TRANSAMERICA FUNDS
Transamerica Large Cap Value
Supplement to the Currently Effective Prospectuses, Summary Prospectuses and Statement of Additional Information
Effective on or about December 1, 2020, Transamerica Asset Management, Inc. (“TAM”) will terminate its investment sub-advisory agreement with Levin Easterly Partners LLC (“Levin”) with respect to Transamerica Large Cap Value (the “fund”) and will enter into a new investment sub-advisory agreement with Rothschild & Co Asset Management US Inc. (“Rothschild”) with respect to the fund. An information statement will be made available to fund shareholders which will provide certain information about the new sub-adviser and the terms of the new sub-advisory agreement.
In connection with the change in sub-adviser: (i) the fund’s principal investment strategies will be revised; and (ii) the fund will have lower management fee and sub-advisory fee schedules. These changes are described below.
TAM will continue to serve as the fund’s investment manager.
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Effective on or about December 1, 2020, the following information will supplement and supersede any contrary information contained in the Prospectuses, Summary Prospectuses and Statement of Additional Information concerning the fund:
The fund will change its management fee schedule as described below.
TAM will receive compensation from the fund, calculated daily and paid monthly, at the annual rates (expressed as a percentage of the fund’s average daily net assets) indicated below:
First $1 billion......................................................................................................... 0.594%
Over $1 billion up to $2 billion............................................................................ 0.58%
Over $2 billion up to $3 billion............................................................................ 0.56%
In excess of $3 billion............................................................................................ 0.54%
The “Annual Fund Operating Expenses” table included in the “Fees and Expenses” section of the Prospectuses and Summary Prospectuses is deleted in its entirety and replaced with the following, as applicable:
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) | |||||||
Class | A | C | I | I2 | R1 | R6 | T2 |
Management fees1 | 0.59% | 0.59% | 0.59% | 0.59% | 0.59% | 0.59% | 0.59% |
Distribution and service (12b-1) fees | 0.25% | 1.00% | 0.00% | 0.00% | 0.50% | 0.00% | 0.25% |
Other expenses2 | 0.19% | 0.18% | 0.15% | 0.05% | 0.20% | 0.05% | 0.04% |
Total annual fund operating expenses | 1.03% | 1.77% | 0.74% | 0.64% | 1.29% | 0.64% | 0.88% |
Fee waiver and/or expense reimbursement3 | 0.00% | 0.00% | 0.09% | 0.00% | 0.00% | 0.00% | 0.00% |
Total annual fund operating expenses after fee waiver and/or expense reimbursement |
1.03% |
1.77% |
0.65% |
0.64% |
1.29% |
0.64% |
0.88% |
1 Management fees have been restated to reflect a reduction in management fees effective December 1, 2020.
2 Other expenses for Class R1 and Class T2 shares are based on estimates for the current fiscal year.
3 Contractual arrangements have been made with the fund’s investment manager, Transamerica Asset Management, Inc. (“TAM”), through March 1, 2021 to waive fees and/or reimburse fund expenses to the extent that total annual fund operating expenses exceed 1.15% for Class A shares, 1.90% for Class C shares, 0.90% for Class I shares, 0.80% for Class I2 shares, 1.40% for Class R1 shares, 0.80% for Class R6 shares and 1.15% for Class T2 shares, excluding, as applicable, acquired fund fees and expenses, interest, taxes, brokerage commissions, dividend and interest expenses on securities sold short, extraordinary expenses and other expenses not incurred in the ordinary course of the fund’s business. These arrangements cannot be terminated prior to March 1, 2021 without the Board of Trustees’ consent. TAM is permitted to recapture amounts waived and/or reimbursed to a class during any of the 36 months from the date on which TAM waived fees and/or reimbursed expenses for the class. A class may reimburse TAM only if such reimbursement does not cause, on any particular business day of the fund, the class’s total annual operating expenses (after the reimbursement is taken into account) to exceed the applicable limits described above or any other lower limit then in effect. In addition, TAM has contractually agreed to reimburse 0.09% of the sub-transfer agency fees on Class I shares through March 1, 2021.
The “Example” table included in the Prospectuses and Summary Prospectuses is deleted in its entirety and replaced with the following, as applicable:
Example: This Example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all shares at the end of those periods (unless otherwise indicated). The Example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same. Only the 1 year dollar amount shown below reflects TAM’s agreement to waive fees and/or reimburse fund expenses. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
If the shares are redeemed at the end of each period:
| 1 year | 3 years | 5 years | 10 years |
Class A | $649 | $860 | $1,087 | $1,740 |
Class C | $280 | $557 | $959 | $2,084 |
Class I | $66 | $225 | $400 | $908 |
Class I2 | $65 | $205 | $357 | $798 |
Class R1 | $131 | $409 | $708 | $1,556 |
Class R6 | $65 | $205 | $357 | $798 |
Class T2 | $387 | $572 | $773 | $1,352 |
If the shares are not redeemed:
| 1 year | 3 years | 5 years | 10 years |
Class A | $649 | $860 | $1,087 | $1,740 |
Class C | $180 | $557 | $959 | $2,084 |
Class I | $66 | $225 | $400 | $908 |
Class I2 | $65 | $205 | $357 | $798 |
Class R1 | $131 | $409 | $708 | $1,556 |
Class R6 | $65 | $205 | $357 | $798 |
Class T2 | $387 | $572 | $773 | $1,352 |
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The following information will be added alphabetically to the sub-section titled “Recent Management Fee Changes” under the heading “Shareholder Information - Investment Manager” in the Prospectuses:
Transamerica Large Cap Value: Effective December 1, 2020, the management fee is 0.594% of the first $1 billion; 0.58% over $1 billion up to $2 billion; 0.56% over $2 billion up to $3 billion; and 0.54% in excess of $3 billion in average daily net assets. Prior to December 1, 2020, the management fee was 0.65% of the first $750 million; 0.62% over $750 million up to
$1 billion; 0.60% over $1 billion up to $2 billion; 0.59% over $2 billion up to $3 billion; and 0.58% in excess of $3 billion in average daily net assets.
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PRINCIPAL INVESTMENT STRATEGIES:
The “Principal Investment Strategies” section included in each of the Prospectuses and Summary Prospectuses is deleted in its entirety and replaced with the following:
Under normal circumstances, the fund will invest at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of large cap companies. The fund considers large cap companies to be companies with capitalizations within the range of companies included in the Russell 1000® Index1. As of December 31, 2019, the market capitalization range of the Russell 1000® Index was between approximately $823.8 million and $1,287.6 billion. The fund’s sub- adviser, Rothschild & Co Asset Management US Inc. (the “sub-adviser”), normally focuses primarily on companies with market capitalizations greater than $5 billion. The fund typically holds between 35 and 50 positions. The fund’s benchmark is the Russell 1000® Value Index.
The fund will employ a relative value approach, combining a quantitative screening tool to identify attractive candidate securities with a bottom-up, fundamental research process to select and weight individual securities. The sub-adviser invests in securities it believes to be attractively valued with the potential to exceed investor expectations and may sell securities that no longer meet the investment criteria of the portfolio management team.
The fund will generally invest in companies across a variety of industries and sectors. Valuation is assessed on both a relative and absolute basis. The fund will invest primarily in common stock and depositary receipts. The fund may invest up to 20% of its assets in non-U.S. securities. The fund considers non-U.S. securities to include issuers organized or located outside the U.S. and trade primarily in a market located outside the U.S. The fund may invest up to 20% of its net assets in small and/or medium capitalization companies.
1 “Russell®” and other service marks and trademarks related to the Russell indexes are trademarks of the London Stock Exchange Group companies.
SUB-ADVISER:
The fund’s sub-adviser will be as follows:
Rothschild & Co Asset Management US Inc. has been registered as an investment adviser since 1970. As of June 30, 2020, Rothschild & Co Asset Management US Inc. had approximately $7.4 billion in total assets under management. Rothschild & Co Asset Management US Inc.’s principal business address is 1251 Avenue of the Americas, New York, NY.
PORTFOLIO MANAGER:
The fund’s portfolio managers will be as follows:
Name | Sub-Adviser | Positions Over Past Five Years |
Paul Roukis, CFA | Rothschild & Co Asset Management US Inc. | Portfolio Manager of the fund since 2020; Managing Director and Co-Portfolio Manager with Rothschild & Co Asset Management US Inc. since 2005 |
Jeff Agne | Rothschild & Co Asset Management US Inc. | Portfolio Manager of the fund since 2020; Managing Director and Co-Portfolio Manager with Rothschild & Co Asset Management US Inc. since 2015 |
MANAGEMENT FEES:
The following information revises the corresponding information appearing in the table contained in the “Investment Manager Compensation” sub-section of the Statement of Additional Information under the heading “Investment Management and Other Services – The Investment Manager”:
Fund Name | Percentage of Average Daily Net Assets |
Transamerica Large Cap Value | First $1 billion................................................. 0.594% Over $1 billion up to $2 billion.................... 0.58% Over $2 billion up to $3 billion.................... 0.56% In excess of $3 billion.................................... 0.54% |
SUB-ADVISORY FEES:
The following information revises the corresponding information appearing in the table contained in the “Sub-Advisory Fees” sub-section of the Statement of Additional Information under the heading “Investment Management and Other Services – Sub-Advisers”:
Fund | Sub-Adviser | Sub-Advisory Fees |
Transamerica Large Cap Value | Rothschild & Co Asset Management US Inc. (11) | 0.144% of the first $1 billion 0.13% over $1 billion up to $3 billion 0.12% in excess of $3 billion |
(11) The average daily net assets for the purpose of calculating sub-advisory fees will be determined on a combined basis with Transamerica Rothschild & Co Large Cap Value VP.
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Investors Should Retain this Supplement for Future Reference
August 10, 2020