Sit Mutual Funds
3300 IDS Center, 80 South Eighth Street
Minneapolis, MN 55402
612-332-5580
| July 12, 2011 | VIA EDGAR |
Ms. Laura Hatch
Division of Investment Management
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
| RE: | Series ID | Class ID | File Number | |||||
| Sit Mid Cap Growth Fund, Inc | S000011802 | C000032269 | 811-03342 | |||||
| Sit Large Cap Growth Fund, Inc | S000011803 | C000032270 | 811-03343 | |||||
| Sit U.S. Government Securities Fund, Inc | S000011654 | C000032004 | 811-04995 | |||||
| Sit Mutual Funds, Inc | ||||||||
| Sit International Growth Fund | S000003461 | C000009595 | 811-06373 | |||||
| Sit Balanced Fund | S000003462 | C000009596 | 811-06373 | |||||
| Sit Developing Markets Growth Fund | S000003463 | C000009597 | 811-06373 | |||||
| Sit Small Cap Growth Fund | S000003464 | C000009598 | 811-06373 | |||||
| Sit Dividend Growth Fund - Class I | S000003466 | C000009600 | 811-06373 | |||||
| Sit Dividend Growth Fund - Class S | S000003466 | C000033658 | 811-06373 | |||||
| Sit Global Dividend Growth Fund - Class I | S000023468 | C000069003 | 811-06373 | |||||
| Sit Global Dividend Growth Fund - Class S | S000023468 | C000071096 | 811-06373 | |||||
| Sit Mutual Funds II, Inc | ||||||||
| Sit Tax-Free Income Fund | S000003467 | C000009601 | 811-04033 | |||||
| Sit MN Tax-Free Income Fund | S000003468 | C000009602 | 811-04033 | |||||
| Sit High Income Municipal Bond Fund - Class I | S000015046 | C000040905 | 811-04033 |
(the “Registrants”)
Dear Ms. Hatch:
This is correspondence in connection with your review of the Registrants’ financial statements and other filings. This correspondence responds to your comments provided to me via the telephone on June 28, 2011 and notes the changes that will be made in subsequent filings in response to such comments.
I address each of your comments below in the order discussed.
1. Rule 17g-1(g)(1)(B)(iii) requires that the fidelity bond information filed with the SEC (filing type 40-17G) include “a statement showing the amount of the single insured bond which the investment company would have provided and maintained had it not been named as an insured under a joint insured bond…”
The form 40-17G filed on November 10, 2011 did not include the information required in item (iii). Ms. Hatch clarified that the information include the cost of a single bond for each fund as provided by the underwriter. Future filings will include this information.
2. Sit U.S. Government Securities Fund. Prospectus dated August 1, 2010, Fees and Expenses of the Fund. The expense example was calculated based on the expenses after the waiver in years 3, 5 and 10. It was noted that (as of August 1, 2010) the fee waiver could be terminated after December 31, 2011.
Effective November 1, 2010, the Sit U.S. Government Securities Fund management fee was contractually changed to 0.8% which is equal to the fee after the fee waiver prior to November 1, 2010. The prospectus dated August 1, 2011 will reflect the management fee of 0.8%.
3. Tax-Free Income Fund. Prospectus dated August 1, 2010. As of March 31, 2011 the closed-end funds held by the Fund totaled 6.9% of the Fund’s assets. Closed-end funds are not discussed in the prospectus. Ms. Hatch suggested adding a discussion regarding the Fund’s investments in closed-end funds.
The prospectus dated August 1, 2011 will include a reference regarding the Fund’s investment in closed-end funds.
4. Sit U. S. Government Securities Fund. Financial statements dated March 31, 2011, Notes to Financial Statements, note 3, Investment Security Transactions. Section 30(e)(6) of the Investment Company Act of 1940 provides that the semi-annual reports include “a statement of the aggregate dollar amounts of purchases and sales of investment securities,other than Government securities, made during the period covered by the report.”
The amounts reported in the Fund’s financial statements in note 3 Investment Security Transactions as of March 31, 2011 included government securities, however the amounts reported should have excluded government securities. The Investment Security Transactions note in the Fund’s future financial statements will exclude the purchases and sales of government securities, and an additional note to the financial statements will include the aggregate dollar amounts of purchases and sales of government securities.
5. Sit International Growth Fund and Sit Developing Markets Growth Fund Annual Report as of June 30, 2010, Notes to Financial Statements 4, and Financial Highlights, notes 5 and 4 respectively. Each Fund received proceeds from market timing settlements. The Notes to Financial Statements should include the impact on the Funds’ total return during the period, if material. In addition, the Notes to Financial Statements should include the impact on performance from the receipt of litigation settlements, if any.
Future financial statements will refer to market timing settlements and litigation settlements paid to the Funds in the Financial Highlights section, and will include the impact of settlement proceeds on total return in the Notes to Financial Statements.
I believe this letter is responsive to all of your comments. Please call me with any questions.
Sincerely,
/s/ Paul E. Rasmussen
Paul E. Rasmussen
Vice President
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