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 811-04708
---------------------------------------------
SunAmerica Income Funds
--------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Harborside 5, 185 Hudson Street, Suite 3300, Jersey City, NJ 07311
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
John T. Genoy
Senior Vice President
SunAmerica Asset Management, LLC
Harborside 5,
185 Hudson Street, Suite 3300,
Jersey City, NJ 07311
--------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (201) 324-6414
-----------------------------
Date of fiscal year end: March 31
--------------------------
Date of reporting period: September 30, 2018
-------------------------
Item 1. Reports to Stockholders
SEMI-ANNUAL REPORT 2018
SUNAMERICA
Income Funds
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Table of Contents
SHAREHOLDER LETTER................... 2
EXPENSE EXAMPLE...................... 4
STATEMENTS OF ASSETS AND LIABILITIES. 6
STATEMENTS OF OPERATIONS............. 8
STATEMENTS OF CHANGES IN NET ASSETS.. 9
FINANCIAL HIGHLIGHTS................. 10
PORTFOLIO OF INVESTMENTS............. 13
NOTES TO FINANCIAL STATEMENTS........ 66
APPROVAL OF ADVISORY AGREEMENTS...... 81
SUPPLEMENTS TO THE PROSPECTUS........ 86
Shareholder Letter -- (unaudited)
Dear Shareholders,
We are pleased to present this semi-annual report for the SunAmerica Income
Funds for the six-month period ended September 30, 2018. From a broad
perspective, it was a period wherein fixed income market performance was
primarily influenced by economic data, central bank monetary policy and
geopolitics. For the semi-annual period overall, the Bloomberg Barclays U.S.
Aggregate Bond Index,/*/ a broad measure of the U.S. fixed income market,
returned -0.14%.
In the second quarter of 2018, when the semi-annual period began, global fixed
income sectors generated mixed results. Sovereign yields outside of Europe
generally moved higher, driven by continued global economic growth momentum and
rising inflation expectations. Government bonds, including U.S. Treasuries,
enjoyed short-lived periods of strength, however, amid escalating tensions
between the U.S. and its trade partners and bouts of elevated political
uncertainty in Europe. Concerns about increased leverage and heavy supply from
a pickup in mergers and acquisitions weighed on investment grade corporate
bonds. Emerging markets debt also underperformed government bonds, while high
yield corporate bonds outperformed - supported by continued demand for income
and a scarcity of supply. Global monetary policies also diverged during the
second quarter. The U.S. Federal Reserve (the "Fed") raised its target rate by
25 basis points+ in June 2018 as expected, and forecast two additional raises
within the calendar year - one more than was projected at its March 2018
meeting. Meanwhile, the European Central Bank (ECB) announced its quantitative
easing would end in December 2018 but pledged to keep its policy rates
unchanged at least through the summer of 2019. The People's Bank of China
unexpectedly cut its reserve-requirement ratio, the amount of cash banks must
keep on reserve, by 100 basis points to free up lending for small businesses.
The Bank of England maintained its policy rate and asset purchase program after
U.K. economic growth fell shy of its forecasts.
Global fixed income sectors again generated mixed returns during the third
quarter of 2018. Despite lingering trade war concerns, sovereign yields across
most markets moved higher, driven by supportive global economic growth data and
rising inflation expectations. Weighing on emerging markets debt were sharp
declines in the Turkish lira and the Argentine peso, which sparked fears of
emerging markets contagion before policymakers intervened with various
stabilization measures. On the other hand, investment grade corporate bonds
rebounded amid favorable earnings trends, positive economic data and light
supply. High yield corporate bonds recorded their best quarterly performance
since the first quarter of 2017. Global monetary policy turned more hawkish/**/
overall. The Fed upgraded its projection for U.S. economic growth, raised its
target interest rate by 25 basis points in September 2018 and forecast four
additional rate increases through the end of 2019. The Bank of England and Bank
of Canada each raised their respective rates by 25 basis points as well. The
Bank of Japan amended its yield curve targeting policy to allow longer-term
bond yields to fluctuate more freely around its 0% target. The People's Bank of
China announced a 20% reserve requirement for banks to help stabilize its
currency. Meanwhile, the ECB remained dovish, leaving rates unchanged and
reiterating its pledge to keep them low at least through next summer.
For the semi-annual period overall, U.S. Treasury securities posted negative
returns, with the yield on the 10-year U.S. Treasury rising approximately 32
basis points to 3.06% by the end of September 2018. The U.S. Treasury yield
curve, or spectrum of maturities, flattened++ during the six months ended
September 30, 2018, as yields on shorter-term and intermediate-term maturities
rose more than those on longer-term maturities. Non-U.S. Treasury sectors
generally outperformed U.S. Treasuries. High yield corporate bonds performed
best. Commercial mortgage-backed securities, investment grade corporate bonds,
asset-backed securities, mortgage-backed securities and agency securities also
outperformed U.S. Treasuries, albeit to a lesser extent. Sovereign emerging
markets debt underperformed U.S. Treasury securities during the semi-annual
period overall.
2
On the following pages, you will find financial statements and portfolio
information for each of the SunAmerica Income Funds during the semi-annual
period ended September 30, 2018.
Thank you for being a part of the SunAmerica Income Funds. We value your
ongoing confidence in us and look forward to serving your investment needs in
the future. As always, if you have any questions regarding your investments,
please contact your financial advisor or get in touch with us directly at
800-858-8850 or via our website, www.aig.com/funds.
Sincerely,
The SunAmerica Income Funds Investment Professionals
Tim Pettee Robert Vanden Assem David L. Albrycht
Timothy Campion Anders Faergemann Frank Ossino
Andrew Sheridan Dana Burns Jonathan Stanley
Jane Bayar Algieri John Yovanovic
--------
Past performance is no guarantee of future results.
* The Bloomberg Barclays U.S. Aggregate Bond Index represents securities that
are SEC-registered, taxable and dollar denominated. The index covers the U.S.
investment-grade fixed-rate bond market, with index components for government
and corporate securities, mortgage pass-through securities and asset-backed
securities. Indices are not managed and an investor cannot invest directly in
an index.
+ A basis point is 1/100/th/ of a percentage point.
**Hawkish policy tends to suggest higher interest rates; opposite of dovish.
++A flattening yield curve is one wherein the differential in yields between
longer-term and shorter-term maturities narrows.
3
SunAmerica Income Funds
EXPENSE EXAMPLE -- September 30, 2018 -- (unaudited)
Disclosure of Portfolio Expenses in Shareholder Reports
As a shareholder of a fund (each, a "Fund" and collectively the "Funds") in the
SunAmerica Income Funds (the "Trust"), you may incur two types of costs: (1)
transaction costs, including sales charges (loads) on purchase payments,
contingent deferred sales charges and (2) ongoing costs, including management
fees, distribution and service fees and other Fund expenses. The example set
forth below is intended to help you understand your ongoing costs (in dollars)
of investing in the 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 April 1, 2018 and held until September 30, 2018.
Actual Expenses
The "Actual" section of the table provides information about actual account
values and actual expenses. You may use the information in these columns,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the column under the heading entitled "Expenses Paid During the Six
Months Ended September 30, 2018" to estimate the expenses you paid on your
account during this period. The "Expenses Paid During the Six Months Ended
September 30, 2018" column and the "Annualized Expense Ratio" column do not
include small account fees that may be charged if your account balance is below
$500 ($250 for retirement plan accounts). In addition, the "Expenses Paid
During the Six Months Ended September 30, 2018" column and the "Annualized
Expense Ratio" column do not include administrative fees that may apply to
qualified retirement plan accounts. See the Funds' prospectuses, your
retirement plan document and/or materials from your financial adviser for a
full description of these fees. Had these fees been included, the "Expenses
Paid During the Six Months Ended September 30, 2018" column would have been
higher and the "Ending Account Value" column would have been lower.
Hypothetical Example for Comparison Purposes
The "Hypothetical" section of the table provides information about hypothetical
account values and hypothetical expenses based on each Fund's actual expense
ratio and an annual rate of return of 5% before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Funds and other funds. To do so, compare this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds. The "Expenses Paid During the Six Months Ended September 30, 2018"
column and the "Annualized Expense Ratio" column do not include small account
fees that may be charged if your account balance is below $500 ($250 for
retirement plan accounts). In addition, the "Expenses Paid During the Six
Months Ended September 30, 2018" column and the "Annualized Expense Ratio"
column do not include administrative fees that may apply to qualified
retirement plan accounts and accounts held through financial institutions. See
the Funds' prospectuses, your retirement plan document and/or materials from
your financial adviser for a full description of these fees. Had these fees
been included, the "Expenses Paid During the Six Months Ended September 30,
2018" column would have been higher and the "Ending Account Value" column would
have been lower.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, including sales
charges on purchase payments, contingent deferred sales charges, small account
fees and administrative fees, if applicable to your account. Please refer to
the Funds' prospectus, your retirement plan document and/or material from your
financial adviser, for more information. Therefore, the "Hypothetical" example
is useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transaction costs and other fees were included, your costs would have been
higher.
4
SunAmerica Income Funds
EXPENSE EXAMPLE -- September 30, 2018 -- (unaudited) (continued)
Actual Hypothetical
------------------------------------------ ------------------------------------------
Ending Account
Ending Account Expenses Paid Value using Expenses Paid
Value using During the a Hypothetical During the
Beginning Actual Six Months Beginning 5% Annual Six Months
Account Value Return at Ended Account Value Return at Ended Annualized
at April 1, September 30, September 30, at April 1, September 30, September 30, Expense
Fund 2018 2018 2018* 2018 2018 2018* Ratio*
---- ------------- -------------- ------------- ------------- -------------- ------------- ----------
AIG U.S. Government Securities#
Class A....................... $1,000.00 $ 994.70 $4.95 $1,000.00 $1,020.10 $5.01 0.99%
Class C....................... $1,000.00 $ 991.47 $8.19 $1,000.00 $1,016.85 $8.29 1.64%
AIG Strategic Bond#
Class A....................... $1,000.00 $1,001.16 $5.77 $1,000.00 $1,019.30 $5.82 1.15%
Class B....................... $1,000.00 $1,000.54 $9.33 $1,000.00 $1,015.74 $9.40 1.86%
Class C....................... $1,000.00 $ 997.88 $9.07 $1,000.00 $1,015.99 $9.15 1.81%
Class W....................... $1,000.00 $1,002.04 $4.82 $1,000.00 $1,020.26 $4.86 0.96%
AIG Flexible Credit#
Class A....................... $1,000.00 $1,022.58 $5.27 $1,000.00 $1,019.85 $5.27 1.04%
Class C....................... $1,000.00 $1,022.00 $8.72 $1,000.00 $1,016.44 $8.69 1.72%
Class W....................... $1,000.00 $1,026.51 $4.27 $1,000.00 $1,020.86 $4.26 0.84%
--------
* Expenses are equal to each Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 183 days then divided
by 365 days (to reflect the one-half year period). 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 documents and/or materials from your financial adviser for
more information.
# During the stated period, the investment advisor either waived a portion of
or all of the 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 Six Months Ended September,
2018" and the "Annualized Expense Ratio" would have been higher.
5
SunAmerica Income Funds
STATEMENTS OF ASSETS AND LIABILITIES -- September 30, 2018 --
(unaudited)
AIG U.S. Government AIG Strategic AIG Flexible
Securities Bond Credit
Fund Fund Fund
------------------- ------------- ------------
ASSETS:
Investments at value (unaffiliated)*........................ $133,126,810 $290,721,255 $362,674,364
Repurchase agreements (cost approximates value)............. 2,636,000 -- --
Cash........................................................ 437 -- 388,555
Foreign cash*............................................... -- -- 7,412
Receivable for:
Shares of beneficial interest sold......................... 7,551 313,188 2,639,245
Dividends and interest..................................... 663,855 3,326,754 3,510,618
Investments sold........................................... -- 3,168,662 1,192,212
Investments sold on an extended settlement basis........... -- 3,016,197 2,966,870
Prepaid expenses and other assets........................... 5,607 6,572 6,214
Due from investment adviser for expense reimbursements/fee
waivers.................................................... 47,596 60,959 108,912
Unrealized appreciation on forward foreign currency
contracts.................................................. -- 180,727 --
------------ ------------ ------------
TOTAL ASSETS................................................ 136,487,856 300,794,314 373,494,402
------------ ------------ ------------
LIABILITIES:
Payable for:
Shares of beneficial interest redeemed..................... 109,279 1,001,734 415,598
Investments purchased...................................... -- 1,739,420 1,603,467
Investments purchased on an extended settlement basis...... -- 4,047,595 13,776,654
Investment advisory and management fees.................... 73,259 158,495 212,893
Distribution and service maintenance fees.................. 42,996 117,006 106,318
Transfer agent fees and expenses........................... 27,815 58,700 69,412
Other accrued expenses..................................... 69,070 104,609 100,973
Dividends Payable........................................... 4,106 65,745 364,281
Due to custodian............................................ -- 427,300 --
Due to custodian for foreign cash*.......................... -- 620 --
Unrealized depreciation on forward foreign currency
contracts.................................................. -- 6,980 --
------------ ------------ ------------
TOTAL LIABILITIES........................................... 326,525 7,728,204 16,649,596
------------ ------------ ------------
NET ASSETS.................................................. $136,161,331 $293,066,110 $356,844,806
============ ============ ============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $0.01........................ $ 154,146 $ 883,116 $ 1,049,552
Paid-in capital............................................. 156,012,443 327,174,295 366,953,900
------------ ------------ ------------
156,166,589 328,057,411 368,003,452
Accumulated undistributed net investment income (loss)...... (33,490) (496,491) 445,696
Accumulated undistributed net realized gain (loss) on
investments, futures contracts, options contracts,
securities sold short, and foreign exchange transactions... (20,473,023) (26,143,448) (8,334,517)
Unrealized appreciation (depreciation) on investments....... 501,255 (8,522,340) (3,269,239)
Unrealized foreign exchange gain (loss) on other assets and
liabilities................................................ -- 170,978 (586)
------------ ------------ ------------
NET ASSETS.................................................. $136,161,331 $293,066,110 $356,844,806
============ ============ ============
*Cost
Investments (unaffiliated)................................. $132,625,555 $299,243,595 $365,943,603
============ ============ ============
Foreign cash............................................... $ -- $ (536) $ 7,998
============ ============ ============
See Notes to Financial Statements
6
SunAmerica Income Funds
STATEMENTS OF ASSETS AND LIABILITIES -- September 30, 2018 --
(unaudited) (continued)
AIG U.S. Government AIG Strategic AIG Flexible
Securities Bond Credit
Fund Fund Fund
------------------- ------------- ------------
Class A (unlimited shares authorized):
Net assets.................................................. $129,579,973 $164,072,505 $138,009,922
Shares of beneficial interest issued and outstanding........ 14,669,212 49,460,922 40,656,042
Net asset value and redemption price per share (excluding
any applicable contingent deferred sales charge) .......... $ 8.83 $ 3.32 $ 3.39
Maximum sales charge (4.75% of offering price).............. $ 0.44 $ 0.17 $ 0.17
------------ ------------ ------------
Maximum offering price to public............................ $ 9.27 $ 3.49 $ 3.56
============ ============ ============
Class B (unlimited shares authorized):
Net assets.................................................. $ -- $ 17,270,439 $ --
Shares of beneficial interest issued and outstanding........ -- 5,209,722 --
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge) $ -- $ 3.32 $ --
============ ============ ============
Class C (unlimited shares authorized):
Net assets.................................................. $ 6,581,358 $ 57,300,534 $ 57,549,134
Shares of beneficial interest issued and outstanding........ 745,377 17,216,618 16,847,986
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge) $ 8.83 $ 3.33 $ 3.42
============ ============ ============
Class W (unlimited shares authorized):
Net assets.................................................. $ -- $ 54,422,632 $161,285,750
Shares of beneficial interest issued and outstanding........ -- 16,424,302 47,451,214
Net asset value, offering and redemption price per share.... $ -- $ 3.31 $ 3.40
============ ============ ============
See Notes to Financial Statements
7
SunAmerica Income Funds
STATEMENTS OF OPERATIONS -- For the Six Months Ended September 30, 2018
-- (unaudited)
AIG U.S. Government AIG Strategic
Securities Bond
Fund Fund
------------------- -------------
INVESTMENT INCOME:
Dividends (unaffiliated)............................................................ $ -- $ 7,821
Interest (unaffiliated)............................................................. 1,696,595 8,090,916
----------- -----------
Total investment income*........................................................... 1,696,595 8,098,737
----------- -----------
EXPENSES:
Investment advisory and management fees............................................. 459,935 1,054,086
Distribution and Service maintenance fees:
Class A............................................................................ 220,535 317,641
Class B............................................................................ -- 100,456
Class C............................................................................ 35,616 318,607
Service fee -- Class W.............................................................. -- 43,513
Transfer agent fees:
Class A............................................................................ 158,028 212,220
Class B............................................................................ -- 23,781
Class C............................................................................ 9,818 74,550
Class W............................................................................ -- 64,376
Registration fees:
Class A............................................................................ 11,494 14,733
Class B............................................................................ -- 7,812
Class C............................................................................ 7,918 8,992
Class W............................................................................ -- 11,300
Custodian and accounting fees....................................................... 18,202 55,756
Reports to shareholders............................................................. 24,429 36,558
Audit and tax fees.................................................................. 31,500 36,693
Legal fees.......................................................................... 11,599 16,989
Trustees' fees and expenses......................................................... 3,653 8,833
Interest expense.................................................................... -- 1,826
Other expenses...................................................................... 8,924 13,611
----------- -----------
Total expenses before fee waivers, expense reimbursements and expense recoupments.. 1,001,651 2,422,333
----------- -----------
Net (fees waived and expenses reimbursed)/recouped by investment advisor (Note 3).. (277,840) (332,304)
----------- -----------
Net expenses....................................................................... 723,811 2,090,029
----------- -----------
Net investment income (loss).......................................................... 972,784 6,008,708
----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments (unaffiliated).......................................................... (244,535) (5,212,044)
Forward contracts................................................................... -- 1,161,074
Net realized foreign exchange gain (loss) on other assets and liabilities............. -- (9,032)
----------- -----------
Net realized gain (loss) on investments and foreign currencies........................ (244,535) (4,060,002)
----------- -----------
Change in unrealized appreciation (depreciation) on:
Investments (unaffiliated).......................................................... (1,431,420) (2,175,466)
Forward contracts................................................................... -- 140,823
Change in unrealized foreign exchange gain (loss) on other assets and liabilities..... -- (8,550)
----------- -----------
Net unrealized gain (loss) on investments and foreign currencies...................... (1,431,420) (2,043,193)
----------- -----------
Net realized and unrealized gain (loss) on investments and foreign currencies......... (1,675,955) (6,103,195)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....................... (703,171) (94,487)
=========== ===========
* Net of foreign withholding taxes on interest and dividends of....................... $ -- $ (291)
=========== ===========
AIG Flexible
Credit
Fund
------------
INVESTMENT INCOME:
Dividends (unaffiliated)............................................................ $ 30,322
Interest (unaffiliated)............................................................. 10,125,116
-----------
Total investment income*........................................................... 10,155,438
-----------
EXPENSES:
Investment advisory and management fees............................................. 1,226,945
Distribution and Service maintenance fees:
Class A............................................................................ 232,320
Class B............................................................................ --
Class C............................................................................ 289,674
Service fee -- Class W.............................................................. 104,297
Transfer agent fees:
Class A............................................................................ 154,978
Class B............................................................................ --
Class C............................................................................ 65,718
Class W............................................................................ 154,215
Registration fees:
Class A............................................................................ 14,895
Class B............................................................................ --
Class C............................................................................ 11,721
Class W............................................................................ 14,741
Custodian and accounting fees....................................................... 42,136
Reports to shareholders............................................................. 33,722
Audit and tax fees.................................................................. 36,032
Legal fees.......................................................................... 16,378
Trustees' fees and expenses......................................................... 8,608
Interest expense.................................................................... 1,205
Other expenses...................................................................... 13,293
-----------
Total expenses before fee waivers, expense reimbursements and expense recoupments.. 2,420,878
-----------
Net (fees waived and expenses reimbursed)/recouped by investment advisor (Note 3).. (628,514)
-----------
Net expenses....................................................................... 1,792,364
-----------
Net investment income (loss).......................................................... 8,363,074
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments (unaffiliated).......................................................... (1,219,640)
Forward contracts................................................................... --
Net realized foreign exchange gain (loss) on other assets and liabilities............. --
-----------
Net realized gain (loss) on investments and foreign currencies........................ (1,219,640)
-----------
Change in unrealized appreciation (depreciation) on:
Investments (unaffiliated).......................................................... 828,965
Forward contracts................................................................... --
Change in unrealized foreign exchange gain (loss) on other assets and liabilities..... (443)
-----------
Net unrealized gain (loss) on investments and foreign currencies...................... 828,522
-----------
Net realized and unrealized gain (loss) on investments and foreign currencies......... (391,118)
-----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....................... 7,971,956
===========
* Net of foreign withholding taxes on interest and dividends of....................... $ --
===========
See Notes to Financial Statements
8
SunAmerica Income Funds
STATEMENTS OF CHANGES IN NET ASSETS
AIG U.S. Government
Securities Fund AIG Strategic Bond Fund
-------------------------- --------------------------
For the For the
six months six months
ended For the year ended For the year
September 30, ended September 30, ended
2018 March 31, 2018 March 31,
(unaudited) 2018 (unaudited) 2018
------------- ------------ ------------- ------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)............................... $ 972,784 $ 1,524,997 $ 6,008,708 $ 10,794,518
Net realized gain (loss) on investments and foreign
currencies................................................ (244,535) (638,420) (4,060,002) 2,956,711
Net unrealized gain (loss) on investments and foreign
currencies................................................ (1,431,420) (1,565,538) (2,043,193) (6,160,474)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting from
operations.................................................. (703,171) (678,961) (94,487) 7,590,755
------------ ------------ ------------ ------------
Distributions to shareholders from:
Net investment income (Class A)............................ (1,096,582) (2,487,089) (3,455,621) (5,155,583)
Net investment income (Class B)............................ -- -- (309,125) (637,563)
Net investment income (Class C)............................ (35,114) (174,406) (995,066) (2,616,763)
Net investment income (Class W)............................ -- -- (1,149,280) (1,770,057)
Net realized gain on securities (Class A).................. -- -- -- --
Net realized gain on securities (Class B).................. -- -- -- --
Net realized gain on securities (Class C).................. -- -- -- --
Net realized gain on securities (Class W).................. -- -- -- --
------------ ------------ ------------ ------------
Total distributions to shareholders.......................... (1,131,696) (2,661,495) (5,909,092) (10,179,966)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting from capital
share transactions (Note 6)................................. (8,239,931) (18,398,158) (60,858,688) 848,412
------------ ------------ ------------ ------------
Total increase (decrease) in net assets...................... (10,074,798) (21,738,614) (66,862,267) (1,740,799)
NET ASSETS:
Beginning of period.......................................... 146,236,129 167,974,743 359,928,377 361,669,176
------------ ------------ ------------ ------------
End of period+............................................... $136,161,331 $146,236,129 $293,066,110 $359,928,377
============ ============ ============ ============
+Includes accumulated undistributed net investment income
(loss) of................................................... $ (33,490) $ 125,422 $ (496,491) $ (596,107)
============ ============ ============ ============
AIG Flexible Credit Fund
--------------------------
For the
six months
ended For the year
September 30, ended
2018 March 31,
(unaudited) 2018
------------- ------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)............................... $ 8,363,074 $ 16,611,951
Net realized gain (loss) on investments and foreign
currencies................................................ (1,219,640) 1,837,310
Net unrealized gain (loss) on investments and foreign
currencies................................................ 828,522 (5,216,653)
------------ ------------
Net increase (decrease) in net assets resulting from
operations.................................................. 7,971,956 13,232,608
------------ ------------
Distributions to shareholders from:
Net investment income (Class A)............................ (3,418,231) (6,747,881)
Net investment income (Class B)............................ -- --
Net investment income (Class C)............................ (1,259,780) (2,890,712)
Net investment income (Class W)............................ (3,632,016) (7,204,700)
Net realized gain on securities (Class A).................. -- --
Net realized gain on securities (Class B).................. -- --
Net realized gain on securities (Class C).................. -- --
Net realized gain on securities (Class W).................. -- --
------------ ------------
Total distributions to shareholders.......................... (8,310,027) (16,843,293)
------------ ------------
Net increase (decrease) in net assets resulting from capital
share transactions (Note 6)................................. 33,758,435 (49,463,029)
------------ ------------
Total increase (decrease) in net assets...................... 33,420,364 (53,073,714)
NET ASSETS:
Beginning of period.......................................... 323,424,442 376,498,156
------------ ------------
End of period+............................................... $356,844,806 $323,424,442
============ ============
+Includes accumulated undistributed net investment income
(loss) of................................................... $ 445,696 $ 392,649
============ ============
See Notes to Financial Statements
9
SunAmerica Income Funds
FINANCIAL HIGHLIGHTS
AIG U.S. GOVERNMENT SECURITIES FUND
-----------------------------------
Net gain
(loss) on
Net investments Distributions Net Net
Asset (both Dividends from net Asset Assets, Ratio of
Value, Net realized Total from from net realized Total Value, end of expenses
beginning investment and investment investment gains on Distri- end of Total period to average
Period Ended of period income(1) unrealized) operations income investments butions period Return(2) (000's) net assets(3)
------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -------- -------------
Class A
-------
03/31/14 $9.91 $0.14 $(0.45) $(0.31) $(0.17) $-- $(0.17) $9.43 (3.11)% $106,747 0.99%
03/31/15 9.43 0.12 0.34 0.46 (0.16) -- (0.16) 9.73 4.94 187,417 0.99
03/31/16 9.73 0.08 (0.05) 0.03 (0.17) -- (0.17) 9.59 0.33 156,468 0.99
03/31/17 9.59 0.09 (0.37) (0.28) (0.16) -- (0.16) 9.15 (2.93) 148,382 0.99
03/31/18 9.15 0.09 (0.13) (0.04) (0.16) -- (0.16) 8.95 (0.46) 138,599 0.99
09/30/2018# 8.95 0.06 (0.11) (0.05) (0.07) -- (0.07) 8.83 (0.53) 129,580 0.99(4)
Class C
-------
03/31/14 $9.91 $0.08 $(0.46) $(0.38) $(0.11) $-- $(0.11) $9.42 (3.84)% $ 7,295 1.64%
03/31/15 9.42 0.06 0.34 0.40 (0.10) -- (0.10) 9.72 4.27 23,999 1.64
03/31/16 9.72 0.01 (0.03) (0.02) (0.11) -- (0.11) 9.59 (0.22) 31,665 1.64
03/31/17 9.59 0.02 (0.37) (0.35) (0.10) -- (0.10) 9.14 (3.66) 19,592 1.64
03/31/18 9.14 0.04 (0.13) (0.09) (0.10) -- (0.10) 8.95 (1.00) 7,637 1.64
09/30/2018# 8.95 0.03 (0.11) (0.08) (0.04) -- (0.04) 8.83 (0.85) 6,581 1.64(4)
Ratio
of net
investment
income to
average Portfolio
net assets(3) Turnover
------------- ---------
1.42% 122%
1.24 57
0.81 36
0.91 95
1.03 29
1.41(4) 18
0.77% 122%
0.61 57
0.16 36
0.26 95
0.38 29
0.76(4) 18
--------
# Unaudited
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements.
(3)Net of the following expense reimbursements, if applicable (based on average
net assets):
03/31/14 03/31/15 03/31/16 03/31/17 03/31/18 09/30/18#(4)
-------- -------- -------- -------- -------- ------------
AIG U.S. Government Securities Fund Class A 0.40% 0.38% 0.37% 0.35% 0.37% 0.38%
AIG U.S. Government Securities Fund
Class C................................... 0.57 0.50 0.39 0.40 0.46 0.64
(4)Annualized
See Notes to Financial Statements
10
SunAmerica Income Funds
FINANCIAL HIGHLIGHTS -- (continued)
AIG STRATEGIC BOND FUND
-----------------------
Net gain
(loss) on
Net investments Distributions Net Net
Asset (both Dividends from net Asset Assets,
Value, Net realized Total from from net realized Total Value, end of
beginning investment and investment investment gains on Distri- end of Total period
Period Ended of period income(1) unrealized) operations income investments butions period Return(2) (000's)
-------------------- --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- --------
Class A
-------
03/31/14 $3.60 $0.14 $(0.06) $ 0.08 $(0.15) $-- $(0.15) $3.53 2.34% $255,821
03/31/15 3.53 0.13 (0.04) 0.09 (0.13) -- (0.13) 3.49 2.70 235,093
03/31/16 3.49 0.12 (0.20) (0.08) (0.14) -- (0.14) 3.27 (2.32) 175,386
03/31/17 3.27 0.10 0.14 0.24 (0.11) -- (0.11) 3.40 7.38 163,163
03/31/18 3.40 0.11 (0.03) 0.08 (0.10) -- (0.10) 3.38 2.41 196,712
09/30/2018# 3.38 0.06 (0.06) 0.00 (0.06) -- (0.06) 3.32 0.12 164,073
Class B
-------
03/31/14 $3.59 $0.12 $(0.05) $ 0.07 $(0.13) $-- $(0.13) $3.53 1.95% $ 46,462
03/31/15 3.53 0.10 (0.03) 0.07 (0.11) -- (0.11) 3.49 2.01 39,733
03/31/16 3.49 0.10 (0.20) (0.10) (0.12) -- (0.12) 3.27 (2.97) 31,038
03/31/17 3.27 0.08 0.14 0.22 (0.09) -- (0.09) 3.40 6.66 29,762
03/31/18 3.40 0.09 (0.04) 0.05 (0.08) -- (0.08) 3.37 1.41 21,875
09/30/2018# 3.37 0.05 (0.05) (0.00) (0.05) -- (0.05) 3.32 0.05 17,270
Class C
-------
03/31/14 $3.61 $0.12 $(0.06) $ 0.06 $(0.13) $-- $(0.13) $3.54 1.69% $197,904
03/31/15 3.54 0.11 (0.04) 0.07 (0.11) -- (0.11) 3.50 2.05 184,282
03/31/16 3.50 0.10 (0.19) (0.09) (0.12) -- (0.12) 3.29 (2.63) 151,197
03/31/17 3.29 0.08 0.13 0.21 (0.09) -- (0.09) 3.41 6.35 128,332
03/31/18 3.41 0.09 (0.03) 0.06 (0.08) -- (0.08) 3.39 1.75 71,103
09/30/2018# 3.39 0.05 (0.06) (0.01) (0.05) -- (0.05) 3.33 (0.21) 57,301
Class W
-------
01/29/15(4)-03/31/15 $3.48 $0.01 $ 0.02 $ 0.03 $(0.02) $-- $(0.02) $3.49 0.99% $ 15,664
03/31/16 3.49 0.12 (0.20) (0.08) (0.14) -- (0.14) 3.27 (2.14) 30,065
03/31/17 3.27 0.11 0.13 0.24 (0.12) -- (0.12) 3.39 7.26 40,412
03/31/18 3.39 0.11 (0.02) 0.09 (0.11) -- (0.11) 3.37 2.65 70,239
09/30/2018# 3.37 0.07 (0.06) 0.01 (0.07) -- (0.07) 3.31 0.20 54,423
Ratio
of net
Ratio of investment
expenses income to
to average average Portfolio
net assets net assets Turnover
---------- ---------- ---------
1.31% 4.01% 158%
1.30 3.62 137
1.34 3.54 108
1.32 3.00 109
1.33 3.15 149
1.15(3)(5) 3.85(3)(5) 57
1.97% 3.35% 158%
1.97 2.95 137
2.01 2.87 108
1.99 2.33 109
2.02 2.46 149
1.86(3)(5) 3.13(3)(5) 57
1.96% 3.37% 158%
1.94 2.98 137
1.98 2.90 108
1.97 2.35 109
1.98 2.50 149
1.81(3)(5) 3.18(3)(5) 57
1.20%(3)(5) 2.73%(3)(5) 137%
1.15 3.71 108
1.14 3.20 109
1.14 3.34 149
0.96(3)(5) 4.03(3)(5) 57
--------
# Unaudited
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements.
(3)Net of the following expense reimbursements and waivers, if applicable
(based on average net assets):
03/31/14 03/31/15 03/31/16 03/31/17 03/31/18 09/30/18#(5)
-------- -------- -------- -------- -------- ------------
AIG Strategic Bond Fund Class A......... -- -- -- -- -- 0.25%
AIG Strategic Bond Fund Class B......... -- -- -- -- -- 0.25
AIG Strategic Bond Fund Class C......... -- -- -- -- -- 0.25
AIG Strategic Bond Fund Class W......... -- 0.69%(5) -- -- -- 0.25
(4)Inception date of class.
(5)Annualized.
See Notes to Financial Statements
11
SunAmerica Income Funds
FINANCIAL HIGHLIGHTS -- (continued)
AIG FLEXIBLE CREDIT FUND
------------------------
Net gain
(loss) on
Net investments Distributions Net
Asset (both Dividends from net Asset Net Assets,
Value, Net realized Total from from net realized Total Value, end of
beginning investment and investment investment gains on Distri- end of Total period
Period Ended of period income(1) unrealized) operations income investment butions period Return(2) (000's)
-------------------- --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -----------
Class A
-------
03/31/14 $3.58 $0.19 $ 0.00 $ 0.19 $(0.18) $-- $(0.18) $3.59 5.60% $ 70,713
03/31/15 3.59 0.15 (0.11) 0.04 (0.17) -- (0.17) 3.46 1.06 127,508
03/31/16 3.46 0.13 (0.16) (0.03) (0.14) -- (0.14) 3.29 (0.93) 125,775
03/31/17 3.29 0.14 0.16 0.30 (0.15) -- (0.15) 3.44 9.11 144,880
03/31/18 3.44 0.16 (0.04) 0.12 (0.16) -- (0.16) 3.40 3.54 133,268
09/30/2018# 3.40 0.09 (0.01) 0.08 (0.09) -- (0.09) 3.39 2.26 138,010
Class C
-------
03/31/14 $3.60 $0.17 $ 0.00 $ 0.17 $(0.16) $-- $(0.16) $3.61 4.92% $ 30,595
03/31/15 3.61 0.13 (0.11) 0.02 (0.15) -- (0.15) 3.48 0.43 45,411
03/31/16 3.48 0.11 (0.16) (0.05) (0.12) -- (0.12) 3.31 (1.54) 61,891
03/31/17 3.31 0.12 0.15 0.27 (0.12) -- (0.12) 3.46 8.38 74,241
03/31/18 3.46 0.14 (0.04) 0.10 (0.14) -- (0.14) 3.42 2.88 58,994
09/30/2018# 3.42 0.08 (0.01) 0.07 (0.07) -- (0.07) 3.42 2.20 57,549
Class W
-------
10/01/14(4)-03/31/15 $3.50 $0.06 $(0.01) $ 0.05 $(0.08) $-- $(0.08) $3.47 1.57% $ 13,632
03/31/16 3.47 0.13 (0.17) (0.04) (0.14) -- (0.14) 3.29 (1.02) 90,441
03/31/17 3.29 0.15 0.15 0.30 (0.15) -- (0.15) 3.44 9.34 157,377
03/31/18 3.44 0.17 (0.04) 0.13 (0.17) -- (0.17) 3.40 3.76 131,163
09/30/2018# 3.40 0.09 (0.00) 0.09 (0.09) -- (0.09) 3.40 2.65 161,286
Ratio
of net
Ratio of investment
expenses income to
to average average Portfolio
net assets net assets Turnover
---------- ---------- ---------
1.36%(3) 5.41%(3) 49%
1.41(3) 4.50(3) 74
1.45(3) 3.92(3) 52
1.43 4.21 69
1.33(3) 4.60(3) 63
1.04(3)(5) 5.07(3)(5) 24
2.01%(3) 4.76%(3) 49%
2.06(3) 3.88(3) 74
2.10(3) 3.27(3) 52
2.07 3.57 69
1.99(3) 3.94(3) 63
1.72(3)(5) 4.40(3)(5) 24
1.25%(3)(5) 4.25%(3)(5) 74%
1.25(3) 4.11(3) 52
1.21 4.44 69
1.12(3) 4.79(3) 63
0.84(3)(5) 5.26(3)(5) 24
--------
# Unaudited
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements.
(3)Net of the following expense reimbursements and waivers, if applicable
(based on average net assets):
03/31/14 03/31/15 03/31/16 03/31/18 09/30/18#(5)
-------- -------- -------- -------- ------------
AIG Flexible Credit Fund Class A........ 0.17% 0.19% 0.03% 0.11% 0.38%
AIG Flexible Credit Fund Class C........ 0.18 0.20 0.02 0.11 0.38
AIG Flexible Credit Fund Class W........ -- 1.12(5) 0.04 0.11 0.38
(4)Inception date of class.
(5)Annualized.
See Notes to Financial Statements
12
AIG U.S. Government Securities Fund
PORTFOLIO PROFILE -- September 30, 2018 -- (unaudited)
Industry Allocation*
United States Treasury Notes.... 49.9%
Government National Mtg. Assoc.. 21.4
United States Treasury Bonds.... 14.1
Federal Home Loan Mtg. Corp..... 7.0
Federal Home Loan Bank.......... 3.4
Federal National Mtg. Assoc..... 2.0
Repurchase Agreements........... 1.9
----
99.7%
====
Credit Quality+#
Aaa........ 98.9%
Not Rated@. 1.1
-----
100.0%
=====
--------
*Calculated as a percentage of net assets
+Source: Moody's
#Calculated as a percentage of total debt issues
@Represents debt issues that either have no rating, or the rating is
unavailable from the data source.
13
AIG U.S. Government Securities Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
Principal Value
Security Description Amount (Note 2)
U.S. GOVERNMENT AGENCIES -- 33.8%
Federal Home Loan Bank -- 3.4%
1.69% due 02/26/2021.................. $ 480,000 $ 466,737
2.00% due 08/15/2019(1)............... 2,250,000 2,246,596
2.14% due 12/05/2022.................. 372,093 356,799
4.50% due 09/13/2019.................. 1,490,000 1,515,196
----------
4,585,328
----------
Federal Home Loan Mtg. Corp. -- 7.0%
3.50% due 08/01/2030.................. 2,620,443 2,637,896
3.50% due 12/01/2044.................. 4,141,736 4,108,373
4.00% due 04/01/2034.................. 1,319,624 1,342,908
Federal Home Loan Mtg. Corp. REMIC
Series 3747, Class WA
3.50% due 10/15/2030(2)............... 1,467,838 1,466,160
----------
9,555,337
----------
Federal National Mtg. Assoc. -- 2.0%
2.50% due 11/01/2027.................. 2,880,743 2,802,463
----------
Government National Mtg. Assoc. -- 21.4%
3.50% due 03/15/2042.................. 279,123 278,816
3.50% due 06/15/2042.................. 1,477,430 1,475,804
3.50% due 07/15/2042.................. 410,109 408,040
3.50% due 02/20/2045.................. 818,292 815,808
4.00% due 03/15/2039.................. 156,362 159,096
4.00% due 06/15/2039.................. 385,515 392,232
4.00% due 12/15/2039.................. 222,715 226,596
4.00% due 08/15/2040.................. 153,593 156,717
4.00% due 11/15/2040.................. 320,614 328,207
4.00% due 09/15/2041.................. 909,367 929,700
4.00% due 10/15/2041.................. 112,606 114,810
4.00% due 11/15/2041.................. 533,059 544,403
4.00% due 12/15/2041.................. 468,582 478,607
4.00% due 01/15/2042.................. 1,436,386 1,469,102
4.00% due 02/15/2042.................. 350,360 358,585
4.00% due 03/15/2042.................. 147,001 149,989
4.50% due 04/20/2044.................. 596,358 624,745
4.50% due 09/15/2033.................. 238,789 248,290
4.50% due 04/15/2039.................. 55,125 57,515
4.50% due 05/15/2039.................. 103,900 108,400
4.50% due 06/15/2039.................. 1,094,838 1,141,999
4.50% due 07/15/2039.................. 321,720 335,045
4.50% due 09/15/2039.................. 147,320 153,721
4.50% due 11/15/2039.................. 92,711 96,620
4.50% due 12/15/2039.................. 294,336 307,026
4.50% due 02/15/2040.................. 729,032 760,792
4.50% due 03/15/2040.................. 332,467 346,791
4.50% due 04/15/2040.................. 134,521 140,372
4.50% due 07/15/2040.................. 371,118 387,317
4.50% due 03/15/2041.................. 1,056,667 1,102,359
4.50% due 04/15/2041.................. 176,544 182,753
4.50% due 06/15/2041.................. 181,955 188,173
4.50% due 08/15/2041.................. 139,643 144,415
5.00% due 08/15/2033.................. 307,282 324,646
5.00% due 10/15/2033.................. 552,747 580,225
5.00% due 05/15/2035.................. 78,022 81,296
5.00% due 08/15/2035.................. 290,802 308,853
5.00% due 05/15/2036.................. 69,865 74,219
5.00% due 09/15/2036.................. 112,843 119,860
5.00% due 01/15/2037.................. 155,179 164,731
Principal Value
Security Description Amount (Note 2)
Government National Mtg. Assoc. (continued)
5.00% due 03/15/2037..................... $ 40,970 $ 43,499
5.00% due 04/15/2037..................... 273,529 285,564
5.00% due 04/15/2038..................... 353,293 373,949
5.00% due 05/15/2038..................... 178,771 189,811
5.00% due 08/15/2038..................... 488,872 519,498
5.00% due 02/15/2039..................... 79,994 84,483
5.00% due 03/15/2039..................... 110,642 117,575
5.00% due 04/15/2039..................... 78,605 83,530
5.00% due 07/20/2039..................... 815,900 872,528
5.00% due 08/15/2039..................... 230,312 244,593
5.00% due 09/20/2039..................... 2,659,124 2,833,156
5.00% due 10/15/2039..................... 549,448 583,471
5.00% due 11/15/2039..................... 420,595 446,683
5.00% due 12/15/2039..................... 401,248 426,272
5.00% due 04/15/2040..................... 375,147 392,304
5.00% due 05/15/2040..................... 804,739 849,599
5.00% due 07/20/2045..................... 338,934 359,097
5.50% due 06/15/2033..................... 493,217 535,395
5.50% due 07/15/2033..................... 90,695 98,431
5.50% due 10/15/2033..................... 132,387 143,771
5.50% due 01/15/2034..................... 387,757 420,502
5.50% due 02/15/2034..................... 238,549 256,980
5.50% due 04/20/2035..................... 391,168 421,451
5.50% due 09/15/2035..................... 350,978 387,889
5.50% due 10/15/2035..................... 164,493 178,672
5.50% due 02/15/2038..................... 126,328 136,902
5.50% due 04/15/2038..................... 70,752 75,861
5.50% due 09/15/2039..................... 64,074 68,828
5.50% due 03/15/2040..................... 241 262
6.00% due 04/15/2028..................... 118,653 129,548
6.00% due 08/15/2033..................... 208,799 228,007
6.00% due 12/15/2033..................... 68,399 73,900
6.00% due 09/20/2038..................... 842,594 915,476
6.50% due 10/15/2031..................... 51,714 56,735
-----------
29,100,897
-----------
Total U.S. Government Agencies
(cost $47,195,214)....................... 46,044,025
-----------
U.S. GOVERNMENT TREASURIES -- 64.0%
United States Treasury Bonds -- 14.1%
2.00% due 08/31/2021..................... 2,000,000 1,951,094
2.38% due 12/31/2020..................... 2,000,000 1,979,453
2.50% due 02/15/2045..................... 1,000,000 875,820
4.25% due 11/15/2040..................... 8,000,000 9,361,875
4.75% due 02/15/2041..................... 4,000,000 5,004,844
-----------
19,173,086
-----------
United States Treasury Notes -- 49.9%
1.38% due 12/15/2019..................... 3,000,000 2,952,891
1.38% due 04/30/2020..................... 2,500,000 2,445,801
1.38% due 05/31/2021..................... 21,000,000 20,196,094
1.39% due 04/15/2019..................... 2,500,000 2,479,297
1.50% due 06/15/2020..................... 3,000,000 2,935,781
1.50% due 02/28/2023..................... 2,000,000 1,881,094
1.63% due 08/31/2019..................... 2,000,000 1,981,797
1.88% due 03/31/2022..................... 2,500,000 2,414,258
2.00% due 01/31/2020..................... 3,000,000 2,971,406
2.00% due 09/30/2020..................... 3,000,000 2,951,836
2.00% due 02/15/2025..................... 5,000,000 4,708,984
14
AIG U.S. Government Securities Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. GOVERNMENT TREASURIES (continued)
United States Treasury Notes (continued)
2.00% due 08/15/2025.................. $3,000,000 $ 2,811,328
2.00% due 11/15/2026.................. 2,700,000 2,497,922
2.13% due 08/31/2020.................. 2,500,000 2,467,480
2.13% due 03/31/2024.................. 2,000,000 1,914,531
2.25% due 02/29/2020.................. 2,000,000 1,986,094
2.25% due 11/15/2027.................. 2,000,000 1,872,031
2.63% due 02/28/2023.................. 3,000,000 2,961,562
2.75% due 11/15/2023.................. 2,500,000 2,475,684
3.13% due 05/15/2019.................. 1,000,000 1,003,828
------------
67,909,699
------------
Total U.S. Government Treasuries
(cost $85,430,341).................... 87,082,785
------------
Total Long-Term Investment Securities
(cost $132,625,555)................... 133,126,810
------------
Principal Value
Security Description Amount (Note 2)
REPURCHASE AGREEMENTS -- 1.9%
Agreement with Fixed Income Clearing Corp.,
bearing interest at 0.42%, dated
09/28/2018, to be repurchased 10/01/2018
in the amount of $2,636,092 and
collateralized by $2,680,000 of United States
Treasury Bonds, bearing interest at 3.13%,
due 08/15/2044 and by $30,000 of United
States Treasury Bonds, bearing interest at
3.00%, due 11/15/2044 having an
approximate combined value of $2,691,109.
(cost $2,636,000).............................. $2,636,000 2,636,000
------------
TOTAL INVESTMENTS
(cost $135,261,555)(3)......................... 99.7% 135,762,810
Other assets less liabilities..................... 0.3 398,521
---------- ------------
NET ASSETS 100.0% $136,161,331
========== ============
--------
(1)"Step-up" security where the rate increases ("steps-up") at a predetermined
rate. The rate reflected is as of September 30, 2018.
(2)Collateralized Mortgage Obligation
(3)See Note 5 for cost of investments on a tax basis.
REMIC --Real Estate Investment Conduit
The following is a summary of the inputs used to value the Fund's net assets as
of September 30, 2018 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- ------------
ASSETS:
Investments at Value:*
U.S. Government Agencies.... $-- $ 46,044,025 $-- $ 46,044,025
U.S. Government Treasuries.. -- 87,082,785 -- 87,082,785
Repurchase Agreements....... -- 2,636,000 -- 2,636,000
--- ------------ --- ------------
Total Investments at Value.. $-- $135,762,810 $-- $135,762,810
=== ============ === ============
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no transfers between Levels during the reporting
period.
See Notes to Financial Statements
15
AIG Strategic Bond Fund
PORTFOLIO PROFILE -- September 30, 2018 -- (unaudited)
Industry Allocation*
Sovereign.............................. 17.0%
Federal National Mtg. Assoc............ 12.3
Federal Home Loan Mtg. Corp............ 6.2
Oil Companies-Exploration & Production. 3.0
Oil Companies-Integrated............... 2.8
Diversified Banking Institutions....... 2.6
Cable/Satellite TV..................... 2.5
Banks-Commercial....................... 2.0
United States Treasury Notes........... 1.9
Pipelines.............................. 1.8
Real Estate Investment Trusts.......... 1.7
Telephone-Integrated................... 1.6
Registered Investment Companies........ 1.4
Cellular Telecom....................... 1.3
Electric-Integrated.................... 1.3
Transport-Rail......................... 1.2
Diversified Financial Services......... 1.1
Medical-Drugs.......................... 1.0
Chemicals-Diversified.................. 0.9
Government National Mtg. Assoc......... 0.9
Satellite Telecom...................... 0.9
Oil-Field Services..................... 0.8
Finance-Consumer Loans................. 0.8
Gambling (Non-Hotel)................... 0.6
Oil & Gas Drilling..................... 0.6
Television............................. 0.6
Steel-Producers........................ 0.6
Metal-Copper........................... 0.6
Auto-Cars/Light Trucks................. 0.5
Transport-Marine....................... 0.5
Metal Processors & Fabrication......... 0.5
Chemicals-Specialty.................... 0.5
Real Estate Management/Services........ 0.5
Central Bank........................... 0.5
Non-Ferrous Metals..................... 0.5
Electric-Distribution.................. 0.4
Paper & Related Products............... 0.4
Computer Services...................... 0.4
Building-Residential/Commercial........ 0.4
Building & Construction-Misc........... 0.4
Insurance-Property/Casualty............ 0.4
Broadcast Services/Program............. 0.4
Building & Construction Products-Misc.. 0.4
Enterprise Software/Service............ 0.4
Cosmetics & Toiletries................. 0.4
Metal-Diversified...................... 0.4
Rental Auto/Equipment.................. 0.4
Finance-Investment Banker/Broker....... 0.4
Finance-Other Services................. 0.4
Computer Software...................... 0.4
Computers-Integrated Systems........... 0.3
Retail-Office Supplies................. 0.3
Agricultural Chemicals................. 0.3
Computers.............................. 0.3
Auto-Heavy Duty Trucks................. 0.3
Batteries/Battery Systems.............. 0.3
Medical-HMO............................ 0.3
Containers-Metal/Glass................. 0.3
Auto/Truck Parts & Equipment-Original.. 0.3
Commercial Services-Finance............ 0.3
Hotels/Motels.......................... 0.3
Aerospace/Defense-Equipment.......... 0.3%
Physicians Practice Management....... 0.3
Finance-Credit Card.................. 0.3
Computers-Memory Devices............. 0.3
Machinery-General Industrial......... 0.3
Marine Services...................... 0.3
E-Commerce/Services.................. 0.3
Building Societies................... 0.3
Insurance-Life/Health................ 0.2
Savings & Loans/Thrifts.............. 0.2
Food-Retail.......................... 0.2
Containers-Paper/Plastic............. 0.2
Building-Heavy Construction.......... 0.2
Quarrying............................ 0.2
Printing-Commercial.................. 0.2
Coal................................. 0.2
Insurance-Multi-line................. 0.2
Security Services.................... 0.2
Food-Meat Products................... 0.2
Electronic Parts Distribution........ 0.2
Machinery-Construction & Mining...... 0.2
Multimedia........................... 0.2
Food-Misc./Diversified............... 0.2
Finance-Mortgage Loan/Banker......... 0.2
Poultry.............................. 0.2
Internet Financial Services.......... 0.2
Energy-Alternate Sources............. 0.2
Transport-Equipment & Leasing........ 0.2
Real Estate Operations & Development. 0.2
Electric-Generation.................. 0.2
Medical-Nursing Homes................ 0.2
Metal-Iron........................... 0.2
Machinery-Pumps...................... 0.2
Insurance Brokers.................... 0.2
Retail-Appliances.................... 0.2
Transport-Services................... 0.2
Retail-Automobile.................... 0.2
Retail-Major Department Stores....... 0.2
Circuit Boards....................... 0.2
Medical-Generic Drugs................ 0.2
Internet Connectivity Services....... 0.2
Building Products-Cement............. 0.2
Radio................................ 0.2
Distribution/Wholesale............... 0.2
Internet Application Software........ 0.2
Retail-Pawn Shops.................... 0.2
Telecom Services..................... 0.2
Independent Power Producers.......... 0.2
Schools.............................. 0.2
Finance-Commercial................... 0.2
Consumer Products-Misc............... 0.2
Retail-Leisure Products.............. 0.2
Banks-Super Regional................. 0.2
Investment Companies................. 0.2
Publishing-Books..................... 0.2
Leisure Products..................... 0.2
Machinery-Farming.................... 0.2
Platinum............................. 0.1
Banks-Special Purpose................ 0.1
Airlines............................. 0.1
Commercial Services.................. 0.1
16
AIG Strategic Bond Fund
PORTFOLIO PROFILE -- September 30, 2018 -- (unaudited) (continued)
Industry Allocation* (continued)
Medical-Hospitals.................... 0.1%
Brewery.............................. 0.1
Machinery-Thermal Process............ 0.1
Water................................ 0.1
Food-Dairy Products.................. 0.1
Applications Software................ 0.1
Retail-Sporting Goods................ 0.1
Retail-Petroleum Products............ 0.1
Building Products-Doors & Windows.... 0.1
Transport-Truck...................... 0.1
Theaters............................. 0.1
Resorts/Theme Parks.................. 0.1
Retail-Hypermarkets.................. 0.1
Racetracks........................... 0.1
Soap & Cleaning Preparation.......... 0.1
Diversified Manufacturing Operations. 0.1
Dialysis Centers..................... 0.1
Footwear & Related Apparel........... 0.1
Oil Field Machinery & Equipment...... 0.1
Internet Content-Entertainment....... 0.1
Building Products-Air & Heating...... 0.1
Diversified Minerals................. 0.1
Pharmacy Services.................... 0.1
Beverages-Non-alcoholic.............. 0.1
Tools-Hand Held...................... 0.1
Gas-Distribution..................... 0.1
Diamonds/Precious Stones............. 0.1
Finance-Auto Loans................... 0.1
Retail-Restaurants................... 0.1
Electronic Components-Misc........... 0.1
Retail-Mail Order.................... 0.1
Machinery-Electrical................. 0.1
Trucking/Leasing..................... 0.1
Banks-Money Center................... 0.1
Medical Labs & Testing Services...... 0.1
Medical Instruments.................. 0.1
Retail-Discount...................... 0.1
United States Treasury Bonds......... 0.1
----
99.2%
====
Credit Quality+#
Aaa........ 22.0%
Aa......... 1.9%
A.......... 6.8%
Baa........ 15.6%
Ba......... 14.1%
B.......... 27.1%
Caa........ 5.1%
Not Rated@. 7.4%
-----
100.0%
=====
--------
*Calculated as a percentage of net assets
+Source: Moody's
#Calculated as a percentage of total debt issues
@Represents debt issues that either have no rating, or the rating is
unavailable from the data source.
17
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
Principal Value
Security Description Amount(17) (Note 2)
ASSET BACKED SECURITIES -- 1.0%
Diversified Financial Services -- 1.0%
American Express Credit Account Master Trust
Series 2018-4, Class A
2.99% due 12/15/2023......................... $100,000 $ 99,664
American Express Credit Account Master Trust
Series 2018-8, Class A
3.18% due 04/15/2024......................... 167,000 166,759
Avis Budget Rental Car Funding AESOP LLC
Series 2015-1A, Class A
2.50% due 07/20/2021*........................ 100,000 98,677
BA Credit Card Trust
Series 2018-A2, Class A2
3.00% due 09/15/2023......................... 104,000 103,726
CarMax Auto Owner Trust
Series 2016-3, Class A4
1.60% due 01/18/2022......................... 150,000 146,159
Chase Mtg. Finance Trust VRS
Series 2016-2, Class M2
3.75% due 12/25/2045*(1)(2).................. 353,589 345,976
Citibank Credit Card Issuance Trust
Series 2018-A6, Class A6
3.21% due 12/07/2024......................... 100,000 99,685
COMM Mtg. Trust VRS
Series 2016-787S, Class B
3.96% due 02/10/2036*(2)(3).................. 132,000 129,387
DBGS Mtg. Trust FRS
Series 2018-BIOD, Class A
2.96% (3 ML+0.80%)
due 05/15/2035*(3)........................... 946,651 946,641
Discover Card Execution Note Trust
Series 2015-A4, Class A4
2.19% due 04/17/2023......................... 117,000 114,897
Ford Credit Auto Owner Trust/Ford Credit
Series 2018-2, Class A
3.47% due 01/15/2030*........................ 100,000 99,833
Ford Credit Floorplan Master Owner Trust
Series 2017-1, Class A1
2.07% due 05/15/2022......................... 81,000 79,690
GS Mtg. Securities Trust
Series 2015-GC28, Class A2
2.90% due 02/10/2048(3)...................... 102,000 101,805
Morgan Stanley Capital Barclays Bank Trust
Series 2016-MART, Class A
2.20% due 09/13/2031*(3)..................... 185,000 178,733
Synchrony Credit Card Master Note Trust
Series 2016-2, Class A
2.21% due 05/15/2024......................... 100,000 97,330
Toyota Auto Receivables Owner Trust
Series 2018-C, Class A4
3.13% due 02/15/2024......................... 125,000 124,689
World Financial Network Credit Card Master
Trust
Series 2017-C, Class A
2.31% due 08/15/2024......................... 100,000 98,080
----------
Total Asset Backed Securities
(cost $3,068,657)............................ 3,031,731
----------
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES -- 30.8%
Advertising Agencies -- 0.0%
Interpublic Group of Cos., Inc.
Senior Notes
4.20% due 04/15/2024............... $ 61,000 $ 61,081
Interpublic Group of Cos., Inc.
Senior Notes
4.65% due 10/01/2028............... 50,000 50,075
--------
111,156
--------
Aerospace/Defense -- 0.0%
General Dynamics Corp.
Company Guar. Notes
2.88% due 05/11/2020............... 92,000 91,778
--------
Aerospace/Defense-Equipment -- 0.3%
Harris Corp.
Senior Notes
4.40% due 06/15/2028............... 77,000 77,277
Triumph Group, Inc.
Company Guar. Notes
4.88% due 04/01/2021............... 439,000 423,635
United Technologies Corp.
Senior Notes
1.15% due 05/18/2024............... EUR 100,000 116,695
United Technologies Corp.
Senior Notes
1.90% due 05/04/2020............... 122,000 119,520
United Technologies Corp.
Senior Notes
3.95% due 08/16/2025............... 60,000 59,716
--------
796,843
--------
Airlines -- 0.0%
Atlas Air, Inc.
Pass-Through Certs.
Series 1999-1, Class B
7.63% due 01/02/2019(4)............ 24,546 24,634
--------
Applications Software -- 0.1%
CDK Global, Inc.
Senior Notes
5.88% due 06/15/2026............... 346,000 356,511
--------
Auto-Cars/Light Trucks -- 0.4%
Daimler Finance North America LLC
Company Guar. Notes
2.00% due 07/06/2021*.............. 78,000 74,878
Daimler Finance North America LLC
Company Guar. Notes
3.10% due 05/04/2020*.............. 274,000 273,168
General Motors Co.
Senior Notes
5.00% due 10/01/2028............... 213,000 210,353
Nissan Motor Acceptance Corp.
Senior Notes
2.15% due 09/28/2020*.............. 271,000 264,223
Nissan Motor Acceptance Corp.
Senior Notes
2.65% due 07/13/2022*.............. 203,000 194,828
18
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Auto-Cars/Light Trucks (continued)
Toyota Motor Credit Corp.
Senior Notes
2.95% due 04/13/2021.................. $189,000 $ 188,134
----------
1,205,584
----------
Auto-Heavy Duty Trucks -- 0.3%
Allison Transmission, Inc.
Senior Notes
5.00% due 10/01/2024*................. 361,000 359,195
JB Poindexter & Co., Inc.
Senior Notes
7.13% due 04/15/2026*................. 440,000 456,500
----------
815,695
----------
Banks-Commercial -- 0.6%
Associated Bank NA
Senior Notes
3.50% due 08/13/2021.................. 80,000 79,599
BankUnited, Inc.
Senior Notes
4.88% due 11/17/2025.................. 313,000 317,933
Citizens Financial Group, Inc.
Sub. Notes
4.15% due 09/28/2022*................. 375,000 373,121
First Horizon National Corp.
Senior Notes
3.50% due 12/15/2020.................. 212,000 212,312
Regions Financial Corp.
Senior Notes
2.75% due 08/14/2022.................. 155,000 149,470
Regions Financial Corp.
Sub. Notes
7.38% due 12/10/2037.................. 319,000 410,359
Santander Holdings USA, Inc.
Senior Notes
3.40% due 01/18/2023.................. 230,000 221,795
SunTrust Bank
Senior Notes
3.50% due 08/02/2022.................. 108,000 107,633
----------
1,872,222
----------
Banks-Super Regional -- 0.1%
Capital One Financial Corp.
Sub. Notes
3.75% due 07/28/2026.................. 64,000 59,723
Wells Fargo & Co.
Senior Notes
3.00% due 02/19/2025.................. 233,000 220,556
----------
280,279
----------
Batteries/Battery Systems -- 0.3%
Energizer Gamma Acquisition, Inc.
Senior Sec. Notes
6.38% due 07/15/2026*................. 550,000 568,562
EnerSys
Company Guar. Notes
5.00% due 04/30/2023*................. 331,000 334,310
----------
902,872
----------
Principal Value
Security Description Amount(17) (Note 2)
Beverages-Non-alcoholic -- 0.1%
Keurig Dr Pepper, Inc.
Company Guar. Notes
4.06% due 05/25/2023*....................... $ 66,000 $ 66,115
Keurig Dr Pepper, Inc.
Company Guar. Notes
4.42% due 05/25/2025*....................... 178,000 178,751
Keurig Dr Pepper, Inc.
Company Guar. Notes
4.60% due 05/25/2028*....................... 31,000 31,151
--------
276,017
--------
Brewery -- 0.1%
Anheuser-Busch InBev Finance, Inc.
Company Guar. Notes
3.65% due 02/01/2026........................ 75,000 72,877
Anheuser-Busch InBev Finance, Inc.
Company Guar. Notes
4.70% due 02/01/2036........................ 57,000 57,076
Anheuser-Busch InBev Finance, Inc.
Company Guar. Notes
4.90% due 02/01/2046........................ 180,000 182,038
Anheuser-Busch InBev Worldwide, Inc.
Company Guar. Notes
4.60% due 04/15/2048........................ 58,000 56,184
--------
368,175
--------
Broadcast Services/Program -- 0.3%
Discovery Communications LLC
Company Guar. Notes
3.50% due 06/15/2022*....................... 73,000 71,812
Discovery Communications LLC
Company Guar. Notes
3.90% due 11/15/2024*....................... 129,000 126,330
Discovery Communications LLC
Company Guar. Notes
5.00% due 09/20/2037........................ 37,000 36,078
Univision Communications, Inc.
Senior Sec. Notes
5.13% due 05/15/2023*....................... 695,000 663,725
--------
897,945
--------
Building & Construction Products-Misc. -- 0.3%
Owens Corning
Senior Notes
4.30% due 07/15/2047........................ 242,000 195,251
Owens Corning
Senior Notes
4.40% due 01/30/2048........................ 72,000 59,626
Standard Industries, Inc.
Senior Notes
6.00% due 10/15/2025*....................... 575,000 587,937
--------
842,814
--------
Building & Construction-Misc. -- 0.3%
Frontdoor, Inc.
Senior Notes
6.75% due 08/15/2026*....................... 419,000 431,570
19
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Building & Construction-Misc. (continued)
Weekley Homes LLC/Weekley Finance Corp.
Senior Notes
6.00% due 02/01/2023......................... $456,000 $441,180
--------
872,750
--------
Building Products-Cement -- 0.1%
Martin Marietta Materials, Inc.
Senior Notes
4.25% due 12/15/2047......................... 52,000 44,409
Vulcan Materials Co.
Senior Notes
4.70% due 03/01/2048*........................ 126,000 115,661
--------
160,070
--------
Building Products-Wood -- 0.0%
Masco Corp.
Senior Notes
4.50% due 05/15/2047......................... 89,000 76,462
--------
Building-Heavy Construction -- 0.2%
Tutor Perini Corp.
Company Guar. Notes
6.88% due 05/01/2025*........................ 690,000 708,975
--------
Building-Residential/Commercial -- 0.2%
Toll Brothers Finance Corp.
Company Guar. Notes
4.35% due 02/15/2028......................... 148,000 135,834
William Lyon Homes, Inc.
Company Guar. Notes
6.00% due 09/01/2023......................... 456,000 440,040
--------
575,874
--------
Cable/Satellite TV -- 1.2%
Block Communications, Inc.
Senior Notes
6.88% due 02/15/2025*........................ 844,000 865,100
CCO Holdings LLC/CCO Holdings Capital Corp.
Senior Notes
5.00% due 02/01/2028*........................ 203,000 190,800
CCO Holdings LLC/CCO Holdings Capital Corp.
Senior Notes
5.38% due 05/01/2025*........................ 300,000 297,750
CCO Holdings LLC/CCO Holdings Capital Corp.
Senior Notes
5.88% due 04/01/2024*........................ 378,000 384,142
Charter Communications Operating LLC/Charter
Communications Operating Capital
Senior Sec. Notes
5.38% due 04/01/2038......................... 14,000 13,618
Charter Communications Operating LLC/Charter
Communications Operating Capital
Senior Sec. Notes
5.38% due 05/01/2047......................... 27,000 25,583
Charter Communications Operating LLC/Charter
Communications Operating Capital
Senior Sec. Notes
5.75% due 04/01/2048......................... 43,000 43,027
Principal Value
Security Description Amount(17) (Note 2)
Cable/Satellite TV (continued)
Charter Communications Operating LLC/Charter
Communications Operating Capital
Senior Sec. Notes
6.38% due 10/23/2035........................... $ 48,000 $ 51,624
Comcast Corp.
Company Guar. Notes
3.60% due 03/01/2024........................... 110,000 109,173
Comcast Corp.
Company Guar. Notes
3.90% due 03/01/2038........................... 33,000 30,246
CSC Holdings LLC
Company Guar. Notes
5.50% due 04/15/2027*.......................... 630,000 611,100
CSC Holdings LLC
Senior Notes
6.75% due 11/15/2021........................... 330,000 347,737
DISH DBS Corp.
Company Guar. Notes
6.75% due 06/01/2021........................... 390,000 398,287
----------
3,368,187
----------
Cellular Telecom -- 1.0%
Sprint Corp.
Company Guar. Notes
7.25% due 09/15/2021........................... 435,000 460,013
Sprint Corp.
Company Guar. Notes
7.88% due 09/15/2023........................... 1,972,000 2,127,295
Sprint Spectrum Co. LLC/Sprint Spectrum Co. II
LLC/Sprint Spectrum Co. III LLC
Senior Sec. Notes
4.74% due 09/20/2029*.......................... 213,000 212,904
----------
2,800,212
----------
Chemicals-Specialty -- 0.3%
GCP Applied Technologies, Inc.
Company Guar. Notes
5.50% due 04/15/2026*.......................... 375,000 368,906
International Flavors & Fragrances, Inc.
Senior Notes
5.00% due 09/26/2048........................... 47,000 47,135
Kraton Polymers LLC/Kraton Polymers Capital
Corp.
Company Guar. Notes
7.00% due 04/15/2025*.......................... 450,000 462,375
Lubrizol Corp.
Company Guar. Notes
6.50% due 10/01/2034........................... 107,000 136,317
----------
1,014,733
----------
Circuit Boards -- 0.2%
TTM Technologies, Inc.
Company Guar. Notes
5.63% due 10/01/2025*.......................... 520,000 521,300
----------
20
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Coal -- 0.2%
SunCoke Energy Partners LP/SunCoke Energy
Partners Finance Corp.
Company Guar. Notes
7.50% due 06/15/2025*..................... $ 675,000 $ 695,250
----------
Coatings/Paint -- 0.0%
RPM International, Inc.
Senior Notes
4.25% due 01/15/2048...................... 25,000 21,921
----------
Commercial Services -- 0.1%
Ecolab, Inc.
Senior Notes
1.00% due 01/15/2024...................... EUR 250,000 293,398
Ecolab, Inc.
Senior Notes
2.38% due 08/10/2022...................... 103,000 98,740
----------
392,138
----------
Commercial Services-Finance -- 0.2%
Refinitiv US Holdings, Inc.
Senior Sec. Notes
6.25% due 05/15/2026*..................... 137,000 137,506
Refinitiv US Holdings, Inc.
Company Guar. Notes
8.25% due 11/15/2026*..................... 330,000 328,000
----------
465,506
----------
Computer Services -- 0.3%
Harland Clarke Holdings Corp.
Senior Sec. Notes
8.38% due 08/15/2022*..................... 707,000 677,836
IBM Credit LLC
Senior Notes
2.65% due 02/05/2021...................... 330,000 326,282
----------
1,004,118
----------
Computer Software -- 0.2%
Rackspace Hosting, Inc.
Company Guar. Notes
8.63% due 11/15/2024*..................... 450,000 437,670
----------
Computers -- 0.3%
Apple, Inc.
Senior Notes
1.38% due 05/24/2029...................... EUR 185,000 217,216
Apple, Inc.
Senior Notes
2.85% due 05/06/2021...................... 88,000 87,560
Diamond 1 Finance Corp./Diamond 2 Finance
Corp.
Senior Sec. Notes
6.02% due 06/15/2026*..................... 370,000 395,468
Diamond 1 Finance Corp./Diamond 2 Finance
Corp.
Senior Sec. Notes
8.10% due 07/15/2036*..................... 181,000 217,216
Principal Value
Security Description Amount(17) (Note 2)
Computers (continued)
Hewlett Packard Enterprise Co.
Senior Notes
6.20% due 10/15/2035...................... $ 32,000 $ 32,898
----------
950,358
----------
Computers-Integrated Systems -- 0.3%
Diebold Nixdorf, Inc.
Company Guar. Notes
8.50% due 04/15/2024...................... 738,000 527,670
Everi Payments, Inc.
Company Guar. Notes
7.50% due 12/15/2025*..................... 470,000 474,700
----------
1,002,370
----------
Consumer Products-Misc. -- 0.2%
Central Garden & Pet Co.
Company Guar. Notes
5.13% due 02/01/2028...................... 475,000 451,250
----------
Containers-Metal/Glass -- 0.3%
Crown Cork & Seal Co., Inc.
Company Guar. Notes
7.38% due 12/15/2026...................... 374,000 406,725
Owens-Brockway Glass Container, Inc.
Company Guar. Notes
5.38% due 01/15/2025*..................... 486,000 481,140
----------
887,865
----------
Containers-Paper/Plastic -- 0.2%
Crown Americas LLC/Crown Americas Capital
Corp. VI
Company Guar. Notes
4.75% due 02/01/2026*..................... 278,000 265,490
Multi-Color Corp.
Company Guar. Notes
4.88% due 11/01/2025*..................... 475,000 444,125
----------
709,615
----------
Cosmetics & Toiletries -- 0.4%
Coty, Inc.
Company Guar. Notes
6.50% due 04/15/2026*..................... 625,000 582,422
First Quality Finance Co., Inc.
Company Guar. Notes
5.00% due 07/01/2025*..................... 548,000 512,380
----------
1,094,802
----------
Data Processing/Management -- 0.0%
Fiserv, Inc.
Senior Notes
4.20% due 10/01/2028...................... 69,000 69,145
----------
Distribution/Wholesale -- 0.2%
H&E Equipment Services, Inc.
Company Guar. Notes
5.63% due 09/01/2025...................... 475,000 473,813
----------
21
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Diversified Banking Institutions -- 1.1%
Bank of America Corp.
Senior Notes
0.75% due 07/26/2023...................... EUR 325,000 $ 375,824
Bank of America Corp.
Senior Notes
3.55% due 03/05/2024...................... 72,000 71,173
Bank of America Corp.
Senior Notes
3.86% due 07/23/2024...................... 88,000 87,999
Bank of America Corp.
Sub. Notes
4.18% due 11/25/2027...................... 273,000 266,457
Citigroup, Inc.
Senior Notes
2.88% due 07/24/2023...................... 106,000 102,476
Citigroup, Inc.
Sub. Notes
4.45% due 09/29/2027...................... 301,000 297,522
Citigroup, Inc.
Senior Notes
4.65% due 07/23/2048...................... 59,000 59,669
Citigroup, Inc.
Sub. Notes
4.75% due 05/18/2046...................... 30,000 29,263
Citigroup, Inc.
Sub. Notes
6.00% due 10/31/2033...................... 50,000 55,931
Goldman Sachs Group, Inc.
Senior Notes
1.25% due 05/01/2025...................... EUR 250,000 286,590
Goldman Sachs Group, Inc.
Senior Notes
2.13% due 09/30/2024...................... EUR 215,000 261,258
Goldman Sachs Group, Inc.
Senior Notes
4.02% due 10/31/2038...................... 123,000 114,012
Goldman Sachs Group, Inc.
Sub. Notes
6.75% due 10/01/2037...................... 118,000 141,949
JPMorgan Chase & Co.
Senior Notes
2.55% due 03/01/2021...................... 171,000 167,931
Morgan Stanley
Senior Notes
1.75% due 03/11/2024...................... EUR 140,000 167,781
Morgan Stanley
Sub. Notes
5.00% due 11/24/2025...................... 606,000 627,626
----------
3,113,461
----------
Diversified Manufacturing Operations -- 0.0%
Carlisle Cos., Inc.
Senior Notes
3.75% due 12/01/2027...................... 79,000 74,872
----------
Electric-Generation -- 0.1%
Basin Electric Power Cooperative
1st Mtg. Notes
4.75% due 04/26/2047*..................... 259,000 262,216
----------
Principal Value
Security Description Amount(17) (Note 2)
Electric-Integrated -- 0.6%
Dominion Resources, Inc.
Senior Notes
5.25% due 08/01/2033.................... $187,000 $ 197,420
Duke Energy Progress LLC
1st Mtg. Notes
2.80% due 05/15/2022.................... 72,000 70,621
Exelon Corp.
Junior Sub. Notes
3.50% due 06/01/2022.................... 90,000 88,429
FirstEnergy Corp.
Senior Notes
7.38% due 11/15/2031.................... 321,000 414,325
Georgia Power Co.
Senior Notes
2.00% due 09/08/2020.................... 109,000 106,271
Pacific Gas & Electric Co.
Senior Notes
3.30% due 12/01/2027.................... 200,000 182,846
Public Service Co. of Colorado
1st Mtg. Bonds
3.70% due 06/15/2028.................... 128,000 128,014
Public Service Co. of Colorado
1st Mtg. Bonds
4.10% due 06/15/2048.................... 88,000 87,247
South Carolina Electric & Gas Co.
1st Mtg. Notes
4.35% due 02/01/2042.................... 62,000 59,305
South Carolina Electric & Gas Co.
1st Mtg. Bonds
5.10% due 06/01/2065.................... 228,000 228,362
Southern California Edison Co.
1st Mtg. Notes
4.13% due 03/01/2048.................... 83,000 79,340
----------
1,642,180
----------
Electronic Components-Misc. -- 0.0%
Jabil, Inc.
Senior Notes
3.95% due 01/12/2028.................... 20,000 18,738
----------
Electronic Measurement Instruments -- 0.0%
Trimble, Inc.
Senior Notes
4.75% due 12/01/2024.................... 10,000 10,126
Trimble, Inc.
Senior Notes
4.90% due 06/15/2028.................... 119,000 119,676
----------
129,802
----------
Electronic Parts Distribution -- 0.2%
Ingram Micro, Inc.
Senior Notes
5.45% due 12/15/2024.................... 666,000 656,091
----------
Electronic Security Devices -- 0.0%
Allegion US Holding Co., Inc.
Company Guar. Notes
3.20% due 10/01/2024.................... 31,000 28,968
----------
22
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Energy-Alternate Sources -- 0.2%
Pattern Energy Group, Inc.
Company Guar. Notes
5.88% due 02/01/2024*....................... $630,000 $ 636,300
----------
Enterprise Software/Service -- 0.4%
Donnelley Financial Solutions, Inc.
Company Guar. Notes
8.25% due 10/15/2024........................ 660,000 696,712
Infor US, Inc.
Company Guar. Notes
6.50% due 05/15/2022........................ 255,000 258,455
Oracle Corp.
Senior Notes
2.95% due 11/15/2024........................ 177,000 170,948
----------
1,126,115
----------
Finance-Auto Loans -- 0.1%
Credit Acceptance Corp.
Company Guar. Notes
7.38% due 03/15/2023........................ 227,000 237,783
----------
Finance-Consumer Loans -- 0.8%
Enova International, Inc.
Company Guar. Notes
8.50% due 09/01/2024*....................... 638,000 639,595
Enova International, Inc.
Company Guar. Notes
8.50% due 09/15/2025*....................... 300,000 298,500
SLM Corp.
Senior Notes
5.63% due 08/01/2033........................ 836,000 700,150
Springleaf Finance Corp.
Company Guar. Notes
6.88% due 03/15/2025........................ 650,000 648,375
Springleaf Finance Corp.
Company Guar. Notes
7.13% due 03/15/2026........................ 183,000 182,085
----------
2,468,705
----------
Finance-Credit Card -- 0.3%
Alliance Data Systems Corp.
Company Guar. Notes
5.88% due 11/01/2021*....................... 750,000 765,000
----------
Finance-Investment Banker/Broker -- 0.3%
Jefferies Group LLC/Jefferies Group Capital
Finance, Inc.
Senior Notes
4.15% due 01/23/2030........................ 103,000 92,536
Lehman Brothers Holdings, Inc.
Escrow Notes
6.75% due 12/28/2017+(4)(5)................. 280,000 28
Lehman Brothers Holdings, Inc.
Escrow Notes
7.50% due 05/11/2038+(4)(5)................. 361,000 36
LPL Holdings, Inc.
Company Guar. Notes
5.75% due 09/15/2025*....................... 740,000 722,425
----------
815,025
----------
Principal Value
Security Description Amount(17) (Note 2)
Finance-Mortgage Loan/Banker -- 0.2%
Quicken Loans, Inc.
Company Guar. Notes
5.75% due 05/01/2025*.............................. $650,000 $649,187
--------
Finance-Other Services -- 0.1%
National Rural Utilities Cooperative Finance Corp.
Senior Notes
2.30% due 09/15/2022............................... 121,000 116,129
National Rural Utilities Cooperative Finance Corp.
Collateral Trust Notes
2.40% due 04/25/2022............................... 73,000 70,543
--------
186,672
--------
Food-Meat Products -- 0.0%
Smithfield Foods, Inc.
Senior Notes
2.65% due 10/03/2021*.............................. 68,000 64,818
--------
Food-Misc./Diversified -- 0.2%
Kraft Heinz Foods Co.
Sec. Notes
4.88% due 02/15/2025*.............................. 174,000 176,848
Nestle Holdings, Inc.
Company Guar. Notes
3.50% due 09/24/2025*.............................. 152,000 150,896
Nestle Holdings, Inc.
Company Guar. Notes
3.90% due 09/24/2038*.............................. 178,000 175,101
Nestle Holdings, Inc.
Company Guar. Notes
4.00% due 09/24/2048*.............................. 150,000 146,639
--------
649,484
--------
Food-Retail -- 0.2%
Albertsons Cos. LLC/Safeway, Inc./New
Albertson's, Inc./Albertson's LLC
Company Guar. Notes
5.75% due 03/15/2025............................... 793,000 713,700
--------
Gambling (Non-Hotel) -- 0.3%
Delta Merger Sub, Inc.
Senior Notes
6.00% due 09/15/2026*.............................. 435,000 440,437
Scientific Games International, Inc.
Senior Sec. Notes
5.00% due 10/15/2025*.............................. 465,000 441,750
Waterford Gaming LLC/Waterford Gaming
Financial Corp.
Escrow Notes
8.63% due 09/15/2014*+(4)(5)....................... 478,062 8,510
--------
890,697
--------
Hotels/Motels -- 0.3%
Wyndham Worldwide Corp.
Senior Sec. Notes
4.15% due 04/01/2024............................... 355,000 344,350
23
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Hotels/Motels (continued)
Wyndham Worldwide Corp.
Senior Sec. Notes
4.50% due 04/01/2027.................... $ 501,000 $472,192
--------
816,542
--------
Independent Power Producers -- 0.2%
NRG Yield Operating LLC
Company Guar. Notes
5.38% due 08/15/2024.................... 465,000 467,325
--------
Insurance Brokers -- 0.0%
Willis North America, Inc.
Company Guar. Notes
5.05% due 09/15/2048.................... 60,000 59,905
--------
Insurance-Life/Health -- 0.0%
AXA Equitable Holdings, Inc.
Senior Notes
5.00% due 04/20/2048*................... 29,000 27,089
Brighthouse Financial, Inc.
Senior Notes
4.70% due 06/22/2047.................... 85,000 70,345
--------
97,434
--------
Insurance-Multi-line -- 0.0%
Assurant, Inc.
Senior Notes
6.75% due 02/15/2034.................... 77,000 88,276
--------
Insurance-Mutual -- 0.0%
Massachusetts Mutual Life Insurance Co.
Sub. Notes
4.50% due 04/15/2065*................... 64,000 59,821
--------
Insurance-Property/Casualty -- 0.3%
ACE INA Holdings, Inc.
Company Guar. Notes
2.88% due 11/03/2022.................... 75,000 73,414
AmWINS Group, Inc.
Company Guar. Notes
7.75% due 07/01/2026*................... 470,000 488,800
Chubb INA Holdings, Inc.
Company Guar. Notes
2.50% due 03/15/2038.................... EUR 260,000 304,366
--------
866,580
--------
Internet Connectivity Services -- 0.2%
Cogent Communications Group, Inc.
Senior Sec. Notes
5.38% due 03/01/2022*................... 507,000 514,605
--------
Internet Content-Entertainment -- 0.1%
Netflix, Inc.
Senior Notes
5.88% due 02/15/2025.................... 322,000 332,868
--------
Investment Companies -- 0.2%
FS Energy & Power Fund
Senior Sec. Notes
7.50% due 08/15/2023*................... 437,000 445,740
--------
Principal Value
Security Description Amount(17) (Note 2)
Machinery-Construction & Mining -- 0.2%
Caterpillar Financial Services Corp.
Senior Notes
2.55% due 11/29/2022................. $ 68,000 $ 65,990
Caterpillar Financial Services Corp.
Senior Notes
3.15% due 09/07/2021................. 49,000 48,942
Caterpillar Financial Services Corp.
Senior Notes
3.45% due 05/15/2023................. 85,000 85,006
Terex Corp.
Company Guar. Notes
5.63% due 02/01/2025*................ 454,000 451,163
--------
651,101
--------
Machinery-Electrical -- 0.0%
ABB Finance USA, Inc.
Company Guar. Notes
3.38% due 04/03/2023................. 108,000 107,593
--------
Machinery-Farming -- 0.1%
CNH Industrial Capital LLC
Company Guar. Notes
4.20% due 01/15/2024................. 180,000 179,384
--------
Machinery-General Industrial -- 0.1%
Roper Technologies, Inc.
Senior Notes
4.20% due 09/15/2028................. 182,000 180,550
Stevens Holding Co, Inc.
Company Guar. Notes
6.13% due 10/01/2026*................ 113,000 114,836
--------
295,386
--------
Machinery-Thermal Process -- 0.1%
Cleaver-Brooks, Inc.
Senior Sec. Notes
7.88% due 03/01/2023*................ 359,000 367,078
--------
Marine Services -- 0.2%
Great Lakes Dredge & Dock Corp.
Company Guar. Notes
8.00% due 05/15/2022................. 430,000 441,825
--------
Medical Instruments -- 0.1%
Medtronic, Inc.
Company Guar. Notes
2.50% due 03/15/2020................. 152,000 150,988
--------
Medical Labs & Testing Services -- 0.1%
Laboratory Corp. of America Holdings
Senior Notes
3.25% due 09/01/2024................. 187,000 179,112
--------
Medical-Biomedical/Gene -- 0.0%
Celgene Corp.
Senior Notes
3.63% due 05/15/2024................. 71,000 70,008
Celgene Corp.
Senior Notes
4.55% due 02/20/2048................. 68,000 63,270
--------
133,278
--------
24
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Medical-Drugs -- 0.3%
AbbVie, Inc.
Senior Notes
4.88% due 11/14/2048.......................... $ 74,000 $ 72,808
Bayer US Finance II LLC
Company Guar. Notes
4.63% due 06/25/2038*......................... 208,000 199,137
Endo Finance LLC/Endo Finco, Inc.
Company Guar. Notes
5.38% due 01/15/2023*......................... 260,000 228,800
GlaxoSmithKline Capital, Inc.
Company Guar. Notes
3.38% due 05/15/2023.......................... 64,000 63,736
Johnson & Johnson
Senior Notes
1.65% due 05/20/2035.......................... EUR 125,000 147,812
Pfizer, Inc.
Senior Notes
3.00% due 09/15/2021.......................... 53,000 52,988
--------
765,281
--------
Medical-Generic Drugs -- 0.1%
Actavis, Inc.
Company Guar. Notes
3.25% due 10/01/2022.......................... 60,000 58,909
Mylan, Inc.
Company Guar. Notes
5.20% due 04/15/2048*......................... 283,000 261,525
--------
320,434
--------
Medical-HMO -- 0.2%
Halfmoon Parent, Inc.
Senior Sec. Notes
4.80% due 08/15/2038*......................... 87,000 87,244
Halfmoon Parent, Inc.
Senior Notes
4.90% due 12/15/2048*......................... 85,000 84,386
UnitedHealth Group, Inc.
Senior Bonds
2.38% due 10/15/2022.......................... 302,000 289,624
UnitedHealth Group, Inc.
Senior Notes
3.75% due 07/15/2025.......................... 107,000 107,509
--------
568,763
--------
Medical-Hospitals -- 0.1%
CHS/Community Health Systems, Inc.
Senior Sec. Notes
5.13% due 08/01/2021.......................... 299,000 290,778
--------
Medical-Wholesale Drug Distribution -- 0.0%
Allergan Sales LLC
Company Guar. Notes
4.88% due 02/15/2021*......................... 56,000 57,657
--------
Metal Processors & Fabrication -- 0.2%
Grinding Media, Inc./Moly-Cop AltaSteel, Ltd.
Senior Sec. Notes
7.38% due 12/15/2023*......................... 42,000 43,711
Principal Value
Security Description Amount(17) (Note 2)
Metal Processors & Fabrication (continued)
Novelis Corp.
Company Guar. Notes
5.88% due 09/30/2026*.......................... $ 300,000 $293,100
Novelis Corp.
Company Guar. Notes
6.25% due 08/15/2024*.......................... 196,000 200,655
Timken Co.
Senior Notes
4.50% due 12/15/2028........................... 50,000 49,105
--------
586,571
--------
Metal-Copper -- 0.2%
Southern Copper Corp.
Senior Notes
6.75% due 04/16/2040........................... 440,000 520,848
--------
Metal-Iron -- 0.2%
Cleveland-Cliffs, Inc.
Company Guar. Notes
5.75% due 03/01/2025........................... 625,000 607,812
--------
Multimedia -- 0.2%
E.W. Scripps Co.
Company Guar. Notes
5.13% due 05/15/2025*.......................... 444,000 426,795
Time Warner, Inc.
Company Guar. Notes
4.85% due 07/15/2045........................... 33,000 30,776
Warner Media LLC
Company Guar. Notes
1.95% due 09/15/2023........................... EUR 160,000 193,228
--------
650,799
--------
Networking Products -- 0.0%
Cisco Systems, Inc.
Senior Notes
2.20% due 02/28/2021........................... 80,000 78,333
--------
Oil Companies-Exploration & Production -- 1.9%
Anadarko Petroleum Corp.
Senior Notes
6.45% due 09/15/2036........................... 69,000 78,734
Apache Corp.
Senior Notes
4.38% due 10/15/2028........................... 48,000 47,077
Callon Petroleum Co.
Company Guar. Notes
6.38% due 07/01/2026........................... 575,000 585,063
Chaparral Energy, Inc.
Senior Notes
8.75% due 07/15/2023*.......................... 450,000 448,875
Continental Resources, Inc.
Company Guar. Notes
4.50% due 04/15/2023........................... 81,000 82,426
Endeavor Energy Resources LP/EER Finance, Inc.
Senior Notes
5.50% due 01/30/2026*.......................... 475,000 475,000
Extraction Oil & Gas, Inc.
Company Guar. Notes
5.63% due 02/01/2026*.......................... 550,000 486,750
25
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Oil Companies-Exploration & Production
(continued)
Hess Corp.
Senior Notes
5.60% due 02/15/2041.................... $ 88,000 $ 89,353
Hilcorp Energy I LP/Hilcorp Finance Co.
Senior Notes
5.00% due 12/01/2024*................... 702,000 684,976
Lonestar Resources America, Inc.
Company Guar. Notes
11.25% due 01/01/2023*.................. 546,000 599,235
QEP Resources, Inc.
Senior Notes
5.63% due 03/01/2026.................... 625,000 597,656
Sanchez Energy Corp.
Company Guar. Notes
6.13% due 01/15/2023.................... 386,000 220,020
Southwestern Energy Co.
Company Guar. Notes
7.50% due 04/01/2026.................... 450,000 471,375
WildHorse Resource Development Corp.
Company Guar. Notes
6.88% due 02/01/2025.................... 565,000 583,363
----------
5,449,903
----------
Oil Companies-Integrated -- 0.0%
Chevron Corp.
Senior Notes
3.19% due 06/24/2023.................... 104,000 103,246
----------
Oil Field Machinery & Equipment -- 0.1%
Forum Energy Technologies, Inc.
Company Guar. Notes
6.25% due 10/01/2021.................... 335,000 334,163
----------
Oil Refining & Marketing -- 0.0%
PBF Holding Co. LLC/PBF Finance Corp.
Company Guar. Notes
7.25% due 06/15/2025.................... 135,000 141,750
----------
Oil-Field Services -- 0.6%
Apergy Corp.
Company Guar. Notes
6.38% due 05/01/2026*................... 298,000 306,195
Calfrac Holdings LP
Senior Notes
8.50% due 06/15/2026*................... 605,000 564,163
Halliburton Co.
Senior Notes
4.85% due 11/15/2035.................... 26,000 27,197
Pioneer Energy Services Corp.
Company Guar. Notes
6.13% due 03/15/2022.................... 390,000 341,250
USA Compression Partners LP/USA
Compression Finance Corp.
Senior Notes
6.88% due 04/01/2026*................... 575,000 593,687
----------
1,832,492
----------
Principal Value
Security Description Amount(17) (Note 2)
Paper & Related Products -- 0.1%
Domtar Corp.
Company Guar. Notes
6.75% due 02/15/2044........................... $204,000 $213,078
Georgia-Pacific LLC
Senior Notes
3.73% due 07/15/2023*.......................... 110,000 110,540
Georgia-Pacific LLC
Company Guar. Notes
5.40% due 11/01/2020*.......................... 96,000 99,884
--------
423,502
--------
Petrochemicals -- 0.0%
Chevron Phillips Chemical Co. LLC/Chevron
Phillips Chemical Co. LP
Senior Notes
3.30% due 05/01/2023*.......................... 67,000 66,115
--------
Pharmacy Services -- 0.1%
CVS Health Corp.
Senior Notes
4.78% due 03/25/2038........................... 94,000 93,550
CVS Pass-Through Trust
Pass-Through Certs.
4.70% due 01/10/2036*.......................... 60,522 59,614
CVS Pass-Through Trust
Pass-Through Certs.
5.77% due 01/10/2033*.......................... 49,211 52,227
CVS Pass-Through Trust
Pass-Through Certs.
5.93% due 01/10/2034*.......................... 78,624 84,256
--------
289,647
--------
Physicians Practice Management -- 0.3%
MEDNAX, Inc.
Company Guar. Notes
5.25% due 12/01/2023*.......................... 770,000 770,962
--------
Pipelines -- 1.6%
Andeavor Logistics LP/Tesoro Logistics Finance
Corp.
Company Guar. Notes
5.20% due 12/01/2047........................... 132,000 131,816
Cheniere Corpus Christi Holdings LLC
Senior Sec. Notes
7.00% due 06/30/2024........................... 640,000 700,800
Energy Transfer Equity LP
Senior Sec. Notes
4.25% due 03/15/2023........................... 480,000 477,000
Energy Transfer Partners LP
Company Guar. Notes
4.90% due 03/15/2035........................... 55,000 51,714
EnLink Midstream Partners LP
Senior Notes
5.05% due 04/01/2045........................... 17,000 14,106
Genesis Energy LP/Genesis Energy Finance Corp.
Company Guar. Notes
6.00% due 05/15/2023........................... 532,000 524,685
26
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Pipelines (continued)
Holly Energy Partners LP/Holly Energy Finance
Corp.
Company Guar. Notes
6.00% due 08/01/2024*......................... $ 448,000 $ 458,080
Kinder Morgan Energy Partners LP
Company Guar. Notes
4.30% due 05/01/2024.......................... 94,000 94,909
Kinder Morgan Energy Partners LP
Company Guar. Notes
6.95% due 01/15/2038.......................... 95,000 115,157
Kinder Morgan, Inc.
Company Guar. Notes
1.50% due 03/16/2022.......................... EUR 275,000 328,533
MPLX LP
Senior Notes
4.00% due 03/15/2028.......................... 150,000 144,273
NGPL PipeCo LLC
Senior Notes
4.38% due 08/15/2022*......................... 140,000 141,050
SemGroup Corp./Rose Rock Finance Corp.
Company Guar. Notes
5.63% due 07/15/2022.......................... 706,000 700,705
Summit Midstream Holdings LLC/Summit
Midstream Finance Corp.
Company Guar. Notes
5.50% due 08/15/2022.......................... 467,000 465,249
Western Gas Partners LP
Senior Notes
4.65% due 07/01/2026.......................... 123,000 120,563
Williams Cos., Inc.
Senior Notes
3.70% due 01/15/2023.......................... 251,000 248,387
Williams Cos., Inc.
Senior Notes
5.75% due 06/24/2044.......................... 104,000 111,297
----------
4,828,324
----------
Platinum -- 0.1%
Stillwater Mining Co.
Company Guar. Notes
7.13% due 06/27/2025.......................... 450,000 431,010
----------
Poultry -- 0.2%
Pilgrim's Pride Corp.
Senior Notes
5.88% due 09/30/2027*......................... 685,000 647,325
----------
Publishing-Books -- 0.2%
McGraw-Hill Global Education Holdings LLC/
McGraw-Hill Global Education Finance
Senior Notes
7.88% due 05/15/2024*......................... 490,000 439,163
----------
Quarrying -- 0.2%
Hi-Crush Partners LP
Senior Notes
9.50% due 08/01/2026*......................... 675,000 627,750
----------
Principal Value
Security Description Amount(17) (Note 2)
Racetracks -- 0.1%
GLP Capital LP/GLP Financing II, Inc.
Company Guar. Notes
5.38% due 04/15/2026....................... $ 340,000 $ 345,273
----------
Radio -- 0.2%
Sirius XM Radio, Inc.
Company Guar. Notes
5.38% due 07/15/2026*...................... 483,000 479,378
----------
Real Estate Investment Trusts -- 1.7%
American Tower Corp.
Senior Notes
1.95% due 05/22/2026....................... EUR 130,000 151,562
CTR Partnership LP/CareTrust Capital Corp.
Company Guar. Notes
5.25% due 06/01/2025....................... 624,000 608,400
Duke Realty LP
Senior Notes
4.00% due 09/15/2028....................... 69,000 68,022
EPR Properties
Company Guar. Notes
4.95% due 04/15/2028....................... 28,000 27,514
ESH Hospitality, Inc.
Company Guar. Notes
5.25% due 05/01/2025*...................... 710,000 686,925
GEO Group, Inc.
Company Guar. Notes
5.13% due 04/01/2023....................... 350,000 335,125
Iron Mountain, Inc.
Company Guar. Notes
4.88% due 09/15/2027*...................... 635,000 582,613
iStar, Inc.
Senior Notes
5.25% due 09/15/2022....................... 692,000 681,620
Kimco Realty Corp.
Senior Notes
4.25% due 04/01/2045....................... 55,000 49,262
MPT Operating Partnership LP/MPT Finance
Corp.
Company Guar. Notes
5.00% due 10/15/2027....................... 506,000 487,658
National Retail Properties, Inc.
Senior Notes
4.80% due 10/15/2048....................... 31,000 31,094
Sabra Health Care LP
Company Guar. Notes
5.13% due 08/15/2026....................... 392,000 383,753
Starwood Property Trust, Inc.
Senior Notes
4.75% due 03/15/2025....................... 625,000 598,506
Washington Prime Group LP
Senior Notes
5.95% due 08/15/2024....................... 84,000 79,501
Welltower, Inc.
Senior Notes
3.95% due 09/01/2023....................... 61,000 60,958
----------
4,832,513
----------
27
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Real Estate Management/Services -- 0.5%
Kennedy-Wilson, Inc.
Company Guar. Notes
5.88% due 04/01/2024...................... $ 700,000 $ 689,500
Realogy Group LLC/Realogy Co-Issuer Corp.
Company Guar. Notes
4.88% due 06/01/2023*..................... 690,000 646,012
----------
1,335,512
----------
Real Estate Operations & Development -- 0.2%
Greystar Real Estate Partners LLC
Senior Sec. Notes
5.75% due 12/01/2025*..................... 650,000 633,750
----------
Rental Auto/Equipment -- 0.4%
Ahern Rentals, Inc.
Sec. Notes
7.38% due 05/15/2023*..................... 470,000 462,950
Jurassic Holdings III, Inc.
Sec. Notes
6.88% due 02/15/2021*..................... 575,000 560,625
----------
1,023,575
----------
Retail-Appliances -- 0.2%
Conn's, Inc.
Company Guar. Notes
7.25% due 07/15/2022...................... 563,000 558,778
----------
Retail-Automobile -- 0.2%
Asbury Automotive Group, Inc.
Company Guar. Notes
6.00% due 12/15/2024...................... 177,000 178,770
AutoNation, Inc.
Company Guar. Notes
3.50% due 11/15/2024...................... 107,000 101,383
Lithia Motors, Inc.
Company Guar. Notes
5.25% due 08/01/2025*..................... 275,000 263,312
----------
543,465
----------
Retail-Discount -- 0.1%
Wal-Mart Stores, Inc.
Senior Notes
2.55% due 04/08/2026...................... EUR 110,000 141,920
----------
Retail-Leisure Products -- 0.2%
Party City Holdings, Inc.
Company Guar. Notes
6.63% due 08/01/2026*..................... 445,000 450,563
----------
Retail-Mail Order -- 0.1%
QVC, Inc.
Senior Sec. Notes
4.85% due 04/01/2024...................... 205,000 202,885
----------
Retail-Office Supplies -- 0.3%
Staples, Inc.
Company Guar. Notes
8.50% due 09/15/2025*..................... 1,051,000 990,567
----------
Principal Value
Security Description Amount(17) (Note 2)
Retail-Pawn Shops -- 0.2%
FirstCash, Inc.
Company Guar. Notes
5.38% due 06/01/2024*................. $470,000 $ 472,350
----------
Retail-Restaurants -- 0.1%
Golden Nugget, Inc.
Company Guar. Notes
8.75% due 10/01/2025*................. 204,000 213,849
----------
Rubber/Plastic Products -- 0.0%
Venture Holdings Co. LLC
Company Guar. Notes
11.00% due 06/01/2007+(4)(5)(6)(7).... 100,000 0
----------
Satellite Telecom -- 0.2%
Hughes Satellite Systems Corp.
Company Guar. Notes
6.63% due 08/01/2026.................. 481,000 465,368
----------
Savings & Loans/Thrifts -- 0.2%
Astoria Financial Corp.
Senior Notes
3.50% due 06/08/2020.................. 238,000 237,203
First Niagara Financial Group, Inc.
Sub. Notes
7.25% due 12/15/2021.................. 434,000 478,153
----------
715,356
----------
Schools -- 0.2%
Graham Holdings Co.
Company Guar. Notes
5.75% due 06/01/2026*................. 445,000 455,569
----------
Security Services -- 0.2%
ADT Corp.
Senior Sec. Notes
4.13% due 06/15/2023.................. 600,000 573,738
ADT Corp.
Senior Sec. Notes
6.25% due 10/15/2021.................. 113,000 118,538
----------
692,276
----------
Semiconductor Components-Integrated Circuits -- 0.0%
QUALCOMM, Inc.
Senior Notes
3.45% due 05/20/2025.................. 126,000 122,235
----------
Steel-Producers -- 0.5%
AK Steel Corp.
Company Guar. Notes
6.38% due 10/15/2025.................. 250,000 237,812
Commercial Metals Co.
Senior Notes
5.75% due 04/15/2026*................. 505,000 489,850
United States Steel Corp.
Senior Notes
6.88% due 08/15/2025.................. 600,000 612,750
----------
1,340,412
----------
28
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Telephone-Integrated -- 0.9%
AT&T, Inc.
Senior Notes
3.15% due 09/04/2036.................. EUR 265,000 $ 308,619
AT&T, Inc.
Senior Notes
4.50% due 05/15/2035.................. 383,000 357,823
AT&T, Inc.
Senior Notes
4.90% due 08/15/2037*................. 95,000 91,167
CenturyLink, Inc.
Senior Notes
6.75% due 12/01/2023.................. 630,000 654,412
Citizens Communications Co.
Senior Notes
9.00% due 08/15/2031.................. 996,000 632,460
Verizon Communications, Inc.
Senior Bonds
2.88% due 01/15/2038.................. EUR 100,000 116,225
Verizon Communications, Inc.
Senior Notes
4.40% due 11/01/2034.................. 90,000 87,767
Verizon Communications, Inc.
Senior Notes
5.25% due 03/16/2037.................. 229,000 244,153
----------
2,492,626
----------
Television -- 0.4%
Belo Corp.
Company Guar. Notes
7.75% due 06/01/2027.................. 652,000 699,270
CBS Corp.
Company Guar. Notes
3.70% due 08/15/2024.................. 75,000 72,917
Gray Television, Inc.
Company Guar. Notes
5.13% due 10/15/2024*................. 307,000 296,639
Gray Television, Inc.
Company Guar. Notes
5.88% due 07/15/2026*................. 111,000 110,029
----------
1,178,855
----------
Transport-Marine -- 0.0%
Kirby Corp.
Senior Notes
4.20% due 03/01/2028.................. 123,000 120,235
----------
Transport-Rail -- 0.1%
Kansas City Southern
Company Guar. Notes
4.70% due 05/01/2048.................. 105,000 104,463
Norfolk Southern Corp.
Senior Notes
5.10% due 08/01/2118.................. 117,000 115,508
----------
219,971
----------
Transport-Services -- 0.0%
CH Robinson Worldwide, Inc.
Senior Notes
4.20% due 04/15/2028.................. 67,000 65,979
Principal Value
Security Description Amount(17) (Note 2)
Transport-Services (continued)
FedEx Corp.
Company Guar. Notes
4.05% due 02/15/2048.................... $ 42,000 $ 38,112
-----------
104,091
-----------
Trucking/Leasing -- 0.1%
Penske Truck Leasing Co. LP/PTL Finance
Corp.
Senior Notes
3.95% due 03/10/2025*................... 195,000 191,058
-----------
Vitamins & Nutrition Products -- 0.0%
HLF Financing SARL LLC/Herbalife
International, Inc.
Company Guar. Notes
7.25% due 08/15/2026*................... 68,000 69,105
-----------
Total U.S. Corporate Bonds & Notes
(cost $91,835,508)...................... 90,205,727
-----------
FOREIGN CORPORATE BONDS & NOTES -- 19.0%
Agricultural Chemicals -- 0.3%
Consolidated Energy Finance SA
Senior Notes
6.88% due 06/15/2025*................... 480,000 498,600
OCI NV
Senior Sec. Notes
6.63% due 04/15/2023*................... 470,000 486,450
-----------
985,050
-----------
Airlines -- 0.1%
Gol Finance, Inc.
Company Guar. Notes
7.00% due 01/31/2025*................... 480,000 387,605
-----------
Auto-Cars/Light Trucks -- 0.1%
Hyundai Capital Services, Inc.
Senior Notes
3.00% due 08/29/2022*................... 201,000 193,453
Volkswagen International Finance NV
Company Guar. Notes
1.88% due 03/30/2027.................... EUR 200,000 229,099
-----------
422,552
-----------
Auto/Truck Parts & Equipment-Original -- 0.3%
Delphi Jersey Holdings PLC
Company Guar. Notes
5.00% due 10/01/2025*................... 595,000 560,044
Toyota Industries Corp.
Senior Notes
3.24% due 03/16/2023*................... 329,000 323,798
-----------
883,842
-----------
Banks-Commercial -- 1.3%
Banco Bilbao Vizcaya Argentaria SA
Senior Notes
1.38% due 05/14/2025.................... EUR 300,000 340,358
Banco de Credito e Inversiones SA
Senior Notes
3.50% due 10/12/2027.................... 490,000 447,125
29
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Banks-Commercial (continued)
Barclays Bank PLC
Sub. Notes
6.63% due 03/30/2022................. EUR 200,000 $ 270,610
BPCE SA
Sub. Notes
4.63% due 07/18/2023................. EUR 200,000 267,070
Credit Suisse AG
Senior Notes
3.00% due 10/29/2021................. 254,000 250,436
Credit Suisse AG
Sub. Notes
5.75% due 09/18/2025................. EUR 430,000 546,681
Danske Bank A/S
Senior Notes
3.88% due 09/12/2023*................ 200,000 195,887
HSBC France SA
Senior Notes
0.60% due 03/20/2023................. EUR 200,000 232,455
Intesa Sanpaolo SpA
Senior Notes
4.00% due 10/30/2023................. EUR 100,000 126,497
Intesa Sanpaolo SpA
Sub. Notes
5.71% due 01/15/2026*................ 255,000 231,971
National Australia Bank, Ltd.
Senior Notes
3.63% due 06/20/2023................. 250,000 248,620
Standard Chartered PLC
Senior Notes
1.63% due 10/03/2027................. EUR 175,000 199,435
Westpac Banking Corp.
Senior Notes
3.05% due 05/15/2020................. 105,000 104,713
Yapi ve Kredi Bankasi AS
Senior Notes
5.75% due 02/24/2022................. 480,000 434,400
----------
3,896,258
----------
Building Products-Cement -- 0.1%
CIMPOR Financial Operations BV
Company Guar. Notes
5.75% due 07/17/2024................. 480,000 338,405
----------
Building Societies -- 0.2%
Nationwide Building Society
Sub. Notes
2.00% due 07/25/2029................. EUR 200,000 226,591
Nationwide Building Society
Sub. Notes
4.13% due 10/18/2032*................ 250,000 229,279
----------
455,870
----------
Building-Residential/Commercial -- 0.2%
Mattamy Group Corp.
Senior Notes
6.50% due 10/01/2025*................ 706,000 684,820
----------
Principal Value
Security Description Amount(17) (Note 2)
Cable/Satellite TV -- 1.0%
Altice Financing SA
Senior Sec. Notes
7.50% due 05/15/2026*........................ $ 675,000 $ 658,125
Altice France SA
Senior Sec. Notes
8.13% due 02/01/2027*........................ 213,000 219,390
Altice Luxembourg SA
Company Guar. Notes
7.63% due 02/15/2025*........................ 965,000 879,501
SFR Group SA
Senior Sec. Notes
7.38% due 05/01/2026*........................ 550,000 550,000
UPCB Finance IV, Ltd.
Senior Sec. Notes
5.38% due 01/15/2025*........................ 475,000 474,406
----------
2,781,422
----------
Cellular Telecom -- 0.3%
C&W Senior Financing Designated Activity Co.
Senior Notes
6.88% due 09/15/2027*........................ 467,000 465,833
Millicom International Cellular SA
Senior Notes
6.00% due 03/15/2025......................... 440,000 442,473
Vodafone Group PLC
Senior Notes
4.13% due 05/30/2025......................... 39,000 38,698
----------
947,004
----------
Chemicals-Diversified -- 0.9%
Braskem Netherlands Finance BV
Company Guar. Notes
4.50% due 01/10/2028*........................ 209,000 199,324
Cydsa SAB de CV
Company Guar. Notes
6.25% due 10/04/2027......................... 490,000 466,725
NOVA Chemicals Corp.
Senior Notes
5.00% due 05/01/2025*........................ 695,000 660,250
Petkim Petrokimya Holding AS
Senior Notes
5.88% due 01/26/2023*........................ 470,000 432,400
Solvay SA
Senior Notes
1.63% due 12/02/2022......................... EUR 300,000 364,210
Trinseo Materials Operating SCA/Trinseo
Materials Finance, Inc.
Company Guar. Notes
5.38% due 09/01/2025*........................ 465,000 448,283
----------
2,571,192
----------
Chemicals-Specialty -- 0.1%
Starfruit Finco BV/Starfruit US Holdco LLC
Senior Notes
8.00% due 10/01/2026*........................ 309,000 313,635
----------
30
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Computers-Memory Devices -- 0.3%
Seagate HDD Cayman
Company Guar. Notes
4.75% due 01/01/2025...................... $ 780,000 $ 747,886
----------
Diamonds/Precious Stones -- 0.1%
Petra Diamonds US Treasury PLC
Sec. Notes
7.25% due 05/01/2022...................... 260,000 253,500
----------
Diversified Banking Institutions -- 1.1%
Credit Agricole SA
Senior Notes
1.88% due 12/20/2026...................... EUR 200,000 234,086
HSBC Holdings PLC
Senior Notes
4.29% due 09/12/2026...................... 200,000 198,035
Mitsubishi UFJ Financial Group, Inc.
Senior Notes
2.67% due 07/25/2022...................... 148,000 142,739
Mizuho Financial Group, Inc.
Senior Notes
2.27% due 09/13/2021...................... 206,000 198,203
Mizuho Financial Group, Inc.
Senior Notes
3.55% due 03/05/2023...................... 304,000 300,279
Natwest Markets PLC
Senior Notes
0.63% due 03/02/2022...................... EUR 150,000 171,702
Royal Bank of Scotland Group PLC
Senior Notes
1.75% due 03/02/2026...................... EUR 175,000 197,807
Royal Bank of Scotland Group PLC
Senior Notes
2.50% due 03/22/2023...................... EUR 185,000 224,897
Royal Bank of Scotland Group PLC
Senior Notes
4.52% due 06/25/2024...................... 200,000 199,432
UBS AG
Sub. Notes
4.75% due 02/12/2026...................... EUR 400,000 503,260
UBS Group Funding Switzerland AG
Company Guar. Notes
3.49% due 05/23/2023*..................... 210,000 205,770
UniCredit SpA
Sub. Notes
5.86% due 06/19/2032*..................... 548,000 488,585
Woori Bank
Sub. Notes
5.13% due 08/06/2028...................... 200,000 200,997
----------
3,265,792
----------
Diversified Financial Services -- 0.1%
GE Capital International Funding Co. ULC
Company Guar. Notes
2.34% due 11/15/2020...................... 260,000 254,050
----------
Diversified Manufacturing Operations -- 0.1%
Siemens Financieringsmaatschappij NV
Company Guar. Notes
2.88% due 03/10/2028...................... EUR 200,000 268,693
----------
Principal Value
Security Description Amount(17) (Note 2)
Diversified Minerals -- 0.1%
Anglo American Capital PLC
Company Guar. Notes
3.25% due 04/03/2023................. EUR 245,000 $ 305,529
----------
Electric-Distribution -- 0.4%
State Grid Overseas Investment, Ltd.
Company Guar. Notes
3.13% due 05/22/2023*................ 1,100,000 1,072,157
State Grid Overseas Investment, Ltd.
Company Guar. Notes
4.13% due 05/07/2024*................ 200,000 202,377
----------
1,274,534
----------
Electric-Generation -- 0.1%
Electricite de France SA
Senior Notes
1.00% due 10/13/2026................. EUR 200,000 225,914
----------
Electric-Integrated -- 0.6%
Capex SA
Senior Notes
6.88% due 05/15/2024................. 450,000 381,375
EDP Finance BV
Senior Notes
2.00% due 04/22/2025................. EUR 335,000 399,567
Enel Finance International NV
Company Guar. Notes
3.50% due 04/06/2028*................ 200,000 176,047
Enel Finance International NV
Company Guar. Notes
3.63% due 05/25/2027*................ 225,000 203,786
Gas Natural Fenosa Finance BV
Company Guar. Notes
1.38% due 01/21/2025................. EUR 200,000 235,366
Iberdrola Finanzas SA
Company Guar. Notes
1.00% due 03/07/2025................. EUR 300,000 348,438
----------
1,744,579
----------
Finance-Commercial -- 0.2%
Unifin Financiera SAB de CV SOFOM
Company Guar. Notes
7.25% due 09/27/2023................. 460,000 454,255
----------
Finance-Leasing Companies -- 0.0%
Aircastle, Ltd.
Senior Notes
4.40% due 09/25/2023................. 39,000 39,005
----------
Finance-Other Services -- 0.2%
Travelport Corporate Finance PLC
Senior Sec. Notes
6.00% due 03/15/2026*................ 431,000 437,754
----------
Food-Meat Products -- 0.2%
JBS USA LUX SA/JBS USA Finance, Inc.
Company Guar. Notes
5.88% due 07/15/2024*................ 632,000 622,520
----------
31
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Gambling (Non-Hotel) -- 0.3%
International Game Technology PLC
Senior Sec. Notes
6.50% due 02/15/2025*.............. $ 378,000 $392,175
LHMC Finco SARL
Senior Sec. Notes
7.88% due 12/20/2023*.............. 590,000 599,735
--------
991,910
--------
Gold Mining -- 0.0%
Kinross Gold Corp.
Company Guar. Notes
4.50% due 07/15/2027............... 95,000 84,911
--------
Insurance-Life/Health -- 0.1%
Athene Holding, Ltd.
Senior Notes
4.13% due 01/12/2028............... 193,000 180,320
--------
Insurance-Multi-line -- 0.0%
XLIT, Ltd.
Company Guar. Notes
5.50% due 03/31/2045............... 111,000 116,817
--------
Insurance-Property/Casualty -- 0.0%
Enstar Group, Ltd.
Senior Notes
4.50% due 03/10/2022............... 34,000 34,149
--------
Internet Application Software -- 0.2%
Tencent Holdings, Ltd.
Senior Notes
3.60% due 01/19/2028*.............. 500,000 473,256
--------
Machinery-Farming -- 0.1%
CNH Industrial NV
Senior Notes
3.85% due 11/15/2027............... 150,000 141,925
CNH Industrial NV
Senior Notes
4.50% due 08/15/2023............... 77,000 78,186
--------
220,111
--------
Machinery-Pumps -- 0.0%
Nvent Finance SARL
Company Guar. Notes
4.55% due 04/15/2028*.............. 76,000 73,991
--------
Medical-Drugs -- 0.5%
Bausch Health Cos., Inc.
Company Guar. Notes
5.88% due 05/15/2023*.............. 800,000 780,000
Bayer Capital Corp BV
Company Guar. Notes
1.50% due 06/26/2026............... EUR 100,000 115,647
Novartis Finance SA
Company Guar. Notes
1.63% due 11/09/2026............... EUR 250,000 304,427
Principal Value
Security Description Amount(17) (Note 2)
Medical-Drugs (continued)
Shire Acquisitions Investments Ireland DAC
Company Guar. Notes
2.88% due 09/23/2023....................... $ 118,000 $ 112,376
----------
1,312,450
----------
Metal-Copper -- 0.4%
First Quantum Minerals, Ltd.
Company Guar. Notes
6.50% due 03/01/2024*...................... 331,000 302,865
First Quantum Minerals, Ltd.
Company Guar. Notes
7.25% due 04/01/2023*...................... 257,000 245,595
Hudbay Minerals, Inc.
Company Guar. Notes
7.25% due 01/15/2023*...................... 575,000 590,876
----------
1,139,336
----------
Metal-Diversified -- 0.3%
Glencore Canada Financial Corp.
Company Guar. Notes
7.38% due 05/27/2020....................... GBP 100,000 141,771
Glencore Finance Europe, Ltd.
Company Guar. Notes
1.75% due 03/17/2025....................... EUR 280,000 318,539
Vedanta Resources PLC
Senior Notes
6.13% due 08/09/2024....................... 470,000 436,663
----------
896,973
----------
Non-Ferrous Metals -- 0.5%
Codelco, Inc.
Senior Notes
3.00% due 07/17/2022....................... 200,000 194,557
Codelco, Inc.
Senior Notes
4.50% due 09/16/2025....................... 1,100,000 1,116,665
----------
1,311,222
----------
Oil & Gas Drilling -- 0.6%
Noble Holding International, Ltd.
Company Guar. Notes
7.75% due 01/15/2024....................... 422,000 418,835
Noble Holding International, Ltd.
Company Guar. Notes
7.88% due 02/01/2026*...................... 269,000 279,087
Shelf Drilling Holdings, Ltd.
Company Guar. Notes
8.25% due 02/15/2025*...................... 600,000 618,750
Trinidad Drilling, Ltd.
Company Guar. Notes
6.63% due 02/15/2025*...................... 525,000 519,750
----------
1,836,422
----------
Oil Companies-Exploration & Production -- 1.0%
Anadarko Finance Co.
Company Guar. Notes
7.50% due 05/01/2031....................... 41,000 50,298
32
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Oil Companies-Exploration & Production (continued)
Medco Platinum Road Pte, Ltd.
Senior Sec. Notes
6.75% due 01/30/2025*.................... $ 480,000 $ 453,164
MEG Energy Corp.
Company Guar. Notes
6.38% due 01/30/2023*.................... 509,000 463,190
MEG Energy Corp.
Sec. Notes
6.50% due 01/15/2025*.................... 837,000 828,630
Nostrum Oil & Gas Finance BV
Company Guar. Notes
7.00% due 02/16/2025*.................... 510,000 448,902
Sinopec Group Overseas Development 2015,
Ltd.
Company Guar. Notes
2.50% due 04/28/2020..................... 750,000 737,835
----------
2,982,019
----------
Oil Companies-Integrated -- 2.8%
BP Capital Markets PLC
Company Guar. Notes
2.97% due 02/27/2026..................... EUR 300,000 392,842
BP Capital Markets PLC
Company Guar. Notes
3.25% due 05/06/2022..................... 48,000 47,687
Cenovus Energy, Inc.
Senior Notes
4.25% due 04/15/2027..................... 87,000 84,099
Eni SpA
Senior Notes
4.75% due 09/12/2028*.................... 201,000 199,085
Pertamina Persero PT
Senior Notes
4.30% due 05/20/2023..................... 1,650,000 1,636,892
Pertamina Persero PT
Senior Notes
4.88% due 05/03/2022*.................... 300,000 306,281
Petrobras Global Finance BV
Company Guar. Notes
6.00% due 01/27/2028..................... 235,000 216,788
Petroleos del Peru SA
Senior Notes
5.63% due 06/19/2047..................... 800,000 795,008
Petroleos Mexicanos
Company Guar. Notes
4.88% due 01/24/2022..................... 500,000 505,750
Petroleos Mexicanos
Company Guar. Notes
6.63% due 06/15/2035..................... 1,400,000 1,390,900
Petroleos Mexicanos
Company Guar. Notes
6.75% due 09/21/2047..................... 1,705,000 1,626,894
Petronas Capital, Ltd.
Company Guar. Notes
7.88% due 05/22/2022..................... 450,000 511,151
Suncor Energy, Inc.
Senior Notes
5.95% due 12/01/2034..................... 48,000 54,971
Principal Value
Security Description Amount(17) (Note 2)
Oil Companies-Integrated (continued)
YPF SA
Senior Notes
6.95% due 07/21/2027.................... $ 450,000 $ 393,615
----------
8,161,963
----------
Oil-Field Services -- 0.2%
KCA Deutag UK Finance PLC
Senior Sec. Notes
9.88% due 04/01/2022*................... 651,000 647,745
----------
Paper & Related Products -- 0.3%
Cascades, Inc.
Company Guar. Notes
5.50% due 07/15/2022*................... 67,000 67,502
Cascades, Inc.
Company Guar. Notes
5.75% due 07/15/2023*................... 384,000 384,000
Fibria Overseas Finance, Ltd.
Company Guar. Notes
5.50% due 01/17/2027.................... 480,000 475,776
----------
927,278
----------
Printing-Commercial -- 0.2%
Cimpress NV
Company Guar. Notes
7.00% due 06/15/2026*................... 690,000 701,130
----------
Retail-Major Department Stores -- 0.1%
El Puerto de Liverpool SAB de CV
Company Guar. Notes
3.88% due 10/06/2026.................... 460,000 428,950
----------
Satellite Telecom -- 0.7%
Inmarsat Finance PLC
Company Guar. Notes
6.50% due 10/01/2024*................... 340,000 345,100
Intelsat Jackson Holdings SA
Company Guar. Notes
5.50% due 08/01/2023.................... 1,010,000 930,462
Intelsat Jackson Holdings SA
Company Guar. Notes
8.50% due 10/15/2024*................... 296,000 299,256
Telesat Canada/Telesat LLC
Company Guar. Notes
8.88% due 11/15/2024*................... 425,000 454,750
----------
2,029,568
----------
Special Purpose Entity -- 0.0%
Hellas Telecommunications Luxembourg II
SCA
Sub. Notes
8.46% due 01/15/2015*+(4)(5)(6)(7)...... 1,330,000 0
----------
Telephone-Integrated -- 0.4%
Orange SA
Senior Notes
1.38% due 03/20/2028.................... EUR 100,000 114,712
Telecom Italia Capital SA
Company Guar. Notes
7.72% due 06/04/2038.................... 299,000 316,940
33
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Telephone-Integrated (continued)
Telefonica Emisiones SAU
Company Guar. Notes
2.93% due 10/17/2029............... EUR 300,000 $ 370,069
Telefonica Emisiones SAU
Company Guar. Notes
4.67% due 03/06/2038............... 260,000 244,269
-----------
1,045,990
-----------
Transport-Equipment & Leasing -- 0.1%
Avolon Holdings Funding, Ltd.
Company Guar. Notes
5.13% due 10/01/2023*.............. 425,000 429,582
-----------
Transport-Marine -- 0.5%
PT Pelabuhan Indonesia II
Senior Notes
4.25% due 05/05/2025*.............. 300,000 289,050
PT Pelabuhan Indonesia II
Senior Notes
4.25% due 05/05/2025............... 1,250,000 1,204,375
-----------
1,493,425
-----------
Transport-Rail -- 1.1%
Canadian National Railway Co.
Senior Notes
2.85% due 12/15/2021............... 56,000 55,227
Canadian Pacific Railway Co.
Senior Notes
6.13% due 09/15/2115............... 93,000 109,846
Kazakhstan Temir Zholy Finance BV
Company Guar. Notes
6.95% due 07/10/2042............... 2,500,000 2,756,250
Transnet SOC, Ltd.
Senior Notes
4.00% due 07/26/2022............... 400,000 375,000
-----------
3,296,323
-----------
Transport-Services -- 0.2%
Rumo Luxembourg SARL
Company Guar. Notes
7.38% due 02/09/2024............... 440,000 449,526
-----------
Total Foreign Corporate Bonds & Notes
(cost $59,096,786)................. 55,827,033
-----------
FOREIGN GOVERNMENT OBLIGATIONS -- 17.6%
Banks-Special Purpose -- 0.1%
Hungarian Development Bank
Government Guar. Notes
6.25% due 10/21/2020............... 400,000 419,142
-----------
Central Bank -- 0.5%
Central Bank of Tunisia
Senior Notes
5.75% due 01/30/2025............... 1,500,000 1,320,000
-----------
Sovereign -- 17.0%
Abu Dhabi Government
Senior Notes
3.13% due 10/11/2027............... 1,600,000 1,512,000
Principal Value
Security Description Amount(17) (Note 2)
Sovereign (continued)
Dominican Republic
Senior Bonds
5.88% due 04/18/2024.......... $ 200,000 $ 205,908
Dominican Republic
Senior Bonds
6.85% due 01/27/2045.......... 1,250,000 1,265,625
Dominican Republic
Senior Bonds
7.45% due 04/30/2044.......... 1,350,000 1,437,750
Dominican Republic
Senior Bonds
8.63% due 04/20/2027.......... 350,000 398,125
Federative Republic of Brazil
Senior Notes
8.25% due 01/20/2034.......... 300,000 351,750
Government of Egypt
Senior Notes
6.59% due 02/21/2028.......... 800,000 764,000
Government of Egypt
Senior Notes
7.50% due 01/31/2027.......... 900,000 915,808
Government of Egypt
Senior Notes
8.50% due 01/31/2047.......... 1,450,000 1,453,129
Government of Ukraine
Senior Notes
7.38% due 09/25/2032*......... 1,000,000 868,300
Government of Ukraine
Senior Notes
7.75% due 09/01/2027.......... 2,200,000 2,043,360
Kingdom of Jordan
Senior Notes
5.75% due 01/31/2027.......... 400,000 378,640
Kingdom of Jordan
Senior Notes
5.75% due 01/31/2027*......... 450,000 425,970
Kingdom of Saudi Arabia
Senior Notes
4.00% due 04/17/2025.......... 1,200,000 1,200,600
Kingdom of Saudi Arabia
Senior Notes
5.00% due 04/17/2049.......... 1,200,000 1,218,000
Lebanese Republic
Senior Notes
6.38% due 03/09/2020.......... 375,000 354,037
Oriental Republic of Uruguay
Senior Notes
4.38% due 10/27/2027.......... 350,000 356,478
Republic of Argentina
Senior Notes
5.88% due 01/11/2028.......... 360,000 284,940
Republic of Argentina
Senior Notes
6.88% due 01/26/2027.......... 1,100,000 935,000
Republic of Argentina
Senior Notes
8.28% due 12/31/2033.......... 1,752,548 1,581,675
34
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
FOREIGN GOVERNMENT OBLIGATIONS (continued)
Sovereign (continued)
Republic of Colombia
Senior Notes
4.00% due 02/26/2024.... $1,200,000 $1,200,000
Republic of Colombia
Senior Notes
4.38% due 07/12/2021.... 300,000 305,400
Republic of Colombia
Senior Notes
8.13% due 05/21/2024.... 900,000 1,080,000
Republic of Croatia
Senior Notes
6.38% due 03/24/2021.... 1,500,000 1,590,000
Republic of Ecuador
Senior Notes
9.63% due 06/02/2027.... 1,000,000 988,700
Republic of Ecuador
Senior Notes
9.65% due 12/13/2026*... 700,000 696,990
Republic of Ecuador
Senior Notes
10.75% due 03/28/2022... 500,000 531,250
Republic of Guatemala
Senior Notes
4.88% due 02/13/2028.... 560,000 544,600
Republic of Honduras
Senior Notes
6.25% due 01/19/2027.... 1,150,000 1,180,302
Republic of Hungary
Senior Notes
5.38% due 02/21/2023.... 350,000 370,827
Republic of Indonesia
Senior Notes
3.70% due 01/08/2022.... 500,000 496,904
Republic of Ivory Coast
Senior Notes
6.13% due 06/15/2033*... 1,600,000 1,460,512
Republic of Lithuania
Senior Notes
6.63% due 02/01/2022.... 200,000 220,230
Republic of Lithuania
Senior Notes
7.38% due 02/11/2020.... 550,000 581,328
Republic of Nigeria
Senior Notes
7.14% due 02/23/2030*... 450,000 438,885
Republic of Nigeria
Senior Notes
7.63% due 11/28/2047.... 650,000 622,037
Republic of Panama
Senior Notes
3.75% due 03/16/2025.... 400,000 398,204
Republic of Poland
Senior Notes
5.13% due 04/21/2021.... 700,000 731,892
Republic of Senegal
Bonds
6.25% due 05/23/2033.... 800,000 745,128
Principal Value
Security Description Amount(17) (Note 2)
Sovereign (continued)
Republic of Senegal
Senior Notes
6.75% due 03/13/2048*........ $ 740,000 $ 661,590
Republic of South Africa
Senior Notes
5.65% due 09/27/2047......... 600,000 547,236
Republic of South Africa
Senior Notes
5.88% due 05/30/2022......... 200,000 207,872
Republic of South Africa
Senior Notes
5.88% due 09/16/2025......... 700,000 711,270
Republic of South Africa
Senior Notes
6.25% due 03/08/2041......... 700,000 695,467
Republic of Sri Lanka
Senior Notes
5.75% due 04/18/2023*........ 1,000,000 972,951
Republic of Sri Lanka
Senior Notes
6.83% due 07/18/2026*........ 265,000 260,136
Republic of Sri Lanka
Senior Notes
6.83% due 07/18/2026......... 1,000,000 981,645
Republic of Sri Lanka
Senior Notes
6.85% due 11/03/2025......... 700,000 690,984
Republic of the Philippines
Senior Notes
4.00% due 01/15/2021......... 1,000,000 1,016,785
Republic of Turkey
Senior Notes
5.75% due 05/11/2047......... 460,000 358,469
Republic of Turkey
Senior Notes
6.63% due 02/17/2045......... 700,000 607,012
Republic of Turkey
Senior Notes
7.00% due 06/05/2020......... 1,500,000 1,514,475
Russian Federation
Senior Notes
4.75% due 05/27/2026......... 1,800,000 1,797,433
State of Qatar
Senior Notes
4.50% due 01/20/2022......... 1,200,000 1,236,240
State of Qatar
Senior Notes
4.50% due 04/23/2028......... 1,200,000 1,234,800
Sultanate of Oman
Senior Notes
4.75% due 06/15/2026......... 1,800,000 1,707,840
Sultanate of Oman
Senior Notes
6.75% due 01/17/2048......... 1,800,000 1,750,716
United Kingdom Gilt Treasury
Bonds
3.50% due 01/22/2045......... GBP 50,000 86,019
35
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
FOREIGN GOVERNMENT OBLIGATIONS (continued)
Sovereign (continued)
United Kingdom Gilt Treasury
Bonds
4.50% due 09/07/2034................... GBP 230,000 $ 412,006
United Mexican States
Senior Bonds
4.75% due 03/08/2044................... 165,000 157,658
-----------
49,742,888
-----------
Total Foreign Government Obligations
(cost $53,465,785)..................... 51,482,030
-----------
U.S. GOVERNMENT AGENCIES -- 19.4%
Federal Home Loan Mtg. Corp. -- 6.2%
2.50% due 01/01/2028................... 204,116 198,295
2.50% due 04/01/2028................... 67,247 65,328
2.50% due 03/01/2031................... 114,466 110,422
2.50% due 11/01/2032................... 817,467 788,516
3.00% due 07/01/2045................... 2,123,507 2,039,410
3.00% due 10/01/2045................... 725,522 696,197
3.00% due 11/01/2046................... 3,050,022 2,923,909
3.50% due 03/01/2042................... 306,842 304,369
3.50% due 04/01/2042................... 318,603 316,036
3.50% due 09/01/2043................... 279,464 277,213
3.50% due 07/01/2045................... 2,844,733 2,807,715
3.50% due 11/01/2047................... 1,550,185 1,526,867
3.50% due 03/01/2048................... 3,833,709 3,782,607
4.00% due 01/01/2046................... 337,214 342,186
4.50% due 02/01/2020................... 1,021 1,033
4.50% due 08/01/2020................... 4,194 4,246
4.50% due 03/01/2039................... 1,353,114 1,407,162
4.50% due 12/01/2039................... 6,185 6,443
5.00% due 02/01/2034................... 19,175 20,348
5.00% due 05/01/2034................... 29,759 31,676
5.00% due 11/01/2043................... 195,010 207,093
5.50% due 05/01/2037................... 45,103 48,604
6.00% due 03/01/2040................... 35,098 38,832
6.50% due 02/01/2035................... 6,591 7,292
Federal Home Loan Mtg. Corp. FRS
3.99% (6 ML+1.49%)
due 02/01/2037......................... 10,935 11,257
4.17% (12 ML+1.89%)
due 11/01/2037......................... 85,888 90,374
Federal Home Loan Mtg. Corp. REMIC FRS
Series 3572, Class JS
4.64% (6.80% -1 ML)
due 09/15/2039(1)(8)(9)................ 379,579 40,289
Federal Home Loan Mtg. Corp. REMIC
Series 1103, Class N
11.57% due 06/15/2021(1)(8)............ 207 12
Series 4740, Class BA
3.00% due 09/15/2045(1)................ 261,793 255,846
-----------
18,349,577
-----------
Federal National Mtg. Assoc. -- 12.3%
2.50% due 12/01/2026................... 466,692 454,313
2.50% due 08/01/2031................... 1,877,580 1,813,100
2.50% due 02/01/2032................... 743,177 717,655
3.00% due 10/01/2027................... 245,158 243,612
3.00% due 03/01/2030................... 2,115,574 2,097,031
Principal Value
Security Description Amount(17) (Note 2)
Federal National Mtg. Assoc. (continued)
3.00% due 10/01/2030.................. $ 182,295 $ 180,697
3.00% due 12/01/2042.................. 124,499 120,287
3.00% due 08/01/2046.................. 4,081,331 3,912,522
3.00% due 01/01/2047.................. 401,090 384,127
3.00% due 02/01/2048.................. 1,962,029 1,878,939
3.50% due 08/01/2026.................. 79,921 80,371
3.50% due 08/01/2027.................. 54,903 55,212
3.50% due 10/01/2028.................. 31,578 31,870
3.50% due 03/01/2033.................. 1,810,314 1,820,505
3.50% due 02/01/2043.................. 117,950 117,123
3.50% due 10/01/2045.................. 260,093 257,060
3.50% due 11/01/2045.................. 214,947 212,475
3.50% due 03/01/2046.................. 2,503,362 2,469,544
3.50% due 07/01/2046.................. 151,182 149,419
3.50% due 12/01/2047.................. 4,491,698 4,429,177
3.50% due 04/01/2048.................. 1,429,283 1,409,288
4.00% due 11/01/2025.................. 121,969 124,855
4.00% due 10/01/2043.................. 303,508 308,323
4.00% due 02/01/2045.................. 1,622,801 1,651,902
4.00% due 05/01/2047.................. 614,928 621,356
4.00% due 07/01/2047.................. 3,019,033 3,050,440
4.00% due 08/01/2047.................. 2,877,623 2,907,410
4.00% due 06/01/2048.................. 979,614 993,025
4.50% due 06/01/2019.................. 2,514 2,546
4.50% due 11/01/2022.................. 18,783 19,117
4.50% due 06/01/2023.................. 12,802 13,190
4.50% due 08/01/2045.................. 1,701,580 1,783,659
4.50% due 04/01/2047.................. 355,016 366,574
5.00% due 06/01/2019.................. 2,831 2,917
5.00% due 01/01/2023.................. 6,716 6,930
5.00% due 03/01/2034.................. 17,202 18,261
5.00% due 05/01/2035.................. 10,065 10,682
5.00% due 05/01/2040.................. 72,934 77,598
5.00% due 07/01/2040.................. 74,566 79,329
5.50% due 06/01/2038.................. 23,112 24,945
6.00% due 02/01/2032.................. 4,603 4,971
6.00% due 05/01/2034.................. 1,522 1,673
6.00% due 10/01/2034.................. 18,558 20,040
7.50% due 01/01/2030.................. 1,088 1,104
8.00% due 11/01/2028.................. 2,772 2,991
Federal National Mtg. Assoc. FRS
3.59% (12 ML+1.76%)
due 05/01/2040........................ 72,452 75,867
3.64% (12 ML + 1.82%)
due 10/01/2040........................ 19,970 20,841
3.79% (12 ML + 1.57%)
due 05/01/2037........................ 17,094 17,800
3.81% (12 ML+1.83%)
due 10/01/2040........................ 43,129 45,271
3.87% (6 ML + 1.54%)
due 09/01/2035........................ 58,760 60,757
3.92% (12 ML + 1.66%)
due 07/01/2039........................ 57,416 59,958
4.12% (1 Yr USTYCR + 2.19%)
due 10/01/2035........................ 68,296 71,761
4.24% (1 Yr USTYCR + 2.26%)
due 11/01/2036........................ 35,351 37,198
36
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. GOVERNMENT AGENCIES (continued)
Federal National Mtg. Assoc. (continued)
4.29% (12 ML + 1.91%)
due 08/01/2035......................... $ 54,406 $ 57,323
Federal National Mtg. Assoc., REMIC
Series 1989-2, Class D
8.80% due 01/25/2019(1)................ 71 71
Series 2017-94, Class DA
3.00% due 06/25/2045(1)................ 225,081 219,670
Series 2018-27, Class EA
3.00% due 05/25/2048(1)................ 386,726 369,403
-----------
35,964,085
-----------
Government National Mtg. Assoc. -- 0.9%
4.50% due 10/20/2045................... 1,509,400 1,581,008
4.50% due 04/20/2047................... 963,935 1,001,441
-----------
2,582,449
-----------
Total U.S. Government Agencies
(cost $58,401,855)..................... 56,896,111
-----------
U.S. GOVERNMENT TREASURIES -- 2.0%
United States Treasury Bonds -- 0.1%
3.13% due 05/15/2048................... 100,000 98,668
-----------
United States Treasury Notes -- 1.9%
1.00% due 06/30/2019................... 3,650,000 3,609,080
1.63% due 07/31/2019................... 1,000,000 992,070
1.63% due 08/31/2019................... 1,000,000 990,899
2.13% due 07/31/2024................... 50,000 47,705
-----------
5,639,754
-----------
Total U.S. Government Treasuries
(cost $5,748,942)...................... 5,738,422
-----------
LOANS(14)(15)(16) -- 5.9%
Auto-Heavy Duty Trucks -- 0.0%
Navistar Financial Corp. FRS
BTL-B
6.00% (1 ML + 3.75%)
due 08/03/2025......................... 90,583 90,866
-----------
Broadcast Services/Program -- 0.1%
Univision Communications, Inc. FRS
BTL
4.99% (1 ML + 2.75%)
due 03/15/2024......................... 353,070 342,919
-----------
Building & Construction Products-Misc. --
0.1%
Forterra Finance LLC FRS
BTL
5.24% (1 ML + 3.00%)
due 10/25/2023......................... 382,076 365,169
-----------
Building & Construction-Misc. -- 0.1%
ATS Consolidated, Inc. FRS
BTL-B
5.99% (1 ML + 3.75%)
due 02/28/2025......................... 353,225 354,771
ATS Consolidated, Inc. FRS
BTL-B
coupon TBD
due 02/28/2025......................... 27,047 27,165
-----------
381,936
-----------
Principal Value
Security Description Amount(17) (Note 2)
Building Products-Air & Heating -- 0.1%
Thermasys Corp. FRS
BTL
6.33% (3 ML + 4.00%)
due 05/03/2019............................ $349,964 $311,468
Thermasys Corp. FRS
BTL
8.25% (USFRBPLR + 3.00%)
due 05/03/2019............................ 2,518 2,241
--------
313,709
--------
Building Products-Doors & Windows -- 0.1%
CHI Doors Holding Corp. FRS
BTL
5.49% (1 ML + 3.25%)
due 07/29/2022............................ 352,284 353,311
--------
Cable/Satellite TV -- 0.3%
Altice France SA FRS
BTL-B13
6.16% (1 ML + 4.00%)
due 08/14/2026............................ 175,000 173,337
Cogeco Communications USA II LP FRS
BTL-B
4.62% (1 ML + 2.38%)
due 01/03/2025............................ 84,788 84,735
CSC Holdings LLC FRS
BTL-B
4.66% (1 ML + 2.50%)
due 01/25/2026............................ 354,113 354,024
Ziggo Secured Finance FRS
BTL-E
4.66% (1 ML + 2.50%)
due 04/15/2025............................ 355,000 348,344
--------
960,440
--------
Casino Services -- 0.0%
Stars Group Holdings BV FRS
BTL
5.89% (3 ML + 3.50%)
due 07/10/2025............................ 62,241 62,742
--------
Chemicals-Diversified -- 0.0%
Schenectady International Group, Inc. FRS
1st Lien
coupon TBD
due 08/10/2025............................ 48,445 48,384
--------
Chemicals-Specialty -- 0.1%
LTI Holdings, Inc. FRS
BTL
coupon TBD
due 09/06/2025............................ 35,621 35,769
LTI Holdings, Inc. FRS
2nd Lien
8.99% (3 ML + 6.75%)
due 08/10/2026............................ 6,322 6,324
Starfruit Finco BV FRS
BTL-B
coupon TBD
due 09/20/2025............................ 70,499 70,782
--------
112,875
--------
37
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
LOANS(14)(15)(16) (continued)
Commercial Services-Finance -- 0.1%
MoneyGram International, Inc. FRS
BTL-B
5.64% (3 ML + 3.25%)
due 03/27/2020...................... $ 352,142 $343,338
Verscend Holding Corp. FRS
BTL
6.74% (1 ML + 4.50%)
due 08/27/2025...................... 33,953 34,066
--------
377,404
--------
Computer Services -- 0.1%
Alion Science & Tech Corp. FRS
BTL
6.74% (1 ML + 4.50%)
due 08/19/2021...................... 180,000 180,825
Banff Merger Sub, Inc. FRS
BTL
coupon TBD
due 09/01/2025...................... 114,981 116,018
--------
296,843
--------
Computer Software -- 0.2%
Rackspace Hosting, Inc. FRS
BTL-B
5.35% (3 ML + 3.00%)
due 11/03/2023...................... 352,324 347,543
Vertafore, Inc. FRS
BTL
9.49% (1 ML + 7.25%)
due 07/02/2026...................... 42,934 43,135
--------
390,678
--------
Computers-Integrated Systems -- 0.0%
Verifone Systems, Inc. FRS
BTL
6.32% (3 ML + 4.00%)
due 08/20/2025...................... 82,533 83,028
--------
Consulting Services -- 0.0%
Stiphout Finance LLC FRS
BTL
5.24% (1 ML + 3.00%)
due 10/26/2022...................... 32,722 33,009
--------
Dialysis Centers -- 0.1%
U.S. Renal Care, Inc. FRS
BTL
6.64% (3 ML + 4.25%)
due 12/31/2022...................... 352,283 343,036
--------
E-Commerce/Services -- 0.3%
RentPath LLC FRS
2nd Lien
11.25% (1 ML + 9.00%)
due 12/17/2022...................... 1,062,906 680,260
--------
Electronic Components-Misc. -- 0.1%
AI Ladder Luxembourg Subco SARL FRS
BTL
7.02% (3 ML + 4.50%)
due 07/09/2025...................... 193,923 194,650
--------
Principal Value
Security Description Amount(17) (Note 2)
Finance-Investment Banker/Broker -- 0.1%
Advisor Group, Inc. FRS
BTL
5.91% (1 ML + 3.75%)
due 08/15/2025........................... $ 25,747 $ 25,860
Deerfield Holdings Corp. Acquisition FRS
BTL
5.49% (3 ML + 3.25%)
due 02/13/2025........................... 119,608 119,664
--------
145,524
--------
Finance-Other Services -- 0.0%
Pi US Mergerco, Inc. FRS
1st Lien
5.74% (1 ML + 3.50%)
due 12/20/2024........................... 89,203 88,891
--------
Footwear & Related Apparel -- 0.1%
Calceus Acquisition, Inc. FRS
BTL
6.25% (1 ML + 4.00%)
due 02/01/2020........................... 339,523 337,259
--------
Hotels/Motels -- 0.0%
Marriott Ownership Resorts, Inc . FRS
BTL-B
4.49% (1 ML + 2.25%)
due 08/29/2025........................... 16,356 16,486
--------
Insurance Brokers -- 0.2%
Financial & Risk Holdings, Inc. FRS
BTL
coupon TBD
due 10/01/2025........................... 72,662 72,493
HUB International, Ltd. FRS
BTL-B1
5.34% (3 ML + 3.00%)
due 04/25/2025........................... 97,191 97,328
USI, Inc. FRS
BTL-B
5.39% (3 ML + 3.00%)
due 05/16/2024........................... 352,331 352,205
--------
522,026
--------
Insurance-Multi-line -- 0.1%
York Risk Services Holdings Corp. FRS
BTL
5.99% (1 ML + 3.75%)
due 10/01/2021........................... 352,248 340,360
--------
Insurance-Property/Casualty -- 0.1%
Asurion LLC FRS
BTL-B6
5.24% (1 ML + 3.00%)
due 11/03/2023........................... 342,014 344,294
Asurion LLC FRS
2nd Lien
8.74% (1 ML + 6.50%)
due 08/04/2025........................... 7,101 7,299
--------
351,593
--------
38
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
LOANS(14)(15)(16) (continued)
Internet Financial Services -- 0.2%
Diamond U.S. Holdings LLC FRS
BTL
6.24% (1 ML + 4.00%)
due 12/23/2024.................... $349,886 $350,324
ION Trading Finance, Ltd. FRS
BTL
6.39% (3 ML + 4.00%)
due 11/21/2024.................... 294,990 293,638
--------
643,962
--------
Leisure Products -- 0.2%
Hayward Industries, Inc. FRS
BTL-B
5.74% (1 ML + 3.50%)
due 08/05/2024.................... 352,331 354,313
Hayward Industries, Inc. FRS
BTL-B
coupon TBD
due 08/05/2024.................... 50,302 50,585
--------
404,898
--------
Machinery-Electrical -- 0.1%
Brookfield Wec Holdings, Inc. FRS
BTL
5.99% (1 ML + 3.75%)
due 08/01/2025.................... 92,340 93,437
--------
Machinery-General Industrial -- 0.2%
Duravant LLC FRS
BTL
5.64% (3 ML + 3.25%)
due 07/19/2024.................... 352,338 347,052
Waterjet Holdings, Inc. FRS
BTL
5.18% (1 ML + 3.00%)
due 04/21/2025.................... 75,564 75,470
Waterjet Holdings, Inc. FRS
BTL
5.31% (3 ML + 3.00%)
due 04/21/2025.................... 9,475 9,463
Waterjet Holdings, Inc. FRS
BTL
5.50% (6 ML + 3.00%)
due 04/21/2025.................... 9,475 9,463
--------
441,448
--------
Machinery-Pumps -- 0.2%
STS Operating, Inc. FRS
1st Lien
6.49% (1 ML + 4.25%)
due 12/11/2024.................... 182,277 181,821
Titan Acquisition, Ltd. FRS
BTL-B
5.24% (1 ML + 3.00%)
due 03/28/2025.................... 353,225 341,855
--------
523,676
--------
Principal Value
Security Description Amount(17) (Note 2)
Marine Services -- 0.1%
Drew Marine Group, Inc. FRS
BTL
5.47%-5.49% (1 ML + 3.25%)
due 11/19/2020...................... $253,845 $252,575
--------
Medical Products -- 0.0%
Auris Luxembourg III SARL FRS
BTL-B
coupon TBD
due 07/20/2025...................... 19,898 20,134
--------
Medical-Drugs -- 0.2%
Akorn, Inc. FRS
BTL
7.00% (1 ML + 4.75%)
due 04/16/2021...................... 355,000 343,463
Alphabet Holding Co., Inc. FRS
BTL
5.74% (1 ML + 3.50%)
due 09/26/2024...................... 141,535 136,581
Alphabet Holding Co., Inc. FRS
BTL
coupon TBD
due 09/26/2024...................... 33,108 31,949
--------
511,993
--------
Medical-Generic Drugs -- 0.1%
Alvogen Pharma US, Inc. FRS
1st Lien
6.99% (1 ML + 4.75%)
due 04/02/2022...................... 196,287 197,514
--------
Medical-HMO -- 0.1%
MultiPlan, Inc. FRS
BTL-B
5.14% (3 ML + 2.75%)
due 06/07/2023...................... 326,530 327,040
--------
Medical-Hospitals -- 0.0%
Envision Healthcare Corp. FRS
1st Lien
coupon TBD
due 09/26/2025...................... 83,362 83,154
--------
Medical-Nursing Homes -- 0.2%
Kindred Healthcare, Inc. FRS
1st Lien
7.25% (1 ML + 5.00%)
due 06/19/2025...................... 608,027 609,547
--------
Metal Processors & Fabrication -- 0.3%
CIRCOR International, Inc. FRS
1st Lien
5.64% (1 ML + 3.50%)
due 12/11/2024...................... 352,338 354,099
Crosby US Acquisition Corp. FRS
1st Lien
5.21% (1 ML + 3.00%)
due 11/23/2020...................... 352,227 348,557
39
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
LOANS(14)(15)(16) (continued)
Metal Processors & Fabrication (continued)
Doncasters Group, Ltd. FRS
BTL
5.89% (3 ML + 3.50%)
due 04/09/2020.............................. $255,591 $237,274
--------
939,930
--------
Metal-Diversified -- 0.1%
Unimin Corp. FRS
BTL
6.14% (3 ML + 3.75%)
due 06/01/2025.............................. 164,588 154,136
--------
Oil Companies-Exploration & Production -- 0.1%
Osum Production Corp. FRS
BTL
7.89% (3 ML + 5.50%)
due 07/28/2020(4)........................... 411,783 378,840
--------
Pipelines -- 0.1%
Medallion Midland Acquisition LLC FRS
1st Lien
5.49% (1 ML + 3.25%)
due 10/30/2024.............................. 352,338 349,034
--------
Quarrying -- 0.0%
US Silica Co. FRS
BTL-B
6.25% (1 ML + 4.00%)
due 05/01/2025.............................. 77,542 75,652
--------
Real Estate Management/Services -- 0.0%
DTZ U. S. Borrower LLC FRS
BTL
5.49% (1 ML + 3.25%)
due 08/21/2025.............................. 62,105 62,260
--------
Resort/Theme Parks -- 0.1%
SW Acquisitions Co., Inc. FRS
BTL
5.24% (1 ML + 3.00%)
due 03/31/2024.............................. 352,317 351,437
--------
Retail-Hypermarkets -- 0.1%
Smart & Final Stores LLC FRS
BTL
5.74% (1 ML + 3.50%)
due 11/15/2022.............................. 355,000 347,723
--------
Retail-Major Department Stores -- 0.1%
Hudson's Bay Co. FRS
BTL-B
5.49% (1 ML + 3.25%)
due 09/30/2022.............................. 100,005 97,655
--------
Retail-Petroleum Products -- 0.1%
EG Dutch Finance Co. FRS
BTL
6.39% (3 ML + 4.00%)
due 02/07/2025.............................. 353,225 354,550
--------
Principal Value
Security Description Amount(17) (Note 2)
Retail-Sporting Goods -- 0.1%
Bass Pro Group LLC FRS
BTL-B
7.24% (1 ML + 5.00%)
due 09/25/2024....................... $352,331 $355,744
--------
Soap & Cleaning Preparation -- 0.1%
Diamond BC BV FRS
BTL
5.24% (1 ML + 3.00%)
due 09/06/2024....................... 352,338 345,071
--------
Steel-Producers -- 0.1%
Helix Acquisition Holdings, Inc. FRS
1st Lien
5.89% (3 ML + 3.50%)
due 09/29/2024....................... 375,229 376,637
--------
Storage/Warehousing -- 0.0%
Moda Midstream LLC FRS
BTL-B
coupon TBD
due 09/26/2025....................... 11,404 11,504
--------
Telecom Services -- 0.1%
GTT Communications, Inc. FRS
BTL
4.99% (1 ML + 2.75%)
due 05/31/2025....................... 164,588 163,070
West Corp. FRS
BTL-B1
5.74% (1 ML + 3.50%)
due 10/10/2024....................... 167,034 165,603
--------
328,673
--------
Telephone-Integrated -- 0.2%
CenturyLink, Inc. FRS
BTL-B
4.99% (1 ML + 2.75%)
due 01/31/2025....................... 352,338 349,842
TDC A/S FRS
BTL-B2
5.84% (3 ML + 3.50%)
due 05/31/2025....................... 124,502 125,872
--------
475,714
--------
Theaters -- 0.1%
Cineworld, Ltd. FRS
BTL-B
4.74% (1 ML + 2.50%)
due 02/28/2025....................... 353,225 352,587
--------
Transport-Equipment & Leasing -- 0.1%
Goodpack, Ltd. FRS
1st Lien
6.09% (3 ML + 3.75%)
due 09/11/2023....................... 179,310 180,356
Goodpack, Ltd. FRS
2nd Lien
9.34% (3 ML + 7.00%)
due 09/11/2024....................... 25,868 26,062
--------
206,418
--------
40
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Shares/
Principal Value
Security Description Amount(17) (Note 2)
LOANS(14)(15)(16) (continued)
Transport-Truck -- 0.1%
Pods LLC FRS
BTL-B4
4.88% (1 ML + 2.75%)
due 12/06/2024........................ $ 352,331 $ 352,948
-----------
Total Loans
(cost $17,720,994).................... 17,259,289
-----------
COMMON STOCKS -- 0.2%
Television -- 0.2%
ION Media Networks, Inc.+(4)(5)(10)
(cost $6)............................. 655 550,318
-----------
PREFERRED SECURITIES -- 0.1%
Electric-Distribution -- 0.0%
Entergy Louisiana LLC
4.70%................................. 5,200 118,300
-----------
Sovereign Agency -- 0.0%
Federal Home Loan Mtg. Corp.
Series Z
8.38%................................. 5,875 31,314
-----------
Telecom Services -- 0.1%
Qwest Corp.
6.13%................................. 6,225 140,249
-----------
Total Preferred Securities
(cost $376,335)....................... 289,863
-----------
PREFERRED SECURITIES/CAPITAL SECURITIES -- 1.8%
Banks-Commercial -- 0.1%
Banco Bilbao Vizcaya Argentaria SA
6.13% due 11/16/2027(11).............. 200,000 179,750
Cooperatieve Rabobank UA
11.00% due 06/30/2019*(11)............ 152,000 160,436
-----------
340,186
-----------
Banks-Money Center -- 0.1%
BBVA Bancomer SA
5.13% due 01/18/2033*................. 201,000 182,659
-----------
Banks-Super Regional -- 0.1%
Huntington Bancshares, Inc.
Series E
5.70% due 04/15/2023(11).............. 64,000 63,440
Wells Fargo Capital X
5.95% due 12/01/2086.................. 97,000 103,790
-----------
167,230
-----------
Building Societies -- 0.1%
Nationwide Building Society
6.88% due 06/20/2019(11).............. GBP 150,000 199,237
-----------
Diversified Banking Institutions -- 0.4%
BAC Capital Trust XIII
Series F
4.00% due 10/17/2018(11).............. 266,000 224,770
Bank of Nova Scotia
4.65% due 10/12/2022(11).............. 196,000 183,873
HSBC Holdings PLC
5.88% due 09/28/2026(11).............. GBP 225,000 293,998
Principal Value
Security Description Amount(17) (Note 2)
Diversified Banking Institutions (continued)
HSBC Holdings PLC
6.00% due 05/22/2027(11)..................... $ 273,000 $ 261,875
JPMorgan Chase & Co.
Series CC
4.63% due 11/01/2022(11)..................... 161,000 152,167
JPMorgan Chase & Co.
Series U
6.13% due 04/30/2024(11)..................... 311,000 322,663
----------
1,439,346
----------
Electric-Generation -- 0.0%
Engie SA
4.63% due 01/10/2019(11)..................... GBP 100,000 131,155
----------
Electric-Integrated -- 0.1%
Dominion Resources, Inc.
5.75% due 10/01/2054......................... 79,000 82,211
Gas Natural Fenosa Finance BV
3.38% due 04/24/2024(11)..................... EUR 100,000 115,670
----------
197,881
----------
Finance-Investment Banker/Broker -- 0.0%
Lehman Brothers Holdings Capital Trust VII
Escrow Security
0.00%+(4)(5)................................. 222,000 22
----------
Finance-Other Services -- 0.1%
National Rural Utilities Cooperative Finance
Corp.
4.75% due 04/30/2043......................... 236,000 237,655
----------
Food-Dairy Products -- 0.1%
Land O'Lakes Capital Trust I
7.45% due 03/15/2028*........................ 328,000 356,700
----------
Gas-Distribution -- 0.1%
Centrica PLC
3.00% due 04/10/2076......................... EUR 225,000 267,130
----------
Insurance-Life/Health -- 0.1%
Aviva PLC
6.13% due 07/05/2043......................... EUR 215,000 290,762
Hanwha Life Insurance Co., Ltd.
4.70% due 04/23/2048*........................ 250,000 237,817
Prudential Financial, Inc.
4.50% due 09/15/2047......................... 72,000 66,420
----------
594,999
----------
Insurance-Multi-line -- 0.1%
Assurant, Inc.
7.00% due 03/27/2048......................... 147,000 149,205
----------
Pipelines -- 0.1%
Energy Transfer Partners LP
6.25% due 02/15/2023(11)..................... 75,000 72,188
EnLink Midstream Partners LP
6.00% due 12/15/2022(11)..................... 67,000 60,572
Enterprise Products Operating LLC
5.25% due 08/16/2077......................... 49,000 45,663
TransCanada Trust
5.30% due 03/15/2077......................... 86,000 81,807
41
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount(17) (Note 2)
PREFERRED SECURITIES/CAPITAL SECURITIES (continued)
Pipelines (continued)
TransCanada Trust
5.63% due 05/20/2075....................... $ 72,000 $ 70,561
------------
330,791
------------
Telephone-Integrated -- 0.1%
Orange SA
5.25% due 02/07/2024(11)................... EUR 140,000 182,464
------------
Tools-Hand Held -- 0.1%
Stanley Black & Decker, Inc.
5.75% due 12/15/2053....................... 272,000 275,400
------------
Water -- 0.1%
Suez
3.00% due 06/23/2020(11)................... EUR 300,000 360,070
------------
Total Preferred Securities/Capital Securities
(cost $5,500,126).......................... 5,412,130
------------
Total Long-Term Investment Securities
(cost $295,214,994)........................ 286,692,654
------------
SHORT-TERM INVESTMENT SECURITIES -- 1.4%
Registered Investment Companies -- 1.4%
State Street Institutional U.S. Government
Money Market Fund, Premier Class
1.97%(12)
(cost $4,028,601).......................... 4,028,601 4,028,601
------------
TOTAL INVESTMENTS
(cost $299,243,595)(13).................... 99.5% 290,721,255
Other assets less liabilities................. 0.5 2,344,855
------------ ------------
NET ASSETS 100.0% $293,066,110
============ ============
--------
* 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 September 30, 2018,
the aggregate value of these securities was $73,454,604 representing 25.1%
of net assets. Unless otherwise indicated, these securities are not
considered to be illiquid.
+ Non-income producing security
(1) Collateralized Mortgage Obligation
(2) Certain variable rate securities are not based on a published reference
rate and spread but are determined by the issuer or agent and are based on
current market conditions. These securities do not indicate a reference
rate and spread in their description above.
(3) Commercial Mortgage Backed Security
(4) Securities classified as Level 3 (see Note 2).
(5) Illiquid security. At September 30, 2018, the aggregate value of these
securities was $558,914 representing 0.2% of net assets.
(6) Company has filed for bankruptcy protection.
(7) Security in default of interest and principal at maturity.
(8) Interest Only
(9) Inverse Floating Rate Security that pays interest that varies inversely to
changes in the market interest rates. The interest rate shown is the
current interest rate at September 30, 2018.
(10) Denotes a restricted security that: (a) cannot be offered for public sale
without first being registered, or being able to take advantage of an
exemption from registration, under the Securities Act of 1933, as amended
(the "1933 Act"); (b) is subject to a contractual restriction on public
sales; or (c) is otherwise subject to a restriction on sales by operation
of applicable law. Restricted securities are valued pursuant to Note
2. Certain restricted securities held by the Fund may not be sold except
in exempt transactions or in a public offering registered under the 1933
Act. The Fund has no right to demand registration of these securities. The
risk of investing in certain restricted securities is greater than the
risk of investing in the securities of widely held, publicly traded
companies. To the extent applicable, lack of a secondary market and resale
restrictions may result in the inability of a Fund to sell a security at a
fair price and may substantially delay the sale of the security. In
addition, certain restricted securities may exhibit greater price
volatility than securities for which secondary markets exist. As of
September 30, 2018, the Fund held the following restricted securities:
Value % of
Acquisition Acquisition Per Net
Description Date Shares Cost Value Share Assets
----------- ----------- ------ ----------- -------- ------- ------
Common Stocks
ION Media Networks,
Inc................ 12/16/2016 655 $6.00 $550,318 $840.18 0.19%
=== ===== ======== ====
(11) Perpetual maturity -- maturity date reflects the next call date.
(12) The rate shown is the 7-day yield as of September 30, 2018.
(13) See Note 5 for cost of investments on a tax basis.
(14) Senior loans in the Fund are generally subject to mandatory and/or
optional prepayment. Because of these mandatory prepayment conditions and
because there may be significant economic incentives for a borrower to
prepay, prepayments may occur. As a result, the actual remaining maturity
may be substantially less than the stated maturities shown.
(15) The Fund invests in senior loans which generally pay interest at rates
which are periodically re-determined by reference to a base lending rate
plus a premium. These base lending rates are generally either the lending
rate offered by one or more major European banks, such as the London
Inter-Bank Offer Rate ("LIBOR") or the prime rate offered by one or more
major United States banks, or the certificate of deposit rate. Senior
loans are generally considered to be restrictive in that the Fund is
ordinarily contractually obligated to receive approval from the Agent Bank
and/or borrower prior to the disposition of a senior loan.
(16) All loans in the Fund were purchased through assignment agreements unless
otherwise indicated.
(17) Denominated in United States dollars unless otherwise indicated.
BTL --Bank Term Loan
REMIC --Real Estate Mortgage Investment Conduit
TBD --Senior loan purchased on a when issued or delayed-delivery basis. Certain
details associated with this purchase are not known prior to the
settlement date of the transaction. In addition, senior loans typically
trade without accrued interest and therefore a coupon rate is not
available prior to the settlement.
ULC --Unlimited Liability Corp.
FRS --Floating Rate Security
VRS --Variable Rate Security
The rates shown on FRS and VRS are the current interest rates at September 30,
2018 and unless noted otherwise, the dates shown are the original maturity
dates.
42
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Currency Legend
EUR --Euro Currency
GBP --Pound Sterling
Index Legend
1 ML -- 1 Month USD LIBOR
1 Yr USTYCR -- 1 Year US Treasury Yield Curve Rate
3 ML -- 3 Month USD LIBOR
6 ML -- 6 Month USD LIBOR
12 ML -- 12 Month USD LIBOR
USFRBPLR --US Federal Reserve Bank Prime Loan Rate
Forward Foreign Currency Contracts
Contract to In Exchange Delivery Unrealized Unrealized
Counterparty Deliver For Date Appreciation Depreciation
------------------------------------------------------------------------------------------
JPMorgan Chase Bank N.A EUR 5,255,000 USD 6,175,410 10/25/2018 $ 63,129 $ --
EUR 6,570,000 USD 7,767,875 11/29/2018 105,066 --
GBP 995,000 USD 1,310,735 10/25/2018 12,532 --
USD 895,023 EUR 764,700 10/25/2018 -- (5,573)
USD 211,347 EUR 180,000 11/29/2018 -- (1,407)
-------- -------
Net Unrealized Appreciation/(Depreciation).... 180,727 (6,980)
======== =======
--------
EUR --Euro Currency
GBP --Pound Sterling
USD --United States Dollar
The following is a summary of the inputs used to value the Fund's net assets as
of September 30, 2018 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- ------------
ASSETS:
Investments at Value:*
Asset Backed Securities.................. $ -- $ 3,031,731 $ -- 3,031,731
U.S. Corporate Bonds & Notes:
Airlines............................... -- -- 24,634 24,634
Finance-Investment Banker/Broker....... -- 814,961 64 815,025
Gambling (Non-Hotel)................... -- 882,187 8,510 890,697
Rubber/Plastic Products................ -- -- 0 0
Other Industries....................... -- 88,475,371 -- 88,475,371
Foreign Corporate Bonds & Notes:
Special Purpose Entity................. -- -- 0 0
Other Industries....................... -- 55,827,033 -- 55,827,033
Foreign Government Obligations........... -- 51,482,030 -- 51,482,030
U.S. Government Agencies................. -- 56,896,111 -- 56,896,111
U.S. Government Treasuries............... -- 5,738,422 -- 5,738,422
Loans:
Oil Companies-Exploration & Production. -- -- 378,840 378,840
Other Industries....................... -- 16,880,449 -- 16,880,449
Common Stocks............................ -- -- 550,318 550,318
Preferred Securities..................... 289,863 -- -- 289,863
Preferred Securities/Capital Securities:
Finance-Investment Banker/Broker....... -- -- 22 22
Other Industries....................... -- 5,412,108 -- 5,412,108
Short-Term Investment Securities......... 4,028,601 -- -- 4,028,601
---------- ------------ -------- ------------
Total Investments at Value............... $4,318,464 $285,440,403 $962,388 290,721,255
========== ============ ======== ============
Other Financial Instruments:+
Forward Foreign Currency Contracts....... $ -- $ 180,727 $ -- $ 180,727
========== ============ ======== ============
LIABILITIES:
Other Financial Instruments:+
Forward Foreign Currency Contracts....... $ -- $ 6,980 $ -- $ 6,980
========== ============ ======== ============
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
+ Other financial instruments are derivative instruments, not reflected in the
Portfolio of Investments, such as futures, forward, swap and written option
contracts, which are valued at the unrealized appreciation (depreciation) on
the instrument.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no material transfers between Levels during the
reporting period.
At the beginning and end of the reporting period, Level 3 investments were not
considered a material portion of the Fund.
See Notes to Financial Statements
43
AIG Flexible Credit Fund
PORTFOLIO PROFILE -- September 30, 2018 -- (unaudited)
Industry Allocation*
Oil Companies-Exploration & Production. 4.4%
Cable/Satellite TV..................... 3.8
Medical-Hospitals...................... 3.2
Chemicals-Specialty.................... 2.5
Telephone-Integrated................... 2.2
Casino Hotels.......................... 2.1
Hotels/Motels.......................... 2.0
Diversified Financial Services......... 2.0
Auto/Truck Parts & Equipment-Original.. 1.9
Pipelines.............................. 1.8
Medical Labs & Testing Services........ 1.8
Computer Services...................... 1.7
Broadcast Services/Program............. 1.7
Building-Residential/Commercial........ 1.7
Registered Investment Companies........ 1.7
Containers-Metal/Glass................. 1.7
Real Estate Investment Trusts.......... 1.7
Medical-Drugs.......................... 1.6
Enterprise Software/Service............ 1.5
Oil-Field Services..................... 1.4
Food-Misc./Diversified................. 1.4
Applications Software.................. 1.3
Building & Construction Products-Misc.. 1.2
Gambling (Non-Hotel)................... 1.2
Finance-Commercial..................... 1.2
Finance-Consumer Loans................. 1.2
Computer Software...................... 1.2
Schools................................ 1.2
Oil & Gas Drilling..................... 1.1
Telecom Services....................... 1.1
Finance-Mortgage Loan/Banker........... 1.1
Cellular Telecom....................... 1.0
Containers-Paper/Plastic............... 1.0
Aerospace/Defense-Equipment............ 1.0
Distribution/Wholesale................. 1.0
Auto-Heavy Duty Trucks................. 1.0
Theaters............................... 0.9
Soap & Cleaning Preparation............ 0.9
Machinery-General Industrial........... 0.8
Investment Companies................... 0.8
Commercial Services.................... 0.8
Food-Retail............................ 0.8
Machinery-Electrical................... 0.7
Electric-Generation.................... 0.7
Diagnostic Equipment................... 0.7
Casino Services........................ 0.7
Commercial Services-Finance............ 0.7
Machinery-Pumps........................ 0.7
Independent Power Producers............ 0.7
Medical-HMO............................ 0.6
Chemicals-Diversified.................. 0.6
Security Services...................... 0.6
Rubber/Plastic Products................ 0.6
Insurance-Property/Casualty............ 0.6
Housewares............................. 0.6
Retail-Building Products............... 0.6
Cosmetics & Toiletries................. 0.6
Building Products-Cement............... 0.6
Data Processing/Management............. 0.6
Diagnostic Kits........................ 0.6
Building-Heavy Construction............ 0.5
Medical-Generic Drugs................... 0.5%
Metal-Diversified....................... 0.5
Publishing-Periodicals.................. 0.5
Medical Products........................ 0.5
Motion Pictures & Services.............. 0.5
Dialysis Centers........................ 0.5
Banks-Super Regional.................... 0.5
Consulting Services..................... 0.5
Private Equity.......................... 0.5
Food-Dairy Products..................... 0.5
Medical Information Systems............. 0.5
Food-Meat Products...................... 0.5
Television.............................. 0.5
Pharmacy Services....................... 0.4
Non-Hazardous Waste Disposal............ 0.4
Paper & Related Products................ 0.4
Oil Refining & Marketing................ 0.4
Steel-Producers......................... 0.4
Retail-Major Department Stores.......... 0.4
Human Resources......................... 0.4
Veterinary Diagnostics.................. 0.4
Computers-Integrated Systems............ 0.4
Disposable Medical Products............. 0.4
Electric-Integrated..................... 0.4
Aerospace/Defense....................... 0.4
Finance-Credit Card..................... 0.4
Retail-Sporting Goods................... 0.4
Publishing-Books........................ 0.3
Energy-Alternate Sources................ 0.3
Bicycle Manufacturing................... 0.3
Finance-Auto Loans...................... 0.3
Consumer Products-Misc.................. 0.3
E-Commerce/Products..................... 0.3
Educational Software.................... 0.3
Vitamins & Nutrition Products........... 0.3
Coal.................................... 0.3
Printing-Commercial..................... 0.3
Instruments-Controls.................... 0.3
Retail-Convenience Store................ 0.3
Telecommunication Equipment............. 0.3
Food-Baking............................. 0.3
Retail-Propane Distribution............. 0.3
Building & Construction-Misc............ 0.3
E-Commerce/Services..................... 0.3
Appliances.............................. 0.3
Cruise Lines............................ 0.3
Advertising Services.................... 0.3
Retail-Vitamins & Nutrition Supplements. 0.3
Direct Marketing........................ 0.3
Retail-Restaurants...................... 0.3
Retail-Bedding.......................... 0.2
Retail-Misc./Diversified................ 0.2
Finance-Other Services.................. 0.2
Athletic Equipment...................... 0.2
Transport-Services...................... 0.2
Diversified Banking Institutions........ 0.2
Racetracks.............................. 0.2
Transport-Marine........................ 0.2
Internet Gambling....................... 0.2
Specified Purpose Acquisitions.......... 0.2
44
AIG Flexible Credit Fund
PORTFOLIO PROFILE -- September 30, 2018 -- (unaudited) (continued)
Industry Allocation* (continued)
Diversified Minerals................... 0.2%
Transport-Equipment & Leasing.......... 0.2
Internet Connectivity Services......... 0.2
Resorts/Theme Parks.................... 0.2
Machinery-Construction & Mining........ 0.2
Retail-Automobile...................... 0.2
Batteries/Battery Systems.............. 0.2
Insurance-Multi-line................... 0.1
Apparel Manufacturers.................. 0.1
Real Estate Operations & Development... 0.1
Gas-Distribution....................... 0.1
Retail-Pet Food & Supplies............. 0.1
Diversified Manufacturing Operations... 0.1
Medical Instruments.................... 0.1
Wireless Equipment..................... 0.1
Pollution Control...................... 0.1
Investment Management/Advisor Services. 0.1
Medical-Outpatient/Home Medical........ 0.1
Metal Processors & Fabrication......... 0.1
Recycling.............................. 0.1
Research & Development................. 0.1
Storage/Warehousing.................... 0.1
Cellular Telecom....................... 0.1
-----
101.6%
=====
Credit Quality+#
Aaa........ 1.0%
Baa........ 2.2
Ba......... 23.0
B.......... 53.7
Caa........ 15.1
Not Rated@. 5.0
-----
100.0%
=====
--------
*Calculated as a percentage of net assets
+Source: Moody's
#Calculated as a percentage of total debt issues, excluding short-term
securities.
@Represents debt issues that either have no rating, or the rating is
unavailable from the data source.
45
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
Principal Value
Security Description Amount (Note 2)
ASSET BACKED SECURITIES -- 2.0%
Diversified Financial Services -- 2.0%
BBCMS Mtg. Trust FRS
Series 2018-TALL, Class A
2.88% (1 ML + 0.72%)
due 03/15/2037*(1)..................... $3,500,000 $3,497,809
Home Equity Loan Trust VRS
Series 2007-HSA3, Class AI4
6.11% due 06/25/2037(2)................ 414,201 414,041
Sofi Consumer Loan Program Trust
Series 2018-3, Class A1
3.20% due 08/25/2027*.................. 3,241,123 3,240,574
----------
Total Asset Backed Securities
(cost $7,149,211)...................... 7,152,424
----------
U.S. CORPORATE BONDS & NOTES -- 34.1%
Aerospace/Defense-Equipment -- 0.3%
TransDigm, Inc.
Company Guar. Notes
6.50% due 07/15/2024................... 380,000 389,310
TransDigm, Inc.
Company Guar. Notes
6.50% due 05/15/2025................... 600,000 611,250
----------
1,000,560
----------
Apparel Manufacturers -- 0.1%
Under Armour, Inc.
Senior Notes
3.25% due 06/15/2026................... 591,000 520,832
----------
Applications Software -- 0.3%
CDK Global, Inc.
Senior Notes
5.88% due 06/15/2026................... 945,000 973,709
----------
Athletic Equipment -- 0.2%
Vista Outdoor, Inc.
Company Guar. Notes
5.88% due 10/01/2023................... 810,000 793,800
----------
Auto-Heavy Duty Trucks -- 0.3%
Navistar International Corp.
Company Guar. Notes
6.63% due 11/01/2025*.................. 1,050,000 1,092,000
----------
Broadcast Services/Program -- 0.8%
Clear Channel Worldwide Holdings, Inc.
Company Guar. Notes
7.63% due 03/15/2020................... 1,680,000 1,684,200
iHeartCommunications, Inc.
Senior Sec. Notes
9.00% due 12/15/2019+(3)(4)............ 690,000 519,225
Univision Communications, Inc.
Senior Sec. Notes
5.13% due 05/15/2023*.................. 740,000 706,700
----------
2,910,125
----------
Building & Construction-Misc. -- 0.3%
Frontdoor, Inc.
Senior Notes
6.75% due 08/15/2026*.................. 150,000 154,500
Principal Value
Security Description Amount (Note 2)
Building & Construction-Misc. (continued)
Weekley Homes LLC/Weekley Finance Corp.
Senior Notes
6.63% due 08/15/2025......................... $ 900,000 $ 857,250
----------
1,011,750
----------
Building-Heavy Construction -- 0.1%
New Enterprise Stone & Lime Co., Inc.
Senior Notes
10.13% due 04/01/2022*....................... 375,000 401,484
----------
Building-Residential/Commercial -- 1.7%
Beazer Homes USA, Inc.
Company Guar. Notes
5.88% due 10/15/2027......................... 560,000 476,000
Beazer Homes USA, Inc.
Company Guar. Notes
6.75% due 03/15/2025......................... 720,000 666,756
Lennar Corp.
Company Guar. Notes
5.25% due 06/01/2026......................... 815,000 807,869
M/I Homes, Inc.
Company Guar. Notes
5.63% due 08/01/2025......................... 730,000 686,200
MDC Holdings, Inc.
Company Guar. Notes
5.50% due 01/15/2024......................... 700,000 698,250
PulteGroup, Inc.
Company Guar. Notes
5.50% due 03/01/2026......................... 660,000 656,700
TRI Pointe Group Inc./TRI Pointe Homes Inc.
Company Guar. Notes
5.88% due 06/15/2024......................... 1,475,000 1,463,937
William Lyon Homes, Inc.
Company Guar. Notes
6.00% due 09/01/2023......................... 700,000 675,500
----------
6,131,212
----------
Cable/Satellite TV -- 2.0%
Altice US Finance I Corp.
Senior Sec. Notes
5.38% due 07/15/2023*........................ 630,000 637,088
Cablevision Systems Corp.
Senior Notes
5.88% due 09/15/2022......................... 1,255,000 1,279,316
CCO Holdings LLC/CCO Holdings Capital Corp.
Senior Notes
5.13% due 05/01/2027*........................ 825,000 781,687
Cequel Communications Holdings I LLC/Cequel
Capital Corp.
Senior Notes
7.50% due 04/01/2028*........................ 585,000 613,519
Charter Communications Operating LLC/Charter
Communications Operating Capital
Senior Sec. Notes
4.50% due 02/01/2024......................... 1,675,000 1,685,266
DISH DBS Corp.
Company Guar. Notes
5.00% due 03/15/2023......................... 1,465,000 1,329,487
46
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Cable/Satellite TV (continued)
DISH DBS Corp.
Company Guar. Notes
7.75% due 07/01/2026.............................. $ 340,000 $ 320,722
Radiate Holdco LLC/Radiate Finance, Inc.
Senior Notes
6.63% due 02/15/2025*............................. 590,000 551,650
Radiate Holdco LLC/Radiate Finance, Inc.
Senior Notes
6.88% due 02/15/2023*............................. 100,000 96,250
----------
7,294,985
----------
Casino Hotels -- 0.8%
Boyd Gaming Corp.
Company Guar. Notes
6.00% due 08/15/2026.............................. 260,000 261,950
Boyd Gaming Corp.
Company Guar. Notes
6.38% due 04/01/2026.............................. 1,615,000 1,661,431
MGM Resorts International
Company Guar. Notes
5.75% due 06/15/2025.............................. 780,000 782,925
----------
2,706,306
----------
Cellular Telecom -- 1.0%
Sprint Corp.
Company Guar. Notes
7.88% due 09/15/2023.............................. 1,475,000 1,591,156
Sprint Nextel Corp.
Senior Notes
6.00% due 11/15/2022.............................. 750,000 765,000
T-Mobile USA, Inc.
Company Guar. Notes
4.50% due 02/01/2026.............................. 1,445,000 1,379,065
----------
3,735,221
----------
Chemicals-Diversified -- 0.2%
Hexion, Inc.
Senior Sec. Notes
10.38% due 02/01/2022*............................ 495,000 481,387
Hexion, Inc.
Sec. Notes
13.75% due 02/01/2022*............................ 395,000 342,663
----------
824,050
----------
Chemicals-Specialty -- 0.7%
Cornerstone Chemical Co.
Senior Sec. Notes
6.75% due 08/15/2024*............................. 795,000 796,169
Kraton Polymers LLC/Kraton Polymers Capital Corp.
Company Guar. Notes
7.00% due 04/15/2025*............................. 535,000 549,712
Platform Specialty Products Corp.
Company Guar. Notes
5.88% due 12/01/2025*............................. 1,000,000 986,770
----------
2,332,651
----------
Principal Value
Security Description Amount (Note 2)
Commercial Services -- 0.2%
ServiceMaster Co. LLC
Company Guar. Notes
5.13% due 11/15/2024*...................... $ 620,000 $ 610,700
----------
Computer Services -- 0.6%
Banff Merger Sub, Inc.
Senior Notes
9.75% due 09/01/2026*...................... 530,000 537,685
Exela Intermediate LLC/Exela Finance, Inc.
Senior Sec. Notes
10.00% due 07/15/2023*..................... 980,000 1,043,700
West Corp.
Company Guar. Notes
8.50% due 10/15/2025*...................... 640,000 587,200
----------
2,168,585
----------
Computers-Integrated Systems -- 0.1%
Everi Payments, Inc.
Company Guar. Notes
7.50% due 12/15/2025*...................... 250,000 252,500
----------
Consumer Products-Misc. -- 0.3%
Prestige Brands, Inc.
Company Guar. Notes
6.38% due 03/01/2024*...................... 1,150,000 1,162,937
----------
Containers-Metal/Glass -- 0.2%
Owens-Brockway Glass Container, Inc.
Company Guar. Notes
6.38% due 08/15/2025*...................... 665,000 683,288
----------
Diagnostic Equipment -- 0.7%
Avantor, Inc.
Senior Sec. Notes
6.00% due 10/01/2024*...................... 1,155,000 1,172,325
Avantor, Inc.
Senior Notes
9.00% due 10/01/2025*...................... 735,000 758,887
Ortho-Clinical Diagnostics, Inc.
Senior Notes
6.63% due 05/15/2022*...................... 525,000 512,925
----------
2,444,137
----------
Dialysis Centers -- 0.2%
DaVita HealthCare Partners, Inc.
Company Guar. Notes
5.13% due 07/15/2024....................... 635,000 612,775
----------
Disposable Medical Products -- 0.2%
Sotera Health Holdings LLC
Senior Notes
6.50% due 05/15/2023*...................... 715,000 736,450
----------
Diversified Manufacturing Operations -- 0.1%
LSB Industries, Inc.
Senior Sec. Notes
9.63% due 05/01/2023*...................... 475,000 497,563
----------
Electric-Generation -- 0.1%
Vistra Operations Co LLC
Company Guar. Notes
5.50% due 09/01/2026*...................... 280,000 283,150
----------
47
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Electric-Integrated -- 0.0%
Texas Competitive Electric Holdings Co. LLC/
TCEH Finance, Inc.
Escrow Notes
11.50% due 10/01/2020+(5).................... $1,667,835 $ 5,837
----------
Energy-Alternate Sources -- 0.3%
TerraForm Power Operating LLC
Company Guar. Notes
4.25% due 01/31/2023*........................ 650,000 635,375
TerraForm Power Operating LLC
Company Guar. Notes
5.00% due 01/31/2028*........................ 590,000 548,700
----------
1,184,075
----------
Enterprise Software/Service -- 0.2%
Infor US, Inc.
Company Guar. Notes
6.50% due 05/15/2022......................... 665,000 674,011
----------
Finance-Consumer Loans -- 1.2%
Navient Corp.
Senior Notes
6.50% due 06/15/2022......................... 1,007,000 1,046,505
Navient Corp.
Senior Notes
6.75% due 06/25/2025......................... 850,000 853,187
Navient Corp.
Senior Notes
7.25% due 09/25/2023......................... 310,000 328,600
Springleaf Finance Corp.
Company Guar. Notes
6.13% due 05/15/2022......................... 1,040,000 1,072,500
Springleaf Finance Corp.
Company Guar. Notes
6.88% due 03/15/2025......................... 455,000 453,863
Springleaf Finance Corp.
Company Guar. Notes
7.13% due 03/15/2026......................... 390,000 388,050
----------
4,142,705
----------
Finance-Mortgage Loan/Banker -- 0.5%
Ladder Capital Finance Holdings LLLP/Ladder
Capital Finance Corp.
Company Guar. Notes
5.88% due 08/01/2021*........................ 1,235,000 1,251,981
Nationstar Mtg. LLC/Nationstar Capital Corp.
Company Guar. Notes
6.50% due 07/01/2021......................... 350,000 350,420
----------
1,602,401
----------
Finance-Other Services -- 0.2%
Tempo Acquisition LLC/Tempo Acquisition
Finance Corp.
Senior Notes
6.75% due 06/01/2025*........................ 885,000 860,663
----------
Food-Misc./Diversified -- 0.8%
Dole Food Co., Inc.
Senior Sec. Notes
7.25% due 06/15/2025*........................ 1,250,000 1,218,750
Principal Value
Security Description Amount (Note 2)
Food-Misc./Diversified (continued)
Matterhorn Merger Sub LLC/Matterhorn
Finance Sub, Inc.
Senior Notes
8.50% due 06/01/2026*......................... $ 580,000 $ 564,050
Post Holdings, Inc.
Company Guar. Notes
5.00% due 08/15/2026*......................... 435,000 411,314
Post Holdings, Inc.
Company Guar. Notes
5.50% due 03/01/2025*......................... 590,000 585,575
----------
2,779,689
----------
Food-Retail -- 0.4%
Albertsons Cos. LLC/Safeway, Inc./New
Albertson's, Inc./Albertson's LLC
Company Guar. Notes
5.75% due 03/15/2025.......................... 705,000 634,500
Safeway, Inc.
Senior Notes
7.25% due 02/01/2031.......................... 680,000 647,700
----------
1,282,200
----------
Gambling (Non-Hotel) -- 0.9%
Caesars Resort Collection LLC/CRC Finco, Inc.
Company Guar. Notes
5.25% due 10/15/2025*......................... 1,160,000 1,104,900
Delta Merger Sub, Inc.
Senior Notes
6.00% due 09/15/2026*......................... 455,000 460,688
Downstream Development Authority of the
Quapaw Tribe of Oklahoma
Senior Sec. Notes
10.50% due 02/15/2023*........................ 485,000 495,912
Pinnacle Entertainment, Inc.
Senior Notes
5.63% due 05/01/2024.......................... 715,000 755,219
Scientific Games International, Inc.
Company Guar. Notes
6.63% due 05/15/2021.......................... 440,000 437,800
----------
3,254,519
----------
Gas-Distribution -- 0.1%
AmeriGas Partners LP/AmeriGas Finance Corp.
Senior Notes
5.50% due 05/20/2025.......................... 510,000 501,075
----------
Hotels/Motels -- 0.5%
Hilton Domestic Operating Co., Inc.
Company Guar. Notes
5.13% due 05/01/2026*......................... 460,000 457,700
Marriott Ownership Resorts, Inc.
Company Guar. Notes
6.50% due 09/15/2026*......................... 1,415,000 1,452,356
----------
1,910,056
----------
Housewares -- 0.2%
American Greetings Corp.
Company Guar. Notes
8.75% due 04/15/2025*......................... 715,000 679,250
----------
48
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Independent Power Producers -- 0.7%
Calpine Corp.
Senior Notes
5.38% due 01/15/2023.............................. $1,497,000 $1,414,665
Dynegy, Inc.
Company Guar. Notes
7.38% due 11/01/2022.............................. 530,000 550,537
NRG Energy, Inc.
Company Guar. Notes
5.75% due 01/15/2028*............................. 340,000 343,400
----------
2,308,602
----------
Internet Connectivity Services -- 0.2%
Zayo Group LLC/Zayo Capital, Inc.
Company Guar. Notes
6.38% due 05/15/2025.............................. 600,000 622,662
----------
Investment Companies -- 0.1%
Compass Diversified Holdings/Compass Group
Diversified Holdings LLC
Senior Notes
8.00% due 05/01/2026*............................. 350,000 360,500
----------
Machinery-Electrical -- 0.2%
Vertiv Intermediate Holding Corp.
Senior Notes
12.00% due 02/15/2022*(6)......................... 795,000 812,888
----------
Medical Information Systems -- 0.1%
Change Healthcare Holdings LLC/Change
Healthcare Finance, Inc.
Senior Notes
5.75% due 03/01/2025*............................. 340,000 337,447
----------
Medical Labs & Testing Services -- 0.5%
Charles River Laboratories International, Inc.
Company Guar. Notes
5.50% due 04/01/2026*............................. 350,000 355,250
Eagle Holding Co. II LLC
Senior Notes
7.63% due 05/15/2022*(6).......................... 735,000 744,187
West Street Merger Sub, Inc.
Senior Notes
6.38% due 09/01/2025*............................. 810,000 767,475
----------
1,866,912
----------
Medical Products -- 0.2%
DJO Finco, Inc./DJO Finance LLC/DJO Finance Corp.
Sec. Notes
8.13% due 06/15/2021*............................. 835,000 852,744
----------
Medical-Drugs -- 0.5%
Bausch Health Cos., Inc.
Company Guar. Notes
8.50% due 01/31/2027*............................. 1,530,000 1,606,500
Endo Finance LLC/Endo Finco, Inc.
Company Guar. Notes
5.38% due 01/15/2023*............................. 350,000 308,000
----------
1,914,500
----------
Principal Value
Security Description Amount (Note 2)
Medical-HMO -- 0.4%
Centene Corp.
Senior Notes
5.38% due 06/01/2026*......... $ 195,000 $ 199,651
MPH Acquisition Holdings LLC
Company Guar. Notes
7.13% due 06/01/2024*......... 465,000 482,437
Polaris Intermediate Corp.
Senior Notes
8.50% due 12/01/2022*(6)...... 360,000 371,966
WellCare Health Plans, Inc.
Senior Notes
5.25% due 04/01/2025.......... 450,000 457,313
----------
1,511,367
----------
Medical-Hospitals -- 1.3%
Envision Healthcare Corp.
Company Guar. Notes
6.25% due 12/01/2024*......... 305,000 327,875
HCA, Inc.
Company Guar. Notes
5.38% due 02/01/2025.......... 1,315,000 1,341,300
Surgery Center Holdings, Inc.
Company Guar. Notes
6.75% due 07/01/2025*......... 125,000 119,687
Surgery Center Holdings, Inc.
Company Guar. Notes
8.88% due 04/15/2021*......... 360,000 374,850
Tenet Healthcare Corp.
Sec. Notes
5.13% due 05/01/2025.......... 285,000 280,725
Tenet Healthcare Corp.
Senior Notes
7.00% due 08/01/2025.......... 1,850,000 1,826,875
Tenet Healthcare Corp.
Senior Notes
8.13% due 04/01/2022.......... 365,000 384,637
----------
4,655,949
----------
Metal Processors & Fabrication -- 0.1%
Hillman Group, Inc.
Senior Notes
6.38% due 07/15/2022*......... 325,000 293,313
----------
Non-Hazardous Waste Disposal -- 0.2%
Wrangler Buyer Corp.
Senior Notes
6.00% due 10/01/2025*......... 858,000 823,680
----------
Oil & Gas Drilling -- 0.3%
Nabors Industries, Inc.
Company Guar. Notes
5.75% due 02/01/2025.......... 535,000 512,885
Rowan Cos., Inc.
Company Guar. Notes
5.40% due 12/01/2042.......... 875,000 651,875
----------
1,164,760
----------
49
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Oil Companies-Exploration & Production -- 3.3%
Alta Mesa Holdings LP/Alta Mesa Finance
Services Corp.
Company Guar. Notes
7.88% due 12/15/2024............................. $ 775,000 $ 736,250
California Resources Corp.
Sec. Notes
8.00% due 12/15/2022*............................ 870,000 830,850
Callon Petroleum Co.
Company Guar. Notes
6.13% due 10/01/2024............................. 641,000 652,217
Carrizo Oil & Gas, Inc.
Company Guar. Notes
6.25% due 04/15/2023............................. 1,120,000 1,143,800
Chesapeake Energy Corp.
Company Guar. Notes
8.00% due 06/15/2027............................. 1,595,000 1,626,900
CrownRock LP/CrownRock Finance, Inc.
Senior Notes
5.63% due 10/15/2025*............................ 1,015,000 989,625
Denbury Resources, Inc.
Sec. Notes
7.50% due 02/15/2024*............................ 410,000 422,300
Denbury Resources, Inc.
Sec. Notes
9.25% due 03/31/2022*............................ 768,000 829,440
EP Energy LLC/Everest Acquisition Finance, Inc.
Senior Sec. Notes
7.75% due 05/15/2026*............................ 505,000 516,994
EP Energy LLC/Everest Acquisition Finance, Inc.
Senior Sec. Notes
8.00% due 11/29/2024*............................ 365,000 367,738
EP Energy LLC/Everest Acquisition Finance, Inc.
Sec. Bonds
8.00% due 02/15/2025*............................ 260,000 198,900
Jagged Peak Energy LLC
Company Guar. Notes
5.88% due 05/01/2026*............................ 755,000 751,225
Oasis Petroleum, Inc.
Company Guar. Notes
6.88% due 01/15/2023............................. 845,000 859,787
Range Resources Corp.
Company Guar. Notes
4.88% due 05/15/2025............................. 580,000 548,825
Range Resources Corp.
Company Guar. Notes
5.00% due 03/15/2023............................. 350,000 343,000
Sanchez Energy Corp.
Senior Sec. Notes
7.25% due 02/15/2023*............................ 405,000 398,925
Vine Oil & Gas LP / Vine Oil & Gas Finance Corp.
Company Guar. Notes
8.75% due 04/15/2023*............................ 575,000 562,063
-----------
11,778,839
-----------
Oil Refining & Marketing -- 0.4%
Citgo Holding, Inc.
Senior Sec. Notes
10.75% due 02/15/2020*........................... 785,000 832,100
Principal Value
Security Description Amount (Note 2)
Oil Refining & Marketing (continued)
Sunoco LP/Sunoco Finance Corp.
Company Guar. Notes
4.88% due 01/15/2023*................................ $ 285,000 $ 282,150
Sunoco LP/Sunoco Finance Corp.
Company Guar. Notes
5.50% due 02/15/2026*................................ 440,000 425,040
----------
1,539,290
----------
Oil-Field Services -- 0.5%
Bristow Group, Inc.
Senior Sec. Notes
8.75% due 03/01/2023*................................ 570,000 557,175
USA Compression Partners LP/USA Compression
Finance Corp.
Senior Notes
6.88% due 04/01/2026*................................ 1,150,000 1,187,375
----------
1,744,550
----------
Paper & Related Products -- 0.3%
Mercer International, Inc.
Senior Notes
5.50% due 01/15/2026................................. 355,000 347,900
Schweitzer-Mauduit International, Inc.
Senior Notes
6.88% due 10/01/2026*................................ 675,000 688,500
----------
1,036,400
----------
Pipelines -- 1.1%
American Midstream Partners LP/American
Midstream Finance Corp.
Company Guar. Notes
9.50% due 12/15/2021*................................ 525,000 525,000
Cheniere Corpus Christi Holdings LLC
Senior Sec. Notes
5.88% due 03/31/2025................................. 1,065,000 1,119,581
Cheniere Energy Partners LP
Company Guar. Notes
5.63% due 10/01/2026*................................ 665,000 669,788
Energy Transfer Equity LP
Senior Sec. Notes
7.50% due 10/15/2020................................. 436,000 466,520
Targa Resources Partners LP/Targa Resources
Partners Finance Corp.
Company Guar. Notes
5.88% due 04/15/2026*................................ 1,000,000 1,031,250
----------
3,812,139
----------
Private Equity -- 0.5%
Icahn Enterprises LP/Icahn Enterprises Finance Corp.
Company Guar. Notes
5.88% due 02/01/2022................................. 985,000 997,312
Icahn Enterprises LP/Icahn Enterprises Finance Corp.
Company Guar. Notes
6.38% due 12/15/2025................................. 700,000 702,625
----------
1,699,937
----------
50
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Publishing-Books -- 0.1%
McGraw-Hill Global Education Holdings LLC/
McGraw-Hill Global Education Finance
Senior Notes
7.88% due 05/15/2024*.......................... $ 500,000 $ 448,125
----------
Publishing-Periodicals -- 0.3%
Meredith Corp.
Company Guar. Notes
6.88% due 02/01/2026*.......................... 1,000,000 1,025,000
----------
Racetracks -- 0.2%
GLP Capital LP/GLP Financing II, Inc.
Company Guar. Notes
5.25% due 06/01/2025........................... 775,000 787,555
----------
Real Estate Investment Trusts -- 1.1%
ESH Hospitality, Inc.
Company Guar. Notes
5.25% due 05/01/2025*.......................... 700,000 677,250
iStar, Inc.
Senior Notes
5.25% due 09/15/2022........................... 1,010,000 994,850
MGM Growth Properties Operating Partnership
LP/MGP Finance Co-Issuer, Inc.
Company Guar. Notes
4.50% due 01/15/2028........................... 580,000 530,758
MGM Growth Properties Operating Partnership
LP/MGP Finance Co-Issuer, Inc.
Company Guar. Notes
5.63% due 05/01/2024........................... 330,000 338,250
MPT Operating Partnership LP/MPT Finance Corp.
Company Guar. Notes
5.00% due 10/15/2027........................... 400,000 385,500
MPT Operating Partnership LP/MPT Finance Corp.
Company Guar. Notes
6.38% due 03/01/2024........................... 280,000 292,600
Uniti Group, Inc./CSL Capital LLC
Company Guar. Notes
7.13% due 12/15/2024*.......................... 595,000 544,425
----------
3,763,633
----------
Resort/Theme Parks -- 0.2%
Boyne USA, Inc.
Sec. Notes
7.25% due 05/01/2025*.......................... 565,000 597,488
----------
Retail-Automobile -- 0.2%
Sonic Automotive, Inc.
Company Guar. Notes
6.13% due 03/15/2027........................... 600,000 561,000
----------
Retail-Convenience Store -- 0.3%
Cumberland Farms, Inc.
Senior Notes
6.75% due 05/01/2025*.......................... 1,025,000 1,050,625
----------
Retail-Major Department Stores -- 0.1%
Neiman Marcus Group, Ltd. LLC
Company Guar. Notes
8.00% due 10/15/2021*.......................... 695,000 456,528
----------
Principal Value
Security Description Amount (Note 2)
Retail-Propane Distribution -- 0.3%
Ferrellgas Partners LP/Ferrellgas Partners Finance Corp.
Senior Notes
8.63% due 06/15/2020..................................... $570,000 $ 541,500
Suburban Propane Partners LP/Suburban Energy
Finance Corp.
Senior Notes
5.50% due 06/01/2024..................................... 490,000 481,425
----------
1,022,925
----------
Retail-Restaurants -- 0.3%
Golden Nugget, Inc.
Senior Notes
6.75% due 10/15/2024*.................................... 895,000 907,870
----------
Rubber/Plastic Products -- 0.0%
Venture Holdings Co. LLC
Company Guar. Notes
11.00% due 06/01/2007+(4)(5)(7)(8)....................... 550,000 0
----------
Schools -- 0.5%
Graham Holdings Co.
Company Guar. Notes
5.75% due 06/01/2026*.................................... 900,000 921,375
Laureate Education, Inc.
Company Guar. Notes
8.25% due 05/01/2025*.................................... 660,000 706,748
----------
1,628,123
----------
Soap & Cleaning Preparation -- 0.2%
Kronos Acquisition Holdings, Inc.
Company Guar. Notes
9.00% due 08/15/2023*.................................... 720,000 678,600
----------
Specified Purpose Acquisitions -- 0.2%
Trident Merger Sub, Inc.
Senior Notes
6.63% due 11/01/2025*.................................... 790,000 748,525
----------
Steel-Producers -- 0.2%
United States Steel Corp.
Senior Notes
6.25% due 03/15/2026..................................... 715,000 708,744
----------
Telephone-Integrated -- 1.2%
CenturyLink, Inc.
Senior Notes
7.50% due 04/01/2024..................................... 660,000 704,550
Cincinnati Bell, Inc.
Company Guar. Notes
7.00% due 07/15/2024*.................................... 535,000 490,862
Frontier Communications Corp.
Senior Notes
7.63% due 04/15/2024..................................... 835,000 538,575
Frontier Communications Corp.
Senior Notes
8.50% due 04/15/2020..................................... 740,000 747,400
Frontier Communications Corp.
Sec. Notes
8.50% due 04/01/2026*.................................... 295,000 278,775
51
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Telephone-Integrated (continued)
Level 3 Financing, Inc.
Company Guar. Notes
5.25% due 03/15/2026....................... $ 530,000 $ 521,414
Level 3 Financing, Inc.
Company Guar. Notes
5.38% due 01/15/2024....................... 670,000 669,491
Windstream Services LLC/Windstream Finance
Corp.
Senior Sec. Notes
8.63% due 10/31/2025*...................... 185,000 177,600
Windstream Services LLC/Windstream Finance
Corp.
Sec. Notes
10.50% due 06/30/2024*..................... 365,000 310,250
------------
4,438,917
------------
Television -- 0.1%
Sinclair Television Group, Inc.
Company Guar. Notes
5.13% due 02/15/2027*...................... 250,000 229,688
------------
Theaters -- 0.3%
Live Nation Entertainment, Inc.
Company Guar. Notes
5.63% due 03/15/2026*...................... 1,130,000 1,141,300
------------
Transport-Equipment & Leasing -- 0.2%
Fortress Transportation & Infrastructure
Investors LLC
Senior Notes
6.50% due 10/01/2025*...................... 700,000 695,065
------------
Veterinary Diagnostics -- 0.1%
Elanco Animal Health, Inc.
Senior Notes
3.91% due 08/27/2021*...................... 111,000 111,105
Elanco Animal Health, Inc.
Senior Notes
4.27% due 08/28/2023*...................... 277,000 278,122
------------
389,227
------------
Vitamins & Nutrition Products -- 0.2%
HLF Financing SARL LLC/Herbalife
International, Inc.
Company Guar. Notes
7.25% due 08/15/2026*...................... 820,000 833,325
------------
Wireless Equipment -- 0.1%
ViaSat, Inc.
Senior Notes
5.63% due 09/15/2025*...................... 490,000 463,197
------------
Total U.S. Corporate Bonds & Notes
(cost $122,659,227)........................ 121,769,190
------------
FOREIGN CORPORATE BONDS & NOTES -- 6.2%
Aerospace/Defense -- 0.4%
Bombardier, Inc.
Senior Notes
6.13% due 01/15/2023*...................... 620,000 622,712
Principal Value
Security Description Amount (Note 2)
Aerospace/Defense (continued)
Bombardier, Inc.
Senior Notes
7.50% due 12/01/2024*........................ $ 675,000 $ 712,125
----------
1,334,837
----------
Building & Construction Products-Misc. -- 0.2%
James Hardie International Finance DAC
Company Guar. Notes
4.75% due 01/15/2025*........................ 655,000 633,844
----------
Cable/Satellite TV -- 1.1%
Altice France SA
Senior Sec. Notes
8.13% due 02/01/2027*........................ 200,000 206,000
Altice Luxembourg SA
Company Guar. Notes
7.63% due 02/15/2025*........................ 1,190,000 1,084,566
SFR Group SA
Senior Sec. Notes
7.38% due 05/01/2026*........................ 1,200,000 1,200,000
Telenet Finance Luxembourg Notes SARL
Senior Sec. Notes
5.50% due 03/01/2028*........................ 600,000 564,000
Virgin Media Finance PLC
Company Guar. Notes
6.00% due 10/15/2024*........................ 800,000 800,544
----------
3,855,110
----------
Casino Services -- 0.2%
Gateway Casinos & Entertainment, Ltd.
Sec. Notes
8.25% due 03/01/2024*........................ 800,000 842,000
----------
Chemicals-Diversified -- 0.3%
NOVA Chemicals Corp.
Senior Notes
4.88% due 06/01/2024*........................ 440,000 423,610
NOVA Chemicals Corp.
Senior Notes
5.00% due 05/01/2025*........................ 630,000 598,500
----------
1,022,110
----------
Chemicals-Specialty -- 0.4%
Alpha 2 BV
Senior Notes
8.75% due 06/01/2023*(6)..................... 325,000 329,875
Alpha 3 BV/Alpha US Bidco, Inc.
Company Guar. Notes
6.25% due 02/01/2025*........................ 950,000 945,535
----------
1,275,410
----------
Containers-Metal/Glass -- 0.6%
ARD Securities Finance SARL
Senior Sec. Notes
8.75% due 01/31/2023*(9)..................... 580,360 580,360
Ardagh Packaging Finance PLC/Ardagh Holdings
USA, Inc.
Company Guar. Notes
6.00% due 02/15/2025*........................ 1,520,000 1,487,700
----------
2,068,060
----------
52
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Cruise Lines -- 0.3%
Viking Cruises, Ltd.
Company Guar. Notes
5.88% due 09/15/2027*.......................... $ 985,000 $ 961,163
----------
Diversified Minerals -- 0.2%
FMG Resources August 2006 Pty, Ltd.
Company Guar. Notes
5.13% due 03/15/2023*.......................... 715,000 700,700
----------
Machinery-Pumps -- 0.1%
Titan Acquisition, Ltd./Titan Co-Borrower LLC
Senior Notes
7.75% due 04/15/2026*.......................... 455,000 394,713
----------
Medical Products -- 0.1%
Mallinckrodt International Finance SA/
Mallinckrodt CB LLC
Company Guar. Notes
5.63% due 10/15/2023*.......................... 350,000 309,750
----------
Medical-Biomedical/Gene -- 0.0%
Concordia International Corp.
Senior Sec. Notes
8.00% due 09/06/2024........................... 142,136 138,938
----------
Medical-Drugs -- 0.6%
Bausch Health Cos., Inc.
Senior Sec. Notes
5.50% due 11/01/2025*.......................... 1,010,000 1,010,000
Bausch Health Cos., Inc.
Company Guar. Notes
9.00% due 12/15/2025*.......................... 385,000 414,356
Teva Pharmaceutical Finance Netherlands III BV
Company Guar. Notes
3.15% due 10/01/2026........................... 505,000 420,170
Teva Pharmaceutical Finance Netherlands III BV
Company Guar. Notes
6.75% due 03/01/2028........................... 330,000 348,106
----------
2,192,632
----------
Metal-Diversified -- 0.2%
Vedanta Resources PLC
Senior Notes
6.38% due 07/30/2022*.......................... 805,000 774,813
----------
Oil & Gas Drilling -- 0.3%
Transocean, Inc.
Company Guar. Notes
6.80% due 03/15/2038........................... 465,000 402,225
Transocean, Inc.
Company Guar. Notes
7.50% due 01/15/2026*.......................... 335,000 345,887
Transocean, Inc.
Company Guar. Notes
9.00% due 07/15/2023*.......................... 265,000 288,188
----------
1,036,300
----------
Oil Companies-Exploration & Production -- 0.4%
Geopark, Ltd.
Senior Sec. Notes
6.50% due 09/21/2024*.......................... 535,000 537,675
Principal Value
Security Description Amount (Note 2)
Oil Companies-Exploration & Production (continued)
Seven Generations Energy, Ltd.
Company Guar. Notes
5.38% due 09/30/2025*....................... $ 795,000 $ 773,137
-----------
1,310,812
-----------
Oil-Field Services -- 0.1%
Weatherford International, Ltd.
Company Guar. Notes
8.25% due 06/15/2023........................ 575,000 543,375
-----------
Paper & Related Products -- 0.1%
Cascades, Inc.
Company Guar. Notes
5.50% due 07/15/2022*....................... 150,000 151,125
Cascades, Inc.
Company Guar. Notes
5.75% due 07/15/2023*....................... 360,000 360,000
-----------
511,125
-----------
Security Services -- 0.2%
Garda World Security Corp.
Senior Notes
8.75% due 05/15/2025*....................... 830,000 808,213
-----------
Special Purpose Entity -- 0.0%
Hellas Telecommunications Luxembourg II SCA
Sub. Notes
6.26% due 01/15/2015+*(4)(5)(7)(8).......... 1,025,000 0
-----------
Steel-Producers -- 0.2%
ArcelorMittal
Senior Notes
6.13% due 06/01/2025........................ 715,000 776,832
-----------
Transport-Marine -- 0.2%
Topaz Marine SA
Company Guar. Notes
9.13% due 07/26/2022*....................... 740,000 758,470
-----------
Total Foreign Corporate Bonds & Notes
(cost $23,722,923).......................... 22,249,207
-----------
LOANS(10)(11)(12) -- 56.6%
Advertising Services -- 0.3%
Advantage Sales & Marketing, Inc. FRS
1st Lien
5.49% (1 ML + 3.25%)
due 07/23/2021.............................. 359,385 330,904
Advantage Sales & Marketing, Inc. FRS
BTL-B
5.49% (1 ML + 3.25%)
due 07/25/2021.............................. 676,834 623,195
-----------
954,099
-----------
Aerospace/Defense-Equipment -- 0.7%
Accudyne Industries Borrower SCA FRS
BTL-B
5.24% (1 ML + 3.00%)
due 08/18/2024.............................. 1,069,688 1,073,253
Transdigm, Inc. FRS
BTL-E
4.74% (1 ML + 2.50%)
due 05/30/2025.............................. 407,950 408,941
53
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS(10)(11)(12) (continued)
Aerospace/Defense-Equipment (continued)
TransDigm, Inc. FRS
BTL-F
4.74% (1 ML + 2.50%)
due 06/09/2023..................... $ 465,662 $ 467,059
TransDigm, Inc. FRS
BTL-G
4.74% (1 ML + 2.50%)
due 08/22/2024..................... 627,086 628,829
----------
2,578,082
----------
Appliances -- 0.3%
Global Appliance, Inc. FRS
BTL-B
6.25% (1 ML + 4.00%)
due 09/29/2024..................... 1,034,550 995,754
----------
Applications Software -- 1.0%
Impala Private Holdings II LLC FRS
1st Lien
6.25% (1 ML + 4.00%)
due 11/11/2024..................... 997,141 998,636
SS&C European Holdings SARL FRS
BTL-B4
4.49% (1 ML + 2.25%)
due 04/16/2025..................... 535,499 535,750
SS&C Technologies, Inc. FRS
BTL-B5
coupon TBD
due 04/16/2025..................... 670,000 669,721
SS&C Technologies, Inc. FRS
BTL-B3
4.49% (1 ML + 2.25%)
due 04/16/2025..................... 1,379,560 1,380,207
----------
3,584,314
----------
Auto-Heavy Duty Trucks -- 0.7%
Deck Chassis Acquisition, Inc. FRS
2nd Lien
8.24% (1 ML + 6.00%)
due 06/15/2023..................... 225,000 226,688
Navistar Financial Corp. FRS
BTL-B
6.00% (1 ML + 3.75%)
due 08/03/2025..................... 650,000 652,031
Navistar, Inc. FRS
BTL-B
5.64% (1 ML + 3.50%)
due 11/06/2024..................... 1,457,675 1,462,230
----------
2,340,949
----------
Auto/Truck Parts & Equipment-Original -- 1.9%
Accuride Corp. FRS
BTL-B
7.64% (3 ML + 5.25%)
due 11/17/2023..................... 1,175,565 1,187,321
Altra Industrial Motion Corp. FRS
BTL-B
coupon TBD
due 10/01/2025..................... 320,000 320,600
Principal Value
Security Description Amount (Note 2)
Auto/Truck Parts & Equipment-Original (continued)
Dexko Global, Inc. FRS
BTL-B
5.73% (1 ML + 3.50%)
due 07/24/2024..................... $1,399,443 $1,402,941
Federal-Mogul Holdings Corp. FRS
BTL-C
5.83% (1 ML + 3.75%)
due 04/15/2021..................... 515,160 515,267
Federal-Mogul Holdings Corp. FRS
BTL-C
5.91% (3 ML + 3.75%)
due 04/15/2021..................... 1,556,516 1,556,839
Tenneco, Inc. FRS
BTL-B
coupon TBD
due 10/01/2025..................... 1,630,000 1,627,454
----------
6,610,422
----------
Batteries/Battery Systems -- 0.2%
Energizer Holdings, Inc. FRS
BTL-B
coupon TBD
due 06/20/2025..................... 530,000 533,975
----------
Bicycle Manufacturing -- 0.3%
SRAM LLC FRS
BTL-B
4.95%-5.01% (2 ML + 2.75%)
due 03/15/2024..................... 1,155,435 1,161,212
SRAM LLC FRS
BTL-B
7.00% (USFRBPLR + 1.75%)
due 03/15/2024..................... 22,482 22,594
----------
1,183,806
----------
Broadcast Services/Program -- 0.9%
iHeartCommunications, Inc.
BTL-D-EXT
6.75% due 01/30/2019+(3)(4)........ 1,555,000 1,155,883
Univision Communications, Inc. FRS
BTL
4.99% (1 ML + 2.75%)
due 03/15/2024..................... 2,208,675 2,145,175
----------
3,301,058
----------
Building & Construction Products-Misc. -- 1.0%
CPG International, Inc. FRS
BTL
6.25% (6 ML + 3.75%)
due 05/03/2024..................... 3,483,293 3,503,611
frontdoor, Inc. FRS
BTL-B
4.89% (1 ML + 2.50%)
due 08/14/2025..................... 95,000 95,594
----------
3,599,205
----------
54
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS(10)(11)(12) (continued)
Building Products-Cement -- 0.6%
Quikrete Holdings, Inc. FRS
BTL-B
4.99% (1 ML + 2.75%)
due 11/15/2023...................... $1,326,136 $1,327,794
Summit Materials LLC FRS
BTL-B
4.22% (1 ML + 2.00%)
due 11/21/2024...................... 992,500 993,120
----------
2,320,914
----------
Building-Heavy Construction -- 0.4%
Brand Industrial Services, Inc. FRS
1st Lien
6.59%-6.64% (3 ML + 4.25%)
due 06/21/2024...................... 1,476,313 1,484,868
----------
Building-Residential/Commercial -- 0.0%
TOUSA, Inc.
Escrow Loans
12.25% due 08/15/2011+(5)(7)........ 2,037,810 0
----------
Cable/Satellite TV -- 0.7%
Altice France SA FRS
BTL-B13
6.16% (1 ML + 4.00%)
due 08/14/2026...................... 650,000 643,825
Radiate Holdco LLC FRS
1st Lien
5.24% (1 ML + 3.00%)
due 02/01/2024...................... 917,457 915,267
UPC Financing Partnership FRS
BTL-AR
4.66% (1 ML + 2.50%)
due 01/15/2026...................... 1,070,291 1,069,176
----------
2,628,268
----------
Casino Hotels -- 1.3%
Caesars Resort Collection LLC FRS
BTL-B
4.99% (1 ML + 2.75%)
due 12/22/2024...................... 2,029,663 2,040,174
CityCenter Holdings LLC FRS
BTL-B
4.49% (1 ML + 2.25%)
due 04/18/2024...................... 1,796,044 1,797,006
Golden Nugget, Inc. FRS
BTL-B
4.90%-4.99% (1 ML + 2.75%)
due 10/04/2023...................... 612,891 615,036
Golden Nugget, Inc. FRS
BTL-B
7.00% (USFRBPLR + 1.75%)
due 10/04/2023...................... 1,584 1,590
----------
4,453,806
----------
Casino Services -- 0.5%
CBAC Borrower LLC FRS
BTL-B
6.24% (1 ML + 4.00%)
due 07/05/2024...................... 702,900 703,954
Principal Value
Security Description Amount (Note 2)
Casino Services (continued)
Gateway Casinos & Entertainment Ltd. FRS
BTL-B
5.39% (3 ML + 3.00%)
due 12/01/2023........................... $ 548,625 $ 550,911
Stars Group Holdings BV FRS
BTL
5.89% (3 ML + 3.50%)
due 07/10/2025........................... 359,100 361,991
----------
1,616,856
----------
Cellular Telecom -- 0.1%
Digicel International Finance, Ltd. FRS
BTL-B
5.57% (1 ML + 3.25%)
due 05/28/2024........................... 460,351 437,717
----------
Chemicals-Diversified -- 0.1%
New Arclin US Holding Corp. FRS
BTL
5.89% (3 ML + 3.50%)
due 02/14/2024........................... 481,705 484,716
----------
Chemicals-Specialty -- 1.4%
Alpha 3 BV/Alpha US Bidco, Inc. FRS
BTL-B1
5.39% (3 ML + 3.00%)
due 01/31/2024........................... 521,991 523,786
Graftech International, Ltd. FRS
BTL-B
5.74% (1 ML + 3.50%)
due 02/12/2025........................... 1,130,688 1,137,754
Kraton Polymers LLC FRS
BTL
4.74% (1 ML + 2.50%)
due 03/05/2025........................... 298,202 299,041
MacDermid, Inc. FRS
BTL-B7
4.74% (1 ML + 2.50%)
due 06/07/2020........................... 646,708 649,335
OMNOVA Solutions, Inc. FRS
2nd Lien
5.49% (1 ML + 3.25%)
due 08/25/2023........................... 1,366,097 1,366,097
Venator Materials LLC FRS
BTL-B
5.24% (1 ML + 3.00%)
due 08/08/2024........................... 999,900 999,900
----------
4,975,913
----------
Coal -- 0.3%
Contura Energy, Inc. FRS
BTL-B
7.22% (2 ML + 5.00%)
due 03/18/2024........................... 1,089,688 1,089,007
----------
Commercial Services -- 0.6%
CPI Acquisition, Inc. FRS
BTL-B
6.84% (3 ML + 4.50%)
due 08/17/2022........................... 2,470,685 1,643,006
55
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS(10)(11)(12) (continued)
Commercial Services (continued)
ServiceMaster Co. LLC FRS
BTL-B
4.74% (1 ML + 2.50%)
due 11/08/2023................... $ 557,165 $ 558,836
----------
2,201,842
----------
Commercial Services-Finance -- 0.7%
Element Materials Tech Group FRS
BTL-B
5.74% (1 ML + 3.50%)
due 06/28/2024................... 749,338 753,084
NAB Holdings LLC FRS
BTL
5.39% (3 ML + 3.00%)
due 07/01/2024................... 1,386,035 1,368,710
Trans Union LLC FRS
BTL-A2
4.24% (1 ML + 2.00%)
due 06/19/2025................... 284,288 284,840
----------
2,406,634
----------
Computer Services -- 1.1%
Banff Merger Sub, Inc. FRS
BTL
coupon TBD
due 10/02/2025................... 2,455,000 2,477,161
Presidio LLC FRS
BTL-B1
4.99% (1 ML + 2.75%)
due 02/02/2024................... 7,415 7,429
Presidio LLC FRS
BTL-B1
5.09% (3 ML + 2.75%)
due 02/02/2024................... 601,850 602,979
Tempo Acquisition LLC FRS
BTL-B
5.24% (1 ML + 3.00%)
due 05/01/2024................... 972,688 975,849
----------
4,063,418
----------
Computer Software -- 1.2%
Rackspace Hosting, Inc. FRS
BTL-B
5.35% (3 ML + 3.00%)
due 11/03/2023(12)............... 1,236,980 1,220,193
Vertafore, Inc. FRS
First Lien
5.49% (1 ML + 3.25%)
due 07/02/2025................... 2,880,000 2,891,005
----------
4,111,198
----------
Computers-Integrated Systems -- 0.3%
Everi Payments, Inc. FRS
BTL-B
5.24% (1 ML + 3.00%)
due 05/09/2024................... 1,140,563 1,146,741
----------
Consulting Services -- 0.5%
AlixPartners LLP FRS
BTL-B
4.99% (1 ML + 2.75%)
due 04/04/2024................... 1,705,443 1,712,144
----------
Principal Value
Security Description Amount (Note 2)
Containers-Metal/Glass -- 0.9%
Anchor Glass Container Corp. FRS
1st Lien
4.91% (1 ML + 2.75%)
due 12/07/2023........................... $ 364,308 $ 326,511
Anchor Glass Container Corp. FRS
1st Lien
5.14% (3 ML + 2.75%)
due 12/07/2023........................... 217,369 194,817
Anchor Glass Container Corp. FRS
2nd Lien
9.91% (1 ML + 7.75%)
due 12/07/2024........................... 796,000 533,320
Berlin Packaging LLC FRS
BTL-B1
5.11%-5.25% (1 ML + 3.00%)
due 11/07/2025........................... 900,184 899,762
Berlin Packaging LLC FRS
BTL-B1
5.39% (3 ML + 3.00%)
due 11/07/2025........................... 102,303 102,255
BWAY Corp. FRS
BTL-B
5.58% (3 ML + 3.25%)
due 04/03/2024........................... 1,254,125 1,252,782
----------
3,309,447
----------
Containers-Paper/Plastic -- 1.0%
Klockner Pentaplast of America, Inc. FRS
BTL-B
6.49% (1 ML + 4.25%)
due 06/30/2022........................... 1,950,300 1,891,791
Reynolds Group Holdings, Inc. FRS
BTL-B
4.99% (1 ML + 2.75%)
due 02/05/2023........................... 1,106,479 1,111,396
Trident TPI Holdings, Inc. FRS
BTL-B1
5.49% (1 ML + 3.25%)
due 10/17/2024........................... 620,997 618,085
----------
3,621,272
----------
Cosmetics & Toiletries -- 0.6%
Parfums Holding Co., Inc. FRS
1st Lien
6.53% (3 ML + 4.25%)
due 06/30/2024........................... 1,120,952 1,125,623
Revlon Consumer Products Corp. FRS
BTL-B
5.81%-5.89% (3 ML + 3.50%)
due 09/07/2023........................... 1,295,338 985,807
----------
2,111,430
----------
Data Processing/Management -- 0.6%
First Data Corp. FRS
1st Lien
4.21% (1 ML + 2.00%)
due 04/26/2024........................... 2,037,298 2,038,379
----------
56
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS(10)(11)(12) (continued)
Diagnostic Equipment -- 0.0%
Immucor, Inc. FRS
BTL-B3
7.39% (3 ML + 5.00%)
due 06/15/2021....................................... $ 108,625 $ 110,481
----------
Diagnostic Kits -- 0.6%
Ortho-Clinical Diagnostics SA FRS
BTL-B
5.49% (1 ML + 3.25%)
due 06/30/2025....................................... 2,005,029 2,010,401
----------
Dialysis Centers -- 0.3%
U.S. Renal Care, Inc. FRS
BTL-B
6.64% (3 ML + 4.25%)
due 12/31/2022....................................... 1,151,448 1,121,223
----------
Direct Marketing -- 0.3%
Red Ventures LLC FRS
BTL-B
6.24% (1 ML + 4.00%)
due 11/08/2024....................................... 911,513 921,957
----------
Disposable Medical Products -- 0.2%
Sterigenics-Nordion Holdings LLC FRS
BTL-B
5.24% (1 ML + 3.00%)
due 05/15/2022....................................... 659,546 660,206
----------
Distribution/Wholesale -- 1.0%
American Builders & Contractors Supply Co., Inc. FRS
BTL-B2
4.24% (1 ML + 2.00%)
due 10/31/2023....................................... 1,118,054 1,114,624
Patriot Container Corp. FRS
1st Lien
5.71% (1 ML + 3.50%)
due 03/20/2025....................................... 383,075 384,272
Spin Holdco, Inc. FRS
BTL-B
5.59% (3 ML + 3.25%)
due 11/14/2022....................................... 1,158,123 1,161,308
Univar USA, Inc. FRS
BTL-B3
4.49% (1 ML + 2.25%)
due 07/01/2024....................................... 784,671 786,088
----------
3,446,292
----------
E-Commerce/Products -- 0.3%
Rodan & Fields LLC FRS
BTL-B
6.16% (1 ML + 4.00%)
due 06/06/2025....................................... 1,147,125 1,157,879
Rodan & Fields LLC FRS
BTL-B
8.25% (USFRBPLR + 3.00%)
due 06/06/2025....................................... 2,875 2,902
----------
1,160,781
----------
Principal Value
Security Description Amount (Note 2)
E-Commerce/Services -- 0.3%
Hoya Midco LLC FRS
BTL-B
5.72% (1 ML + 3.50%)
due 06/30/2024................. $1,002,263 $ 997,251
----------
Educational Software -- 0.3%
Blackboard, Inc. FRS
BTL-B4
7.33% (3 ML + 5.00%)
due 06/30/2021................. 1,192,399 1,148,677
----------
Electric-Generation -- 0.6%
APLP Holdings LP FRS
BTL
5.24% (1 ML + 3.00%)
due 04/13/2023................. 953,429 956,606
TEX Operations Co. LLC FRS
BTL-B
4.24% (1 ML + 2.00%)
due 08/04/2023................. 769,959 769,959
Vistra Endergy Corp. FRS
BTL-B
4.16%-4.24% (1 ML + 2.00%)
due 12/31/2025................. 578,550 578,550
----------
2,305,115
----------
Electric-Integrated -- 0.4%
Talen Energy Supply LLC FRS
BTL-B1
6.24% (1 ML + 4.00%)
due 07/15/2023................. 610,156 613,969
Talen Energy Supply LLC FRS
BTL-B2
6.24% (1 ML + 4.00%)
due 04/15/2024................. 735,750 739,245
----------
1,353,214
----------
Enterprise Software/Service -- 1.3%
Applied Systems, Inc. FRS
BTL-B
5.39% (3 ML + 3.00%)
due 09/19/2024................. 178,200 179,140
Applied Systems, Inc. FRS
2nd Lien
9.39% (3 ML + 7.00%)
due 09/19/2025................. 205,000 209,027
BMC Software Finance, Inc. FRS
BTL-B2
5.49% (1 ML + 3.25%)
due 09/10/2022................. 1,468,097 1,475,895
Kronos, Inc. FRS
1st Lien
5.34% (3 ML + 3.00%)
due 11/01/2023................. 2,194,733 2,204,559
Kronos, Inc. FRS
2nd Lien
10.59% (3 ML + 8.25%)
due 11/01/2024................. 440,000 448,800
----------
4,517,421
----------
57
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS(10)(11)(12) (continued)
Finance-Auto Loans -- 0.3%
Capital Automotive LP FRS
BTL-B
4.75% (1 ML + 2.50%)
due 03/24/2024......................... $ 306,730 $ 306,730
Capital Automotive LP FRS
2nd Lien
8.25% (1 ML + 6.00%)
due 03/24/2025......................... 855,674 868,509
----------
1,175,239
----------
Finance-Commercial -- 1.2%
Financial Risk US Holdings, Inc. FRS
BTL
coupon TBD
due 10/01/2025......................... 1,735,000 1,730,973
Pi US Mergerco, Inc. FRS
1st Lien
5.74% (1 ML + 3.50%)
due 12/20/2024......................... 2,452,675 2,444,091
----------
4,175,064
----------
Finance-Credit Card -- 0.4%
Blackhawk Network Holdings LLC FRS
1st Lien
5.39% (3 ML + 3.00%)
due 06/15/2025......................... 1,311,713 1,318,818
----------
Finance-Mortgage Loan/Banker -- 0.6%
Walter Investment Management Corp. FRS
BTL-B
8.24% (1 ML + 6.00%)
due 06/30/2022......................... 2,295,209 2,158,931
----------
Food-Baking -- 0.3%
Hostess Brands LLC FRS
BTL-B
4.49% (1 ML + 2.25%)
due 08/03/2022......................... 1,042,072 1,042,593
----------
Food-Dairy Products -- 0.5%
Chobani LLC FRS
BTL-B
5.72% (1 ML + 3.50%)
due 10/10/2023......................... 722,928 704,854
Milk Specialties Co. FRS
BTL-B
6.24% (1 ML + 4.00%)
due 08/16/2023......................... 986,860 986,860
----------
1,691,714
----------
Food-Fl our & Grain -- 0.0%
C.H. Guenther & Son, Inc. FRS
BTL-B
4.99% (1 ML + 2.75%)
due 03/31/2025......................... 119,700 119,550
----------
Food-Meat Products -- 0.5%
Informatica LLC FRS
BTL-B
4.84%-4.89% (3 ML + 2.50%)
due 10/30/2022......................... 1,627,304 1,629,338
----------
Principal Value
Security Description Amount (Note 2)
Food-Misc./Diversified -- 0.6%
Dole Food Co., Inc. FRS
BTL-B
4.88%-4.99% (1 ML + 2.75%)
due 04/06/2024........................... $ 644,787 $ 644,082
Dole Food Co., Inc. FRS
BTL-B
5.14% (3 ML + 2.75%)
due 04/06/2024........................... 14,329 14,313
Dole Food Co., Inc. FRS
BTL-B
7.00% (USFRBPLR + 1.75%)
due 04/06/2024........................... 4,478 4,473
H Food Holdings LLC FRS
First Lien
5.24% (1 ML + 3.00%)
due 05/23/2025........................... 977,550 974,128
Sigma Bidco BV FRS
BTL-B
5.11% (1 ML + 3.00%)
due 07/02/2025........................... 385,000 384,519
----------
2,021,515
----------
Food-Retail -- 0.4%
Albertson's LLC FRS
BTL-B4
4.99% (1 ML + 2.75%)
due 08/25/2021........................... 1,036,604 1,037,382
Albertson's LLC FRS
BTL-B5
5.38% (3 ML + 3.00%)
due 12/21/2022........................... 459,673 459,902
----------
1,497,284
----------
Gambling (Non-Hotel) -- 0.3%
Scientific Games International, Inc. FRS
BTL-B4
4.99% (1 ML + 2.75%)
due 08/14/2024........................... 179,180 178,844
Scientific Games International, Inc. FRS
BTL-B4
5.04% (2 ML + 2.75%)
due 08/14/2024........................... 751,145 749,737
----------
928,581
----------
Hotels/Motels -- 1.5%
Playa Resorts Holding BV FRS
BTL-B
4.99% (1 ML + 2.75%)
due 04/29/2024........................... 2,107,845 2,090,281
Wyndham Hotels & Resorts, Inc. FRS
BTL -B
3.99% (1 ML + 1.75%)
due 05/30/2025........................... 3,375,000 3,384,281
----------
5,474,562
----------
58
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS(10)(11)(12) (continued)
Housewares -- 0.4%
American Greetings Corp Term Loan FRS
BTL
6.74% (1 ML + 4.50%)
due 04/06/2024................................ $ 553,613 $ 554,996
American Greetings Corp Term Loan FRS
BTL
coupon TBD
due 04/06/2024................................ 100,000 100,250
Libbey Glass, Inc. FRS
BTL-B
5.13% (1 ML + 3.00%)
due 04/09/2021................................ 866,719 865,636
----------
1,520,882
----------
Human Resources -- 0.4%
CHG Healthcare Services, Inc. FRS
1st Lien
5.24% (1 ML + 3.00%)
due 06/07/2023................................ 319,965 321,498
CHG Healthcare Services, Inc. FRS
1st Lien
5.34% (3 ML + 3.00%)
due 06/07/2023................................ 570,035 572,767
Team Health Holdings, Inc. FRS
BTL-B
4.99% (1 ML + 2.75%)
due 02/06/2024................................ 576,422 558,409
----------
1,452,674
----------
Instruments-Controls -- 0.3%
Deliver Buyer, Inc. FRS
BTL-B
7.31% (3 ML + 5.00%)
due 05/01/2024................................ 1,044,710 1,053,199
----------
Insurance-Multi-line -- 0.0%
Genworth Holdings, Inc. FRS
BTL
6.65% (1 ML + 4.50%)
due 03/07/2023................................ 154,613 157,705
----------
Insurance-Property/Casualty -- 0.6%
Sedgwick Claims Management Services, Inc. FRS
1st Lien
4.99% (1 ML + 2.75%)
due 03/01/2021................................ 1,244,854 1,245,113
Sedgwick Claims Management Services, Inc. FRS
2nd Lien
7.99% (1 ML + 5.75%)
due 02/28/2022................................ 749,281 751,388
Sedgwick Claims Management Services, Inc. FRS
2nd Lien
8.06% (3 ML + 5.75%)
due 02/28/2022................................ 220,719 221,339
----------
2,217,840
----------
Internet Gambling -- 0.2%
GVC Holdings PLC FRS
BTL-B2
4.74% (1 ML + 2.50%)
due 03/29/2024................................ 751,225 752,790
----------
Principal Value
Security Description Amount (Note 2)
Investment Companies -- 0.7%
TKC Holdings, Inc. FRS
1st Lien
6.00% (1 ML + 3.75%)
due 02/01/2023............................ $1,669,971 $1,668,719
UFC Holdings LLC FRS
BTL-B
5.50% (1 ML + 3.25%)
due 08/18/2023............................ 819,605 823,703
----------
2,492,422
----------
Investment Management/Advisor Services -- 0.1%
FB Income Advisor LLC FRS
BTL-B
4.63% (1 ML + 2.50%)
due 08/01/2025............................ 355,000 356,555
----------
Machinery-Construction & Mining -- 0.2%
International Equipment Solutions LLC FRS
BTL-B
7.89% (3 ML + 5.50%)
due 08/15/2022............................ 587,287 587,287
----------
Machinery-Electrical -- 0.5%
Brookfield Wec Holdings, Inc. FRS
1st Lien
5.99% (1 ML + 3.75%)
due 08/01/2025............................ 1,290,000 1,305,319
Brookfield WEC Holdings, Inc. FRS
2nd Lien
8.99% (1 ML + 6.75%)
due 08/03/2026............................ 515,000 523,154
----------
1,828,473
----------
Machinery-General Industrial -- 0.8%
Gardner Denver, Inc. FRS
BTL-B1
4.99% (1 ML + 2.75%)
due 07/30/2024............................ 1,576,733 1,585,711
Pro Mach Group, Inc. FRS
BTL-B
5.13% (1 ML + 3.00%)
due 03/07/2025............................ 975,100 971,931
Zodiac Pool Solutions LLC FRS
BTL-B
4.49% (1 ML + 2.25%)
due 07/02/2025............................ 319,200 320,663
----------
2,878,305
----------
Machinery-Pumps -- 0.6%
NN, Inc. FRS
BTL
5.49% (1 ML + 3.25%)
due 04/02/2021............................ 531,100 530,436
NN, Inc. FRS
BTL-B
5.99% (1 ML + 3.75%)
due 10/19/2022............................ 712,005 713,192
59
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS(10)(11)(12) (continued)
Machinery-Pumps (continued)
Titan Acquisition, Ltd. FRS
BTL-B
5.24% (1 ML + 3.00%)
due 03/28/2025.................................. $ 776,100 $ 751,119
----------
1,994,747
----------
Medical Information Systems -- 0.4%
Iqvia, Inc. FRS
BTL-B
4.14% (3 ML + 1.75%)
due 06/11/2025.................................. 1,296,750 1,296,102
----------
Medical Instruments -- 0.1%
CryoLife, Inc. FRS
BTL-B
6.39% (3 ML + 4.00%)
due 11/14/2024.................................. 486,325 490,580
----------
Medical Labs & Testing Services -- 1.3%
Enterprise Merger Sub, Inc. FRS
BTL-B
coupon TBD
due 10/10/2025.................................. 3,744,578 3,735,216
Explorer Holdings, Inc. FRS
BTL-B
6.14% (3 ML + 3.75%)
due 05/02/2023.................................. 261,654 263,126
Jaguar Holding Co. II FRS
BTL
4.74% (1 ML + 2.50%)
due 08/18/2022.................................. 526,213 526,410
----------
4,524,752
----------
Medical Products -- 0.2%
Auris Luxembourg III SARL FRS
BTL-B
coupon TBD
due 07/20/2025.................................. 165,000 166,960
Greatbatch, Ltd. FRS
BTL-B
5.14% (1 ML + 3.00%)
due 10/27/2022.................................. 453,414 456,005
----------
622,965
----------
Medical-Drugs -- 0.5%
PharMerica Corp. FRS
1st Lien
5.65% (1 ML + 3.50%)
due 12/06/2024.................................. 781,075 785,224
Valeant Pharmaceuticals International, Inc. FRS
BTL-B
5.10% (1 ML + 3.00%)
due 06/02/2025.................................. 1,047,298 1,052,389
----------
1,837,613
----------
Medical-Generic Drugs -- 0.5%
Amneal Pharmaceuticals LLC FRS
BTL-B
5.74% (1 ML + 3.50%)
due 05/04/2025.................................. 1,062,091 1,071,053
Principal Value
Security Description Amount (Note 2)
Medical-Generic Drugs (continued)
Endo Luxembourg Finance Co. I SARL FRS
BTL-B
6.49% (1 ML + 4.25%)
due 04/29/2024......................... $ 765,313 $ 770,335
----------
1,841,388
----------
Medical-HMO -- 0.2%
One Call Corp. FRS
BTL-B1
7.38% (1 ML + 5.25%)
due 11/25/2022......................... 872,620 826,444
----------
Medical-Hospitals -- 1.9%
Acadia Healthcare Co, Inc. FRS
BTL-B2
4.74% (1 ML + 2.50%)
due 02/16/2023......................... 586,046 589,709
AHP Health Partners, Inc. FRS
BTL-B
6.74% (1 ML + 4.50%)
due 06/30/2025......................... 1,002,488 1,013,765
CCS-CMGC Holdings, Inc. FRS
1st Lien
coupon TBD
due 09/20/2025......................... 810,000 810,000
CHS/Community Health Systems, Inc. FRS
BTL-H
5.56% (3 ML + 3.25%)
due 01/27/2021......................... 1,015,511 1,000,137
Envision Healthcare Corp. FRS
BTL-C
5.25% (1 ML + 3.00%)
due 12/01/2023......................... 1,010,997 1,009,733
Prospect Medical Holdings, Inc. FRS
BTL-B
7.63% (1 ML + 5.50%)
due 02/22/2024......................... 492,525 496,219
Quorum Health Corp. FRS
BTL
8.99% (1 ML + 6.75%)
due 04/29/2022......................... 325,264 328,679
Select Medical Corp. FRS
BTL-B
4.90% (1 ML + 2.75%)
due 03/01/2021......................... 942,574 948,080
Select Medical Corp. FRS
BTL-B
7.00% (USFRBPLR + 1.75%)
due 03/01/2021......................... 3,026 3,036
Surgery Center Holdings, Inc. FRS
1st Lien
5.57% (3 ML + 3.25%)
due 09/02/2024......................... 727,650 727,832
----------
6,927,190
----------
60
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS(10)(11)(12) (continued)
Medical-Outpatient/Home Medical -- 0.1%
21st Century Oncology, Inc. FRS
BTL-B
8.47% (3 ML + 6.13%)
due 01/16/2023.................. $ 360,316 $ 338,697
----------
Metal-Diversified -- 0.3%
Unimin Corp. FRS
BTL
6.14% (3 ML + 3.75%)
due 06/01/2025.................. 1,137,150 1,064,941
----------
Motion Pictures & Services -- 0.5%
Delta 2 Lux SARL FRS
BTL-B
4.74% (1 ML + 2.50%)
due 02/01/2024.................. 1,779,690 1,764,118
----------
Non-Hazardous Waste Disposal -- 0.2%
Wrangler Buyer Corp. FRS
BTL-B
4.99% (1 ML + 2.75%)
due 09/27/2024.................. 729,861 733,358
----------
Oil & Gas Drilling -- 0.5%
Paragon Offshore Finance Co.
Escrow Loans
7.00% due 07/18/2021+(5)(7)..... 1,745 0
Seadrill Operating LP FRS
BTL-B
8.39% (3 ML + 6.00%)
due 02/21/2021.................. 1,989,497 1,882,975
----------
1,882,975
----------
Oil Companies-Exploration & Production -- 0.7%
California Resources Corp. FRS
1st Lien
6.96% (1 ML + 4.75%)
due 12/31/2022.................. 650,000 663,000
Fieldwood Energy LLC FRS
First Lien
7.49% (1 ML + 5.25%)
due 04/11/2022.................. 480,382 482,784
Fieldwood Energy LLC FRS
2nd Lien
9.49% (1 ML + 7.25%)
due 04/11/2023.................. 128,766 124,582
Gavilan Resources LLC FRS
2nd Lien
8.17% (1 ML + 6.00%)
due 03/01/2024.................. 470,000 442,975
Ultra Resources, Inc. FRS
1st Lien
5.17% (1 ML + 3.00%)
due 04/12/2024.................. 705,000 633,619
----------
2,346,960
----------
Oil Field Machinery & Equipment -- 0.0%
Thermon Industries, Inc. FRS
BTL-B
5.85% (2 ML + 3.75%)
due 10/24/2024.................. 158,940 159,735
----------
Principal Value
Security Description Amount (Note 2)
Oil-Field Services -- 0.8%
McDermott Technology Americas, Inc. FRS
1st Lien
7.24% (1 ML + 5.00%)
due 05/12/2025................................ $1,179,075 $1,192,929
MRC Global US, Inc. FRS
BTL-B
5.24% (1 ML + 3.00%)
due 09/20/2024................................ 1,002,425 1,004,931
Weatherford International, Ltd. FRS
BTL
3.68% (1 ML + 1.43%)
due 07/13/2020................................ 653,226 645,061
----------
2,842,921
----------
Pharmacy Services -- 0.4%
Change Healthcare Holdings LLC FRS
BTL-B
4.99% (1 ML + 2.75%)
due 03/01/2024................................ 1,591,546 1,596,189
----------
Pipelines -- 0.7%
Lotus Midstream LLC FRS
BTL-B
coupon TBD
due 09/25/2025................................ 285,000 286,425
Medallion Midland Acquisition LLC FRS
1st Lien
5.49% (1 ML + 3.25%)
due 10/30/2024................................ 1,109,430 1,099,030
Traverse Midstream Partners LLC FRS
BTL-B
6.16% (3 ML + 4.00%)
due 09/27/2024................................ 1,225,000 1,231,562
----------
2,617,017
----------
Pollution Control -- 0.1%
Filtration Group Corp. FRS
1st Lien
5.24% (1 ML + 3.00%)
due 03/29/2025................................ 407,950 410,330
----------
Printing-Commercial -- 0.3%
Fort Dearborn Co. FRS
1st Lien
6.10% (1 ML + 4.00%)
due 10/19/2023................................ 3,416 3,211
Fort Dearborn Co. FRS
1st Lien
6.34% (3 ML + 4.00%)
due 10/19/2023................................ 1,129,055 1,061,312
----------
1,064,523
----------
Publishing-Books -- 0.2%
McGraw-Hill Global Education Holdings LLC FRS
BTL-B
6.24% (1 ML + 4.00%)
due 05/04/2022................................ 860,130 834,326
----------
61
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS(10)(11)(12) (continued)
Publishing-Periodicals -- 0.2%
Meredith Corp. FRS
BTL-B
5.24% (1 ML + 3.00%)
due 01/31/2025........................... $ 806,614 $ 810,983
----------
Real Estate Investment Trusts -- 0.6%
iStar, Inc. FRS
BTL-B
4.87%-4.92% (1 ML + 2.75%)
due 06/28/2023........................... 1,441,387 1,441,387
Uniti Group, Inc. FRS
BTL-B
5.24% (1 ML + 3.00%)
due 10/24/2022........................... 761,437 727,554
----------
2,168,941
----------
Real Estate Operations & Development -- 0.1%
Lightstone Generation LLC FRS
BTL-B
5.99% (1 ML + 3.75%)
due 01/30/2024........................... 486,256 482,870
Lightstone Generation LLC FRS
BTL-C
5.99% (1 ML + 3.75%)
due 01/30/2024........................... 26,117 25,935
----------
508,805
----------
Recycling -- 0.1%
Gopher Resource LLC FRS
BTL
5.49% (1 ML + 3.25%)
due 03/06/2025........................... 260,120 260,607
----------
Research & Development -- 0.1%
PAREXEL International Corp. FRS
BTL-B
4.99% (1 ML + 2.75%)
due 09/27/2024........................... 227,700 226,206
----------
Retail-Bedding -- 0.2%
Serta Simmons Bedding LLC FRS
1st Lien
5.60%-5.63% (1 ML + 3.50%)
due 11/08/2023........................... 965,300 870,278
----------
Retail-Building Products -- 0.6%
84 Lumber Co. FRS
BTL-B1
7.47% (1 ML + 5.25%)
due 10/25/2023........................... 1,201,202 1,210,211
SiteOne Landscape Supply Holding LLC FRS
BTL-E
4.89% (1 ML + 2.75%)
due 10/29/2024........................... 896,252 901,854
----------
2,112,065
----------
Retail-Major Department Stores -- 0.3%
Neiman Marcus Group, Ltd. LLC FRS
BTL
5.37% (1 ML + 3.25%)
due 10/25/2020........................... 1,104,202 1,023,458
----------
Principal Value
Security Description Amount (Note 2)
Retail-Misc./Diversified -- 0.2%
Leslie's Poolmart, Inc. FRS
BTL-B
5.70% (2 ML + 3.50%)
due 08/16/2023........................... $ 870,253 $ 868,622
----------
Retail-Pet Food & Supplies -- 0.1%
PetSmart, Inc. FRS
BTL-B
5.12% (1 ML + 3.00%)
due 03/11/2022........................... 569,858 498,388
----------
Retail-Sporting Goods -- 0.4%
Bass Pro Group LLC FRS
BTL-B
7.24% (1 ML + 5.00%)
due 09/25/2024........................... 1,301,850 1,314,462
----------
Retail-Vitamins & Nutrition Supplements -- 0.3%
Isagenix International LLC FRS
BTL
8.14% (3 ML + 5.75%)
due 06/14/2025........................... 943,063 944,241
----------
Rubber/Plastic Products -- 0.6%
Gates Global LLC FRS
BTL-B2
4.99% (1 ML + 2.75%)
due 04/01/2024........................... 1,215,750 1,222,588
U.S. Farathane LLC FRS
BLT-B4
5.89% (3 ML + 3.50%)
due 12/23/2021........................... 1,015,574 1,019,383
----------
2,241,971
----------
Schools -- 0.7%
Laureate Education, Inc. FRS
BTL-B
5.74% (1 ML + 3.50%)
due 04/26/2024........................... 1,424,416 1,430,647
SSH Group Holdings, Inc. FRS
1st Lien
6.59% (3 ML + 4.25%)
due 07/30/2025........................... 945,000 952,560
----------
2,383,207
----------
Security Services -- 0.4%
Prime Security Services Borrower LLC FRS
BTL-B1
4.99% (1 ML + 2.75%)
due 05/02/2022........................... 1,479,614 1,486,189
----------
Soap & Cleaning Preparation -- 0.7%
Diamond BC BV FRS
BTL
5.24% (1 ML + 3.00%)
due 09/06/2024........................... 1,096,713 1,074,093
KIK Custom Products, Inc. FRS
BTL-B
6.24% (1 ML + 4.00%)
due 05/15/2023........................... 809,167 804,615
62
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS(10)(11)(12) (continued)
Soap & Cleaning Preparation (continued)
Zep, Inc. FRS
1st Lien
6.38% (3 ML + 4.00%)
due 08/12/2024.......................... $ 757,350 $ 719,798
----------
2,598,506
----------
Storage/Warehousing -- 0.1%
Moda Midstream LLC FRS
BTL-B
coupon TBD
due 09/26/2025.......................... 175,000 176,531
----------
Telecom Services -- 1.0%
Securus Technologies Holdings, Inc. FRS
1st Lien
6.74% (1 ML + 4.50%)
due 11/01/2024.......................... 1,038,551 1,040,499
Securus Technologies Holdings, Inc. FRS
2nd Lien
10.49% (1 ML + 8.25%)
due 11/01/2025.......................... 505,000 505,000
Securus Technology Holdings LLC FRS
Delayed Draw
coupon TBD
due 11/01/2024.......................... 132,000 132,247
Telenet Financing USD LLC FRS
BTL-AN
4.41% (3 ML + 2.25%)
due 08/15/2026.......................... 1,145,000 1,139,513
West Corp. FRS
BTL-B
6.24% (1 ML + 4.00%)
due 10/10/2024.......................... 685,799 683,418
----------
3,500,677
----------
Telecommunication Equipment -- 0.3%
Global Tel*Link Corp. FRS
1st Lien
6.39% (3 ML + 4.00%)
due 05/23/2020.......................... 943,225 948,177
Sorenson Communications LLC FRS
BTL-B
8.14% (3 ML + 5.75%)
due 04/30/2020.......................... 98,711 98,958
----------
1,047,135
----------
Telephone-Integrated -- 1.0%
CenturyLink, Inc. FRS
BTL-B
4.99% (1 ML + 2.75%)
due 01/31/2025.......................... 2,037,797 2,023,363
Frontier Communications Corp. FRS
BTL-B
6.00% (1 ML + 3.75%)
due 06/15/2024.......................... 613,447 600,794
Shares/
Principal Value
Security Description Amount (Note 2)
Telephone-Integrated (continued)
TDC A/S FRS
BTL-B2
5.84% (3 ML + 3.50%)
due 05/31/2025........................... $ 822,938 $ 831,990
------------
3,456,147
------------
Television -- 0.2%
Tribune Media Co. FRS
BTL-B
5.24% (1 ML + 3.00%)
due 12/27/2020........................... 53,618 53,886
Tribune Media Co. FRS
BTL-C
5.24% (1 ML + 3.00%)
due 01/27/2024........................... 668,275 669,945
------------
723,831
------------
Theaters -- 0.6%
CDS U.S. Intermediate Holdings, Inc. FRS
BTL-B
6.14% (3 ML + 3.75%)
due 07/08/2022........................... 1,227,223 1,205,747
Cineworld, Ltd. FRS
BTL-B
4.74% (1 ML + 2.50%)
due 02/28/2025........................... 1,009,925 1,008,101
------------
2,213,848
------------
Transport-Services -- 0.2%
Ceva Group PLC FRS
BTL-B
6.14% (3 ML + 3.75%)
due 07/24/2025........................... 790,000 789,012
------------
Veterinary Diagnostics -- 0.3%
NVA Holdings, Inc. FRS
BTL-B3
4.99% (1 ML + 2.75%)
due 02/02/2025........................... 1,034,800 1,032,213
------------
Vitamins & Nutrition Products -- 0.1%
HLF Financing SARL LLC FRS
BTL-B
5.49% (1 ML + 3.25%)
due 08/18/2025........................... 300,000 301,875
------------
Web Hosting/Design -- 0.0%
WEB.COM Group, Inc. FRS
BTL-B
Coupon TBD
due 09/14/2025........................... 115,000 115,672
------------
Total Loans
(cost $203,177,506)...................... 201,872,315
------------
COMMON STOCKS -- 0.2%
Auto/Truck Parts & Equipment-Original -- 0.0%
Lear Corp................................. 80 11,600
------------
Electric-Generation -- 0.0%
Vistra Energy Corp. CVR+(5)(13)........... 27,942 20,956
------------
63
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
Shares/
Principal Value
Security Description Amount (Note 2)
COMMON STOCKS (continued)
Multimedia -- 0.0%
Haights Cross Communication,
Inc.+(5)(7)(13)............................ 19,388 $ 0
------------
Television -- 0.2%
ION Media Networks, Inc.+(5)(7)(13)......... 660 554,519
------------
Total Common Stocks
(cost $167,312)............................ 587,075
------------
PREFERRED SECURITIES -- 0.2%
Diversified Banking Institutions -- 0.2%
GMAC Capital Trust I FRS
Series 2
8.10%
(3 ML+5.79%)
(cost $770,412)............................ 30,000 789,000
------------
PREFERRED SECURITIES/CAPITAL SECURITIES -- 0.6%
Banks-Super Regional -- 0.5%
Huntington Bancshares, Inc.
Series E
5.70% due 04/15/2023(14)................... $ 860,000 852,475
KeyCorp.
Series D
5.00% due 09/15/2026(14)................... 880,000 862,400
------------
1,714,875
------------
Insurance-Multi-line -- 0.1%
Voya Financial, Inc.
5.65% due 05/15/2053....................... 460,000 463,450
------------
Total Preferred Securities/Capital Securities
(cost $2,220,184).......................... 2,178,325
------------
Total Long-Term Investment Securities
(cost $359,866,775)........................ 356,597,536
------------
SHORT-TERM INVESTMENT SECURITIES -- 1.7%
Registered Investment Companies -- 1.7%
State Street Institutional U.S. Government
Money Market Fund,
Premier Class
1.97%(15)
(cost $6,076,828).......................... 6,076,828 6,076,828
------------
TOTAL INVESTMENTS
(cost $365,943,603)(16).................... 101.6% 362,674,364
Liabilities in excess of other assets......... (1.6) (5,829,558)
---------- ------------
NET ASSETS 100.0% $356,844,806
========== ============
--------
* 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 September 30, 2018,
the aggregate value of these securities was $89,436,183 representing 25.1%
of net assets. Unless otherwise indicated, these securities are not
considered to be illiquid.
+ Non-income producing security.
(1) Commercial Mortgage Backed Security.
(2) Certain variable rate securities are not based on a published reference
rate and spread but are determined by the issuer or agent and are based on
current market conditions. These securities do not indicate a reference
rate and spread in their description above.
(3) Security in default of interest.
(4) Company has filed for bankruptcy protection.
(5) Illiquid security. At September 30, 2018, the aggregate value of these
securities was $581,312 representing 0.2% of net assets.
(6) PIK ("Payment-in-Kind") security -- Income may be paid in additional
securities or cash at the discretion of the issuer. The security is
currently paying interest in cash at the coupon rate listed.
(7) Securities classified as Level 3 (see Note 2).
(8) Security in default of interest and principal at maturity.
(9) PIK ("Payment-in-Kind") security -- Income may be paid in additional
securities or cash at the discretion of the issuer. The security is
currently paying interest in the form of additional securities at the
coupon rate listed.
(10) Senior loans in the Fund are generally subject to mandatory and/or
optional prepayment. Because of these mandatory prepayment conditions and
because there may be significant economic incentives for a borrower to
prepay, prepayments may occur. As a result, the actual remaining maturity
may be substantially less than the stated maturities shown.
(11) The Fund invests in senior loans which generally pay interest at rates
which are periodically re-determined by reference to a base lending rate
plus a premium. These base lending rates are generally either the lending
rate offered by one or more major European banks, such as the London
Inter-Bank Offer Rate ("LIBOR") or the prime rate offered by one or more
major United States banks, or the certificate of deposit rate. Senior
loans are generally considered to be restrictive in that the Fund is
ordinarily contractually obligated to receive approval from the Agent Bank
and/or borrower prior to the disposition of a senior loan.
(12) All loans in the Fund were purchased through assignment agreements unless
otherwise indicated.
(13) Denotes a restricted security that: (a) cannot be offered for public sale
without first being registered, or being able to take advantage of an
exemption from registration, under the Securities Act of 1933, as amended
(the "1933 Act"); (b) is subject to a contractual restriction on public
sales; or (c) is otherwise subject to a restriction on sales by operation
of applicable law. Restricted securities are valued pursuant to Note
2. Certain restricted securities held by the Fund may not be sold except
in exempt transactions or in a public offering registered under the 1933
Act. The Fund has no right to demand registration of these securities. The
risk of investing in certain restricted securities is greater than the
risk of investing in the securities of widely held, publicly traded
companies. To the extent applicable, lack of a secondary market and resale
restrictions may result in the inability of a Fund to sell a security at a
fair price and may substantially delay the sale of the security. In
addition, certain restricted securities may exhibit greater price
volatility than securities for which secondary markets exist. As of
September 30, 2018, the Fund held the following restricted securities:
Value % of
Acquisition Acquisition Per Net
Description Date Shares Cost Value Share Assets
----------- ----------- ------ ----------- -------- ------- ------
Common Stocks
Vistra Energy Corp.
CVR................ 10/06/2016 27,942 $ 0 $ 20,956 $ 0.75 0.00%
Haights Cross
Communications,
Inc................ 01/27/2004 1,491 13,216
06/06/2005 17,897 154,089
------ --------
19,388 167,305 0 0.00 0.00
ION Media Networks,
Inc................ 12/21/2016 660 7 554,519 840.18 0.16
-------- ----
$575,475 0.16%
======== ====
64
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
(continued)
(14) Perpetual maturity -- maturity date reflects the next call date.
(15) The rate shown is the 7-day yield as of September 30, 2018.
(16) See Note 5 for cost of investments on a tax basis.
BTL --Bank Term Loan
CVR --Contingent Value Rights
TBD --Senior loan purchased on a when-issued or delayed-delivery basis. Certain
details associated with this purchase are not known prior to the
settlement date of the transaction. In addition, senior loans typically
trade without accrued interest and therefore a coupon rate is not
available prior to the settlement.
FRS --Floating Rate Security
VRS --Variable Rate Security
The rates shown on FRS and VRS are the current interest rates at September 30,
2018 and unless noted otherwise, the dates shown are the original maturity
dates.
Index Legend
1 ML -- 1 Month USD Libor
2 ML -- 2 Month USD Libor
3 ML -- 3 Month USD Libor
6 ML -- 6 Month USD Libor
USFRBPLR --US Federal Reserve Bank Prime Loan Rate
The following is a summary of the inputs used to value the Fund's net assets as
of September 30, 2018 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- ------------
ASSETS:
Investments at Value:*
Asset Backed Securities................. $ -- $ 7,152,424 $ -- $ 7,152,424
U.S. Corporate Bonds & Notes:
Rubber/Plastic Products............... -- -- 0 0
Other Industries...................... -- 121,769,190 -- 121,769,190
Foreign Corporate Bonds & Notes:
Special Purpose Entity................ -- -- 0 0
Other Industries...................... -- 22,249,207 -- 22,249,207
Loans:
Building-Residential/Commercial....... -- -- 0 0
Oil & Gas Drilling.................... -- 1,882,975 0 1,882,975
Other Industries...................... -- 199,989,340 -- 199,989,340
Common Stocks:
Auto/Truck Parts & Equipment-Original. 11,600 -- -- 11,600
Electric-Generation................... -- 20,956 -- 20,956
Other Industries...................... -- -- 554,519 554,519
Preferred Securities.................... 789,000 -- -- 789,000
Preferred Securities/Capital Securities. -- 2,178,325 -- 2,178,325
Short-Term Investment Securities........ 6,076,828 -- -- 6,076,828
---------- ------------ -------- ------------
Total Investments at Value.............. $6,877,428 $355,242,417 $554,519 $362,674,364
========== ============ ======== ============
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no transfers between Levels during the reporting
period.
At the beginning and end of the reporting period, Level 3 investments were not
considered a material portion of the Fund.
See Notes to Financial Statements
65
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited)
Note 1. Organization
The SunAmerica Income Funds (the "Trust") is a diversified open-end
management investment company organized as a Massachusetts business trust.
The Trust currently consists of three different series (each, a "Fund" and
collectively, the "Funds"). Each Fund is a separate series of the Trust with
distinct investment objectives and/or strategies. Each Fund is managed by
SunAmerica Asset Management, LLC (the "Adviser" or "SunAmerica"), an
indirect wholly-owned subsidiary of American International Group, Inc.
("AIG"). An investor may invest in one or more of the following Funds: AIG
U.S. Government Securities Fund ("U.S. Government Securities Fund"), AIG
Strategic Bond Fund ("Strategic Bond Fund"), and AIG Flexible Credit Fund
("Flexible Credit Fund"). The Funds are considered to be separate entities
for financial and tax reporting purposes.
The investment goals and principal investment techniques for each of the
Funds are as follows:
U.S. Government Securities Fund seeks high current income consistent with
relative safety of capital by the active trading of U.S. Government
securities, without regard to the maturities of such securities. Under
normal market conditions, at least 80% of the Fund's net assets plus any
borrowing for investment purposes will be invested in such securities.
Strategic Bond Fund seeks a high level of total return by the active trading
of a broad range of bonds, including both investment grade and
non-investment grade U.S. and foreign bonds (which may include "junk
bonds"), U.S. and foreign government and agency obligations, and
mortgage-backed securities, without regard to the maturities of such
securities. Under normal market conditions, at least 80% of the Fund's net
assets plus any borrowing for investment purposes will be invested in bonds.
Flexible Credit Fund seeks a high level of total return by the active
trading in credit instruments. Under normal circumstances, at least 80% of
the Fund's net assets, plus any borrowings for investment purposes, will be
invested in credit instruments and derivative instruments and
exchange-traded funds ("ETFs") that are linked to, or provide investment
exposure to, credit instruments. The Fund considers a credit instrument to
be any debt instrument or instrument with debt-like characteristics,
including but not limited to, corporate and sovereign bonds, secured
floating rate loans and other institutionally traded secured floating rate
debt obligations ("Loans"), and securitized instruments, which are
securities backed by pools of assets such as mortgages, loans, or other
receivables. The credit instruments in which the Fund intends to primarily
invest are U.S. and non-U.S. below investment grade, high yield bonds
(commonly referred to as "junk bonds") and Loans.
Each Fund offers multiple classes of shares. The classes within each Fund
are presented in the Statements 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, purchases of Class A shares in amounts of
$1,000,000 or more will be purchased at net asset value but will be subject
to a contingent deferred sales charge on redemptions made within two years
of purchase.
Class B shares are offered without an initial sales charge, although a
declining contingent deferred sales charge may be imposed on redemptions
made within six years of purchase. Class B shares convert automatically to
Class A shares on the first business day of the month following the eighth
anniversary of the issuance of such Class B shares and at such time will be
subject to the lower distribution fee applicable to Class A shares.
Class C shares are offered at net asset value per share without an initial
sales charge and may be subject to a contingent deferred sales charge on
redemptions made within 12 months of purchase. Class C shares convert
automatically to Class A shares approximately ten years after purchase and
at such time will be subject to the lower distribution fee applicable to
Class A shares.
Class W shares 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. Class W shares of the Flexible
Credit Fund and the Strategic Bond Fund commenced operations effective
October 1, 2014 and January 29, 2015, respectively.
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions except as may otherwise be provided in the Trust's
registration statement. Class A, Class B and Class C shares each makes
distribution and account
66
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited)
(continued)
maintenance and service fee payments under the distribution plan pursuant to
Rule 12b-1 under the Investment Company Act of 1940, as amended (the "1940
Act"), with Class B and Class C shares being subject to higher distribution
fee rates. Class W shares have not adopted 12b-1 Plans and make no payments
thereunder, however, Class W shares pay a service fee to the Funds'
distributor for administrative and shareholder services.
Indemnifications: The Trust's organizational documents provide current and
former officers and trustees with a limited indemnification against
liabilities arising out of the performance of their duties to the Trust. In
addition, pursuant to Indemnification Agreements between the Trust and each
of the current trustees who is not an "interested person," as defined in
Section 2(a)(19) of the 1940 Act, of the Trust (collectively, the
"Disinterested Trustees"), the Trust provides the Disinterested Trustees
with a limited indemnification against liabilities arising out of the
performance of their duties to the Trust, whether such liabilities are
asserted during or after their service as trustees. In addition, in the
normal course of business, the Trust enters into contracts that contain the
obligation to indemnify others. The Trust's maximum exposure under these
arrangements is unknown. Currently, however, the Trust expects the risk of
loss to be remote.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles ("GAAP") requires management to make
estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those
estimates and those differences could be significant. The Funds are
considered investment companies under GAAP and follow the accounting and
reporting guidance applicable to investment companies. The following is a
summary of significant accounting policies consistently followed by the
Trust in the preparation of its financial statements:
Security Valuation: In accordance with the authoritative guidance on fair
value measurements and disclosures under GAAP, the Funds disclose the fair
value of their investments in a hierarchy that prioritizes the inputs to
valuation techniques used to measure the fair value. In accordance with
GAAP, fair value is defined as the price that the Funds would receive upon
selling an asset or transferring a liability in a timely transaction to an
independent third party in the principal or most advantageous market. GAAP
establishes a three-tier hierarchy to provide more transparency around the
inputs used to measure fair value and to establish classification of fair
value measurements for disclosure purposes. Inputs refer broadly to the
assumptions that market participants would use in pricing the asset or
liability, including assumptions about risk. Inputs may be observable or
unobservable. Observable inputs are inputs that reflect the assumptions
market participants would use in pricing the asset or liability developed
based on market data obtained from sources independent of the reporting
entity. Unobservable inputs are inputs that reflect the reporting entity's
own assumptions about the assumptions market participants would use in
pricing the asset or liability developed based on the best information
available in the circumstances. The three-tiers are as follows:
Level 1 -- Unadjusted quoted prices in active markets for identical
securities
Level 2 -- Other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk,
referenced indices, quoted prices in inactive markets, adjusted quoted
prices in active markets, adjusted quoted prices on foreign equity
securities that were adjusted in accordance with pricing procedures approved
by the Board of Trustees ("the Board"), etc.)
Level 3 -- Significant unobservable inputs (includes inputs that reflect the
Funds' own assumptions about the assumptions market participants would use
in pricing the security, developed based on the best information available
under the circumstances)
Changes in valuation techniques may result in transfers in or out of an
investment's assigned Level within the hierarchy. The methodology used for
valuing investments is not necessarily an indication of the risk associated
with investing in those investments and the determination of the
significance of a particular input to the fair value measurement in its
entirety requires judgment and consideration of factors specific to each
security.
The availability of observable inputs can vary from security to security and
is affected by a wide variety of factors, including, for example, the type
of security, whether the security is recently issued and not yet established
in the marketplace, the liquidity of markets, and other characteristics
particular to the security. To the extent that valuation is based on models
or inputs that are less observable or unobservable in the market, the
determination of fair value requires more judgment. Accordingly, the degree
of judgment exercised in determining fair value is greatest for instruments
categorized in Level 3.
67
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited)
(continued)
The summary of each Fund's asset and liabilities classified in the fair
value hierarchy as of September 30, 2018 is reported on a schedule at the
end of each Fund's Portfolio of Investments.
Stocks are generally valued based upon closing sales prices reported on
recognized securities exchanges on which the securities are principally
traded and are generally categorized as Level 1. Stocks listed on the NASDAQ
are valued using the NASDAQ Official Closing Price ("NOCP"). Generally, the
NOCP will be the last sale price unless the reported trade for the stock is
outside the range of the bid/ask price. In such cases, the NOCP will be
normalized to the nearer of the bid or ask price. For listed securities
having no sales reported and for unlisted securities, such securities will
be valued based upon the last reported bid price.
As of the close of regular trading on the New York Stock Exchange ("NYSE"),
securities traded primarily on security exchanges outside the United States
are valued at the last sale price on such exchanges on the day of valuation,
or if there is no sale on the day of valuation, at the last-reported bid
price. If a security's price is available from more than one exchange, the
Funds use the exchange that is the primary market for the security. Such
securities are generally categorized as Level 1. However, depending on the
foreign market, closing prices may be up to 15 hours old when they are used
to price a Fund's shares, and a Fund may determine that certain closing
prices do not reflect the fair value of the security. This determination
will be based on review of a number of factors, including developments in
foreign markets, the performance of U.S. securities markets, and the
performance of instruments trading in U.S. markets that represent foreign
securities and baskets of foreign securities. If a Fund determines that
closing prices do not reflect the fair value of the securities, the Fund
will adjust the previous closing prices in accordance with pricing
procedures approved by the Board to reflect what it believes to be the fair
value of the securities as of the close of regular trading on the NYSE. The
Funds may also fair value securities in other situations, for example, when
a particular foreign market is closed but a Fund is open. For foreign equity
securities and foreign equity futures contracts, the Funds use an outside
pricing service to provide it with closing market prices and information
used for adjusting those prices and when so adjusted, such securities and
futures are generally categorized as Level 2.
Bonds, debentures and other debt securities are valued at evaluated bid
prices obtained for the day of valuation from a Board-approved pricing
service, and are generally categorized as Level 2. The pricing service may
use valuation models or matrix pricing which considers information with
respect to comparable bond and note transactions, quotations from bond
dealers, or by reference to other securities that are considered comparable
in such characteristics as rating, interest rate, and maturity date, option
adjusted spread models, prepayments projections, interest rate spreads, and
yield curves to determine current value. If a price is unavailable from a
Board-approved pricing service, the securities may be priced at the mean of
two independent quotes obtained from brokers.
Senior floating rate loans ("Loans") are valued at the average of available
bids in the market for such Loans, as provided by a Board-approved loan
pricing service, and are generally categorized as Level 2.
Investments in registered investment companies that do not trade on an
exchange are valued at the end of day net asset value per share. Investments
in registered investment companies that trade on an exchange are valued at
the last sales price or official closing price as of the close of the
customary trading session on the exchange where the security is principally
traded. Investments in registered investment companies are generally
categorized as Level 1.
Forward foreign currency contracts ("forward contracts") are valued at the
4:00 p.m. Eastern Time forward rate and are generally categorized as Level 2.
Other securities are valued on the basis of last sale or bid price (if a
last sale price is not available) which is, in the opinion of the Adviser,
the broadest and most representative market, that may be either a securities
exchange or over-the-counter market and are generally categorized as Level 1
or Level 2.
The Board is responsible for the share valuation process and has adopted
policies and procedures (the "PRC Procedures") for valuing the securities
and other assets held by the Funds, including procedures for the fair
valuation of securities and other assets for which market quotations are not
readily available or are unreliable. The PRC Procedures provide for the
establishment of a pricing review committee, which is responsible for, among
other things, making certain determinations in connection with the
68
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited)
(continued)
Trust's fair valuation procedures. Securities for which market quotations
are not readily available or the values of which may be significantly
impacted by the occurrence of developments or significant events are
generally categorized as Level 3. There is no single standard for making
fair value determinations, which may result in prices that vary from those
of other funds.
Derivative Instruments:
Forward Foreign Currency Contracts: During the period, the Strategic Bond
Fund used forward contracts to attempt to protect securities and related
receivables and payables against changes in future foreign exchange rates.
A forward contract is an agreement between two parties to buy or sell
currency at a set price on a future date. The market value of the contract
will fluctuate with changes in currency exchange rates. The contract is
marked-to-market daily using the forward rate and the cumulative change in
market value is recorded by a Fund as unrealized appreciation or
depreciation. On the settlement date, a Fund records either realized gains
or losses equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
Risks to the Funds of entering into forward contracts include counterparty
risk, market risk and illiquidity risk. Counterparty risk arises upon
entering into these contracts from the potential inability of counterparties
to meet the terms of their contracts. If the counterparty defaults, a Fund's
loss will generally consist of the net amount of contractual payments that
the Fund has not yet received though the Fund's maximum exposure due to
counterparty risk could extend to the notional amount of the contract.
Market risk is the risk that the value of the forward contract will
depreciate due to unfavorable changes in the exchange rates. These contracts
may involve market risk in excess of the unrealized appreciation or
depreciation reported on the Statements of Assets and Liabilities.
Illiquidity risk arises because the secondary market for forwards may have
less liquidity relative to markets for other securities. Currency
transactions are also subject to risks different from those of other
portfolio transactions. Because currency control is of great importance to
the issuing governments and influences economic planning and policy,
purchases and sales of currency and related instruments can be adversely
affected by government exchange controls, limitations or restrictions on
repatriation of currency, and manipulations or exchange restrictions imposed
by governments.
Forward foreign currency contracts outstanding at the end of the period, if
any, are reported on a schedule at the end of each Fund's Portfolio of
Investments.
Master Agreements: Certain Funds that hold derivative instruments and other
financial instruments may be a party to ISDA (International Swaps and
Derivatives Association, Inc.) Master Agreements or similar agreements
("Master Agreements") with certain counterparties that govern certain
instruments. Master Agreements may contain provisions regarding, among other
things, the parties' general obligations, representations, agreements,
collateral requirements, events of default and early termination. Collateral
can be in the form of cash or securities as agreed to by the Fund and
applicable counterparty. Collateral requirements are generally determined
based on a Fund's net position with each counterparty. Master Agreements may
also include certain provisions that require a Fund to post additional
collateral upon the occurrence of certain events, such as when a Fund's net
assets fall below a specified level. In addition, Master Agreements
typically specify certain standard termination events, such as failure of a
party to pay or deliver, credit support defaults and other events of
default. Termination events applicable to a Fund may also occur upon a
decline in the Fund's net assets below a specified level over a certain
period of time. Additional termination events applicable to counterparties
may occur upon a decline in a counterparty's long-term and short-term credit
ratings below a specified level, or upon a decline in the ratings of a
counterparty's credit support provider. Upon the occurrence of a termination
event, the other party may elect to terminate early and cause settlement of
all instruments outstanding pursuant to a particular Master Agreement,
including the payment of any losses and costs resulting from such early
termination, as reasonably determined by the terminating party. Any decision
by one or more of a Fund's counterparties to elect early termination could
cause a Fund to accelerate the payment of liabilities, which settlement
amounts could be in excess of the amount of assets that are already posted
as collateral. Typically, the Master Agreement will permit a single net
payment in the event of default. Note, however, that bankruptcy or
insolvency laws of a particular jurisdiction may impose restrictions on or
prohibitions against the right of offset in bankruptcy, insolvency or other
events. As a result, the early termination with respect to derivative
instruments subject to Master Agreements that are in a net liability
position could be material to a Fund's financial statements. The Funds do
not offset derivative assets and derivative liabilities that are subject to
netting arrangements in the Statements of Asset and Liabilities.
69
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited)
(continued)
The following tables represent the value of derivatives held as of
September 30, 2018, by their primary underlying risk exposure. The
derivative contracts held during the period are not accounted for as hedging
instruments under GAAP. For a detailed presentation of derivatives held as
of September 30, 2018, please refer to the schedule at the end of each
Fund's Portfolio of Investments.
Liability
Asset Derivatives Derivatives
----------------- ------------
Foreign Foreign
Exchange Exchange
Contracts Contracts
----------------- ------------
Forward Forward
Foreign Foreign
Currency Currency
Fund Contracts(1) Contracts(2)
---- ----------------- ------------
Strategic Bond............................... $180,727 $6,980
======== ======
--------
Statement of Assets and Liabilities Location:
(1)Unrealized appreciation on forward foreign currency contracts
(2)Unrealized depreciation on forward foreign currency contracts
Change in
Unrealized
Realized Appreciation
Gain (Loss) on (Depreciation) on
Derivatives Derivatives
Recognized in Recognized in
Statement of Statement of
Operations Operations
-------------- -----------------
Foreign Foreign
Exchange Exchange
Contracts Contracts
-------------- -----------------
Forward Forward
Foreign Foreign
Currency Currency
Fund Contracts(1) Contracts(2)
---- -------------- -----------------
Strategic Bond............................... $1,161,074 $140,823
========== ========
--------
Statement of Operations Location:
(1)Net realized gain (loss) on forward contracts
(2)Change in unrealized appreciation (depreciation) on forward contracts
The following table represents the average monthly balances of derivatives
held during the six months ended September 30, 2018:
Average Amount
Outstanding
During the Year
---------------
Forward
Foreign
Currency
Fund Contracts(1)
---- ---------------
Strategic Bond............................... $17,785,502
===========
--------
(1)Amounts represent notional amounts in US dollars.
There were no derivative assets and liabilities subject to Master Agreements
outstanding at September 30, 2018. The repurchase agreements held by the
Funds as of September 30, 2018, are subject to Master Agreements. See the
Portfolio of Investments and the Notes to the Financial Statements for more
information about the Funds' holdings in repurchase agreements.
70
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited)
(continued)
Mortgage-Backed Dollar Rolls: During the six months ended September 30,
2018, the Strategic Bond Fund entered into dollar rolls using "to be
announced" ("TBA") mortgage-backed securities ("TBA Rolls"). TBA Roll
transactions involve the sale of mortgage or other asset backed securities
with the commitment to purchase substantially similar securities on a
specified future date. The Funds' policy is to record the components of TBA
Rolls as purchase/sale transactions. Any difference between the purchase and
sale price is recorded as a realized gain or loss on the date the
transaction is entered into. TBA Roll transactions involve the risk that the
market value of the securities held by a Fund may decline below the price of
the securities that the Fund has sold but is obligated to repurchase under
the agreement. In the event that the buyer of securities in a TBA Roll
transaction files bankruptcy or becomes insolvent, a Fund's use of the
proceeds from the sale of the securities may be restricted pending a
determination by the other party, or its trustee or receiver, whether to
enforce the Fund's obligation to repurchase the securities. Mortgage-Backed
Dollar Rolls outstanding at the end of the period, if any, are included in
investments purchased/sold on an extended settlement basis in the Statement
of Assets and Liabilities.
When-Issued Securities and Forward Commitments: Certain Funds may purchase
or sell when-issued securities (including TBA securities) that have been
authorized, but not yet issued in the market. In addition, a Fund may
purchase or sell securities on a forward commitment basis. A forward
commitment involves entering into a contract to purchase or sell securities,
typically on an extended settlement basis, for a fixed price at a future
date. The Funds may engage in when-issued or forward commitment transactions
in order to secure what is considered to be an advantageous price and yield
at the time of entering into the obligation. The purchase of securities on a
when-issued or forward commitment basis involves a risk of loss if the value
of the security to be purchased declines before the settlement date.
Conversely, the sale of securities on a when-issued or forward commitment
basis involves the risk that the value of the securities sold may increase
before the settlement date. For the six months ended September 30, 2018, the
Strategic Bond Fund purchased and/or sold when-issued securities. Securities
purchased or sold on a when-issued or forward commitment basis outstanding
at the end of the period, if any, are included in investments purchased/sold
on an extended settlement basis in the Statement of Assets and Liabilities.
Loans: The Fund invests in senior loans which generally consist of direct
debt obligations of companies (collectively, "Borrowers"), primarily U.S.
companies and their affiliates, undertaken to finance the growth of the
Borrower's business internally and externally, or to finance a capital
restructuring. Transactions in senior loans may settle on a delayed basis.
Unsettled loans at the end of the period, if any, are included in
investments purchased/sold on an extended settlement basis in the Statement
of Assets and Liabilities.
Stripped Mortgage-Backed Securities: Stripped Mortgage-Backed Securities
("SMBS") are multiple-class mortgage-backed securities. SMBS are often
structured with two classes that receive different proportions of the
interest and principal distributions on a pool of mortgage assets. SMBS have
greater market volatility than other types of U.S. government securities in
which a Fund invests. A common type of SMBS has one class receiving some of
the interest and all or most of the principal (the "principal only" class)
from the mortgage pool, while the other class will receive all or most of
the interest (the "interest only" class). The yield to maturity on an
interest only class is extremely sensitive not only to changes in prevailing
interest rates, but also to the rate of principal payments, including
principal prepayments, on the underlying pool of mortgage assets, and a
rapid rate of principal payment may have a material adverse effect on a
Fund's yield.
Inflation-Indexed Bonds: Certain Funds may purchase inflation-indexed bonds.
Inflation-indexed bonds are fixed income securities whose principal value is
adjusted periodically according to the rate of inflation. Two structures are
common. The U.S. Treasury and certain other issuers use a structure that
reflects inflation in the principal value of the bond. Other issuers pay out
any inflation related accruals as part of a semiannual coupon. The value of
inflation-indexed bonds is expected to change in response to changes in real
interest rates. Real interest rates, in turn, are tied to the relationship
between nominal interest rates (i.e., stated interest rates) and the rate of
inflation. Therefore, if the rate of inflation rises at a faster rate than
nominal interest rates, real interest rates (i.e., nominal interest rates
minus inflation) might decline, leading to an increase in value of
inflation-indexed bonds. In contrast, if nominal interest rates increase at
a faster rate than inflation, real interest rates might rise, leading to a
decrease in value of inflation-indexed bonds. There can be no assurance,
however, that the value of inflation-indexed bonds will be directly
correlated to changes in nominal interest rates, and short-term increases in
inflation may lead to a decline in their value. Coupon payments received
from inflation-indexed bonds are recorded in the Statements of Operations as
interest income. In addition, any increase or decrease in the principal
amount of an inflation-indexed bond will be recorded in the Statements of
Operations as an increase or decrease to interest income, even though
principal is not paid until maturity.
71
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited)
(continued)
Repurchase Agreements: The Funds, along with other affiliated registered
investment companies, pursuant to procedures adopted by the Board and
applicable guidance from the Securities and Exchange Commission ("SEC"), may
transfer uninvested cash balances into a single joint account, the daily
aggregate balance of which is invested in one or more repurchase agreements
collateralized by U.S. Treasury or federal agency obligations. In a
repurchase agreement, the seller of a security agrees to repurchase the
security at a mutually agreed-upon time and price, which reflects the
effective rate of return for the term of the agreement. For repurchase
agreements and joint repurchase agreements, the Trust's custodian takes
possession of the collateral pledged for investments in such repurchase
agreements ("repo" or collectively "repos"). The underlying collateral is
valued daily on a mark to market basis, plus accrued interest to ensure that
the value, at the time the agreement is entered into, is equal to at least
102% of the repurchase price, including accrued interest. In the event of
default of the obligation to repurchase, a Fund has the right to liquidate
the collateral and apply the proceeds in satisfaction of the obligation. If
the seller defaults and the value of the collateral declines or if
bankruptcy proceedings are commenced with respect to the seller of the
security, realization of the collateral by a Fund may be delayed or limited.
Securities Transactions, Investment Income, Expenses, Dividends and
Distributions to Shareholders: Security transactions are recorded on a trade
date basis. Interest income is accrued daily from settlement date except
when collection is not expected. Dividend income is recorded on the
ex-dividend date except for certain dividends from foreign securities, which
are recorded as soon as the Trust is informed after the ex-dividend date.
Paydown gains and losses on mortgage and asset-backed securities are
recorded as components of interest income on the Statements of Operations.
For financial statement purposes, the Funds amortize all premiums and
accrete all discounts on fixed income securities.
Realized gains and losses on the sale of investments are calculated on the
identified cost basis. Funds which earn foreign income and capital gains may
be subject to foreign withholding taxes and capital gains taxes at various
rates. Under applicable foreign law, a withholding of tax may be imposed on
interest, dividends, and capital gains from the sale of foreign securities
at various rates.
Net investment income, expenses other than class specific expenses, and
realized and unrealized gains and losses are allocated daily to each class
of shares based upon the relative net asset value of outstanding shares of
each class of shares at the beginning of the day (after adjusting for
current capital shares activity of the respective class).
Expenses common to all Funds are allocated among the Funds based upon
relative net assets or other appropriate allocation methods. In all other
respects, expenses are charged to each Fund as incurred on a specific
identification basis.
Dividends from net investment income are accrued daily and paid monthly.
Capital gain distributions, if any, are paid annually. The Funds record
dividends and distributions to their shareholders on the ex-dividend date.
The Funds reserve the right to declare and pay dividends less frequently
than disclosed above, provided that the net realized capital gains and net
investment income, if any, are paid at least annually.
The amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations, which may differ from GAAP. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within
the capital accounts at fiscal year end based on their federal tax-basis
treatment; temporary differences do not require reclassification. Net assets
are not affected by these reclassifications.
Each Fund is considered a separate entity for tax purposes and intends to
comply with the requirements of the Internal Revenue Code, as amended,
applicable to regulated investment companies and distribute all of its
taxable income, including any net capital gains on investments, to its
shareholders. Each Fund also intends to distribute sufficient net investment
income and net capital gains, if any, so that it will not be subject to
excise tax on undistributed income and gains. Therefore, no federal income
tax or excise tax provision is required.
The Funds recognize the tax benefits of uncertain tax positions only when
the position is more likely than not to be sustained, assuming examination
by tax authorities. Management has analyzed each Fund's tax positions and
concluded that no liability for unrecognized tax benefits should be recorded
related to uncertain tax positions taken on returns filed for open tax years
2015 -- 2017 or expected to be taken in each Fund's 2018 tax return. The
Funds are not aware of any tax provisions for which it is
72
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited)
(continued)
reasonably possible that the total amounts of unrecognized tax benefits will
change materially in the next twelve months. The Funds file U.S. federal and
certain state income tax returns. With few exceptions, the Funds are no
longer subject to U.S. federal and state tax examinations by tax authorities
for tax returns ending before 2015.
Foreign Currency Translation: The books and records of the Funds are
maintained in U.S. dollars. Assets and liabilities denominated in foreign
currencies and commitments under forward foreign currency contracts are
translated into U.S. dollars based on the exchange rate of such currencies
against U.S. dollars on the date of valuation.
The Funds do not isolate that portion of the results of operations arising
as a result of changes in the foreign exchange rates from the changes in the
market prices of securities held at the end of the period. Similarly, the
Funds do not isolate the effect of changes in foreign exchange rates from
the changes in the market prices of portfolio securities sold during the
period.
Realized foreign exchange gains and losses on other assets and liabilities
and change in unrealized foreign exchange gains and losses on other assets
and liabilities located in the Statements of Operations include realized
foreign exchange gains and losses from currency gains or losses between the
trade and the settlement dates of securities transactions, the difference
between the amounts of interest, dividends and foreign withholding taxes
recorded on the Funds' books and the U.S. dollar equivalent amounts actually
received or paid and changes in the unrealized foreign exchange gains and
losses relating to the other assets and liabilities arising as a result of
changes in the exchange rates.
New Accounting Pronouncements: In August 2018, the SEC adopted amendments to
certain financial statement disclosure requirements of Regulation S-X to
conform them to GAAP for investment companies. The final rule became
effective on November 5, 2018. All required changes have been made in
accordance with Regulation S-X.
In August 2018, the FASB issued Accounting Standards Update ("ASU")
No. 2018-13 "Disclosure Framework -- Changes to the Disclosure Requirements
for Fair Value Measurement". The ASU eliminates, modifies, and adds
disclosure requirements for fair value measurements and is effective for
fiscal years, and interim periods within those fiscal years, beginning after
December 15, 2019. Management is currently evaluating the amendments and
their impact, if any, on the Funds' financial statements.
Note 3. Investment Advisory and Management Agreement, Distribution Agreement
and Service Agreement
The Trust, on behalf of each Fund, has an Investment Advisory and Management
Agreement (the "Agreement") with SunAmerica. Under the Agreement, SunAmerica
provides continuous supervision of a Fund's portfolio and administers its
corporate affairs, subject to general review by the Trustees. In connection
therewith, SunAmerica furnishes the Funds with office facilities, maintains
certain of the Funds' books and records, and pays the salaries and expenses
of all personnel, including officers of the Funds, who are employees of
SunAmerica and its affiliates.
The Funds pay SunAmerica a monthly investment advisory and management fee
calculated daily at the following annual percentages of each Fund's average
daily net assets:
Management
Fund Assets Fees
---- ---------------------------- ----------
U.S. Government Securities........................ $0 - $200 million 0.650%
(greater than) $200 million 0.620
(greater than) $400 million 0.550
Strategic Bond(1)................................. $0 - $350 million 0.650
(greater than) $350 million 0.600
Flexible Credit(2)................................ $0 - $200 million 0.750
(greater than) $200 million 0.720
(greater than) $400 million 0.550
--------
(1)Effective May 1, 2018, the Advisor contractually agreed to waive its
advisory fee with respect to the AIG Strategic Bond Fund through July 31,
2019 so that the advisory fee payable by the Fund to the Advisor under the
agreement equals 0.40% on the first $350 million and 0.35% above $350
million of average daily net assets.
(2)The Advisor contractually agreed to waive its advisory fee with respect to
the AIG Flexible Credit Fund through July 31, 2019 so that the advisory fee
payable by the Fund to the Advisor under the agreement equals 0.36% of
average daily net assets.
For the six months ended September 30, 2018 the amount of investment
advisory fees waived for Strategic Bond Fund and Flexible Credit Fund were
$332,304 and $628,514 respectively. These amounts are reflected in the
Statement of Operations.
73
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited)
(continued)
The Strategic Bond Fund is subadvised by PineBridge Investments, LLC
("PineBridge") and the Flexible Credit Fund is subadvised by Newfleet Asset
Management, LLC ("Newfleet"). Under the Subadvisory Agreements, PineBridge
and Newfleet manage the investment and reinvestment of the assets of the
Strategic Bond Fund and the Flexible Credit Fund, respectively.
SunAmerica pays PineBridge and Newfleet fees out of the investment advisory
fees it receives from the respective Funds. The portion of the investment
advisory fees received by SunAmerica that are paid to PineBridge and
Newfleet Asset Management, LLC with respect to the Strategic Bond Fund and
Flexible Credit Fund are as follows:
Subadvisory
Fund Assets Fees
---- ---------------------------- -----------
Strategic Bond(1)................................. $0 - $200 million 0.350%
(greater than) $200 million 0.250
(greater than) $500 million 0.200
Flexible Credit(2)................................ $0 - $200 million 0.300
(greater than) $200 million 0.250
(greater than) $400 million 0.150
--------
(1)Effective May 1, 2018, PineBridge has contractually agreed to waive a
portion of its subadvisory fee through July 31, 2019 so that the subadvisory
fee rate paid to PineBridge is 0.17% of average daily net assets.
(2)Newfleet has contractually agreed to waive a portion of its subadvisory fee
through July 31, 2019 so that the subadvisory fee rate paid to Newfleet is
0.14% of average daily net assets.
SunAmerica has contractually agreed to waive fees and/or reimburse expenses,
to the extent necessary to cap the Funds' annual fund operating expenses at
the following percentages of each Fund's average net assets. For the
purposes of waived fees and/or reimbursed expense calculations, annual Fund
operating expenses shall not include extraordinary expenses (i.e., expenses
that are unusual in nature and/or infrequent in occurrence, such as
litigation), or acquired Fund fees and expenses, brokerage commissions and
other transactional expenses relating to the purchase and sale of portfolio
securities, interest, taxes and governmental fees, and other expenses not
incurred in the ordinary course of a Fund's business. The contractual fee
waivers and expense reimbursements will continue indefinitely, subject to
termination by the Trustees, including a majority of the Disinterested
Trustees.
Fund Percentage
---- ----------
U.S. Government Securities Class A..... 0.99%
U.S. Government Securities Class C..... 1.64
Strategic Bond Class A................. 1.40
Strategic Bond Class B................. 2.05
Strategic Bond Class C................. 2.05
Strategic Bond Class W................. 1.20
Flexible Credit Class A................ 1.45
Flexible Credit Class C................ 2.10
Flexible Credit Class W................ 1.25
For the U.S. Government Securities Fund, any contractual waivers and/or
reimbursements made by SunAmerica are subject to recoupment from the Fund
within two years after the occurrence of the waivers and/or reimbursements,
provided that the Fund is able to effect such payment to SunAmerica and
remain in compliance with the expense limitations in effect at the time the
waivers and/or reimbursements were made.
For the six months ended September 30, 2018, pursuant to the contractual
expense limitations in the above tables SunAmerica has waived and/or
reimbursed expenses as follows:
Other Expenses
Fund Reimbursed
---- --------------
U.S. Government Securities......... $101,101
Class Specific
Fund Expenses
---- --------------
U.S. Government Securities Class A. $159,003
U.S. Government Securities Class C. 17,736
74
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited)
(continued)
At September 30, 2018, expenses previously waived or reimbursed by
SunAmerica that are subject to recoupment and expire during the time period
indicated are as follows:
Other Expenses Reimbursed
------------------------------------------------
Fund March 31, 2019 March 31, 2020 September 30, 2020
---- -------------- -------------- ------------------
U.S. Government Securities........................ $100,787 $180,779 $101,101
Class Specific Expenses Reimbursed
------------------------------------------------
Fund March 31, 2019 March 31, 2020 September 30, 2020
---- -------------- -------------- ------------------
U.S. Government Securities Class A................ $190,687 $362,838 $159,003
U.S. Government Securities Class C................ 30,259 54,695 17,736
The Trust, on behalf of each Fund, has entered into a Distribution Agreement
with AIG Capital Services, Inc. ("ACS" or "Distributor"), an affiliate of
the Adviser. Each Fund has adopted a Distribution Plan on behalf of each
Class (other than Class W shares of the Strategic Bond and Flexible Credit
Funds), in accordance with the provisions of Rule 12b-1 under the 1940 Act
(each, a "Plan," and collectively, the "Plans"), hereinafter referred to as
the "Class A Plan," the "Class B Plan" and the "Class C Plan." In adopting
the Class A Plan, the Class B Plan and the Class C Plan, the Trustees
determined that there was a reasonable likelihood that each such Plan would
benefit the Trust 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.
The Class A, Class B and Class C Plans provide that the Trust, on behalf of
the respective classes, shall pay the Distributor a distribution fee at an
annual rate of up to 0.10%, 0.75% and 0.75%, of average daily net assets of
such Fund's Class A, Class B and Class C shares, respectively, to compensate
the Distributor and certain securities firms for providing sales and
promotional activities for distributing that class of shares. The
distribution costs for which the Distributor may be compensated include fees
paid to broker-dealers that have sold Fund shares, commissions, and other
expenses such as those incurred for sales literature, prospectus printing
and distribution and compensation to wholesalers. It is possible that in any
given year, the amount paid to the Distributor under the Class A Plan,
Class B Plan or Class C Plan may exceed the Distributor's distribution costs
as described above. Except for Class W shares of the Strategic Bond and
Flexible Credit Funds, the Plans also provide that each class of shares of
the Trust will also pay the Distributor an account maintenance fee at the
annual rate of up to 0.25% of the aggregate average daily net assets of such
class of shares to compensate the Distributor and securities firms for
account maintenance activities. The Distributor does not receive or retain
any distribution and/or account maintenance fees for any shares when the
shareholder does not have a broker of record. For the six months ended
September 30, 2018, ACS received fees as reflected in the Statements of
Operations based on the aforementioned rates.
The Trust, on behalf of the Strategic Bond and Flexible Credit Funds, has
entered into an Administrative and Shareholder Services Agreement with ACS,
pursuant to which ACS is paid an annual fee of 0.15% of average daily net
assets of Class W shares as compensation for providing additional
shareholder services to Class W shareholders. The Distributor does not
receive or retain any distribution and/or account maintenance fees for any
shares when the shareholder does not have a broker of record. For the six
months ended September 30, 2018, ACS earned fees as reflected in the
Statements of Operations based on the aforementioned rate.
ACS receives sales charges on each Fund's Class A shares, portions of which
are reallowed to affiliated broker-dealers and non-affiliated
broker-dealers. ACS also receives the proceeds of contingent deferred sales
charges paid by investors in connection with certain redemptions of Class A,
Class B and Class C shares. ACS has advised the Funds that for the six
months ended September 30, 2018, the proceeds received from Class A sales
(and paid out to affiliated and non-affiliated broker-dealers) and Class A,
Class B and Class C redemptions were as follows:
Class A Class B Class C
---------------------------------------------------- ------------- -------------
Contingent Contingent Contingent
Sales Affiliated Non-affiliated Deferred Deferred Deferred
Fund Charges Broker-dealers Broker-dealers Sales Charges Sales Charges Sales Charges
---- -------- -------------- -------------- ------------- ------------- -------------
U.S. Government Securities......... $ 7,642 $ 938 $ 5,553 $ 59 $ -- $ 66
Strategic Bond..................... 62,148 40,137 10,527 35,035 17,159 3,111
Flexible Credit.................... 190,663 20,266 137,869 18,713 -- 4,717
75
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited)
(continued)
The Trust has entered into a Service Agreement with AIG Fund Services, Inc.
("AFS"), an affiliate of the Adviser. Under the Service Agreement, AFS
performs certain shareholder account functions by assisting the Funds'
transfer agent, DST Asset Manager Solutions, Inc. ("DST") in connection with
the services that it offers to the shareholders of the Funds. The Service
Agreement permits the Funds to compensate AFS for services rendered, based
upon an annual rate of 0.22% of average daily net assets, which is approved
annually by the Trustees. For the six months ended September 30, 2018, the
Funds incurred the following expenses which are included in transfer agent
fees and expenses in the Statements of Operations to compensate AFS pursuant
to the terms of the Service Agreement:
Payable at
Fund Expenses September 30, 2018
---- -------- ------------------
U.S. Government Securities Class A........... $146,000 $21,807
U.S. Government Securities Class C........... 7,798 1,116
Strategic Bond Class A....................... 199,833 28,950
Strategic Bond Class B....................... 22,113 3,313
Strategic Bond Class C....................... 70,032 10,349
Strategic Bond Class W....................... 63,820 9,974
Flexible Credit Class A...................... 148,419 24,346
Flexible Credit Class C...................... 63,642 10,340
Flexible Credit Class W...................... 152,969 28,180
At September 30, 2018, AIG Active Allocation Portfolio and AIG Multi-Asset
Allocation Portfolio, each a series of SunAmerica Series, Inc., owned a
percentage of the outstanding shares of the following Funds:
Holder
---------------------
AIG AIG
Active Multi-Asset
Allocation Allocation
Fund Portfolio Portfolio
---- ---------- -----------
U.S. Government Securities................... 13.95% 18.28%
Strategic Bond............................... 2.19 1.88
Flexible Credit.............................. 2.57 3.48
Note 4. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales and maturities of long-term
investments during the six months ended September 30, 2018 were as follows:
Purchases of Investment Sales of Investment Purchase of U.S. Sales of U.S.
Securities (Excluding U.S. Securities (Excluding U.S. Government Government
Fund Government Securities) Government Securities) Securities Securities
---- -------------------------- -------------------------- ---------------- -------------
U.S. Government Securities......... $ -- $ -- $23,926,949 $30,074,155
Strategic Bond..................... 119,110,994 216,014,053 60,586,210 29,700,784
Flexible Credit.................... 119,472,902 80,056,906 -- --
Note 5. Federal Income Taxes
The following details the tax basis of distributions as well as the
components of distributable earnings. The tax basis components of
distributable earnings differ from the amounts reflected in the Statements
of Assets and Liabilities by temporary book/tax differences primarily
arising from wash sales, post October capital losses, late year ordinary
losses, distributions payable, straddle loss deferrals, amortization of
premium/discount and treatment of defaulted securities.
Distributable Earnings Tax Distributions
For the year ended March 31, 2018 For the year ended March 31, 2018
---------------------------------------- ---------------------------------
Long-term Unrealized
Ordinary Gains/Capital Appreciation Ordinary Long-Term
Fund Income Loss Carryover (Depreciation)* Income Capital Gains
---- ---------- -------------- --------------- ----------- -------------
U.S. Government Securities......... $ 481,565 $(19,632,848) $ 1,460,586 $ 2,661,495 $ --
Strategic Bond..................... 754,183 (20,384,604) (7,630,955) 10,179,966 --
Flexible Credit.................... 1,281,870 (7,003,721) (4,723,674) 16,843,293 --
--------
* Unrealized appreciation (depreciation) includes amounts for derivatives and
other assets and liabilities denominated in foreign currency.
76
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited)
(continued)
As of March 31, 2018, for Federal income tax purposes, the Funds indicated
below have capital loss carryforwards, which are available to offset future
capital gains, if any:
Unlimited+
-----------------------
Fund ST LT
---- ----------- -----------
U.S. Government Securities............. $13,869,489 $ 5,763,359
Strategic Bond......................... 602,094 19,782,510
Flexible Credit........................ -- 7,003,721
--------
+ On December 22, 2010, the Regulated Investment Company Modernization Act of
2010 (the "Act") was enacted which changes various technical rules governing
the tax treatment of regulated investment companies. The changes are
generally effective taxable years beginning after the date of enactment.
Under the Act, the fund will be permitted to carry forward capital losses
incurred in taxable years beginning after the date of enactment for an
unlimited period. However, any losses incurred during those future taxable
years will be required to be utilized prior to the losses incurred in
pre-enactment taxable years, which carry an expiration date. As a result of
this ordering rule, pre-enactment capital loss carryforwards may be more
likely to expire unused. Additionally, post-enactment capital losses that
are carried forward will retain their character as either short-term or
long-term losses rather than being considered all short-term as under
previous law.
Under the current law, capital losses realized after October 31 and late
year ordinary losses may be deferred and treated as occurring on the first
day of the following year. For the fiscal year ended March 31, 2018, the
Funds elected to defer late year ordinary losses and post October capital
losses as follows:
Deferred Deferred
Deferred Post-October Post-October
Late Year Short-Term Long-Term
Fund Ordinary Loss Capital Loss Capital Loss
---- ------------- ------------ ------------
U.S. Government Securities............. $ -- $ -- $477,827
Strategic Bond......................... 212,069 1,402,544 19,844
Flexible Credit........................ -- -- 74,752
At September 30, 2018, the amounts of aggregate unrealized gain (loss) and
the cost of investment securities for federal tax purposes, including
short-term securities, repurchase agreements and derivatives, were as
follows:
Aggregate Aggregate Unrealized
Unrealized Unrealized Gain/(Loss) Cost of
Fund Gain Loss Net Investments
---- ---------- ------------ ----------- ------------
U.S. Government Securities....... $3,584,028 $ (3,554,862) $ 29,166 $135,733,644
Strategic Bond................... 3,094,816 (12,758,934) (9,664,118) 301,405,571
Flexible Credit Bond............. 4,197,843 (8,092,409) (3,894,566) 366,568,930
On December 22, 2017, the Tax Cuts and Jobs Act (the "Act") was signed into
law. Certain provisions of the Act were effective upon enactment with the
remainder becoming effective for tax years beginning after December 31,
2017. Management is currently evaluating the impact, if any, on the
financial statements and the accompanying notes to financial statements.
Note 6. Capital Share Transactions
Transactions in capital shares of each class of each Fund were as follows:
U.S. Government Securities
--------------------------------------------------
Class A
--------------------------------------------------
For the
six months ended For the
September 30, 2018 year ended
(unaudited) March 31, 2018
------------------------ ------------------------
Shares Amount Shares Amount
---------- ------------ ---------- ------------
Shares sold(1)(2)........ 891,570 $ 7,935,706 2,316,337 $ 20,988,914
Reinvested dividends..... 111,396 991,021 244,835 2,226,713
Shares redeemed.......... (1,821,210) $(16,202,795) (3,295,222) (29,980,480)
---------- ------------ ---------- ------------
Net increase (decrease).. (818,244) $ (7,276,068) (734,050) $ (6,764,853)
========== ============ ========== ============
77
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited)
(continued)
U.S. Government Securities
-----------------------------------------------
Class C
-----------------------------------------------
For the
six months ended For the
September 30, 2018 year ended
(unaudited) March 31, 2018
--------------------- ------------------------
Shares Amount Shares Amount
-------- ----------- ---------- ------------
Shares sold.............. 48,650 $ 432,362 166,535 $ 1,513,933
Reinvested dividends..... 3,414 30,346 16,706 152,011
Shares redeemed(1)(2).... (160,449) (1,426,571) (1,472,671) (13,299,249)
-------- ----------- ---------- ------------
Net increase (decrease).. (108,385) $ (963,863) (1,289,430) $(11,633,305)
======== =========== ========== ============
--------
(1)For the six months ended September 30, 2018, includes automatic conversion
of 9,952 shares of Class C shares in the amount of $88,486 to 9,950 shares
of Class A shares in the amount of $88,486.
(2)For the year ended March 31, 2018, includes automatic conversion of 251,877
shares of Class C shares in the amount of $2,244,225 to 251,595 shares of
Class A shares in the amount of $2,244,225.
Strategic Bond
--------------------------------------------------------------------------------------------------------
Class A Class B
---------------------------------------------------- --------------------------------------------------
For the For the
six months ended For the six months ended For the
September 30, 2018 year ended September 30, 2018 year ended
(unaudited) March 31, 2018 (unaudited) March 31, 2018
------------------------- ------------------------- ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------
Shares sold(1)(2)(3)(4) 3,544,844 $ 11,806,303 19,972,035 $ 68,107,643 379,110 $ 1,260,646 869,650 $ 2,985,386
Reinvested dividends... 916,396 3,046,100 1,317,545 4,531,780 79,664 264,653 159,576 548,783
Shares redeemed(1)(2).. (13,281,800) (44,201,614) (11,040,002) (37,839,522) (1,733,636) (5,760,263) (3,310,957) (11,372,010)
----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------
Net increase (decrease) (8,820,560) $(29,349,211) 10,249,578 $ 34,799,901 (1,274,862) $ (4,234,964) (2,281,731) $ (7,837,841)
=========== ============ =========== ============ ========== ============ ========== ============
Strategic Bond
--------------------------------------------------------------------------------------------------------
Class C Class W
---------------------------------------------------- --------------------------------------------------
For the For the
six months ended For the six months ended For the
September 30, 2018 year ended September 30, 2018 year ended
(unaudited) March 31, 2018 (unaudited) March 31, 2018
------------------------- ------------------------- ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------
Shares sold............ 539,300 $ 1,806,876 3,141,993 $ 10,844,054 4,156,526 $ 13,806,360 14,598,225 $ 50,166,169
Reinvested dividends... 231,622 772,923 598,701 2,067,953 222,638 739,358 317,651 1,091,699
Shares redeemed(3)(4).. (4,550,884) (15,193,370) (20,387,026) (69,770,025) (8,787,483) (29,206,660) (5,987,746) (20,513,498)
----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------
Net increase (decrease) (3,779,962) $(12,613,571) (16,646,332) $(56,858,018) (4,408,319) $(14,660,942) 8,928,130 $ 30,744,370
=========== ============ =========== ============ ========== ============ ========== ============
--------
(1)For the six months ended September 30, 2018, includes automatic conversion
of 67,687 shares of Class B shares in the amount of $225,243 to 67,646
shares of Class A shares in the amount of $225,243.
(2)For the year ended March 31, 2018, includes automatic conversion of 146,651
shares of Class B shares in the amount of $502,679 to 146,509 shares of
Class A shares in the amount of $502,679.
(3)For the six months ended September 30, 2018, includes automatic conversion
of 180,428 shares of Class C shares in the amount of $602,552 to 180,970
shares of Class A shares in the amount of $602,552.
(4)For the year ended March 31, 2018, includes automatic conversion of
2,044,542 shares of Class C shares in the amount of $6,930,997 to 2,056,676
shares of Class A shares in the amount of $6,930,997.
Flexible Credit
---------------------------------------------------
Class A
---------------------------------------------------
For the
six months ended For the
September 30, 2018 year ended
(unaudited) March 31, 2018
------------------------ -------------------------
Shares Amount Shares Amount
---------- ------------ ----------- ------------
Shares sold(1)(2)........ 9,242,298 $ 31,345,040 15,263,536 $ 52,432,452
Reinvested dividends..... 917,514 3,108,637 1,805,509 6,214,632
Shares redeemed.......... (8,711,424) (29,539,320) (20,023,513) (68,775,062)
---------- ------------ ----------- ------------
Net increase (decrease).. 1,448,388 $ 4,914,357 (2,954,468) $(10,127,978)
========== ============ =========== ============
78
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited)
(continued)
Flexible Credit
-------------------------------------------------------------------------------------------------------
Class C Class W
------------------------------------------------- ----------------------------------------------------
For the For the
six months ended For the six months ended For the
September 30, 2018 year ended September 30, 2018 year ended
(unaudited) March 31, 2018 (unaudited) March 31, 2018
----------------------- ------------------------ ------------------------ --------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ----------- ---------- ------------ ---------- ------------ ----------- -------------
Shares sold............ 1,784,386 $ 6,086,881 4,346,092 $ 15,053,291 17,720,336 $ 60,137,865 21,898,961 $ 75,416,969
Reinvested dividends... 266,428 908,886 619,069 2,143,889 596,598 2,024,217 1,071,044 3,689,146
Shares redeemed(1)(2).. (2,452,288) (8,370,339) (9,187,515) (31,714,471) (9,405,755) (31,943,432) (30,165,932) (103,923,875)
---------- ----------- ---------- ------------ ---------- ------------ ----------- -------------
Net increase (decrease) (401,474) $(1,374,572) (4,222,354) $(14,517,291) 8,911,179 $ 30,218,650 (7,195,927) $ (24,817,760)
========== =========== ========== ============ ========== ============ =========== =============
--------
(1)For the six months ended September 30, 2018, includes automatic conversion
of 48,751 shares of Class C shares in the amount of $166,678 to 49,083
shares of Class A shares in the amount of $166,678.
(2)For the year ended March 31, 2018, includes automatic conversion of 811,222
shares of Class C shares in the amount of $2,782,490 to 815,980 shares of
Class A shares in the amount of $2,782,490.
Note 7. Line of Credit
The Trust has access to a $75 million committed unsecured line of credit
and, along with certain other funds managed by the Adviser, a $50 million
uncommitted unsecured line of credit. The committed and uncommitted lines of
credit are renewable on an annual basis with State Street Bank and Trust
Company ("State Street"), the Trust's custodian. Interest is currently
payable on the committed line of credit at the higher of the Federal Funds
Rate (but not less than zero) plus 125 basis points or the One-Month London
Interbank Offered Rate (but not less than zero) plus 125 basis points and
State Street's discretionary bid rate on the uncommitted line of credit. The
Trust, on behalf of each of the Funds, has paid State Street for its own
account, such Fund's ratable portion of an upfront fee in an amount equal to
$25,000 in the aggregate for the uncommitted line of credit made available
by State Street to certain other funds managed by the Adviser, which are
also party to the uncommitted line of credit. There is also a commitment fee
of 25 basis points per annum on the daily unused portion of the committed
line of credit. Borrowings under the line of credit will commence when the
respective Fund's cash shortfall exceeds $100,000.00.
For the six months ended September 30, 2018, the following Funds had
borrowings:
Days Interest Debt Average
Fund Outstanding Charges Utilized Interest
---- ----------- -------- ---------- --------
Strategic Bond........... 3 $1,826 $6,574,420 3.32%
Flexible Credit.......... 5 1,205 2,731,715 3.18
At September 30, 2018, there were no borrowings outstanding.
Note 8. Interfund Lending Agreement
Pursuant to the exemptive relief granted by the Securities and Exchange
Commission, 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 lend money to each other for temporary or emergency purposes. An
interfund loan will be made under this facility only if the participating
Funds receive a more favorable interest rate than would otherwise be
available from a typical bank for a comparable transaction. For the six
months ended September 30, 2018, none of the Funds participated in this
program.
Note 9. Investment Concentration
The Flexible Credit Fund's investment in high yield securities, whether
rated or unrated, may be considered speculative and subject to greater
market fluctuations and risk of loss of income and principal than
lower-yielding, higher-rated, fixed-income securities. The risk of loss due
to default by the issuer may be significantly greater for the holders of
high yield securities, because such securities are generally unsecured and
are often subordinated to other creditors of the issuer.
The Flexible Credit Fund and Strategic Bond Fund invest in participations
and assignments, or act as a party to the primary lending syndicate of a
variable rate senior loan interest to United States corporations,
partnerships, and other entities. If the lead
79
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited)
(continued)
lender in a typical lending syndicate becomes insolvent, enters receivership
or, if not FDIC insured, enters into bankruptcy, a Fund may incur certain
costs and delays in receiving payment, or may suffer a loss of principal
and/or interest. When a Fund purchases a participation of a senior loan
interest, the Fund typically enters into a contractual agreement with the
lender or other third party selling the participation but not with the
borrower directly. As such, a Fund is subject to the credit risk of the
borrower, selling participant, lender or other persons positioned between
the Funds and the borrower.
Each Fund may invest in obligations issued by agencies and instrumentalities
of the U.S. Government that may vary in the level of support they receive
from the government. The government may choose not to provide financial
support to government sponsored agencies or instrumentalities if it is not
legally obligated to do so, and if the issuer defaulted, a fund holding
securities of such issuer might not be able to recover its investment from
the U.S. Government. As a result of the U.S. Government Fund's concentration
in such investments, it may be subject to risks associated with U.S.
Government agencies or instrumentalities.
Note 10. Subsequent Event
Effective November 19, 2018, pursuant to an Advisory Fee Waiver Agreement
with AIG Strategic Bond Fund, SunAmerica is contractually obligated to waive
its management fee with respect to the Fund so that the management fee
payable by the Fund to SunAmerica equals 0.38% on the first $350 million of
average daily net assets and 0.33% above $350 million of average daily net
assets. This agreement will continue in effect through July 31, 2020, and
from year to year thereafter provided such continuance is agreed to by
SunAmerica and approved by a majority of the Independent Trustees.
Effective November 19, 2018, pursuant to an Advisory Fee Waiver Agreement
with AIG Flexible Credit Fund, SunAmerica is contractually obligated to
waive its management fee with respect to the Fund so that the management fee
payable by the Fund to SunAmerica equals 0.34% of average daily net assets.
This agreement will continue in effect through July 31, 2020, and from year
to year thereafter provided such continuance is agreed to by SunAmerica and
approved by a majority of the Independent Trustees.
80
SunAmerica Income Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2018 -- (unaudited)
Approval of the Investment Advisory and Management Agreement and Subadvisory
Agreements
The Board of Trustees (the "Board" the members of which are referred to as
"Trustees") of SunAmerica Income Funds (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") (the "Independent
Trustees"), of the Trust or its separate series (each, a "Fund," and
collectively, the "Funds"), SunAmerica Asset Management, LLC ("SunAmerica"),
PineBridge Investments LLC ("PineBridge") or Newfleet Asset Management, LLC
("Newfleet," and together with PineBridge, the "Subadvisers"), approved the
continuation of the Investment Advisory and Management Agreement between the
Trust, on behalf of the Funds, and SunAmerica (the "Advisory Agreement") for a
one-year period ending June 30, 2019 at an in-person meeting held on June 5-6,
2018 (the "Meeting"). The Trust currently consists of the following three
separate Funds: AIG Flexible Credit Fund ("Flexible Credit Fund"), AIG
Strategic Bond Fund ("Strategic Bond Fund") and AIG U.S. Government Securities
Fund ("U.S. Government Securities Fund").
At the Meeting, the Board, including the Independent Trustees, also approved
the continuation of the Subadvisory Agreement between SunAmerica and PineBridge
with respect to the Strategic Bond Fund and the Subadvisory Agreement between
SunAmerica and Newfleet with respect to the Flexible Credit Fund (the
"Subadvisory Agreements" and together with the Advisory Agreement, the
"Agreements"), each for a one-year period ending June 30, 2019.
In accordance with Section 15(c) of the 1940 Act, the Board requested, and
SunAmerica and the Subadvisers provided, materials relating to the Board's
consideration of whether to approve the continuation of the Agreements. These
materials included, as applicable: (a) a summary of the services provided or to
be provided, as applicable, by SunAmerica and its affiliates to the Funds and
by the Subadvisers; (b) information independently compiled and prepared by
Broadridge Financial Solutions, Inc. ("Broadridge"), an independent third-party
provider of mutual fund data, on fees and expenses of the Funds, and the
investment performance of the Funds as compared with a peer group of funds,
along with fee and performance data with respect to the Funds and any other
mutual funds or other accounts advised or subadvised by SunAmerica or the
Subadvisers with similar investment objectives and/or strategies, as
applicable; (c) information on the profitability of SunAmerica and its
affiliates, and a discussion relating to indirect benefits; (d) information
relating to economies of scale; (e) information about SunAmerica's general
compliance policies and procedures and the services it provides in connection
with its oversight of subadvisers; (f) information about SunAmerica's and the
Subadvisers' risk management processes; (g) information regarding brokerage and
soft dollar practices; and (h) information about the key personnel of
SunAmerica and its affiliates, and the Subadvisers, that are involved in the
investment management, administration, compliance and risk management
activities with respect to the Funds, as well as current and projected staffing
levels and compensation practices.
In determining whether to approve the continuation of the Agreements, the
Board, including the Independent Trustees, considered at the Meeting, and from
time to time as appropriate, factors it deemed relevant, including the
following information:
Nature, Extent and Quality of Services Provided by SunAmerica and the
Subadvisers. The Board, including the Independent Trustees, considered the
nature, extent and quality of services provided by SunAmerica. The Board noted
that the services include acting as investment manager and adviser to the
Funds, managing the daily business affairs of the Funds, and obtaining and
evaluating economic, statistical and financial information to formulate and
implement investment policies. Additionally, the Board observed that SunAmerica
provides office space, bookkeeping, accounting, legal, and compliance, clerical
and administrative services and has authorized its officers and employees, if
elected, to serve as officers or trustees of the Trust without compensation.
The Board also noted that SunAmerica is responsible for monitoring and
reviewing the activities of affiliated and unaffiliated third-party service
providers, including the Subadvisers. In addition to the quality of the
advisory services provided by SunAmerica, the Board considered the quality of
the administrative and other services provided by SunAmerica to the Funds
pursuant to the Advisory Agreement.
In connection with the services provided by SunAmerica, the Board analyzed the
structure and duties of SunAmerica's fund administration, accounting,
operations, legal and compliance departments and concluded that they were
adequate to meet the needs of the Funds. The Board also reviewed the personnel
responsible for providing advisory services to the Funds and other key
personnel of SunAmerica, in addition to current and projected staffing levels
and compensation practices. The Board concluded, based on its experience and
interaction with SunAmerica, that: (i) SunAmerica would continue to be able to
retain quality investment and other personnel; (ii) SunAmerica has exhibited a
high level of diligence and attention to detail in carrying out its advisory
and other responsibilities under the Advisory Agreement; (iii) SunAmerica has
been responsive to requests of the Board; and (iv) SunAmerica
81
SunAmerica Income Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2018 -- (unaudited)
(continued)
has kept the Board apprised of developments relating to the Funds and the
industry in general. The Board concluded that the nature and extent of services
provided under the Advisory Agreement were reasonable and appropriate in
relation to the management fee and that the quality of services continues to be
high.
The Board also considered SunAmerica's reputation and long-standing
relationship with the Funds 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 March 31,
2018, SunAmerica managed, advised and/or administered approximately
$89.5 billion in assets. In addition, the Board considered SunAmerica's code of
ethics and its commitment to compliance generally and with respect to its
management and administration of the Funds. The Board also considered
SunAmerica's risk management processes. The Board further observed that
SunAmerica has developed internal procedures for monitoring compliance with the
investment objectives, policies and restrictions of the Funds as set forth in
the Funds' prospectuses. The Board also reviewed SunAmerica's compliance and
regulatory history and noted that there were no material legal, regulatory or
compliance issues that would potentially impact SunAmerica in effectively
serving as the investment adviser to the Funds.
The Board also considered the nature, extent and quality of services provided
by each Subadviser to the applicable Funds. The Board observed that the
Subadvisers are responsible for providing day-to-day investment management
services, including investment research, advice and supervision, and
determining which securities will be purchased or sold by the Fund that each
Subadviser manages, subject to the oversight and review of SunAmerica. The
Board reviewed each Subadviser's history, structure, size, visibility and
resources, which are needed to attract and retain highly qualified investment
professionals. The Board reviewed the personnel that are responsible for
providing subadvisory services to the Funds, and other key personnel of each
Subadviser, in addition to current and projected staffing levels and
compensation practices, and concluded, based on its experience with the
Subadvisers, that each Subadviser: (i) has been able to retain high quality
portfolio managers and other investment personnel; (ii) has exhibited a high
level of diligence and attention to detail in carrying out its responsibilities
under the applicable Subadvisory Agreement; and (iii) has been responsive to
requests of the Board and of SunAmerica. In addition, the Board considered each
Subadviser's code of ethics and risk management processes. The Board further
observed that each Subadviser has developed internal policies and procedures
for monitoring compliance with the investment objectives, policies and
restrictions of the Funds as set forth in the Funds' prospectuses. The Board
also reviewed each Subadviser's compliance and regulatory history and noted
that there were no material legal, regulatory or compliance issues that would
potentially impact the Subadvisers from effectively serving as Subadvisers to
the Funds. The Board concluded that the nature and extent of services provided
by each Subadviser under the respective Subadvisory Agreement were reasonable
and appropriate in relation to the subadvisory fee and that the quality of
services continues to be high.
Investment Performance. The Board, including the Independent Trustees, also
considered the investment performance of SunAmerica and the Subadvisers with
respect to the Funds, as applicable. In connection with its review, the Board
received and reviewed information regarding the investment performance of the
Funds as compared to each Fund's peer group ("Peer Group") and/or peer universe
("Peer Universe") as independently determined by Broadridge and to an
appropriate index or combination of indices, including the Funds' benchmarks.
The Board was provided with a description of the methodology used by Broadridge
to select the funds in each Peer Group and Peer Universe.
The Board noted that performance information was for the periods ended
March 31, 2018. The Board also noted that it regularly reviews the performance
of the Funds throughout the year. The Board further noted that, while it
monitors performance of the Funds closely, it generally attaches more
importance to performance over relatively long periods of time, typically three
to five years.
Flexible Credit Fund. The Board considered that the Fund's performance was
above the medians of its Peer Group and Peer Universe for the one-, three- and
five-year periods. The Board further considered that the Fund outperformed its
Broadridge Index for the one-, three- and five-year periods. The Board
concluded that the Fund's performance was satisfactory.
Strategic Bond Fund. The Board considered that the Fund's performance was below
the medians of its Peer Group and Peer Universe for the one-, three- and
five-year periods The Board further noted that the Fund underperformed its
Broadridge Index for the one-, three- and five-year periods. The Board took
into account management's discussion of the reasons for the Portfolio's recent
underperformance and concluded that the Portfolio's performance was being
appropriately monitored.
82
SunAmerica Income Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2018 -- (unaudited)
(continued)
U.S. Government Securities Fund. The Board considered that the Fund's
performance was below the medians of its Peer Group and Peer Universe for the
one-, three- and five-year periods. The Board also considered that the Fund
underperformed its Broadridge Index for the one-, three- and five-year periods.
The Board noted management's discussion of the Fund's performance and concluded
that the Fund's performance was being appropriately monitored.
Consideration of the Management Fees and Subadvisory Fee and the Cost of the
Services and Profits to be Realized by SunAmerica, the Subadvisers and their
Affiliates from the Relationship with the Funds. The Board, including the
Independent Trustees, received and reviewed information regarding the fees paid
by the Funds to SunAmerica pursuant to the Advisory Agreement and the fees to
be paid by SunAmerica to the Subadvisers pursuant to the Subadvisory
Agreements. 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,
the Subadvisers or their affiliates in connection with providing such services
to the Funds.
To assist in analyzing the reasonableness of the management fee for each of the
Funds, the Board received reports independently prepared by Broadridge. The
reports showed comparative fee information for each Fund's Peer Group and/or
Peer Universe as determined by Broadridge, including rankings within each
category. 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 each Fund's total operating expenses, the
Board analyzed the level of fee waivers and expense reimbursements and the net
expense caps contractually agreed upon by SunAmerica with respect to each Fund.
The Board further considered that, unlike the funds in each Peer Group and Peer
Universe, the fee waivers and/or reimbursements being made by SunAmerica with
respect to the Funds are only reflected in the total expenses category of the
Broadridge reports, rather than also being reflected as specific management fee
waivers in the actual management fee category of the Broadridge reports. As a
result, the Board took into account that the actual management fees presented
by Broadridge for the funds in each Peer Group and Peer Universe may appear
lower on a relative basis. The Board also considered the various expense
components of the Funds and compared each Fund's net expense ratio (taking into
account the contractual fee caps and waivers) to those of other funds within
its Peer Group and/or Peer Universe as a guide to help assess the
reasonableness of the management fee for the Funds. 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. The Board noted, however, that
the comparative fee information provided by Broadridge 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 considered the management fees received by SunAmerica with
respect to other mutual funds and accounts with similar investment strategies
to the Funds, to the extent applicable. The Board noted, however, that the
mutual funds identified as similar to the Funds are sold only in the variable
annuity market and, accordingly, are in different Broadridge classifications,
with peer groups consisting of funds underlying variable insurance products.
The Board then noted the management fees paid by the Funds were reasonable as
compared to the fees SunAmerica was receiving from other mutual funds and
accounts for which it serves as adviser or subadviser.
The Board also received and reviewed information regarding the fees paid by
SunAmerica to the Subadvisers pursuant to the Subadvisory Agreements. To assist
in analyzing the reasonableness of the subadvisory fees, the Board received a
report independently prepared by Broadridge. The report showed comparative fee
information of the Funds' Peer Groups and/or Peer Universes that the Board used
as a guide to help assess the reasonableness of the subadvisory fees. The Board
noted that Peer Group information as a whole was useful in assessing whether
the Subadvisers were providing services at a cost that was competitive with
other similar funds. The Board also considered that the subadvisory fees are
paid by SunAmerica out of its management fee and not by the Funds, and that
subadvisory fees may vary widely within a Peer Group for various reasons,
including market pricing demands, existing relationships, experience and
success, and individual client needs. The Board further considered the amount
of subadvisory fees paid out by SunAmerica and the amount of the management
fees which it retained and determined that these amounts were reasonable in
light of the services performed by SunAmerica and the Subadvisers, respectively.
The Board also considered fees received by the Subadvisers with respect to
other mutual funds and accounts with similar investment strategies to the Funds
for which they serve as adviser or subadviser, to the extent applicable. The
Board then noted that the subadvisory fee paid by SunAmerica to PineBridge was
reasonable as compared to fees PineBridge receives for other mutual funds and
accounts for which it serves as adviser or subadviser. The Board also noted
that Newfleet indicated that there are meaningful differences between the
Flexible Credit Fund and another subadvised account with a similar strategy.
83
SunAmerica Income Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2018 -- (unaudited)
(continued)
Flexible Credit Fund. The Board considered that the Fund's actual management
fees were below the medians of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were below the medians of its Peer
Group and Peer Universe. The Board noted that the Fund's advisory fee contains
breakpoints and further noted management's discussion regarding the Fund's
expenses. The Board also took into account recent actions to reduce Fund
expenses through fee waivers.
Strategic Bond Fund. The Board considered that the Fund's actual management
fees were above the medians of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were above the medians of its Peer
Group and Peer Universe. The Board noted that the Fund's advisory fee contains
breakpoints and further noted management's discussion regarding the Fund's
expenses. The Board also took into account recent actions to reduce Fund
expenses through fee waivers.
U.S. Government Securities Fund. The Board considered that the Fund's actual
management fees were above the medians of its Peer Group and Peer Universe. The
Board also considered that the Fund's total expenses were below the median of
its Peer Group and above the median of its Peer Universe. The Board noted that
the Fund's advisory fee contains breakpoints and further noted management's
discussion regarding the Fund's expenses.
Profitability. The Board also considered SunAmerica's profitability and the
benefits SunAmerica and its affiliates received from its relationship with the
Funds. The Board received and reviewed financial statements relating to
SunAmerica's financial condition and profitability with respect to the services
it provided the Funds and considered how profit margins could affect
SunAmerica's ability to attract and retain high quality investment
professionals and other key personnel. The Board was also provided with a
profitability analysis that detailed the revenues earned and the expenses
incurred by SunAmerica and its affiliates that provide services to the Funds on
a Fund by Fund basis, as well as an Investment Management Profitability
Analysis prepared by an independent information service, Broadridge. The Board
also considered the contractual fee waivers and/or expense reimbursements
agreed to by SunAmerica.
The Board considered the profitability of SunAmerica under the Advisory
Agreement, including the amount of management fees it retained after payment to
the Subadvisers, and considered the profitability of SunAmerica's affiliates
under the Rule 12b-1 Plans Service Agreements, and Administrative and
Shareholder Services Agreements. Additionally, the Board considered whether
SunAmerica, the Subadvisers and their affiliates received any indirect benefits
from the relationship with the Funds. Specifically, the Board observed that AIG
Federal Savings Bank, an affiliate of SunAmerica serves as custodian with
respect to certain shareholder retirement accounts that are administered by
SunAmerica and receives a fee payable by the qualifying shareholders. The Board
further considered whether there were any collateral or "fall-out" benefits
that SunAmerica and its affiliates may derive as a result of their relationship
with the Funds. The Board noted that SunAmerica believes that any such benefits
are de minimis and do not impact the reasonableness of the management fees.
The Board also reviewed the Subadvisers' financial statements and/or other
information and considered whether the Subadvisers had the financial resources
necessary to attract and retain high quality investment management personnel
and to provide a high quality of services.
The Board concluded that SunAmerica and the Subadvisers had the financial
resources necessary to perform their obligations under the Agreements and to
continue to provide the Funds with the high quality services that they had
provided in the past. The Board also concluded that the management fee and
subadvisory fee were reasonable in light of the factors discussed above.
Economies of Scale. The Board, including the Independent Trustees, considered
whether the shareholders would benefit from economies of scale and whether
there was potential for future realization of economies with respect to the
Funds. The Board considered that as a result of being part of the AIG fund
complex, the Funds share common resources and may share certain expenses, and
if the size of the complex increases, each Fund could incur lower expenses than
they otherwise would achieve as stand-alone entities. The Board also took into
account that each of the Funds had management fee arrangements that included
breakpoints that will adjust the fee downward as the size of the Fund
increases, thereby allowing the shareholders to participate in any economies of
scale. The Board further noted that SunAmerica has agreed to contractually cap
the total annual operating expenses of each class of the Funds, at certain
levels. The Board observed that those expense caps benefited shareholders by
limiting total fees even in the absence of breakpoints or economies of scale.
The Board concluded that the Funds' management fee structure was reasonable and
that it would continue to review fees in connection with the renewal of the
Advisory Agreement, including whether the implementation of additional
breakpoints would be appropriate in the future due to an increase in asset size
or otherwise.
84
SunAmerica Income Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2018 -- (unaudited)
(continued)
The Board noted that the Subadvisory Agreements included breakpoints, but did
not review specific information regarding whether there have been economies of
scale with respect to the Subadvisers' management of the Funds because it
regards that information as less relevant at the subadviser level. Rather, the
Board considered information regarding economies of scale in the context of the
renewal of the Advisory Agreement.
Other Factors. In consideration of the Agreements, the Board also received
information regarding SunAmerica's and the Subadvisers' brokerage and soft
dollar practices. The Board considered that SunAmerica and the Subadvisers are
responsible for decisions to buy and sell securities for the applicable Funds,
selection of broker-dealers and negotiation of commission rates. The Board
noted that it receives reports from SunAmerica and from an independent third
party which include information on brokerage commissions and execution
throughout the year. The Board also considered the benefits SunAmerica and the
Subadvisers derive from their soft dollar arrangements, including arrangements
under which brokers provide brokerage and/or research services to SunAmerica
and/or the Subadvisers in return for allocating brokerage; however, the Board
noted that the securities in which the Funds invest are traded primarily in the
over-the-counter market on a "net" basis with dealers acting as principal for
their own accounts without a stated commission (although the price of the
security usually includes a profit to the dealer) and, therefore, the Funds
generally do not incur brokerage commissions. Accordingly, the Board observed
that SunAmerica and the Subadvisers typically would not receive soft dollar
benefits in return for allocating the Funds' brokerage transactions. The Board
further observed that when making purchases of new issues with fixed
underwriting fees, SunAmerica or the Subadvisers may designate the use of
broker-dealers who have agreed to provide certain statistical, research and
other information.
Conclusion. After a full and complete discussion, the Board approved the
Agreements, each for a one-year period ending June 30, 2019. Based upon their
evaluation of all these factors in their totality, the Board, including the
Independent Trustees, was satisfied that the terms of the Agreements were fair
and reasonable and in the best interests of the Funds and the Funds'
shareholders. In arriving at a decision to approve the Agreements, the Board
did not identify any single factor or group of factors as all-important or
controlling, but considered all factors together, and each Independent Trustee
may have attributed different weights to different factors. The Independent
Trustees were also assisted by the advice of independent legal counsel in
making this determination.
85
SunAmerica Income Funds
SUPPLEMENTS TO THE PROSPECTUS
THESE SUPPLEMENTS ARE NOT PART OF THE SEMI-ANNUAL REPORT
SunAmerica Income Funds
AIG Strategic Bond Fund
Class A, Class B, Class C, Class W
(the "Fund")
Supplement dated November 19, 2018, to the Summary Prospectus, Prospectus
and Statement of Additional Information
each dated July 30, 2018, as supplemented and amended to date
Effective November 19, 2018, pursuant to an Amended and Restated Advisory Fee
Waiver Agreement, SunAmerica Asset Management, LLC has contractually agreed to
waive further a portion of its fees payable by the Fund through July 31, 2020.
Accordingly, the following changes to the Summary Prospectus, Prospectus and
Statement of Additional Information are effective as of November 19, 2018:
The table in the section of the Fund's Summary Prospectus entitled "Fees and
Expenses of the Fund" and the table in the subsection of the Fund's Prospectus
entitled "Fund Highlights: AIG Strategic Bond Fund -- Fees and Expenses of the
Fund" are deleted in their entirety and replaced with the following:
Class A Class B Class C Class W
------- ------- ------- -------
Shareholder Fees (fees paid directly from your
investment)
Maximum Sales Charge (Load) Imposed on
Purchases (as a percentage of offering price)... 4.75% None None None
Maximum Deferred Sales Charge (Load) (as a
percentage of the lesser of the amount redeemed
or original purchase cost)/(1)/................. None 4.00% 1.00% None
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends....................................... None None None None
Redemption Fee.................................... None None None None
Annual Fund Operating Expenses (expenses that you
pay each year as a percentage of the value of
your investment)
Management Fees................................... 0.65% 0.65% 0.65% 0.65%
Distribution and/or Service (12b-1) Fees.......... 0.35% 1.00% 1.00% None
Other Expenses.................................... 0.33% 0.37% 0.33% 0.49%
Total Annual Fund Operating Expenses Before Fee
Waiver and/or Expense Reimbursement............. 1.33% 2.02% 1.98% 1.14%
Fee Waiver and/or Expense Reimbursement/(2)(3)/... 0.27% 0.27% 0.27% 0.27%
Total Annual Fund Operating Expenses After Fee
Waiver and/or Expense Reimbursement/(2)(3)/..... 1.06% 1.75% 1.71% 0.87%
--------
(1)Purchases of Class A shares of $1 million or more will be subject to a
contingent deferred sales charge ("CDSC") on redemptions made within two
years of purchase. The CDSC on Class B shares applies only if shares are
redeemed within six years of their purchase. The CDSC on Class C shares
applies only if shares are redeemed within twelve months of their purchase.
See pages 19-21 of the Prospectus for more information about the CDSCs.
(2)Pursuant to an Expense Limitation Agreement, SunAmerica Asset Management,
LLC ("SunAmerica") is contractually obligated to waive its fees and/or
reimburse expenses to the extent that the Total Annual Fund Operating
Expenses exceed 1.40%, 2.05%, 2.05% and 1.20% for Class A, Class B, Class C
and Class W shares, respectively. For purposes of the Expense Limitation
Agreement, "Total Annual Fund Operating Expenses" shall not include
extraordinary expenses (i.e., expenses that are unusual in nature and/or
infrequent in occurrence, such as litigation), or acquired fund fees and
expenses, brokerage commissions and other transactional expenses relating to
the purchase and sale of portfolio securities, interest, taxes and
governmental fees, and other expenses not incurred in the ordinary course of
the Fund's business. This agreement will continue in effect indefinitely,
unless terminated by the Board of Trustees, including a majority of the
trustees of the Board of Trustees who are not "interested persons" of
SunAmerica Income Funds as defined in the Investment Company Act of 1940, as
amended (the "Independent Trustees").
(3)Pursuant to an Advisory Fee Waiver Agreement, effective November 19, 2018,
SunAmerica is contractually obligated to waive its management fee with
respect to the Fund so that the management fee payable by the Fund to
SunAmerica equals 0.38% on the first $350 million of average daily net
assets and 0.33% above $350 million of average daily net assets. This
agreement will continue in effect through July 31, 2020, and from year to
year thereafter provided such continuance is agreed to by SunAmerica and
approved by a majority of the Independent Trustees.
86
SunAmerica Income Funds
SUPPLEMENTS TO THE PROSPECTUS
The subsection of the Fund's Summary Prospectus entitled "Fees and Expenses of
the Fund -- Example" and the subsection of the Fund's Prospectus entitled "Fund
Highlights: AIG Strategic Bond Fund -- Fees and Expenses of the Fund --
Example" are deleted in their entirety and replaced with the following:
This Example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. The Example assumes
that you invest $10,000 in the Fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year and that the Fund's
operating expenses remain the same and that all fee waivers and/or
reimbursements remain in place through the term of the applicable waiver
and/or expense reimbursement. Although your actual costs may be higher or
lower, based on these assumptions and the net expenses shown in the fee
table, your costs would be:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Class A... $578 $851 $1,145 $1,978
Class B*.. 578 907 1,263 2,149
Class C... 274 595 1,043 2,285
Class W... 89 335 602 1,362
You would pay the following expenses if you did not redeem your shares:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Class A... $578 $851 $1,145 $1,978
Class B*.. 178 607 1,063 2,149
Class C... 174 595 1,043 2,285
Class W... 89 335 602 1,362
--------
* Class B shares generally convert to Class A shares approximately eight years
after purchase. Therefore, the expense ratios used in the calculations for
years 9 and 10 are the same for both Class A and Class B shares.
The last sentence of the fourth paragraph in the subsection of the Fund's
Prospectus entitled "Fund Management -- Adviser" is deleted in its entirety and
replaced with the following:
Pursuant to an Advisory Fee Waiver Agreement, effective November 19, 2018,
through July 31, 2020, SunAmerica has contractually agreed to waive its
management fee with respect to the Strategic Bond Fund so that the
management fee payable by the Strategic Bond Fund to SunAmerica equals 0.38%
on the first $350 million of average daily net assets and 0.33% above
$350 million of average daily net assets.
The fifth paragraph in the subsection of the Fund's Statement of Additional
Information entitled "Adviser, Subadviser, Personal Securities Trading,
Distributor and Servicing Agent" is deleted in its entirety and replaced with
the following:
Effective November 19, 2018, SunAmerica has contractually agreed to waive its
management fee with respect to the Strategic Bond Fund so that the management
fee payable by the Strategic Bond Fund to SunAmerica equals 0.38% on the first
$350 million of average daily net assets and 0.33% above $350 million of
average daily net assets. The Advisory Fee Waiver Agreement is effective
through July 31, 2020, and from year to year thereafter provided such
continuance is agreed to by SunAmerica and approved by a majority of the
Disinterested Trustees. From May 1, 2018, through November 18, 2018, SunAmerica
contractually agreed to waive its management fee with respect to the Strategic
Bond Fund so that the management fee payable by the Strategic Bond Fund to
SunAmerica equaled 0.40% on the first $350 million of average daily net assets
and 0.35% above $350 million of average daily net assets.
Capitalized terms used but not defined herein shall have the meanings assigned
to them by the Summary Prospectus, Prospectus and/or the Statement of
Additional Information.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
87
SunAmerica Income Funds
SUPPLEMENTS TO THE PROSPECTUS
SunAmerica Income Funds
AIG Flexible Credit Fund
Class A, Class C, Class W
(the "Fund")
Supplement dated November 19, 2018, to the Summary Prospectus, Prospectus
and Statement of Additional Information
each dated July 30, 2018, as supplemented and amended to date
Effective November 19, 2018, pursuant to an Amended and Restated Advisory Fee
Waiver Agreement, SunAmerica Asset Management, LLC has contractually agreed to
waive further a portion of its fees payable by the Fund through July 31, 2020.
Accordingly, the following changes to the Summary Prospectus, Prospectus and
Statement of Additional Information are effective as of November 19, 2018:
The table in the section of the Fund's Summary Prospectus entitled "Fees and
Expenses of the Fund" and the table in the subsection of the Fund's Prospectus
entitled "Fund Highlights: AIG Flexible Credit Fund -- Fees and Expenses of the
Fund" are deleted in their entirety and replaced with the following:
Class A Class C Class W
------- ------- -------
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases (as a
percentage of offering price)............................. 4.75% None None
Maximum Deferred Sales Charge (Load) (as a percentage of
the lesser of the amount redeemed or original purchase
cost)/(1)/................................................ None 1.00% None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends. None None None
Redemption Fee.............................................. None None None
Annual Fund Operating Expenses (expenses that you pay each
year as a percentage of the value of your investment)
Management Fees............................................. 0.74% 0.74% 0.74%
Distribution and/or Service (12b-1) Fees.................... 0.35% 1.00% None
Other Expenses.............................................. 0.35% 0.36% 0.49%
Total Annual Fund Operating Expenses Before Fee Waiver
and/or Expense Reimbursement.............................. 1.44% 2.10% 1.23%
Fee Waiver and/or Expense Reimbursement/(2)(3)/............. 0.40% 0.40% 0.40%
Total Annual Fund Operating Expenses After Fee Waiver
and/or Expense Reimbursement/(2)(3)/...................... 1.04% 1.70% 0.83%
--------
(1)Purchases of Class A shares of $1 million or more will be subject to a
contingent deferred sales charge ("CDSC") on redemptions made within two
years of purchase. The CDSC on Class C shares applies only if shares are
redeemed within twelve months of their purchase. See pages 19-21 of the
Prospectus for more information about the CDSCs.
(2)Pursuant to an Expense Limitation Agreement, SunAmerica Asset Management,
LLC ("SunAmerica") is contractually obligated to waive its fees and/or
reimburse expenses to the extent that the Total Annual Fund Operating
Expenses exceed 1.45%, 2.10% and 1.25% for Class A, Class C and Class W
shares, respectively. For purposes of the Expense Limitation Agreement,
"Total Annual Fund Operating Expenses" shall not include extraordinary
expenses (i.e., expenses that are unusual in nature and/or infrequent in
occurrence, such as litigation), or acquired fund fees and expenses,
brokerage commissions and other transactional expenses relating to the
purchase and sale of portfolio securities, interest, taxes and governmental
fees, and other expenses not incurred in the ordinary course of the Fund's
business. This agreement will continue in effect indefinitely, unless
terminated by the Board of Trustees, including a majority of the trustees of
the Board of Trustees who are not "interested persons" of SunAmerica Income
Funds as defined in the Investment Company Act of 1940, as amended (the
"Independent Trustees").
(3)Pursuant to an Advisory Fee Waiver Agreement, effective November 19, 2018,
SunAmerica is contractually obligated to waive its management fee with
respect to the Fund so that the management fee payable by the Fund to
SunAmerica equals 0.34% of average daily net assets. This agreement will
continue in effect through July 31, 2020, and from year to year thereafter
provided such continuance is agreed to by SunAmerica and approved by a
majority of the Independent Trustees.
88
SunAmerica Income Funds
SUPPLEMENTS TO THE PROSPECTUS
The subsection of the Fund's Summary Prospectus entitled "Fees and Expenses of
the Fund -- Example" and the subsection of the Fund's Prospectus entitled "Fund
Highlights: AIG Flexible Credit Fund -- Fees and Expenses of the Fund --
Example" are deleted in their entirety and replaced with the following:
This Example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. The Example assumes
that you invest $10,000 in the Fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year and that the Fund's
operating expenses remain the same and that all fee waivers and/or
reimbursements remain in place through the term of the applicable waiver
and/or expense reimbursement. Although your actual costs may be higher or
lower, based on these assumptions and the net expenses shown in the fee
table, your costs would be:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Class A... $576 $871 $1,188 $2,085
Class C... 273 619 1,092 2,400
Class W... 85 351 637 1,453
You would pay the following expenses if you did not redeem your shares:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Class A... $576 $871 $1,188 $2,085
Class C... 173 619 1,092 2,400
Class W... 85 351 637 1,453
The penultimate sentence of the fourth paragraph in the subsection of the
Fund's Prospectus entitled "Fund Management -- Adviser" is deleted in its
entirety and replaced with the following:
Pursuant to an Advisory Fee Waiver Agreement, effective November 19, 2018,
through July 31, 2020, SunAmerica has contractually agreed to waive its
management fee with respect to the Flexible Credit Fund so that the management
fee payable by the Flexible Credit Fund to SunAmerica equals 0.34% of average
daily net assets.
The sixth paragraph in the subsection of the Fund's Statement of Additional
Information entitled "Adviser, Subadviser, Personal Securities Trading,
Distributor and Servicing Agent" is deleted in its entirety and replaced with
the following:
Effective November 19, 2018, SunAmerica has contractually agreed to waive its
management fee with respect to the Flexible Credit Fund so that the management
fee payable by the Flexible Credit Fund to SunAmerica equals 0.34% of average
daily net assets. The Advisory Fee Waiver Agreement is effective through
July 31, 2020, and from year to year thereafter provided such continuance is
agreed to by SunAmerica and approved by a majority of the Disinterested
Trustees. From December 7, 2017, through November 18, 2018, SunAmerica
contractually agreed to waive its management fee with respect to the Flexible
Credit Fund so that the management fee payable by the Flexible Credit Fund to
SunAmerica equaled 0.36% of average daily net assets.
Capitalized terms used but not defined herein shall have the meanings assigned
to them by the Summary Prospectus, Prospectus and/or the Statement of
Additional Information.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
89
[LOGO]
AIG Funds
Harborside 5
185 Hudson Street, Suite 3300
Jersey City, NJ 07311
Trustees VOTING PROXIES ON DISCLOSURE OF
Richard W. Grant TRUST PORTFOLIO QUARTERLY PORTFOLIO
Peter A. Harbeck SECURITIES HOLDINGS
Dr. Judith L. Craven A description of the The Trust is required
William F. Devin policies and to file its com-plete
Stephen J. Gutman proce-dures that the schedule of portfolio
Eileen A. Kamerick Trust uses to holdings with the U.S.
Officers determine how to vote Securities and
John T. Genoy, President proxies relating to Exchange Commission
James Nichols, Vice secu-rities held in a for its first and
President Fund's portfolio, third fiscal quarters
Christopher C. Joe, which is available in on Form N-Q. The
Chief Compliance the Trust's Statement Trust's Forms N-Q are
Officer of Additional available on the
Gregory N. Bressler, Information, may be U.S. Securities and
Secretary ob-tained without Exchange Commis-sion
Kathleen Fuentes, Chief charge upon request, website at
Legal Officer and by calling (800) www.sec.gov. You can
Assistant Secretary 858-8850. The also review and obtain
Gregory R. Kingston, in-formation is also copies of the Forms
Treasurer available from the N-Q at the U.S.
Donna McManus, Vice EDGAR database on the Securities and
President and U.S. Secu-rities and Exchange Commission
Assistant Treasurer Exchange Commission's Public Refer-ence Room
Shawn Parry, Vice website at in Washington DC
President and http://www.sec.gov. (information on the
Assistant Treasurer DELIVERY OF operation of the
Matthew J. Hackethal, SHAREHOLDER DOCUMENTS Public Reference Room
Anti-Money Laundering The Funds have adopted may be ob-tained by
Compliance Officer a policy that allows calling
Investment Adviser them to send only one 1-800-SEC-0330).
SunAmerica Asset copy of a Fund's PROXY VOTING RECORD ON
Management, LLC prospectus, proxy SUNAMERICA INCOME FUNDS
Harborside 5 material, annual Information regarding
185 Hudson Street, Suite report and semi-annual how the Funds voted
3300 report (the proxies relating to
Jersey City, NJ 07311 "shareholder securities held in the
Distributor documents") to Funds during the most
AIG Capital Services, shareholders with recent twelve month
Inc. multiple accounts period ended June 30
Harborside 5 residing at the same is available, once
185 Hudson Street, Suite "household." This filed with the U.S.
3300 practice is called Securities and
Jersey City, NJ 07311 householding and Exchange Commission,
Shareholder Servicing reduces Fund expenses, without charge, upon
Agent which benefits you and request, by calling
AIG Fund Services, Inc. other shareholders. (800) 858-8850 or on
Harborside 5 Unless the Funds the U.S. Securities
185 Hudson Street, Suite receive instructions and Exchange
3300 to the con-trary, you Commission's website
Jersey City, NJ 07311 will only receive one at http://www.sec.gov.
Custodian copy of the This report is
State Street Bank and shareholder documents. submitted solely for
Trust Company The Funds will the general
One Lincoln Street continue to household information of
Boston, MA 02111 the share-holder shareholders of the
Transfer Agent documents Funds. Distribution of
DST Asset Manager indefinitely, until we this report to persons
Solutions, Inc. are instructed other than
303 W 11th Street otherwise. If you do shareholders of the
Kansas City, MO 64105 not wish to Funds is authorized
participate in only in con-nection
householding please with a currently
contact Shareholder effective pro-spectus,
Services at (800) setting forth details
858-8850 ext. 6010 or of the Funds, which
send a written request must precede or
with your name, the accom-pany this report.
name of your fund(s) The accompanying
and your account report has not been
number(s) to AIG Funds audited by independent
c/o DST, P.O. Box accountants and
219186, Kansas City accordingly no opinion
MO, 64121-9186. We has been expressed
will resume thereon.
in-dividual mailings
for your account
within thirty (30)
days of receipt of
your request.
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.aig.com/funds
2 Click on the link to "Go Paperless!!"
The email address you provide will be kept strictly confidential. Once your
enrollment has been processed, you will begin receiving email notifications
when anything you receive electronically is available online.
You can return to www.aig.com/funds at any time to change your email
address, edit your preferences or to cancel this service if you choose to
resume physical delivery of your Fund documents.
Please note - this option is only available to accounts opened through the
Funds.
For information on receiving this report online, see inside back cover.
AIG Funds are advised by SunAmerica Asset Management, LLC (SAAMCo) and
distributed by AIG Capital Services, Inc. (ACS), Member FINRA. Harborside 5,
185 Hudson Street, Suite 3300, Jersey City, NJ 07311, 800-858-8850. SAAMCo and
ACS are members of American International Group, Inc. (AIG).
This fund report must be preceded by or accompanied by a prospectus.
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
AIG Funds Sales Desk at 800-858-8850, ext. 6003, or at aig.com/funds. Read the
prospectus carefully before investing.
aig.com/funds
INSAN - 9/18
[LOGO]
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
229.407) (as required by 22(b)(15)) of Schedule 14A (17 CFR 240.14a-
101), or this Item 10.
Item 11. Controls and Procedures.
(a) An evaluation was performed within 90 days of the filing of this
report, under the supervision and with the participation of the
registrant's management, including the President and Treasurer, of the
effectiveness of the design and operation of the registrant's
disclosure controls and procedures (as defined in Rule 30a-3(c)
under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))). Based
on that evaluation, the registrant's management, including the
President and Treasurer, concluded that the registrant's disclosure
controls and procedures are effective.
(b) There was no change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act
of 1940 (17 CFR 270.30a-3(d))) that occurred during the registrant's
last fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal contro1 over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management
Investment Companies.
Not applicable.
Item 13. Exhibits.
(a) (1) Not applicable.
(2) Certifications pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit
99.CERT.
(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) and Section 906 of the Sarbanes-
Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SunAmerica Income Funds
By: /s/ John T. Genoy
-----------------------
John T. Genoy
President
Date: December 07, 2018
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: December 07, 2018
By: /s/ Gregory R. Kingston
-----------------------
Gregory R. Kingston
Treasurer
Date: December 07, 2018