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 811-21482
---------------------------------------------
AIG Series Trust
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Harborside Financial Center, 3200 Plaza 5 Jersey City, NJ 07311
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
John T. Genoy
Senior Vice President
SunAmerica Asset Management Corp.
Harborside Financial Center,
3200 Plaza 5
Jersey City, NJ 07311
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (201) 324-6414
-----------------------------
Date of fiscal year end: October 31
--------------------------
Date of reporting period: April 30, 2009
-------------------------
Item 1. Reports to Stockholders
2009 SEMI-ANNUAL REPORT
High Watermark Funds
2015 High Watermark Fund
2020 High Watermark Fund
SunAmerica
Alternative Strategies Fund
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Sun America
Mutual Funds
www.sunamericafunds.com
TABLE OF CONTENTS
MESSAGE FROM THE PRESIDENT..................... 1
EXPENSE EXAMPLE................................ 2
STATEMENT OF ASSETS AND LIABILITIES............ 4
STATEMENT OF OPERATIONS........................ 6
STATEMENT OF CHANGES IN NET ASSETS............. 7
FINANCIAL HIGHLIGHTS........................... 8
PORTFOLIO OF INVESTMENTS....................... 11
NOTES TO FINANCIAL STATEMENTS.................. 18
APPROVAL OF ADVISORY AGREEMENT AND SUBADVISORY
AGREEMENT...................................... 30
A MESSAGE FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present you with the semi-annual report for the SunAmerica
High Watermark Funds and the SunAmerica Alternative Strategies Fund for the
period ended April 30, 2009.
These unique Funds offer investors important tools with which to build a
diversified portfolio. The High Watermark Funds, subject to certain conditions,
offer a feature that is designed to preserve both principal and the investment
gains generated during the life of each Fund.
The SunAmerica Alternative Strategies Fund, launched November 4, 2008, is an
open-end mutual fund that seeks to provide long term total return by utilizing
an actively-managed, quantitative investment process to provide commodity and
hedge fund exposure. The Fund may provide investors with a way to achieve
diversification in their portfolio since the returns generated by this exposure
are generally expected to provide a low correlation to the returns of equity
and fixed income investments.
Investing in funds that help provide diversification was particularly timely in
the six-month period. The economy continued to deteriorate during the period,
creating great uncertainty among consumers, businesses and investors. Despite
an equity rally at the end of the period, the S&P 500 Index returned -8.53%.
Commodities, as represented by the S&P GSCI Total Return Index, showed an even
greater decline, returning -34.65% during the six-month period. In this time of
volatility and uncertainty, investors rushed to the safety of U.S. Treasury
Bonds. The 10-year Treasury Bond began the period with daily yields at 3.95%,
hit a low of 2.05% and ended the period with a 3.12% yield. In contrast to the
S&P 500 during the six-month period, the 10-year Treasury Bond delivered a
positive 8.88% return.
On the following pages, you will find unaudited financial statements and
portfolio information for the High Watermark Funds and the SunAmerica
Alternative Strategies Fund for the period ended April 30, 2009. We believe
that these funds provide investors with important tools in building a
diversified portfolio and in attempting to manage risk. We strongly recommend
that you contact your financial adviser to make certain that your portfolio is
tailored to your individual investment goals and risk tolerance levels. After
the dramatic downturn in both the economy and the markets, this is more
important than ever.
We thank you for including SunAmerica Mutual Funds in your investment plan. We
value your ongoing confidence in us and look forward to serving your investment
needs in the future.
Sincerely,
/s/ Peter A. Harbeck
Peter A. Harbeck
PRESIDENT & CEO
SunAmerica Asset Management Corp.
- --------
Past performance is no guarantee of future results.
The S&P 500 Index is an unmanaged, broad-based, market-cap weighted index of
500 stocks. The S&P GSCI Total Return Index is calculated primarily on a world
production-weighted basis and is comprised of the principal physical
commodities that are the subject of active, and liquid futures markets. S&P
GSCI is a registered service mark and trademark of Standard & Poor's. Indices
are not managed and an investor cannot invest directly in an index.
The High Watermark Funds' subadviser employs a disciplined quantitative
approach through a proprietary, computer-assisted methodology to construct and
rebalance the Funds' portfolios. This construction and rebalancing process is
similar to asset allocation except that it controls not only portfolio assets
such as U.S. government securities but also the portfolios' exposures to equity
markets via futures contracts. Under certain circumstances, the Funds may be
required to invest 100% of their assets in U.S. government securities. In these
circumstances, the Funds may not participate meaningfully in any subsequent
recovery in the equity markets. Use of fixed-income securities reduces the
Funds' ability to participate as fully in upward equity market movements, and
therefore, represents some loss of opportunity compared to portfolios that are
fully invested in equities. Asset allocation does not guarantee a profit nor
does it protect against loss.
The High Watermark Funds' payment undertaking is backed by a master agreement
("Master Agreement") between AIG Series Trust, on behalf of the High Watermark
Funds, and Prudential Global Funding ("PGF"). PGF's obligations are backed by
its parent company, Prudential Financial Inc., ("Prudential Financial"). The
Master Agreement is solely the obligation of PGF and Prudential Financial. The
Master Agreement is an obligation that runs solely to the High Watermark Funds,
not to the High Watermark Funds' shareholders. PGF's obligations under the
Master Agreement are dependent on the financial condition of PGF and Prudential
Financial. A shareholder's payout will be reduced by any redemption of High
Watermark Fund shares or dividends and distributions taken in cash, sales
charges and extraordinary fund expenses. Dividends and distributions from the
High Watermark Funds are taxable whether or not you reinvest them in additional
shares of the High Watermark Funds. The payment undertaking does not apply to
shares redeemed prior to the protected maturity date and shareholders can lose
money on shares redeemed early. If certain obligations are not performed under
the master agreement (master agreement risk), or the Board of Trustees
determines that it is in the best interests of shareholders to liquidate a High
Watermark Fund (early Fund termination risk), shareholders will receive upon
redemption the then-current net asset value, which may be lower than the
current high watermark value. Neither the High Watermark Funds nor SunAmerica
Asset Management Corp., the Funds' investment adviser, is obligated to replace
the Master Agreement provider or Prudential Financial should they be unable to
make payments under the Master Agreement. The Master Agreement increases the
High Watermark Funds' expenses and could lower fund performance. If the Master
Agreement is terminated, the fee payable under a new agreement may be higher.
The SunAmerica Alternative Strategies Fund is not a complete investment program
and should not be an investor's sole investment because its performance is
linked to the performance of highly volatile commodities and hedge funds.
Investors should consider buying shares of the SunAmerica Alternative
Strategies Fund only as part of an overall portfolio strategy that includes
other asset classes, such as fixed income and equity investments. Investors in
the SunAmerica Alternative Strategies Fund should be willing to assume greater
risks of potentially significant short-term share price fluctuation because of
the SunAmerica Alternative Strategies Fund's investments in commodity-linked
and hedge fund linked instruments.
1
AIG SERIES TRUST
EXPENSE EXAMPLE -- April 30, 2009 -- (unaudited)
DISCLOSURE OF PORTFOLIO EXPENSES IN SHAREHOLDER REPORTS
As a shareholder of a Fund in the AIG Series Trust (the "Trust"), you may incur
two types of costs: (1) transaction costs, including applicable sales charges
(loads) on purchase payments and contingent deferred sales charges and (2)
ongoing costs, including management fees; distribution and service fees; and
other Fund expenses. This Example is intended to help you understand your
ongoing costs (in dollars) on 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 November 1, 2008 and held until April
30, 2009.
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 Period ended April 30, 2009" to estimate the expenses you paid on
your account during this period. For shareholder accounts in classes other than
Class I and Class W, the "Expenses Paid During the Period ended April 30, 2009"
column does not include small account fees that may be charged if your balance
is below $500 ($250 for retirement plan accounts). In addition, the "Expenses
Paid During the Period ended April 30, 2009" column does not include
administrative or other fees that may apply to qualified retirement plan
accounts and accounts held through financial institutions. See the Funds'
prospectuses, your retirement plan document and/or materials from your
financial advisers for a full description of these fees. Had these fees, if
applicable, been included, the "Expenses Paid During the Period ended April 30,
2009" column would have been higher and the "Ending Account Value" would have
been lower.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The "Hypothetical" section of the table provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year 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 other Funds. To do so, compare this 5% hypothetical example with
the 5% hypothetical examples that appear in the shareholder reports of other
Funds. For shareholder accounts in classes other than Class I and Class W, the
"Expenses Paid During the Period ended April 30, 2009" column does not include
small account fees that may be charged if your balance is below $500 ($250 for
retirement plan accounts). In addition, the "Expenses Paid During the Period
ended April 30, 2009" column does not include administrative or other fees that
may apply to qualified retirement plan accounts and accounts held through
financial institutions. See the Funds' prospectuses, your retirement plan
document and/or materials from your financial advisers for a full description
of these fees. Had these fees, if applicable, been included, the "Expenses Paid
During the Period ended April 30, 2009" column would have been higher and the
"Ending Account Value" would have been lower.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, including sales
charges on purchase payments, contingent deferred sales charges; small account
fees and administrative fees, if applicable, to your account. Please refer to
your prospectus, your retirement plan document and/or materials from your
financial adviser, for more information. Therefore, the "Hypothetical" example
is useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs and other fees were included, your costs would have been
higher.
2
AIG SERIES TRUST
EXPENSE EXAMPLE -- April 30, 2009 -- (unaudited) (continued)
ACTUAL HYPOTHETICAL
--------------------------------------------- ------------------------------
ENDING ACCOUNT
ENDING ACCOUNT EXPENSES PAID VALUE USING A
BEGINNING VALUE USING DURING THE BEGINNING HYPOTHETICAL 5%
ACCOUNT VALUE ACTUAL RETURN AT PERIOD ENDED ACCOUNT VALUE ASSUMED RETURN
AT NOVEMBER 1, APRIL 30, APRIL 30, AT NOVEMBER 1, AT APRIL 30,
2008 2009 2009* 2008 2009
-------------- ---------------- ------------- -------------- ---------------
2015 HIGH WATERMARK FUND
Class A#............................. $1,000.00 $1,073.26 $ 7.45 $1,000.00 $1,017.60
Class C#............................. $1,000.00 $1,069.48 $10.78 $1,000.00 $1,014.38
Class I#............................. $1,000.00 $1,075.45 $ 5.04 $1,000.00 $1,019.93
2020 HIGH WATERMARK FUND
Class A#............................. $1,000.00 $1,066.03 $ 8.04 $1,000.00 $1,017.01
Class C#............................. $1,000.00 $1,061.40 $11.35 $1,000.00 $1,013.79
Class I#............................. $1,000.00 $1,066.87 $ 5.64 $1,000.00 $1,019.34
SUNAMERICA ALTERNATIVE STRATEGIES FUND
Class A#@............................ $1,000.00 $ 925.00 $ 8.07 $1,000.00 $1,016.27
Class C#@............................ $1,000.00 $ 923.00 $11.11 $1,000.00 $1,013.04
Class W#@............................ $1,000.00 $ 927.00 $ 7.14 $1,000.00 $1,017.26
--------------
EXPENSES PAID
DURING THE EXPENSE
PERIOD ENDED RATIO AS OF
APRIL 30, APRIL 30,
2009* 2009*
------------- -----------
2015 HIGH WATERMARK FUND
Class A#............................. $ 7.25 1.45%
Class C#............................. $10.49 2.10%
Class I#............................. $ 4.91 0.98%
2020 HIGH WATERMARK FUND
Class A#............................. $ 7.85 1.57%
Class C#............................. $11.08 2.22%
Class I#............................. $ 5.51 1.10%
SUNAMERICA ALTERNATIVE STRATEGIES FUND
Class A#@............................ $ 8.60 1.72%
Class C#@............................ $11.83 2.37%
Class W#@............................ $ 7.60 1.52%
- --------
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 181 days for High
Watermark Funds and 178 days for SunAmerica Alternative Strategies Fund
divided by 365 days. These ratios do not reflect transaction costs,
including sales charges on purchase payments, contingent deferred sales
charges, small account fees and administrative fees, if applicable to your
account. Please refer to your prospectus, your retirement plan document
and/or materials from your financial adviser, for more information.
# During the stated period, the investment adviser either waived a portion of
or all fees and assumed a portion of or all expenses for the Funds. 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 Period ended April 30, 2009"
and the "Expense Ratios" would have been higher.
@ Commencement of operations on November 4, 2008.
3
AIG SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES -- April 30, 2009 -- (unaudited)
SUNAMERICA
2015 HIGH 2020 HIGH ALTERNATIVE
WATERMARK FUND WATERMARK FUND STRATEGIES FUND
-------------- -------------- ---------------
ASSETS:
Long-term investment securities, at market value
(unaffiliated)*.................................. $185,078,323 $ 50,485,939 $111,470,282
Short-term investment securities, at market value
(unaffiliated)*.................................. 44,994,513 14,997,608 73,951,744
Repurchase agreements (cost approximates market
value)........................................... 13,373,000 4,494,000 8,675,000
------------ ------------ ------------
Total investments................................ 243,445,836 69,977,547 194,097,026
------------ ------------ ------------
Cash.............................................. 337 944 901
Receivable for:
Shares of beneficial interest sold............... 67,065 139,053 485,057
Dividends and interest........................... 4 1 288,716
Prepaid expenses and other assets................. 5,576 4,995 4,693
Due from investment adviser for expense
reimbursements/fee waivers....................... 77,511 12,492 306,691
Variation margin on futures contracts............. 45 45 --
------------ ------------ ------------
Total assets..................................... 243,596,374 70,135,077 195,183,084
------------ ------------ ------------
LIABILITIES:
Payable for:
Shares of beneficial interest redeemed........... 84,872 1,035 3,562
Investment advisory and management fees.......... 131,174 38,048 157,824
Distribution and service maintenance fees........ 119,447 28,294 57,899
Transfer agent fees and expenses................. 52,014 16,845 36,098
Trustees' fees and expenses...................... 482 689 318
Other accrued expenses........................... 99,651 35,611 374,467
Variation margin on futures contracts............. -- -- 11,420
------------ ------------ ------------
Total liabilities................................ 487,640 120,522 641,588
------------ ------------ ------------
NET ASSETS........................................ $243,108,734 $ 70,014,555 $194,541,496
============ ============ ============
NET ASSETS REPRESENTED BY:
Paid-in capital................................... 260,987,581 90,548,767 206,782,018
Accumulated undistributed net investment income
(loss)........................................... 991,589 347,111 (488,096)
Accumulated undistributed net realized gain
(loss) on investments, futures contracts and
options contracts................................ (34,174,994) (23,434,814) (18,136,339)
Unrealized appreciation (depreciation) on
investments...................................... 15,299,810 2,548,743 3,157,878
Unrealized appreciation (depreciation) on futures
contracts........................................ 4,748 4,748 3,226,035
------------ ------------ ------------
NET ASSETS........................................ $243,108,734 $ 70,014,555 $194,541,496
============ ============ ============
* Cost
Long-term investment securities (unaffiliated)... $169,778,513 $ 47,937,196 $108,421,199
============ ============ ============
Short-term investment securities (unaffiliated).. $ 44,994,513 $ 14,997,608 $ 73,842,949
============ ============ ============
See Notes to Financial Statements
4
AIG Series Trust
STATEMENT OF ASSETS AND LIABILITIES -- April 30, 2009 -- (unaudited)
(continued)
SunAmerica
2015 High 2020 High Alternative
Watermark Fund Watermark Fund Strategies Fund
-------------- -------------- ---------------
Class A (unlimited shares authorized):
Net assets........................................ $118,176,011 $41,270,775 $186,512,641
Shares of beneficial interest issued and
outstanding...................................... 12,094,617 5,103,541 20,155,357
Net asset value and redemption price per share
(excluding any applicable contingent deferred
sales charge).................................... $ 9.77 $ 8.09 $ 9.25
Maximum sales charge (5.75% of offering price).... $ 0.60 $ 0.49 $ 0.56
------------ ----------- ------------
Maximum offering price to public.................. $ 10.37 $ 8.58 $ 9.81
============ =========== ============
Class C (unlimited shares authorized):
Net assets........................................ $ 95,144,270 $16,187,207 $ 5,829,467
Shares of beneficial interest issued and
outstanding...................................... 9,792,456 2,010,399 631,805
Net asset value, offering and redemption price
per share (excluding any applicable contingent
deferred sales charge)........................... $ 9.72 $ 8.05 $ 9.23
============ =========== ============
Class I (unlimited shares authorized):
Net assets........................................ $ 29,788,453 $12,556,573 $ --
Shares of beneficial interest issued and
outstanding...................................... 3,038,989 1,548,540 --
Net asset value, offering and redemption price
per share........................................ $ 9.80 $ 8.11 $ --
============ =========== ============
Class W (unlimited shares authorized):
Net assets........................................ $ -- $ -- $ 2,199,388
Shares of beneficial interest issued and
outstanding...................................... -- -- 237,368
Net asset value, offering and redemption price
per share........................................ $ -- $ -- $ 9.27
============ =========== ============
See Notes to Financial Statements
5
AIG SERIES TRUST
STATEMENT OF OPERATIONS -- For the period ended April 30, 2009 --
(unaudited)
SUNAMERICA
2015 HIGH 2020 HIGH ALTERNATIVE
WATERMARK FUND WATERMARK FUND STRATEGIES FUND+
-------------- -------------- ----------------
INVESTMENT INCOME:
Dividends (unaffiliated)........................... $ -- $ -- $ 553,068
Interest (unaffiliated)............................ 3,454,123 1,109,365 455,896
----------- ----------- ------------
Total investment income........................... 3,454,123 1,109,365 1,008,964
----------- ----------- ------------
Expenses:
Investment advisory and management fees........... 773,032 222,421 865,556
Distribution and service maintenance fees:
Class A......................................... 203,908 71,213 295,862
Class C......................................... 461,263 79,993 14,531
Service fees:
Class I......................................... 36,356 14,682 --
Class W......................................... -- -- 856
Transfer agent fees and expenses:
Class A......................................... 136,165 49,551 187,789
Class C......................................... 108,088 19,954 3,921
Class I......................................... 32,773 13,765 --
Class W......................................... -- -- 1,871
Registration fees:
Class A......................................... 9,793 9,319 45,367
Class C......................................... 9,809 6,011 1,145
Class I......................................... 12,755 6,077 --
Class W......................................... -- -- 639
Custodian and accounting fees..................... 33,057 16,695 27,344
Reports to shareholders........................... 30,489 9,760 8,943
Audit and tax fees................................ 13,494 13,496 19,959
Legal fees........................................ 6,825 5,624 407,339
Trustees' fees and expenses....................... 14,517 4,805 6,598
Fees paid to Prudential Global Funding, Inc.
(Note 1)........................................ 416,248 119,765 --
Other expenses.................................... 13,177 10,261 10,382
----------- ----------- ------------
Total expenses before fee waivers, expense
reimbursements, and custody credits............ 2,311,749 673,392 1,898,102
Fees waived and expenses reimbursed by
investment advisor (Note 3).................... (352,106) (112,110) (401,038)
Custody credits earned on cash balances......... (52) -- (4)
----------- ----------- ------------
Net expenses.................................... 1,959,591 561,282 1,497,060
----------- ----------- ------------
Net investment income (loss)....................... 1,494,532 548,083 (488,096)
----------- ----------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on investments
(unaffiliated).................................... 409,902 807,992 (15,921,134)
Net realized gain (loss) on futures contracts and
options contracts................................. (4,478,090) (4,913,609) (2,215,205)
----------- ----------- ------------
Net realized gain (loss) on investments............ (4,068,188) (4,105,617) (18,136,339)
----------- ----------- ------------
Change in unrealized appreciation (depreciation)
on investments (unaffiliated)..................... 16,020,673 4,991,524 3,157,878
Change in unrealized appreciation (depreciation)
on futures contracts and options contracts........ 2,721,080 2,670,394 3,226,035
----------- ----------- ------------
Net unrealized gain (loss) on investments.......... 18,741,753 7,661,918 6,383,913
----------- ----------- ------------
Net realized and unrealized gain (loss) on
investments....................................... 14,673,565 3,556,301 (11,752,426)
----------- ----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................... $16,168,097 $ 4,104,384 $(12,240,522)
=========== =========== ============
- --------
+ For the period November 4, 2008 to April 30, 2009.
See Notes to Financial Statements
6
AIG SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS -- April 30, 2009
SUNAMERICA
ALTERNATIVE
2015 HIGH WATERMARK FUND 2020 HIGH WATERMARK FUND STRATEGIES FUND
-------------------------- ------------------------- ---------------
FOR THE SIX FOR THE SIX FOR THE PERIOD
MONTHS ENDED FOR THE MONTHS ENDED FOR THE NOVEMBER 4,
APRIL 30, YEAR ENDED APRIL 30, YEAR ENDED 2008@ THROUGH
2009 OCTOBER 31, 2009 OCTOBER 31, APRIL 30, 2009
(UNAUDITED) 2008 (UNAUDITED) 2008 (UNAUDITED)
------------ ------------ ------------ ------------ ---------------
OPERATIONS:
Net investment income (loss)........... $ 1,494,532 $ 3,455,916 $ 548,083 $ 1,415,551 $ (488,096)
Net realized gain (loss) on investments (4,068,188) (28,502,360) (4,105,617) (18,666,599) (18,136,339)
Net unrealized gain (loss) on
investments.......................... 18,741,753 (5,600,999) 7,661,918 (5,599,436) 6,383,913
------------ ------------ ----------- ------------ ------------
Net Increase (decrease) in net assets
resulting from operations.............. 16,168,097 (30,647,443) 4,104,384 (22,850,484) (12,240,522)
------------ ------------ ----------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A)........ (1,739,111) (2,855,973) (813,455) (1,249,133) --
Net investment income (Class C)........ (912,472) (1,200,606) (219,641) (364,151) --
Net investment income (Class I)........ (556,548) (904,695) (277,527) (458,859) --
Net investment income (Class W)........ --
Net realized gain on securities (Class
A)................................... -- (5,522,922) -- (2,718,561) --
Net realized gain on securities (Class
C)................................... -- (2,959,957) -- (1,025,858) --
Net realized gain on securities (Class
I)................................... -- (1,517,346) -- (871,092) --
Net realized gain on securities (Class
W)................................... -- -- -- -- --
------------ ------------ ----------- ------------ ------------
Total distributions to shareholders..... (3,208,131) (14,961,499) (1,310,623) (6,687,654) --
------------ ------------ ----------- ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM TRUST SHARE
TRANSACTIONS (NOTE 6).................. 5,725,154 88,756,510 4,671,948 21,862,030 206,782,018
------------ ------------ ----------- ------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS. 18,685,120 43,147,568 7,465,709 (7,676,108) 194,541,496
NET ASSETS:
Beginning of period..................... 224,423,614 181,276,046 62,548,846 70,224,954 $ --
------------ ------------ ----------- ------------ ------------
End of period+.......................... $243,108,734 $224,423,614 $70,014,555 $ 62,548,846 $194,541,496
============ ============ =========== ============ ============
- --------
+ Includes accumulated undistributed
net investment income (loss)........... $ 991,589 $ 2,705,188 $ 347,111 $ 1,109,651 $ (488,096)
============ ============ =========== ============ ============
@ Commencement of operations.
See Notes to Financial Statements
7
AIG SERIES TRUST
FINANCIAL HIGHLIGHTS
NET GAIN
(LOSS) ON
NET INVESTMENT NET NET
ASSET (BOTH DIVIDENDS DISTRIBUTIONS ASSET ASSETS RATIO OF
VALUE NET REALIZED TOTAL FROM FROM NET FROM TOTAL VALUE END OF EXPENSE
BEGINNING INVESTMENT AND INVESTMENT INVESTMENT NET REALIZED DISTRI- END OF TOTAL PERIOD TO AVERAGE
PERIOD ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(2) (000'S) NET ASSETS(4)
- ------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -------- -------------
2015 HIGH WATERMARK FUND
------------------------
CLASS A
-------
6/25/04@-
10/31/04 $10.00 $0.05 $ 0.28 $ 0.33 $ -- $ -- $ -- $10.33 3.30% $ 12,262 1.65%(3)
10/31/05 10.33 0.22 0.27 0.49 (0.04) (0.09) (0.13) 10.69 4.74 58,350 1.65
10/31/06 10.69 0.32 0.90 1.22 (0.16) (0.08) (0.24) 11.67 11.62 88,219 1.65
10/31/07 11.67 0.34 0.78 1.12 (0.32) (0.76) (1.08) 11.71 10.28 100,199 1.65
10/31/08 11.71 0.18 (1.67) (1.49) (0.33) (0.65) (0.98) 9.24 (13.76) 110,924 1.65
04/30/09(5) 9.24 0.07 0.61 0.68 (0.15) -- (0.15) 9.77 7.33 118,176 1.45(3)
CLASS C
-------
6/25/04@-
10/31/04 $10.00 $0.04 $ 0.29 $ 0.33 $ -- $ -- $ -- $10.33 3.30% $ 5,239 2.30%(3)
10/31/05 10.33 0.15 0.26 0.41 (0.03) (0.09) (0.12) 10.62 3.92 32,569 2.30
10/31/06 10.62 0.25 0.90 1.15 (0.10) (0.08) (0.18) 11.59 10.94 45,450 2.30
10/31/07 11.59 0.27 0.77 1.04 (0.25) (0.76) (1.01) 11.62 9.54 53,232 2.30
10/31/08 11.62 0.11 (1.64) (1.53) (0.26) (0.65) (0.91) 9.18 (14.18) 86,196 2.30
04/30/09(5) 9.18 0.04 0.60 0.64 (0.10) -- (0.10) 9.72 6.95 95,144 2.10(3)
CLASS I
-------
2/18/05#-
10/31/05 $10.75 $0.20 $(0.23) $(0.03) $ -- $ -- $ -- $10.72 (0.28)% $ 16,269 1.15%(3)
10/31/06 10.72 0.37 0.92 1.29 (0.21) (0.08) (0.29) 11.72 12.22 25,097 1.18
10/31/07 11.72 0.40 0.77 1.17 (0.37) (0.76) (1.13) 11.76 10.71 27,845 1.18
10/31/08 11.76 0.23 (1.67) (1.44) (0.38) (0.65) (1.03) 9.29 (13.28) 27,304 1.18
04/30/09(5) 9.29 0.09 0.61 0.70 (0.19) -- (0.19) 9.80 7.54 29,788 0.98(3)
RATIO
OF NET
INVESTMENT
INCOME TO
AVERAGE PORTFOLIO
NET ASSETS(4) TURNOVER
- ------------- ---------
1.29%(3) 0%
2.12 1
2.94 1
3.09 14
1.85 26
1.45(3) 3
0.65%(3) 0%
1.47 1
2.28 1
2.44 14
1.16 26
0.80(3) 3
2.73%(3) 1%
3.42 1
3.56 14
2.34 26
1.92(3) 3
- --------
@ Commencement of operations.
# Inception date of class.
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements and expense reductions.
(3)Annualized
(4)Net of following expense reimbursements (recoupments) and custody credits,
if applicable (based on average net assets):
10/31/04(3) 10/31/05 10/31/06 10/31/07 10/31/08 4/30/09(3)(5)
----------- -------- -------- -------- -------- -------------
2015 High Watermark Fund Class A........ 10.24% 0.13% 0.07% 0.08% 0.04% 0.24%
2015 High Watermark Fund Class C........ 22.14 0.14 0.08 0.09 0.05 0.25
2015 High Watermark Fund Class I........ -- 0.52 0.48 0.42 0.41 0.67
(5)Unaudited
See Notes to Financial Statements
8
AIG SERIES TRUST
FINANCIAL HIGHLIGHTS -- (continued)
NET GAIN
(LOSS) ON
NET INVESTMENT NET NET
ASSET (BOTH DIVIDENDS DISTRIBUTIONS ASSET ASSETS RATIO OF
VALUE NET REALIZED TOTAL FROM FROM NET FROM TOTAL VALUE END OF EXPENSE
BEGINNING INVESTMENT AND INVESTMENT INVESTMENT NET REALIZED DISTRI- END OF TOTAL PERIOD TO AVERAGE
PERIOD ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(2) (000'S) NET ASSETS(4)
- ------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- ------- -------------
2020 HIGH WATERMARK FUND
------------------------
CLASS A
-------
6/25/04@-
10/31/04 $10.00 $0.05 $ 0.24 $ 0.29 $ -- $ -- $ -- $10.29 2.90% $ 4,152 1.65%(3)
10/31/05 10.29 0.21 0.45 0.66 (0.03) (0.07) (0.10) 10.85 6.42 22,847 1.65
10/31/06 10.85 0.34 1.03 1.37 (0.16) (0.09) (0.25) 11.97 12.75 34,897 1.65
10/31/07 11.97 0.37 0.84 1.21 (0.33) (0.86) (1.19) 11.99 10.88 41,679 1.65
10/31/08 11.99 0.20 (3.30) (3.10) (0.36) (0.79) (1.15) 7.74 (28.39) 37,762 1.65
04/30/09(5) 7.74 0.07 0.44 0.51 (0.16) -- (0.16) 8.09 6.60 41,271 1.57(3)
CLASS C
-------
6/25/04@-
10/31/04 $10.00 $0.03 $ 0.26 $ 0.29 $ -- $ -- $ -- $10.29 2.90% $ 1,355 2.30%(3)
10/31/05 10.29 0.15 0.44 0.59 (0.02) (0.07) (0.09) 10.79 5.73 9,008 2.30
10/31/06 10.79 0.26 1.03 1.29 (0.09) (0.09) (0.18) 11.90 12.07 14,751 2.30
10/31/07 11.90 0.30 0.83 1.13 (0.27) (0.86) (1.13) 11.90 10.10 15,411 2.30
10/31/08 11.90 0.13 (3.27) (3.14) (0.28) (0.79) (1.07) 7.69 (28.82) 14,330 2.30
04/30/09(5) 7.69 0.04 0.43 0.47 (0.11) -- (0.11) 8.05 6.14 16,187 2.22(3)
CLASS I
-------
2/18/05#-
10/31/05 $10.88 $0.20 $(0.19) $ 0.01 $ -- $ -- $ -- $10.89 0.09% $ 5,841 1.15%(3)
10/31/06 10.89 0.39 1.04 1.43 (0.20) (0.09) (0.29) 12.03 13.34 10,621 1.18
10/31/07 12.03 0.43 0.83 1.26 (0.38) (0.86) (1.24) 12.05 11.32 13,135 1.18
10/31/08 12.05 0.25 (3.31) (3.06) (0.41) (0.79) (1.20) 7.79 (27.97) 10,457 1.18
04/30/09(5) 7.79 0.09 0.43 0.52 (0.20) -- (0.20) 8.11 6.69 12,557 1.10(3)
RATIO
OF NET
INVESTMENT
INCOME TO
AVERAGE PORTFOLIO
NET ASSETS(4) TURNOVER
- ------------- ---------
1.23%(3) 0%
2.07 0
3.06 0
3.27 4
2.05 50
1.67(3) 14
0.59%(3) 0%
1.41 0
2.42 0
2.62 4
1.41 50
1.02(3) 14
2.73%(3) 0%
3.55 0
3.74 4
2.53 50
2.14(3) 14
- --------
@ Commencement of operations.
# Inception date of class.
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements and expense reductions.
(3)Annualized
(4)Net of following expense reimbursements (recoupments) and custody credits,
if applicable (based on average net assets):
10/31/04(3) 10/31/05 10/31/06 10/31/07 10/31/08 4/30/09(3)(5)
----------- -------- -------- -------- -------- -------------
2020 High Watermark Fund Class A........ 25.34% 0.43% 0.19% 0.17% 0.15% 0.25%
2020 High Watermark Fund Class C........ 79.03 0.50 0.22 0.21 0.20 0.28
2020 High Watermark Fund Class I........ -- 0.87 0.65 0.53 0.59 0.66
(5)Unaudited
See Notes to Financial Statements
9
AIG SERIES TRUST
FINANCIAL HIGHLIGHTS -- (continued)
NET GAIN
(LOSS) ON
NET INVESTMENT NET NET
ASSET (BOTH DIVIDENDS DISTRIBUTIONS ASSET ASSETS
VALUE NET REALIZED TOTAL FROM FROM NET FROM TOTAL VALUE END OF
BEGINNING INVESTMENT AND INVESTMENT INVESTMENT NET REALIZED DISTRI- END OF TOTAL PERIOD
PERIOD ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(2) (000'S)
- ------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- --------
SUNAMERICA ALTERNATIVE STRATEGIES FUND
--------------------------------------
CLASS A
-------
11/04/08@-
04/30/09(5) $10.00 $(0.02) $(0.73) $(0.75) $-- $-- $-- $9.25 (7.50)% $186,513
CLASS C
-------
11/04/08@-
04/30/09(5) $10.00 $(0.04) $(0.73) $(0.77) $-- $-- $-- $9.23 (7.70)% $ 5,829
CLASS W
-------
11/04/08@-
04/30/09(5) $10.00 $(0.01) $(0.72) $(0.73) $-- $-- $-- $9.27 (7.30)% $ 2,199
RATIO
OF NET
RATIO OF INVESTMENT
EXPENSE INCOME TO
TO AVERAGE AVERAGE PORTFOLIO
NET ASSETS(3)(4) NET ASSETS(3)(4) TURNOVER
- ---------------- ---------------- ---------
1.72% (0.56)% 34%
2.37% (0.98)% 34%
1.52% (0.25)% 34%
- --------
@ Commencement of operations.
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements and expense reductions.
(3)Annualized
(4)Net of following expense reimbursements (recoupments) and custody credits,
if applicable (based on average net assets):
04/30/09(3)(5)
--------------
SunAmerica Alternative Strategies Fund
Class A................................ 0.46%
SunAmerica Alternative Strategies Fund
Class C................................ 0.60
SunAmerica Alternative Strategies Fund
Class W................................ 0.67
(5)Unaudited
See Notes to Financial Statements
10
AIG Series Trust -- 2015 High Watermark Fund
PORTFOLIO PROFILE -- April 30, 2009 -- (unaudited)
Industry Allocation*
U.S. Treasury Bonds............ 67.2%
U.S. Government Treasury Bills. 18.5%
U.S. Government Agencies....... 8.9%
Repurchase Agreements.......... 5.5%
-----
100.1%
=====
Credit Quality+#
Government -- Treasury. 88.3%
Government -- Agencies. 11.7
-----
100.0%
=====
- --------
* Calculated as a percentage of net assets.
+ Source -- Standard and Poors
# Calculated as a percentage of total debt issues, excluding short-term
securities.
11
AIG SERIES TRUST -- 2015 HIGH WATERMARK FUND
PORTFOLIO OF INVESTMENTS -- April 30, 2009 -- (unaudited)
PRINCIPAL MARKET VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS -- 76.1%
U.S. TREASURY BONDS -- 67.2%
U.S. Treasury Bond STRIPS
zero coupon due 08/15/15(3)
(cost $148,281,161)........................ $192,555,000 $163,397,551
------------
U.S. GOVERNMENT AGENCIES -- 8.9%
FEDERAL HOME LOAN MTG. CORP. -- 2.4%
zero coupon due 11/24/14.................... 2,260,000 1,866,749
zero coupon due 06/01/15.................... 5,000,000 4,044,685
------------
5,911,434
------------
RESOLUTION FUNDING -- 6.5%
Resolution Funding Corp, STRIPS
zero coupon due 07/15/15(3)................ 19,054,000 15,769,338
------------
TOTAL U.S. GOVERNMENT AGENCIES
($21,497,352).............................. 21,680,772
------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $169,778,513)........................ 185,078,323
------------
SHORT-TERM INVESTMENT SECURITIES -- 18.5%
U.S. GOVERNMENT TREASURY BILLS -- 18.5%
U.S. Treasury Bills
0.06% due 06/04/09 22,000,000 $ 21,997,317
0.16% due 06/04/09(1)...................... 10,000,000 9,998,781
0.23% due 06/04/09......................... 13,000,000 12,998,415
------------
TOTAL SHORT-TERM INVESTMENT SECURITIES
(cost $44,994,513)......................... 44,994,513
------------
REPURCHASE AGREEMENT -- 5.5%
Agreement with State Street Bank & Trust
Co., bearing interest at 0.01%, dated
04/30/09, to be repurchased 05/01/09 in
the amount of $13,373,004 and
collateralized by $13,645,000 of U.S.
Treasury Bills, bearing interest at 0.00%
due 05/21/09 and having approximate
value of $13,645,000.
(cost $13,373,000)......................... 13,373,000 13,373,000
------------
TOTAL INVESTMENTS --
(cost $228,146,027)(2)..................... 100.1% 243,445,836
Liabilities in excess of other assets......... (0.1) (337,102)
------------ ------------
NET ASSETS -- 100.0% $243,108,734
============ ============
- --------
(1)The security or a portion thereof was pledged as collateral to cover margin
requirements for open futures contracts.
(2)See Note 5 for cost of investments on a tax basis.
(3)Principal Only
STRIPS-- Separate Trading of Registered Insterest and Principal of Securities.
OPEN FUTURES CONTRACTS
- ---------------------------------------------------------------------------------
VALUE AT UNREALIZED
NUMBER OF VALUE AT APRIL 30, APPRECIATION/
CONTRACTS DESCRIPTION EXPIRATION DATE TRADE DATE 2009 DEPRECIATION
- --------- -------------------- --------------- ---------- --------- -------------
1 Long S&P 500 E-Mini Index June 2009 $38,752 $43,500 $4,748
======
See Notes to Financial Statements
12
AIG Series Trust -- 2020 High Watermark Fund
PORTFOLIO PROFILE -- April 30, 2009 -- (unaudited)
Industry Allocation*
U.S. Treasury Bonds............ 66.1%
U.S. Government Treasury Bills. 21.4%
Repurchase Agreements.......... 6.4%
U.S. Government Agencies....... 6.0%
----
99.9%
====
Credit Quality+#
Government -- Treasury. 91.7%
Government -- Agencies. 8.3
-----
100.0%
=====
- --------
* Calculated as a percentage of net assets.
+ Source -- Standard and Poors
# Calculated as a percentage of total debt issues, excluding short-term
securities.
13
AIG SERIES TRUST -- 2020 HIGH WATERMARK FUND
PORTFOLIO OF INVESTMENTS -- April 30, 2009 -- (unaudited)
PRINCIPAL MARKET VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS -- 72.1%
U.S. TREASURY BONDS -- 66.1%
U.S. Treasury Bond STRIPS
zero coupon due 08/15/20(3)
(cost $43,490,139)............................ $72,890,000 $46,262,335
-----------
U.S. GOVERNMENT AGENCIES -- 6.0%
RESOLUTION FUNDING -- 6.0%
Resolution Funding Corp. STRIPS
zero coupon due 07/15/20(3)
(cost $4,447,057)............................. 7,000,000 4,223,604
-----------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $47,937,196)............................ 50,485,939
-----------
SHORT-TERM INVESTMENT SECURITIES -- 21.4%
U.S. GOVERNMENT TREASURY BILLS -- 21.4%
U.S. Treasury Bills
0.06% due 06/04/09............................ 5,000,000 $ 4,999,203
0.12% due 06/04/09(1)......................... 10,000,000 9,998,405
-----------
TOTAL SHORT-TERM INVESTMENT SECURITIES
(cost $14,997,608)............................ 14,997,608
-----------
REPURCHASE AGREEMENT -- 6.4%
Agreement with State Street Bank & Trust Co.,
bearing interest at 0.01%, dated 04/30/09,
to be repurchased 05/01/09 in the amount
of $4,494,001 and collateralized by
$4,585,000 of U.S. Treasury Bills, bearing
interest at 0.00% due 05/21/09 and having
approximate value of $4,585,000.
(cost $4,494,000)............................. 4,494,000 4,494,000
-----------
TOTAL INVESTMENTS --
(cost $67,428,804)(2)......................... 99.9% 69,977,547
Other assets less liabilities.................... 0.1 37,008
----------- -----------
NET ASSETS -- 100.0% $70,014,555
=========== ===========
- --------
(1)The security or a portion thereof was pledged as collateral to cover margin
requirements for open futures contracts.
(2)See Note 5 for cost of investments on a tax basis.
(3)Principal Only.
STRIPS-- Separate Trading of Registered Interest and Principal of Securities.
OPEN FUTURES CONTRACTS
- ---------------------------------------------------------------------------------
VALUE AT UNREALIZED
NUMBER OF VALUE AT APRIL 30, APPRECIATION/
CONTRACTS DESCRIPTION EXPIRATION DATE TRADE DATE 2009 DEPRECIATION
- --------- -------------------- --------------- ---------- --------- -------------
1 Long S&P 500 E-Mini Index June 2009 $38,752 $43,500 $4,748
======
See Notes to Financial Statements
14
AIG SERIES TRUST -- SUNAMERICA ALTERNATIVE STRATEGIES FUND
PORTFOLIO PROFILE -- April 30, 2009 -- (unaudited)
INDUSTRY ALLOCATION*
U.S. Government Treasury Bills..... 26.7%
U.S. Treasury Bonds................ 18.9
Federal Home Loan Bank Disc. Notes. 11.3
Exchange Traded Funds.............. 10.0
Federal Home Loan Mtg. Corp........ 7.7
Repurchase Agreement............... 4.5
Federal Farm Credit Bank........... 5.9
Export/Import Banks................ 5.5
Banks-Commercial................... 3.3
Finance-Consumer Loans............. 2.6
Federal National Mtg. Assoc........ 2.6
Diversified Financial Services..... 0.8
----
99.8%
====
CREDIT QUALITY+#
Government -- Treasury. 55.5%
Government -- Agencies. 33.6
AAA.................... 4.2
N/R@................... 6.7
-----
100.0%
=====
- --------
* Calculated as a percentage of net assets
+ Source -- Standard and Poors
# 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.
15
AIG SERIES TRUST -- SUNAMERICA ALTERNATIVE STRATEGIES FUND
PORTFOLIO OF INVESTMENTS -- April 30, 2009 -- (unaudited)
PRINCIPAL MARKET VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------------
CORPORATE BONDS & NOTES -- 3.4%
DIVERSIFIED FINANCIAL SERVICES -- 0.8%
General Electric Capital Corp.
FDIC Guar. Notes
1.58% due 06/08/12(1)........................ $ 1,000,000 $ 1,003,241
General Electric Capital Corp.
FDIC Guar. Notes
2.20% due 06/08/12........................... 500,000 503,129
-----------
1,506,370
-----------
FINANCE-CONSUMER LOANS -- 2.6%
John Deere Capital Corp.
FDIC Guar. Notes
2.88% due 06/19/12........................... 5,000,000 5,139,600
-----------
TOTAL CORPORATE BONDS & NOTES
(cost $6,614,376)............................ 6,645,970
-----------
COMMODITY INDEX-LINKED NOTES -- 8.8%
BANKS-COMMERCIAL -- 3.3%
Credit Suisse New York (Indexed to the S&P
GSCI Official Close Index Total Return)
Senior Notes
0.35% due 04/12/10*(1)(4).................... 6,000,000 6,445,201
-----------
EXPORT/IMPORT BANKS -- 5.5%
Eksportfinans A/S (Indexed to the S&P GSCI
Official Close Index Total Return)
Notes
1.00% due 03/23/10*(1)(4).................... 5,000,000 5,366,835
Swedish Export Credit Corp. (Indexed to the
S&P GSCI Official Close Index Total Return)
Notes
0.98% due 03/23/10*(1)(4).................... 5,000,000 5,366,835
-----------
10,733,670
-----------
TOTAL COMMODITY INDEX-LINKED NOTES
(cost $16,000,000)........................... 17,178,871
-----------
U.S. GOVERNMENT AGENCIES -- 16.2%
FEDERAL FARM CREDIT BANK -- 5.9%
2.25% due 01/12/12............................ 4,000,000 4,004,140
4.88% due 02/18/11............................ 7,000,000 7,437,829
-----------
11,441,969
-----------
FEDERAL HOME LOAN MTG. CORP. -- 7.7%
1.38% due 10/20/10............................ 10,000,000 10,016,350
1.50% due 01/07/11............................ 5,000,000 5,026,925
-----------
15,043,275
-----------
FEDERAL NATIONAL MTG. ASSOC. -- 2.6%
2.00% due 01/09/12............................ 5,000,000 5,048,525
-----------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $31,420,249)........................... 31,533,769
-----------
U.S. GOVERNMENT TREASURIES -- 18.9%
U.S. Treasury Bonds
0.63% due 04/15/13 TIPS(3)................... 1,505,625 1,479,277
0.88% due 04/15/10 TIPS(3)................... 27,997,250 27,761,009
1.63% due 01/15/15 TIPS(3)................... 1,444,417 1,437,195
1.88% due 07/15/15 TIPS(3)................... 1,417,949 1,433,015
1.88% due 07/15/13 TIPS(3)................... 1,617,196 1,647,518
2.00% due 01/15/14 TIPS(3)................... 1,492,660 1,520,647
2.00% due 07/15/14 TIPS(3)................... 1,463,189 1,493,825
-----------
TOTAL U.S. GOVERNMENT TREASURIES
(cost $36,112,001)........................... 36,772,486
-----------
PRINCIPAL
AMOUNT/ MARKET VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
-----------------------------------------------------------------------
EXCHANGE TRADED FUNDS -- 10.0%
CORPORATE FUNDS -- 10.0%
iShares Barclays Aggregate Bond Fund........ 55,100 $ 5,600,364
iShares iBoxx $ High Yield Corporate Bond
Fund....................................... 91,800 7,001,586
iShares iBoxx $ Investment Grade Corporate
Bond Fund.................................. 33,000 3,174,600
SPDR Barclays Capital High Yield Bond
ETF........................................ 107,600 3,562,636
------------
TOTAL EXCHANGE TRADED FUNDS
(cost $18,274,573)......................... 19,339,186
------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $108,421,199)........................ 111,470,282
------------
SHORT-TERM INVESTMENT SECURITIES -- 38.0%
U.S. GOVERNMENT AGENCIES -- 11.3%
Federal Home Loan Bank Disc. Notes
0.48% due 07/01/09......................... $15,000,000 14,995,935
0.81% due 12/21/09......................... 7,000,000 6,983,620
------------
21,979,555
------------
U.S. GOVERNMENT TREASURY BILLS -- 26.7%
U.S. Treasury Bills
0.30% due 05/21/09......................... 15,000,000 14,997,492
0.33% due 06/25/09......................... 12,000,000 11,993,932
0.46% due 07/30/09......................... 13,500,000 13,495,612
0.86% due 10/22/09(2)...................... 11,500,000 11,485,153
------------
51,972,189
------------
TOTAL SHORT-TERM INVESTMENT SECURITIES
(cost $73,842,949)......................... 73,951,744
------------
REPURCHASE AGREEMENT -- 4.5%
Agreement with State Street Bank & Trust
Co., bearing interest at 0.01%, dated
04/30/09, to be repurchased 05/01/09 in
the amount of $8,675,002 and
collateralized by $8,425,000 of Federal
Home Loan Bank Bonds, bearing interest at
4.38% due 09/17/10 and having an
approximate value of $8,852,148
(cost $8,675,000).......................... 8,675,000 8,675,000
------------
TOTAL INVESTMENTS --
(cost $190,939,148)(5)..................... 99.8% 194,097,026
Other assets less liabilities................. 0.2 444,470
----------- ------------
NET ASSETS -- 100.0% $194,541,496
=========== ============
- --------
* 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 April 30, 2009, the aggregate value of
these securities was $17,178,871 representing 8.8% of net assets. Unless
otherwise indicated these securities are not considered to be illiquid.
(1)Floating rate security where the rate fluctuates. The rate moves up or down
at each reset date. The rate reflected is as of April 30, 2009.
(2)The security or a portion thereof was pledged as collateral to cover margin
requirements for open future contracts.
(3)Principal amount of security is adjusted for inflation.
(4)Fair valued security; see Note 2.
(5)See Note 5 for cost of investments on a tax basis.
FDIC--Federal Deposit Insurance Corporation
TIPS--Treasury Inflation Protected Securities
16
AIG Series Trust -- SunAmerica Alternative Strategies Fund
PORTFOLIO OF INVESTMENTS -- April 30, 2009 -- (unaudited) (continued)
Open Futures Contracts
- -------------------------------------------------------------------------------------------------
Value as of Unrealized
Number of Value at April 30, Appreciation
Contracts Description Expiration Date Trade Date 2009 (Depreciation)
- --------- --------------------------------- --------------- ---------- ----------- --------------
80 Long E-Mini MSCI Emerging Market Index June 2009 $2,124,800 $ 2,647,200 $ 522,400
155 Long E-Mini MSCI EAFE Index June 2009 8,020,124 9,011,700 991,576
6 Long Russell 2000 Mini June 2009 233,029 292,020 58,991
232 Long S&P 500 E-Mini Index June 2009 8,682,194 10,092,000 1,409,806
23 Long S&P MidCap 400 E-Mini Index June 2009 1,044,738 1,288,000 243,262
----------
$3,226,035
==========
See Notes to Financial Statements
17
AIG SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- April 30, 2009 -- (unaudited)
NOTE 1. ORGANIZATION
AIG Series Trust (the "Trust") is registered under the Investment Company
Act of 1940, as amended, (the "1940 Act") as an open-end management
investment company and is organized as a Delaware Statutory Trust. The Trust
consists of three different investment funds (each, a "Fund" and
collectively, the "Funds"), which were offered to shareholders as of April
30, 2009. Each Fund is managed by SunAmerica Asset Management Corp. (the
"Adviser" or "SunAmerica")*. SunAmerica Alternative Strategies Fund
commenced operations on November 4, 2008. An Investor may invest in one or
more of the following Funds: 2015 High Watermark Fund and 2020 High
Watermark Fund (each a "High Watermark Fund" and collectively, the "High
Watermark Funds") and SunAmerica Alternative Strategies Fund (the
"Alternative Strategies Fund"). The High Watermark Funds have the same
investment goals and investment strategy, but have a different protected
maturity date ("Protected Maturity Date"). The Protected Maturity Date for
each of these Funds is: 2015 High Watermark Fund -- August 31, 2015; 2020
High Watermark Fund -- August 31, 2020.
The Funds are considered to be separate entities for financial and tax
reporting purposes. The investment objective and principal investment
techniques for each Fund are as follows:
Each High Watermark Fund seeks capital appreciation to the extent consistent
with the preservation of capital investment gains in order to have a net
asset value ("NAV") on its Protected Maturity Date at least equal to the
protected high watermark value ("Protected High Watermark Value"). The
Protected High Watermark Value for a High Watermark Fund is the highest NAV
per share attained, (i) reduced by an amount that is proportionate to the
sum of all dividends and distributions paid by the High Watermark Fund
subsequent to the time that the highest NAV was achieved, (ii) reduced by
extraordinary expenses, if any, and (iii) increased by appreciation in share
value to the extent such appreciation exceeds this adjusted share value
subsequent to the last paid dividend or distribution. Each High Watermark
Fund seeks high total return as a secondary objective. Each High Watermark
Fund undertakes that on the Protected Maturity Date each shareholder in the
High Watermark Fund will be entitled to redeem his or her outstanding shares
for an amount no less than the Protected High Watermark Value (the "Payment
Undertaking"). The Payment Undertaking is backed by a master agreement
between the Trust, on behalf of the High Watermark Funds, and Prudential
Global Funding, LLC ("PGF"), under which PGF will pay to each High Watermark
Fund any shortfall between its Protected High Watermark Value and the actual
NAV per share on the High Watermark Fund's Protected Maturity Date, provided
certain conditions are met.
If the NAV of a High Watermark Fund at its Protected Maturity Date is
insufficient to satisfy the Payment Undertaking, a shareholders ability to
receive the Protected High Watermark Value will depend on the High Watermark
Fund's ability to collect the difference under the Master Agreement with
PGF. A shareholder's ability to rely on the Master Agreement is subject to
certain conditions and restrictions that may reduce, or eliminate, the High
Watermark Funds' ability to meet the Payment Undertaking.
The High Watermark Funds are subject to conditions of the Master Agreement
that require Trajectory Asset Management LLC ("Trajectory"), the High
Watermark Funds' subadviser, to provide certain information to PGF on a
daily basis and to follow certain parameters and proprietary mathematical
formulae in making investment allocation decisions. These limitations are
designed to reduce, but do not eliminate, the risk that the High Watermark
Funds' assets will be insufficient to allow a High Watermark Fund to redeem
shares at not less than the Protected High Watermark Value on its Protected
Maturity Date.
While Trajectory intends to meet all obligations under the Master Agreement,
a failure to meet the commercially negotiated terms could permit PGF to
cancel the Master Agreement and thus terminate its obligations to make any
payment to the High Watermark Fund if a shortfall exists to the Payment
Undertaking on the Protected Maturity Date. In this event, shareholders will
not receive the Protected High Watermark Value but instead will receive the
High Watermark Fund's then-current net asset value when they redeem their
shares, which may be lower than the Protected High Watermark Value and lower
than the shareholder's initial investment.
If the High Watermark Fund has irrevocably allocated its assets to the fixed
income portfolio, it will close to new share issuances. A new High Watermark
fund may be formed with the same Protected Maturity Date to accept new
contributions. As described under Note 3 SunAmerica has contractually agreed
to reduce its fees in the event that a High Watermark Fund becomes
completely invested in fixed income securities. However, if this reduction
in fees is not sufficient to reduce total annual operating expenses to an
extent that they are covered by the current yield on the High Watermark
Fund's fixed income securities,
- --------
* Effective April 1, 2009, AIG SunAmerica Asset Management Corp. changed its
name to SunAmerica Asset Management Corp.
18
AIG SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- April 30, 2009 -- (unaudited)
(continued)
and the High Watermark Fund is within three years of its Protected Maturity
Date, that date will be accelerated and the Trust's Board of Trustees will
consider appropriate action under all of the circumstances as described
below. PGF may, however, permit the High Watermark Fund to hold a higher
proportion of its assets in obligations of U.S. government agencies and
instrumentalities (which generally pay higher rates of interest than direct
obligations of the U.S. Treasury) in order to avoid this circumstance.
Under the Master Agreement, if certain low interest rate conditions occur
and a High Watermark Fund is within three years of its initial Protected
Maturity Date, the High Watermark Fund can terminate early. If a High
Watermark Fund terminates early under these circumstances, the High
Watermark Fund's Protected High Watermark Value will be accelerated and
shareholders will receive the benefit of the Protected High Watermark Value.
Thereafter, the Trust's Board of Trustees will consider appropriate action
under all of the circumstances. These actions could include liquidating the
High Watermark Fund or continuing to operate the High Watermark Fund and
pursuing a strategy other than the High Watermark Strategy. Shareholders
will receive 30 days' written notice of any shareholder distribution of
liquidation proceeds or other action following a Protected Maturity Date
Early High Watermark Fund Termination.
Please refer to the High Watermark Funds' prospectus for additional details
concerning the calculation of the Protected High Watermark Value, the
Payment Undertaking, Master Agreement and the early closing and termination
conditions.
The Alternative Strategies Fund seeks to provide long-term total return by
utilizing an actively managed quantitative investment process to provide
commodity and hedge fund exposure and by investing in U.S. Government
Securities and other fixed income securities.
Each Fund is a "diversified" Fund within the meaning of the 1940 Act.
Each Fund offers multiple classes of shares of beneficial interest. The
classes within each Fund are presented in the Statement of Assets and
Liabilities. The cost structure for each class is as follows:
Class A shares are offered at net asset value per share plus an initial
sales charge. Additionally, any purchases of Class A shares in excess of
$1,000,000 will be purchased at net asset value but will be subject to a
contingent deferred sales charge on redemptions made within two years of
purchase.
Class C shares are offered at net asset value and may be subject to a
contingent deferred sales charge on redemptions made within 12 months of
purchase. Class C shares of the High Watermark Funds will convert
automatically to Class A shares approximately eight years after purchase and
at such time will be subject to the lower distribution fee applicable to
Class A shares.
Class I shares are offered at net asset value per share. The class is
offered exclusively to participants in certain employee retirement plans and
other programs.
Class W shares are offered at net asset value per share. The class is
offered exclusively through advisory fee-based programs sponsored by certain
financial intermediaries and other programs.
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions, except as may otherwise be provided in the Funds'
registration statement. Class A and Class C shares make distribution and
account maintenance fee payments under a distribution plan pursuant to Rule
12b-1 under the 1940 Act except that Class C shares are subject to higher
distribution fee rates. Class I shares and Class W shares have not adopted
12b-1 Plans and make no payments there under, however, Class I shares and
Class W shares pay a service fee to the Funds' distributor for
administrative and shareholder services.
INDEMNIFICATIONS: Under the Trust's organizational documents, its officers
and trustees are indemnified against certain liability arising out of the
performance of their duties to the Funds. In addition, in the normal course
of business the Funds enter into contracts that may contain the obligation
to indemnify others. The Funds' maximum exposure under these arrangements is
unknown. Currently, however, the Funds expect 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 requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results
19
AIG SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- April 30, 2009 -- (unaudited)
(continued)
could differ from these estimates. The following is a summary of the
significant accounting policies followed by the Funds in the preparation of
their financial statements:
SECURITY VALUATIONS: Stocks are generally valued based upon closing sales
prices reported on recognized securities exchanges. 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.
Non-convertible bonds and debentures, other long-term debt securities, and
short term debt securities with maturities in excess of 60 days, are valued
at bid prices obtained for the day of valuation from a bond pricing service,
when such prices are available. If a vendor quote is unavailable the
securities may be priced at the mean of two independent quotes obtained from
brokers.
Short-term securities with 60 days or less to maturity are amortized to
maturity based on their cost to the Fund if acquired within 60 days of
maturity or, if already held by the Fund on the 60th day, are amortized to
maturity based on the value determined on the 61st day.
Future contracts and options traded on national securities exchanges are
valued as of the close of the exchange upon which they trade. Other
securities are valued on the basis of last sale or bid price (if a last sale
price is not available) in what is, in the opinion of the Adviser, the
broadest and most representative market, that may be either a securities
exchange or over-the-counter market.
Securities for which market quotations are not readily available or if a
development/significant event occurs that may significantly impact the value
of the security, then these securities are valued, as determined pursuant to
procedures adopted in good faith by the Board of Trustees. There is no
single standard for making fair value determinations, which may result in
prices that vary from those of other funds.
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement on Financial Accounting Standards No. 157, " Fair Value
Measurements " ("FAS 157"). This standard clarifies the definition of fair
value for financial reporting, establishes a framework for measuring fair
value and requires additional disclosures about the use of fair value
measurements. FAS 157 is effective for financial statements issued for
fiscal years beginning after November 15, 2007 and interim periods within
those fiscal years. Various inputs are used in determining the value of the
Funds' investments. These inputs are summarized in the three broad levels
listed below:
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, quoted
prices in inactive markets, etc.)
Level 3 -- Significant unobservable inputs (including the Funds' own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Funds' net assets
as of April 30, 2009:
SUNAMERICA ALTERNATIVE
2015 HIGH WATERMARK FUND 2020 HIGH WATERMARK FUND STRATEGIES FUND
------------------------------ ------------------------------ ------------------------------
INVESTMENTS IN OTHER FINANCIAL INVESTMENTS IN OTHER FINANCIAL INVESTMENTS IN OTHER FINANCIAL
VALUATION INPUTS SECURITIES INSTRUMENTS* SECURITIES INSTRUMENTS* SECURITIES INSTRUMENTS*
- ---------------- -------------- --------------- -------------- --------------- -------------- ---------------
Level 1 -- Unadjusted
Quoted Prices............... $163,397,551 $4,748 $46,262,335 $4,748 $ 81,092,437 $3,226,035
Level 2 -- Other Significant
Observable Inputs........... 80,048,285 -- 23,715,212 -- 95,825,718 --
Level 3 -- Significant
Unobservable Inputs......... -- -- -- -- 17,178,871 --
------------ ------ ----------- ------ ------------ ----------
Total........................ $243,445,836 $4,748 $69,977,547 $4,748 $194,097,026 $3,226,035
============ ====== =========== ====== ============ ==========
- --------
* Other financial instruments are derivative instruments not reflected in the
Portfolio of Investments, such as future, forward, written option, and swap
contracts, which are valued at the unrealized appreciation/depreciation on
the instrument.
20
AIG SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- April 30, 2009 -- (unaudited)
(continued)
The following is a reconciliation of Level 3 assets for which significant
unobservable inputs were used to determine fair value:
SUNAMERICA ALTERNATIVE
STRATEGIES FUND
------------------------------
INVESTMENTS IN OTHER FINANCIAL
SECURITIES INSTRUMENTS*
- - -------------- ---------------
Balance as of 11/04/2008@....................... $ -- $--
Accrued discounts/premiums...................... $ -- $--
Realized gain(loss)............................. $(6,587,878) $--
Change in unrealized appreciation(depreciation). $ 2,430,516 $--
Net purchases(sales)............................ $21,336,233 $--
Transfers in and/or out of Level 3.............. $ -- $--
----------- ---
Balance as of 4/30/2009......................... $17,178,871 $--
=========== ===
@ Commencement of operations
- --------
* Other financial instruments are derivative instruments not reflected in the
Portfolio of Investments, such as future, forward and swap contracts, which
are valued at the unrealized appreciation/depreciation on the instrument.
REPURCHASE AGREEMENTS: For repurchase agreements, the Funds' custodian takes
possession of the collateral pledged for investments in such repurchase
agreements. The underlying collateral is valued daily on a mark to market
basis 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 the Fund may
be delayed or limited.
SECURITIES TRANSACTIONS, INVESTMENT INCOME, EXPENSES, DIVIDENDS AND
DISTRIBUTIONS TO SHAREHOLDERS: Securities transactions are recorded on a
trade date basis. Realized gains and losses on sales of investments are
calculated on the identified cost basis. Interest income, is accrued daily
except when collection is not expected. For financial statement purposes,
the Funds amortize all premiums and accrete all discounts on fixed income
securities.
Expenses common to all Funds, not directly related to individual Funds are
allocated among the Funds based on relative net assets or other appropriate
methods. In all other respects, expenses are charged to each Fund as
incurred on a specific identification basis. Interest earned on cash
balances held at the custodian are shown as custody credits on the Statement
of Operations.
Net investment income, other than class specific expenses, and realized and
unrealized gains and losses are allocated daily to each class of shares
based upon the relative net asset value of outstanding shares (or the value
of dividend-eligible shares, as appropriate) of each class of shares at the
beginning of the day (after adjusting for the current capital share activity
of the respective class).
Dividends from net investment income and capital gain distributions, if any,
are 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 U.S. generally accepted accounting principles. 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 investment income/loss, net realized gain/loss and net
assets are not affected by these reclassifications.
Each Fund intends to comply with the requirements of the Internal Revenue
Code, as amended, applicable to regulated investment companies and to
distribute all of their net income (taxable and tax exempt) and capital
gains to their shareholders. Therefore, no federal tax provision is
required. Each Fund is considered a separate entity for tax purposes.
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 2005.
21
AIG SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- April 30, 2009 -- (unaudited)
(continued)
FUTURES CONTRACTS: 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 deposit an
initial margin payment of cash or other liquid securities with the futures
commission merchant (the "futures broker"). The Funds' activities in futures
contracts are conducted through regulated exchanges which minimizes
counterparty credit risks. A Fund's participation in the futures market
involves certain risks, including imperfect correlation between movements in
the price of futures contracts and movements in the price of the securities
hedged or used for cover. Pursuant to a contract the Funds agree to receive
from or pay to the broker an amount of cash equal to the daily fluctuation
in value of the contract. Such receipts or payments are known as "variation
margin" and are recorded by the Funds as unrealized appreciation or
depreciation. 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. Futures contracts
involve elements of risk in excess of the amount reflected in the Statement
of Assets and Liabilities.
COMMODITY LINKED NOTE: A commodity linked note is a derivative instrument
that has characteristics of a debt security and of a commodity-linked
derivative. It typically provides for interest payments and a principal
payment at maturity linked to the price movement of a commodity, commodity
index or commodity futures or option contract.
OPTIONS: An option is a contract conveying a right to buy or sell a
financial instrument at a specified price during a stipulated period. The
premium paid by a Fund for the purchase of a call or a put option is
included in the Fund's Statement of Assets and Liabilities as an investment
and subsequently marked to market to reflect the current market value of the
option.
When a Fund writes a call or a put option, an amount equal to the premium
received by the Fund is included in the Fund's Statement of Assets and
Liabilities as a liability and is subsequently marked to market to reflect
the current market value of the option written. If an option which the Fund
has written either expires on its stipulated expiration date, or if the Fund
enters into a closing purchase transaction, the Fund realizes a gain (or
loss if the cost of a closing purchase transaction exceeds the premium
received when the option was written) without regard to any unrealized gain
or loss on the underlying security, and the liability related to such
options is extinguished. If a call option which the Fund has written is
exercised, the Fund realizes a capital gain or loss from the sale of the
underlying security and the proceeds from such sale are increased by the
premium originally received. If a put option which the Fund has written is
exercised, the amount of the premium originally received reduces the cost of
the security which the Fund purchased upon exercise of the option.
Transactions in call options written during the period ended April 30, 2009
are summarized as follows:
2015 HIGH WATERMARK FUND
-----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ---------
Options outstanding at October 31, 2008............. (54) $(312,327)
Options written..................................... (13) (17,503)
Options terminated in closing purchase transactions. 67 329,830
Options expired..................................... -- --
Options exercised................................... -- --
--- ---------
Options outstanding at April 30, 2009............... -- $ --
=== =========
2020 HIGH WATERMARK FUND
-----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ---------
Options outstanding at October 31, 2008............. (51) $(316,789)
Options written..................................... (25) (93,609)
Options terminated in closing purchase transactions. 76 410,398
Options expired..................................... -- --
Options exercised................................... -- --
--- ---------
Options outstanding at April 30, 2009............... -- $ --
=== =========
22
AIG SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- April 30, 2009 -- (unaudited)
(continued)
NEW ACCOUNTING PRONOUNCEMENT: In March 2008, the Financial Accounting
Standards (FASB) issued FASB Statement No. 161 ("FAS 161"), Disclosures
about Derivative Instruments and Hedging Activities. The standard is
intended to improve financial reporting about derivative instruments and
hedging activities by requiring enhanced disclosures to enable investors to
better understand their effects on an entity's financial position and
financial performance. It is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008.
Management is currently in the process of determining the impact of the
standard on the Fund's disclosures in the financial statements.
NOTE 3. INVESTMENT ADVISORY AND MANAGEMENT AGREEMENTS, DISTRIBUTION AND SERVICE
AGREEMENTS
The Trust, on behalf of the High Watermark Funds and Alternative Strategies
Fund, has entered into Investment Advisory and Management Agreements (the
"Agreements") with SunAmerica. Under the Agreements, SunAmerica provides
continuous supervision of each Fund's portfolio and administrative affairs,
subject to general review by the Board. In connection therewith, SunAmerica
furnishes the Funds with office facilities, maintains certain of the Funds'
books and records, pays the salaries and expenses of all personnel,
including officers of the Funds who are employees of SunAmerica and its
affiliates and oversees the performance of services provided to the Funds by
third parties. The investment advisory and management fee paid to SunAmerica
with respect to High Watermark Funds and Alternative Strategies Fund are
computed daily and payable monthly are as follows: 0.65% of the average
daily net assets of the High Watermark Funds and 1.00% of the average daily
net assets of the Alternative Strategies Fund. If a High Watermark Fund's
portfolio becomes completely and irreversibly invested in fixed income
securities, the management fees for the Fund will be reduced to 0.40% for
the remainder of the investment period.
Pursuant to the Subadvisory Agreement between SunAmerica, Trajectory and the
Trust (the "High Watermark Subadvisory Agreement") SunAmerica has delegated
portfolio management responsibilities to Trajectory. Trajectory's fee will
be 43% of the net management fee. The term "net management fee" means the
gross management fee less any fund waivers and/or reimbursement made by
SunAmerica. Effective as of September 1, 2006 until October 31, 2007,
SunAmerica has agreed to pay Trajectory a minimum annual fee equal to 0.25%
and 0.20%, respectively, of the 2015 and 2020 High Watermark Fund's average
daily net assets, accrued daily and payable monthly (the "Minimum Fee"). The
Minimum Fee will continue in effect for successive annual periods ending
October 31, upon mutual agreement of SunAmerica and Trajectory, and subject
to approval by the Board, including a majority of Trustees who are not
parties to the High Watermark Subadvisory Agreement or interested persons of
any such party. Payments to Trajectory for its services are made by
SunAmerica, not by the Funds. The continuation of the Minimum Fee was most
recently approved at the August 26, 2008 board meeting to continue in effect
until October 31, 2009.
Pursuant to the Subadvisory Agreement between SunAmerica and Pelagos Capital
Management, LLC ("Pelagos") (the "Alternative Strategies Subadvisory
Agreement"), SunAmerica has delegated portfolio management responsibilities
of Alternative Strategies Fund to Pelagos. Pelagos' fee will be 0.40% of the
average daily net assets of the Fund. Payments to Pelagos for its services
are made by SunAmerica, not by the Fund. The Board has approved the
Alternative Strategies Subadvisory Agreement for an initial two-year period
ending August 31, 2010.
SunAmerica has contractually agreed to waive fees and/or reimburse expenses
to the extent necessary to cap the Funds' annual Fund operating expense at
the following percentages of each Fund's average net assets. Annual Fund
operating expenses do not include extraordinary expenses as determined under
generally accepted accounting principals, or acquired fund fees and
expenses. The contractual expense waivers and fee reimbursements will
continue indefinitely, subject to termination by the Trustees, including a
majority of Trustees who are not interested persons of the Trust or
SunAmerica as defined by the 1940 Act (the "Disinterested Trustees").
FUND PERCENTAGE
- ---- ----------
2015 High Watermark Class A............. 1.65%
2015 High Watermark Class C............. 2.30
2015 High Watermark Class I............. 1.18
2020 High Watermark Class A............. 1.65
2020 High Watermark Class C............. 2.30
2020 High Watermark Class I............. 1.18
SunAmerica Alternative Strategies Class
A...................................... 1.72
SunAmerica Alternative Strategies Class
C...................................... 2.37
SunAmerica Alternative Strategies Class
W...................................... 1.52
23
AIG SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- April 30, 2009 -- (unaudited)
(continued)
SunAmerica may also voluntarily waive fees and/or reimburse expenses. The
voluntary waivers and/or reimbursements may be terminated at any time at the
option of SunAmerica. The exact amount of such waivers and/or reimbursements
may change on a day-to-day basis.
For the period ended April 30, 2009, SunAmerica voluntarily waived and/or
reimbursed expenses in the amount of $234,191, and $27,717 for 2015 High
Watermark Fund and 2020 High Watermark Fund, respectively.
Further, any voluntary or contractual waivers and/or reimbursements made by
SunAmerica with respect to a Fund are subject to recoupment from that Fund
within the following two years, provided that the Fund is able to effect
such payment to SunAmerica and remain in compliance with the foregoing
expense limitations.
For the period ended April 30, 2009, SunAmerica has contractually and
voluntarily waived and/or reimbursed expenses as follows:
OTHER
EXPENSES
FUND REIMBURSED
- ---- --------------
2015 High Watermark..................... $136,037
2020 High Watermark..................... 30,086
SunAmerica Alternative Strategies....... 252,143
CLASS SPECIFIC
EXPENSES
FUND REIMBURSED
- ---- --------------
2015 High Watermark Class A............. $ 73,799
2015 High Watermark Class C............. 60,942
2015 High Watermark Class I............. 81,328
2020 High Watermark Class A............. 32,499
2020 High Watermark Class C............. 15,589
2020 High Watermark Class I............. 33,936
SunAmerica Alternative Strategies Class
A...................................... 143,192
SunAmerica Alternative Strategies Class
C...................................... 3,715
SunAmerica Alternative Strategies Class
W...................................... 1,988
As of April 30, 2009, the amount of expenses previously waived and/or
reimbursed by SunAmerica during the prior two years that remain subject to
the recoupment are as follows:
OTHER
EXPENSES
FUND REIMBURSED
- ---- --------------
2015 High Watermark..................... $136,037
2020 High Watermark..................... 52,951
SunAmerica Alternative Strategies....... 252,143
CLASS SPECIFIC
EXPENSES
FUND REIMBURSED
- ---- --------------
2015 High Watermark Class A............. $175,426
2015 High Watermark Class C............. 127,712
2015 High Watermark Class I............. 248,822
2020 High Watermark Class A............. 122,411
2020 High Watermark Class C............. 62,675
2020 High Watermark Class I............. 135,112
SunAmerica Alternative Strategies Class
A...................................... 143,192
SunAmerica Alternative Strategies Class
C...................................... 3,715
SunAmerica Alternative Strategies Class
W...................................... 1,988
24
AIG SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- April 30, 2009 -- (unaudited)
(continued)
The Trust, on behalf of each Fund, has a Distribution Agreement with
SunAmerica Capital Services, Inc. ("SACS" or the "Distributor")+, an
affiliate of the Adviser. Each Fund has adopted a Distribution Plan on
behalf of its Class A shares and Class C shares (each a "Plan" and
collectively, the "Plans") in accordance with the provisions of Rule 12b-1
under the 1940 Act, hereinafter referred to as the "Class A Plan" and the
"Class C Plan." In adopting the Plans, the Trustees determined that there
was a reasonable likelihood that each such Plan would benefit the Fund and
the shareholders of the respective class. The sales charge and distribution
fees of a particular class will not be used to subsidize the sale of shares
of any other class.
Under the Class A Plan and Class C Plan, the Distributor receives payments
from a Fund at an annual rate of 0.10% and 0.75%, respectively, of average
daily net assets of such Fund's Class to compensate the Distributor and
certain securities firms for providing sales and promotional activities for
distributing that class of shares. The distribution costs for which the
Distributor may be compensated for include fees paid to broker-dealers that
have sold Fund shares, commissions and other expenses such as those incurred
for sales literature, prospectus printing and distribution and compensation
to wholesalers. It is possible that in any given year the amount paid to the
Distributor under each Plan may exceed the Distributor's distribution costs
as described above. The Plans further provide that the Class A and Class C
shares of each Fund shall pay the Distributor an account maintenance fee up
to an annual rate of 0.25% of the average daily net assets of such class of
shares for payments to broker-dealers for providing account maintenance
activities. Accordingly, for the period ended April 30, 2009, SACS received
fees (see Statement of Operations) based upon the aforementioned rates.
The Trust on behalf of each High Watermark Fund, has entered into an
Administrative and Shareholder Services Agreement with SACS, pursuant to
which SACS is paid a fee of 0.25% of average daily net assets of Class I
shares as compensation for providing administrative and shareholder services
to Class I shareholders. For the period ended April 30, 2009, SACS earned
fees (see Statement of Operations) based upon aforementioned rates.
The Trust, on behalf of the Alternative Strategies Fund, has entered into an
Administrative and Shareholder Services Agreement with SACS, pursuant to
which SACS is paid a fee of 0.15% of average daily net assets of Class W
shares as compensation for providing administrative and shareholder services
to Class W shareholders. For the period ended April 30, 2009, SACS earned
fees (see Statement of Operations) based upon aforementioned rates.
SACS receives sales charges on each Fund's Class A shares, portions of which
are reallocated to affiliated broker-dealers and non-affiliated
broker-dealers. SACS also receives the proceeds of contingent deferred sales
charges paid by investors in connection with certain redemptions of each
Fund's Class A and Class C shares. SACS has advised the Funds that for the
period ended April 30, 2009, the proceeds received from sales (and paid out
to affiliated and non-affiliated broker-dealers) and redemptions are as
follows:
CLASS A CLASS A CLASS C
------------------------------------- ------------- -------------
CONTINGENT CONTINGENT
SALES AFFILIATED NON-AFFILIATED DEFERRED DEFERRED
FUND CHARGES BROKER-DEALERS BROKER-DEALERS SALES CHARGES SALES CHARGES
- ---- -------- -------------- -------------- ------------- -------------
2015 High Watermark...... $270,732 $72,590 $149,190 $934 $7,442
2020 High Watermark...... 191,978 73,201 93,452 65 858
SunAmerica Alternative
Strategies.............. 133,866 99,977 (3,168) -- 273
- --------
+ Effective November 12, 2008, AIG SunAmerica Capital Services, Inc. changed
its name to SunAmerica Capital Services, Inc.
25
AIG SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- April 30, 2009 -- (unaudited)
(continued)
The Trust has entered into a Service Agreement with SunAmerica Fund
Services, Inc. ("SAFS")*, an affiliate of the Adviser. Under the Service
Agreement SAFS performs certain shareholder account functions by assisting
the Funds' transfer agent in connection with the services that it offers to
the shareholders of the Funds. The Service Agreement, which permits the
Funds to compensate SAFS for services rendered based upon an annual rate of
0.22% of average daily net assets, is approved annually by the Trustees. For
the period ended April 30, 2009, the Funds incurred the following expenses
which are included in transfer agent fees and expenses in the Statement of
Operations to compensate SAFS pursuant to the terms of the Service Agreement.
PAYABLE AT
FUND EXPENSES APRIL 30, 2009
- ---- -------- --------------
2015 High Watermark Class A............. $128,171 $21,582
2015 High Watermark Class C............. 101,478 17,361
2015 High Watermark Class I............. 31,993 5,454
2020 High Watermark Class A............. 44,762 7,597
2020 High Watermark Class C............. 17,598 2,994
2020 High Watermark Class I............. 12,920 2,287
SunAmerica Alternative Strategies Class
A...................................... 185,971 33,372
SunAmerica Alternative Strategies Class
C...................................... 3,197 1,006
SunAmerica Alternative Strategies Class
W...................................... 1,255 343
At April 30, 2009, Variable Annuity Life Insurance Company, an indirect
wholly-owned subsidiary of SunAmerica, owned 99.90% and 99.12% of the
outstanding shares of the 2015 High Watermark Fund Class I and the 2020 High
Watermark Fund Class I, respectively.
At April 30, 2009, the following affiliates owned a percentage of the
outstanding shares of the Alternative Strategies Fund; Focused Balanced
Strategy Portfolio and Focused Multi-Asset Strategy Portfolio owned 27.56%
and 42.05% of the Class A shares, respectively.
On March 4, 2009, American International Group, Inc. ("AIG"), the ultimate
parent of SunAmerica, SACS, and SAFS, issued and sold to the AIG Credit
Facility Trust, a trust established for the sole benefit of the United
States Treasury (the "Trust"), 100,000 shares of AIG's Series C Perpetual,
Convertible, Participating Preferred Stock (the "Stock") for an aggregate
purchase price of $500,000, with an understanding that additional and
independently sufficient consideration was also furnished to AIG by the
Federal Reserve Bank of New York (the "FRBNY") in the form of its lending
commitment (the "Credit Facility") under the Credit Agreement, dated as of
September 22, 2008, between AIG and the FRBNY. The Stock has preferential
liquidation rights over AIG common stock, and, to the extent permitted by
law, votes with AIG's common stock on all matters submitted to AIG's
shareholders. The Trust has approximately 79.9% of the aggregate voting
power of AIG's common stock and is entitled to approximately 79.9% of all
dividends paid on AIG's common stock, in each case treating the Stock as if
converted. The Stock will remain outstanding even if the Credit Facility is
repaid in full or otherwise terminates.
NOTE 4. PURCHASES AND SALES OF INVESTMENT SECURITIES
The cost of purchases and proceeds from sales and maturities of long-term
investments during the period ended April 30, 2009 were as follows:
PURCHASES SALES
OF PORTFOLIO OF PORTFOLIO
SECURITIES SECURITIES PURCHASES SALES
(EXCLUDING U.S. (EXCLUDING U.S. OF U.S. OF U.S.
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT
FUND SECURITIES) SECURITIES) SECURITIES SECURITIES
- ---- --------------- --------------- ----------- ----------
2015 High Watermark............... $ -- $ -- $21,221,047 $5,855,416
2020 High Watermark............... -- -- 12,160,184 6,993,052
SunAmerica Alternative Strategies. 81,785,220 20,477,452 69,834,482 2,000,000
- --------
* Effective March 17, 2009, AIG SunAmerica Fund Services, Inc. changed its
name to SunAmerica Fund Services, Inc.
26
AIG SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- April 30, 2009 -- (unaudited)
(continued)
NOTE 5. FEDERAL INCOME TAXES
At April 30, 2009, the amounts of aggregate unrealized gain (loss) and the
cost of investment securities for federal tax purposes, including short-term
securities and repurchase agreements, were as follows:
SUNAMERICA
2015 2020 ALTERNATIVE
HIGH WATERMARK HIGH WATERMARK STRATEGIES
FUND FUND FUND
-------------- -------------- ------------
Cost.......................................... $228,148,827 $67,437,137 $190,939,148
============ =========== ============
Appreciation.................................. 15,302,501 2,772,196 3,268,423
Depreciation.................................. (2,691) (223,452) (110,545)
------------ ----------- ------------
Unrealized appreciation (depreciation) -- net. $ 15,299,810 $ 2,548,744 $ 3,157,878
============ =========== ============
The tax basis components of distributable earnings differ from the amounts
reflected in the Statement of Assets and Liabilities due to temporary
book/tax differences primarily arising from Section 1256 contracts and wash
sales.
DISTRIBUTABLE EARNINGS TAX DISTRIBUTIONS
--------------------------------------- ------------------------
FOR THE YEAR ENDED OCTOBER 31, 2008
-----------------------------------------------------------------
LONG-TERM UNREALIZED
ORDINARY GAINS/CAPITAL APPRECIATION ORDINARY LONG-TERM
FUND INCOME LOSS CARRYOVER (DEPRECIATION) INCOME CAPITAL GAINS
- ---- ---------- -------------- -------------- ---------- -------------
2015 High Watermark........... $2,709,076 $(32,820,339) $ (723,662) $8,939,238 $6,022,261
2020 High Watermark........... 1,111,117 (21,986,511) (2,451,113) 3,925,566 2,762,088
SunAmerica Alternative
Strategies................... -- -- -- -- --
For Federal income tax purposes, the Funds indicated below have capital loss
carryforwards, which expire in the year indicated, as of October 31, 2008,
which are available to offset future capital gains, if any:
CAPITAL LOSS CARRYFORWARD
----------------------------------------------
FUND 2009 2010 2011 2012 2013 2014 2015 2016
- ---- ---- ---- ---- ---- ---- ---- ---- -----------
2015 High Watermark............... $-- $-- $-- $-- $-- $-- $-- $32,820,339
2020 High Watermark............... -- -- -- -- -- -- -- 21,986,511
SunAmerica Alternative Strategies. -- -- -- -- -- -- -- --
27
AIG SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- April 30, 2009 -- (unaudited)
(continued)
NOTE 6. CAPITAL SHARE TRANSACTIONS
Transactions in capital shares of each class of each fund were as follows:
2015 HIGH WATERMARK FUND
--------------------------------------------------------------------------
CLASS A CLASS A CLASS C
------------------------ ------------------------ ---------------------
FOR THE FOR THE
PERIOD ENDED FOR THE PERIOD ENDED
APRIL 30, 2009 YEAR ENDED APRIL 30, 2009
(UNAUDITED) OCTOBER 31, 2008 (UNAUDITED)
------------------------ ------------------------ ---------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ -------- -----------
Shares sold.................................. 1,049,518 $ 10,162,537 4,665,980 $ 46,890,817 897,848 $ 8,664,026
Reinvested shares............................ 165,085 1,594,721 736,570 7,726,622 83,420 803,337
Shares redeemed.............................. (1,119,546) (10,858,467) (1,962,325) (19,721,402) (581,762) (5,601,931)
---------- ------------ ---------- ------------ -------- -----------
Net increase (decrease)...................... 95,057 $ 898,791 3,440,225 $ 34,896,037 399,506 $ 3,865,432
========== ============ ========== ============ ======== ===========
2015 HIGH WATERMARK FUND
--------------------------------------------------
CLASS I CLASS I
------------------------ ------------------------
FOR THE
PERIOD ENDED FOR THE
APRIL 30, 2009 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2008
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
Shares sold.................................. 200,494 $ 1,946,421 629,780 $ 6,332,161
Reinvested shares............................ 57,495 556,548 230,671 2,422,042
Shares redeemed.............................. (157,258) (1,542,038) (289,214) (2,947,844)
---------- ------------ ---------- ------------
Net increase (decrease)...................... 100,731 $ 960,931 571,237 $ 5,806,359
========== ============ ========== ============
2020 HIGH WATERMARK FUND
--------------------------------------------------------------------------
CLASS A CLASS A CLASS C
------------------------ ------------------------ ---------------------
FOR THE FOR THE
PERIOD ENDED FOR THE PERIOD ENDED
APRIL 30, 2009 YEAR ENDED APRIL 30, 2009
(UNAUDITED) OCTOBER 31, 2008 (UNAUDITED)
------------------------ ------------------------ ---------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ -------- -----------
Shares sold.................................. 617,988 $ 5,043,148 1,680,692 $ 16,217,374 233,376 $ 1,896,115
Reinvested shares............................ 83,067 685,308 357,259 3,754,796 24,228 199,402
Shares redeemed.............................. (473,497) (3,928,288) (638,043) (6,191,453) (110,410) (907,207)
---------- ------------ ---------- ------------ -------- -----------
Net increase (decrease)...................... 227,558 $ 1,800,168 1,399,908 $ 13,780,717 147,194 $ 1,188,310
========== ============ ========== ============ ======== ===========
2020 HIGH WATERMARK FUND
--------------------------------------------------
CLASS I CLASS I
------------------------ ------------------------
FOR THE
PERIOD ENDED FOR THE
APRIL 30, 2009 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2008
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
Shares sold.................................. 220,246 $ 1,806,202 291,078 $ 2,862,315
Reinvested shares............................ 33,640 277,527 126,421 1,329,951
Shares redeemed.............................. (48,520) (400,259) (164,364) (1,543,292)
---------- ------------ ---------- ------------
Net increase (decrease)...................... 205,366 $ 1,683,470 253,135 $ 2,648,974
========== ============ ========== ============
SUNAMERICA ALTERNATIVE STRATEGIES FUND
-------------------------------------------------------------------------
CLASS A CLASS C CLASS W
------------------------ ------------------------ ---------------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
NOVEMBER 4, 2008@ NOVEMBER 4, 2008@ NOVEMBER 4, 2008@
THROUGH APRIL 30, 2009 THROUGH APRIL 30, 2009 THROUGH APRIL 30, 2009
(UNAUDITED) (UNAUDITED) (UNAUDITED)
------------------------ ------------------------ ---------------------
Shares sold.................................. 21,814,867 $213,401,272 687,682 $ 6,345,678 247,425 $ 2,307,173
Reinvested shares............................ -- -- -- -- -- --
Shares redeemed.............................. (1,659,510) (14,667,709) (55,877) (512,437) (10,057) (91,959)
---------- ------------ ---------- ------------ -------- -----------
Net increase (decrease)...................... 20,155,357 $198,733,563 631,805 $ 5,833,241 237,368 $ 2,215,214
========== ============ ========== ============ ======== ===========
-----------------------
CLASS C
----------------------
FOR THE
YEAR ENDED
OCTOBER 31, 2008
----------------------
SHARES AMOUNT
--------- -----------
Shares sold.................................. 5,341,499 $53,119,264
Reinvested shares............................ 341,517 3,575,687
Shares redeemed.............................. (869,329) (8,640,837)
--------- -----------
Net increase (decrease)...................... 4,813,687 $48,054,114
========= ===========
Shares sold..................................
Reinvested shares............................
Shares redeemed..............................
Net increase (decrease)......................
-----------------------
CLASS C
----------------------
FOR THE
YEAR ENDED
OCTOBER 31, 2008
----------------------
SHARES AMOUNT
--------- -----------
Shares sold.................................. 669,271 $ 6,326,961
Reinvested shares............................ 118,250 1,241,624
Shares redeemed.............................. (219,283) (2,136,246)
--------- -----------
Net increase (decrease)...................... 568,238 $ 5,432,339
========= ===========
Shares sold..................................
Reinvested shares............................
Shares redeemed..............................
Net increase (decrease)......................
Shares sold..................................
Reinvested shares............................
Shares redeemed..............................
Net increase (decrease)......................
- --------
@ Commencement of operations.
28
AIG SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- April 30, 2009 -- (unaudited)
(continued)
NOTE 7. LINE OF CREDIT
The Trust has established a $10 million committed secured line of credit
with State Street Bank and Trust Company, the Funds' custodian. Interest is
currently payable at the Federal Funds Rate plus 50 basis points on the
committed line. There is also a commitment fee of 10 basis points per annum
on the daily unused portion of the committed secured line of credit which is
included in other expenses on the Statement of Operations. Borrowings under
the committed secured line of credit will commence when the respective
Fund's cash shortfall exceeds $100,000. This committed secured line of
credit was not used during the period ended April 30, 2009.
NOTE 8. INTERFUND LENDING AGREEMENT
Pursuant to exemptive relief granted by the Securities and Exchange
Commission ("SEC"), the Funds are permitted to participate in an interfund
lending program among investment companies advised by SunAmerica or an
affiliate. The interfund lending program allows the participating Funds to
borrow money from and loan 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 period ended April 30, 2009, none of the Funds participated in this
program.
NOTE 9. TRUSTEES RETIREMENT PLAN
The Trustees have adopted the SunAmerica Disinterested Trustees' and
Directors' Retirement Plan (the "Retirement Plan") effective January 1,
1993, as amended, for the Disinterested Trustees. The Retirement Plan
provides generally that a Trustee may become a participant ("Participant")
in the Retirement Plan if he or she has at least 10 years of consecutive
service as a Disinterested Trustee of any of the adopting SunAmerica mutual
funds (the "Adopting Funds"), or has attained the age of 60 while a Trustee
and completed five (5) consecutive years of service as a Trustee of any
Adopting Fund (an "Eligible Trustee"). Pursuant to the Retirement Plan, an
Eligible Trustee may receive benefits upon (i) his or her death or
disability while a Trustee or (ii) the termination or his or her tenure as a
Trustee, other than removal for cause from each of the Adopting Funds with
respect to which he or she is an Eligible Trustee.
As of each of the first 10 birthdays after becoming a Participant and on
which he or she is both a Trustee and a Participant, each Eligible Trustee
will be credited with an amount equal to 50% of his or her regular fees
(excluding committee fees) for services as a Disinterested Trustee of each
Adopting Fund for the calendar year in which such birthday occurs. In
addition, an amount equal to 8.50% of any amounts credited under the
preceding statement during prior years is added to each Eligible Trustee's
account. The rights of any Participant to benefits under the Retirement Plan
shall not be an unsecured claim against the assets of the Adopting Funds. An
Eligible Trustee may receive any benefits payable under the Retirement Plan,
at his or her election, either in one lump sum or in up to 15 annual
installments. Any undistributed amounts shall continue to accrue interest at
8.50%.
Effective December 3, 2008, the Retirement Plan was amended to, among other
things, (1) freeze the Retirement Plan as to future accruals for active
Participants as of December 31, 2008, (2) prohibit Disinterested Trustees
from first becoming participants in the Retirement Plan after December 31,
2008 and (3) permit active Participants to elect to receive a distribution
of their entire Retirement Plan account balance in 2009. The freeze on
future accruals does not apply to participants that have commenced receiving
benefits under the Retirement Plan on or before December 31, 2008.
The following amounts for the Retirement Plan Liabilities are included in
the Trustees' fees and expense line on the Statement of Assets and
Liabilities and the Amounts for the Retirement Plan Expenses are included in
the Trustees' fees and expenses line on the Statement of Operations.
RETIREMENT RETIREMENT RETIREMENT
PLAN PLAN PLAN
LIABILITY EXPENSE PAYMENTS
- - ---------- ---------- ----------
FUND AS OF APRIL 30, 2009
- ---- --------------------------------
2015 High Watermark........... $69 $1,598 $8,140
2020 High Watermark........... 26 589 3,070
SunAmerica Alternative
Strategies................... -- -- --
29
AIG SERIES TRUST
APPROVAL OF THE ADVISORY AGREEMENT AND SUBADVISORY AGREEMENT -- April
30, 2009 -- (unaudited)
APPROVAL OF THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT AND SUBADVISORY
AGREEMENT
The Board of Trustees (the "Board," the members of which are referred to as
"Trustees") of the Trust, including the Trustees who are not "interested
persons," as defined in Section 2(a)(19) of the Investment Company Act of 1940,
as amended (the "1940 Act"), of the Trust or its separate series, SunAmerica
and Pelagos (the "Disinterested Trustees"), approved the initial Investment
Advisory and Management Agreement between the Trust, on behalf of the
SunAmerica Alternative Strategies Fund (the "Fund"), and SunAmerica (the
"Advisory Agreement") for an initial two-year period ending August 31, 2010 at
an in-person meeting held on August 26-27, 2008. At this same meeting, the
Board also approved the initial Subadvisory Agreement between SunAmerica and
Pelagos (the "Subadvisory Agreement") with respect to the Fund for an initial
two-year period ending August 31, 2010.
In accordance with Section 15(c) of the 1940 Act, the Board requested and
SunAmerica and Pelagos, where applicable, provided materials relating to the
Board's consideration of whether to approve the Advisory Agreement and
Subadvisory Agreement. These materials included (a) a summary of the services
to be provided by SunAmerica and its affiliates to the Fund; (b) information
independently compiled and prepared by Lipper, Inc. ("Lipper") on proposed Fund
fees and expenses; (c) a detailed description of the Fund's investment
objective, investment strategies and risks; (d) a discussion on general
compliance policies and procedures of SunAmerica and Pelagos; (e) a summary of
brokerage and soft dollar practices; and (f) a discussion of the key personnel
of SunAmerica, Pelagos and SunAmerica Capital Services, Inc.
In determining whether to approve the Advisory Agreement and Subadvisory
Agreement, the Board, including Disinterested Trustees, considered the
following information:
Nature, Extent and Quality of Services to be Provided by SunAmerica and
Pelagos. The Board, including the Disinterested Trustees, considered the
nature, quality and extent of services to be provided by SunAmerica and
Pelagos. In connection with the investment advisory services to be provided to
the Fund, the Trustees observed that, due to the unique nature of the Fund,
they had extensive discussions with representatives of SunAmerica and Pelagos
regarding the management of the Fund's investments in accordance with the
Fund's stated investment objective and policies, including at both the August
2008 meeting and at the June 3-4, 2008 Board meeting, at which the formation of
the Fund was approved. In particular, the Board considered the ability of
SunAmerica and Pelagos to effectively implement such strategies as well as
their ability to manage the potential risks associated with the Fund's
investment objective and policies. The Board also noted that, as part of the
Fund's investment strategy, it may make certain investments through a
wholly-owned subsidiary organized under the laws of the Cayman Islands (the
"Subsidiary"). The Board further considered this component of the Fund's
investment strategy when evaluating the nature of the services that SunAmerica
and Pelagos would be providing to the Fund.
The Board noted that the proposed services under the Advisory Agreement include
acting as investment manager and adviser to the Fund, managing the daily
business affairs of the Fund, and obtaining and evaluating economic,
statistical and financial information to formulate and implement investment
policies. Additionally, the Board observed that SunAmerica would provide office
space, accounting, legal, and compliance, clerical and administrative services
and has authorized any of its officers and employees, if elected, to serve as
officers or trustees of the Fund without compensation. Finally, the Board noted
that SunAmerica will be responsible for monitoring and reviewing the activities
of affiliated and unaffiliated third-party service providers, including
Pelagos. In addition to the quality of the advisory services to be provided,
the Board considered the quality of the administrative and non-investment
advisory services to be provided to the Fund pursuant to the Advisory Agreement
and noted that such services include (i) preparing disclosure documents, such
as the prospectus, the statement of additional information and shareholder
reports; (ii) assisting with daily accounting and pricing; (iii) organizing
Board meetings and preparing the materials for such Board meetings; (iv)
providing legal and compliance support; and (v) performing other administrative
functions necessary for the operation of the Fund, such as tax reporting and
fulfilling regulatory filing requirements.
In connection with the services to be provided by SunAmerica, the Board
analyzed the structure and duties of SunAmerica's fund administration,
accounting, legal and compliance departments and concluded that they were
adequate to meet the needs of the Fund. The Board also reviewed the personnel
who would be responsible for providing advisory services to the Fund and other
key personnel of SunAmerica and concluded, based on their experience and
interaction with SunAmerica, that: (i) SunAmerica is able to retain quality
portfolio managers, analysts and other personnel; (ii) SunAmerica exhibited a
high level of diligence and attention to detail in carrying out its advisory
and other responsibilities to other funds its manages; (iii) SunAmerica had
been responsive to requests of the
30
AIG SERIES TRUST
APPROVAL OF THE ADVISORY AGREEMENT AND SUBADVISORY AGREEMENT -- April
30, 2009 -- (unaudited) (continued)
Board; and (iv) SunAmerica had kept the Board apprised of developments relating
to the organization of the Fund and the industry in general and the formulation
and development of the Fund's investment objective and investment strategy. The
Board concluded that the nature and extent of services to be provided by
SunAmerica under the Advisory Agreement were reasonable and appropriate in
relation to the proposed management fees and that the Board expects that the
quality of services will be high.
The Board also considered SunAmerica's reputation and considered the benefit to
shareholders of investing in funds that are part of a family of funds offering
a variety of types of mutual funds and shareholder services. The Board
considered SunAmerica's experience in providing management and investment
advisory and administrative services to advisory clients and noted that as of
June 30, 2008, SunAmerica managed, advised an/or administered approximately
$49.7 billion in assets. The Board also considered SunAmerica's code of ethics,
and that it has developed internal procedures, adopted by the Board, for
monitoring compliance with the investment objectives, policies and restrictions
of the Fund as set forth in the Fund's prospectus. Additionally, the Board
considered SunAmerica's compliance and regulatory history.
The Board also considered the nature, quality and extent of subadvisory
services to be provided by Pelagos. The Board observed that Pelagos would be
responsible for providing investment management services, including investment
research, advice and supervision, and determining which securities will be
purchased or sold by the Fund and which transactions the Fund will enter into,
subject to the oversight and review of SunAmerica. The Board reviewed Pelagos'
limited operating history, structure, relatively small size, visibility and
resources, and considered their ability to attract and retain highly qualified
investment professionals. The Board reviewed and met with the personnel that
would be responsible for the providing subadvisory services to the Fund and
concluded, based on their in-depth discussions with the Pelagos representatives
and the diligence conducted by SunAmerica, that Pelagos: (i) has the ability to
retain high quality portfolio managers and other investment personnel; (ii)
would exhibit a high level of diligence and attention to detail in carrying out
its responsibilities under the Subadvisory Agreement; and (iii) has been and
would continue to be responsive to requests of the Board and of SunAmerica. The
Board considered that Pelagos has developed internal policies and procedures
for monitoring compliance with the investment objectives, policies and
restrictions of the Fund as set forth in the Prospectus. The Board also
considered Pelagos' code of ethics, compliance and limited regulatory history
and noted that SunAmerica has reviewed Pelagos' compliance program and
representatives of SunAmerica have had extensive discussions and meetings with
representatives of Pelagos. The Board concluded that the nature and extent of
services to be provided by Pelagos under the Subadvisory Agreement were
reasonable and appropriate in relation to the proposed subadvisory fees and
that the Board expects that the quality of services will be high.
In approving the Subadvisory Agreement, the Board observed that it was relying
in part on the representations and assurances of SunAmerica that it had the
capability to effectively monitor the activities of Pelagos in connection with
Pelagos' day-to-day management of the Fund. The Board noted further that, given
Pelagos' status as a relatively small, start-up firm with no other accounts
under management, it was important that SunAmerica closely oversee Pelagos'
activities in connection with the performance of its responsibilities under the
Subadvisory Agreement.
INVESTMENT PERFORMANCE. Because the Fund is newly formed, the Trustees did not
consider the investment performance of the Fund. The Board will monitor the
Fund's performance.
CONSIDERATION OF THE MANAGEMENT FEES AND SUBADVISORY FEES AND THE COST OF THE
SERVICES AND PROFITS TO BE REALIZED BY SUNAMERICA AND PELAGOS AND THEIR
AFFILIATES FROM THE RELATIONSHIP WITH THE FUND. The Board, including the
Disinterested Trustees, received and reviewed information regarding the fees to
be paid by the Fund to SunAmerica pursuant to the Advisory Agreement and the
fees to be paid by SunAmerica to Pelagos pursuant to the Subadvisory Agreement.
The Board examined this information in order to determine the reasonableness of
the fees in light of the nature and quality of services to be provided and any
potential additional benefits to be received by SunAmerica, its affiliates or
Pelagos in connection with providing such services to the Funds.
To assist in analyzing the reasonableness of the management fee for the Fund,
the Board received reports independently prepared by Lipper. The reports showed
comparative fee information for the Fund's peer group ("Peer Group") and/or
peer universe ("Peer Universe"). In considering the reasonableness of the
management fee to be paid by each Fund to SunAmerica, the Board reviewed a
number of expense comparisons, including: (i) contractual and actual management
fees; and (ii) actual total operating expenses. In considering the Fund's total
operating expenses, the Board analyzed the level of the proposed fee waivers
and expense reimbursements. The Board also observed that SunAmerica was
proposing to contractually waive the management fee it received
31
AIG SERIES TRUST
APPROVAL OF THE ADVISORY AGREEMENT AND SUBADVISORY AGREEMENT -- April
30, 2009 -- (unaudited) (continued)
from the Fund in an amount equal to the management fee paid to SunAmerica by
the Subsidiary. The Board compared the Fund's net expense ratio to those of
other funds within its Peer Group and/or Peer Universe as a guide to help
assess the reasonableness of the Fund's management fee. The Board acknowledged
that it was difficult to make precise comparisons with other funds in the Peer
Groups and Peer Universes since the exact nature of services provided under the
various fund agreements is often not apparent. In addition, the Board
acknowledged that such comparisons were even more difficult with respect to the
Fund given its unique nature and lack of a true "peer" group that could be
evaluated as comparable funds. The Board observed, nonetheless, that the
comparative fee information provided by Lipper as a whole was useful in
assessing whether SunAmerica was providing services at a cost that was
competitive with other, similar funds. The Board also noted that SunAmerica did
not manage any other mutual funds and accounts with similar investment
strategies to the Fund and, therefore, there were no management fee comparisons
to be considered in this regard.
The Board also received and reviewed information regarding the fees to be paid
by SunAmerica to Pelagos pursuant to the Subadvisory Agreement. The Board
acknowledged that given the unique nature of the Fund as well as the small
number of comparable funds (including no others with disclosed subadvisory
fees), the Lipper reports did not include any comparable subadvisory fee rates.
The Board also considered that the subadvisory fee will be paid by SunAmerica
out of its management fee and not by the Fund. The Board further considered the
amount of subadvisory fee to be paid out by SunAmerica and the amount of the
management fees that it would retain. The Board also observed that Pelagos was
proposing to contractually waive the subadvisory fee it received from
SunAmerica with respect to the Fund in an amount equal to the subadvisory fee
paid to Pelagos by SunAmerica with respect to the Subsidiary. The Board also
noted that Pelagos did not manage any other mutual fund and other accounts and,
therefore, there were no subadvisory fee comparisons to be considered in this
regard.
The Board noted that it did not receive information regarding profitability of
SunAmerica, its affiliates and Pelagos because the Fund had not yet commenced
operations and the applicable agreements and Rule 12b-1 Plans were not yet in
effect.
The Board noted that it had reviewed unaudited financial statements from
Pelagos and considered whether Pelagos had the financial resources necessary to
attract and retain high quality investment management personnel and to provide
high quality services to the Fund. While the Board acknowledged that Pelagos
was a relatively small start-up firm, it observed that the principals of the
firm appeared to be committed to the firm and also that SunAmerica was serving
as the investment adviser to the Fund and would be responsible for overseeing
Pelagos, pursuant to the terms of the Advisory Agreement.
The Board concluded that SunAmerica and Pelagos had the resources necessary to
perform their obligations under the Advisory Agreement and Subadvisory
Agreement and to provide the Funds with high quality services that the Board
expects. The Board also concluded that the management fee and subadvisory fees
were reasonable in light of the factors discussed above.
ECONOMIES OF SCALE. The Board did not review specific information whether
shareholders would benefit from economies of scale with respect to the Fund as
the Fund has not yet commenced operations.
OTHER FACTORS. In consideration of the Advisory Agreement and Subadvisory
Agreement, the Board also received information regarding SunAmerica's and
Pelagos' brokerage and soft dollar practices. The Board considered that
SunAmerica and Pelagos will be responsible for decisions to buy and sell
securities for the portfolios they manage, selection of broker-dealers and
negotiation of commission rates. The Board noted that Pelagos presently does
not intend to make use of soft dollars.
CONCLUSION. After full and complete discussion, the Board approved the Advisory
Agreement and the Subadvisory Agreement, each for an initial two-year period
ending August 31, 2010. Based upon their evaluation of all these factors in
their totality, the Board, including the Disinterested Trustees, was satisfied
that the terms of the Advisory Agreement and Subadvisory Agreement were fair
and reasonable and in the best interests of the Fund and the Fund's
shareholders. In arriving at a decision to approve the Advisory Agreement and
Subadvisory Agreement, the Board did not identify any single factor or group of
factors as all-important or controlling, but considered all factors together.
The Disinterested Trustees were also assisted by the advice of independent
counsel in making this determination.
32
[LOGO] AIG SunAmerica
Mutual Funds
HARBORSIDE FINANCIAL CENTER
3200 PLAZA 5
JERSEY CITY, NJ 07311-4992
DIRECTORS/TRUSTEES OTHER INFORMATION This report is submitted solely for the
JEFFREY S. BURUM The most recent annual and/or quar- general information of shareholders of
DR. JUDITH L. CRAVEN terly report of Prudential Financial and the Funds. Distribution of this report
WILLIAM F. DEVIN PGF is available without charge by call- to persons other than shareholders of
SAMUEL M. EISENSTAT ing (800) 858-8850. the Funds is authorized only in con-
STEPHEN J. GUTMAN nection with a currently effective pro-
PETER A. HARBECK VOTING PROXIES ON FUND PORTFOLIO spectus, setting forth details of the
WILLIAM J. SHEA SECURITIES Funds, which must precede or accom-
A description of the policies and proce- pany this report.
OFFICERS dures that the Trust uses to determine
JOHN T. GENOY, PRESIDENT AND CHIEF how to vote proxies related to securities DELIVERY OF SHAREHOLDER DOCUMENTS
EXECUTIVE OFFICER held in a Fund's portfolio, which is The Funds have adopted a policy that
DONNA M. HANDEL, TREASURER available in the Trust's Statement of allows them to send only one copy of a
JAMES NICHOLS, VICE PRESIDENT Additional Information, may be ob- Fund's prospectus, proxy material,
TIMOTHY PETTEE, VICE PRESIDENT tained without charge upon request, by annual report and semi-annual report
GREGORY N. BRESSLER, CHIEF LEGAL calling (800) 858-8850. The in- (the "shareholder documents") to
OFFICER AND SECRETARY formation is also available from the shareholders with multiple accounts
NORI L. GABERT, VICE PRESIDENT AND EDGAR database on the U.S. Secu- residing at the same "household." This
ASSISTANT SECRETARY rities and Exchange Commission's practice is called householding and
CYNTHIA A. SKREHOT, VICE PRESIDENT AND website at http://www.sec.gov. reduces Fund expenses, which benefits
CHIEF COMPLIANCE OFFICER you and other shareholders. Unless the
GREGORY R. KINGSTON, VICE PRESIDENT PROXY VOTING RECORD ON FUND Funds receive instructions to the con-
AND ASSISTANT TREASURER PORTFOLIO SECURITIES trary, you will only receive one copy of
KATHLEEN FUENTES, ASSISTANT SECRETARY Information regarding how the Trust the shareholder documents. The Funds
JOHN E. MCLEAN, ASSISTANT SECRETARY voted proxies related to securities held will continue to household the share-
KRISTINE UNG, ASSISTANT TREASURER in the Funds during the most recent holder documents indefinitely, until we
MATTHEW J. HACKETHAL, ANTI-MONEY twelve month period ended June 30 is are instructed otherwise. If you do not
LAUNDERING COMPLIANCE OFFICER available, once filed with the U.S. wish to participate in householding
Securities and Exchange Commission, please contact Shareholder Services at
INVESTMENT ADVISER without charge, upon request, by call- (800) 858-8850 ext. 6010 or send a
SUNAMERICA ASSET MANAGEMENT CORP. ing (800) 858-8850 or on the U.S. written request with your name, the
HARBORSIDE FINANCIAL CENTER Securities and Exchange Commission name of your fund(s) and your account
3200 PLAZA 5 website at http://www.sec.gov. number(s) to SunAmerica Mutual
JERSEY CITY, NJ 07311-4992 Funds c/o BFDS, P.O. Box 219186,
DISCLOSURE OF QUARTERLY PORTFOLIO Kansas City MO, 64121-9186. We
DISTRIBUTOR HOLDINGS will resume individual mailings for
SUNAMERICA CAPITAL SERVICES, INC. The Trust is required to file its com- your account within thirty (30) days of
HARBORSIDE FINANCIAL CENTER plete schedule of portfolio holdings receipt of your request.
3200 PLAZA 5 with the U.S. Securities and Exchange
JERSEY CITY, NJ 07311-4992 Commission for its first and third fiscal The accompanying report has not been
quarters on Form N-Q. The Trust's audited by independent accountants
SHAREHOLDER SERVICING AGENT Forms N-Q are available on the U.S. and accordingly no opinion has been
SUNAMERICA FUND SERVICES, INC. Securities and Exchange Commission expressed thereon.
HARBORSIDE FINANCIAL CENTER website at www.sec.gov. You can also
3200 PLAZA 5 review and obtain copies of the Forms
JERSEY CITY, NJ 07311-4992 N-Q at the U.S. Securities and Ex-
change Commission Public Reference
CUSTODIAN AND TRANSFER AGENT Room in Washington DC (informa
STATE STREET BANK AND TRUST COMPANY tion on the operation of the Public
P.O. BOX 5607 Reference Room may be obtained by
BOSTON, MA 02110 calling 1-800-SEC-0330).
33
[GRAPHIC]
GO PAPERLESS!!
Did you know that you have the option to
receive your shareholder reports online?
By choosing this convenient service, you will no longer receive paper copies of
Fund documents such as annual reports, semi-annual reports, prospectuses and
proxy statements in the mail. Instead, you are provided with quick and easy
access to this information via the Internet.
Why Choose Electronic Delivery?
IT'S QUICK -- Fund documents will be received faster than via traditional mail.
IT'S CONVENIENT -- Elimination of bulky documents from personal files.
IT'S COST EFFECTIVE -- Reduction of your Fund's printing and mailing costs.
TO SIGN UP FOR ELECTRONIC DELIVERY, FOLLOW
THESE SIMPLE STEPS:
1 GO TO
WWW.SUNAMERICAFUNDS.COM
2 UNDER THE "SHAREHOLDER SERVICES"
SECTION, click on the "Go Paperless" link.
3 FILL OUT THE APPROPRIATE INFORMATION
including the email address to which you
would like your information sent.
4 CLICK "SUBMIT" --
IT'S THAT EASY!
The email address you provide will be kept strictly confidential. Once your
enrollment has been processed, you will begin receiving email notifications
when anything you receive electronically is available online.
You can return to www.sunamericafunds.com at any time to change your email
address, edit your preferences or to cancel this service if you choose to
resume physical delivery of your Fund documents.
Please note - this option is only available to accounts opened through the
Funds.
[GRAPHIC]
[GRAPHIC]
[LOGO]
FOR INFORMATION ON RECEIVING THIS REPORT online, SEE INSIDE BACK COVER.
Distributed by:
SunAmerica Capital Services, Inc.
Investors should carefully consider a Fund's investment objectives, risks,
charges and expenses before investing. The prospectus, containing this and
other important information, can be obtained from your financial adviser, the
SunAmerica Sales Desk at 800-858-8850, ext. 6003, or at
www.sunamericafunds.com. Read the prospectus carefully before investing.
HWSAN-4/09
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
Included in Item 1 to the Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders
may recommend nominees to the Registrant's Board of 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
299.407) (as required by 22(b)(15)) of Schedule 14A (17 CFR 240.14a-
101), or this Item 10.
Item 11. Controls and Procedures.
(a) An evaluation was performed within 90 days of the filing of this
report, under the supervision and with the participation of the
registrant's management, including the President and Treasurer, of the
effectiveness of the design and operation of the registrant's
disclosure controls and procedures (as defined under Rule 30a-3(c)
under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))). Based
on that evaluation, the registrant's management, including the
President and Treasurer, concluded that the registrant's disclosure
controls and procedures are effective.
(b) There was no change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act
of 1940 (17 CFR 270.30a-3(d))) that occurred during the registrant's
last fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal contro1 over financial reporting.
Item 12. Exhibits.
(a) (1) Not applicable.
(2) Certifications pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit
99.CERT.
(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) and Section 906 of the
Sarbanes-Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
AIG Series Trust
By: /s/ John T. Genoy
-------------------
John T. Genoy
President
Date: July 6, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ John T. Genoy
-------------------
John T. Genoy
President
Date: July 6, 2009
By: /s/ Donna M. Handel
-------------------
Donna M. Handel
Treasurer
Date: July 6, 2009