certain dividends with respect to shares of stock issued by domestic corporations, subject to applicable tax laws and regulations. In addition, it was noted that VALIC may receive foreign tax credits with respect to certain foreign securities held or to be held in certain Funds that benefit VALIC. These benefits can be material. The Boards also noted that VALIC and its affiliates may receive revenue sharing payments from certain sub-advisers to the Funds in connection with certain administrative, marketing and other servicing activities, which payments help offset costs for education, marketing activities and training to support sales of the Funds offered through variable annuity contracts and variable life insurance policies (“Variable Contracts”) issued by VALIC, as well as occasional gifts, entertainment or other compensation as incentives. In addition, the Board considered that, because shares of the Funds are offered as investment options through Variable Contracts issued by VALIC and its affiliated life insurers (collectively, the “Life Companies”), the investment objectives, strategies and performance of the Funds may positively or negatively impact a Life Company’s ability to hedge and the related hedging costs associated with guarantees that the Life Company may provide as the issuer of the Variable Contracts.
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VALIC Company II
APPROVAL OF ADVISORY AGREEMENTS (unaudited) — (continued)
In considering the profitability to VALIC and its affiliates in connection with their relationship with the Funds, the Board reviewed information provided by VALIC setting forth the revenues and other benefits, both direct and indirect, received by VALIC and its affiliates attributable to managing each Fund, the cost of providing such services, and the resulting profitability to VALIC and its affiliates from these relationships. The Board also reviewed VALIC’s profitability on a Fund-by-Fund basis. The Board received and reviewed information prepared by VALIC that reflects an allocation of costs that result in a reasonable determination of profitability of VALIC and its affiliates, as adviser, as transfer agent and/or as shareholder servicing agent, as applicable. In addition, the Board considered the profitability of SunAmerica in its role as the administrator of the Funds and as sub-adviser to certain Funds. The Board concluded that the profitability to VALIC and its affiliates from their relationship with the Funds was reasonable.
In considering the profitability to the Sub-advisers in connection with their relationship to the Funds, the Trustees noted that the fees under the Sub-Advisory Agreements are paid by VALIC out of the advisory fees that VALIC receives under the Advisory Agreement. With respect to the unaffiliated Sub-advisers, the Board also relied on the ability of VALIC to negotiate the Sub-Advisory Agreements and the fees thereunder at arm’s length.
For each of the above reasons, the Trustees determined that the profitability to the Sub-advisers from their relationship with the Funds was not a material factor in their deliberations with respect to consideration of approval of the Investment Sub-Advisory Agreements.
Economies of Scale. The Board noted that the advisory fee rate and sub-advisory fee rates payable to VALIC and each of the Sub-advisers with respect to most of the Funds contain breakpoints, which allow the Funds to participate in any economies of scale. The Board also took into account management’s discussion of the Funds’ advisory fee and sub-advisory fee structure, including with respect to the Funds that do not currently have breakpoints. The Board also considered the effect of each Fund’s growth and size on its performance and fees, noting that if the Funds’ assets increase over time, the Funds may realize other economies of scale if assets increase proportionally more than expenses. The Board concluded that no changes to the advisory fee structure of the Funds were necessary.
For similar reasons as stated above with respect to the Sub-advisers’ profitability and the costs of their providing services, the Board concluded that the potential for economies of scale in the Sub-advisers’ management of the Funds are not a material factor to the approval of the Sub-advisory Agreements, although it was noted that most of the Funds have breakpoints at the sub-advisory fee level.
Terms of the Advisory Contracts. The Board reviewed the terms of the Advisory Contracts including the duties and responsibilities undertaken. The Board also reviewed the terms of payment for services rendered by VALIC and the Sub-advisers and noted that VALIC would compensate the Sub-advisers out of the advisory fees it receives from the Funds. The Board noted that the Sub-Advisory Agreements provide that each Sub-adviser will pay all of its own expenses in connection with the performance of their respective duties as well as the cost of maintaining the staff and personnel as necessary for it to perform its obligations. The Board also considered the termination and liability provisions of the Advisory Contracts and other terms contained therein. The Board concluded that the terms of each of the Advisory Contracts were reasonable.
Compliance. The Board reviewed VALIC’s and the Sub-advisers’ compliance personnel and regulatory history, including information whether it was currently involved in any regulatory actions or investigations. In addition, the Board reviewed information concerning each entities’ compliance staff that would be responsible for providing compliance functions on behalf of the Funds and concluded that there was no information provided that would have a material adverse effect on their abilities to provide services to the Funds.
Conclusions. In reaching its decision to approve the Advisory Contracts, the Board did not identify any single factor as being controlling, but based its recommendation on each of the factors it considered. Each Trustee may have contributed different weight to the various factors. Based upon the materials reviewed, the representations made and the considerations described above, and as part of their deliberations, the Board, including the Independent Trustees, concluded that VALIC and each Sub-adviser possess the capability and resources to perform the duties required of them under their respective Advisory Contracts.
Further, based upon its review of the Advisory Contracts, the materials provided, and the considerations described above, the Board, including the Independent Trustees, concluded that (1) the terms of the Advisory Contracts are reasonable, fair and in the best interests of each of the Funds and its respective shareholders, and (2) the fee rates payable under the Advisory Contracts are fair and reasonable in light of the usual and customary charges made for services of the same nature and quality.
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VALIC Company II
TRUSTEE AND OFFICER INFORMATION — August 31, 2017 (unaudited)
Name, Age and Address at August 31, 2017* | Position Held With VALIC Complex | Term of Office and Length of Time Served(4) | Principal Occupations During Past Five Years | Number of Funds in Fund Complex Overseen by Trustee(2) | Other Directorships Held by Trustee(3) | |||||||||
Independent Trustees | ||||||||||||||
Thomas J. Brown | Trustee | | 2005- Present | | Retired | 49 | Trustee, Virtus Series Fund (2011-Present). | |||||||
Dr. Judith L. Craven | Trustee | | 1998- Present |
| Retired | 78 | Director, A.G. Belo Corporation, a media company (1992-2014); Director, SYSCO Corporation, a food marketing and distribution company (1996-Present); Director, Luby’s Restaurant (1998-Present); Director, Hilton Hotel — Downtown Houston (1998-2011). | |||||||
William F. Devin | Chairman and Trustee(5) | | 2001- Present | Retired | 78 | None | ||||||||
Dr. Timothy J. Ebner | Trustee | | 1998- Present |
| Professor and Head, Department of Neuroscience Medical School (1980-Present), and Visscher Chair of Physiology, University of Minnesota (1999-2013); Pickworth Chair (2000-Present) and Scientific Director, Society for Research on the Cerebellum (2008-Present); President, Association of Medical School Neuroscience Department Chairpersons (2011-2014). | 49 | Trustee, Minnesota Medical Foundation (2003-2013). | |||||||
Judge Gustavo E. Gonzales, Jr. | Trustee | | 1998- Present |
| Semi-Retired. Attorney At Law, Criminal Defense and General Practice (2004-2014). Retired Municipal Court Judge, Dallas, TX (since 2004). | 49 | None. | |||||||
Kenneth J. Lavery | Trustee | | 2001- Present |
| Retired, Vice President, Massachusetts Capital Resources Co. (1982-2013). | 49 | None. | |||||||
Dr. John E. Maupin, Jr. | Trustee | | 1998- Present |
| Retired, President, Morehouse School of Medicine, Atlanta, Georgia (2006-2014). | 49 | Director, LifePoint Hospitals, Inc., hospital management (1999-Present); Director, HealthSouth, Corporation, rehabilitation health care services (2004-Present); Director, Regions Financials Inc., bank holding company (2007-Present). | |||||||
Interested Trustees | ||||||||||||||
Peter A. Harbeck(1) | Trustee | | 2001- Present |
| President, CEO and Director, SunAmerica (1995-Present); Director, AIG Capital Services, Inc. (“ACS”) (1993-Present); Chairman, President and CEO, Advisor Group, Inc. (2004-2016) | 153 | None. | |||||||
Eric S. Levy | Trustee | | 2017- Present | | Executive Vice President, VALIC (2015-Present); Executive Vice President, Group Retirement, AIG (2015-Present); and Senior Vice President, Lincoln Financial Group (2010-2015). | 49 | None | |||||||
Officers | ||||||||||||||
John T. Genoy | President and Principal Executive Officer | | 2014- Present |
| Chief Financial Officer (2002-Present), Senior Vice President, (2003-Present), Chief Operating Officer (2006-Present) and Director (2014-Present), SunAmerica. | N/A | N/A |
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VALIC Company II
DIRECTOR AND OFFICER INFORMATION — August 31, 2017 (unaudited) — (continued)
Name, Age and Address at August 31, 2017* | Position Held With VALIC Complex | Term of Office and Length of Time Served(4) | Principal Occupations During Past Five Years | Number of Funds in Fund Complex Overseen by Director(2) | Other Directorships Held by Director(3) | |||||||||
Officers | ||||||||||||||
John Packs | Vice President and Senior Investment Officer | | 2001- Present |
| Senior Investment Officer, VALIC (2001-2013); Senior Vice President, SunAmerica (2008-Present). | N/A | N/A | |||||||
Gregory R. Kingston | Treasurer and Principal Financial Officer | | 2000- Present |
| Vice President (2001-Present) and Head of Mutual Fund Administration (2014-Present), SunAmerica. | | N/A | N/A | ||||||
Gregory N. Bressler | Vice President | | 2005- Present |
| Senior Vice President, General Counsel (2005-Present) and Assistant Secretary (2013-Present), SunAmerica. | N/A | N/A | |||||||
Christopher C. Joe | Chief Compliance Officer | | 2017 to Present | | Chief Compliance Officer, AIG Funds, Anchor Series Trust, Seasons Series Trust, SunAmerica Series Trust, VALIC Company I and VALIC Company II (2017-Present); Chief Compliance Officer, VALIC Retirement Services Company (2017-Present); Chief Compliance Officer, Invesco PowerShares (2012-2017); Chief Compliance Officer, Invesco Investment Advisers, LLC (2010-2013); U.S. Compliance Director, Invesco Ltd. (2006-2014); Deputy Chief Compliance Officer, Invesco Advisers, LLC (2014-2015). | N/A | N/A | |||||||
Matthew J. Hackethal | Anti-Money Laundering (“AML”) Compliance Officer | | 2007- Present |
| Chief Compliance Officer, SunAmerica (2006-Present), Vice President (2011-Present) and Acting Chief Compliance Officer (2016-2017); AML Compliance Officer, SunAmerica Fund Complex (2006-Present). | N/A | N/A | |||||||
Thomas M. Ward | Vice President | | 2008- Present |
| Vice President (2009-Present), VALIC and VALIC Financial Advisors, Inc. | N/A | N/A | |||||||
Kathleen D. Fuentes | Chief Legal Officer, Vice President and Secretary | | 2015- Present |
| Vice President and Deputy General Counsel, SunAmerica (2006-Present). | N/A | N/A | |||||||
Shawn Parry | Vice President and Assistant Treasurer | | 2014- Present |
| Vice President (2014-Present) and Assistant Vice President (2005-2014), SunAmerica. | N/A | N/A | |||||||
Donna McManus | Vice President and Assistant Treasurer | | 2014- Present |
| Vice President, SunAmerica (2014-Present); Managing Director, BNY Mellon (2009-2014). | N/A | N/A |
* | The business address for each Director and Officer is, 2929 Allen Parkway, Houston, TX, 77019. |
(1) | Mr. Harbeck is considered to be an interested trustee because he serves as President, CEO and Director, SunAmerica; Director, ACS; and Chairman, President and CEO, affiliates of the Adviser, and Advisor Group, Inc., which was an affiliate of the Adviser until May 6, 2016. Mr. Levy is considered to be an interested trustee because he serves as an officer of the Adviser and AIG, the Adviser’s ultimate parent company. |
(2) | The “Fund Complex” consists of all registered investment company portfolios for which VALIC or an affiliated person of VALIC serves as investment adviser or administrator. The “Fund Complex” includes the Series (15 funds), SunAmerica Speciality Series (8 funds), SunAmerica Equity Funds (2 funds), SunAmerica Income Funds (3 funds), SunAmerica Money Market Funds, Inc. (1 fund), SunAmerica Senior Floating Rate Fund, Inc. (1 fund), SunAmerica Series, Inc. (6 portfolios), Anchor Series Trust (8 portfolios), Seasons Series Trust (20 portfolios), SunAmerica Series Trust (55 portfolios), and VALIC Company I (34 funds). |
(3) | Directorships of companies required to report to the Securities and Exchange Commission under the Securities Exchange Act of 1934 (i.e. “public companies”) or other investment companies registered under the 1940 Act. |
(4) | Directors serve until their successors are duly elected and qualified. |
(5) | Effective July 27, 2005, Mr. Devin became Chairman of the Board. |
Additional Information concerning the Directors and Officers is contained in the Statement of Additional Information and is available without charge by calling 1-800-448-2542.
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SHAREHOLDERS TAX INFORMATION — August 31, 2017 (unaudited)
Certain tax information regarding the VALIC Company II is required to be provided to the shareholders based upon each Fund’s income and capital gain distributions for the taxable year ended August 31, 2017.
During the year ended August 31, 2017, the Funds paid the following long-term capital gains along with the percentage of ordinary income dividends that qualified for the 70% dividends received deductions for corporations:
Fund | Net Long-Term Capital Gains | Foreign Tax Credit* | Foreign Source Income | Qualifying % for the 70% Dividends Received Deduction | ||||||||||||
Aggressive Growth Lifestyle | $ | 30,381,170 | $ | 159,226 | $ | 2,008,124 | 21.72 | % | ||||||||
Capital Appreciation | 7,982,648 | — | — | 100.00 | ||||||||||||
Conservative Growth Lifestyle | 2,821,833 | 43,391 | 574,823 | 3.27 | ||||||||||||
Core Bond | — | — | — | — | ||||||||||||
Government Money Market II | — | — | — | — | ||||||||||||
High Yield Bond | — | — | — | — | ||||||||||||
International Opportunities | — | 595,692 | 9,366,281 | 0.03 | ||||||||||||
Large Cap Value | — | — | — | 100.00 | ||||||||||||
Mid Cap Growth | — | — | — | — | ||||||||||||
Mid Cap Value | 62,435,557 | — | — | 100.00 | ||||||||||||
Moderate Growth Lifestyle | 34,930,260 | 167,805 | 2,193,558 | 12.61 | ||||||||||||
Small Cap Growth | 6,507,357 | — | — | — | ||||||||||||
Small Cap Value | 19,876,650 | — | — | 95.03 | ||||||||||||
Socially Responsible | 52,113,193 | — | — | 100.00 | ||||||||||||
Strategic Bond | — | — | — | — |
* | The Funds make an election under the Internal Revenue Code Section 853 to pass through foreign taxes paid to the shareholders. |
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COMPARISONS: FUNDS VS. INDEXES (unaudited)
In the following pages, we have included graphs that compare each Fund’s performance with certain market indices. These graphs show the hypothetical growth of a $10,000 investment in each Fund versus the same $10,000 investment in comparable market indices. Descriptions of these market indices are provided below the individual graphs. It is important to note that the VC II Funds are professionally managed mutual funds while the indices are not available for investment and are unmanaged.
Please note that the graphs and tables that accompany the following investment comments include all fund expenses, but do not reflect the charges imposed by the variable annuity contracts or variable life insurance policies (collectively, the “Contracts”), qualifying employer-sponsored retirement plans (the “Plans”), or Individual Retirement Accounts (“IRAs”). All dividends are assumed to be reinvested. No expenses are deducted from the performance of the indices.
Investments in stocks and bonds are subject to risk, including stock market and interest rate fluctuations. Investments in non-U.S. stocks are subject to additional risks, including political and social instability, differing securities regulations and accounting standards, and limited public information. Mortgage-backed securities are subject to prepayment, which can result in reinvestment of principal at lower yields. Money market instruments generally offer stability and income, but an investment in these securities, like investments in other portfolios, are not guaranteed by the U.S. government or any other federal government entity. Lower rated high yield, high-risk securities generally involve more credit risk. These securities may also be subject to greater market price fluctuations than lower yielding, higher rated debt securities. The common stocks of medium-sized companies may be more volatile than those of larger, more established companies. Investing in real estate involves special risks, which may not be associated with investing in stocks, including possible declines in real estate values, adverse economic conditions, and changes in interest rates. Investments in small capitalization and emerging growth companies involve greater than average risk. Such securities may have limited marketability and the issuers may have limited product lines, markets and financial resources. The value of such investments may fluctuate more widely than investments in larger, more established companies. The technology industry can be significantly affected by obsolescence, short product cycles, falling prices and profits, and competition from new market participants. Funding choices that primarily invest in one sector are more volatile than those that diversify across many industry sectors and companies.
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VALIC Company II Aggressive Growth Lifestyle Fund
COMPARISON: FUND VS. INDEX (unaudited)
MANAGEMENT OVERVIEW
A discussion with PineBridge Investments, LLC
For the twelve-months ended August 31, 2017, the Aggressive Growth Lifestyle Fund returned 10.61%, compared to 16.23% for the S&P 500® Index and 11.01% for the blended index. The blended index is comprised of 54% Russell 3000 Index, 13% MSCI EAFE Index (net), 25% Bloomberg Barclays U.S. Aggregate Bond Index, and 8% FTSE EPRA/NAREIT Developed Index.
The Aggressive Growth Lifestyle Fund allocates its assets among a combination of underlying funds, also known as “fund of funds”. Accordingly, the key indicators of performance are underlying fund performance and asset allocation, rather than individual security or sector selection.
The Fund underperformed its benchmark primarily due to its overweight allocation to value over growth stocks within U.S. equities, in a year when growth equities outperformed value equities. Manager selection was a contributor to relative performance.
Among the top performers this 1-year period were Science & Technology Fund, Blue Chip Growth Fund, and Small Cap Growth Fund. Bottom performers this 1-year period included Government Securities Fund, Capital Conservation Fund, and Core Bond Fund.
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VALIC Company II Aggressive Growth Lifestyle Fund
COMPARISON: FUND VS. INDEX (unaudited) — (continued)
For the year ended August 31, 2017, the Aggressive Growth Lifestyle Fund returned 10.61% compared to 16.23% for the S&P 500® Index and 11.01% for the Blended Index.
* | The S&P 500® Index is an index of the stocks of 500 major large-cap U.S. corporations, chosen for market size, liquidity, and industry group representation. It is a market-value weighted index, with each stock’s percentage in the Index in proportion to its market value. |
** | The Fund’s Blended Index consists of the Russell 3000® Index (54%), MSCI EAFE Index (net) (13%), the Bloomberg Barclays U.S. Aggregate Bond Index (25%) and the FTSE/EPRA NAREIT Developed Index (8%). |
*** | The MSCI EAFE Index (net) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. The Index consists of 22 developed market country indices. The net index approximates the minimum possible dividend reinvestment and assumes that the dividend is reinvested after the deduction of withholding tax, applying the rate to non-resident individuals who do not benefit from double taxation treaties. |
**** | The Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage- and asset-backed securities and commercial mortgage-backed securities. Effective August 24, 2016, the name of the Barclays U.S. Aggregate Bond Index was changed to Bloomberg Barclays U.S. Aggregate Bond Index. |
† | The Russell 3000® Index follows the 3,000 largest U.S. companies, based on total market capitalization. |
†† | The FTSE EPRA/NAREIT Developed Index is a global market capitalization weighted index composed of listed real estate securities in the North American, European and Asian real estate markets. |
Average Annual Total Return as of August 31, 2017 | ||||
1 Year | 5 Years | 10 Years | ||
10.61% | 9.19% | 5.87% |
Past performance is not predictive of future performance. The performance data quoted represents past performance; past performance does not guarantee future results; the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance data quoted.
The Fund’s returns reflect investment management fees and other Fund expenses. Charges imposed by the Variable Contracts, Plans or IRAs that invest in the Fund are not included in the Fund’s returns.
Indices are not managed and an investor can not invest directly into an index.
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VALIC Company II Capital Appreciation Fund
COMPARISON: FUND VS. INDEX (unaudited)
MANAGEMENT OVERVIEW
A discussion with The Boston Company Asset Management, LLC.
The Capital Appreciation Fund posted a return of 14.13% for the twelve-month period ending August 31, 2017, compared to a return of 20.82% for the Russell 1000® Growth Index.
The Fund underperformed the benchmark for the period due to weak stock selection relative to the benchmark. Sector allocation was also negative for the period.
Strong stock selection in the telecommunication services and consumer discretionary were additive to overall results. As was the lack of exposure to the real estate sector.
Top individual contributors during the period included positions in Square, Inc. Class A and Charter Communications, Inc. Class A. Another strong contribution resulted from not owning CVS Health Corporation.
Weak selection within the healthcare and information technology sectors detracted from overall results.
The bottom performing names included; limited exposure to Apple Inc. and the lack of exposure to the Boeing Company as well as owning a non-benchmark holding, Molson Coors Brewing Company Class B.
For the year ended August 31, 2017, the Capital Appreciation Fund returned 14.13% compared to 20.82% for the Russell 1000® Growth Index.
* | The Russell 1000® Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. |
Average Annual Total Return as of August 31, 2017 | ||||
1 Year | 5 Years | 10 Years | ||
14.13% | 13.38% | 6.82% |
Past performance is not predictive of future performance. The performance data quoted represents past performance; past performance does not guarantee future results; the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance data quoted.
The Fund’s returns reflect investment management fees and other Fund expenses. Charges imposed by the Variable Contracts, Plans or IRAs that invest in the Fund are not included in the Fund’s returns.
Indices are not managed and an investor can not invest directly into an index.
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VALIC Company II Conservative Growth Lifestyle Fund
COMPARISON: FUND VS. INDEX (unaudited)
MANAGEMENT OVERVIEW
A discussion with PineBridge Investments, LLC
For the twelve-months ended August 31, 2017, the Conservative Growth Lifestyle Fund returned 5.76%, compared to 16.23% for the S&P 500® Index and 5.44% for the blended index. The blended index is comprised of 24% Russell 3000 Index, 8% MSCI EAFE Index (net), 65% Bloomberg Barclays U.S. Aggregate Bond Index, and 3% FTSE EPRA/NAREIT Developed Index.
The Conservative Growth Lifestyle Fund allocates its assets among a combination of underlying funds, also known as “fund of funds”. Accordingly, the key indicators of performance are underlying fund performance and asset allocation, rather than individual security or sector selection.
The Fund outperformed its benchmark primarily due to positive manager selection. Its underweight allocation to higher quality bonds was a positive contributor. Within fixed income, in the past year, the Fund has largely been in credit assets such as high yield. Overall, asset allocation detracted from relative performance.
The largest contributors to relative performance were Strategic Bond Fund, High Yield Bond Fund, and Mid Cap Value Fund. Top individual detractors included Large Cap Core Fund and Government Securities Fund.
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VALIC Company II Conservative Growth Lifestyle Fund
COMPARISON: FUND VS. INDEX (unaudited) — (continued)
For the year ended August 31, 2017, the Conservative Growth Lifestyle Fund returned 5.76% compared to 16.23% for the S&P 500® Index and 5.44% for the Blended Index.
* | The S&P 500® Index is an index of the stocks of 500 major large-cap U.S. corporations, chosen for market size, liquidity, and industry group representation. It is a market-value weighted index, with each stock’s percentage in the Index in proportion to its market value. |
** | The Fund’s Blended Index consists of the Russell 3000® Index (24%), MSCI EAFE Index (net) (8%), the Bloomberg Barclays U.S. Aggregate Bond Index (65%) and the FTSE EPRA/NAREIT Developed Index (3%). |
*** | The MSCI EAFE Index (net) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. The Index consists of 22 developed market country indices. The net index approximates the minimum possible dividend reinvestment and assumes that the dividend is reinvested after the deduction of withholding tax, applying the rate to non-resident individuals who do not benefit from double taxation treaties. |
**** | The Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage- and asset-backed securities and commercial mortgage-backed securities. Effective August 24, 2016, the name of the Barclays U.S. Aggregate Bond Index was changed to Bloomberg Barclays U.S. Aggregate Bond Index. |
† | The Russell 3000® Index follows the 3,000 largest U.S. companies, based on total market capitalization. |
†† | The FTSE EPRA/NAREIT Developed Index is a global market capitalization weighted index composed of listed real estate securities in the North American, European and Asian real estate markets. |
Average Annual Total Return as of August 31, 2017 | ||||
1 Year | 5 Years | 10 Years | ||
5.76% | 5.39% | 5.31% |
Past performance is not predictive of future performance. The performance data quoted represents past performance; past performance does not guarantee future results; the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance data quoted.
The Fund’s returns reflect investment management fees and other Fund expenses. Charges imposed by the Variable Contracts, Plans or IRAs that invest in the Fund are not included in the Fund’s returns.
Indices are not managed and an investor can not invest directly into an index.
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VALIC Company II Core Bond Fund
COMPARISON: FUND VS. INDEX (unaudited)
MANAGEMENT OVERVIEW
A discussion with PineBridge Investments, LLC.
The Core Bond Fund posted a return of 1.37% for the twelve-month period ending August 31, 2017, compared to a return of 0.49% for the Bloomberg Barclays U.S. Aggregate Bond Index.
In aggregate, sector selection had a positive effect on the relative performance of the fund. An underweight allocation to Treasuries and overweight allocations to Financials and Industrials contributed to performance. The fund’s overweight in Fixed Rate Agency MBS detracted from performance.
Security selection was a key driver of outperformance during the year, accounting for a large portion of the fund’s excess returns. Security selection within the Industrial, Financial and Utilities sectors were the primary driver of excess returns for the year.
The Fund’s yield curve positioning detracted from performance as rates were volatile during the period.
Top individual contributors include Regions Financial Corp. (7.38% due 12/10/2037), Sprint Corp. (7.25% due 09/15/2021) and Telecom Italia Capital SA (7.72% due 06/04/2038).
Top individual detractors include Bristow Group, Inc (6.25% due 10/15/2022), Verizon Communications, Inc. (4.67% due 03/15/2055) and MEG Energy Corp. (6.38% due 01/30/2023).
For the year ended August 31, 2017, the Core Bond Fund returned 1.37% compared to 0.49% for the Bloomberg Barclays U.S. Aggregate Bond Index.
* | The Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage- and asset-backed securities and commercial mortgage-backed securities. Effective August 24, 2016, the name of the Barclays U.S. Aggregate Bond Index was changed to Bloomberg Barclays U.S. Aggregate Bond Index. |
Average Annual Total Return as of August 31, 2017 | ||||
1 Year | 5 Years | 10 Years | ||
1.37% | 2.40% | 4.64% |
Past performance is not predictive of future performance. The performance data quoted represents past performance; past performance does not guarantee future results; the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance data quoted.
The Fund’s returns reflect investment management fees and other Fund expenses. Charges imposed by the Variable Contracts, Plans or IRAs that invest in the Fund are not included in the Fund’s returns.
Indices are not managed and an investor can not invest directly into an index.
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VALIC Company II Government Money Market II Fund
COMPARISON: FUND VS. INDEX (unaudited)
MANAGEMENT OVERVIEW
A discussion with SunAmerica Asset Management, LLC
The Govrnment Money Market II Fund posted a return of 0.16% for the twelve-month period ending August 31, 2017, compared to a return of 0.58% for the Treasury Bill Three-Month Index.
On June 14, 2017, the Federal Open Market Committee (FOMC) raised the Federal Fund rate from 1.00% to 1.25%. This was the third increase in six months.
The Fund maintained a short duration throughout the year. The weighted average maturity was 26 days as of August 31, 2017.
The Fund’s allocation to U.S. Treasuries most negatively impacted performance during the period. This was primarily due to the short duration and the compression of rates towards the end of the year.
The Fund was overweight in government agencies, especially Federal Home Loan Bank, which positively attributed to performance. The Federal Home Loan Bank had higher funding needs throughout the year and had more attractive yields versus other securities.
The Fund was also long Federal Farm Credit floating rate securities, which positively attributed to the total return of the fund. This was primarily due to the multiple rate hikes by the FOMC over the course of the year.
Average Annual Total Return as of August 31, 2017 | ||||
1 Year | 5 Years | 10 Years | ||
0.16% | 0.04% | 0.42% |
Past performance is not predictive of future performance. The performance data quoted represents past performance; past performance does not guarantee future results; the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance data quoted.
The Fund’s returns reflect investment management fees and other Fund expenses. Charges imposed by the Variable Contracts, Plans or IRAs that invest in the Fund are not included in the Fund’s returns.
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VALIC Company II High Yield Bond Fund
COMPARISON: FUND VS. INDEX (unaudited)
MANAGEMENT OVERVIEW
A discussion with Wellington Management Company LLP.
The High Yield Bond Fund posted a return of 7.54% for the twelve-month period ending August 31, 2017, compared to its benchmark, the Citigroup High-Yield Market Index, which returned 8.26%.
Security selection contributed favorably to relative performance over the trailing 12-month period. Positive selection in the financial institutions, media and entertainment, and technology sectors contributed to benchmark relative performance but was partially offset by poor selection in the energy, metals and mining, and consumer products sectors.
Sector allocation detracted slightly from relative performance of the Fund over the period. Overweight allocations to the pharmaceuticals, packaging, and health care sectors detracted most from relative performance. This was partially offset by positive relative performance from underweight allocations to the retailers and wirelines sectors, as well as the Fund’s avoidance of the supermarkets sector.
During the period, CCC and below rated bonds outperformed their higher quality peers. Though the fund was slightly overweight CCC and below rated bonds, selection within CCC and below rated bonds detracted. An underweight allocation to BB rated bonds contributed to relative returns.
Top individual contributors during the period included positions in Microchip Technology and Frontier Communications. Another strong contribution resulted from not owning Concordia Healthcare.
Top detractors included Owens-Illinois, Cardtronics and Denbury Resources.
For the year ended August 31, 2017, the High Yield Bond Fund returned 7.54% compared to 8.26% for the Citigroup High-Yield Market Index.
* | The Citigroup High-Yield Market Index measures the performance of below investment grade debt issued by corporations domiciled in the U.S or Canada. All of the bonds in such index are publicly placed, have a fixed coupon, and are nonconvertible. |
Average Annual Total Return as of August 31, 2017 | ||||
1 Year | 5 Years | 10 Years | ||
7.54% | 5.36% | 5.34% |
Past performance is not predictive of future performance. The performance data quoted represents past performance; past performance does not guarantee future results; the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance data quoted.
The Fund’s returns reflect investment management fees and other Fund expenses. Charges imposed by the Variable Contracts, Plans or IRAs that invest in the Fund are not included in the Fund’s returns.
Indices are not managed and an investor can not invest directly into an index.
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VALIC Company II International Opportunities Fund
COMPARISON: FUND VS. INDEX (unaudited)
MANAGEMENT OVERVIEW
The International Opportunities Fund posted a return of 22.81% for the twelve-month period ending August 31, 2017, compared to a return of 21.98% for the MSCI EAFE Small Cap Index (net).
A discussion with Massachusetts Financial Services Company – regarding their portion of the Fund (the “portfolio”)
For the twelve months ended August 31, 2017, the portfolio underperformed the MSCI EAFE Small Cap Index (net).
Stock selection in the industrials sector hurt results relative to the MSCI EAFE Small Cap Index (net). Here, Bunzl, GEA Group and Yamato dampened relative results.
The combination of stock selection and, to a lesser extent, an overweight allocation to the consumer discretionary sector also weakened relative returns led by Paddy Power Betfair, NEXT and Whitbread. Overweight positions in Domino’s Pizza Group and Dignity further weighed on relative performance.
The portfolio’s cash and/or cash equivalents position during the period detracted from relative performance.
An underweight allocation to the real estate and energy sectors aided relative returns. There were no individual securities within these sectors that were among the portfolio’s top relative contributors for the reporting period.
Stocks in other sectors that benefited relative results included Federal Bank Ltd, ASM Pacific Technology and Fuji Seal International.
A discussion with Delaware Investments Fund Advisers – regarding their portion of the Fund (the “portfolio”)
For the twelve months ended August 31, 2017, the VALIC International Opportunities Fund outperformed the MSCI EAFE Small Cap Index (net).
Stock selection within consumer discretionary, information technology and consumer staples contributed positively to performance over the time period. From a country perspective, the United Kingdom, China and Brazil were key drivers of performance. Key individual contributors included Start Today Co., Ltd., Fevertree Drinks PLC and Magazine Luiza S.A.
Stock selection within materials and financials weighed on performance during the period. From a country perspective, Canada and Norway detracted from performance during the period. Key individual detractors included Ichigo Inc., Torex Gold Resources and Detour Gold Corporation.
For the year ended August 31, 2017, the International Opportunities Fund returned 22.81% compared to 21.98% for the MSCI EAFE Small Cap Index (net).
* | The MSCI EAFE Small Cap Index (net) is an unmanaged index considered representative of small-cap stocks of Europe, Australasia and the Far East. The net index approximates the minimum possible dividend reinvestment and assumes that the dividend is reinvested after the deduction of withholding tax, applying the rate to non-resident individuals who do not benefit from double taxation treaties. |
Average Annual Total Return as of August 31, 2017 | ||||
1 Year | 5 Years | 10 Years | ||
22.81% | 11.86% | 2.88% |
Past performance is not predictive of future performance. The performance data quoted represents past performance; past performance does not guarantee future results; the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance data quoted.
The Fund’s returns reflect investment management fees and other Fund expenses. Charges imposed by the Variable Contracts, Plans or IRAs that invest in the Fund are not included in the Fund’s returns.
Indices are not managed and an investor can not invest directly into an index.
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VALIC Company II Large Cap Value Fund
COMPARISON: FUND VS. INDEX (unaudited)
MANAGEMENT OVERVIEW
The Large Cap Value Fund posted a return of 13.66% for the twelve-month period ending August 31, 2017, compared to a return of 11.58% for the Russell 1000® Value Index.
A discussion with Perkins Investment Management, LLC a Janus Henderson Global Investors plc Company – regarding their portion of the Fund (the “portfolio”)
Overall, both stock selection and sector allocation contributed to the portfolio’s outperformance versus the benchmark. Stock selection in the technology, industrials and real estate sectors aided relative returns. Relative detractors were led by stock selection in the energy, consumer discretionary, and consumer staples sectors.
Among the leading individual contributors were Citigroup, Inc., CSX Corp., and Westlake Chemical Corp. The largest individual detractors included Noble Energy, Inc., Occidental Petroleum Corp., and Target Corp.
A discussion with The Boston Company Asset Management, LLC – regarding their portion of the Fund (the “portfolio”)
Overall, both stock selection and sector allocation contributed to the portfolio’s outperformance versus the benchmark. On a sector basis, stock selection in financials and industrials delivered strong relative results. Another large contributor was an overweight to the outperforming financials sector. Larger detractors included stock selection in the real estate, energy, and consumer staples sectors.
Among individual positions, some of the largest positive contributions were made by holdings in JPMorgan Chase & Co., and lack of exposure to the poor-performing Exxon Mobil Corp. and General Electric Co. Holdings in Occidental Petroleum Corp., Anadarko Petroleum Corp., and Uniti Group, Inc. were large detractors.
For the year ended August 31, 2017, the Large Cap Value Fund returned 13.66% as compared to 11.58% for the Russell 1000® Value Index.
* | The Russell 1000® Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. |
Average Annual Total Return as of August 31, 2017 | ||||
1 Year | 5 Years | 10 Years | ||
13.66% | 13.52% | 4.82% |
Past performance is not predictive of future performance. The performance data quoted represents past performance; past performance does not guarantee future results; the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance data quoted.
The Fund’s returns reflect investment management fees and other Fund expenses. Charges imposed by the Variable Contracts, Plans or IRAs that invest in the Fund are not included in the Fund’s returns.
Indices are not managed and an investor can not invest directly into an index.
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VALIC Company II Mid Cap Growth Fund
COMPARISON: FUND VS. INDEX (unaudited)
MANAGEMENT OVERVIEW
The Mid Cap Growth Fund posted a return of 19.48% for the twelve-month period ending August 31, 2017, compared to a return of 12.37% for the S&P Mid Cap 400® Index.
A discussion with Wells Capital Management Incorporated (WellsCap)
For the partial fiscal year period from August 31, 2016, ending May 31, 2017, the Mid Cap Growth Fund outperformed the Russell MidCap Growth Index, 17.36% versus 11.52%.
The Fund outperformed the benchmark for the period due to both stock selection relative to the benchmark and sector allocation.
Stock selection across various sectors drove outperformance for the period, while relative sector weight differences also added value. Most notably, stock selection in consumer discretionary, information technology, real estate, materials, and health care enhanced relative performance.
The top performing names included; MercadoLibre, Inc., Universal Display Corp., and Micron Technology, Inc.
Holding cash was a negative drag on relative performance. Stock selection was weakest in the consumer staples sector, however the negative impact was offset by the portfolio’s underweight in the weak-performing sector for the period.
The bottom performing names included; Yandex NV., NCR Corp. and Tyler Technologies, Inc.
A discussion with Wellington Management Company LLP.
For the period since Wellington began managing the fund on June 1, 2017 through August 31, 2017, the Mid Cap Growth Fund returned 1.9%, outperforming the -1.2% return of the S&P Midcap 400 Index.
The Fund outperformed the benchmark for the period due to strong stock selection relative to the benchmark. Sector allocation was also positive for the period.
In terms of sector allocation, the fund’s overweight allocation to the information technology sector and underweight allocations to the energy and consumer discretionary sectors aided relative performance.
Top relative contributors included TransUnion, Neurocrine Biosciences, Inc., and VeriSign, Inc.
From a sector allocation standpoint, the underweight allocations to the utilities and materials sectors partially offset positive relative performance.
The bottom performing names included; Spirit Airlines, Inc., Alkermes, and Advance Auto Parts, Inc.
For the year ended August 31, 2017, the Mid Cap Growth Fund returned 19.48% compared to 12.37% for the S&P MidCap 400® Index.
* | Effective June 6, 2017, in connection with a change in its principal investment strategies, the Fund changed its benchmark from the Russell Midcap® Growth Index to the S&P MidCap 400® Index. The S&P MidCap 400® Index is more representative of the distinctive characteristics of the mid-cap market segment in which the Fund invests pursuant to its stated investment strategies. The S&P MidCap 400® Index is an index of the stocks of 400 domestic stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index, with each stock’s percentage in the Index in proportion to its market value. |
** | The Russell Midcap® Growth Index measures the performance of those Russell Midcap® companies with higher price-to-book ratios and high forecasted growth values. The stocks are also members of the Russell 1000® Growth Index. |
Average Annual Total Return as of August 31, 2017 | ||||
1 Year | 5 Years | 10 Years | ||
19.48% | 10.74% | 5.34% |
Past performance is not predictive of future performance. The performance data quoted represents past performance; past performance does not guarantee future results; the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance data quoted.
The Fund’s returns reflect investment management fees and other Fund expenses. Charges imposed by the Variable Contracts, Plans or IRAs that invest in the Fund are not included in the Fund’s returns.
Indices are not managed and an investor can not invest directly into an index.
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VALIC Company II Mid Cap Value Fund
COMPARISON: FUND VS. INDEX (unaudited)
MANAGEMENT OVERVIEW
The Mid Cap Value Fund posted a return of 11.02% for the twelve-month period ending August 31, 2017, compared to a return of 10.82% for the Russell Mid Cap Value Index.
A discussion with Wellington Management Company LLP – regarding their portion of the Fund (the “portfolio”)
Overall, sector allocation was the primary contributor to the portfolio’s outperformance. The portfolio’s overweight allocation to the information technology sector, as well as an underweight allocation to the real estate sector aided relative performance. Another strong contribution to performance was security election in the materials sector.
Overall stock selection detracted from relative performance. Weak stock selection in the information technology, industrials, and energy sectors were larger detractors.
Top relative contributors to performance included Methanex Corp., Comerica Inc., and Zions Bancorporation. Larger relative detractors included Newfield Exploration, QEP Resources Inc., and Hertz Global Holdings, Inc.
A discussion with Boston Partners – regarding their portion of the Fund (the “portfolio”)
Overall, sector allocation was the primary contributor to the portfolio’s outperformance. Our overweight positioning in the information technology sector, an overweight in financials, and an underweight in real estate were strong contributing factors.
Security selection was negative overall during the period, primarily due to our stock pickings in the real estate, materials, and energy sectors.
Among the largest individual contributors were Activision Blizzard, Inc., IAC/InterActiveCorp., and Unum Group. Larger individual detractors included Kimco Realty Corp., Regency Centers Corp., and Graphic Packaging Holding Company.
For the year ended August 31, 2017, the Mid Cap Value Fund returned 11.02% compared to 10.82% for the Russell Midcap® Value Index.
* | The Russell Midcap® Value Index measures the performance of the mid-cap value segment of the U.S. equity universe. It includes those Russell Midcap Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell Midcap® Value Index is constructed to provide a comprehensive and unbiased barometer of the mid-cap value market. The index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true mid-cap value market. |
Average Annual Total Return as of August 31, 2017 | ||||
1 Year | 5 Years | 10 Years | ||
11.02% | 12.81% | 6.24% |
Past performance is not predictive of future performance. The performance data quoted represents past performance; past performance does not guarantee future results; the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance data quoted.
The Fund’s returns reflect investment management fees and other Fund expenses. Charges imposed by the Variable Contracts, Plans or IRAs that invest in the Fund are not included in the Fund’s returns.
Indices are not managed and an investor can not invest directly into an index.
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VALIC Company II Moderate Growth Lifestyle Fund
COMPARISON: FUND VS. INDEX (unaudited)
MANAGEMENT OVERVIEW
A discussion with PineBridge Investments, LLC
For the twelve-month period ended August 31, 2017, the Moderate Growth Lifestyle Fund returned 8.42%, compared to 16.23% for the S&P 500® Index and 8.27% for the Fund’s Blended Index. The blended index is comprised of 40% Russell 3000 Index, 10% MSCI EAFE Index (net), 45% Bloomberg Barclays U.S. Aggregate Bond Index, and 5% FTSE EPRA/NAREIT Developed Index.
The Moderate Growth Lifestyle Fund allocates its assets among a combination of underlying funds, also known as “fund of funds”. Accordingly, the key indicators of performance are underlying fund performance and asset allocation, rather than individual security or sector selection.
Manager selection contributed to the outperformance versus the benchmark. The Fund outperformed the benchmark primarily due to its overweight allocation to equity, particularly in the strong U.S. small cap equity segment. In contrast, our underweight to U.S. equity and overweight to international equity in the early part of the 12-month period, particularly in October and November 2016, accounted for the negative contribution to asset allocation alpha.
The largest contributors to relative performance were Small Cap Index Fund, High Yield Bond Fund, and Mid Cap Value Fund. Top individual detractors included International Government Bond Fund and Government Securities Fund.
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VALIC Company II Moderate Growth Lifestyle Fund
COMPARISON: FUND VS. INDEX (unaudited) — (continued)
For the year ended August 31, 2017, the Moderate Growth Lifestyle Fund returned 8.42% compared to 16.23% for the S&P 500® Index and 8.27% for the Blended Index.
* | The S&P 500® Index is an index of the stocks of 500 major large-cap U.S. corporations, chosen for market size, liquidity, and industry group representation. It is a market-value weighted index, with each stock’s percentage in the Index in proportion to its market value. |
** | The Blended Index consists of the Russell 3000® Index (40%), MSCI EAFE Index (net) (10%), the Bloomberg Barclays U.S. Aggregate Bond Index (45%) and the FTSE EPRA/NAREIT Developed Index (5%). |
*** | The MSCI EAFE Index (net) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. The Index consists of 22 developed market country indices. The net index approximates the minimum possible dividend reinvestment and assumes that the dividend is reinvested after the deduction of withholding tax, applying the rate to non-resident individuals who do not benefit from double taxation treaties. |
**** | The Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage- and asset-backed securities and commercial mortgage-backed securities. Effective August 24, 2016, the name of the Barclays U.S. Aggregate Bond Index was changed to Bloomberg Barclays U.S. Aggregate Bond Index. |
† | The Russell 3000® Index follows the 3,000 largest U.S. companies, based on total market capitalization. |
†† | The FTSE EPRA/NAREIT Developed Index is a global market capitalization weighted index composed of listed real estate securities in the North American, European and Asian real estate markets. |
Average Annual Total Return as of August 31, 2017 | ||||
1 Year | 5 Years | 10 Years | ||
8.42% | 7.71% | 5.89% |
Past performance is not predictive of future performance. The performance data quoted represents past performance; past performance does not guarantee future results; the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance data quoted.
The Fund’s returns reflect investment management fees and other Fund expenses. Charges imposed by the Variable Contracts, Plans or IRAs that invest in the Fund are not included in the Fund’s returns.
Indices are not managed and an investor can not invest directly into an index.
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VALIC Company II Small Cap Growth Fund
COMPARISON: FUND VS. INDEX (unaudited)
MANAGEMENT OVERVIEW
A discussion with JPMorgan Investment Management Inc.
The Small Cap Growth Fund posted a return of 26.05% for the twelve-month period ending August 31, 2017, compared to a return of 16.39% for the Russell 2000 Growth Index.
The Fund outperformed the benchmark for the period. Stock selection was the primary driver of outperformance during the period. Sector allocation detracted for the period.
Stock selection within information technology and consumer discretionary sector, were the largest contributors to performance.
The top performing names included; Kite Pharma, Inc., Shopify, Inc., and Take-Two Interactive Software, Inc.
Underweight positioning in telecom services followed by the consumer staples overweight were modest detractors from performance during the period.
The bottom performing names included; elf Beauty, Inc., Coherus Biosciences, Inc., and Evolent Health, Inc.
For the year ended August 31, 2017, the Small Cap Growth Fund returned 26.05% compared to 16.39% for the Russell 2000® Growth Index.
* | The Russell 2000® Growth Index measures the performance of those Russell 2000® companies with higher price-to-book ratios and higher forecasted growth values. |
Average Annual Total Return as of August 31, 2017 | ||||
1 Year | 5 Years | 10 Years | ||
26.05% | 14.93% | 8.03% |
Past performance is not predictive of future performance. The performance data quoted represents past performance; past performance does not guarantee future results; the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance data quoted.
The Fund’s returns reflect investment management fees and other Fund expenses. Charges imposed by the Variable Contracts, Plans or IRAs that invest in the Fund are not included in the Fund’s returns.
Indices are not managed and an investor can not invest directly into an index.
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VALIC Company II Small Cap Value Fund
COMPARISON: FUND VS. INDEX (unaudited)
MANAGEMENT OVERVIEW
The Small Cap Value Fund posted a return of 11.61% for the twelve-month period ending August 31, 2017, compared to a return of 13.47% for the Russell 2000® Value Index.
A discussion with J.P. Morgan Investment Management Inc. – regarding their portions of the Fund (the “portfolio”)
The Quality / Deployment of capital prudently / Valuation strategy from J.P. Morgan. Stock selection was mainly responsible for the underperformance in the portfolio versus the benchmark. Poor stock selection in the healthcare, industrials, and energy sectors detracted from results. Alternatively, stock selection in the consumer discretionary and real estate sectors contributed to performance. Overall sector allocation contributed to performance, highlighted by an underweight to the weak energy sector.
At the individual stock level, positions in Huron Consulting Group and FTI Consulting, Inc. detracted from performance. Individual contributors to performance included the portfolio’s positions in Take-Two Interactive Interactive Software, Inc. and Children’s Place, Inc.
The Trends / Momentum / Valuation strategy from J.P. Morgan. For the 10 months ended August 31, 2017, the portfolio outperformed its benchmark. Both stock selection and sector allocation contributed to the outperformance. Strong stock selection in the information technology, real estate, and consumer staples sectors contributed to results. Alternatively, stock selection in the industrials, healthcare, and materials sectors detracted from performance.
At the individual stock level, positions in Take-Two Interactive Interactive Software, Inc. and Extreme Networks, Inc. contributed to performance. Individual detractors to performance included the portfolio’s positions in Iconix Brand Group Corp. and ACCO Brands Corp.
A discussion with Wells Capital Management Incorporated – regarding their portion of the Fund (the “portfolio”)
For the 2 months from September 1, 2016 to October 28, 2016 the portfolio outperformed its benchmark. Both stock selection and sector allocation contributed to the outperformance.
Security selection in financials and energy were large contributors to relative performance. A relative underweight in the worst-performing real estate sector during the period was another large contributor.
Conversely, stock selection in the information technology and consumer discretionary sectors were large detractors from relative performance. Additionally, an overweight to the poor-performing healthcare sector detracted.
At the individual stock level, positions in Endurance Specialty Holdings Ltd., Kirby Corporation, and Whiting Petroleum Corporation contributed to performance. Individual detractors to performance included Ascena Retail Group, Inc., VeriFone Systems, Inc., and EVERTEC, Inc.
For the year ended August 31, 2017, the Small Cap Value Fund returned 11.61% compared to 13.47% for the Russell 2000® Value Index.
* | The Russell 2000® Value Index measures the performance of those Russell 2000® companies with lower price-to-book ratios and lower forecasted growth values. |
Average Annual Total Return as of August 31, 2017 | ||||
1 Year | 5 Years | 10 Years | ||
11.61% | 12.66% | 6.28% |
Past performance is not predictive of future performance. The performance data quoted represents past performance; past performance does not guarantee future results; the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance data quoted.
The Fund’s returns reflect investment management fees and other Fund expenses. Charges imposed by the Variable Contracts, Plans or IRAs that invest in the Fund are not included in the Fund’s returns.
Indices are not managed and an investor can not invest directly into an index.
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VALIC Company II Socially Responsible Fund
COMPARISON: FUND VS. INDEX (unaudited)
MANAGEMENT OVERVIEW
A discussion with SunAmerica Asset Management, LLC.
The Socially Responsible Fund posted a return of 13.90% for the twelve-month period ending August 31, 2017, compared to its benchmark, the S&P 500 Index, which returned 16.23%.
The Fund invests, under normal circumstances, at least 80% of its net assets in the equity securities of U.S. companies meeting the Fund’s social criteria. As with all funds, there will be performance discrepancies due to social criteria, trading, cash, and pricing effects. The Fund’s social criteria screen eliminates companies that significantly participate in the alcohol, firearms, gambling, tobacco, nuclear power, weapons, labor/employee relations and environmental performance industries.
Security selection was the primary driver of underperformance, particularly in the technology, consumer discretionary, and energy sectors. While overweight exposure to financials was beneficial overall, not owning Bank of America and JPMorgan Chase, hurt relative performance. Zero exposure to Apple Inc. also hindered results.
The Fund benefited from security selection in the healthcare, industrials, and utilities group. Underweight exposure to the energy and telecom sectors also positively impacted results as did a technology overweight. In terms of positioning, not owning General Electric, Exxon Mobil and AT&T Inc. also proved advantageous.
On an absolute basis, Microsoft Corporation, Facebook, Inc. Class A, Berkshire Hathaway Inc. Class B, PNC Financial Services Group, Inc., and Visa Inc. Class A assisted the Fund’s performance the most during the fiscal period. Stocks detracting performance included Simon Property Group, Inc., Occidental Petroleum Corporation, General Mills, Inc., Schlumberger NV, and L Brands, Inc.
For the year ended August 31, 2017, the Socially Responsible Fund returned 13.90% compared to 16.23% for the S&P 500® Index.
* | The S&P 500® Index is an index of the stocks of 500 major large-cap U.S. corporations, chosen for market size, liquidity, and industry group representation. It is a market-value weighted index, with each stock’s percentage in the Index in proportion to its market value. |
Average Annual Total Return as of August 31, 2017 | ||||
1 Year | 5 Years | 10 Years | ||
13.90% | 14.54% | 7.67% |
Past performance is not predictive of future performance. The performance data quoted represents past performance; past performance does not guarantee future results; the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance data quoted.
The Fund’s returns reflect investment management fees and other Fund expenses. Charges imposed by the Variable Contracts, Plans or IRAs that invest in the Fund are not included in the Fund’s returns.
Indices are not managed and an investor can not invest directly into an index.
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VALIC Company II Strategic Bond Fund
COMPARISON: FUND VS. INDEX (unaudited)
MANAGEMENT OVERVIEW
A discussion with PineBridge Investments, LLC
The Strategic Bond Fund posted a return of 4.75% for the twelve-month period ending August 31, 2017, compared to its benchmark, the Bloomberg Barclays Capital U.S. Aggregate Bond Index, which returned 0.49%.
Sector selection contributed to performance versus that of the benchmark index during the period. Overweight allocations to energy, basic industry and sovereign credits along with an underweight allocation to Treasury securities were the most notable contributors. These contributions more than offset the impact of an underweight allocation to local authority securities and a cash position.
Security selection contributed to performance versus that of the benchmark index during the year. Most notable contributions came from selections made among communications, consumer cyclicals and sovereign names. These contributions more than offset the marginally negative impact of selections made among mortgage-backed securities and utility natural gas.
Yield curve positioning contributed to performance marginally during this period.
Top individual contributors include Sprint Corp. 7.25% 9/15/2021, Scientific Games International 10.0% 12/01/2022 and Conn’s, Inc. 7.25% 7/15/2022.
Top detractors include Denbury Resources, Inc 9.0% 5/15/2021, Bristow Group, Inc. 6.25% 10/15/2022 and Meg Energy Corp 6.375% 1/30/2023.
For the year ended August 31, 2017, the Strategic Bond Fund returned 4.75% compared to 0.49% for the Bloomberg Barclays U.S. Aggregate Bond Index.
* | The Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage- and asset-backed securities and commercial mortgage-backed securities. Effective August 24, 2016, the name of the Barclays U.S. Aggregate Bond Index was changed to Bloomberg Barclays U.S. Aggregate Bond Index. |
Average Annual Total Return as of August 31, 2017 | ||||
1 Year | 5 Years | 10 Years | ||
4.75% | 3.80% | 5.46% |
Past performance is not predictive of future performance. The performance data quoted represents past performance; past performance does not guarantee future results; the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance data quoted.
The Fund’s returns reflect investment management fees and other Fund expenses. Charges imposed by the Variable Contracts, Plans or IRAs that invest in the Fund are not included in the Fund’s returns.
Indices are not managed and an investor can not invest directly into an index.
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SUPPLEMENTS TO THE PROSPECTUS
THE SUPPLEMENTS ARE NOT PART OF ANNUAL REPORT.
VALIC COMPANY II
INTERNATIONAL OPPORTUNITIES FUND
(the “Fund”)
Supplement dated April 3, 2017, to the Fund’s Prospectus and
Statement of Additional Information dated January 1, 2017, as supplemented and amended to date
Effective immediately, all reference to “Delaware Management Business Trust” is hereby deleted and replaced with “Macquarie Investment Management Business Trust”.
Capitalized terms used but not defined herein shall have the meanings assigned to them by the Prospectus and SAI, as applicable.
Please retain this supplement for future reference.
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VALIC Company II
SUPPLEMENTS TO THE PROSPECTUS — (continued)
THE SUPPLEMENTS ARE NOT PART OF ANNUAL REPORT.
VALIC COMPANY II
LARGE CAP VALUE FUND
(the “Fund”)
Supplement dated May 8, 2017, to the Fund’s Prospectus
dated January 1, 2017, as supplemented and amended to date
Janus Capital Management, LLC (“Janus”) currently serves as subadviser to the Fund and Perkins Investment Management LLC (“Perkins”), an affiliate of Janus, currently serves as sub-subadviser to the Fund. On or about May 30, 2017 (the “Effective Date”), Janus Capital Group, Inc. (“JCGI”), the ultimate parent entity of Janus, is expected to merge with Henderson Group plc (the “Merger”). As a result of the Merger, a newly formed entity, Janus Henderson Global Investors plc, will become the ultimate parent entity of Janus and Perkins.
The change in control of Janus resulting from the Merger will constitute an “assignment” of the subadvisory agreement between The Variable Annuity Life Insurance Company (“VALIC”) and Janus with respect to the Fund (the “Prior Subadvisory Agreement”), as that term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”). In accordance with the 1940 Act, and pursuant to the terms of the Prior Subadvisory Agreement, the Prior Subadvisory Agreement will terminate upon its assignment. In addition, pursuant to the terms of the sub-subadvisory agreement between Janus and Perkins with respect to the Fund (the “Prior Sub-Subadvisory Agreement”), the Prior Sub-Subadvisory Agreement will terminate upon the termination of the Prior Subadvisory Agreement. Generally, an assignment triggers a requirement to obtain shareholder approval of a new subadvisory agreement; however, pursuant to the terms of an exemptive order granted by the Securities and Exchange Commission, VALIC is permitted, under certain conditions and subject to Board approval, to enter into new subadvisory agreements with unaffiliated subadvisers without obtaining shareholder approval.
At an in-person meeting held on April 24-25, 2017, the Board of Trustees of VC II approved a new subadvisory agreement between VALIC and Janus (the “New Subadvisory Agreement”) and a new sub-subadvisory agreement between Janus and Perkins (the “New Sub-Subadvisory Agreement”) with respect to the Fund, each of which will become effective on the Effective Date. Neither Janus nor Perkins anticipates any change to the portfolio management team or other key personnel that provide services to the Fund as a result of the Merger. The level and scope of services to be rendered by Janus and Perkins and the fees payable by VALIC to Janus under the New Subadvisory Agreement will also remain the same.
Shareholders of record as of the close of business on May 31, 2017 will receive a notice that explains how to access an Information Statement, which will include more information about the Merger, the New Subadvisory Agreement and the New Sub-Subadvisory Agreement.
Upon the Effective Date, the following change to the Prospectus will become effective:
The first paragraph of the section entitled “Management — Investment Sub-Advisers — Janus Capital Management LLC (“Janus”)” is hereby deleted in its entirety and replaced with the following:
Janus is a wholly-owned subsidiary of Janus Henderson Global Investors plc, a publicly traded company with principal operations in financial asset management businesses that had approximately $138 billion in assets under management as of December 31, 2016. Janus (together with its predecessors) has served as an investment adviser since 1970.
Capitalized terms used but not defined herein shall have the meanings assigned to them by the Prospectus.
Please retain this supplement for future reference.
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VALIC Company II
SUPPLEMENTS TO THE PROSPECTUS — (continued)
THE SUPPLEMENTS ARE NOT PART OF ANNUAL REPORT.
VALIC COMPANY II
SMALL CAP GROWTH FUND
(the “Fund”)
Supplement dated April 3, 2017, to the Fund’s Prospectus and
Statement of Additional Information (“SAI”) dated January 1, 2017, as supplemented and amended to date
Effective immediately, Felise Agranoff is on parental leave. During the time Ms. Agranoff is on leave, the Fund will continue to be managed by the remaining members of the portfolio management team. Ms. Agranoff is expected to return from her leave on or about April 24, 2017, at which point she will resume her full responsibilities as a member of the Fund’s portfolio management team.
Capitalized terms used but not defined herein shall have the meanings assigned to them by the Prospectus and SAI, as applicable.
Please retain this supplement for future reference.
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VALIC Company II
SUPPLEMENTS TO THE PROSPECTUS — (continued)
THE SUPPLEMENTS ARE NOT PART OF ANNUAL REPORT.
VALIC COMPANY II
SOCIALLY RESPONSIBLE FUND
(the “Fund”)
Supplement dated April 21, 2017, to the Fund’s
Summary Prospectus dated January 1, 2017, as supplemented and amended to date
In the section entitled “Fund Summary: Socially Responsible Fund,” the table under the heading “Investment Adviser — Portfolio Managers” is deleted in its entirety and replaced with the following:
Name | Portfolio Manager of the Fund Since | Title | ||||||
Timothy Campion | 2012 | Lead Portfolio Manager | ||||||
Kara Murphy | 2013 | Co-Portfolio Manager | ||||||
Jane Bayar Algieri | 2015 | Co-Portfolio Manager |
Capitalized terms used but not defined herein shall have the meanings assigned to them by the Prospectus.
Please retain this supplement for future reference.
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VALIC Company II
BOARD OF TRUSTEES
Thomas J. Brown
Judith L. Craven
William F. Devin
Timothy J. Ebner
Gustavo E. Gonzales, Jr.
Peter A. Harbeck
Kenneth J. Lavery
Eric S. Levy
John E. Maupin, Jr.
CUSTODIAN
State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111
INVESTMENT ADVISER
The Variable Annuity
Life Insurance Company (VALIC)
2929 Allen Parkway
Houston, Texas 77019
INVESTMENT SUBADVISERS
Delaware Investments Fund Advisers
2005 Market Street
Philadelphia, PA 19103
J.P. Morgan Investment Management Inc.
270 Park Avenue
New York, New York 10017
Janus Capital Management, LLC
151 Detroit Street
Denver, Colorado 80206
Massachusetts Financial Services Company
111 Huntington Avenue
Boston, MA 02199
PineBridge Investments, LLC
399 Park Avenue
New York, New York 10022
Boston Partners Global Investors, Inc. d/b/a Boston Partners
909 Third Avenue, 32nd Floor
New York, New York 10022
SunAmerica Asset Management, LLC
Haborside 5
185 Hudson Street, Suite 3300
Jersey City, New Jersey 07311
The Boston Company Asset Management, LLC
One Boston Place
Boston, Massachusetts 02108
Wellington Management Company LLP
280 Congress Street
Boston, Massachusetts 02210
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
1000 Louisiana Street, Suite 5800
Houston, Texas 77002
TRANSFER AND SHAREHOLDER SERVICE AGENT
VALIC Retirement
Services Company (VRSCO)
2929 Allen Parkway
Houston, Texas 77019
OFFICERS
John T. Genoy,
President and Principal Executive Officer
John Packs,
Vice President and Senior Investment Officer
Gregory R. Kingston,
Treasurer and Principal Financial Officer
Kathleen Fuentes,
Vice President, Chief Legal Officer and Secretary
Gregory N. Bressler,
Vice President
Thomas M. Ward,
Vice President
Shawn Parry,
Vice President and Assistant Treasurer
Donna McManus,
Vice President and Assistant Treasurer
Daniel Subea,
Assistant Treasurer
Christopher C. Joe,
Chief Compliance Officer
Matthew J. Hackethal,
Anti-Money Laundering Compliance Officer
Christopher J. Tafone,
Assistant Secretary
DISCLOSURE OF QUARTERLY FUND PORTFOLIO HOLDINGS
VC II is required to file its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission for its first and third fiscal quarters on Form N-Q. VC II’s Forms N-Q are available on the U.S. Securities and Exchange Commission’s website at www.sec.gov. You can also review and obtain copies of Forms N-Q at the U.S. Securities and Exchange Commission’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330).
VOTING PROXIES ON VALIC COMPANY II PORTFOLIO SECURITIES
A description of the policies and procedures that VC II uses to determine how to vote proxies related to securities held in the Fund’s portfolios, which is available in VC II’s Statement of Additional Information, may be obtained without charge upon request, by calling 800-448-2542. 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 VALIC COMPANY II PORTFOLIO SECURITIES
Information regarding how VC II voted proxies relating to securities held in the VC II Funds portfolios 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 800-448-2542 or on the U.S. Securities and Exchange Commission’s website at http://www.sec.gov.
This report is for the information of the shareholders and variable contract owners investing in VC II. It is authorized for distribution to other persons only when preceded or accompanied by an effective prospectus which contains information on how to purchase shares and other pertinent information.
If you would like further information about this material or products issued by VALIC or American General Life Insurance Company, please contact your financial professional.
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VALIC.com — Account access
You will need to create an online security profile with a unique user ID and password.
With your PIN, you can also access your account via the 24-hour VALIC automated phone line at 1-800-448-2542. | Manage your account online
• Print and download account transaction confirmations and tax statements
• View transaction history and download it to Quicken using Direct ConnectSM
• Use the Account Aggregation feature to display information from other accounts in addition to your VALIC accounts
• Easily manage your personal profile to update your contact information (phone, address, email), update your beneficiaries, reset your password, and more | |
With VALIC.com, you can initiate account transactions including:
• Change allocation
• Transfer money among investment options
• Rebalance account to your desired allocation mix
• Change contributions
• Automate future contribution increases | ||
Start exploring VALIC.com today! | ||
• Visit VALIC.com
• Register for online access
• Follow steps to create a security profile | ||
PersonalDeliver-e® | ||
• It’s easy to sign up
• Simply visit VALIC.com today to get started | ||
Please note:
Email delivery is not accessible to certain VALIC annuity contract owners. | ||
Easy and secure.
Sign up for PersonalDeliver-e® today.
CLICK VALIC.com
CALL 1-800-448-2542
VISIT your financial advisor |
Sign up today at VALIC.com We know privacy is important to you, so please be assured that your email address and other information you share with us is kept private and never sold. Review our Privacy Policy online for more information.
Securities and investment advisory services offered through VALIC Financial Advisors, Inc. (“VFA”), member FINRA, SIPC and an SEC-registered investment advisor. VFA registered representatives offer securities and other products under retirement plans and IRAs, and to clients outside of such arrangements.
Annuities issued by The Variable Annuity Life Insurance Company (“VALIC”). Variable annuities distributed by its affiliate, AIG Capital Services, Inc. (“ACS”), member FINRA. VALIC, VFA and ACS are members of American International Group, Inc. (“AIG”). | |
Copyright © The Variable Annuity Life Insurance Company. All rights reserved. VC 23800 (06/2017) J102011 EE |
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VALIC Company II P.O. Box 3206 Houston, TX 77253-3206 | PRST STD U.S. POSTAGE PAID LANCASTER, PA PERMIT NO. 1765 |
VC 11288 (08/2017) J102713
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Item 2. | Code of Ethics. |
VALIC Company II (the “registrant”) has adopted a Code of Ethics applicable to its Principal Executive and Principal Accounting Officers pursuant to Section 406 of the Sarbanes-Oxley Act of 2002 (the Code”). During the fiscal year ended August 31, 2017, there were no reportable waivers or implicit waivers to a provision of the Code that applies to the registrant’s Principal Executive and Principal Accounting Officers (the “Covered Officers”). During the fiscal year ended August 31, 2017, however, there were reportable amendments to the Code that apply to the Covered Officers, and that relate to one or more of the items set forth in paragraph (b) of Item 2 of Form N-CSR. In particular, the Code has been amended to provide an enhanced description of the Covered Officers’ responsibilities, which include a responsibility to observe the ethical principles contained in the Code.
Item 3. | Audit Committee Financial Expert. |
The registrant’s Board of Trustees has determined that Thomas J. Brown, the Chairman of the registrant’s Audit Committee, qualifies as an audit committee financial expert, as defined in instructions to Item 3(b) of Form N-CSR. Mr. Brown is considered to be “independent” for purposes of Item 3(a)(2) of Form N-CSR.
Item 4. | Principal Accountant Fees and Services. |
(a) - (d) Aggregate fees billed to the registrant for the last two fiscal years for professional services rendered by the registrant’s principal accountant were as follows:
2016 | 2017 | |||||||
(a) Audit Fees | $ | 409,345 | $ | 421,625 | ||||
(b) Audit-Related Fees | $ | 0 | $ | 0 | ||||
(c) Tax Fees | $ | 0 | $ | 0 | ||||
(d) All Other Fees | $ | 0 | $ | 0 |
Audit Fees include amounts related to the audit of the registrant’s annual financial statements and services normally provided by the principal accountant in connection with statutory and regulatory filings.
Aggregate fees billed to the investment adviser and Adviser Affiliates (as defined below in Item 4(e)) that are required to be pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X for the last two fiscal years for services rendered by the registrant’s principal accountant were as follows:
2016 | 2017 | |||||||
(b) Audit-Related Fees | $ | 0 | $ | 0 | ||||
(c) Tax Fees | $ | 0 | $ | 0 | ||||
(d) All Other Fees | $ | 401,110 | $ | 296,820 |
All other fees are for professional services rendered by the registrant’s principal accountant for services associated with issuing a SSAE16 report and Third Party Assurance report.
(e) (1) | The registrant’s audit committee pre-approves all audit services provided by the registrant’s principal accountant for the registrant and all non-audit services provided by the registrant’s principal accountant for the |
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registrant, its investment adviser and any entity controlling, controlled by, or under common control with the investment adviser (“Adviser Affiliates”) that provides ongoing services to the registrant, if the engagement by the investment adviser or Adviser Affiliate relates directly to the operations and financial reporting of the registrant. The audit committee has not presently established any pre-approval policies and procedures that permit the pre-approval of the above services other than by the full audit committee. Certain de minimis exceptions are allowed for non-audit services in accordance with Rule 2-01(c)(7)(i)(C) of Regulation S-X as set forth in the registrant's audit committee charter. |
(2) | No services included in (b) - (d) above in connection with fees billed to the registrant or the investment adviser or Adviser Affiliates were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. |
(f) | Not applicable. |
(g) | The aggregate fees billed for the most recent fiscal year and the preceding fiscal year by the registrant’s principal accountant for non-audit services rendered to the registrant, its investment adviser, and Adviser Affiliates that provides ongoing services to the registrant for 2016 and 2017 were $426,045 and $322,505, respectively. |
(h) | Non-audit services rendered to the registrant’s investment adviser and any Adviser Affiliates that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X were considered by the registrant’s audit committee as to whether they were compatible with maintaining the principal accountant’s independence. |
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.
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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 Trustees 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 270.3a-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 control over financial reporting. |
Item 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. |
Not applicable.
Item 13. | Exhibits. |
(a) | (1) Code of Ethics applicable to its Principal Executive and Principal Accounting Officers pursuant to Section 406 of the Sarbanes-Oxley Act of 2002 attached hereto as Exhibit 99.406.Code of Ethics. |
(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. |
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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.
VALIC Company II | ||
By: | /s/ John T. Genoy | |
John T. Genoy | ||
President |
Date: November 08, 2017
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: November 08, 2017
By: | /s/ Gregory R. Kingston | |
Gregory R. Kingston | ||
Treasurer |
Date: November 08, 2017