0001193125-17-363673.txt : 20171207 0001193125-17-363673.hdr.sgml : 20171207 20171207131304 ACCESSION NUMBER: 0001193125-17-363673 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20170930 FILED AS OF DATE: 20171207 DATE AS OF CHANGE: 20171207 EFFECTIVENESS DATE: 20171207 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUNAMERICA INCOME FUNDS CENTRAL INDEX KEY: 0000795307 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-04708 FILM NUMBER: 171244314 BUSINESS ADDRESS: STREET 1: HARBORSIDE 5 STREET 2: 185 HUDSON STREET, SUITE 3300 CITY: JERSEY CITY STATE: NJ ZIP: 07311 BUSINESS PHONE: 800-858-8850 MAIL ADDRESS: STREET 1: HARBORSIDE 5 STREET 2: 185 HUDSON STREET, SUITE 3300 CITY: JERSEY CITY STATE: NJ ZIP: 07311 FORMER COMPANY: FORMER CONFORMED NAME: SUNAMERICA INCOME PORTFOLIOS DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: INTEGRATED INCOME PORTFOLIOS DATE OF NAME CHANGE: 19900306 0000795307 S000007632 AIG U.S. Government Securities Fund C000020823 Class A SGTAX C000020825 Class C NASBX 0000795307 S000007633 AIG Flexible Credit Fund C000020826 Class A SHNAX C000020828 Class C SHNCX C000146854 Class W SHNWX 0000795307 S000007634 AIG Strategic Bond Fund C000020829 Class A SDIAX C000020830 Class B SDIBX C000020831 Class C NAICX C000152057 Class W SDIWX N-CSRS 1 d381951dncsrs.txt N-CSRS 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, 2017 ------------------------- Item 1. Reports to Stockholders SEMI-ANNUAL REPORT 2017 SUNAMERICA Income Funds [PHOTO] [LOGO] [LOGO] 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........ 67 APPROVAL OF ADVISORY AGREEMENTS...... 82
Shareholder Letter -- (unaudited) Dear Shareholders, We are pleased to present this semi-annual update for the SunAmerica Income Funds for the six months ended September 30, 2017. It was a period wherein fixed income market performance was primarily driven by elevated political and geopolitical uncertainty, muted inflation data and incrementally more hawkish monetary policy among developed markets' central banks./*/ 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 2.31%. In the second quarter of 2017, when the semi-annual period began, global fixed income markets generated strong gains as bouts of elevated political uncertainty kept a lid on government bond yields. In the U.S., political controversies - in particular, the ongoing investigation into alleged involvement by Russia in the 2016 presidential election - led to a short-lived dip in risk assets. Elections in France and the U.K. also presented potential sources of volatility but proved benign in the aftermath. On the monetary policy front, the U.S. Federal Reserve (the "Fed") raised interest rates by 25 basis points+ in June 2017, projected an additional hike later in 2017 and laid out a plan for tapering its asset purchases. Comments from the Bank of England indicated rate hikes may be looming in the U.K. However, even as it noted improved Eurozone growth, the European Central Bank (ECB) lowered its inflation forecasts, triggering speculation it might postpone the tapering of its asset purchases expected to begin later in 2017. For the second calendar quarter overall, sovereign yield curves flattened across most developed markets, meaning the differential between short-term and long-term yields narrowed. Short-term yields increased - especially in Germany, the U.K. and Canada - driven by hawkish comments from their respective central banks. However, a lack of global inflation suppressed long-term yields. Intermediate and long-term U.S. Treasury yields declined on diminished expectations of fiscal stimulus. Japanese government bond yields, anchored by the Bank of Japan's yield-targeting policy, were little changed. Globally, most spread, or non-government, sectors outperformed government bonds. Notably, despite concerns about prospects for retailers, particularly in the U.S., generally solid corporate earnings and continued demand for yield-producing assets supported credit markets, and spreads, or yield differentials to government bonds, tightened. Global fixed income markets generated positive returns in the third quarter of 2017. Escalating geopolitical tensions between the U.S. and North Korea and disappointments in inflation data helped to contain the increase in sovereign yields prompted by central bank policy normalization.++ Monetary policy continued along an incrementally more hawkish path. The Fed announced it would begin tapering its asset purchases in October 2017 and continued to project another rate hike later in 2017. The ECB attempted to push back against the then-recent strength of the euro, which was hampering its ability to achieve higher inflation. Strong economic growth and inflation data prompted the Bank of Canada to raise rates for the first time in seven years. Meanwhile, the Bank of England signaled it was close to raising rates to contain surging inflation, despite uncertainty about the post-Brexit growth outlook. For the third calendar quarter overall, sovereign yields increased across most developed markets, with the biggest moves in Canada, Australia and the U.K. U.S. Treasury yields also increased, but the yield curve flattened as longer-term yields increased only marginally due to stubbornly low inflation. Japanese government bond yields, anchored by the Bank of Japan's yield-targeting policy, were little changed. Globally, most spread sectors outperformed U.S. Treasuries. Generally strong economic data, a rally in commodity prices and ongoing demand for yield especially supported credit markets, and spreads tightened further. For the semi-annual period overall, U.S. Treasury securities posted positive returns, with the yield on the 10-year U.S. Treasury declining approximately seven basis points to 2.33% by the end of September 2017. The U.S. Treasury yield curve, or spectrum of maturities, flattened slightly during the six months ended September 30, 2017, as yields on shorter-term maturities generally rose and yields on intermediate- and longer-term maturities fell. Non-U.S. Treasury sectors generally outperformed U.S. Treasuries. High yield corporate bonds, sovereign emerging markets debt and investment grade corporate bonds outperformed U.S. Treasuries most. Commercial mortgage-backed securities, agency securities, asset-backed securities and mortgage-backed securities also outperformed U.S. Treasuries, albeit more modestly. 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, 2017. We 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 adviser or get in touch us directly at 800-858-8850 or via our website, www.aig.com/funds. Sincerely, The SunAmerica Income Funds Investment Professionals Timothy Campion Robert Vanden Assem David L. Albrycht Kara Murphy Anders Faergemann Frank Ossino Andrew Sheridan Dana Burns Jonathan Stanley Jane Algieri John Yovanovic
-------- Past performance is no guarantee of future results. * Hawkish policy tends to suggest higher interest rates; opposite of dovish. **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. ++Balance sheet normalization refers to the steps the Fed will take to reverse quantitative easing and reduce the substantial monetary accommodation it has provided to the economy since the financial crisis began in 2007. 3 SunAmerica Income Funds EXPENSE EXAMPLE -- September 30, 2017 -- (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, 2017 and held until September 30, 2017. 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, 2017" to estimate the expenses you paid on your account during this period. The "Expenses Paid During the Six Months Ended September 30, 2017" 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, 2017" 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, 2017" column would have been higher and the "Ending Account Value" column would have been lower. Hypothetical Example for Comparison Purposes The "Hypothetical" section of the table provides information about hypothetical account values and hypothetical expenses based on each Fund's actual expense ratio and an annual rate of return of 5% before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. The "Expenses Paid During the Six Months Ended September 30, 2017" 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, 2017" 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, 2017" column would have been higher and the "Ending Account Value" column would have been lower. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any 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, 2017 -- (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 2017 2017 2017* 2017 2017 2017* Ratio* ---- ------------- -------------- ------------- ------------- -------------- ------------- ---------- AIG U.S. Government Securities Class A#..................... $1,000.00 $1,006.89 $ 4.98 $1,000.00 $1,020.10 $ 5.01 0.99% Class C#..................... $1,000.00 $1,003.61 $ 8.24 $1,000.00 $1,016.85 $ 8.29 1.64% AIG Strategic Bond Class A...................... $1,000.00 $1,035.35 $ 6.79 $1,000.00 $1,018.40 $ 6.73 1.33% Class B...................... $1,000.00 $1,031.85 $10.24 $1,000.00 $1,014.99 $10.15 2.01% Class C...................... $1,000.00 $1,034.91 $10.10 $1,000.00 $1,015.14 $10.00 1.98% Class W...................... $1,000.00 $1,039.40 $ 5.88 $1,000.00 $1,019.30 $ 5.82 1.15% AIG Flexible Credit Class A...................... $1,000.00 $1,025.43 $ 7.16 $1,000.00 $1,018.00 $ 7.13 1.41% Class C...................... $1,000.00 $1,022.08 $10.49 $1,000.00 $1,014.69 $10.45 2.07% Class W...................... $1,000.00 $1,026.53 $ 6.15 $1,000.00 $1,019.00 $ 6.12 1.21%
-------- * 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 30, 2017" and the "Annualized Expense Ratio" would have been higher. 5 SunAmerica Income Funds STATEMENT OF ASSETS AND LIABILITIES -- September 30, 2017 -- (unaudited)
AIG U.S. Government Securities Fund ------------------- ASSETS: Investments at value (unaffiliated)*.......................................................... $156,950,781 Repurchase agreements (cost approximates value)............................................... 1,718,000 Cash.......................................................................................... 310 Foreign cash*................................................................................. -- Receivable for: Shares of beneficial interest sold.......................................................... 41,167 Dividends and interest...................................................................... 556,645 Investments sold............................................................................ -- Investments sold on an extended settlement basis............................................ -- Prepaid expenses and other assets............................................................. 5,533 Due from investment adviser for expense reimbursements/fee waivers............................ 115,403 Unrealized appreciation on forward foreign currency contracts................................. -- ------------ TOTAL ASSETS.................................................................................. 159,387,839 ------------ LIABILITIES: Payable for: Shares of beneficial interest redeemed...................................................... 92,332 Investments purchased....................................................................... -- Investments purchased on an extended settlement basis....................................... -- Investment advisory and management fees..................................................... 86,119 Distribution and service maintenance fees................................................... 55,126 Transfer agent fees and expenses............................................................ 35,053 Trustees' fees and expenses................................................................. 1,517 Other accrued expenses...................................................................... 111,458 Line of Credit.............................................................................. -- Dividends Payable............................................................................. 5,018 Unrealized depreciation on forward foreign currency contracts................................. -- ------------ TOTAL LIABILITIES............................................................................. 386,623 ------------ NET ASSETS.................................................................................... $159,001,216 ============ NET ASSETS REPRESENTED BY: Shares of beneficial interest, $0.01.......................................................... $ 174,172 Paid-in capital............................................................................... 173,972,433 ------------ 174,146,605 Accumulated undistributed net investment income (loss)........................................ (633,311) Accumulated undistributed net realized gain (loss) on investments, futures contracts, options contracts, securities sold short, and foreign exchange transactions.......................... (19,047,300) Unrealized appreciation (depreciation) on investments......................................... 4,535,222 Unrealized foreign exchange gain (loss) on other assets and liabilities....................... -- ------------ NET ASSETS.................................................................................... $159,001,216 ============ *Cost Investments (unaffiliated).................................................................. $152,415,559 ============ Foreign cash................................................................................ $ -- ============
AIG Strategic Bond Fund ------------------ ASSETS: Investments at value (unaffiliated)*.......................................................... $365,639,350 Repurchase agreements (cost approximates value)............................................... 2,731,000 Cash.......................................................................................... 416,957 Foreign cash*................................................................................. 121,798 Receivable for: Shares of beneficial interest sold.......................................................... 1,256,978 Dividends and interest...................................................................... 4,168,524 Investments sold............................................................................ 4,061,324 Investments sold on an extended settlement basis............................................ 576,026 Prepaid expenses and other assets............................................................. 6,368 Due from investment adviser for expense reimbursements/fee waivers............................ 843 Unrealized appreciation on forward foreign currency contracts................................. 143,363 ------------ TOTAL ASSETS.................................................................................. 379,122,531 ------------ LIABILITIES: Payable for: Shares of beneficial interest redeemed...................................................... 1,514,063 Investments purchased....................................................................... 2,777,222 Investments purchased on an extended settlement basis....................................... 5,011,553 Investment advisory and management fees..................................................... 196,235 Distribution and service maintenance fees................................................... 171,325 Transfer agent fees and expenses............................................................ 65,412 Trustees' fees and expenses................................................................. -- Other accrued expenses...................................................................... 194,558 Line of Credit.............................................................................. -- Dividends Payable............................................................................. 47,403 Unrealized depreciation on forward foreign currency contracts................................. 71,704 ------------ TOTAL LIABILITIES............................................................................. 10,049,475 ------------ NET ASSETS.................................................................................... $369,073,056 ============ NET ASSETS REPRESENTED BY: Shares of beneficial interest, $0.01.......................................................... $ 1,064,523 Paid-in capital............................................................................... 436,997,470 ------------ 438,061,993 Accumulated undistributed net investment income (loss)........................................ (1,753,139) Accumulated undistributed net realized gain (loss) on investments, futures contracts, options contracts, securities sold short, and foreign exchange transactions.......................... (71,899,610) Unrealized appreciation (depreciation) on investments......................................... 4,581,165 Unrealized foreign exchange gain (loss) on other assets and liabilities....................... 82,647 ------------ NET ASSETS.................................................................................... $369,073,056 ============ *Cost Investments (unaffiliated).................................................................. $361,058,185 ============ Foreign cash................................................................................ $ 121,413 ============
AIG Flexible Credit Fund ------------------- ASSETS: Investments at value (unaffiliated)*.......................................................... $371,103,101 Repurchase agreements (cost approximates value)............................................... -- Cash.......................................................................................... -- Foreign cash*................................................................................. 7,545 Receivable for: Shares of beneficial interest sold.......................................................... 1,762,134 Dividends and interest...................................................................... 4,184,709 Investments sold............................................................................ 3,636,738 Investments sold on an extended settlement basis............................................ 5,198,161 Prepaid expenses and other assets............................................................. 5,601 Due from investment adviser for expense reimbursements/fee waivers............................ 3,254 Unrealized appreciation on forward foreign currency contracts................................. -- ------------ TOTAL ASSETS.................................................................................. 385,901,243 ------------ LIABILITIES: Payable for: Shares of beneficial interest redeemed...................................................... 885,331 Investments purchased....................................................................... 1,348,636 Investments purchased on an extended settlement basis....................................... 13,636,466 Investment advisory and management fees..................................................... 225,094 Distribution and service maintenance fees................................................... 121,420 Transfer agent fees and expenses............................................................ 70,788 Trustees' fees and expenses................................................................. -- Other accrued expenses...................................................................... 140,725 Line of Credit.............................................................................. 1,258,824 Dividends Payable............................................................................. 352,525 Unrealized depreciation on forward foreign currency contracts................................. -- ------------ TOTAL LIABILITIES............................................................................. 18,039,809 ------------ NET ASSETS.................................................................................... $367,861,434 ============ NET ASSETS REPRESENTED BY: Shares of beneficial interest, $0.01.......................................................... $ 1,065,883 Paid-in capital............................................................................... 414,449,220 ------------ 415,515,103 Accumulated undistributed net investment income (loss)........................................ 19,075 Accumulated undistributed net realized gain (loss) on investments, futures contracts, options contracts, securities sold short, and foreign exchange transactions.......................... (48,966,613) Unrealized appreciation (depreciation) on investments......................................... 1,294,322 Unrealized foreign exchange gain (loss) on other assets and liabilities....................... (453) ------------ NET ASSETS.................................................................................... $367,861,434 ============ *Cost Investments (unaffiliated).................................................................. $369,808,779 ============ Foreign cash................................................................................ $ 7,998 ============
See Notes to Financial Statements 6 SunAmerica Income Funds STATEMENT OF ASSETS AND LIABILITIES -- September 30, 2017 -- (unaudited) (continued)
AIG U.S. Government Securities Fund ------------------- Class A (unlimited shares authorized): Net assets......................................................................................... $142,740,825 Shares of beneficial interest issued and outstanding............................................... 15,634,979 Net asset value and redemption price per share (excluding any applicable contingent deferred sales charge) .......................................................................................... $ 9.13 Maximum sales charge (4.75% of offering price)..................................................... $ 0.46 ------------ Maximum offering price to public................................................................... $ 9.59 ============ Class B (unlimited shares authorized): Net assets......................................................................................... $ -- Shares of beneficial interest issued and outstanding............................................... -- Net asset value, offering and redemption price per share (excluding any applicable contingent deferred sales charge)............................................................................ $ -- ============ Class C (unlimited shares authorized): Net assets......................................................................................... $ 16,260,391 Shares of beneficial interest issued and outstanding............................................... 1,782,181 Net asset value, offering and redemption price per share (excluding any applicable contingent deferred sales charge)............................................................................ $ 9.12 ============ Class W (unlimited shares authorized): Net assets......................................................................................... $ -- Shares of beneficial interest issued and outstanding............................................... -- Net asset value, offering and redemption price per share........................................... $ -- ============
AIG Strategic Bond Fund ------------------ Class A (unlimited shares authorized): Net assets......................................................................................... $175,079,952 Shares of beneficial interest issued and outstanding............................................... 50,545,170 Net asset value and redemption price per share (excluding any applicable contingent deferred sales charge) .......................................................................................... $ 3.46 Maximum sales charge (4.75% of offering price)..................................................... $ 0.17 ------------ Maximum offering price to public................................................................... $ 3.63 ============ Class B (unlimited shares authorized): Net assets......................................................................................... $ 28,426,508 Shares of beneficial interest issued and outstanding............................................... 8,210,863 Net asset value, offering and redemption price per share (excluding any applicable contingent deferred sales charge)............................................................................ $ 3.46 ============ Class C (unlimited shares authorized): Net assets......................................................................................... $109,683,567 Shares of beneficial interest issued and outstanding............................................... 31,552,333 Net asset value, offering and redemption price per share (excluding any applicable contingent deferred sales charge)............................................................................ $ 3.48 ============ Class W (unlimited shares authorized): Net assets......................................................................................... $ 55,883,029 Shares of beneficial interest issued and outstanding............................................... 16,143,954 Net asset value, offering and redemption price per share........................................... $ 3.46 ============
AIG Flexible Credit Fund ------------------- Class A (unlimited shares authorized): Net assets......................................................................................... $147,088,865 Shares of beneficial interest issued and outstanding............................................... 42,694,728 Net asset value and redemption price per share (excluding any applicable contingent deferred sales charge) .......................................................................................... $ 3.45 Maximum sales charge (4.75% of offering price)..................................................... $ 0.17 ------------ Maximum offering price to public................................................................... $ 3.62 ============ Class B (unlimited shares authorized): Net assets......................................................................................... $ -- Shares of beneficial interest issued and outstanding............................................... -- Net asset value, offering and redemption price per share (excluding any applicable contingent deferred sales charge)............................................................................ $ -- ============ Class C (unlimited shares authorized): Net assets......................................................................................... $ 72,934,720 Shares of beneficial interest issued and outstanding............................................... 21,039,312 Net asset value, offering and redemption price per share (excluding any applicable contingent deferred sales charge)............................................................................ $ 3.47 ============ Class W (unlimited shares authorized): Net assets......................................................................................... $147,837,849 Shares of beneficial interest issued and outstanding............................................... 42,854,230 Net asset value, offering and redemption price per share........................................... $ 3.45 ============
See Notes to Financial Statements 7 SunAmerica Income Funds STATEMENT OF OPERATIONS -- For the six months ended September 30, 2017 -- (unaudited)
AIG U.S. Government AIG Strategic Bond Securities Fund Fund ------------------- ------------------ INVESTMENT INCOME: Dividends (unaffiliated).......................................................... $ -- $ 9,733 Interest (unaffiliated)........................................................... 1,630,326 8,240,723 ---------- ----------- Total investment income*......................................................... 1,630,326 8,250,456 ---------- ----------- EXPENSES: Investment advisory and management fees............................................. 536,793 1,184,400 Distribution and Service maintenance fees: Class A........................................................................... 245,660 297,613 Class B........................................................................... -- 146,194 Class C........................................................................... 87,790 587,016 Service fee -- Class W.............................................................. -- 35,837 Transfer agent fees: Class A........................................................................... 178,199 197,951 Class B........................................................................... -- 33,650 Class C........................................................................... 22,908 133,007 Class W........................................................................... -- 53,110 Registration fees: Class A........................................................................... 14,726 11,346 Class B........................................................................... -- 5,856 Class C........................................................................... 12,670 10,248 Class W........................................................................... -- 8,052 Custodian and accounting fees....................................................... 18,117 53,253 Reports to shareholders............................................................. 21,777 40,809 Audit and tax fees.................................................................. 26,901 34,953 Legal fees.......................................................................... 10,065 11,529 Trustees' fees and expenses......................................................... 3,477 7,137 Interest expense.................................................................... -- 42 Other expenses...................................................................... 14,695 19,846 ---------- ----------- Total expenses before fee waivers, expense reimbursements and expense recoupments. 1,193,778 2,871,849 Net (fees waived and expenses reimbursed)/recouped by investment advisor (Note 3). (318,744) -- ---------- ----------- Net expenses...................................................................... 875,034 2,871,849 ---------- ----------- Net investment income (loss)........................................................ 755,292 5,378,607 ---------- ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES: Net realized gain (loss) on: Investments (unaffiliated)........................................................ (671,374) 5,349,809 Forward contracts................................................................. -- (2,582,670) Net realized foreign exchange gain (loss) on other assets and liabilities........... -- 15,575 ---------- ----------- Net realized gain (loss) on investments and foreign currencies...................... (671,374) 2,782,714 ---------- ----------- Change in unrealized appreciation (depreciation) on: Investments (unaffiliated)........................................................ 1,037,009 4,674,460 Forward contracts................................................................. -- 124,202 Change in unrealized foreign exchange gain (loss) on other assets and liabilities... -- 12,845 ---------- ----------- Net unrealized gain (loss) on investments and foreign currencies.................... 1,037,009 4,811,507 ---------- ----------- Net realized and unrealized gain (loss) on investments and foreign currencies....... 365,635 7,594,221 ---------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... $1,120,927 $12,972,828 ========== =========== * Net of foreign withholding taxes on interest and dividends of..................... $ -- $ 672 ========== ===========
AIG Flexible Credit Fund ------------------- INVESTMENT INCOME: Dividends (unaffiliated).......................................................... $ 40,309 Interest (unaffiliated)........................................................... 10,897,125 ----------- Total investment income*......................................................... 10,937,434 ----------- EXPENSES: Investment advisory and management fees............................................. 1,399,886 Distribution and Service maintenance fees: Class A........................................................................... 256,021 Class B........................................................................... -- Class C........................................................................... 374,082 Service fee -- Class W.............................................................. 117,932 Transfer agent fees: Class A........................................................................... 170,000 Class B........................................................................... -- Class C........................................................................... 84,172 Class W........................................................................... 173,882 Registration fees: Class A........................................................................... 16,287 Class B........................................................................... -- Class C........................................................................... 10,431 Class W........................................................................... 14,091 Custodian and accounting fees....................................................... 46,482 Reports to shareholders............................................................. 30,744 Audit and tax fees.................................................................. 36,051 Legal fees.......................................................................... 16,287 Trustees' fees and expenses......................................................... 7,137 Interest expense.................................................................... 1,030 Other expenses...................................................................... 16,857 ----------- Total expenses before fee waivers, expense reimbursements and expense recoupments. 2,771,372 Net (fees waived and expenses reimbursed)/recouped by investment advisor (Note 3). -- ----------- Net expenses...................................................................... 2,771,372 ----------- Net investment income (loss)........................................................ 8,166,062 ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES: Net realized gain (loss) on: Investments (unaffiliated)........................................................ 934,243 Forward contracts................................................................. -- Net realized foreign exchange gain (loss) on other assets and liabilities........... -- ----------- Net realized gain (loss) on investments and foreign currencies...................... 934,243 ----------- Change in unrealized appreciation (depreciation) on: Investments (unaffiliated)........................................................ 174,828 Forward contracts................................................................. -- Change in unrealized foreign exchange gain (loss) on other assets and liabilities... 735 ----------- Net unrealized gain (loss) on investments and foreign currencies.................... 175,563 ----------- Net realized and unrealized gain (loss) on investments and foreign currencies....... 1,109,806 ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... $ 9,275,868 =========== * Net of foreign withholding taxes on interest and dividends of..................... $ -- ===========
See Notes to Financial Statements 8 SunAmerica Income Funds STATEMENT OF CHANGES IN NET ASSETS
AIG U.S. Government AIG Strategic Bond Securities Fund Fund -------------------------- -------------------------- For the For the six months six months ended For the Year ended For the Year September ended September ended 30, 2017 March 31, 30, 2017 March 31, (unaudited) 2017 (unaudited) 2017 ------------ ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income (loss)....................................... $ 755,292 $ 1,544,525 $ 5,378,607 $ 10,313,149 Net realized gain (loss) on investments and foreign currencies..... (671,374) (3,707,604) 2,782,714 (1,494,836) Net unrealized gain (loss) on investments and foreign currencies... 1,037,009 (4,357,250) 4,811,507 16,386,601 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations...... 1,120,927 (6,520,329) 12,972,828 25,204,914 ------------ ------------ ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income (Class A).................................... (1,333,788) (2,798,856) (2,948,524) (5,554,446) Net investment income (Class B).................................... -- -- (406,579) (785,283) Net investment income (Class C).................................... (102,593) (290,749) (1,652,843) (3,770,924) Net investment income (Class W).................................... -- -- (866,916) (1,129,107) 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.................................. (1,436,381) (3,089,605) (5,874,862) (11,239,760) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from capital share transactions (Note 6)............................................... (8,658,073) (10,548,448) 305,914 (39,982,323) ------------ ------------ ------------ ------------ Total Increase (decrease) in net assets.............................. (8,973,527) (20,158,382) 7,403,880 (26,017,169) NET ASSETS: Beginning of period.................................................. 167,974,743 188,133,125 361,669,176 387,686,345 ------------ ------------ ------------ ------------ End of period+....................................................... $159,001,216 $167,974,743 $369,073,056 $361,669,176 ============ ============ ============ ============ + Includes accumulated undistributed net investment income (loss) of. $ (633,311) $ 47,778 $ (1,753,139) $ (1,256,884) ============ ============ ============ ============
AIG Flexible Credit Fund -------------------------- For the six months ended For the Year September ended 30, 2017 March 31, (unaudited) 2017 ------------ ------------ INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income (loss)....................................... $ 8,166,062 $ 13,687,344 Net realized gain (loss) on investments and foreign currencies..... 934,243 2,673,462 Net unrealized gain (loss) on investments and foreign currencies... 175,563 10,941,400 ------------ ------------ Net increase (decrease) in net assets resulting from operations...... 9,275,868 27,302,206 ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income (Class A).................................... (3,304,848) (5,974,085) Net investment income (Class B).................................... -- -- Net investment income (Class C).................................... (1,424,361) (2,514,450) Net investment income (Class W).................................... (3,667,627) (5,460,071) 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.................................. (8,396,836) (13,948,606) ------------ ------------ Net increase (decrease) in net assets resulting from capital share transactions (Note 6)............................................... (9,515,754) 85,037,339 ------------ ------------ Total Increase (decrease) in net assets.............................. (8,636,722) 98,390,939 NET ASSETS: Beginning of period.................................................. 376,498,156 278,107,217 ------------ ------------ End of period+....................................................... $367,861,434 $376,498,156 ============ ============ + Includes accumulated undistributed net investment income (loss) of. $ 19,075 $ 249,849 ============ ============
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 ------- 03/31/13 $10.06 $0.14 $ 0.05 $ 0.19 $(0.21) $(0.13) $(0.34) $9.91 1.84% $121,807 0.99% 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 09/30/17# 9.15 0.05 0.01 0.06 (0.08) -- (0.08) 9.13 0.69 142,741 0.99(4) Class C ------- 03/31/13 $10.05 $0.08 $ 0.05 $ 0.13 $(0.14) $(0.13) $(0.27) $9.91 1.28% $ 12,226 1.64% 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 09/30/17# 9.14 0.02 0.01 0.03 (0.05) -- (0.05) 9.12 0.36 16,260 1.64(4)
Ratio of net investment income to average Portfolio net assets(3) Turnover ------------- --------- 1.40% 89% 1.42 122 1.24 57 0.81 36 0.91 95 0.98(4) 17 0.76% 89% 0.77 122 0.61 57 0.16 36 0.26 95 0.34(4) 17
-------- # 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):
03/31/13 03/31/14 03/31/15 03/31/16 03/31/17 09/30/17#(4) -------- -------- -------- -------- -------- ------------ AIG U.S. Government Securities Fund Class A 0.40% 0.40% 0.38% 0.37% 0.35% 0.37% AIG U.S. Government Securities Fund Class C................................... 0.45 0.57 0.50 0.39 0.40 0.52
(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 ------- 03/31/13 $3.45 $0.13 $ 0.16 $ 0.29 $(0.14) $-- $(0.14) $3.60 8.64% $336,759 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 09/30/17# 3.40 0.05 0.07 0.12 (0.06) -- (0.06) 3.46 3.54 175,080 Class B ------- 03/31/13 $3.45 $0.11 $ 0.15 $ 0.26 $(0.12) $-- $(0.12) $3.59 7.62% $ 56,776 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 09/30/17# 3.40 0.04 0.07 0.11 (0.05) -- (0.05) 3.46 3.19 28,427 Class C ------- 03/31/13 $3.47 $0.11 $ 0.15 $ 0.26 $(0.12) $-- $(0.12) $3.61 7.62% $270,965 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 09/30/17# 3.41 0.04 0.08 0.12 (0.05) -- (0.05) 3.48 3.49 109,684 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 09/30/17# 3.39 0.06 0.07 0.13 (0.06) -- (0.06) 3.46 3.94 55,883
Ratio of net Ratio of investment expenses income to to average average Portfolio net assets net assets Turnover ---------- ---------- --------- 1.30% 3.70% 166% 1.31 4.01 158 1.30 3.62 137 1.34 3.54 108 1.32 3.00 109 1.33(5) 3.18(5) 70 1.97% 3.02% 166% 1.97 3.35 158 1.97 2.95 137 2.01 2.87 108 1.99 2.33 109 2.01(5) 2.51(5) 70 1.94% 3.05% 166% 1.96 3.37 158 1.94 2.98 137 1.98 2.90 108 1.97 2.35 109 1.98(5) 2.54(5) 70 1.20%(3)(5) 2.73%(3)(5) 137% 1.15 3.71 108 1.14 3.20 109 1.15(5) 3.35(5) 70
-------- # 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):
03/31/15 -------- AIG Strategic Bond Fund Class W......... 0.69%(5)
(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 ------- 03/31/13 $3.40 $0.20 $ 0.18 $ 0.38 $(0.20) $-- $(0.20) $3.58 11.42% $ 74,175 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 09/30/17# 3.44 0.07 0.02 0.09 (0.08) -- (0.08) 3.45 2.54 147,089 Class C ------- 03/31/13 $3.42 $0.18 $ 0.18 $ 0.36 $(0.18) $-- $(0.18) $3.60 10.67% $ 33,918 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 09/30/17# 3.46 0.06 0.02 0.08 (0.07) -- (0.07) 3.47 2.21 72,935 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 09/30/17# 3.44 0.08 0.01 0.09 (0.08) -- (0.08) 3.45 2.65 147,838
Ratio of net Ratio of investment expenses income to to average average Portfolio net assets net assets Turnover ---------- ---------- --------- 1.36%(3) 5.82%(3) 44% 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 1.41(5) 4.34(5) 33 2.01%(3) 5.18%(3) 44% 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 2.07(5) 3.68(5) 33 1.25%(3)(5) 4.25%(3)(5) 74% 1.25(3) 4.11(3) 52 1.21 4.44 69 1.21(5) 4.54(5) 33
-------- # 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):
03/31/13 03/31/14 03/31/15 03/31/16 -------- -------- -------- -------- AIG Flexible Credit Fund Class A........ 0.16% 0.17% 0.19% 0.03% AIG Flexible Credit Fund Class C........ 0.16 0.18 0.20 0.02 AIG Flexible Credit Fund Class W........ -- -- 1.12(5) 0.04
(4)Inception date of class. (5)Annualized. See Notes to Financial Statements 12 AIG U.S. Government Securities Fund PORTFOLIO PROFILE -- September 30, 2017 -- (unaudited) Industry Allocation* Government National Mtg. Assoc.. 31.1% United States Treasury Notes.... 22.9 Federal Home Loan Bank.......... 15.8 United States Treasury Bonds.... 10.3 Federal Home Loan Mtg. Corp..... 7.3 Federal Farm Credit Bank........ 5.9 Federal National Mtg. Assoc..... 5.4 Repurchase Agreements........... 1.1 ---- 99.8% ====
Credit Quality+# Aaa........ 98.8% Not Rated@. 1.2 ----- 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, 2017 -- (unaudited)
Principal Value Security Description Amount (Note 2) U.S. GOVERNMENT AGENCIES -- 65.5% Federal Farm Credit Bank -- 5.9% Federal Farm Credit Bank FRS 1.40% (1 ML+0.16%) due 03/26/2018........................ $ 9,435,000 $ 9,448,341 ----------- Federal Home Loan Bank -- 15.8% 1.25% due 08/15/2019(1)............... 2,250,000 2,245,840 1.38% due 03/09/2018.................. 5,460,000 5,464,767 1.69% due 02/26/2021.................. 480,000 473,522 2.14% due 12/05/2022.................. 372,093 368,617 4.50% due 09/13/2019.................. 1,490,000 1,573,316 Federal Home Loan Bank FRS 1.26% (1 ML+0.03%) due 05/17/2018........................ 15,000,000 15,014,522 ----------- 25,140,584 ----------- Federal Home Loan Mtg. Corp. -- 7.3% 3.50% due 08/01/2030.................. 3,190,260 3,339,308 3.50% due 12/01/2044.................. 4,445,567 4,607,811 4.00% due 04/01/2034.................. 1,666,784 1,772,063 Federal Home Loan Mtg. Corp. REMIC Series 3747, Class WA 3.50% due 10/15/2030(2)............... 1,801,711 1,868,912 ----------- 11,588,094 ----------- Federal National Mtg. Assoc. -- 5.4% 1.00% due 03/28/2018.................. 5,000,000 4,992,795 2.50% due 11/01/2027.................. 3,459,995 3,506,597 ----------- 8,499,392 ----------- Government National Mtg. Assoc. -- 31.1% 3.50% due 03/15/2042.................. 340,187 354,992 3.50% due 06/15/2042.................. 1,748,089 1,823,825 3.50% due 07/15/2042.................. 552,596 575,579 3.50% due 02/20/2045.................. 1,002,636 1,043,929 4.00% due 03/15/2039.................. 181,767 191,772 4.00% due 04/15/2039.................. 121,824 128,814 4.00% due 06/15/2039.................. 493,178 520,326 4.00% due 12/15/2039.................. 261,092 275,464 4.00% due 08/15/2040.................. 212,324 224,956 4.00% due 09/15/2040.................. 214,864 227,647 4.00% due 11/15/2040.................. 384,749 407,699 4.00% due 12/15/2040.................. 701,339 741,857 4.00% due 02/15/2041.................. 273,842 290,182 4.00% due 03/15/2041.................. 188,812 200,030 4.00% due 07/15/2041.................. 368,318 389,772 4.00% due 08/15/2041.................. 520,401 550,760 4.00% due 09/15/2041.................. 1,396,846 1,477,906 4.00% due 10/15/2041.................. 570,222 603,499 4.00% due 11/15/2041.................. 1,799,933 1,906,089 4.00% due 12/15/2041.................. 885,138 936,498 4.00% due 01/15/2042.................. 1,866,000 1,974,975 4.00% due 02/15/2042.................. 706,262 747,786 4.00% due 03/15/2042.................. 214,302 226,257 4.00% due 06/15/2042.................. 215,153 227,861 4.50% due 05/15/2018.................. 19,073 19,239 4.50% due 08/15/2018.................. 24,708 24,956 4.50% due 09/15/2018.................. 105,555 106,782 4.50% due 10/15/2018.................. 143,431 145,291 4.50% due 09/15/2033.................. 324,575 348,834 4.50% due 03/15/2039.................. 88,849 95,098
Principal Value Security Description Amount (Note 2) Government National Mtg. Assoc. (continued) 4.50% due 04/15/2039.. $ 68,397 $ 73,336 4.50% due 05/15/2039.. 337,336 361,817 4.50% due 06/15/2039.. 1,373,373 1,473,523 4.50% due 07/15/2039.. 632,678 678,280 4.50% due 09/15/2039.. 180,395 193,433 4.50% due 11/15/2039.. 196,429 210,696 4.50% due 12/15/2039.. 526,530 565,283 4.50% due 01/15/2040.. 248,064 265,957 4.50% due 02/15/2040.. 1,074,077 1,153,849 4.50% due 03/15/2040.. 659,509 707,392 4.50% due 04/15/2040.. 678,413 729,275 4.50% due 05/15/2040.. 266,441 287,140 4.50% due 06/15/2040.. 272,680 293,438 4.50% due 07/15/2040.. 458,929 491,717 4.50% due 08/15/2040.. 143,751 154,380 4.50% due 09/15/2040.. 173,776 187,648 4.50% due 11/15/2040.. 194,338 208,994 4.50% due 01/15/2041.. 167,369 179,747 4.50% due 02/15/2041.. 197,456 211,344 4.50% due 03/15/2041.. 1,312,383 1,412,190 4.50% due 04/15/2041.. 579,581 622,148 4.50% due 05/15/2041.. 203,881 219,408 4.50% due 06/15/2041.. 395,986 426,935 4.50% due 07/15/2041.. 161,190 172,527 4.50% due 08/15/2041.. 395,525 425,449 4.50% due 04/20/2044.. 742,644 792,815 5.00% due 04/15/2018.. 78,009 78,888 5.00% due 05/15/2018.. 2,590 2,618 5.00% due 08/15/2033.. 390,968 429,894 5.00% due 10/15/2033.. 666,592 733,085 5.00% due 05/15/2035.. 127,142 138,872 5.00% due 08/15/2035.. 357,193 393,183 5.00% due 03/15/2036.. 169,815 185,782 5.00% due 05/15/2036.. 88,423 97,347 5.00% due 09/15/2036.. 220,302 241,758 5.00% due 01/15/2037.. 162,283 177,366 5.00% due 02/15/2037.. 286,655 313,096 5.00% due 03/15/2037.. 47,497 52,250 5.00% due 04/15/2037.. 339,725 371,160 5.00% due 04/15/2038.. 440,496 481,901 5.00% due 05/15/2038.. 220,745 243,044 5.00% due 08/15/2038.. 563,896 617,685 5.00% due 01/15/2039.. 206,989 227,821 5.00% due 02/15/2039.. 105,675 116,028 5.00% due 03/15/2039.. 113,515 125,091 5.00% due 04/15/2039.. 115,738 126,503 5.00% due 07/20/2039.. 1,017,461 1,116,015 5.00% due 08/15/2039.. 299,847 330,056 5.00% due 09/20/2039.. 3,319,128 3,627,323 5.00% due 10/15/2039.. 664,700 730,205 5.00% due 11/15/2039.. 573,113 629,213 5.00% due 12/15/2039.. 497,655 547,696 5.00% due 04/15/2040.. 502,677 551,077 5.00% due 05/15/2040.. 1,001,279 1,099,711 5.00% due 07/20/2045.. 448,536 481,107 5.50% due 06/15/2033.. 666,971 750,630 5.50% due 07/15/2033.. 106,324 119,840 5.50% due 10/15/2033.. 165,121 186,164 5.50% due 01/15/2034.. 483,357 544,674
14 AIG U.S. Government Securities Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. GOVERNMENT AGENCIES (continued) Government National Mtg. Assoc. (continued) 5.50% due 02/15/2034............... $ 252,070 $ 282,627 5.50% due 04/20/2035............... 461,160 512,663 5.50% due 09/15/2035............... 400,358 461,078 5.50% due 10/15/2035............... 325,740 367,397 5.50% due 02/15/2038............... 148,293 166,787 5.50% due 04/15/2038............... 83,888 93,461 5.50% due 05/15/2038............... 99,787 111,174 5.50% due 09/15/2039............... 75,940 84,766 5.50% due 03/15/2040............... 136,447 153,533 5.50% due 08/15/2040............... 67,243 75,867 6.00% due 04/15/2028............... 153,191 174,298 6.00% due 08/15/2033............... 254,855 289,958 6.00% due 12/15/2033............... 90,892 102,821 6.00% due 07/15/2034............... 55,686 62,766 6.00% due 12/15/2034............... 38,374 43,253 6.00% due 09/20/2038............... 1,056,919 1,185,508 6.50% due 10/15/2031............... 71,162 78,652 ------------ 49,401,088 ------------ Total U.S. Government Agencies (cost $103,422,896)................ 104,077,499 ------------ U.S. GOVERNMENT TREASURIES -- 33.2% United States Treasury Bonds -- 10.3% 2.50% due 02/15/2045............... 1,000,000 932,656 4.25% due 11/15/2040............... 8,000,000 10,038,125 4.75% due 02/15/2041............... 4,000,000 5,373,594 ------------ 16,344,375 ------------
Principal Value Security Description Amount (Note 2) United States Treasury Notes -- 22.9% 1.38% due 05/31/2021........................ $ 28,000,000 $ 27,621,563 2.00% due 02/15/2025........................ 5,000,000 4,931,641 2.00% due 08/15/2025........................ 3,000,000 2,948,672 3.13% due 05/15/2019........................ 1,000,000 1,027,031 ------------ 36,528,907 ------------ Total U.S. Government Treasuries (cost $48,992,663).......................... 52,873,282 ------------ Total Long-Term Investment Securities (cost $152,415,559)......................... 156,950,781 ------------ REPURCHASE AGREEMENTS -- 1.1% Agreement with Fixed Income Clearing Corp., bearing interest at 0.12%, dated 09/29/2017, to be repurchased 10/02/2017 in the amount $1,718,017 and collateralized by $1,730,000 of United States Treasury Notes, bearing interest at 2.38% due 05/15/2027 and having an approximate value of $1,755,158 (cost $1,718,000)........................... 1,718,000 1,718,000 ------------ TOTAL INVESTMENTS (cost $154,133,559)(3)...................... 99.8% 158,668,781 Other assets less liabilities.................. 0.2 332,435 ------------ ------------ NET ASSETS 100.0% $159,001,216 ============ ============
-------- (1)"Step-up" security where the rate increases ("steps-up") at a predetermined rate. The rate reflected is as of September 30, 2017. (2)Collateralized Mortgage Obligation (3)See Note 5 for cost of investments on a tax basis. REMIC --Real Estate Mortgage Investment Conduit FRS --Floating Rate Security The rates shown on FRS are the current interest rates at September 30, 2017 and unless noted otherwise, the dates shown are the original maturity dates Index Legend 1ML --1 Month USD LIBOR The following is a summary of the inputs used to value the Fund's net assets as of September 30, 2017 (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...... $-- $104,077,499 $-- $104,077,499 U.S. Government Treasuries.... -- 52,873,282 -- 52,873,282 Repurchase Agreements......... -- 1,718,000 -- 1,718,000 --- ------------ --- ------------ Total Investments at Value.... $-- $158,668,781 $-- $158,668,781 === ============ === ============
-------- * 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, 2017 -- (unaudited) Industry Allocation* Sovereign.............................. 14.9% Diversified Financial Services......... 6.3 Federal National Mtg. Assoc............ 5.2 United States Treasury Notes........... 5.2 Diversified Banking Institutions....... 4.5 Banks-Commercial....................... 3.6 Federal Home Loan Mtg. Corp............ 3.1 Pipelines.............................. 3.0 Oil Companies-Exploration & Production. 2.9 Cable/Satellite TV..................... 2.6 Oil Companies-Integrated............... 1.8 Real Estate Investment Trusts.......... 1.7 Cellular Telecom....................... 1.5 Electric-Integrated.................... 1.4 United States Treasury Bonds........... 1.4 Telephone-Integrated................... 1.1 Computers.............................. 0.9 Medical-Hospitals...................... 0.9 Auto-Cars/Light Trucks................. 0.8 Satellite Telecom...................... 0.8 Oil Refining & Marketing............... 0.8 Chemicals-Diversified.................. 0.8 Medical-Drugs.......................... 0.8 Repurchase Agreements.................. 0.7 Computer Services...................... 0.7 Paper & Related Products............... 0.7 Finance-Consumer Loans................. 0.7 Oil-Field Services..................... 0.6 Finance-Auto Loans..................... 0.6 Enterprise Software/Service............ 0.6 Gambling (Non-Hotel)................... 0.6 Insurance-Multi-line................... 0.6 Time Deposits.......................... 0.5 Real Estate Management/Services........ 0.5 Aerospace/Defense-Equipment............ 0.5 Metal-Copper........................... 0.5 Savings & Loans/Thrifts................ 0.5 Banks-Super Regional................... 0.5 Energy-Alternate Sources............... 0.5 Retail-Restaurants..................... 0.5 Transport-Rail......................... 0.4 Metal Processors & Fabrication......... 0.4 Investment Management/Advisor Services. 0.4 Printing-Commercial.................... 0.4 Internet Connectivity Services......... 0.4 Banks-Special Purpose.................. 0.4 Containers-Metal/Glass................. 0.4 Auto-Heavy Duty Trucks................. 0.4 Building-Residential/Commercial........ 0.4 Finance-Credit Card.................... 0.4 Rental Auto/Equipment.................. 0.4 Airlines............................... 0.4 Publishing-Books....................... 0.4 Electric-Generation.................... 0.3 Auto/Truck Parts & Equipment-Original.. 0.3 Building Products-Wood................. 0.3 Central Bank........................... 0.3 Cruise Lines........................... 0.3 Steel-Producers........................ 0.3 Retail-Office Supplies................. 0.3 Brewery................................ 0.3
Electric-Distribution.................. 0.3% Medical Products....................... 0.3 Banks-Export/Import.................... 0.3 Building & Construction-Misc........... 0.3 Diversified Manufacturing Operations... 0.3 Food-Retail............................ 0.3 Telecom Services....................... 0.3 E-Commerce/Services.................... 0.3 Finance-Investment Banker/Broker....... 0.3 Building-Heavy Construction............ 0.3 Wireless Equipment..................... 0.3 Marine Services........................ 0.3 Batteries/Battery Systems.............. 0.3 Internet Content-Entertainment......... 0.3 Gas-Distribution....................... 0.3 Television............................. 0.2 Computers-Memory Devices............... 0.2 Broadcast Services/Program............. 0.2 Independent Power Producers............ 0.2 Machinery-Construction & Mining........ 0.2 Finance-Mortgage Loan/Banker........... 0.2 Diversified Minerals................... 0.2 Finance-Other Services................. 0.2 Radio.................................. 0.2 Retail-Appliances...................... 0.2 Food-Dairy Products.................... 0.2 Coal................................... 0.2 Agricultural Chemicals................. 0.2 SupraNational Banks.................... 0.2 Building & Construction Products-Misc.. 0.2 Auction Houses/Art Dealers............. 0.2 Containers-Paper/Plastic............... 0.2 Precious Metals........................ 0.2 Resorts/Theme Parks.................... 0.2 Casino Hotels.......................... 0.2 Banks-Fiduciary........................ 0.2 Cosmetics & Toiletries................. 0.2 Distribution/Wholesale................. 0.2 Poultry................................ 0.2 Insurance-Mutual....................... 0.2 Circuit Boards......................... 0.2 Retail-Automobile...................... 0.2 Travel Services........................ 0.2 Electronic Parts Distribution.......... 0.2 Hotels/Motels.......................... 0.2 Data Processing/Management............. 0.2 Oil Field Machinery & Equipment........ 0.2 Medical-HMO............................ 0.2 Transport-Services..................... 0.2 Metal-Iron............................. 0.2 Retail-Major Department Stores......... 0.2 Platinum............................... 0.2 Hazardous Waste Disposal............... 0.2 Medical-Generic Drugs.................. 0.2 Food-Misc./Diversified................. 0.2 Insurance-Life/Health.................. 0.1 Metal-Diversified...................... 0.1 Semiconductor Equipment................ 0.1 Racetracks............................. 0.1 Medical-Biomedical/Gene................ 0.1 Wire & Cable Products.................. 0.1
16 AIG Strategic Bond Fund PORTFOLIO PROFILE -- September 30, 2017 -- (unaudited) (continued) Industry Allocation* (continued) Commercial Services.................. 0.1% Gold Mining.......................... 0.1 Water................................ 0.1 Retail-Misc./Diversified............. 0.1 Electric Products-Misc............... 0.1 Building Societies................... 0.1 Retail-Drug Store.................... 0.1 Food-Wholesale/Distribution.......... 0.1 Coatings/Paint....................... 0.1 Electronic Components-Semiconductors. 0.1 Telecommunication Equipment.......... 0.1 Diversified Operations............... 0.1 Networking Products.................. 0.1 Petrochemicals....................... 0.1 E-Commerce/Products.................. 0.1 Investment Companies................. 0.1 Airport Development/Maintenance...... 0.1 Oil & Gas Drilling................... 0.1 Tools-Hand Held...................... 0.1 Non-Hazardous Waste Disposal......... 0.1 Food-Meat Products................... 0.1 Appliances........................... 0.1 Transport-Marine..................... 0.1 Beverages-Non-alcoholic.............. 0.1 Finance-Leasing Companies............ 0.1 Beverages-Wine/Spirits............... 0.1 Retail-Discount...................... 0.1 Multimedia........................... 0.1 Tennessee Valley Authority........... 0.1 Power Converter/Supply Equipment..... 0.1 Pharmacy Services.................... 0.1 Gas-Transportation................... 0.1 Transport-Equipment & Leasing........ 0.1 ---- 99.8% ====
Credit Quality+# Aaa........ 18.2% Aa......... 1.9 A.......... 9.2 Baa........ 16.8 Ba......... 17.9 B.......... 21.0 Caa........ 5.1 Ca......... 0.1 Not Rated@. 9.8 ----- 100.0% =====
-------- *Calculated as a percentage of net assets. +Source: Moody's #Calculated as a percentage of total debt issues, excluding short-term securities. @Represents debt issues that either have no rating or the rating is unavailable from the data source. 17 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
Principal Value Security Description Amount** (Note 2) ASSET BACKED SECURITIES -- 6.1% Diversified Financial Services -- 6.1% Ally Auto Receivables Trust Series 2017-4, Class A3 1.75% due 12/15/2021......................... $1,100,000 $1,098,111 American Express Credit Account Master Trust FRS Series 2014-1, Class A 1.60% (1 ML+0.37%) due 12/15/2021............................... 49,000 49,215 American Express Credit Account Master Trust Series 2017-3, Class A 1.77% due 11/15/2022......................... 1,000,000 996,993 American Express Credit Account Master Trust Series 2017-1, Class A 1.93% due 09/15/2022......................... 1,000,000 1,001,357 Capital One Multi-Asset Execution Trust Series 2016-A4, Class A4 1.33% due 06/15/2022......................... 1,000,000 991,832 CarMax Auto Owner Trust Series 2016-3, Class A4 1.60% due 01/18/2022......................... 150,000 148,328 Chase Issuance Trust Series 2016-A2, Class A 1.37% due 06/15/2021......................... 200,000 198,691 Chase Issuance Trust Series 2015-A4, Class A4 1.84% due 04/15/2022......................... 1,500,000 1,498,896 Chase Mtg. Trust VRS Series 2016-2, Class M2 3.75% due 12/25/2045*(1)(14)................. 396,172 403,217 Citibank Credit Card Issuance Trust Series 2017-A3, Class A3 1.92% due 04/07/2022......................... 1,081,000 1,081,676 Citibank Credit Card Issuance Trust Series 2014-A6, Class A6 2.15% due 07/15/2021......................... 1,000,000 1,006,654 Citibank Credit Card Issuance Trust Series 2014-A1, Class A1 2.88% due 01/23/2023......................... 78,000 80,152 Citigroup Commercial Mtg. Trust Series 2016-SMPL, Class A 2.23% due 09/10/2031*(2)..................... 163,000 161,586 COMM Mtg. Trust Series 2016-787S, Class A 3.55% due 02/10/2036*(2)..................... 329,000 338,753 COMM Mtg. Trust VRS Series 2016-787S, Class B 3.96% due 02/10/2036*(2)(14)................. 132,000 136,797 Discover Card Execution Note Trust Series 2017-A6, Class A6 1.88% due 02/15/2023......................... 1,000,000 997,864 Discover Card Execution Note Trust Series 2015-A4, Class A4 2.19% due 04/17/2023......................... 117,000 117,747 Ford Credit Auto Owner Trust Series 2016-A, ClassA4 1.60% due 06/15/2021......................... 1,000,000 996,946
Principal Value Security Description Amount** (Note 2) Diversified Financial Services (continued) Ford Credit Auto Owner Trust Series 2014-C,Class B 1.97% due 04/15/2020....................... $ 81,000 $ 81,221 Ford Credit Auto Owner Trust Series 2015-2, Class A 2.44% due 01/15/2027*...................... 50,000 50,480 GM Financial Automobile Leasing Trust Series 2016-2, Class A3 1.62% due 09/20/2019....................... 1,000,000 999,659 GS Mtg. Securities Trust Series 2015-GC28, Class A2 2.90% due 02/10/2048(2).................... 102,000 103,541 Honda Auto Receivables Owner Trust Series 2016-2, Class A4 1.62% due 08/15/2022....................... 104,000 103,577 Honda Auto Receivables Owner Trust Series 2017-1, ClassA3 1.72% due 07/21/2021....................... 1,000,000 999,445 Hudson Yards Mtg. Trust Series 2016-10HY, Class A 2.84% due 08/10/2038*(2)................... 1,000,000 976,182 Hyundai Auto Receivables Trust Series 2017-B, ClassA3 1.77% due 01/18/2022....................... 1,000,000 998,083 JPMDB Commercial Mtg. Securities Trust Series 2016-C2, Class A2 2.66% due 06/15/2049(2).................... 990,000 998,726 Morgan Stanley Capital Barclays Bank Trust Series 2016-MART, Class A 2.20% due 09/13/2031*(2)................... 185,000 183,231 Nissan Auto Receivables Owner Trust Series 2017-B, ClassA4 1.95% due 10/16/2023....................... 1,600,000 1,595,116 Synchrony Credit Card Master Note Trust Series 2016-2, Class A 2.21% due 05/15/2024....................... 1,600,000 1,598,903 Toyota Auto Receivables Series 2016-C, ClassA3 1.14% due 08/17/2020....................... 1,500,000 1,492,647 Verizon Owner Trust Series 2016-2A, ClassA 1.68% due 05/20/2021*...................... 1,000,000 996,843 ----------- Total Asset Backed Securities (cost $22,595,666)......................... 22,482,469 ----------- U.S. CORPORATE BONDS & NOTES -- 39.4% Advertising Agencies -- 0.0% Interpublic Group of Cos., Inc. Senior Notes 4.20% due 04/15/2024....................... 133,000 139,712 ----------- Aerospace/Defense-Equipment -- 0.5% Moog, Inc. Company Guar. Notes 5.25% due 12/01/2022*...................... 628,000 654,690 Triumph Group, Inc. Company Guar. Notes 4.88% due 04/01/2021....................... 765,000 753,908
18 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Aerospace/Defense-Equipment (continued) United Technologies Corp. Senior Notes 1.90% due 05/04/2020.............. $152,000 $ 151,509 United Technologies Corp. Senior Notes 4.05% due 05/04/2047.............. 111,000 112,513 ---------- 1,672,620 ---------- Agricultural Chemicals -- 0.0% Mosaic Co. Senior Notes 4.88% due 11/15/2041.............. 64,000 60,282 ---------- Airlines -- 0.4% Atlas Air, Inc. Pass-Through Certs. Series 1999-1, Class B 7.63% due 01/02/2018(3)........... 29,221 29,326 Atlas Air, Inc. Pass-Through Certs. Series 2000-1, Class B 9.06% due 01/02/2018(3)........... 53,263 53,743 Delta Air Lines, Inc. Senior Notes 2.88% due 03/13/2020.............. 151,000 152,698 United Airlines Pass-Through Trust Pass-Through Certs. Series 2014-2, Class B 4.63% due 03/03/2024.............. 608,363 631,177 United Airlines Pass-Through Trust Pass-Through Certs. Series 2013-1, Class B 5.38% due 02/15/2023.............. 398,899 418,843 ---------- 1,285,787 ---------- Appliances -- 0.0% Whirlpool Corp. Senior Notes 4.50% due 06/01/2046.............. 104,000 108,559 ---------- Applications Software -- 0.0% Microsoft Corp. Senior Notes 4.10% due 02/06/2037.............. 117,000 126,795 ---------- Auction Houses/Art Dealers -- 0.2% KAR Auction Services, Inc. Company Guar. Notes 5.13% due 06/01/2025*............. 725,000 754,000 ---------- Auto-Cars/Light Trucks -- 0.5% American Honda Finance Corp. Senior Notes 1.20% due 07/12/2019.............. 218,000 216,023 BMW US Capital LLC Company Guar. Notes 1.50% due 04/11/2019*............. 159,000 158,530 Daimler Finance North America LLC Company Guar. Notes 2.00% due 07/06/2021*............. 78,000 76,813
Principal Value Security Description Amount** (Note 2) Auto-Cars/Light Trucks (continued) Daimler Finance North America LLC Company Guar. Notes 2.30% due 01/06/2020*............ $ 162,000 $ 162,672 Daimler Finance North America LLC Company Guar. Notes 2.45% due 05/18/2020*............ 277,000 278,946 Ford Motor Co. Senior Notes 5.29% due 12/08/2046............. 126,000 131,469 Ford Motor Credit Co. LLC Senior Notes 2.02% due 05/03/2019............. 129,000 128,924 General Motors Co. Senior Notes 5.15% due 04/01/2038............. 91,000 93,301 Nissan Motor Acceptance Corp. Senior Notes 2.15% due 09/28/2020*............ 142,000 142,065 Nissan Motor Acceptance Corp. Senior Notes 2.65% due 07/13/2022*............ 252,000 252,643 Toyota Motor Credit Corp. Senior Notes 1.70% due 01/09/2019............. 336,000 336,078 ---------- 1,977,464 ---------- Auto-Heavy Duty Trucks -- 0.4% JB Poindexter & Co., Inc. Senior Notes 9.00% due 04/01/2022*............ 1,325,000 1,384,625 ---------- Auto/Truck Parts & Equipment-Original -- 0.0% Lear Corp. Senior Notes 3.80% due 09/15/2027............. 78,000 77,704 ---------- Banks-Commercial -- 0.7% BankUnited, Inc. Senior Notes 4.88% due 11/17/2025............. 366,000 381,235 Fifth Third Bank Senior Notes 1.63% due 09/27/2019............. 207,000 205,727 First Horizon National Corp. Senior Notes 3.50% due 12/15/2020............. 460,000 473,614 PNC Bank NA Senior Notes 2.00% due 05/19/2020............. 250,000 249,832 Regions Financial Corp. Senior Notes 2.75% due 08/14/2022............. 233,000 232,599 Regions Financial Corp. Sub. Notes 7.38% due 12/10/2037............. 631,000 850,107 Santander Holdings USA, Inc. Senior Notes 3.70% due 03/28/2022*............ 210,000 213,957
19 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Banks-Commercial (continued) Santander Holdings USA, Inc. Senior Notes 4.40% due 07/13/2027*................. $107,000 $ 109,406 ---------- 2,716,477 ---------- Banks-Fiduciary -- 0.2% Bank of New York Mellon Corp. Senior Notes 2.66% due 05/16/2023.................. 105,000 105,436 Citizens Financial Group, Inc. Sub. Notes 4.15% due 09/28/2022*................. 575,000 598,922 ---------- 704,358 ---------- Banks-Super Regional -- 0.4% Capital One Financial Corp. Sub. Notes 4.20% due 10/29/2025.................. 148,000 152,085 Wells Fargo & Co. Senior Notes 3.07% due 01/24/2023.................. 805,000 818,791 Wells Fargo & Co. Sub. Notes 4.40% due 06/14/2046.................. 27,000 28,034 Wells Fargo & Co. Sub. Notes 4.75% due 12/07/2046.................. 278,000 305,206 Wells Fargo & Co. Sub. Notes 4.90% due 11/17/2045.................. 35,000 39,041 ---------- 1,343,157 ---------- Batteries/Battery Systems -- 0.3% EnerSys Company Guar. Notes 5.00% due 04/30/2023*................. 896,000 931,840 ---------- Brewery -- 0.2% Anheuser-Busch InBev Finance, Inc. Company Guar. Notes 2.65% due 02/01/2021.................. 337,000 342,473 Anheuser-Busch InBev Finance, Inc. Company Guar. Notes 3.65% due 02/01/2026.................. 103,000 106,555 Anheuser-Busch InBev Finance, Inc. Company Guar. Notes 4.70% due 02/01/2036.................. 230,000 253,583 Anheuser-Busch InBev Finance, Inc. Company Guar. Notes 4.90% due 02/01/2046.................. 129,000 145,714 ---------- 848,325 ---------- Broadcast Services/Program -- 0.2% Clear Channel Worldwide Holdings, Inc. Company Guar. Notes 6.50% due 11/15/2022.................. 700,000 721,000 Discovery Communications LLC Company Guar. Notes 3.95% due 03/20/2028.................. 109,000 108,219
Principal Value Security Description Amount** (Note 2) Broadcast Services/Program (continued) Discovery Communications LLC Company Guar. Notes 5.00% due 09/20/2037......................... $ 79,000 $ 80,217 ---------- 909,436 ---------- Building & Construction Products-Misc. -- 0.2% Owens Corning Company Guar. Notes 4.30% due 07/15/2047......................... 300,000 286,169 Standard Industries, Inc. Senior Notes 5.00% due 02/15/2027*........................ 479,000 499,357 ---------- 785,526 ---------- Building & Construction-Misc. -- 0.3% Weekley Homes LLC/Weekley Finance Corp. Senior Notes 6.00% due 02/01/2023......................... 1,089,000 1,067,220 ---------- Building Products-Air & Heating -- 0.0% Lennox International, Inc. Company Guar. Notes 3.00% due 11/15/2023......................... 102,000 102,161 ---------- Building Products-Wood -- 0.3% Boise Cascade Co. Company Guar. Notes 5.63% due 09/01/2024*........................ 855,000 898,818 Masco Corp. Senior Notes 4.45% due 04/01/2025......................... 252,000 268,985 Masco Corp. Senior Notes 4.50% due 05/15/2047......................... 110,000 110,302 ---------- 1,278,105 ---------- Building-Heavy Construction -- 0.3% Tutor Perini Corp. Company Guar. Notes 6.88% due 05/01/2025*........................ 890,000 965,650 ---------- Building-Residential/Commercial -- 0.2% Lennar Corp. Company Guar. Notes 4.13% due 01/15/2022......................... 65,000 67,113 Lennar Corp. Company Guar. Notes 4.50% due 04/30/2024......................... 558,000 574,617 Toll Brothers Finance Corp. Company Guar. Notes 4.88% due 03/15/2027......................... 80,000 82,608 ---------- 724,338 ---------- Cable/Satellite TV -- 1.2% Block Communications, Inc. Senior Notes 6.88% due 02/15/2025*........................ 703,000 762,966 Charter Communications Operating LLC/Charter Communications Operating Capital Senior Sec. Notes 3.75% due 02/15/2028*........................ 340,000 332,706
20 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Cable/Satellite TV (continued) Charter Communications Operating LLC/ Charter Communications Operating Capital Senior Sec. Notes 4.20% due 03/15/2028*.................... $ 226,000 $ 228,691 Charter Communications Operating LLC/ Charter Communications Operating Capital Senior Sec. Notes 4.91% due 07/23/2025..................... 825,000 881,938 Charter Communications Operating LLC/ Charter Communications Operating Capital Senior Sec. Notes 5.38% due 05/01/2047*.................... 58,000 60,254 Charter Communications Operating LLC/ Charter Communications Operating Capital Senior Sec. Notes 6.38% due 10/23/2035..................... 138,000 161,408 CSC Holdings LLC Company Guar. Notes 5.50% due 04/15/2027*.................... 905,000 941,200 DISH DBS Corp. Company Guar. Notes 7.75% due 07/01/2026..................... 820,000 941,499 ---------- 4,310,662 ---------- Casino Hotels -- 0.2% Caesars Growth Properties Holdings LLC/ Caesars Growth Properties Finance, Inc. Sec. Notes 9.38% due 05/01/2022..................... 670,000 720,250 ---------- Cellular Telecom -- 1.1% Sprint Corp. Company Guar. Notes 7.25% due 09/15/2021..................... 834,000 926,782 Sprint Corp. Company Guar. Notes 7.88% due 09/15/2023..................... 2,557,000 2,966,120 United States Cellular Corp. Senior Notes 6.70% due 12/15/2033..................... 123,000 128,074 ---------- 4,020,976 ---------- Chemicals-Diversified -- 0.3% Eastman Chemical Co. Senior Notes 1.88% due 11/23/2026..................... EUR 310,000 380,255 Hexion, Inc. Senior Sec. Notes 6.63% due 04/15/2020..................... 695,000 622,025 ---------- 1,002,280 ---------- Chemicals-Specialty -- 0.0% Lubrizol Corp. Company Guar. Notes 6.50% due 10/01/2034..................... 133,000 175,001 ----------
Principal Value Security Description Amount** (Note 2) Circuit Boards -- 0.2% TTM Technologies, Inc. Company Guar. Notes 5.63% due 10/01/2025*..................... $ 630,000 $ 637,481 ---------- Coal -- 0.2% SunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp. Company Guar. Notes 7.50% due 06/15/2025*..................... 800,000 826,000 ---------- Coatings/Paint -- 0.1% RPM International, Inc. Senior Notes 3.75% due 03/15/2027...................... 68,000 68,924 Sherwin-Williams Co. Senior Notes 2.25% due 05/15/2020...................... 209,000 209,827 Sherwin-Williams Co. Senior Notes 2.75% due 06/01/2022...................... 179,000 180,205 ---------- 458,956 ---------- Commercial Services -- 0.1% Ecolab, Inc. Senior Notes 1.00% due 01/15/2024...................... EUR 250,000 297,939 Ecolab, Inc. Senior Notes 2.38% due 08/10/2022...................... 222,000 221,755 ---------- 519,694 ---------- Commercial Services-Finance -- 0.0% Automatic Data Processing, Inc. Senior Notes 2.25% due 09/15/2020...................... 94,000 94,921 ---------- Computer Services -- 0.7% Harland Clarke Holdings Corp. Senior Sec. Notes 8.38% due 08/15/2022*..................... 595,000 636,650 Harland Clarke Holdings Corp. Senior Notes 9.25% due 03/01/2021*..................... 975,000 1,004,250 IBM Credit LLC Senior Notes 1.63% due 09/06/2019...................... 271,000 270,792 Leidos Holdings, Inc. Senior Sec. Notes 4.45% due 12/01/2020...................... 679,000 $ 713,969 ---------- 2,625,661 ---------- Computers -- 0.9% Apple, Inc. Senior Notes 1.38% due 05/24/2029...................... EUR 470,000 555,243 Apple, Inc. Senior Notes 2.85% due 05/06/2021...................... 191,000 196,267 Apple, Inc. Senior Notes 2.85% due 02/23/2023...................... 181,000 185,338
21 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Computers (continued) Dell International LLC/EMC Corp. Senior Sec. Notes 8.35% due 07/15/2046*....................... $ 135,000 $ 173,385 Diamond 1 Finance Corp./Diamond 2 Finance Corp. Senior Sec. Notes 6.02% due 06/15/2026*....................... 1,475,000 1,638,061 Diamond 1 Finance Corp./Diamond 2 Finance Corp. Senior Sec. Notes 8.10% due 07/15/2036*....................... 393,000 491,839 Hewlett Packard Enterprise Co. Senior Notes 6.20% due 10/15/2035........................ 205,000 220,088 ---------- 3,460,221 ---------- Containers-Metal/Glass -- 0.4% Crown Cork & Seal Co., Inc. Company Guar. Notes 7.38% due 12/15/2026........................ 667,000 783,725 Owens-Brockway Glass Container, Inc. Company Guar. Notes 5.38% due 01/15/2025*....................... 565,000 606,669 ---------- 1,390,394 ---------- Containers-Paper/Plastic -- 0.2% Multi-Color Corp. Company Guar. Notes 6.13% due 12/01/2022*....................... 546,000 572,754 WestRock Co. Company Guar. Notes 3.38% due 09/15/2027*....................... 161,000 160,362 ---------- 733,116 ---------- Cosmetics & Toiletries -- 0.2% First Quality Finance Co., Inc. Company Guar. Notes 5.00% due 07/01/2025*....................... 548,000 565,125 Procter & Gamble Co. Senior Notes 2.30% due 02/06/2022........................ 132,000 133,023 ---------- 698,148 ---------- Data Processing/Management -- 0.2% Fidelity National Information Services, Inc. Senior Notes 1.10% due 07/15/2024........................ EUR 450,000 529,233 Fidelity National Information Services, Inc. Senior Notes 4.50% due 08/15/2046........................ 84,000 86,954 ---------- 616,187 ---------- Distribution/Wholesale -- 0.2% H&E Equipment Services, Inc. Company Guar. Notes 5.63% due 09/01/2025*....................... 625,000 659,375 ----------
Principal Value Security Description Amount** (Note 2) Diversified Banking Institutions -- 2.1% Bank of America Corp. Senior Notes 2.37% due 07/21/2021..... $146,000 $146,011 Bank of America Corp. Senior Notes 3.59% due 07/21/2028..... 147,000 148,427 Bank of America Corp. Sub. Notes 4.18% due 11/25/2027..... 605,000 627,068 Citigroup, Inc. Senior Notes 2.88% due 07/24/2023..... 229,000 229,291 Citigroup, Inc. Senior Notes 3.67% due 07/24/2028..... 129,000 130,263 Citigroup, Inc. Sub. Notes 4.40% due 06/10/2025..... 396,000 416,889 Citigroup, Inc. Sub. Notes 4.45% due 09/29/2027..... 453,000 478,158 Citigroup, Inc. Sub. Notes 6.00% due 10/31/2033..... 108,000 130,973 Goldman Sachs Group, Inc. Senior Notes 2.13% due 09/30/2024..... EUR 400,000 500,560 Goldman Sachs Group, Inc. Senior Notes 2.63% due 08/19/2020..... EUR 275,000 348,270 Goldman Sachs Group, Inc. Senior Notes 2.91% due 06/05/2023..... 222,000 222,176 Goldman Sachs Group, Inc. Senior Notes 3.63% due 01/22/2023..... 98,000 101,539 Goldman Sachs Group, Inc. Senior Notes 6.13% due 02/15/2033..... 338,000 424,475 Goldman Sachs Group, Inc. Sub. Notes 6.75% due 10/01/2037..... 256,000 337,739 JPMorgan Chase & Co. Senior Notes 2.55% due 03/01/2021..... 240,000 242,400 JPMorgan Chase & Co. Senior Notes 2.70% due 05/18/2023..... 28,000 28,007 JPMorgan Chase & Co. Senior Notes 3.20% due 01/25/2023..... 307,000 314,853 JPMorgan Chase & Co. Senior Notes 3.88% due 07/24/2038..... 432,000 435,512 Morgan Stanley Senior Notes 1.75% due 03/11/2024..... EUR 350,000 431,966
22 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Diversified Banking Institutions (continued) Morgan Stanley Senior Notes 2.38% due 03/31/2021................ EUR 350,000 $ 444,395 Morgan Stanley Senior Notes 2.75% due 05/19/2022................ 413,000 415,285 Morgan Stanley Senior Notes 3.59% due 07/22/2028................ 140,000 140,522 Morgan Stanley Senior Notes 3.97% due 07/22/2038................ 108,000 108,617 Morgan Stanley Sub. Notes 4.10% due 05/22/2023................ 308,000 322,054 Morgan Stanley Sub. Notes 5.00% due 11/24/2025................ 450,000 493,189 ---------- 7,618,639 ---------- Diversified Financial Services -- 0.1% USAA Capital Corp. Senior Notes 2.13% due 06/03/2019*............... 270,000 270,916 ---------- Diversified Manufacturing Operations -- 0.2% Illinois Tool Works, Inc. Senior Notes 2.65% due 11/15/2026................ 101,000 98,508 Textron, Inc. Senior Notes 3.38% due 03/01/2028................ 215,000 213,463 Textron, Inc. Senior Notes 4.00% due 03/15/2026................ 157,000 163,838 Trinity Industries, Inc. Company Guar. Notes 4.55% due 10/01/2024................ 184,000 185,965 ---------- 661,774 ---------- E-Commerce/Products -- 0.0% Amazon.com, Inc. Senior Notes 3.88% due 08/22/2037*............... 100,000 101,768 ---------- Electric Products-Misc. -- 0.1% WESCO Distribution, Inc. Company Guar. Notes 5.38% due 06/15/2024................ 451,000 475,805 ---------- Electric-Distribution -- 0.2% NextEra Energy Operating Partners LP Company Guar. Notes 4.25% due 09/15/2024*............... 482,000 492,242 NextEra Energy Operating Partners LP Company Guar. Notes 4.50% due 09/15/2027*............... 262,000 266,913 ---------- 759,155 ----------
Principal Value Security Description Amount** (Note 2) Electric-Generation -- 0.1% Basin Electric Power Cooperative 1st Mtg. Notes 4.75% due 04/26/2047*.............. $ 322,000 $ 348,474 ---------- Electric-Integrated -- 0.7% Dominion Energy, Inc. Junior Sub. Notes 2.58% due 07/01/2020............... 105,000 105,876 Dominion Resources, Inc. Junior Sub. Notes 2.96% due 07/01/2019............... 67,000 67,963 Dominion Resources, Inc. Senior Notes 5.25% due 08/01/2033............... 405,000 463,573 Duke Energy Progress LLC 1st Mtg. Notes 2.80% due 05/15/2022............... 157,000 160,132 Exelon Corp. Junior Sub. Notes 3.50% due 06/01/2022............... 194,000 199,838 FirstEnergy Corp. Senior Notes 3.90% due 07/15/2027............... 216,000 219,356 FirstEnergy Corp. Senior Notes 4.85% due 07/15/2047............... 111,000 116,489 FirstEnergy Corp. Senior Notes 7.38% due 11/15/2031............... 283,000 376,483 Georgia Power Co. Senior Notes 2.00% due 09/08/2020............... 136,000 135,603 Massachusetts Electric Co. Notes 4.00% due 08/15/2046*.............. 264,000 268,164 Pacific Gas & Electric Co. Senior Notes 4.00% due 12/01/2046............... 167,000 175,034 South Carolina Electric & Gas Co. 1st Mtg. Bonds 5.10% due 06/01/2065............... 112,000 129,920 Trans-Allegheny Interstate Line Co. Senior Notes 3.85% due 06/01/2025*.............. 20,000 20,912 ---------- 2,439,343 ---------- Electronic Components-Misc. -- 0.0% Corning, Inc. Senior Notes 1.50% due 05/08/2018............... 124,000 123,843 ---------- Electronic Components-Semiconductors -- 0.1% Intel Corp. Senior Notes 2.35% due 05/11/2022............... 449,000 452,206 ---------- Electronic Parts Distribution -- 0.2% Ingram Micro, Inc. Senior Notes 5.45% due 12/15/2024............... 615,000 631,229 ----------
23 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Electronic Security Devices -- 0.0% Allegion US Holding Co., Inc. Company Guar. Notes 3.55% due 10/01/2027............... $ 110,000 $ 109,047 ---------- Energy-Alternate Sources -- 0.5% Pattern Energy Group, Inc. Company Guar. Notes 5.88% due 02/01/2024*.............. 960,000 1,012,800 TerraForm Power Operating LLC Company Guar. Notes 6.38% due 02/01/2023*.............. 650,000 676,000 ---------- 1,688,800 ---------- Enterprise Software/Service -- 0.6% Donnelley Financial Solutions, Inc. Company Guar. Notes 8.25% due 10/15/2024............... 1,351,000 1,445,570 Oracle Corp. Senior Notes 1.90% due 09/15/2021............... 219,000 217,402 Oracle Corp. Senior Notes 3.85% due 07/15/2036............... 376,000 389,137 Oracle Corp. Senior Notes 3.90% due 05/15/2035............... 51,000 53,485 ---------- 2,105,594 ---------- Finance-Auto Loans -- 0.6% Ally Financial, Inc. Sub. Notes 5.75% due 11/20/2025............... 1,385,000 1,501,617 Credit Acceptance Corp. Company Guar. Notes 7.38% due 03/15/2023............... 651,000 688,432 ---------- 2,190,049 ---------- Finance-Consumer Loans -- 0.7% Enova International, Inc. Company Guar. Notes 8.50% due 09/01/2024*.............. 955,000 953,806 Enova International, Inc. Company Guar. Notes 9.75% due 06/01/2021............... 101,000 106,555 Navient Corp. Senior Notes 5.63% due 08/01/2033............... 611,000 527,476 Springleaf Finance Corp. Company Guar. Notes 6.13% due 05/15/2022............... 855,000 905,488 ---------- 2,493,325 ---------- Finance-Credit Card -- 0.4% Alliance Data Systems Corp. Company Guar. Notes 5.88% due 11/01/2021*.............. 750,000 780,000 American Express Co. Senior Notes 2.50% due 08/01/2022............... 522,000 521,402 ---------- 1,301,402 ----------
Principal Value Security Description Amount** (Note 2) Finance-Investment Banker/Broker -- 0.3% E*TRADE Financial Corp. Senior Notes 3.80% due 08/24/2027.............................. $ 56,000 $ 56,670 Lehman Brothers Holdings, Inc. Escrow Notes 6.75% due 12/28/2017+(3)(4)....................... 280,000 28 Lehman Brothers Holdings, Inc. Escrow Notes 7.50% due 05/11/2038+(3)(4)....................... 361,000 36 LPL Holdings, Inc. Company Guar. Notes 5.75% due 09/15/2025*............................. 740,000 767,158 TD Ameritrade Holding Corp. Senior Notes 2.95% due 04/01/2022.............................. 151,000 154,106 -------- 977,998 -------- Finance-Leasing Companies -- 0.1% International Lease Finance Corp. Senior Notes 5.88% due 08/15/2022.............................. 145,000 162,360 Washington Prime Group LP Senior Notes 5.95% due 08/15/2024.............................. 104,000 105,984 -------- 268,344 -------- Finance-Mortgage Loan/Banker -- 0.2% Quicken Loans, Inc. Company Guar. Notes 5.75% due 05/01/2025*............................. 850,000 892,500 -------- Finance-Other Services -- 0.1% National Rural Utilities Cooperative Finance Corp. Collateral Trust Bonds 2.00% due 01/27/2020.............................. 207,000 207,344 National Rural Utilities Cooperative Finance Corp. Collateral Trust Bonds 2.30% due 11/01/2020.............................. 90,000 90,725 National Rural Utilities Cooperative Finance Corp. Senior Notes 2.30% due 09/15/2022.............................. 150,000 148,982 National Rural Utilities Cooperative Finance Corp. Collateral Trust Notes 2.40% due 04/25/2022.............................. 91,000 91,560 -------- 538,611 -------- Food-Meat Products -- 0.0% Smithfield Foods, Inc. Senior Notes 2.65% due 10/03/2021*............................. 84,000 83,915 Smithfield Foods, Inc. Company Guar. Notes 4.25% due 02/01/2027*............................. 58,000 59,960 -------- 143,875 -------- Food-Misc./Diversified -- 0.1% Kraft Heinz Foods Co. Sec. Notes 4.88% due 02/15/2025*............................. 216,000 230,853 --------
24 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Food-Retail -- 0.3% Albertsons Cos. LLC/Safeway, Inc./New Albertson's, Inc./Albertson's LLC Company Guar. Notes 5.75% due 03/15/2025....................... $ 950,000 $ 836,000 Kroger Co. Senior Notes 4.65% due 01/15/2048....................... 219,000 211,827 ---------- 1,047,827 ---------- Food-Wholesale/Distribution -- 0.1% C&S Group Enterprises LLC Senior Sec. Notes 5.38% due 07/15/2022*...................... 475,000 470,250 ---------- Gambling (Non-Hotel) -- 0.4% Mohegan Gaming & Entertainment Company Guar. Notes 7.88% due 10/15/2024*...................... 630,000 669,375 Scientific Games International, Inc. Company Guar. Notes 10.00% due 12/01/2022...................... 565,000 625,738 Waterford Gaming LLC/Waterford Gaming Financial Corp. Escrow Notes 8.63% due 09/15/2014*+(3)(4)............... 478,062 7,075 ---------- 1,302,188 ---------- Gas-Distribution -- 0.1% Dominion Gas Holdings LLC Senior Notes 4.80% due 11/01/2043....................... 136,000 146,843 NiSource Finance Corp. Company Guar. Notes 3.49% due 05/15/2027....................... 93,000 94,134 NiSource Finance Corp. Company Guar. Notes 4.38% due 05/15/2047....................... 72,000 75,543 Sempra Energy Senior Notes 3.25% due 06/15/2027....................... 55,000 54,317 ---------- 370,837 ---------- Hazardous Waste Disposal -- 0.2% Clean Harbors, Inc. Company Guar. Notes 5.13% due 06/01/2021....................... 543,000 551,650 ---------- Hotels/Motels -- 0.2% Hilton Grand Vacations Borrower LLC/Hilton Grand Vacations Borrower, Inc. Company Guar. Notes 6.13% due 12/01/2024*...................... 567,000 621,716 ---------- Independent Power Producers -- 0.2% Calpine Corp. Senior Sec. Notes 5.25% due 06/01/2026*...................... 625,000 621,875 NRG Yield Operating LLC Company Guar. Notes 5.00% due 09/15/2026....................... 275,000 286,000 ---------- 907,875 ----------
Principal Value Security Description Amount** (Note 2) Industrial Gases -- 0.0% Airgas, Inc. Company Guar. Notes 3.05% due 08/01/2020................... $ 62,000 $ 63,416 ---------- Insurance-Life/Health -- 0.1% Aflac, Inc. Senior Notes 4.00% due 10/15/2046................... 108,000 107,759 Brighthouse Financial, Inc. Senior Notes 4.70% due 06/22/2047*.................. 265,000 258,868 Pacific LifeCorp Senior Notes 6.00% due 02/10/2020*.................. 159,000 171,432 ---------- 538,059 ---------- Insurance-Multi-line -- 0.3% Assurant, Inc. Senior Notes 6.75% due 02/15/2034................... 168,000 205,804 MetLife, Inc. Senior Notes 4.60% due 05/13/2046................... 102,000 112,263 Metropolitan Life Global Funding I Sec. Notes 2.30% due 04/10/2019*.................. 809,000 814,639 ---------- 1,132,706 ---------- Insurance-Mutual -- 0.2% Massachusetts Mutual Life Insurance Co. Sub. Notes 4.50% due 04/15/2065*.................. 80,000 81,680 Massachusetts Mutual Life Insurance Co. Sub. Notes 4.90% due 04/01/2077*.................. 34,000 36,831 MassMutual Global Funding II Senior Sec. Notes 2.50% due 10/17/2022*.................. 145,000 145,207 New York Life Global Funding Sec. Notes 1.95% due 09/28/2020*.................. 377,000 374,352 ---------- 638,070 ---------- Insurance-Reinsurance -- 0.0% Berkshire Hathaway, Inc. Senior Notes 1.15% due 08/15/2018................... 148,000 147,565 ---------- Internet Connectivity Services -- 0.4% Cogent Communications Group, Inc. Senior Sec. Notes 5.38% due 03/01/2022*.................. 687,000 722,209 Zayo Group LLC/Zayo Capital, Inc. Company Guar. Notes 6.38% due 05/15/2025................... 685,000 738,176 ---------- 1,460,385 ---------- Internet Content-Entertainment -- 0.3% Netflix, Inc. Senior Notes 5.88% due 02/15/2025................... 851,000 930,781 ----------
25 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Investment Management/Advisor Services -- 0.3% Drawbridge Special Opportunities Fund LP/ Drawbridge Special Opportunities Finance Senior Notes 5.00% due 08/01/2021*.................... $1,106,000 $1,127,219 ---------- Machinery-Construction & Mining -- 0.2% Caterpillar Financial Services Corp. Senior Notes 1.85% due 09/04/2020..................... 225,000 223,962 Caterpillar Financial Services Corp. Senior Notes 3.30% due 06/09/2024..................... 228,000 235,638 Terex Corp. Company Guar. Notes 5.63% due 02/01/2025*.................... 420,000 442,575 ---------- 902,175 ---------- Machinery-Farming -- 0.0% CNH Industrial Capital LLC Company Guar. Notes 4.38% due 04/05/2022..................... 103,000 108,150 ---------- Machinery-General Industrial -- 0.0% Roper Technologies, Inc. Senior Notes 3.80% due 12/15/2026..................... 56,000 57,644 ---------- Marine Services -- 0.3% Great Lakes Dredge & Dock Corp. Company Guar. Notes 8.00% due 05/15/2022..................... 905,000 938,937 ---------- Medical Labs & Testing Services -- 0.0% Laboratory Corp. of America Holdings Senior Notes 3.20% due 02/01/2022..................... 65,000 66,528 Laboratory Corp. of America Holdings Senior Notes 3.25% due 09/01/2024..................... 95,000 95,277 ---------- 161,805 ---------- Medical Products -- 0.3% Becton Dickinson and Co. Senior Notes 0.37% due 06/06/2019..................... EUR 335,000 397,892 Becton Dickinson and Co. Senior Notes 1.90% due 12/15/2026..................... EUR 300,000 356,419 Becton Dickinson and Co. Senior Notes 3.70% due 06/06/2027..................... 365,000 369,048 ---------- 1,123,359 ---------- Medical-Biomedical/Gene -- 0.1% Amgen, Inc. Senior Notes 2.65% due 05/11/2022..................... 192,000 193,568 Baxalta, Inc. Company Guar. Notes 3.60% due 06/23/2022..................... 162,000 167,861
Principal Value Security Description Amount** (Note 2) Medical-Biomedical/Gene (continued) Celgene Corp. Senior Notes 3.63% due 05/15/2024......................... $ 154,000 $ 160,435 ---------- 521,864 ---------- Medical-Drugs -- 0.2% Endo Finance LLC/Endo Finco, Inc. Company Guar. Notes 5.38% due 01/15/2023*........................ 500,000 407,500 Forest Laboratories LLC Company Guar. Notes 4.88% due 02/15/2021*........................ 122,000 131,011 Johnson & Johnson Senior Notes 3.63% due 03/03/2037......................... 58,000 60,271 ---------- 598,782 ---------- Medical-Generic Drugs -- 0.1% Actavis, Inc. Company Guar. Notes 3.25% due 10/01/2022......................... 221,000 226,772 ---------- Medical-HMO -- 0.2% Cigna Corp. Senior Notes 3.88% due 10/15/2047......................... 226,000 225,221 UnitedHealth Group, Inc. Senior Notes 1.40% due 12/15/2017......................... 213,000 212,970 UnitedHealth Group, Inc. Senior Notes 2.13% due 03/15/2021......................... 155,000 154,983 ---------- 593,174 ---------- Medical-Hospitals -- 0.9% CHS/Community Health Systems, Inc. Senior Sec. Notes 6.25% due 03/31/2023......................... 560,000 550,200 HCA, Inc. Senior Sec. Notes 5.25% due 06/15/2026......................... 719,000 774,723 HCA, Inc. Company Guar. Notes 7.50% due 11/15/2095......................... 822,000 848,715 Tenet Healthcare Corp. Senior Sec. Notes 4.63% due 07/15/2024*........................ 1,044,000 1,034,562 ---------- 3,208,200 ---------- Metal Processors & Fabrication -- 0.4% Grinding Media, Inc./Moly-Cop AltaSteel, Ltd. Senior Sec. Notes 7.38% due 12/15/2023*........................ 805,000 873,425 Novelis Corp. Company Guar. Notes 5.88% due 09/30/2026*........................ 300,000 304,500 Novelis Corp. Company Guar. Notes 6.25% due 08/15/2024*........................ 396,000 412,909 ---------- 1,590,834 ----------
26 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Metal-Diversified -- 0.0% Glencore Funding LLC Company Guar. Notes 4.00% due 03/27/2027*...... $ 148,000 $148,896 -------- Multimedia -- 0.1% Time Warner, Inc. Company Guar. Notes 4.85% due 07/15/2045....... 111,000 112,807 Viacom, Inc. Senior Notes 5.25% due 04/01/2044....... 56,000 53,632 Walt Disney Co. Senior Notes 1.65% due 01/08/2019....... 76,000 76,053 -------- 242,492 -------- Networking Products -- 0.1% Cisco Systems, Inc. Senior Notes 2.13% due 03/01/2019....... 243,000 244,834 Cisco Systems, Inc. Senior Notes 2.20% due 02/28/2021....... 173,000 174,003 -------- 418,837 -------- Non-Hazardous Waste Disposal -- 0.1% Wrangler Buyer Corp. Senior Notes 6.00% due 10/01/2025*...... 345,000 351,038 -------- Oil Companies-Exploration & Production -- 2.0% Anadarko Petroleum Corp. Senior Notes 6.45% due 09/15/2036....... 257,000 304,030 Carrizo Oil & Gas, Inc. Company Guar. Notes 6.25% due 04/15/2023....... 575,000 583,625 Concho Resources, Inc. Company Guar. Notes 3.75% due 10/01/2027....... 87,000 87,387 Concho Resources, Inc. Company Guar. Notes 4.38% due 01/15/2025....... 214,000 225,235 Concho Resources, Inc. Company Guar. Notes 4.88% due 10/01/2047....... 88,000 91,832 Continental Resources, Inc. Company Guar. Notes 5.00% due 09/15/2022....... 590,000 599,587 Denbury Resources, Inc. Sec. Notes 9.00% due 05/15/2021*...... 455,000 444,194 Devon Energy Corp. Senior Notes 5.00% due 06/15/2045....... 74,000 77,980 Devon Energy Corp. Senior Notes 5.60% due 07/15/2041....... 75,000 82,080
Principal Value Security Description Amount** (Note 2) Oil Companies-Exploration & Production (continued) EP Energy LLC/Everest Acquisition Finance, Inc. Senior Sec. Notes 8.00% due 11/29/2024*.......................... $ 810,000 $ 818,100 Hess Corp. Senior Notes 4.30% due 04/01/2027........................... 58,000 57,489 Hess Corp. Senior Notes 5.60% due 02/15/2041........................... 191,000 191,375 Hilcorp Energy I LP/Hilcorp Finance Co. Senior Notes 5.00% due 12/01/2024*.......................... 1,060,000 1,038,800 Marathon Oil Corp. Senior Notes 4.40% due 07/15/2027........................... 156,000 159,077 Marathon Oil Corp. Senior Notes 6.60% due 10/01/2037........................... 206,000 236,987 Newfield Exploration Co. Senior Notes 5.38% due 01/01/2026........................... 559,000 587,649 RSP Permian, Inc. Company Guar. Notes 5.25% due 01/15/2025*.......................... 600,000 609,000 Sanchez Energy Corp. Company Guar. Notes 6.13% due 01/15/2023........................... 706,000 603,630 WPX Energy, Inc. Senior Notes 7.50% due 08/01/2020........................... 503,000 547,013 ---------- 7,345,070 ---------- Oil Companies-Integrated -- 0.2% Chevron Corp. Senior Notes 1.96% due 03/03/2020........................... 135,000 135,528 Chevron Corp. Senior Bonds 1.99% due 03/03/2020........................... 394,000 395,483 Chevron Corp. Senior Notes 2.50% due 03/03/2022........................... 94,000 94,781 Exxon Mobil Corp. Senior Notes 1.31% due 03/06/2018........................... 151,000 150,920 ---------- 776,712 ---------- Oil Field Machinery & Equipment -- 0.2% Forum Energy Technologies, Inc. Company Guar. Notes 6.25% due 10/01/2021........................... 610,000 611,525 ---------- Oil Refining & Marketing -- 0.5% Murphy Oil USA, Inc. Company Guar. Notes 5.63% due 05/01/2027........................... 556,000 597,700 PBF Holding Co LLC/PBF Finance Corp. Company Guar. Notes 7.25% due 06/15/2025*.......................... 1,155,000 1,180,987 ---------- 1,778,687 ----------
27 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Oil-Field Services -- 0.2% Bristow Group, Inc. Company Guar. Notes 6.25% due 10/15/2022.......................... $ 961,000 $ 672,700 Halliburton Co. Senior Notes 4.85% due 11/15/2035.......................... 56,000 60,710 ---------- 733,410 ---------- Paper & Related Products -- 0.4% Domtar Corp. Company Guar. Notes 6.75% due 02/15/2044.......................... 197,000 217,968 Georgia-Pacific LLC Senior Notes 3.60% due 03/01/2025*......................... 372,000 384,414 Georgia-Pacific LLC Senior Notes 3.73% due 07/15/2023*......................... 508,000 535,522 Georgia-Pacific LLC Company Guar. Notes 5.40% due 11/01/2020*......................... 208,000 227,926 International Paper Co. Senior Notes 4.40% due 08/15/2047.......................... 41,000 41,472 International Paper Co. Senior Notes 5.00% due 09/15/2035.......................... 80,000 88,736 ---------- 1,496,038 ---------- Pharmacy Services -- 0.1% Express Scripts Holding Co. Company Guar. Notes 3.00% due 07/15/2023.......................... 81,000 81,098 Express Scripts Holding Co. Company Guar. Notes 4.80% due 07/15/2046.......................... 124,000 130,936 ---------- 212,034 ---------- Pipelines -- 2.7% Antero Midstream Partners LP/Antero Midstream Finance Corp. Company Guar. Notes 5.38% due 09/15/2024.......................... 507,000 524,745 Cheniere Corpus Christi Holdings LLC Senior Sec. Notes 7.00% due 06/30/2024.......................... 1,240,000 1,413,600 Cheniere Energy Partners LP Senior Sec. Notes 5.25% due 10/01/2025*......................... 702,000 717,795 Columbia Pipeline Group, Inc. Company Guar. Notes 2.45% due 06/01/2018.......................... 45,000 45,155 Enable Midstream Partners LP Senior Notes 5.00% due 05/15/2044.......................... 123,000 119,741 Enbridge Energy Partners LP Senior Notes 7.38% due 10/15/2045.......................... 108,000 139,127
Principal Value Security Description Amount** (Note 2) Pipelines (continued) Energy Transfer Partners LP Senior Notes 4.90% due 03/15/2035............................... $ 87,000 $ 86,450 Energy Transfer Partners LP Senior Notes 6.05% due 06/01/2041............................... 22,000 23,766 Energy Transfer Partners LP Senior Notes 6.63% due 10/15/2036............................... 277,000 315,100 EnLink Midstream Partners LP Senior Notes 4.85% due 07/15/2026............................... 143,000 149,634 EnLink Midstream Partners LP Senior Notes 5.05% due 04/01/2045............................... 141,000 135,843 Genesis Energy LP/Genesis Energy Finance Corp. Company Guar. Notes 5.63% due 06/15/2024............................... 847,000 821,590 Genesis Energy LP/Genesis Energy Finance Corp. Company Guar. Notes 6.00% due 05/15/2023............................... 532,000 528,010 Holly Energy Partners LP/Holly Energy Finance Corp. Company Guar. Notes 6.00% due 08/01/2024*.............................. 672,000 704,760 NGPL PipeCo LLC Senior Notes 4.38% due 08/15/2022*.............................. 174,000 180,525 ONEOK, Inc. Company Guar. Notes 4.00% due 07/13/2027............................... 176,000 178,182 Phillips 66 Partners LP Senior Notes 4.90% due 10/01/2046............................... 66,000 66,058 Sabine Pass Liquefaction LLC Senior Sec. Notes 5.00% due 03/15/2027............................... 112,000 119,457 SemGroup Corp. Company Guar. Notes 7.25% due 03/15/2026*.............................. 707,000 710,535 SemGroup Corp./Rose Rock Finance Corp. Company Guar. Notes 5.63% due 07/15/2022............................... 731,000 714,552 Summit Midstream Holdings LLC/Summit Midstream Finance Corp. Company Guar. Notes 5.50% due 08/15/2022............................... 742,000 745,710 Sunoco Logistics Partners Operations LP Company Guar. Notes 5.40% due 10/01/2047............................... 68,000 69,170 Tallgrass Energy Partners LP/Tallgrass Energy Finance Corp. Company Guar. Notes 5.50% due 09/15/2024*.............................. 823,000 845,632 Western Gas Partners LP Senior Notes 4.65% due 07/01/2026............................... 153,000 160,363
28 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Pipelines (continued) Williams Partners LP Senior Notes 3.75% due 06/15/2027...................... $121,000 $ 120,825 Williams Partners LP Senior Notes 5.10% due 09/15/2045...................... 260,000 273,284 ---------- 9,909,609 ---------- Platinum -- 0.2% Stillwater Mining Co. Company Guar. Notes 7.13% due 06/27/2025*..................... 560,000 574,017 ---------- Poultry -- 0.2% Pilgrim's Pride Corp. Senior Notes 5.88% due 09/30/2027*..................... 635,000 648,494 ---------- Power Converter/Supply Equipment -- 0.1% Hubbell, Inc. Senior Notes 3.15% due 08/15/2027...................... 77,000 76,959 Hubbell, Inc. Senior Notes 3.35% due 03/01/2026...................... 139,000 140,713 ---------- 217,672 ---------- Precious Metals -- 0.2% Coeur Mining, Inc. Company Guar. Notes 5.88% due 06/01/2024...................... 730,000 730,000 ---------- Publishing-Books -- 0.2% McGraw-Hill Global Education Holdings LLC/ McGraw-Hill Global Education Finance Senior Notes 7.88% due 05/15/2024*..................... 630,000 621,338 ---------- Racetracks -- 0.1% GLP Capital LP/GLP Financing II, Inc. Company Guar. Notes 5.38% due 04/15/2026...................... 490,000 534,713 ---------- Radio -- 0.2% Sirius XM Radio, Inc. Company Guar. Notes 5.38% due 07/15/2026*..................... 795,000 836,737 ---------- Real Estate Investment Trusts -- 1.5% CTR Partnership LP/CareTrust Capital Corp. Company Guar. Notes 5.25% due 06/01/2025...................... 869,000 894,288 ESH Hospitality, Inc. Company Guar. Notes 5.25% due 05/01/2025*..................... 635,000 656,431 GEO Group, Inc. Company Guar. Notes 6.00% due 04/15/2026...................... 595,000 625,494 Goodman US Finance Three LLC Company Guar. Notes 3.70% due 03/15/2028*..................... 78,000 77,743
Principal Value Security Description Amount** (Note 2) Real Estate Investment Trusts (continued) Goodman US Finance Three LLC Company Guar. Notes 4.50% due 10/15/2037*.......................... $ 77,000 $ 77,960 Iron Mountain, Inc. Company Guar. Notes 4.88% due 09/15/2027*.......................... 635,000 644,525 iStar, Inc. Senior Notes 5.25% due 09/15/2022........................... 692,000 702,380 iStar, Inc. Senior Notes 6.00% due 04/01/2022........................... 310,000 320,850 MPT Operating Partnership LP/MPT Finance Corp. Company Guar. Notes 5.00% due 10/15/2027........................... 769,000 788,225 Simon Property Group LP Senior Notes 4.25% due 11/30/2046........................... 31,000 31,650 Starwood Property Trust, Inc. Senior Notes 5.00% due 12/15/2021........................... 818,000 853,787 ---------- 5,673,333 ---------- Real Estate Management/Services -- 0.5% Kennedy-Wilson, Inc. Company Guar. Notes 5.88% due 04/01/2024........................... 925,000 952,750 Realogy Group LLC/Realogy Co-Issuer Corp. Company Guar. Notes 4.88% due 06/01/2023*.......................... 865,000 888,787 ---------- 1,841,537 ---------- Rental Auto/Equipment -- 0.4% Herc Rentals, Inc. Sec. Notes 7.75% due 06/01/2024*.......................... 605,000 656,425 United Rentals North America, Inc. Company Guar. Notes 4.88% due 01/15/2028........................... 635,000 638,175 ---------- 1,294,600 ---------- Resort/Theme Parks -- 0.2% Six Flags Entertainment Corp. Company Guar. Notes 4.88% due 07/31/2024*.......................... 710,000 722,425 ---------- Retail-Appliances -- 0.2% Conn's, Inc. Company Guar. Notes 7.25% due 07/15/2022........................... 858,000 836,550 ---------- Retail-Auto Parts -- 0.0% O'Reilly Automotive, Inc. Senior Notes 3.60% due 09/01/2027........................... 134,000 133,913 ---------- Retail-Automobile -- 0.2% Lithia Motors, Inc. Company Guar. Notes 5.25% due 08/01/2025*.......................... 613,000 636,754 ----------
29 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Retail-Discount -- 0.1% Costco Wholesale Corp. Senior Notes 2.25% due 02/15/2022................. $ 260,000 $ 260,905 ---------- Retail-Drug Store -- 0.1% CVS Pass-Through Trust Pass-Through Certs. 4.70% due 01/10/2036*................ 136,217 146,060 CVS Pass-Through Trust Pass-Through Certs. 5.77% due 01/10/2033*................ 110,052 123,813 CVS Pass-Through Trust Pass-Through Certs. 5.93% due 01/10/2034*................ 176,136 201,145 ---------- 471,018 ---------- Retail-Misc./Diversified -- 0.1% FirstCash, Inc. Company Guar. Notes 5.38% due 06/01/2024*................ 470,000 489,975 ---------- Retail-Office Supplies -- 0.3% Arch Merger Sub, Inc. Senior Notes 8.50% due 09/15/2025*................ 1,225,000 1,191,312 ---------- Retail-Restaurants -- 0.5% Brinker International, Inc. Company Guar. Notes 5.00% due 10/01/2024*................ 950,000 941,687 Golden Nugget, Inc. Company Guar. Notes 8.75% due 10/01/2025*................ 715,000 727,513 ---------- 1,669,200 ---------- Rubber/Plastic Products -- 0.0% Venture Holdings Co. LLC Company Guar. Notes 11.00% due 06/01/2007 +(3)(4)(5)(6).. 100,000 0 ---------- Satellite Telecom -- 0.2% Hughes Satellite Systems Corp. Company Guar. Notes 6.63% due 08/01/2026................. 705,000 754,350 ---------- Savings & Loans/Thrifts -- 0.5% Astoria Financial Corp. Senior Notes 3.50% due 06/08/2020................. 158,000 159,579 First Niagara Financial Group, Inc. Senior Notes 6.75% due 03/19/2020................. 902,000 1,001,170 First Niagara Financial Group, Inc. Sub. Notes 7.25% due 12/15/2021................. 539,000 631,293 ---------- 1,792,042 ---------- Semiconductor Components-Integrated Circuits -- 0.0% QUALCOMM, Inc. Senior Notes 2.10% due 05/20/2020................. 164,000 165,249 ----------
Principal Value Security Description Amount** (Note 2) Semiconductor Equipment -- 0.0% Applied Materials, Inc. Senior Notes 4.35% due 04/01/2047............. $ 90,000 $ 96,310 ---------- Telecom Services -- 0.2% Embarq Corp. Senior Notes 8.00% due 06/01/2036............. 815,000 827,225 ---------- Telecommunication Equipment -- 0.1% Plantronics, Inc. Company Guar. Notes 5.50% due 05/31/2023*............ 417,000 432,638 ---------- Telephone-Integrated -- 0.9% AT&T, Inc. Senior Notes 2.85% due 02/14/2023............. 221,000 219,612 AT&T, Inc. Senior Notes 3.15% due 09/04/2036............. EUR 425,000 505,924 AT&T, Inc. Senior Notes 4.35% due 06/15/2045............. 227,000 208,345 AT&T, Inc. Senior Notes 4.50% due 05/15/2035............. 278,000 274,466 AT&T, Inc. Senior Notes 4.75% due 05/15/2046............. 25,000 24,042 AT&T, Inc. Senior Notes 4.90% due 08/14/2037............. 661,000 668,037 AT&T, Inc. Senior Notes 5.30% due 08/14/2058............. 269,000 271,920 CenturyLink, Inc. Senior Notes 5.63% due 04/01/2025............. 295,000 282,463 CenturyLink, Inc. Senior Notes 5.80% due 03/15/2022............. 301,000 300,007 Verizon Communications, Inc. Senior Notes 3.38% due 02/15/2025*............ 170,000 170,591 Verizon Communications, Inc. Senior Notes 4.40% due 11/01/2034............. 112,000 112,072 Verizon Communications, Inc. Senior Notes 4.67% due 03/15/2055............. 168,000 160,036 Verizon Communications, Inc. Senior Notes 5.25% due 03/16/2037............. 270,000 296,092 ---------- 3,493,607 ---------- Television -- 0.1% Belo Corp. Company Guar. Notes 7.75% due 06/01/2027............. 461,000 522,083 ----------
30 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Transport-Equipment & Leasing -- 0.1% GATX Corp. Senior Notes 3.25% due 09/15/2026.......................... $ 72,000 $ 70,926 GATX Corp. Senior Notes 3.85% due 03/30/2027.......................... 109,000 110,775 ------------ 181,701 ------------ Transport-Rail -- 0.0% Union Pacific Corp. Senior Notes 3.60% due 09/15/2037.......................... 149,000 150,778 ------------ Transport-Services -- 0.1% United Parcel Service, Inc. Senior Notes 2.35% due 05/16/2022.......................... 197,000 198,560 ------------ Travel Services -- 0.2% Sabre GLBL, Inc. Senior Sec. Notes 5.38% due 04/15/2023*......................... 610,000 632,143 ------------ Trucking/Leasing -- 0.0% Penske Truck Leasing Co. LP/PTL Finance Corp. Senior Notes 3.38% due 02/01/2022*......................... 95,000 97,543 ------------ Wire & Cable Products -- 0.1% General Cable Corp. Company Guar. Notes 5.75% due 10/01/2022.......................... 518,000 520,279 ------------ Wireless Equipment -- 0.3% ViaSat, Inc. Senior Notes 5.63% due 09/15/2025*......................... 950,000 955,985 ------------ Total U.S. Corporate Bonds & Notes (cost $141,253,790)........................... 145,308,588 ------------ FOREIGN CORPORATE BONDS & NOTES -- 19.6% Aerospace/Defense-Equipment -- 0.0% EADS Finance BV Company Guar. Notes 2.70% due 04/17/2023*......................... 160,000 161,594 ------------ Agricultural Chemicals -- 0.2% Consolidated Energy Finance SA Senior Notes 6.88% due 06/15/2025*......................... 730,000 765,588 ------------ Airport Development/Maintenance -- 0.1% Heathrow Funding, Ltd. Senior Sec. Notes 1.88% due 05/23/2022.......................... EUR 290,000 366,088 ------------ Appliances -- 0.1% Arcelik AS Senior Notes 5.00% due 04/03/2023.......................... 200,000 205,827 ------------ Auto-Cars/Light Trucks -- 0.3% Hyundai Capital Services, Inc. Senior Notes 3.00% due 08/29/2022*......................... 201,000 198,282
Principal Value Security Description Amount** (Note 2) Auto-Cars/Light Trucks -- 0.1% RCI Banque SA Senior Notes 2.25% due 03/29/2021................ EUR 350,000 $ 441,319 Volkswagen International Finance NV Company Guar. Notes 1.88% due 03/30/2027................ EUR 300,000 356,578 ---------- 996,179 ---------- Auto/Truck Parts & Equipment-Original -- 0.3% Delphi Jersey Holdings PLC Senior Notes 5.00% due 10/01/2025*............... 645,000 656,287 Tenedora Nemak SA de CV Senior Notes 5.50% due 02/28/2023................ 530,000 545,238 ---------- 1,201,525 ---------- Banks-Commercial -- 2.8% ABN AMRO Bank NV Senior Notes 2.50% due 11/29/2023................ EUR 200,000 264,440 ABN AMRO Bank NV Sub. Notes 7.13% due 07/06/2022................ EUR 360,000 546,689 Akbank Turk AS Senior Notes 5.13% due 03/31/2025................ 380,000 375,687 Banco de Credito del Peru Senior Notes 5.38% due 09/16/2020................ 200,000 218,000 Banco Macro SA Sub. Notes 6.75% due 11/04/2026*............... 200,000 210,578 Bank of China, Ltd. Sub. Notes 5.00% due 11/13/2024................ 540,000 580,410 Barclays Bank PLC Sub. Notes 6.63% due 03/30/2022................ EUR 200,000 291,365 BPCE SA Senior Notes 2.88% due 01/16/2024................ EUR 200,000 269,809 BPCE SA Sub. Notes 2.88% due 04/22/2026................ EUR 200,000 255,119 BPCE SA Sub. Notes 4.50% due 03/15/2025*............... 265,000 273,850 Canadian Imperial Bank of Commerce Senior Notes 2.10% due 10/05/2020................ 368,000 367,913 Credit Suisse AG Senior Notes 3.00% due 10/29/2021................ 254,000 260,782 Credit Suisse AG Sub. Notes 5.75% due 09/18/2025................ EUR 550,000 734,578 Danske Bank A/S Sub. Notes 3.88% due 10/04/2023................ EUR 300,000 367,482
31 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Banks-Commercial -- 0.1% HBOS PLC Sub. Notes 5.37% due 06/30/2021.................. EUR 600,000 $ 825,757 HSBC Bank PLC Sub. Notes 5.00% due 03/20/2023.................. GBP 400,000 545,094 ICICI Bank, Ltd. Senior Notes 5.75% due 11/16/2020.................. 200,000 217,804 ING Groep NV Senior Notes 0.75% due 03/09/2022.................. EUR 400,000 476,852 Intesa Sanpaolo SpA Senior Notes 1.13% due 01/14/2020.................. EUR 500,000 604,734 Intesa Sanpaolo SpA Sub. Notes 5.71% due 01/15/2026*................. 255,000 268,736 Mizuho Bank, Ltd. Company Guar. Notes 2.15% due 10/20/2018*................. 15,000 15,044 PKO Bank Polski SA Via PKO Finance AB Senior Notes 4.63% due 09/26/2022.................. 200,000 214,617 Santander Issuances SAU Company Guar. Notes 3.25% due 04/04/2026.................. EUR 300,000 381,364 Shinhan Bank Sub. Bonds 3.88% due 03/24/2026*................. 200,000 201,940 Standard Chartered PLC Sub. Notes 3.13% due 11/19/2024.................. EUR 350,000 448,775 Swedbank AB Sub. Notes 1.00% due 11/22/2027.................. EUR 600,000 705,986 Toronto-Dominion Bank Senior Notes 1.85% due 09/11/2020.................. 248,000 247,024 Union National Bank PJSC Senior Notes 2.75% due 10/05/2021.................. 200,000 198,144 Westpac Banking Corp. Sub. Notes 4.32% due 11/23/2031.................. 101,000 103,768 ----------- 10,472,341 ----------- Banks-Special Purpose -- 0.1% Nederlandse Waterschapsbank NV Senior Notes 1.13% due 01/28/2019.................. EUR 170,000 205,177 ----------- Beverages-Non-alcoholic -- 0.1% Coca-Cola Femsa SAB de CV Company Guar. Notes 2.38% due 11/26/2018.................. 292,000 293,955 ----------- Beverages-Wine/Spirits -- 0.1% Diageo Capital PLC Company Guar. Notes 5.75% due 10/23/2017.................. 262,000 262,631 -----------
Principal Value Security Description Amount** (Note 2) Brewery -- 0.1% Anheuser-Busch InBev SA/NV Company Guar. Notes 2.75% due 03/17/2036......................... EUR 250,000 $ 321,418 ---------- Building Societies -- 0.1% Nationwide Building Society Sub. Notes 2.00% due 07/25/2029......................... EUR 400,000 474,385 ---------- Building-Residential/Commercial -- 0.2% Mattamy Group Corp. Senior Notes 6.50% due 10/01/2025*........................ 632,000 647,800 ---------- Cable/Satellite TV -- 1.4% Altice Financing SA Senior Sec. Notes 7.50% due 05/15/2026*........................ 1,380,000 1,518,000 Altice Luxembourg SA Company Guar. Notes 7.63% due 02/15/2025*........................ 965,000 1,040,994 Numericable-SFR SA Senior Sec. Notes 7.38% due 05/01/2026*........................ 1,834,000 1,980,720 Ziggo Secured Finance BV Senior Sec. Notes 5.50% due 01/15/2027*........................ 800,000 819,752 ---------- 5,359,466 ---------- Cellular Telecom -- 0.4% C&W Senior Financing Designated Activity Co. Senior Notes 6.88% due 09/15/2027*........................ 667,000 693,680 Empresa Nacional de Telecomunicaciones SA Senior Notes 4.88% due 10/30/2024......................... 200,000 209,362 GTH Finance BV Company Guar. Notes 7.25% due 04/26/2023*........................ 200,000 226,888 VimpelCom Holdings BV Company Guar. Notes 5.95% due 02/13/2023......................... 200,000 217,200 ---------- 1,347,130 ---------- Chemicals-Diversified -- 0.5% Israel Chemicals, Ltd. Senior Notes 4.50% due 12/02/2024*........................ 200,000 206,500 LYB International Finance II BV Company Guar. Notes 3.50% due 03/02/2027......................... 151,000 150,190 NOVA Chemicals Corp. Senior Notes 5.00% due 05/01/2025*........................ 695,000 705,425 Trinseo Materials Operating SCA/Trinseo Materials Finance, Inc. Company Guar. Notes 5.38% due 09/01/2025*........................ 615,000 632,681 ---------- 1,694,796 ----------
32 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Computers-Memory Devices -- 0.2% Seagate HDD Cayman Company Guar. Notes 4.75% due 01/01/2025.................. $ 955,000 $ 929,666 ---------- Cruise Lines -- 0.3% NCL Corp., Ltd. Senior Notes 4.75% due 12/15/2021*................. 445,000 461,688 Silversea Cruise Finance, Ltd. Senior Sec. Notes 7.25% due 02/01/2025*................. 730,000 781,100 ---------- 1,242,788 ---------- Diversified Banking Institutions -- 2.0% Barclays PLC Sub. Notes 4.84% due 05/09/2028.................. 200,000 207,186 BNP Paribas SA Senior Bonds 1.50% due 11/17/2025.................. EUR 425,000 509,243 BNP Paribas SA Senior Notes 3.80% due 01/10/2024*................. 302,000 313,944 Credit Agricole SA Senior Notes 1.88% due 12/20/2026.................. EUR 400,000 489,924 Credit Agricole SA Senior Notes 4.13% due 01/10/2027*................. 262,000 273,842 Credit Suisse Group AG Senior Notes 4.28% due 01/09/2028*................. 448,000 466,644 HSBC Holdings PLC Sub. Notes 3.00% due 06/30/2025.................. EUR 300,000 392,598 HSBC Holdings PLC Senior Notes 3.26% due 03/13/2023.................. 200,000 204,135 HSBC Holdings PLC Senior Notes 4.04% due 03/13/2028.................. 201,000 209,860 Lloyds Banking Group PLC Sub. Notes 4.58% due 12/10/2025.................. 336,000 353,057 Mitsubishi UFJ Financial Group, Inc. Senior Notes 2.67% due 07/25/2022.................. 184,000 183,778 Mitsubishi UFJ Financial Group, Inc. Senior Notes 2.95% due 03/01/2021.................. 314,000 319,026 Mizuho Financial Group, Inc. Senior Notes 2.27% due 09/13/2021.................. 406,000 399,861 Royal Bank of Scotland Group PLC Senior Notes 2.00% due 03/08/2023.................. EUR 525,000 648,431 Royal Bank of Scotland Group PLC Senior Notes 3.88% due 09/12/2023.................. 201,000 205,680
Principal Value Security Description Amount** (Note 2) Diversified Banking Institutions (continued) UBS AG Sub. Notes 4.75% due 02/12/2026...................... EUR 350,000 $ 457,538 UBS Group Funding Switzerland AG Company Guar. Bonds 1.25% due 09/01/2026...................... EUR 350,000 409,954 UniCredit SpA Senior Notes 2.00% due 03/04/2023...................... EUR 425,000 531,882 UniCredit SpA Sub. Notes 5.86% due 06/19/2032*..................... 236,000 247,315 UniCredit SpA Sub. Notes 6.95% due 10/31/2022...................... EUR 300,000 433,369 ---------- 7,257,267 ---------- Diversified Financial Services -- 0.1% GE Capital International Funding Co. ULC Company Guar. Notes 4.42% due 11/15/2035...................... 263,000 285,986 ---------- Diversified Manufacturing Operations -- 0.1% Siemens Financieringsmaatschappij NV Company Guar. Notes 2.20% due 03/16/2020*..................... 400,000 404,046 ---------- Diversified Minerals -- 0.2% FMG Resources August 2006 Pty, Ltd. Company Guar. Notes 4.75% due 05/15/2022*..................... 860,000 870,750 ---------- Diversified Operations -- 0.1% Grupo KUO SAB De CV Senior Notes 5.75% due 07/07/2027*..................... 400,000 421,000 ---------- E-Commerce/Products -- 0.1% Alibaba Group Holding, Ltd. Senior Notes 3.60% due 11/28/2024...................... 280,000 290,171 ---------- Electric-Distribution -- 0.1% State Grid Overseas Investment, Ltd. Company Guar. Notes 4.13% due 05/07/2024*..................... 200,000 213,647 ---------- Electric-Generation -- 0.1% Comision Federal de Electricidad Senior Notes 4.75% due 02/23/2027*..................... 200,000 210,500 Electricite de France SA Senior Notes 2.35% due 10/13/2020*..................... 153,000 153,890 Electricite de France SA Senior Notes 6.00% due 01/22/2114*..................... 127,000 141,535 ---------- 505,925 ---------- Electric-Integrated -- 0.6% EDP Finance BV Senior Notes 2.00% due 04/22/2025...................... EUR 400,000 495,141
33 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Electric-Integrated (continued) EDP Finance BV Senior Notes 3.63% due 07/15/2024*............. $ 295,000 $ 297,422 Enel Finance International NV Company Guar. Notes 1.97% due 01/27/2025.............. EUR 350,000 440,451 Enel Finance International NV Company Guar. Notes 3.63% due 05/25/2027*............. 425,000 425,864 Enel Finance International NV Company Guar. Notes 4.75% due 05/25/2047*............. 200,000 211,681 Pampa Energia SA Senior Notes 7.50% due 01/24/2027*............. 360,000 391,259 ---------- 2,261,818 ---------- Electronic Connectors -- 0.0% Tyco Electronics Group SA Company Guar. Notes 3.13% due 08/15/2027.............. 77,000 76,336 ---------- Food-Meat Products -- 0.1% Minerva Luxembourg SA Company Guar. Notes 6.50% due 09/20/2026*............. 200,000 202,050 ---------- Food-Misc./Diversified -- 0.1% BRF GmbH Company Guar. Notes 4.35% due 09/29/2026.............. 300,000 294,750 ---------- Gambling (Non-Hotel) -- 0.2% International Game Technology PLC Senior Sec. Notes 6.50% due 02/15/2025*............. 570,000 640,538 ---------- Gas-Distribution -- 0.1% China Resources Gas Group, Ltd. Senior Notes 4.50% due 04/05/2022.............. 350,000 371,463 ---------- Gas-Transportation -- 0.1% Transportadora de Gas del Peru SA Senior Notes 4.25% due 04/30/2028.............. 200,000 207,000 ---------- Gold Mining -- 0.1% Goldcorp, Inc. Senior Notes 5.45% due 06/09/2044.............. 80,000 89,833 Kinross Gold Corp. Company Guar. Notes 4.50% due 07/15/2027*............. 211,000 212,846 Polyus Finance PLC Company Guar. Notes 5.25% due 02/07/2023.............. 200,000 208,980 ---------- 511,659 ---------- Insurance-Life/Health -- 0.0% Manulife Financial Corp. Sub. Notes 4.06% due 02/24/2032.............. 108,000 109,080 ----------
Principal Value Security Description Amount** (Note 2) Insurance-Multi-line -- 0.1% Willow No 2 Ireland PLC for Zurich Insurance Co., Ltd. Senior Sec. Notes 3.38% due 06/27/2022......................... $ 175,000 $ 235,987 ---------- Insurance-Property/Casualty -- 0.0% Enstar Group, Ltd. Senior Notes 4.50% due 03/10/2022......................... 74,000 76,555 ---------- Investment Companies -- 0.1% Huarong Finance II Co., Ltd. Company Guar. Notes 5.00% due 11/19/2025......................... 350,000 367,625 ---------- Investment Management/Advisor Services -- 0.1% China Cinda Finance 2015 I, Ltd. Company Guar. Notes 4.25% due 04/23/2025*........................ 380,000 388,485 ---------- Medical-Drugs -- 0.6% Endo, Ltd./Endo Finance LLC/Endo Finco, Inc. Company Guar. Notes 6.00% due 02/01/2025*........................ 275,000 222,750 Teva Pharmaceutical Finance Netherlands II BV Company Guar. Bonds 1.88% due 03/31/2027......................... EUR 150,000 166,683 Valeant Pharmaceuticals International, Inc. Company Guar. Notes 5.88% due 05/15/2023*........................ 875,000 773,281 Valeant Pharmaceuticals International, Inc. Senior Sec. Notes 7.00% due 03/15/2024*........................ 838,000 894,641 ---------- 2,057,355 ---------- Medical-Generic Drugs -- 0.1% Allergan Funding SCS Company Guar. Notes 2.13% due 06/01/2029......................... EUR 250,000 301,679 ---------- Metal-Copper -- 0.5% First Quantum Minerals, Ltd. Company Guar. Notes 7.25% due 04/01/2023*........................ 1,230,000 1,266,900 HudBay Minerals, Inc. Company Guar. Notes 7.63% due 01/15/2025*........................ 487,000 527,187 ---------- 1,794,087 ---------- Metal-Diversified -- 0.1% Glencore Canada Financial Corp. Company Guar. Notes 7.38% due 05/27/2020......................... GBP 100,000 153,923 Rio Tinto Finance USA, Ltd. Company Guar. Notes 3.75% due 06/15/2025......................... 149,000 157,105 Vedanta Resources PLC Senior Notes 6.38% due 07/30/2022*........................ 200,000 208,000 ---------- 519,028 ----------
34 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Metal-Iron -- 0.2% NLMK Group Senior Notes 4.50% due 06/15/2023............ $ 200,000 $ 206,146 Vale Overseas, Ltd. Company Guar. Notes 6.25% due 08/10/2026............ 165,000 187,225 Vale SA Senior Notes 3.75% due 01/10/2023............ EUR 150,000 195,657 ---------- 589,028 ---------- Oil & Gas Drilling -- 0.1% Pacific Drilling SA Senior Sec. Notes 5.38% due 06/01/2020*(15)....... 1,050,000 362,250 ---------- Oil Companies-Exploration & Production -- 0.9% Anadarko Finance Co. Company Guar. Notes 7.50% due 05/01/2031............ 89,000 110,763 Empresa Nacional del Petroleo Senior Notes 3.75% due 08/05/2026*........... 500,000 499,820 MEG Energy Corp. Company Guar. Notes 6.38% due 01/30/2023*........... 1,659,000 1,447,477 MEG Energy Corp. Sec. Notes 6.50% due 01/15/2025*........... 1,037,000 1,012,371 Tengizchevroil Finance Co. International, Ltd. Senior Sec. Notes 4.00% due 08/15/2026*........... 200,000 198,166 ---------- 3,268,597 ---------- Oil Companies-Integrated -- 1.5% BP Capital Markets PLC Company Guar. Notes 1.38% due 11/06/2017............ 228,000 227,968 BP Capital Markets PLC Company Guar. Notes 2.97% due 02/27/2026............ EUR 250,000 337,814 BP Capital Markets PLC Company Guar. Notes 3.25% due 05/06/2022............ 103,000 106,698 Ecopetrol SA Senior Notes 4.13% due 01/16/2025............ 200,000 200,500 Lukoil International Finance BV Company Guar. Notes 4.75% due 11/02/2026*........... 200,000 210,540 Pertamina Persero PT Senior Notes 4.88% due 05/03/2022*........... 300,000 321,708 Petrobras Global Finance BV Company Guar. Notes 6.75% due 01/27/2041............ 290,000 288,550
Principal Value Security Description Amount** (Note 2) Oil Companies-Integrated (continued) Petrobras Global Finance BV Company Guar. Notes 7.38% due 01/17/2027.............. $ 150,000 $ 165,150 Petrobras Global Finance BV Company Guar. Notes 8.75% due 05/23/2026.............. 155,000 186,194 Petroleos de Venezuela SA Company Guar. Notes 6.00% due 05/16/2024(16).......... 950,000 288,800 Petroleos de Venezuela SA Company Guar. Notes 6.00% due 11/15/2026(16).......... 2,000,000 607,000 Petroleos Mexicanos Company Guar. Notes 5.50% due 06/27/2044.............. 119,000 110,967 Petroleos Mexicanos Company Guar. Notes 6.75% due 09/21/2047*............. 207,000 220,227 Petroleos Mexicanos Company Guar. Notes 6.75% due 09/21/2047.............. 1,024,000 1,089,433 Petronas Capital, Ltd. Company Guar. Notes 3.50% due 03/18/2025.............. 275,000 283,395 Petronas Capital, Ltd. Company Guar. Notes 5.25% due 08/12/2019.............. 450,000 474,630 Shell International Finance BV Company Guar. Notes 1.25% due 11/10/2017.............. 152,000 151,966 Shell International Finance BV Company Guar. Notes 2.13% due 05/11/2020.............. 166,000 167,021 Shell International Finance BV Company Guar. Notes 2.25% due 11/10/2020.............. 176,000 177,282 ---------- 5,615,843 ---------- Oil Refining & Marketing -- 0.3% Cosan Luxembourg SA Company Guar. Notes 7.00% due 01/20/2027*............. 550,000 596,090 Reliance Industries, Ltd. Senior Notes 4.13% due 01/28/2025*............. 250,000 259,882 Thai Oil PCL Senior Notes 3.63% due 01/23/2023*............. 200,000 205,154 ---------- 1,061,126 ---------- Oil-Field Services -- 0.4% KCA Deutag UK Finance PLC Senior Sec. Notes 9.88% due 04/01/2022*............. 876,000 908,850 Trinidad Drilling, Ltd. Company Guar. Notes 6.63% due 02/15/2025*............. 300,000 280,500
35 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Oil-Field Services (continued) Weatherford International, Ltd. Company Guar. Notes 9.88% due 02/15/2024*............... $ 450,000 $ 495,000 ---------- 1,684,350 ---------- Paper & Related Products -- 0.3% Cascades, Inc. Company Guar. Notes 5.50% due 07/15/2022*............... 275,000 285,313 Cascades, Inc. Company Guar. Notes 5.75% due 07/15/2023*............... 753,000 790,650 ---------- 1,075,963 ---------- Petrochemicals -- 0.1% Alpek SAB de CV Company Guar. Notes 5.38% due 08/08/2023*............... 200,000 212,600 Equate Petrochemical BV Company Guar. Notes 4.25% due 11/03/2026*............... 200,000 205,660 ---------- 418,260 ---------- Printing-Commercial -- 0.4% Cimpress NV Company Guar. Notes 7.00% due 04/01/2022*............... 1,420,000 1,471,475 ---------- Real Estate Investment Trusts -- 0.2% Goodman Australia Finance Pty, Ltd. Company Guar. Notes 1.38% due 09/27/2025*............... EUR 500,000 589,739 Trust F/1401 Senior Notes 5.25% due 01/30/2026*............... 200,000 213,500 ---------- 803,239 ---------- Retail-Major Department Stores -- 0.2% El Puerto de Liverpool SAB de CV Company Guar. Notes 3.88% due 10/06/2026................ 380,000 380,000 El Puerto de Liverpool SAB de CV Company Guar. Notes 3.88% due 10/06/2026*............... 200,000 200,000 ---------- 580,000 ---------- Satellite Telecom -- 0.6% Intelsat Jackson Holdings SA Company Guar. Notes 5.50% due 08/01/2023................ 860,000 728,850 Intelsat Luxembourg SA Company Guar. Notes 8.13% due 06/01/2023................ 795,000 496,875 Telesat Canada/Telesat LLC Company Guar. Notes 8.88% due 11/15/2024*............... 841,000 947,176 ---------- 2,172,901 ----------
Principal Value Security Description Amount** (Note 2) Semiconductor Equipment -- 0.1% Sensata Technologies BV Company Guar. Notes 4.88% due 10/15/2023*....................... $ 444,000 $ 466,755 ---------- Special Purpose Entity -- 0.0% Hellas Telecommunications Luxembourg II SCA Sub. Notes 8.46% due 01/15/2015*+(3)(4)(5)(6).......... 1,330,000 0 ---------- Steel-Producers -- 0.3% ArcelorMittal Senior Notes 6.13% due 06/01/2025........................ 870,000 1,000,500 Evraz Group SA Senior Notes 5.38% due 03/20/2023*....................... 200,000 205,650 ---------- 1,206,150 ---------- SupraNational Banks -- 0.2% European Investment Bank Senior Notes 1.63% due 08/14/2020........................ 384,000 382,271 North American Development Bank Senior Notes 2.30% due 10/10/2018........................ 434,000 436,584 ---------- 818,855 ---------- Telephone-Integrated -- 0.2% Oi SA Senior Notes 9.75% due 09/15/2016*+(4)(5)(6)............. BRL 575,000 50,834 Telecom Italia Capital SA Company Guar. Notes 7.72% due 06/04/2038........................ 258,000 330,962 Telefonica Emisiones SAU Company Guar. Notes 4.10% due 03/08/2027........................ 151,000 156,227 Telefonica Emisiones SAU Company Guar. Notes 5.21% due 03/08/2047........................ 205,000 225,610 ---------- 763,633 ---------- Transport-Marine -- 0.1% PT Pelabuhan Indonesia II Senior Notes 4.25% due 05/05/2025*....................... 300,000 308,094 ---------- Transport-Rail -- 0.4% Canadian Pacific Railway Co. Senior Notes 6.13% due 09/15/2115........................ 115,000 146,293 Kazakhstan Temir Zholy Finance BV Company Guar. Notes 6.95% due 07/10/2042........................ 1,200,000 1,341,216 ---------- 1,487,509 ----------
36 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Transport-Services -- 0.1% Transnet SOC, Ltd. Senior Notes 4.00% due 07/26/2022............. $ 400,000 $ 393,560 ----------- Total Foreign Corporate Bonds & Notes (cost $72,205,064)............... 72,160,229 ----------- FOREIGN GOVERNMENT OBLIGATIONS -- 15.8% Banks-Export/Import -- 0.3% Export Credit Bank of Turkey Senior Notes 4.25% due 09/18/2022*............ 1,100,000 1,082,875 ----------- Banks-Special Purpose -- 0.3% Brazilian Development Bank Senior Notes 4.75% due 05/09/2024*............ 228,000 229,425 Corp Financiera de Desarrollo SA Senior Notes 4.75% due 02/08/2022............. 500,000 535,000 Hungarian Development Bank Government Guar. Notes 6.25% due 10/21/2020............. 400,000 441,407 ----------- 1,205,832 ----------- Central Bank -- 0.3% Central Bank of Tunisia Senior Notes 5.75% due 01/30/2025............. 1,300,000 1,264,541 ----------- Sovereign -- 14.9% Dominican Republic Senior Bonds 5.50% due 01/27/2025*............ 415,000 438,863 Dominican Republic Senior Bonds 5.88% due 04/18/2024............. 380,000 412,300 Dominican Republic Senior Bonds 5.95% due 01/25/2027*............ 250,000 268,750 Dominican Republic Senior Bonds 6.85% due 01/27/2045............. 750,000 839,062 Dominican Republic Senior Bonds 7.45% due 04/30/2044............. 600,000 714,750 Dominican Republic Senior Bonds 8.63% due 04/20/2027............. 350,000 426,125 Federal Republic of Germany Bonds 2.50% due 08/15/2046............. EUR 355,000 546,368 Government of Egypt Senior Notes 5.75% due 04/29/2020............. 380,000 393,452 Government of Egypt Senior Notes 6.13% due 01/31/2022*............ 300,000 310,467 Government of Egypt Senior Notes 6.88% due 04/30/2040............. 200,000 193,687
Principal Value Security Description Amount** (Note 2) Sovereign (continued) Government of Egypt Senior Notes 8.50% due 01/31/2047... $ 715,000 $ 796,623 Government of Jamaica Senior Notes 6.75% due 04/28/2028... 200,000 230,500 Government of Jamaica Senior Notes 8.00% due 03/15/2039... 1,000,000 1,237,500 Government of Romania Senior Notes 6.13% due 01/22/2044... 780,000 990,748 Government of Ukraine Senior Notes 7.38% due 09/25/2032*.. 1,000,000 973,750 Government of Ukraine Senior Notes 7.75% due 09/01/2026... 700,000 720,279 Government of Ukraine Senior Notes 7.75% due 09/01/2027... 150,000 153,840 Kingdom of Bahrain Senior Bonds 7.50% due 09/20/2047*.. 565,000 552,502 Kingdom of Jordan Senior Notes 5.75% due 01/31/2027... 400,000 392,231 Kingdom of Jordan Senior Notes 5.75% due 01/31/2027*.. 450,000 441,260 Republic of Argentina Senior Notes 5.63% due 01/26/2022... 640,000 672,000 Republic of Argentina Senior Notes 6.88% due 04/22/2021... 650,000 708,500 Republic of Argentina Senior Notes 7.63% due 04/22/2046... 479,000 531,690 Republic of Argentina Senior Notes 8.28% due 12/31/2033... 280,408 325,273 Republic of Azerbaijan Senior Notes 4.75% due 03/18/2024... 1,500,000 1,541,250 Republic of Belarus Senior Bonds 7.63% due 06/29/2027*.. 450,000 502,256 Republic of Chile Senior Notes 3.86% due 06/21/2047... 550,000 559,625 Republic of Colombia Senior Notes 4.38% due 07/12/2021... 300,000 320,100 Republic of Colombia Senior Bonds 7.38% due 09/18/2037... 400,000 527,600
37 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) FOREIGN GOVERNMENT OBLIGATIONS (continued) Sovereign (continued) Republic of Colombia Senior Notes 8.13% due 05/21/2024...... $ 500,000 $ 640,000 Republic of Costa Rica Senior Bonds 7.16% due 03/12/2045...... 300,000 324,000 Republic of Ecuador Senior Notes 9.65% due 12/13/2026*..... 700,000 738,500 Republic of El Salvador Senior Bonds 8.63% due 02/28/2029*..... 350,000 392,875 Republic of Ghana Senior Notes 8.13% due 01/18/2026...... 400,000 425,128 Republic of Guatemala Senior Notes 4.38% due 06/05/2027*..... 460,000 455,400 Republic of Guatemala Senior Notes 4.88% due 02/13/2028...... 800,000 818,000 Republic of Guatemala Senior Notes 5.75% due 06/06/2022...... 740,000 802,900 Republic of Honduras Senior Notes 6.25% due 01/19/2027...... 800,000 860,272 Republic of Hungary Senior Notes 5.38% due 02/21/2023...... 500,000 563,910 Republic of Indonesia Senior Notes 3.70% due 01/08/2022...... 700,000 726,383 Republic of Indonesia Senior Notes 6.63% due 02/17/2037...... 400,000 509,360 Republic of Iraq Senior Notes 6.75% due 03/09/2023*..... 500,000 496,502 Republic of Italy Bonds 1.20% due 04/01/2022...... EUR 150,000 181,203 Republic of Italy Bonds 4.75% due 09/01/2044...... EUR 120,000 179,696 Republic of Italy Bonds 6.50% due 11/01/2027...... EUR 75,000 123,890 Republic of Ivory Coast Senior Notes 6.13% due 06/15/2033*..... 1,600,000 1,571,475 Republic of Lebanon Senior Notes 5.80% due 04/14/2020...... 390,000 390,612 Republic of Lebanon Senior Notes 6.60% due 11/27/2026...... 900,000 882,918
Principal Value Security Description Amount** (Note 2) Sovereign (continued) Republic of Lebanon Senior Notes 6.65% due 04/22/2024..... $ 600,000 $ 600,516 Republic of Lebanon Senior Notes 8.25% due 04/12/2021..... 840,000 905,856 Republic of Lithuania Senior Notes 6.63% due 02/01/2022..... 500,000 586,250 Republic of Lithuania Senior Notes 7.38% due 02/11/2020..... 550,000 617,186 Republic of Namibia Senior Notes 5.25% due 10/29/2025..... 570,000 579,166 Republic of Panama Senior Notes 3.75% due 03/16/2025..... 600,000 627,600 Republic of Paraguay Senior Notes 6.10% due 08/11/2044..... 650,000 729,625 Republic of Peru Senior Notes 5.63% due 11/18/2050..... 330,000 416,625 Republic of Peru Senior Notes 6.55% due 03/14/2037..... 300,000 403,500 Republic of Peru Senior Notes 8.75% due 11/21/2033..... 750,000 1,180,500 Republic of Poland Senior Notes 3.00% due 03/17/2023..... 1,500,000 1,535,400 Republic of Poland Senior Notes 5.13% due 04/21/2021..... 550,000 602,937 Republic of Serbia Senior Notes 7.25% due 09/28/2021..... 1,000,000 1,154,500 Republic of South Africa Senior Notes 4.67% due 01/17/2024..... 1,000,000 1,023,000 Republic of South Africa Senior Notes 5.65% due 09/27/2047..... 220,000 218,662 Republic of South Africa Senior Notes 6.25% due 03/08/2041..... 1,300,000 1,404,325 Republic of Sri Lanka Senior Notes 6.25% due 10/04/2020..... 200,000 213,054 Republic of Sri Lanka Senior Notes 6.83% due 07/18/2026*.... 265,000 291,014 Republic of Sri Lanka Senior Notes 6.83% due 07/18/2026..... 900,000 988,350
38 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) FOREIGN GOVERNMENT OBLIGATIONS (continued) Sovereign (continued) Republic of Sri Lanka Senior Notes 6.85% due 11/03/2025*........ $ 400,000 $ 439,110 Republic of Sri Lanka Senior Notes 6.85% due 11/03/2025......... 700,000 768,443 Republic of the Philippines Senior Notes 4.00% due 01/15/2021......... 1,350,000 1,431,811 Republic of Turkey Senior Notes 3.25% due 03/23/2023......... 400,000 380,309 Republic of Turkey Senior Notes 5.75% due 05/11/2047......... 460,000 452,217 Republic of Turkey Senior Notes 6.25% due 09/26/2022......... 300,000 329,049 Republic of Turkey Senior Notes 7.25% due 03/05/2038......... 300,000 352,476 Republic of Turkey Senior Notes 8.00% due 02/14/2034......... 750,000 933,225 Republic of Venezuela Senior Notes 8.25% due 10/13/2024(16)..... 960,000 324,000 Republic of Venezuela Senior Notes 9.25% due 05/07/2028(16)..... 650,000 222,755 Republic of Venezuela Senior Notes 9.38% due 01/13/2034(16)..... 817,000 287,993 Russian Federation Senior Notes 4.88% due 09/16/2023......... 800,000 871,168 Russian Federation Bonds 5.00% due 04/29/2020......... 1,000,000 1,060,000 Russian Federation Senior Bonds 5.25% due 06/23/2047*........ 800,000 817,322 United Kingdom Gilt Treasury Bonds 3.50% due 01/22/2045......... GBP 400,000 711,877 United Kingdom Gilt Treasury Bonds 4.50% due 09/07/2034......... GBP 380,000 711,608 United Mexican States Senior Notes 4.13% due 01/21/2026......... 850,000 895,475 United Mexican States Senior Notes 4.15% due 03/28/2027......... 205,000 215,465 United Mexican States Senior Notes 4.35% due 01/15/2047......... 628,000 610,730
Principal Value Security Description Amount** (Note 2) Sovereign (continued) United Mexican States Senior Bonds 4.75% due 03/08/2044.................... $ 53,000 $ 54,617 United Mexican States Senior Notes 6.05% due 01/11/2040.................... 900,000 1,080,000 ----------- 54,832,091 ----------- Total Foreign Government Obligations (cost $58,078,211)...................... 58,385,339 ----------- U.S. GOVERNMENT AGENCIES -- 8.4% Federal Home Loan Mtg. Corp. -- 3.1% 2.50% due 01/01/2028.................... 247,071 250,570 2.50% due 04/01/2028.................... 82,289 83,429 2.50% due 03/01/2031.................... 133,839 134,904 3.00% due 07/01/2045.................... 2,366,911 2,377,404 3.00% due 10/01/2045.................... 807,824 811,531 3.50% due 03/01/2042.................... 338,455 350,821 3.50% due 04/01/2042.................... 338,979 351,362 3.50% due 09/01/2043.................... 327,159 339,779 3.50% due 07/01/2045.................... 3,266,896 3,380,096 4.00% due 01/01/2046.................... 395,589 419,990 4.50% due 02/01/2020.................... 2,654 2,713 4.50% due 08/01/2020.................... 9,558 9,772 4.50% due 03/01/2039.................... 1,529,928 1,659,356 4.50% due 12/01/2039.................... 7,670 8,355 5.00% due 02/01/2034.................... 22,866 25,091 5.00% due 05/01/2034.................... 33,371 36,931 5.00% due 11/01/2043.................... 236,450 259,332 5.50% due 05/01/2037.................... 55,418 61,628 6.00% due 03/01/2040.................... 44,897 50,965 6.50% due 02/01/2035.................... 10,433 11,564 Federal Home Loan Mtg. Corp. FRS 2.91% (6 ML+1.53%) due 02/01/2037.......................... 18,684 19,330 3.60% (12 ML+1.89%) due 11/01/2037.......................... 117,606 124,143 Federal Home Loan Mtg. Corp. REMIC FRS Series 3572, Class JS 5.57% (6.80%-1ML) due 09/15/2039(1)(7)(8)................. 505,101 67,173 Federal Home Loan Mtg. Corp. REMIC Series 1103, Class N 11.50% due 06/15/2021(1)(7)............. 372 33 Federal Home Loan Mtg. Corp. Structured Agency Credit Risk FRS Series 2015-DNA1, Class M2 3.09% (1 ML+1.85%) due 10/25/2027(1)....................... 200,000 204,317 Federal Home Loan Mtg. Corp. Structured Agency Credit Risk FRS Series 2014-DN1, Class M2 3.44% (1 ML+2.20%) due 02/25/2024(1)....................... 65,548 67,653 Federal Home Loan Mtg. Corp. Structured Agency Credit Risk FRS Series 2015-HQ1, Class M2 3.44% (1 ML+2.20%) due 03/25/2025(1)....................... 180,039 181,549
39 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. GOVERNMENT AGENCIES (continued) Federal Home Loan Mtg. Corp. (continued) Federal Home Loan Mtg. Corp. Structured Agency Credit Risk FRS Series 2014-HQ3, Class M2 3.89% (1 ML+2.65%) due 10/25/2024(1)....................... $ 101,472 $ 101,845 Federal Home Loan Mtg. Corp. Structured Agency Credit Risk FRS Series 2015-HQA1, Class M2 3.89% (1 ML+2.65%) due 03/25/2028(1)....................... 257,277 262,920 ----------- 11,654,556 ----------- Federal National Mtg. Assoc. -- 5.2% Federal National Mtg. Assoc. FRS 2.97% (6 ML+1.54%) due 09/01/2035.......................... 76,733 79,425 Federal National Mtg. Assoc. FRS 3.13% (1 Yr USTYCR+2.19%) due 10/01/2035.......................... 96,482 101,786 Federal National Mtg. Assoc. FRS 3.13% (12 ML+1.82%) due 10/01/2040.......................... 28,785 30,097 Federal National Mtg. Assoc. FRS 3.18% (1 Yr USTYCR+2.26%) due 11/01/2036.......................... 48,443 51,105 Federal National Mtg. Assoc. FRS 3.21% (12 ML+1.57%) due 05/01/2037.......................... 27,000 28,235 Federal National Mtg. Assoc. FRS 3.27% (12 ML+1.83%) due 10/01/2040.......................... 50,838 53,325 Federal National Mtg. Assoc. FRS 3.34% (12 ML+1.77%) due 05/01/2040.......................... 102,149 107,157 Federal National Mtg. Assoc. FRS 3.36% (12 ML+1.66%) due 07/01/2039.......................... 76,036 80,096 Federal National Mtg. Assoc. FRS 3.60% (12 ML+1.91%) due 08/01/2035.......................... 70,180 74,639 2.50% due 12/01/2026.................... 583,549 592,450 2.50% due 09/01/2027.................... 465,182 471,449 3.00% due 10/01/2027.................... 274,127 282,467 3.00% due 11/01/2027.................... 267,271 275,376 3.00% due 10/01/2030.................... 219,220 225,721 3.00% due 10/01/2032.................... 280,000 287,882 3.00% due 12/01/2042.................... 140,412 141,649 3.00% due 06/01/2045.................... 42,812 43,129 3.00% due October TBA................... 1,000,000 1,003,281 3.50% due 08/01/2026.................... 101,792 106,025 3.50% due 08/01/2027.................... 73,131 76,176 3.50% due 10/01/2028.................... 38,745 40,594 3.50% due October TBA................... 1,936,000 2,016,162 3.50% due 02/01/2043.................... 131,278 136,451 3.50% due 10/01/2045.................... 276,965 287,072 3.50% due 11/01/2045.................... 254,122 262,165
Principal Value Security Description Amount** (Note 2) Federal National Mtg. Assoc. (continued) 3.50% due 12/01/2045.................. $ 1,295,127 $ 1,336,118 3.50% due 03/01/2046.................. 2,854,137 2,944,472 3.50% due 07/01/2046.................. 176,216 182,543 4.00% due 11/01/2025.................. 164,308 172,695 4.00% due 10/01/2043.................. 338,829 361,195 4.00% due 02/01/2045.................. 1,975,839 2,104,771 4.00% due 06/01/2046.................. 1,315,849 1,386,023 4.00% due 05/01/2047.................. 684,005 720,523 4.50% due 06/01/2019.................. 9,989 10,216 4.50% due 11/01/2022.................. 33,051 34,088 4.50% due 06/01/2023.................. 18,471 19,460 4.50% due 08/01/2045.................. 2,056,776 2,257,635 4.50% due 04/01/2047.................. 468,857 503,473 5.00% due 06/01/2019.................. 8,024 8,212 5.00% due 01/01/2023.................. 10,030 10,376 5.00% due 03/01/2034.................. 22,345 24,619 5.00% due 05/01/2035.................. 12,414 13,675 5.00% due 05/01/2040.................. 91,534 100,099 5.00% due 07/01/2040.................. 92,262 100,779 5.50% due 06/01/2038.................. 28,318 31,597 6.00% due 02/01/2032.................. 4,868 5,476 6.00% due 05/01/2034.................. 1,970 2,251 6.00% due 10/01/2034.................. 19,875 22,357 7.50% due 01/01/2030.................. 1,203 1,232 8.00% due 11/01/2028.................. 3,574 3,996 Federal National Mtg. Assoc. REMIC Series 1989-2, Class D 8.80% due 01/25/2019(1)............... 1,017 1,048 ----------- 19,212,843 ----------- Tennessee Valley Authority -- 0.1% 1.75% due 10/15/2018.................. 238,000 238,798 ----------- Total U.S. Government Agencies (cost $31,477,070).................... 31,106,197 ----------- U.S. GOVERNMENT TREASURIES -- 6.6% United States Treasury Bonds -- 1.4% 2.25% due 08/15/2027.................. 1,500,000 1,489,805 2.50% due 05/15/2046.................. 1,745,000 1,621,487 3.00% due 02/15/2047.................. 285,000 293,160 3.00% due 05/15/2047.................. 1,550,000 1,594,926 ----------- 4,999,378 ----------- United States Treasury Notes -- 5.2% 1.38% due 07/31/2019.................. 7,400,000 7,388,148 1.63% due 05/15/2026.................. 569,000 539,705 1.75% due 09/30/2022.................. 184,000 182,304 1.88% due 02/28/2022.................. 454,000 454,142 1.88% due 04/30/2022.................. 500,000 499,551 2.13% due 07/31/2024.................. 62,000 61,910 3.50% due 02/15/2018.................. 10,000,000 10,085,169 ----------- 19,210,929 ----------- Total U.S. Government Treasuries (cost $24,501,406).................... 24,210,307 -----------
40 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Amount/ Value Security Description Shares** (Note 2) LOANS (11)(12)(13) -- 0.5% E-Commerce/Services -- 0.3% RentPath LLC FRS 2nd Lien 10.25% (1ML+9.00%) due 12/17/2022........................ $1,062,906 $1,023,047 ---------- Publishing-Books -- 0.2% Houghton Mifflin Harcourt Publishers, Inc. FRS BTL-B 4.23% (1ML+3.00%) due 05/29/2021........................ 676,539 651,169 ---------- Total Loans (cost $1,675,172)..................... 1,674,216 ---------- COMMON STOCKS -- 0.1% Television -- 0.1% ION Media Networks, Inc.+(3)(4) (cost $7)............................. 655 498,684 ---------- PREFERRED SECURITIES -- 0.1% Electric-Distribution -- 0.0% Entergy Louisiana LLC 4.70%................................. 6,500 162,370 ---------- Sovereign Agency -- 0.0% Federal Home Loan Mtg. Corp. Series Z 8.38%+................................ 7,375 50,371 ---------- Telecom Services -- 0.1% Qwest Corp. 6.13%................................. 7,725 195,984 ---------- Total Preferred Securities (cost $469,495)....................... 408,725 ---------- PREFERRED SECURITIES/CAPITAL SECURITIES -- 2.0% Banks-Commercial -- 0.1% Rabobank Nederland 11.00% due 06/30/2019*(9)............. 152,000 171,760 ---------- Banks-Super Regional -- 0.1% SunTrust Banks, Inc. 5.05% due 06/15/2022(9)............... 269,000 275,052 Wells Fargo Capital X 5.95% due 12/01/2086.................. 120,000 135,000 ---------- 410,052 ---------- Diversified Banking Institutions -- 0.4% BAC Capital Trust XIII Series F 4.00% due 10/20/2017(9)............... 575,000 507,437 HSBC Holdings PLC 6.00% due 05/22/2027(9)............... 273,000 285,531 JPMorgan Chase & Co. Series U 6.13% due 04/30/2024(9)............... 386,000 425,083 Societe Generale SA 7.88% due 12/18/2023*(9).............. 356,000 395,783 ---------- 1,613,834 ---------- Electric-Generation -- 0.1% Electricite de France SA 4.25% due 01/29/2020(9)............... EUR 200,000 250,858
Value Security Description Shares** (Note 2) Electric-Generation (continued) Electricite de France SA 5.38% due 01/29/2025(9).................... EUR 200,000 $264,732 -------- 515,590 -------- Electric-Integrated -- 0.1% Dominion Resources, Inc. 5.75% due 10/01/2054....................... 170,000 183,600 Southern Co. Series B 5.50% due 03/15/2057....................... 130,000 137,497 -------- 321,097 -------- Finance-Investment Banker/Broker -- 0.0% Lehman Brothers Holdings Capital Trust VII Escrow Security 0.00%+(3)(4)............................... 222,000 22 -------- Finance-Other Services -- 0.1% National Rural Utilities Cooperative Finance Corp. 4.75% due 04/30/2043....................... 293,000 304,183 -------- Food-Dairy Products -- 0.2% Land O'Lakes Capital Trust I 7.45% due 03/15/2028*...................... 730,000 830,375 -------- Gas-Distribution -- 0.1% Centrica PLC 3.00% due 04/10/2076....................... EUR 150,000 182,985 -------- Insurance-Life/Health -- 0.0% Prudential Financial, Inc. Jr. Sub. Notes 4.50% due 09/15/2047....................... 90,000 91,359 -------- Insurance-Multi-line -- 0.2% MetLife, Inc. 6.40% due 12/15/2066....................... 287,000 330,767 Zurich Finance UK PLC 6.63% due 10/02/2022(9).................... GBP 150,000 238,374 -------- 569,141 -------- Oil Companies-Integrated -- 0.1% TOTAL SA 3.88% due 05/18/2022(9).................... EUR 285,000 368,885 -------- Pipelines -- 0.3% Enbridge, Inc. 5.50% due 07/15/2077....................... 389,000 393,863 EnLink Midstream Partners LP 6.00% due 12/15/2022(9).................... 144,000 144,116 Enterprise Products Operating LLC Company Guar. Notes 4.88% due 08/16/2077....................... 122,000 122,610 Enterprise Products Operating LLC Company Guar. Notes 5.25% due 08/16/2077....................... 107,000 107,936 TransCanada Trust 5.30% due 03/15/2077....................... 107,000 109,541 TransCanada Trust 5.63% due 05/20/2075....................... 90,000 95,445 -------- 973,511 --------
41 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Amount/ Value Security Description Shares** (Note 2) PREFERRED SECURITIES/CAPITAL SECURITIES (continued) Telephone-Integrated -- 0.0% Orange SA 5.25% due 02/07/2024(9).................. EUR 125,000 $ 170,520 ------------ Tools-Hand Held -- 0.1% Stanley Black & Decker, Inc. 5.75% due 12/15/2053..................... 338,000 351,520 ------------ Water -- 0.1% Suez 3.00% due 06/23/2020(9).................. EUR 400,000 498,762 ------------ Total Preferred Securities/Capital Securities (cost $6,771,304)........................ 7,373,596 ------------ Total Long-Term Investment Securities (cost $359,027,185)...................... 363,608,350 ------------ SHORT-TERM INVESTMENT SECURITIES -- 0.5% Time Deposits -- 0.5% Euro Time Deposit with State Street Bank and Trust Co. 0.12% due 10/02/2017 (cost $2,031,000)........................ $ 2,031,000 2,031,000 ------------ REPURCHASE AGREEMENTS -- 0.7% Agreement with Fixed Income Clearing Corp., bearing interest at 0.12%, dated 09/29/2017, to be repurchased 10/02/2017 in the amount of $2,731,027 collateralized by $2,795,000 of United States Treasury Notes, bearing interest at 2.25% due 02/15/2027 and having an approximate value of $2,790,162 (cost $2,731,000)........................ 2,731,000 2,731,000 ------------ TOTAL INVESTMENTS (cost $363,789,185) (10)................. 99.8% 368,370,350 Other assets less liabilities............... 0.2 702,706 ------------- ------------ NET ASSETS 100.0% $369,073,056 ============= ============
-------- * 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, 2017, the aggregate value of these securities was $108,026,132 representing 29.3% of net assets. Unless otherwise indicated, these securities are not considered to be illiquid. ** Denominated in United States Dollars unless otherwise indicated. + Non-income producing security (1) Collateralized Mortgage Obligation (2) Commercial Mortgage Backed Security (3) Securities are classified as Level 3 (see Note 2). (4) Illiquid security. At September 30, 2017, the aggregate value of these securities was $556,679 representing 0.2% of net assets. (5) Security in default of interest and principal at maturity. (6) Company has filed for bankruptcy protection. (7) Interest Only (8) 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, 2017. (9) Perpetual maturity - maturity date reflects the next call date. (10) See Note 5 for cost of investments on a tax basis. (11) Senior loans in the Fund are generally subject to mandatory and/or optional prepayment. Because of these mandatory prepayment conditions and because there may be significant economic incentives for a borrower to prepay, prepayments may occur. As a result, the actual remaining maturity may be substantially less than the stated maturities shown. (12) The Fund invests in senior loans which generally pay interest at rates which are periodically re-determined by reference to a base lending rate plus a premium. These base lending rates are generally either the lending rate offered by one or more major European banks, such as the London Inter-Bank Offer Rate ("LIBOR") or the prime rate offered by one or more major United States banks, or the certificate of deposit rate. Senior loans are generally considered to be restrictive in that the Fund is ordinarily contractually obligated to receive approval from the Agent Bank and/or borrower prior to the disposition of a senior loan. (13) All loans in the Fund were purchased through assignment agreements unless otherwise indicated. (14) Certain variable rate securities are not based on a published reference rate and spread but are determined by these issues or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above. (15) Subsequent to September 30, 2017, company has filed for bankruptcy protection. (16) Subsequent to September 30, 2017, security is in default of interest. BTL --Bank Term Loan REMIC --Real Estate Mortgage Investment Conduit TBA --Securities purchased on a forward commitment basis with an approximate principal amount and no definite maturity date. The actual principal amount and maturity date will be determined upon settlement date. ULC --Unlimited Liability Corp. FRS --Floating Rate Security VRS --Variable Rate Security The rates shown on FRS and VRS are the current rates at September 30, 2017 and unless noted otherwise, the dates shown are the original maturity dates. Currency Legend BRL --Brazilian Real EUR --Euro Currency GBP --British Pound Index Legend 1 ML -- 1 Month USD LIBOR 1 Yr USTYCR -- 1 Year US Treasury Yield Curve Rate 12 ML -- 12 Month USD LIBOR 6 ML -- 6 Month USD LIBOR 42 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued) Forward Foreign Currency Contracts
Contract In Exchange Delivery Unrealized Unrealized Counterparty to Deliver For Date Appreciation Depreciation -------------------------------------------------------------------------------------------- JPMorgan Chase Bank N.A EUR 10,087,000 USD 11,939,821 10/20/2017 $ 7,153 $ -- EUR 10,063,350 USD 12,046,212 11/16/2017 124,575 -- GBP 2,047,125 USD 2,684,006 10/20/2017 -- (60,674) JPY 67,130,510 USD 607,769 10/20/2017 10,726 -- USD 679,411 EUR 565,000 10/20/2017 -- (11,030) USD 596,134 JPY 67,130,510 10/20/2017 909 -- -------- -------- Net Unrealized Appreciation/(Depreciation)...... $143,363 $(71,704) ======== ========
-------- EUR --Euro Currency GBP --Pound Sterling JPY --Japanese Yen USD --United States Dollar The following is a summary of the inputs used to value the Fund's net assets as of September 30, 2017 (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.................. $ -- $ 22,482,469 $ -- $ 22,482,469 U.S. Corporate Bonds & Notes: Airlines............................... -- 1,202,718 83,069 1,285,787 Finance-Investment Banker/Broker....... -- 977,934 64 977,998 Gambling (Non-Hotel)................... -- 1,295,113 7,075 1,302,188 Rubber/Plastic Products................ -- -- 0 0 Other Industries....................... -- 141,742,615 -- 141,742,615 Foreign Corporate Bonds & Notes: Special Purpose Entity................. -- -- 0 0 Other Industries....................... -- 72,160,229 -- 72,160,229 Foreign Government Obligation............ -- 58,385,339 -- 58,385,339 U.S. Government Agencies................. -- 31,106,197 -- 31,106,197 U.S. Government Treasuries............... -- 24,210,307 -- 24,210,307 Loans.................................... 1,674,216 -- 1,674,216 Common Stocks............................ -- -- 498,684 498,684 Preferred Securities..................... 408,725 -- -- 408,725 Preferred Securities/Capital Securities: Finance-Investment Banker/Broker....... -- -- 22 22 Other Industries....................... -- 7,373,574 -- 7,373,574 Short-Term Investment Securities......... -- 2,031,000 -- 2,031,000 Repurchase Agreements.................... -- 2,731,000 -- 2,731,000 -------- ------------ -------- ------------ Total Investments at Value............... $408,725 $367,372,711 $588,914 $368,370,350 ======== ============ ======== ============ Other Financial Instruments:+ Forward Foreign Currency Contracts....... $ -- $ 143,363 $ -- $ 143,363 ======== ============ ======== ============ LIABILITIES: Other Financial Instruments:+ Forward Foreign Currency Contracts....... $ -- $ 71,704 $ -- $ 71,704 ======== ============ ======== ============
-------- * 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, 2017 -- (unaudited) Industry Allocation* Medical-Hospitals...................... 4.4% Oil Companies-Exploration & Production. 4.2 Cable/Satellite TV..................... 3.9 Broadcast Services/Program............. 2.4 Chemicals-Specialty.................... 2.2 Casino Hotels.......................... 2.2 Building-Residential/Commercial........ 2.1 Auto/Truck Parts & Equipment-Original.. 2.1 Commercial Services.................... 2.1 Enterprise Software/Service............ 1.9 Real Estate Investment Trusts.......... 1.9 Telecom Services....................... 1.9 Containers-Metal/Glass................. 1.8 Medical-Drugs.......................... 1.7 Pipelines.............................. 1.6 Machinery-General Industrial........... 1.5 Gambling (Non-Hotel)................... 1.5 Aerospace/Defense-Equipment............ 1.4 Distribution/Wholesale................. 1.4 Chemicals-Diversified.................. 1.3 Building & Construction Products-Misc.. 1.3 Electric-Integrated.................... 1.2 Finance-Consumer Loans................. 1.2 Coal................................... 1.2 Finance-Mortgage Loan/Banker........... 1.1 Finance-Auto Loans..................... 1.0 Containers-Paper/Plastic............... 1.0 Independent Power Producers............ 1.0 Medical Products....................... 1.0 Oil & Gas Drilling..................... 1.0 Telephone-Integrated................... 1.0 Security Services...................... 0.9 Cellular Telecom....................... 0.9 Diagnostic Equipment................... 0.9 Oil-Field Services..................... 0.9 Oil Companies-Integrated............... 0.9 Building Products-Cement............... 0.9 Medical Labs & Testing Services........ 0.9 Schools................................ 0.8 Electric-Generation.................... 0.8 Data Processing/Management............. 0.8 Educational Software................... 0.8 Steel-Producers........................ 0.8 Non-Hazardous Waste Disposal........... 0.7 Computer Software...................... 0.7 Investment Companies................... 0.7 Food-Retail............................ 0.7 Dialysis Centers....................... 0.7 Human Resources........................ 0.7 Food-Meat Products..................... 0.6 Extended Service Contracts............. 0.6 Diversified Financial Services......... 0.6 Food-Misc./Diversified................. 0.6 Casino Services........................ 0.6 Diversified Banking Institutions....... 0.6 Computer Services...................... 0.6 Professional Sports.................... 0.6 Rubber/Plastic Products................ 0.6 Retail-Drug Store...................... 0.5 Medical-HMO............................ 0.5 Soap & Cleaning Preparation............ 0.5
Pharmacy Services...................... 0.5% Metal-Aluminum......................... 0.5 Publishing-Books....................... 0.5 Auto-Heavy Duty Trucks................. 0.5 Sovereign.............................. 0.5 Investment Management/Advisor Services. 0.5 Metal-Diversified...................... 0.5 Retail-Propane Distribution............ 0.5 Cosmetics & Toiletries................. 0.5 Food-Flour & Grain..................... 0.4 Retail-Building Products............... 0.4 Television............................. 0.4 Advertising Services................... 0.4 Real Estate Management/Services........ 0.4 Gas-Distribution....................... 0.4 Metal-Iron............................. 0.4 Retail-Auto Parts...................... 0.4 Food-Dairy Products.................... 0.4 Disposable Medical Products............ 0.4 Diversified Minerals................... 0.4 Metal-Copper........................... 0.4 Bicycle Manufacturing.................. 0.4 Hotels/Motels.......................... 0.3 Computers-Integrated Systems........... 0.3 Machinery-Pumps........................ 0.3 Paper & Related Products............... 0.3 Theaters............................... 0.3 Retail-Sporting Goods.................. 0.3 Finance-Other Services................. 0.3 Auction Houses/Art Dealers............. 0.3 Radio.................................. 0.3 Banks-Super Regional................... 0.3 Private Equity......................... 0.3 Printing-Commercial.................... 0.3 Building & Construction-Misc........... 0.3 Cruise Lines........................... 0.3 Tools-Hand Held........................ 0.3 Food-Baking............................ 0.3 Machinery-Electrical................... 0.3 Retail-Restaurants..................... 0.3 Airlines............................... 0.3 Retail-Convenience Store............... 0.3 Insurance-Multi-line................... 0.3 Rental Auto/Equipment.................. 0.3 Retail-Bedding......................... 0.3 Internet Connectivity Services......... 0.3 Transport-Marine....................... 0.2 Retail-Pet Food & Supplies............. 0.2 Diversified Manufacturing Operations... 0.2 Retail-Misc./Diversified............... 0.2 Bloodstock Services.................... 0.2 Retail-Arts & Crafts................... 0.2 Retail-Automobile...................... 0.2 Athletic Equipment..................... 0.2 Transport-Services..................... 0.2 Machinery-Farming...................... 0.2 Energy-Alternate Sources............... 0.2 Building Products-Wood................. 0.2 Retail-Office Supplies................. 0.2 Chemicals-Other........................ 0.2 Electric Products-Misc................. 0.2
44 AIG Flexible Credit Fund PORTFOLIO PROFILE -- September 30, 2017 -- (unaudited) (continued) Industry Allocation* (continued) Housewares........................... 0.2% Banks-Commercial..................... 0.2 Coatings/Paint....................... 0.2 Water Treatment Systems.............. 0.2 Medical-Generic Drugs................ 0.2 Finance-Investment Banker/Broker..... 0.2 Financial Guarantee Insurance........ 0.2 Retail-Major Department Stores....... 0.2 Rubber-Tires......................... 0.2 Food-Confectionery................... 0.2 E-Commerce/Services.................. 0.1 Machinery-Construction & Mining...... 0.1 Medical-Nursing Homes................ 0.1 Metal Processors & Fabrication....... 0.1 Medical-Outpatient/Home Medical...... 0.1 Motion Pictures & Services........... 0.1 Real Estate Operations & Development. 0.1 Consumer Products-Misc............... 0.1 Registered Investment Companies...... 0.1 Filtration/Separation Products....... 0.1 Commercial Services & Supplies....... 0.1 Building-Heavy Construction.......... 0.1 Leisure Products..................... 0.1 Physicians Practice Management....... 0.1 Medical Information Systems.......... 0.1 Resorts/Theme Parks.................. 0.1 Transport-Air Freight................ 0.1 Research & Development............... 0.1 Retail-Toy Stores.................... 0.1 Medical-Biomedical/Gene.............. 0.1 Satellite Telecom.................... 0.1 ----- 100.9% =====
Credit Quality+# Baa........ 0.4% Ba......... 24.8 B.......... 53.0 Caa........ 14.0 Not Rated@. 7.8 ----- 100.0% =====
-------- *Calculated as a percentage of net assets. +Source: Moody's #Calculated as a percentage of total debt issues, excluding short-term securities. @Represents debt issues that either have no rating, or the rating is unavailable from the data source. 45 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
Principal Value Security Description Amount (Note 2) ASSET BACKED SECURITIES -- 0.2% Diversified Financial Services -- 0.2% Home Equity Loan Trust VRS Series 2007-HSA3, Class AI4 6.11% due 06/25/2037(13) (cost $811,335)........................ $ 823,429 $ 825,667 ------------ U.S. CORPORATE BONDS & NOTES -- 40.0% Aerospace/Defense-Equipment -- 0.4% TransDigm, Inc. Company Guar. Notes 6.50% due 05/15/2025................... 1,530,000 1,575,900 ------------ Athletic Equipment -- 0.2% Vista Outdoor, Inc. Company Guar. Notes 5.88% due 10/01/2023................... 780,000 802,425 ------------ Auction Houses/Art Dealers -- 0.1% KAR Auction Services, Inc. Company Guar. Notes 5.13% due 06/01/2025*.................. 345,000 358,800 ------------ Auto-Heavy Duty Trucks -- 0.2% Navistar International Corp. Company Guar. Notes 8.25% due 11/01/2021................... 780,000 782,925 ------------ Auto/Truck Parts & Equipment-Original -- 0.9% Cooper-Standard Automotive, Inc. Company Guar. Notes 5.63% due 11/15/2026*.................. 1,015,000 1,037,837 Tenneco, Inc. Company Guar. Notes 5.00% due 07/15/2026................... 605,000 620,125 TI Group Automotive Systems, LLC Company Guar. Notes 8.75% due 07/15/2023*.................. 1,650,000 1,749,000 ------------ 3,406,962 ------------ Broadcast Services/Program -- 1.0% Clear Channel Worldwide Holdings, Inc. Company Guar. Notes 7.63% due 03/15/2020................... 1,495,000 1,476,312 iHeartCommunications, Inc. Senior Sec. Notes 9.00% due 12/15/2019................... 1,075,000 811,625 Univision Communications, Inc. Senior Sec. Notes 5.13% due 05/15/2023*.................. 1,195,000 1,218,900 ------------ 3,506,837 ------------ Building & Construction Products-Misc. -- 0.6% NCI Building Systems, Inc. Company Guar. Notes 8.25% due 01/15/2023*.................. 1,000,000 1,072,500 Standard Industries, Inc. Senior Notes 5.50% due 02/15/2023*.................. 385,000 407,619
Principal Value Security Description Amount (Note 2) Building & Construction Products-Misc. (continued) Standard Industries, Inc. Senior Notes 6.00% due 10/15/2025*....................... $ 690,000 $ 752,762 ------------ 2,232,881 ------------ Building & Construction-Misc. -- 0.3% Weekley Homes LLC/Weekley Finance Corp. Senior Notes 6.63% due 08/15/2025*....................... 1,180,000 1,141,650 ------------ Building Products-Cement -- 0.3% CEMEX Finance LLC Senior Sec. Notes 6.00% due 04/01/2024*....................... 920,000 977,509 ------------ Building Products-Wood -- 0.2% Boise Cascade Co. Company Guar. Notes 5.63% due 09/01/2024*....................... 745,000 783,181 ------------ Building-Heavy Construction -- 0.1% New Enterprise Stone & Lime Co., Inc. Senior Notes 10.13% due 04/01/2022*...................... 360,000 387,900 ------------ Building-Residential/Commercial -- 2.1% Beazer Homes USA, Inc. Company Guar. Notes 5.75% due 06/15/2019........................ 310,000 325,500 Beazer Homes USA, Inc. Senior Notes 5.88% due 10/15/2027*....................... 450,000 450,000 Beazer Homes USA, Inc. Company Guar. Notes 6.75% due 03/15/2025........................ 690,000 726,639 CalAtlantic Group, Inc. Company Guar. Notes 5.25% due 06/01/2026........................ 1,475,000 1,526,625 CalAtlantic Group, Inc. Company Guar. Notes 5.88% due 11/15/2024........................ 159,000 173,707 M/I Homes, Inc. Company Guar. Notes 5.63% due 08/01/2025*....................... 955,000 977,538 MDC Holdings, Inc. Company Guar. Notes 5.50% due 01/15/2024........................ 830,000 894,076 PulteGroup, Inc. Company Guar. Notes 5.50% due 03/01/2026........................ 675,000 736,020 TRI Pointe Group Inc./TRI Pointe Homes Inc. Company Guar. Notes 5.88% due 06/15/2024........................ 1,930,000 2,065,100 ------------ 7,875,205 ------------ Cable/Satellite TV -- 1.9% Altice US Finance I Corp. Senior Sec. Notes 5.38% due 07/15/2023*....................... 830,000 877,725
46 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Cable/Satellite TV (continued) Cablevision Systems Corp. Senior Notes 5.88% due 09/15/2022........................ $1,965,000 $ 2,033,775 Cequel Communications Holdings I LLC/Cequel Capital Corp. Senior Notes 5.13% due 12/15/2021*....................... 570,000 579,975 CSC Holdings LLC Senior Notes 5.25% due 06/01/2024........................ 595,000 601,694 DISH DBS Corp. Company Guar. Notes 6.75% due 06/01/2021........................ 1,320,000 1,452,000 DISH DBS Corp. Company Guar. Notes 7.75% due 07/01/2026........................ 530,000 608,530 Radiate Holdco LLC/Radiate Finance, Inc. Senior Notes 6.63% due 02/15/2025*....................... 910,000 889,525 ------------ 7,043,224 ------------ Casino Hotels -- 1.1% Caesars Entertainment Resort Properties LLC Senior Sec. Notes 8.00% due 10/01/2020........................ 265,000 270,963 Caesars Growth Properties Holdings LLC/ Caesars Growth Properties Finance, Inc. Sec. Notes 9.38% due 05/01/2022........................ 840,000 903,000 CRC Escrow Issuer LLC/CRC Finco, Inc. Company Guar. Notes 5.25% due 10/15/2025*....................... 1,320,000 1,320,000 MGM Resorts International Company Guar. Notes 4.63% due 09/01/2026........................ 1,085,000 1,098,562 Station Casinos LLC Company Guar. Notes 5.00% due 10/01/2025*....................... 310,000 310,744 ------------ 3,903,269 ------------ Casino Services -- 0.2% Eldorado Resorts, Inc. Company Guar. Notes 6.00% due 04/01/2025........................ 655,000 687,750 ------------ Cellular Telecom -- 0.9% Sprint Corp. Company Guar. Notes 7.88% due 09/15/2023........................ 1,370,000 1,589,200 Sprint Nextel Corp. Senior Notes 6.00% due 11/15/2022........................ 985,000 1,054,462 T-Mobile USA, Inc. Company Guar. Notes 6.38% due 03/01/2025........................ 320,000 344,544 T-Mobile USA, Inc. Company Guar. Notes 6.50% due 01/15/2026........................ 315,000 347,681 ------------ 3,335,887 ------------
Principal Value Security Description Amount (Note 2) Chemicals-Diversified -- 0.2% Hexion, Inc. Senior Sec. Notes 10.38% due 02/01/2022*...................... $ 560,000 $ 537,600 Hexion, Inc. Sec. Notes 13.75% due 02/01/2022*...................... 400,000 328,000 ------------ 865,600 ------------ Chemicals-Specialty -- 0.5% Kraton Polymers LLC/Kraton Polymers Capital Corp. Company Guar. Notes 7.00% due 04/15/2025*....................... 865,000 927,712 Valvoline, Inc. Company Guar. Notes 4.38% due 08/15/2025*....................... 1,060,000 1,079,875 ------------ 2,007,587 ------------ Coal -- 0.7% Alliance Resource Operating Partners LP/ Alliance Resource Finance Corp. Company Guar. Notes 7.50% due 05/01/2025*....................... 1,107,000 1,148,512 Peabody Energy Corp. Senior Sec. Notes 6.00% due 03/31/2022*....................... 1,210,000 1,249,325 ------------ 2,397,837 ------------ Commercial Services -- 0.2% ServiceMaster Co. LLC Company Guar. Notes 5.13% due 11/15/2024*....................... 695,000 714,113 ------------ Computer Software -- 0.4% Rackspace Hosting, Inc. Company Guar. Notes 8.63% due 11/15/2024*....................... 1,430,000 1,525,953 ------------ Containers-Metal/Glass -- 0.3% BWAY Holding Co. Senior Notes 7.25% due 04/15/2025*....................... 75,000 77,250 Owens-Brockway Glass Container, Inc. Company Guar. Notes 6.38% due 08/15/2025*....................... 750,000 848,438 ------------ 925,688 ------------ Containers-Paper/Plastic -- 0.1% Flex Acquisition Co, Inc. Senior Notes 6.88% due 01/15/2025*....................... 485,000 503,491 ------------ Data Processing/Management -- 0.2% First Data Corp. Senior Sec. Notes 5.00% due 01/15/2024*....................... 685,000 711,236 ------------ Diagnostic Equipment -- 0.3% Avantor, Inc. Senior Sec. Notes 6.00% due 10/01/2024*....................... 500,000 512,500
47 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Diagnostic Equipment (continued) Ortho-Clinical Diagnostics, Inc. Senior Notes 6.63% due 05/15/2022*....................... $ 635,000 $ 622,300 ------------ 1,134,800 ------------ Dialysis Centers -- 0.2% DaVita HealthCare Partners, Inc. Company Guar. Notes 5.13% due 07/15/2024........................ 720,000 721,800 ------------ Disposable Medical Products -- 0.2% Sterigenics-Nordion Holdings LLC Senior Notes 6.50% due 05/15/2023*....................... 720,000 748,800 ------------ Educational Software -- 0.1% Blackboard, Inc. Sec. Notes 9.75% due 10/15/2021*....................... 365,000 325,763 ------------ Electric Products-Misc. -- 0.2% GrafTech International, Ltd. Company Guar. Notes 6.38% due 11/15/2020........................ 780,000 758,550 ------------ Electric-Integrated -- 0.2% AES Corp. Senior Notes 5.13% due 09/01/2027........................ 655,000 671,375 Texas Competitive Electric Holdings Co. LLC/ TCEH Finance, Inc. Escrow Notes 11.50% due 10/01/2020+(2)................... 1,667,835 8,339 ------------ 679,714 ------------ Energy-Alternate Sources -- 0.2% TerraForm Power Operating LLC Company Guar. Notes 6.38% due 02/01/2023*....................... 760,000 790,400 ------------ Enterprise Software/Service -- 0.2% BMC Software Finance, Inc. Senior Notes 8.13% due 07/15/2021*....................... 765,000 783,169 ------------ Finance-Auto Loans -- 0.7% Ally Financial, Inc. Senior Notes 4.13% due 03/30/2020........................ 1,910,000 1,967,300 Ally Financial, Inc. Sub. Notes 5.75% due 11/20/2025........................ 700,000 758,940 ------------ 2,726,240 ------------ Finance-Consumer Loans -- 1.2% Navient Corp. Senior Notes 6.50% due 06/15/2022........................ 962,000 1,020,317 Navient Corp. Senior Notes 6.75% due 06/25/2025........................ 820,000 852,800
Principal Value Security Description Amount (Note 2) Finance-Consumer Loans (continued) Navient Corp. Senior Notes 7.25% due 09/25/2023......................... $ 205,000 $ 222,681 Springleaf Finance Corp. Company Guar. Notes 5.25% due 12/15/2019......................... 1,390,000 1,446,990 Springleaf Finance Corp. Company Guar. Notes 6.13% due 05/15/2022......................... 760,000 804,878 ------------ 4,347,666 ------------ Finance-Investment Banker/Broker -- 0.2% LPL Holdings, Inc. Company Guar. Notes 5.75% due 09/15/2025*........................ 645,000 668,672 ------------ Finance-Mortgage Loan/Banker -- 0.4% Ladder Capital Finance Holdings LLLP/Ladder Capital Finance Corp. Senior Notes 5.25% due 03/15/2022*........................ 420,000 428,400 Ladder Capital Finance Holdings LLLP/Ladder Capital Finance Corp. Company Guar. Notes 5.88% due 08/01/2021*........................ 1,045,000 1,068,512 ------------ 1,496,912 ------------ Finance-Other Services -- 0.3% CSTN Merger Sub, Inc. Senior Sec. Notes 6.75% due 08/15/2024*........................ 800,000 798,000 Nationstar Mtg. LLC/Nationstar Capital Corp. Company Guar. Notes 6.50% due 07/01/2021......................... 415,000 423,300 ------------ 1,221,300 ------------ Food-Flour & Grain -- 0.4% Post Holdings, Inc. Company Guar. Notes 5.00% due 08/15/2026*........................ 650,000 648,375 Post Holdings, Inc. Company Guar. Notes 5.50% due 03/01/2025*........................ 490,000 508,375 Post Holdings, Inc. Company Guar. Notes 5.75% due 03/01/2027*........................ 475,000 489,250 ------------ 1,646,000 ------------ Food-Misc./Diversified -- 0.4% Dole Food Co., Inc. Senior Sec. Notes 7.25% due 06/15/2025*........................ 1,400,000 1,513,750 ------------ 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......................... 785,000 690,800
48 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Food-Retail (continued) Safeway, Inc. Senior Notes 7.25% due 02/01/2031............................ $ 760,000 $ 653,600 ------------ 1,344,400 ------------ Gambling (Non-Hotel) -- 0.6% Pinnacle Entertainment, Inc. Senior Notes 5.63% due 05/01/2024............................ 935,000 956,037 Scientific Games International, Inc. Company Guar. Notes 6.63% due 05/15/2021............................ 495,000 507,375 Scientific Games International, Inc. Senior Sec. Notes 7.00% due 01/01/2022*........................... 690,000 732,263 ------------ 2,195,675 ------------ Gas-Distribution -- 0.4% AmeriGas Partners LP/AmeriGas Finance Corp. Senior Notes 5.50% due 05/20/2025............................ 505,000 518,888 NGL Energy Partners LP/NGL Energy Finance Corp. Company Guar. Notes 5.13% due 07/15/2019............................ 935,000 935,000 ------------ 1,453,888 ------------ Human Resources -- 0.3% Team Health Holdings, Inc. Company Guar. Notes 6.38% due 02/01/2025*........................... 975,000 923,813 ------------ Independent Power Producers -- 1.0% Calpine Corp. Senior Notes 5.38% due 01/15/2023............................ 1,487,000 1,448,189 Dynegy, Inc. Company Guar. Notes 7.38% due 11/01/2022............................ 1,580,000 1,645,175 NRG Energy, Inc. Company Guar. Notes 7.25% due 05/15/2026............................ 630,000 675,675 ------------ 3,769,039 ------------ Insurance-Multi-line -- 0.1% Genworth Holdings, Inc. Company Guar. Notes 4.90% due 08/15/2023............................ 400,000 342,000 ------------ Internet Connectivity Services -- 0.3% Zayo Group LLC/Zayo Capital, Inc. Company Guar. Notes 5.75% due 01/15/2027*........................... 185,000 196,100 Zayo Group LLC/Zayo Capital, Inc. Company Guar. Notes 6.38% due 05/15/2025............................ 670,000 722,012 ------------ 918,112 ------------
Principal Value Security Description Amount (Note 2) Machinery-Electrical -- 0.3% Vertiv Intermediate Holding Corp. Senior Notes 12.00% due 02/15/2022*(3)................... $ 930,000 $ 1,046,250 ------------ Medical Information Systems -- 0.1% Change Healthcare Holdings LLC/Change Healthcare Finance, Inc. Senior Bonds 5.75% due 03/01/2025*....................... 345,000 351,900 ------------ Medical Labs & Testing Services -- 0.5% Eagle Holding Co. II LLC Senior Notes 7.63% due 05/15/2022*(3).................... 740,000 767,750 West Street Merger Sub, Inc. Senior Notes 6.38% due 09/01/2025*....................... 920,000 915,400 ------------ 1,683,150 ------------ Medical Products -- 0.4% DJO Finco, Inc./DJO Finance LLC/DJO Finance Corp. Sec. Notes 8.13% due 06/15/2021*....................... 785,000 751,637 Hill-Rom Holdings, Inc. Company Guar. Notes 5.00% due 02/15/2025*....................... 760,000 786,600 ------------ 1,538,237 ------------ Medical-Drugs -- 0.4% Endo Finance LLC/Endo Finco, Inc. Company Guar. Notes 5.38% due 01/15/2023*....................... 460,000 374,900 PRA Holdings, Inc. Senior Notes 9.50% due 10/01/2023*....................... 421,000 458,890 Valeant Pharmaceuticals International, Inc. Company Guar. Notes 6.38% due 10/15/2020*....................... 505,000 506,262 Valeant Pharmaceuticals International, Inc. Company Guar. Notes 7.25% due 07/15/2022*....................... 295,000 287,625 ------------ 1,627,677 ------------ Medical-HMO -- 0.4% MPH Acquisition Holdings LLC Company Guar. Notes 7.13% due 06/01/2024*....................... 1,000,000 1,075,000 WellCare Health Plans, Inc. Senior Notes 5.25% due 04/01/2025........................ 525,000 552,562 ------------ 1,627,562 ------------ Medical-Hospitals -- 2.7% CHS/Community Health Systems, Inc. Senior Sec. Notes 6.25% due 03/31/2023........................ 1,070,000 1,051,275
49 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Medical-Hospitals (continued) CHS/Community Health Systems, Inc. Company Guar. Notes 6.88% due 02/01/2022..................... $ 730,000 $ 573,050 Envision Healthcare Corp. Company Guar. Notes 6.25% due 12/01/2024*.................... 345,000 370,013 HCA, Inc. Senior Sec. Notes 4.50% due 02/15/2027..................... 380,000 388,550 HCA, Inc. Senior Sec. Notes 5.25% due 06/15/2026..................... 705,000 759,637 HCA, Inc. Company Guar. Notes 5.38% due 02/01/2025..................... 1,595,000 1,680,731 IASIS Healthcare LLC/IASIS Capital Corp. Company Guar. Notes 8.38% due 05/15/2019..................... 615,000 617,383 Surgery Center Holdings, Inc. Company Guar. Notes 6.75% due 07/01/2025*.................... 140,000 131,600 Surgery Center Holdings, Inc. Company Guar. Notes 8.88% due 04/15/2021*.................... 420,000 441,000 Tenet Healthcare Corp. Senior Sec. Notes 6.00% due 10/01/2020..................... 750,000 799,282 Tenet Healthcare Corp. Senior Notes 8.13% due 04/01/2022..................... 355,000 361,213 THC Escrow Corp. III Sec. Notes 5.13% due 05/01/2025*.................... 635,000 626,269 THC Escrow Corp. III Senior Notes 7.00% due 08/01/2025*.................... 2,090,000 1,964,600 ------------ 9,764,603 ------------ Medical-Nursing Homes -- 0.1% Kindred Healthcare, Inc. Company Guar. Notes 8.00% due 01/15/2020..................... 515,000 505,828 ------------ Metal Processors & Fabrication -- 0.1% Hillman Group, Inc. Company Guar. Notes 6.38% due 07/15/2022*.................... 490,000 487,550 ------------ Metal-Aluminum -- 0.2% Aleris International, Inc. Senior Sec. Notes 9.50% due 04/01/2021*.................... 763,000 812,595 ------------ Metal-Copper -- 0.4% Freeport-McMoRan Copper & Gold, Inc. Company Guar. Notes 3.55% due 03/01/2022..................... 445,000 438,187
Principal Value Security Description Amount (Note 2) Metal-Copper (continued) Freeport-McMoRan Copper & Gold, Inc. Company Guar. Notes 3.88% due 03/15/2023............................ $ 965,000 $ 950,525 ------------ 1,388,712 ------------ Non-Hazardous Waste Disposal -- 0.4% Advanced Disposal Services, Inc. Company Guar. Notes 5.63% due 11/15/2024*........................... 660,000 689,700 Wrangler Buyer Corp. Senior Notes 6.00% due 10/01/2025*........................... 693,000 705,128 ------------ 1,394,828 ------------ Oil & Gas Drilling -- 0.2% Rowan Cos., Inc. Company Guar. Notes 5.40% due 12/01/2042............................ 870,000 661,200 ------------ Oil Companies-Exploration & Production -- 2.6% Alta Mesa Holdings LP/Alta Mesa Finance Services Corp. Company Guar. Notes 7.88% due 12/15/2024*........................... 910,000 982,800 Antero Resources Corp. Company Guar. Notes 5.38% due 11/01/2021............................ 130,000 133,413 Antero Resources Corp. Company Guar. Notes 5.63% due 06/01/2023............................ 190,000 198,075 Carrizo Oil & Gas, Inc. Company Guar. Notes 6.25% due 04/15/2023............................ 1,125,000 1,141,875 Chesapeake Energy Corp. Company Guar. Notes 8.00% due 06/15/2027*........................... 1,780,000 1,762,200 Continental Resources, Inc. Company Guar. Notes 4.50% due 04/15/2023............................ 420,000 421,050 Denbury Resources, Inc. Company Guar. Notes 5.50% due 05/01/2022............................ 655,000 374,169 EP Energy LLC/Everest Acquisition Finance, Inc. Senior Sec. Notes 8.00% due 11/29/2024*........................... 410,000 414,100 EP Energy LLC/Everest Acquisition Finance, Inc. Sec. Bonds 8.00% due 02/15/2025*........................... 270,000 210,262 EP Energy LLC/Everest Acquisition Finance, Inc. Company Guar. Notes 9.38% due 05/01/2020............................ 479,000 398,767 Matador Resources Co. Company Guar. Notes 6.88% due 04/15/2023............................ 535,000 566,431 Oasis Petroleum, Inc. Company Guar. Notes 6.88% due 01/15/2023............................ 940,000 954,100
50 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Oil Companies-Exploration & Production (continued) RSP Permian, Inc. Company Guar. Notes 5.25% due 01/15/2025*....................... $1,005,000 $ 1,020,075 Tapstone Energy LLC/Tapstone Energy Finance Corp. Senior Notes 9.75% due 06/01/2022*....................... 710,000 633,675 Ultra Resources, Inc. Company Guar. Notes 6.88% due 04/15/2022*....................... 44,000 44,880 Ultra Resources, Inc. Company Guar. Notes 7.13% due 04/15/2025*....................... 221,000 223,210 ------------ 9,479,082 ------------ Oil-Field Services -- 0.4% FTS International, Inc. FRS Senior Sec. Notes 8.82% (3 ML+7.50%) due 06/15/2020*............................. 475,000 482,719 SESI LLC Company Guar. Notes 7.75% due 09/15/2024*....................... 980,000 1,014,300 ------------ 1,497,019 ------------ Physicians Practice Management -- 0.1% MEDNAX, Inc. Company Guar. Notes 5.25% due 12/01/2023*....................... 355,000 371,863 ------------ Pipelines -- 1.6% American Midstream Partners LP/American Midstream Finance Corp. Company Guar. Notes 8.50% due 12/15/2021*....................... 685,000 707,262 Blue Racer Midstream LLC/Blue Racer Finance Corp. Company Guar. Notes 6.13% due 11/15/2022*....................... 875,000 907,812 Cheniere Corpus Christi Holdings LLC Senior Sec. Notes 5.88% due 03/31/2025........................ 1,815,000 1,953,394 Crestwood Midstream Partners LP/Crestwood Midstream Finance Corp. Company Guar. Notes 5.75% due 04/01/2025........................ 415,000 423,819 Crestwood Midstream Partners LP/Crestwood Midstream Finance Corp. Company Guar. Notes 6.25% due 04/01/2023........................ 600,000 618,750 Energy Transfer Equity LP Senior Sec. Notes 7.50% due 10/15/2020........................ 571,000 643,089 NuStar Logistics LP Company Guar. Notes 5.63% due 04/28/2027........................ 725,000 764,875 ------------ 6,019,001 ------------
Principal Value Security Description Amount (Note 2) Private Equity -- 0.3% Icahn Enterprises LP/Icahn Enterprises Finance Corp. Company Guar. Notes 5.88% due 02/01/2022........................... $1,120,000 $ 1,153,600 ------------ Publishing-Books -- 0.3% McGraw-Hill Global Education Holdings LLC/ McGraw-Hill Global Education Finance Senior Notes 7.88% due 05/15/2024*.......................... 1,025,000 1,010,906 ------------ Radio -- 0.2% Sirius XM Radio, Inc. Company Guar. Notes 5.38% due 07/15/2026*.......................... 835,000 878,838 ------------ Real Estate Investment Trusts -- 1.7% Corrections Corp. of America Company Guar. Notes 5.00% due 10/15/2022........................... 615,000 639,600 ESH Hospitality, Inc. Company Guar. Notes 5.25% due 05/01/2025*.......................... 780,000 806,325 iStar Financial, Inc. Senior Notes 5.00% due 07/01/2019........................... 715,000 724,384 iStar, Inc. Senior Notes 5.25% due 09/15/2022........................... 595,000 603,925 iStar, Inc. Senior Notes 6.00% due 04/01/2022........................... 730,000 755,550 MGM Growth Properties Operating Partnership LP/MGP Finance Co-Issuer, Inc. Senior Notes 4.50% due 01/15/2028*.......................... 645,000 650,676 MGM Growth Properties Operating Partnership LP/MGP Finance Co-Issuer, Inc. Company Guar. Notes 5.63% due 05/01/2024........................... 280,000 303,403 MPT Operating Partnership LP/MPT Finance Corp. Company Guar. Notes 5.00% due 10/15/2027........................... 590,000 604,750 MPT Operating Partnership LP/MPT Finance Corp. Company Guar. Notes 6.38% due 03/01/2024........................... 315,000 339,806 Uniti Group, Inc./CSL Capital LLC Company Guar. Notes 7.13% due 12/15/2024*.......................... 1,065,000 902,588 ------------ 6,331,007 ------------ Rental Auto/Equipment -- 0.3% United Rentals North America, Inc. Company Guar. Notes 5.50% due 07/15/2025........................... 895,000 958,769 ------------
51 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Resort/Theme Parks -- 0.1% Six Flags Entertainment Corp. Company Guar. Notes 4.88% due 07/31/2024*...................... $ 330,000 $ 335,775 ------------ Retail-Automobile -- 0.2% Sonic Automotive, Inc. Company Guar. Notes 6.13% due 03/15/2027....................... 800,000 820,000 ------------ Retail-Convenience Store -- 0.3% Cumberland Farms, Inc. Senior Notes 6.75% due 05/01/2025*...................... 925,000 983,090 ------------ Retail-Drug Store -- 0.4% Rite Aid Corp. Company Guar. Notes 6.13% due 04/01/2023*...................... 1,135,000 1,102,369 Rite Aid Corp. Company Guar. Notes 6.75% due 06/15/2021....................... 395,000 408,706 ------------ 1,511,075 ------------ Retail-Pet Food & Supplies -- 0.1% PetSmart, Inc. Senior Sec. Notes 5.88% due 06/01/2025*...................... 95,000 82,888 PetSmart, Inc. Company Guar. Notes 7.13% due 03/15/2023*...................... 460,000 358,708 ------------ 441,596 ------------ Retail-Propane Distribution -- 0.5% Ferrellgas LP/Ferrellgas Finance Corp. Company Guar. Notes 6.75% due 06/15/2023....................... 585,000 564,525 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....................... 555,000 557,775 ------------ 1,663,800 ------------ Retail-Restaurants -- 0.3% Golden Nugget, Inc. Senior Notes 6.75% due 10/15/2024*...................... 1,005,000 1,016,306 ------------ Rubber-Tires -- 0.2% Goodyear Tire & Rubber Co. Company Guar. Notes 4.88% due 03/15/2027....................... 550,000 566,214 ------------ Rubber/Plastic Products -- 0.0% Venture Holdings Co. LLC Company Guar. Notes 11.00% due 06/01/2007+(2)(4)(5)(6)......... 550,000 0 ------------
Principal Value Security Description Amount (Note 2) Schools -- 0.1% Laureate Education, Inc. Company Guar. Notes 8.25% due 05/01/2025*...................... $ 390,000 $ 420,225 ------------ Security Services -- 0.7% ADT Corp. Senior Sec. Notes 6.25% due 10/15/2021....................... 845,000 938,901 Altegrity, Inc. Senior Sec. Notes 9.50% due 07/01/2019*...................... 865,000 919,062 Prime Security Services Borrower LLC/Prime Finance, Inc. Sec. Notes 9.25% due 05/15/2023*...................... 785,000 866,295 ------------ 2,724,258 ------------ Soap & Cleaning Preparation -- 0.2% Kronos Acquisition Holdings, Inc. Company Guar. Notes 9.00% due 08/15/2023*...................... 940,000 916,500 ------------ Steel-Producers -- 0.4% AK Steel Corp. Company Guar. Notes 7.00% due 03/15/2027....................... 745,000 758,969 AK Steel Corp. Senior Sec. Notes 7.50% due 07/15/2023....................... 495,000 538,312 ------------ 1,297,281 ------------ Telecom Services -- 0.1% Qwest Corp. Senior Notes 7.25% due 09/15/2025....................... 415,000 459,200 ------------ Telephone-Integrated -- 1.0% CenturyLink, Inc. Senior Notes 7.50% due 04/01/2024....................... 650,000 672,887 Frontier Communications Corp. Senior Notes 6.25% due 09/15/2021....................... 495,000 406,989 Frontier Communications Corp. Senior Notes 10.50% due 09/15/2022...................... 2,095,000 1,817,412 Level 3 Financing, Inc. Company Guar. Notes 5.25% due 03/15/2026....................... 580,000 594,320 ------------ 3,491,608 ------------ Television -- 0.1% Sinclair Television Group, Inc. Company Guar. Notes 5.13% due 02/15/2027*...................... 300,000 291,375 ------------ Water Treatment Systems -- 0.2% CD&R Waterworks Merger Sub LLC Senior Notes 6.13% due 08/15/2025*...................... 660,000 677,325 ------------
52 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Wireless Equipment -- 0.0% ViaSat, Inc. Senior Notes 5.63% due 09/15/2025*................. $ 60,000 $ 60,378 ------------ Total U.S. Corporate Bonds & Notes (cost $145,145,917)................... 147,230,456 ------------ FOREIGN CORPORATE BONDS & NOTES -- 10.0% Airlines -- 0.3% Latam Finance, Ltd. Company Guar. Notes 6.88% due 04/11/2024*................. 945,000 999,337 ------------ Auto/Truck Parts & Equipment-Original -- 0.1% Dana Financing Luxembourg SARL Company Guar. Notes 5.75% due 04/15/2025*................. 180,000 189,788 Dana Financing Luxembourg SARL Company Guar. Notes 6.50% due 06/01/2026*................. 185,000 199,800 ------------ 389,588 ------------ Cable/Satellite TV -- 1.6% Altice Luxembourg SA Company Guar. Notes 7.63% due 02/15/2025*................. 1,390,000 1,499,462 Numericable-SFR SA Senior Sec. Notes 6.00% due 05/15/2022*................. 1,200,000 1,254,000 Numericable-SFR SA Senior Sec. Notes 7.38% due 05/01/2026*................. 1,410,000 1,522,800 UPCB Finance IV, Ltd. Senior Sec. Notes 5.38% due 01/15/2025*................. 360,000 374,400 Virgin Media Finance PLC Company Guar. Notes 6.00% due 10/15/2024*................. 400,000 420,500 Ziggo Secured Finance BV Senior Sec. Notes 5.50% due 01/15/2027*................. 750,000 768,518 ------------ 5,839,680 ------------ Casino Services -- 0.3% Gateway Casinos & Entertainment, Ltd. Sec. Notes 8.25% due 03/01/2024*................. 940,000 987,000 ------------ Chemicals-Diversified -- 0.6% INEOS Group Holdings SA Company Guar. Notes 5.63% due 08/01/2024*................. 955,000 992,006 NOVA Chemicals Corp. Senior Notes 4.88% due 06/01/2024*................. 510,000 516,375 NOVA Chemicals Corp. Senior Notes 5.00% due 05/01/2025*................. 830,000 842,450 ------------ 2,350,831 ------------
Principal Value Security Description Amount (Note 2) Chemicals-Specialty -- 0.2% Alpha 3 BV/Alpha US Bidco, Inc. Company Guar. Notes 6.25% due 02/01/2025*........................ $ 280,000 $ 284,900 Tronox Finance PLC Company Guar. Notes 5.75% due 10/01/2025*........................ 225,000 230,625 Venator Finance SARL/Venator Materials Corp. Company Guar. Notes 5.75% due 07/15/2025*........................ 275,000 286,000 ------------ 801,525 ------------ Containers-Metal/Glass -- 0.5% Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc. Company Guar. Notes 6.00% due 06/30/2021*........................ 365,000 375,038 Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc. Company Guar. Notes 6.00% due 02/15/2025*........................ 1,320,000 1,397,550 Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc. Company Guar. Notes 7.25% due 05/15/2024*........................ 260,000 285,186 ------------ 2,057,774 ------------ Cruise Lines -- 0.3% Viking Cruises, Ltd. Company Guar. Notes 5.88% due 09/15/2027*........................ 1,115,000 1,118,847 ------------ Diversified Manufacturing Operations -- 0.2% Bombardier, Inc. Senior Notes 8.75% due 12/01/2021*........................ 850,000 911,200 ------------ Diversified Minerals -- 0.4% Anglo American Capital PLC Company Guar. Notes 3.63% due 09/11/2024*........................ 1,125,000 1,122,192 Teck Resources, Ltd. Company Guar. Notes 8.50% due 06/01/2024*........................ 240,000 275,400 ------------ 1,397,592 ------------ Food-Meat Products -- 0.2% MARB BondCo PLC Company Guar. Notes 7.00% due 03/15/2024*........................ 740,000 728,900 ------------ Gambling (Non-Hotel) -- 0.3% International Game Technology PLC Senior Sec. Notes 6.25% due 02/15/2022*........................ 900,000 994,950 ------------ Machinery-Farming -- 0.2% CNH Industrial NV Senior Notes 4.50% due 08/15/2023......................... 750,000 794,250 ------------
53 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Medical Products -- 0.1% Mallinckrodt International Finance SA/ Mallinckrodt CB LLC Company Guar. Notes 5.63% due 10/15/2023*....................... $ 465,000 $ 434,194 ------------ Medical-Biomedical/Gene -- 0.1% Concordia International Corp. Senior Sec. Notes 9.00% due 04/01/2022*....................... 245,000 191,100 ------------ Medical-Drugs -- 0.2% Valeant Pharmaceuticals International, Inc. Company Guar. Notes 6.13% due 04/15/2025*....................... 815,000 714,144 Valeant Pharmaceuticals International, Inc. Senior Sec. Notes 7.00% due 03/15/2024*....................... 185,000 197,504 ------------ 911,648 ------------ Metal-Aluminum -- 0.3% Rusal Capital DAC Company Guar. Notes 5.13% due 02/02/2022*....................... 1,100,000 1,119,077 ------------ Metal-Diversified -- 0.5% Vedanta Resources PLC Senior Notes 6.13% due 08/09/2024*....................... 380,000 385,622 Vedanta Resources PLC Senior Notes 6.38% due 07/30/2022*....................... 405,000 421,200 Vedanta Resources PLC Senior Notes 8.25% due 06/07/2021*....................... 800,000 896,000 ------------ 1,702,822 ------------ Metal-Iron -- 0.4% Vale Overseas, Ltd. Company Guar. Notes 5.88% due 06/10/2021........................ 460,000 505,770 Vale Overseas, Ltd. Company Guar. Notes 6.25% due 08/10/2026........................ 820,000 930,454 ------------ 1,436,224 ------------ Oil & Gas Drilling -- 0.2% Transocean, Inc. Company Guar. Notes 6.80% due 03/15/2038........................ 520,000 423,800 Transocean, Inc. Company Guar. Notes 9.00% due 07/15/2023*....................... 300,000 323,250 ------------ 747,050 ------------ Oil Companies-Exploration & Production -- 0.7% Geopark, Ltd. Senior Sec. Notes 6.50% due 09/21/2024*....................... 935,000 937,337
Principal Value Security Description Amount (Note 2) Oil Companies-Exploration & Production (continued) MEG Energy Corp. Sec. Notes 6.50% due 01/15/2025*......................... $ 725,000 $ 707,781 Seven Generations Energy, Ltd. Company Guar. Notes 5.38% due 09/30/2025*......................... 895,000 901,713 ------------ 2,546,831 ------------ Oil Companies-Integrated -- 0.9% Petrobras Global Finance BV Company Guar. Notes 5.30% due 01/27/2025*......................... 411,000 410,384 Petrobras Global Finance BV Company Guar. Notes 6.00% due 01/27/2028*......................... 753,000 752,435 Petrobras Global Finance BV Company Guar. Notes 7.38% due 01/17/2027.......................... 355,000 390,855 YPF SA Senior Notes 6.95% due 07/21/2027*......................... 1,550,000 1,643,000 ------------ 3,196,674 ------------ Oil-Field Services -- 0.2% Weatherford International, Ltd. Company Guar. Notes 8.25% due 06/15/2023.......................... 485,000 499,550 Weatherford International, Ltd. Company Guar. Notes 9.88% due 02/15/2024*......................... 140,000 154,000 ------------ 653,550 ------------ Paper & Related Products -- 0.3% Cascades, Inc. Company Guar. Notes 5.50% due 07/15/2022*......................... 675,000 700,312 Cascades, Inc. Company Guar. Notes 5.75% due 07/15/2023*......................... 530,000 556,500 ------------ 1,256,812 ------------ Satellite Telecom -- 0.1% Intelsat Jackson Holdings SA Senior Sec. Notes 8.00% due 02/15/2024*......................... 175,000 188,125 ------------ Special Purpose Entity -- 0.0% Hellas Telecommunications Luxembourg II SCA Sub. Notes 6.26% due 01/15/2015+*(2)(4)(5)(6)............ 1,025,000 0 ------------ Steel-Producers -- 0.4% ArcelorMittal Senior Notes 6.13% due 06/01/2025.......................... 745,000 856,750 BlueScope Steel Finance, Ltd./BlueScope Steel Finance USA LLC Company Guar. Notes 6.50% due 05/15/2021*......................... 490,000 513,177 ------------ 1,369,927 ------------
54 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Transport-Marine -- 0.2% Topaz Marine SA Senior Notes 9.13% due 07/26/2022*................. $ 940,000 $ 940,705 ------------ Transport-Services -- 0.2% JSL Europe SA Company Guar. Notes 7.75% due 07/26/2024*................. 755,000 794,638 ------------ Total Foreign Corporate Bonds & Notes (cost $36,404,368).................... 36,860,851 ------------ LOANS(7)(8)(9) -- 48.4% Advertising Services -- 0.4% Advantage Sales & Marketing, Inc. FRS 1st Lien 4.49% (1 ML+3.25%) due 07/23/2021........................ 362,192 341,479 Advantage Sales & Marketing, Inc. FRS BTL-B2 4.56% (3 ML+3.25%) due 07/25/2021........................ 603,488 568,976 Advantage Sales & Marketing, Inc. FRS 2nd Lien 7.74% (1 ML+6.50%) due 07/25/2022........................ 758,000 657,565 ------------ 1,568,020 ------------ Aerospace/Defense-Equipment -- 1.0% Accudyne Industries LLC FRS BTL 5.01% (2 ML+3.75%) due 08/02/2024........................ 1,180,000 1,182,029 TransDigm, Inc. FRS BTL-D 4.24% (1 ML+3.00%) due 06/04/2021........................ 87,833 88,012 TransDigm, Inc. FRS BTL-F 4.24% (1 ML+3.00%) due 06/09/2023........................ 305,723 306,392 TransDigm, Inc. FRS BTL-G 4.24% (1 ML+3.00%) due 08/22/2024........................ 493,775 494,461 TransDigm, Inc. FRS BTL-D 4.33% (3 ML+3.00%) due 06/04/2021........................ 1,367,054 1,369,830 TransDigm, Inc. FRS BTL-F 4.33% (3 ML+3.00%) due 06/09/2023........................ 164,631 164,991 TransDigm, Inc. FRS BTL-G 4.33% (3 ML+3.00%) due 08/22/2024........................ 139,637 139,831 ------------ 3,745,546 ------------
Principal Value Security Description Amount (Note 2) Auction Houses/Art Dealers -- 0.2% KAR Auction Services, Inc. FRS BTL-B5 3.88% (3 ML+2.50%) due 03/09/2023...................... $ 846,772 $ 850,742 ------------ Auto-Heavy Duty Trucks -- 0.3% Navistar, Inc. FRS BTL-B 5.24% (1 ML+4.00%) due 08/07/2020...................... 1,014,673 1,021,437 ------------ Auto/Truck Parts & Equipment-Original -- 1.1% Accuride Corp. FRS BTL 8.33% (3 ML+7.00%) due 10/21/2023...................... 1,087,024 1,103,329 Federal-Mogul Holdings Corp. FRS BTL-C 4.98%-4.99% (1 ML+3.75%) due 04/15/2021...................... 2,071,675 2,079,875 TI Group Automotive Systems LLC FRS BTL-B 3.99% (1 ML+2.75%) due 06/30/2022...................... 694,820 695,689 ------------ 3,878,893 ------------ Bicycle Manufacturing -- 0.4% SRAM LLC FRS BTL-B 4.52% (2 ML+3.25%) due 03/15/2024...................... 1,323,515 1,325,169 SRAM LLC FRS BTL-B 6.50% (USFRBPLR+2.25%) due 03/15/2024...................... 40,674 40,724 ------------ 1,365,893 ------------ Bloodstock Services -- 0.2% NVA Holdings, Inc. FRS BTL-B2 4.83% (3 ML+3.50%) due 08/14/2021...................... 370,630 373,062 NVA Holdings, Inc. FRS 2nd Lien 8.33% (3 ML+7.00%) due 08/14/2022...................... 482,382 485,397 ------------ 858,459 ------------ Broadcast Services/Program -- 1.4% iHeartCommunications, Inc. FRS BTL-D-EXT 8.08% (3 ML+6.75%) due 01/30/2019...................... 1,555,000 1,194,240 Nexstar Broadcasting, Inc. FRS BTL-B2 3.74% (1 ML+2.50%) due 01/17/2024...................... 527,542 528,669
55 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS (continued) Broadcast Services/Program (continued) Univision Communications, Inc. FRS BTL 3.99% (1 ML+2.75%) due 03/15/2024.............................. $3,339,813 $ 3,307,934 ------------ 5,030,843 ------------ Building & Construction Products-Misc. -- 0.7% CPG International, Inc. FRS BTL 5.08% (3 ML+3.75%) due 05/03/2024.............................. 1,491,285 1,493,616 Summit Materials Co. I LLC FRS BTL-B 3.99% (1 ML+2.75%) due 07/17/2022.............................. 1,029,308 1,036,598 ------------ 2,530,214 ------------ Building Products-Cement -- 0.6% Quikrete Holdings, Inc. FRS BTL-B 3.99% (1 ML+2.75%) due 11/15/2023.............................. 2,138,837 2,135,050 ------------ Building-Residential/Commercial -- 0.0% TOUSA, Inc. Escrow Loans 12.25% due 08/15/2011+(2)(4)................ 2,037,810 0 ------------ Cable/Satellite TV -- 0.4% Radiate Holdco LLC FRS BTL 4.24% (1 ML+3.00%) due 02/01/2024.............................. 926,771 913,448 Virgin Media Bristol LLC FRS BTL 3.98% (1 ML+2.75%) due 01/31/2025.............................. 405,000 406,456 ------------ 1,319,904 ------------ Casino Hotels -- 1.1% Caesars Entertainment Operating Co., Inc. BTL-B5 1.50% due 03/01/2022(2)(5).................. 260,000 308,317 Caesars Entertainment Resort Properties LLC FRS BTL-B 4.74% (1 ML+3.50%) due 10/11/2020.............................. 992,115 993,728 CBAC Borrower LLC FRS BTL-B 5.24% (1 ML+4.00%) due 06/28/2024.............................. 710,000 713,328 CityCenter Holdings LLC FRS BTL-B 3.74% (1 ML+2.50%) due 04/18/2024.............................. 1,311,713 1,316,016 Golden Nugget, Inc. FRS BTL coupon TBD due 10/04/2023.............................. 630,000 632,992 ------------ 3,964,381 ------------
Principal Value Security Description Amount (Note 2) Casino Services -- 0.1% Gateway Casinos & Entertainment, Ltd. FRS BTL-B1 5.08% (3 ML+3.75%) due 02/22/2023............................ $ 513,713 $ 516,281 ------------ Chemicals-Diversified -- 0.5% INEOS US Finance LLC FRS BTL-B 3.99% (1 ML+2.75%) due 03/31/2022............................ 1,191,040 1,196,549 INEOS US Finance LLC FRS BTL-B 3.99% (1 ML+2.75%) due 04/01/2024............................ 312,638 313,984 New Arclin US Holding Corp. FRS 1st Lien 5.58% (3 ML+4.25%) due 02/14/2024............................ 428,925 432,142 ------------ 1,942,675 ------------ Chemicals-Other -- 0.2% Zep, Inc. FRS BTL 5.24% (1 ML+4.00%) due 08/12/2024............................ 765,000 766,913 ------------ Chemicals-Specialty -- 1.5% Alpha 3 BV/Alpha US Bidco, Inc. FRS BTL-B1 4.33% (3 ML+3.00%) due 01/31/2024............................ 468,825 470,193 Huntsman International LLC FRS BTL-B 4.24% (1 ML+3.00%) due 04/01/2023............................ 365,138 366,622 KMG Chemicals, Inc. FRS BTL-B 5.49% (1 ML+4.25%) due 06/15/2024............................ 332,582 337,363 Kraton Polymers LLC FRS BTL 4.24% (1 ML+3.00%) due 01/06/2022............................ 352,113 356,048 MacDermid, Inc. FRS BTL-B5 4.74% (1 ML+3.50%) due 06/07/2020............................ 522,719 524,679 MacDermid, Inc. FRS BTL-B7 coupon TBD due 06/07/2020............................ 175,000 175,394 Omnova Solutions, Inc. FRS BTL-B 5.49% (1 ML+4.25%) due 08/28/2023............................ 1,562,220 1,571,984 PQ Corp. FRS BTL-B 5.56% (3 ML+4.25%) due 11/04/2022............................ 300,966 303,545
56 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS (continued) Chemicals-Specialty (continued) Tronox Blocked Brower LLC Blocked Dollar coupon TBD due 09/14/2024................ $ 110,349 $ 110,676 Tronox Finance LLC Initial Dollar coupon TBD due 09/14/2024................ 254,651 255,407 Venator Materials Corp. FRS BTL-B 4.31% (3 ML+3.00%) due 08/08/2024................ 1,010,000 1,013,787 ------------ 5,485,698 ------------ Coal -- 0.5% Blackhawk Mining LLC FRS 1st Lien 10.78% (2 ML+9.50%) due 02/14/2022................ 770,873 704,707 Contura Energy, Inc. FRS BTL 6.28% (2 ML+5.00%) due 03/18/2024................ 1,110,650 1,092,602 ------------ 1,797,309 ------------ Coatings/Paint -- 0.2% Royal Holdings, Inc. FRS 1st Lien 4.58% (3 ML+3.25%) due 06/19/2022................ 683,407 686,311 ------------ Commercial Services -- 1.9% Brand Energy & Infrastructure Services, Inc. FRS 1st Lien 5.51% (2 ML+4.25%) due 06/21/2024................ 1,245,646 1,250,600 Brand Energy & Infrastructure Services, Inc. FRS 1st Lien 5.56%-5.58% (3 ML+4.25%) due 06/21/2024................ 245,617 246,593 Brickman Group, Ltd. FRS BTL-B 4.23%-4.24% (1 ML+3.00%) due 12/18/2020................ 1,346,682 1,351,100 Brickman Group, Ltd. FRS 2nd Lien 7.73% (1 ML+6.50%) due 12/17/2021................ 363,234 363,972 CPI Acquisition, Inc. FRS BTL-B 5.96% (3 ML+4.50%) due 08/17/2022................ 2,470,685 1,618,299 PAE Holding Corp. FRS BTL-B 6.74% (1 ML+5.50%) due 10/20/2022................ 548,698 550,070
Principal Value Security Description Amount (Note 2) Commercial Services (continued) ServiceMaster Co. LLC FRS BTL-B 3.74% (1 ML+2.50%) due 11/08/2023............................... $1,418,464 $ 1,422,305 ------------ 6,802,939 ------------ Commercial Services & Supplies -- 0.1% Element Materials Tech Group FRS BTL-B 4.83% (3 ML+3.50%) due 06/28/2024............................... 386,282 388,922 ------------ Computer Services -- 0.6% Presidio LLC FRS 1st Lien 4.55% (3 ML+3.25%) due 02/02/2022............................... 506,560 508,821 Science Applications International Corp. FRS BTL-B 3.81% (3 ML+2.50%) due 09/26/2018............................... 548,235 550,977 Tempo Acquisition LLC FRS BTL-B 4.24% (1 ML+3.00%) due 05/01/2024............................... 982,538 982,742 ------------ 2,042,540 ------------ Computer Software -- 0.3% Rackspace Hosting, Inc. FRS BTL-B 4.31% (3 ML+3.00%) due 11/03/2023............................... 1,094,507 1,091,967 ------------ Computers-Integrated Systems -- 0.3% Cologix, Inc. FRS 2nd Lien 8.24% (1 ML+7.00%) due 03/20/2025............................... 110,000 110,733 Everi Payments, Inc. FRS BTL-B 5.74% (1 ML+4.50%) due 05/09/2024............................... 1,152,113 1,161,474 ------------ 1,272,207 ------------ Consumer Products-Misc. -- 0.1% Prestige Brands, Inc. FRS BTL-B4 3.99% (1 ML+2.75%) due 01/26/2024............................... 429,545 430,954 ------------ Containers-Metal/Glass -- 1.0% Anchor Glass Container Corp. FRS 1st Lien 3.98% (1 ML+2.75%) due 12/07/2023............................... 364,308 365,446 Anchor Glass Container Corp. FRS 1st Lien 4.07% (3 ML+2.75%) due 12/07/2023............................... 223,252 223,950
57 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS (continued) Containers-Metal/Glass (continued) Anchor Glass Container Corp. FRS 2nd Lien 9.07% (3 ML+7.75%) due 12/07/2024........................... $ 796,000 $ 806,945 Berlin Packaging LLC FRS BTL-B 4.49% (1 ML+3.25%) due 10/01/2021........................... 539,870 542,373 Berlin Packaging LLC FRS BTL-B 4.59% (3 ML+3.25%) due 10/01/2021........................... 322,864 324,361 BWAY Corp. FRS BTL-B 4.48% (1 ML+3.25%) due 04/03/2024........................... 1,266,825 1,268,635 ------------ 3,531,710 ------------ Containers-Paper/Plastic -- 0.9% Klockner Pentaplast of America, Inc. FRS BTL-B 5.58% (3 ML+4.25%) due 06/30/2022........................... 1,970,000 1,971,641 Reynolds Group Holdings, Inc. FRS BTL-B 4.24% (1 ML+3.00%) due 02/05/2023........................... 1,443,561 1,449,234 ------------ 3,420,875 ------------ Cosmetics & Toiletries -- 0.5% Parfums Holding Co., Inc. FRS BTL 6.08% (3 ML+4.75%) due 06/30/2024........................... 1,087,275 1,093,617 Revlon Consumer Products Corp. FRS BTL-B 4.74% (1 ML+3.50%) due 09/07/2023........................... 626,834 561,213 ------------ 1,654,830 ------------ Data Processing/Management -- 0.6% First Data Corp. FRS BTL 3.74% (1 ML+2.50%) due 04/26/2024........................... 2,102,730 2,108,226 ------------ Diagnostic Equipment -- 0.6% Immucor, Inc. FRS BTL-B3 6.24% (1 ML+5.00%) due 06/15/2021........................... 109,725 111,097 Ortho-Clinical Diagnostics, Inc. FRS BTL-B 5.08% (3 ML+3.75%) due 06/30/2021........................... 2,040,812 2,044,851 ------------ 2,155,948 ------------
Principal Value Security Description Amount (Note 2) Dialysis Centers -- 0.5% U.S. Renal Care, Inc. FRS BTL 5.58% (3 ML+4.25%) due 12/31/2022.............................. $1,724,634 $ 1,669,303 ------------ Disposable Medical Products -- 0.2% Sterigenics-Nordion Holdings LLC FRS BTL-B 4.24% (1 ML+3.00%) due 05/15/2022.............................. 666,242 665,687 ------------ Distribution/Wholesale -- 1.4% American Builders & Contractors Supply Co., Inc. FRS BTL-B1 3.74% (1 ML+2.50%) due 10/31/2023.............................. 1,129,405 1,133,169 McJunkin Red Man Corp. FRS BTL-B 4.74% (1 ML+3.50%) due 09/20/2024.............................. 1,010,000 1,013,788 Siteone Landscape Supply, Inc. FRS BTL-B 4.74% (1 ML+3.50%) due 04/29/2022.............................. 689,117 692,562 Spin Holdco, Inc. FRS BTL-B 5.01% (2 ML+3.75%) due 11/14/2022.............................. 1,169,851 1,173,263 Univar USA, Inc. FRS BTL-B2 3.99% (1 ML+2.75%) due 07/01/2022.............................. 1,025,178 1,027,741 ------------ 5,040,523 ------------ Diversified Financial Services -- 0.4% NAB Holdings LLC FRS BTL-B 4.83% (3 ML+3.50%) due 07/01/2024.............................. 1,396,500 1,401,737 ------------ E-Commerce/Services -- 0.1% Hoya Midco LLC FRS BTL-B 5.24% (1 ML+4.00%) due 06/30/2024.............................. 518,700 517,403 ------------ Educational Software -- 0.7% Blackboard, Inc. FRS BTL-B4 6.30% (3 ML+5.00%) due 06/30/2021.............................. 2,477,217 2,388,966 ------------ Electric-Generation -- 0.6% APLP Holdings LP FRS BTL 5.49% (1 ML+4.25%) due 04/13/2023.............................. 1,141,534 1,150,095
58 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS (continued) Electric-Generation (continued) TEX Operations Co. LLC FRS BTL-C 3.98% (1 ML+2.75%) due 08/04/2023................................ $ 179,082 $ 179,338 TEX Operations Co. LLC FRS BTL-B 3.98%-3.99% (1 ML+2.75%) due 08/04/2023................................ 777,796 778,907 Vistra Operations Co. LLC FRS BTL-B 3.98% (1 ML+2.75%) due 12/14/2023................................ 228,275 228,941 ------------ 2,337,281 ------------ Electric-Integrated -- 1.0% Dayton Power & Light Co. FRS BTL-B 4.49% (1 ML+3.25%) due 08/24/2022................................ 152,845 154,947 Energy Future Intermediate Holding Co LLC FRS DIP 4.24% (1 ML+3.00%) due 06/30/2018................................ 2,340,000 2,350,724 Talen Energy Supply LLC FRS BTL-B1 5.24% (1 ML+4.00%) due 07/15/2023................................ 616,350 601,969 Talen Energy Supply LLC FRS BTL-B2 5.24% (1ML+4.00%) due 04/15/2024................................ 745,500 728,260 ------------ 3,835,900 ------------ Enterprise Software/Service -- 1.7% Applied Systems, Inc. FRS BTL-B 4.57% (3 ML+3.25%) due 09/19/2024................................ 180,000 181,625 Applied Systems, Inc. FRS 2nd Lien 8.32% (3 ML+7.00%) due 09/19/2025................................ 205,000 210,125 BMC Software Finance, Inc. FRS BTL 5.24% (1 ML+4.00%) due 09/10/2022................................ 1,482,926 1,490,078 Donnelley Financial Solutions, Inc. FRS BTL-B 7.25% (USFRBPLR+3.00%) due 09/30/2023................................ 205,714 206,357 Kronos, Inc. FRS 1st Lien 4.81% (3 ML+3.50%) due 11/01/2023................................ 2,211,318 2,222,034 Kronos, Inc. FRS 2nd Lien 9.56% (3 ML+8.25%) due 11/01/2024................................ 440,000 452,870
Principal Value Security Description Amount (Note 2) Enterprise Software/Service (continued) Veritas US, Inc. FRS BTL-B 5.83% (3 ML+4.50%) due 01/27/2023................................ $1,590,202 $ 1,599,856 ------------ 6,362,945 ------------ Extended Service Contracts -- 0.6% Sedgwick Claims Management Services, Inc. FRS 1st Lien 3.99% (1 ML+2.75%) due 03/01/2021................................ 1,126,222 1,128,032 Sedgwick Claims Management Services, Inc. FRS BTL 4.58% (3 ML+3.25%) due 03/01/2021................................ 128,375 128,719 Sedgwick Claims Management Services, Inc. FRS 2nd Lien 6.99% (1 ML+5.75%) due 02/28/2022................................ 970,000 972,829 ------------ 2,229,580 ------------ Filtration/Separation Products -- 0.1% Filtration Group, Inc. FRS BTL-B 4.24% (1 ML+3.00%) due 11/21/2020................................ 403,823 405,770 ------------ Finance-Auto Loans -- 0.3% Capital Automotive LP FRS BTL-B 4.24% (1 ML+3.00%) due 03/24/2024................................ 309,868 311,353 Capital Automotive LP FRS 2nd Lien 7.24% (1 ML+6.00%) due 03/24/2025................................ 898,911 907,900 ------------ 1,219,253 ------------ Finance-Mortgage Loan/Banker -- 0.7% Walter Investment Management Corp. FRS BTL-B 4.99% (1 ML+3.75%) due 12/18/2020................................ 2,621,371 2,395,933 ------------ Financial Guarantee Insurance -- 0.2% VF Holdings Corp. FRS BTL-B1 4.49% (1 ML+3.25%) due 06/30/2023................................ 595,313 596,884 ------------ Food-Baking -- 0.3% Hostess Brands LLC FRS BTL-B 3.74% (1 ML+2.50%) due 08/03/2022................................ 1,049,946 1,053,227 ------------ Food-Confectionery -- 0.2% Amplify Snack Brands, Inc. FRS 1st Lien 6.74% (1 ML+5.50%) due 09/02/2023................................ 562,260 555,232 ------------
59 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS (continued) Food-Dairy Products -- 0.4% Chobani LLC FRS BTL-B coupon TBD due 10/07/2023........................... $ 180,000 $ 181,575 Chobani LLC FRS BTL-B 5.49% (1 ML+4.25%) due 10/07/2023........................... 235,310 235,996 Milk Specialties Co. FRS BTL 5.33% (3 ML+4.00%) due 08/16/2023........................... 996,930 1,002,330 ------------ 1,419,901 ------------ Food-Meat Products -- 0.4% JBS USA LLC FRS BTL-B 3.80% (3 ML+2.50%) due 10/30/2022........................... 1,578,496 1,556,397 ------------ Food-Misc./Diversified -- 0.2% Dole Food Co., Inc. FRS BTL-B 4.01%-4.02% (2 ML+2.75%) due 04/06/2024........................... 648,947 650,570 Dole Food Co., Inc. FRS BTL-B 4.08% (3 ML+2.75%) due 04/06/2024........................... 31,726 31,806 Dole Food Co., Inc. FRS BTL-B 6.00% (USFRBPLR+1.75%) due 04/06/2024........................... 45 45 ------------ 682,421 ------------ Food-Retail -- 0.3% Albertson's LLC FRS BTL-B4 3.99% (1 ML+2.75%) due 08/25/2021........................... 662,102 636,342 Albertson's LLC FRS BTL-B5 4.33% (3 ML+3.00%) due 12/21/2022........................... 464,328 445,972 ------------ 1,082,314 ------------ Gambling (Non-Hotel) -- 0.6% Greektown Holdings LLC FRS BTL 4.24% (1 ML+3.00%) due 03/21/2024........................... 517,793 517,632 Mohegan Tribal Gaming Authority FRS BTL-B 5.24% (1 ML+4.00%) due 10/13/2023........................... 843,625 849,319 Scientific Games International, Inc. FRS BTL-B4 4.49% (1 ML+3.25%) due 08/14/2024........................... 172,720 213,401
Principal Value Security Description Amount (Note 2) Gambling (Non-Hotel) (continued) Scientific Games International, Inc. FRS BTL-B4 4.52% (2 ML+3.25%) due 08/14/2024........................... $ 637,280 $ 787,380 ------------ 2,367,732 ------------ Hotels/Motels -- 0.3% Playa Resorts Holding BV FRS BTL-B 4.32% (3 ML+3.00%) due 04/05/2024........................... 1,286,775 1,283,826 ------------ Housewares -- 0.2% Libbey Glass, Inc. FRS BTL-B coupon TBD due 04/09/2021........................... 775,000 710,094 ------------ Human Resources -- 0.4% CHG Healthcare Services, Inc. FRS 1st Lien 4.56% (3 ML+3.25%) due 06/07/2023........................... 208,879 210,852 Team Health, Inc. FRS 1st Lien 3.99% (1ML+2.75%) due 02/06/2024........................... 1,152,274 1,132,590 ------------ 1,343,442 ------------ Investment Companies -- 0.7% TKC Holdings, Inc. FRS BTL 5.52% (2 ML+4.25%) due 02/01/2023........................... 1,606,925 1,616,165 UFC Holdings LLC FRS BTL-B 4.49% (1 ML+3.25%) due 08/18/2023........................... 825,862 828,443 ------------ 2,444,608 ------------ Investment Management/Advisor Services -- 0.5% AlixPartners LLP FRS BTL-B 4.33% (3 ML+3.00%) due 04/04/2024........................... 1,582,050 1,584,876 Focus Financial Partners LLC FRS 1st Lien 4.55% (3 ML+3.25%) due 07/03/2024........................... 145,000 146,087 ------------ 1,730,963 ------------ Leisure Products -- 0.1% Hayward Industries, Inc. FRS BTL-B 4.74% (1 ML+3.50%) due 08/05/2024........................... 380,000 382,217 ------------ Machinery-Construction & Mining -- 0.1% Paladin Brands Holding, Inc. FRS BTL-B coupon TBD due 08/15/2022........................... 510,000 511,913 ------------
60 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS (continued) Machinery-General Industrial -- 1.5% Gardner Denver, Inc. FRS BTL-B 4.08% (3 ML+2.75%) due 07/30/2024........................... $1,975,795 $ 1,976,558 Husky Injection Molding Systems, Ltd. FRS BTL-B 4.49% (1 ML+3.25%) due 06/30/2021........................... 1,553,536 1,563,422 Rexnord LLC FRS BTL-B 3.99% (1 ML+2.75%) due 08/21/2023........................... 126,045 126,470 Rexnord LLC FRS BTL-B 4.06%-4.08% (3 ML+2.75%) due 08/21/2023........................... 908,070 911,130 Zodiac Pool Solutions LLC FRS BTL 5.33% (3 ML+4.00%) due 12/20/2023........................... 1,017,325 1,023,048 ------------ 5,600,628 ------------ Machinery-Pumps -- 0.3% NN, Inc. FRS BTL 4.99% (1 ML+3.75%) due 03/22/2021........................... 553,700 553,239 NN, Inc. FRS BTL-B 5.49% (1 ML+4.25%) due 10/19/2022........................... 718,669 718,219 ------------ 1,271,458 ------------ Medical Labs & Testing Services -- 0.4% Explorer Holdings, Inc. FRS BTL 5.06% (3 ML+3.75%) due 05/02/2023........................... 264,331 265,322 Jaguar Holding Co. II FRS BTL 3.99% (1 ML+2.75%) due 08/18/2022........................... 251,619 252,791 Jaguar Holding Co. II FRS BTL 4.08% (3 ML+2.75%) due 08/18/2022........................... 280,032 281,337 US Anesthesia Partners, Inc. FRS BTL 4.49% (1 ML+3.25%) due 06/23/2024........................... 513,713 509,860 ------------ 1,309,310 ------------ Medical Products -- 0.5% DJO Finance LLC FRS BTL-B 4.49% (1 ML+3.25%) due 06/08/2020........................... 1,138,481 1,135,350
Principal Value Security Description Amount (Note 2) Medical Products (continued) Greatbatch, Ltd. FRS BTL-B 4.74% (1 ML+3.50%) due 10/27/2022................................. $ 608,389 $ 610,062 ------------ 1,745,412 ------------ Medical-Drugs -- 1.1% Endo Luxembourg Finance Co. I SARL FRS BTL-B 5.50% (1 ML+4.25%) due 04/29/2024................................. 773,063 779,988 HLF Financing SARL FRS BTL-B 6.74% (1 ML+5.50%) due 02/15/2023................................. 548,625 552,740 Pharmerica Corp. FRS 1st Lien coupon TBD due 09/26/2024................................. 785,000 789,168 Pharmerica Corp. FRS 2nd Lien coupon TBD due 09/26/2025................................. 75,000 74,812 Valeant Pharmaceuticals International, Inc. FRS BTL-BF1 5.99% (1 ML+4.75%) due 04/01/2022................................. 1,669,295 1,698,383 ------------ 3,895,091 ------------ Medical-Generic Drugs -- 0.2% Amneal Pharmaceuticals LLC FRS BTL-B2 4.83% (3 ML+3.50%) due 11/01/2019................................. 666,038 669,368 ------------ Medical-HMO -- 0.1% MultiPlan, Inc. FRS BTL-B 4.33% (3 ML+3.00%) due 06/07/2023................................. 396,421 398,953 ------------ Medical-Hospitals -- 1.7% Acadia Healthcare Co., Inc. FRS BTL-B2 3.98% (1 ML+2.75%) due 02/16/2023................................. 606,533 610,627 Ardent Legacy Acquisitions, Inc. FRS BTL-B 6.83% (3 ML+5.50%) due 08/04/2021................................. 489,850 490,462 CHS/Community Health Systems, Inc. FRS BTL-H 4.32% (3 ML+3.00%) due 01/27/2021................................. 1,144,892 1,138,214 Envision Healthcare Corp. FRS BTL-C 4.24% (1 ML+3.00%) due 12/01/2023................................. 1,777,208 1,786,836 Quorum Health Corp. FRS BTL 7.99% (1 ML+6.75%) due 04/29/2022................................. 14,320 14,443
61 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS (continued) Medical-Hospitals (continued) Quorum Health Corp. FRS BTL 8.07% (3 ML+6.75%) due 04/29/2022.................... $ 541,153 $ 545,791 Select Medical Corp. FRS BTL-B 4.81% (3 ML+3.50%) due 03/01/2021.................... 954,991 963,050 Select Medical Corp. FRS BTL-B 6.75% (USFRBPLR+2.50%) due 03/01/2021.................... 209 210 Surgery Center Holdings, Inc. FRS 1st Lien 4.49% (1 ML+3.25%) due 09/03/2024.................... 735,000 728,340 ------------ 6,277,973 ------------ Medical-Outpatient/Home Medical -- 0.1% 21st Century Oncology, Inc. FRS BTL-B 7.43% (3 ML+6.13%) due 04/30/2022(5)................. 363,039 342,391 National Mentor Holdings, Inc. FRS BTL-B 4.33% (3 ML+3.00%) due 01/31/2021.................... 138,066 139,101 ------------ 481,492 ------------ Motion Pictures & Services -- 0.1% Lions Gate Entertainment Corp. FRS BTL-B 4.24% (1 ML+3.00%) due 12/08/2023.................... 458,338 460,744 ------------ Non-Hazardous Waste Disposal -- 0.3% Casella Waste Systems, Inc. FRS BTL-B 3.98% (1 ML+2.75%) due 10/17/2023.................... 687,802 689,522 Wrangler Buyer Corp. FRS BTL-B coupon TBD due 09/27/2024.................... 585,000 586,755 ------------ 1,276,277 ------------ Oil & Gas Drilling -- 0.6% Jonah Energy LLC FRS 2nd Lien 9.75% (3ML+6.50%) due 05/12/2021.................... 400,000 399,000 Paragon Offshore Finance Co. Escrow Loans 6.00% due 07/18/2021+(2)(4)....... 2,672 0 Seadrill Operating LP FRS BTL-B 4.33% (3 ML+3.00%) due 02/21/2021.................... 2,480,670 1,815,024 ------------ 2,214,024 ------------
Principal Value Security Description Amount (Note 2) Oil Companies-Exploration & Production -- 0.8% Chesapeake Energy Corp Term Loan FRS BTL 8.81% (3 ML+7.50%) due 08/23/2021...................... $ 181,000 $ 194,405 Fieldwood Energy LLC FRS 1st Lien 8.33% (3 ML+7.00%) due 08/31/2020...................... 480,382 420,335 Fieldwood Energy LLC FRS 1st Lien 8.46% (3 ML+7.13%) due 09/30/2020...................... 128,766 87,561 Fieldwood Energy LLC FRS 2nd Lien 8.46% (3 ML+7.13%) due 09/30/2020...................... 211,234 84,494 Gavilan Resources LLC FRS 2nd Lien 7.23% (1 ML+6.00%) due 03/01/2024...................... 470,000 451,200 MEG Energy Corp. FRS BTL 4.83% (3 ML+3.50%) due 12/31/2023...................... 1,149,857 1,143,491 Ultra Resources, Inc. FRS 1st Lien 4.31% (3 ML+3.00%) due 04/12/2024...................... 705,000 704,413 ------------ 3,085,899 ------------ Oil-Field Services -- 0.3% Traverse Midstream Partner LLC FRS BTL 5.33% (3 ML+4.00%) due 09/27/2024...................... 1,085,000 1,098,562 ------------ Pharmacy Services -- 0.5% Change Healthcare Holdings LLC FRS BTL-B 3.99% (1ML +2.75%) due 03/01/2024...................... 1,975,075 1,978,531 ------------ Printing-Commercial -- 0.3% Fort Dearborn Co. FRS 1st Lien 5.23% (1ML +4.00%) due 10/19/2023...................... 15,369 15,458 Fort Dearborn Co. FRS 1st Lien 5.30% (3ML +4.00%) due 10/19/2023...................... 1,128,628 1,135,212 ------------ 1,150,670 ------------ Professional Sports -- 0.6% Delta 2 Luxembourg SARL FRS BTL-B3 4.24% (1 ML+3.00%) due 02/01/2024...................... 2,025,000 2,030,062 ------------
62 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS (continued) Publishing-Books -- 0.2% McGraw-Hill Global Education Holdings LLC FRS BTL 5.24% (1 ML+4.00%) due 05/04/2022............................... $ 869,000 $ 852,344 ------------ Radio -- 0.1% CBS Radio, Inc. FRS BTL-B 4.74% (1 ML+3.50%) due 10/17/2023............................... 321,541 323,451 ------------ Real Estate Investment Trusts -- 0.2% Uniti Group, Inc. FRS BTL 4.24% (1 ML+3.00%) due 10/24/2022............................... 769,188 710,537 ------------ Real Estate Management/Services -- 0.4% DTZ US Borrower LLC FRS BTL-B 4.56%-4.58% (3 ML+3.25%) due 11/04/2021............................... 1,466,250 1,468,694 ------------ Real Estate Operations & Development -- 0.1% Lightstone Generation LLC FRS BTL-B 5.74% (1 ML+4.50%) due 01/30/2024............................... 418,663 416,766 Lightstone Generation LLC FRS BTL-C 5.74% (1 ML+4.50%) due 01/30/2024............................... 26,087 25,969 ------------ 442,735 ------------ Research & Development -- 0.1% PAREXEL International Corp. FRS BTL-B coupon TBD due 09/27/2024............................... 230,000 231,610 ------------ Retail-Arts & Crafts -- 0.2% Michaels Stores, Inc. FRS BTL-B1 3.98%-3.99% (1 ML+2.75%) due 01/30/2023............................... 847,239 845,386 ------------ Retail-Auto Parts -- 0.4% Dragon Merger Sub LLC FRS 1st Lien 5.31% (3 ML+4.00%) due 07/24/2024............................... 1,410,000 1,424,100 ------------ Retail-Bedding -- 0.3% Serta Simmons Bedding LLC FRS 1st Lien 4.80%-4.81% (3 ML+3.50%) due 11/08/2023............................... 975,100 945,319 ------------ Retail-Building Products -- 0.4% 84 Lumber Co. FRS BTL-B 6.99% (1 ML+5.75%) due 10/04/2023............................... 1,599,438 1,616,099 ------------
Principal Value Security Description Amount (Note 2) Retail-Drug Store -- 0.1% Rite Aid Corp. FRS BTL-2 5.12% (1 ML+3.88%) due 06/21/2021..................................... $ 520,000 $ 521,842 ------------ Retail-Major Department Stores -- 0.2% Neiman Marcus Group, Ltd. LLC FRS BTL 4.48% (1 ML+3.25%) due 10/25/2020..................................... 763,023 567,499 ------------ Retail-Misc./Diversified -- 0.2% Leslie's Poolmart, Inc. FRS BTL-B 5.06% (3 ML+3.75%) due 08/16/2023..................................... 895,370 896,210 ------------ Retail-Office Supplies -- 0.2% Staples, Inc. FRS BTL-B 5.31% (3 ML+4.00%) due 09/12/2024..................................... 775,000 770,896 ------------ Retail-Pet Food & Supplies -- 0.1% PetSmart, Inc. FRS BTL-B 4.24% (1 ML+3.00%) due 03/11/2022..................................... 575,748 487,535 ------------ Retail-Sporting Goods -- 0.3% Bass Pro Group LLC FRS BTL-B 6.24% (1 ML+5.00%) due 12/16/2023..................................... 1,315,000 1,237,744 ------------ Retail-Toy Stores -- 0.1% Toys "R" Us-Delaware, Inc. FRS BTL coupon TBD due 01/22/2019..................................... 205,000 207,050 ------------ Rubber/Plastic Products -- 0.6% Gates Global LLC FRS BTL-B 4.58% (3 ML+3.25%) due 04/01/2024..................................... 1,228,030 1,232,356 U.S. Farathane LLC FRS BLT-B4 4.80% (3 ML+3.50%) due 12/23/2021..................................... 1,069,025 1,071,698 ------------ 2,304,054 ------------ Schools -- 0.7% Laureate Education, Inc. FRS BTL-B 5.74% (1 ML+4.50%) due 04/26/2024..................................... 2,403,156 2,408,162 St. George's University Scholastic Services LLC FRS BTL 5.48% (1 ML+4.25%) due 07/06/2022..................................... 207,310 207,957 ------------ 2,616,119 ------------
63 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS (continued) Security Services -- 0.2% Garda World Security Corp. FRS BTL-B 5.31% (3 ML+4.00%) due 05/24/2024........................... $ 494,265 $ 498,281 Garda World Security Corp. FRS BTL-B 7.25% (USFRBPLR+3.00%) due 05/24/2024........................... 1,242 1,252 Prime Security Services Borrower LLC FRS BTL-B1 3.99% (1 ML+2.75%) due 05/02/2022........................... 288,552 290,626 ------------ 790,159 ------------ Soap & Cleaning Preparation -- 0.3% Diamond (BC) B.V. FRS USD BTL 4.32% (3 ML+3.00%) due 09/06/2024........................... 1,105,000 1,101,980 ------------ Telecom Services -- 1.8% CenturyLink, Inc. BTL-B 2.75% due 01/31/2025..................... 775,000 749,674 Coral-US Co. Borrower LLC FRS BTL-B 4.74% (1 ML+3.50%) due 01/31/2025........................... 565,000 558,026 Digicel International Finance, Ltd. FRS BTL-B 5.07% (3 ML+3.75%) due 05/28/2024........................... 465,000 467,519 Securus Technologies Holdings, Inc. FRS BTL-B2 5.45% (1 ML+4.25%) due 04/30/2020........................... 957,543 957,543 Securus Technologies Holdings, Inc. FRS 1st Lien coupon TBD due 06/20/2024........................... 1,350,000 1,358,437 Securus Technologies Holdings, Inc. FRS 2nd Lien coupon TBD due 06/15/2025........................... 670,000 673,350 UPC Financing Partnership FRS BTL-AN 3.98% (1 ML+2.75%) due 04/15/2025........................... 1,780,000 1,785,721 ------------ 6,550,270 ------------ Telecommunication Equipment -- 0.0% Sorenson Communications, Inc. FRS BTL 7.08% (3 ML+5.75%) due 04/30/2020........................... 99,742 99,992 ------------ Television -- 0.2% Mission Broadcasting, Inc. FRS BTL-B2 3.74% (1 ML+2.50%) due 01/17/2024........................... 66,042 66,183
Principal Amount/ Value Security Description Shares (Note 2) Television (continued) Tribune Media Co. FRS BTL-B 4.24% (1 ML+3.00%) due 12/27/2020.......................... $ 53,618 $ 53,668 Tribune Media Co. FRS BTL-C 4.24% (1 ML+3.00%) due 01/27/2024.......................... 668,275 669,110 ------------ 788,961 ------------ Theaters -- 0.3% CDS US Intermediate Holdings, Inc. FRS BTL 5.30% (3 ML+4.00%) due 07/08/2022.......................... 1,242,757 1,245,864 ------------ Tools-Hand Held -- 0.3% Apex Tool Group LLC FRS BTL-B 4.50% (1 ML+3.25%) due 02/01/2020.......................... 1,098,940 1,065,971 ------------ Transport-Air Freight -- 0.1% Air Medical Group Holdings, Inc. FRS BTL coupon TBD due 09/07/2024.......................... 250,000 249,219 ------------ Total Loans (cost $178,768,395)..................... 177,863,233 ------------ FOREIGN GOVERNMENT OBLIGATIONS -- 0.5% Sovereign -- 0.5% Republic of Argentina Senior Notes 6.50% due 02/15/2023*................... 935,000 985,640 Republic of Argentina Senior Notes 7.13% due 07/06/2036.................... 755,000 792,750 ------------ Total Foreign Government Obligations (cost $1,693,628)....................... 1,778,390 ------------ COMMON STOCKS -- 0.4% Electric-Generation -- 0.2% Vistra Energy Corp.+..................... 27,942 522,236 Vistra Energy Corp. CVR+(2).............. 27,942 29,339 ------------ 551,575 ------------ Multimedia -- 0.0% Haights Cross Communication, Inc.+(2)(4). 19,388 0 ------------ Oil Companies-Exploration & Production -- 0.1% Bonanza Creek Energy, Inc.+.............. 5 165 Linn Energy, Inc.+....................... 10,500 379,575 ------------ 379,740 ------------ Television -- 0.1% ION Media Networks, Inc.+(2)(4)(10)...... 660 502,491 ------------ Total Common Stocks (cost $2,084,573)....................... 1,433,806 ------------
64 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued)
Principal Amount/ Value Security Description Shares (Note 2) PREFERRED SECURITIES -- 0.3% Diversified Banking Institutions -- 0.3% GMAC Capital Trust I FRS Series 2 7.10% (3 ML+5.79%) (cost $1,191,988).......................... 46,500 $ 1,227,600 ------------ PREFERRED SECURITIES/CAPITAL SECURITIES -- 1.0% Banks-Commercial -- 0.2% Macquarie Bank, Ltd. 6.13% due 03/08/2027*(11).................. $ 675,000 698,423 ------------ Banks-Super Regional -- 0.3% KeyCorp. 5.00% due 09/15/2026(11)................... 1,150,000 1,190,250 ------------ Diversified Banking Institutions -- 0.3% Citigroup, Inc. Series T 6.25% due 08/15/2026(11)................... 845,000 950,625 ------------ Insurance-Multi-line -- 0.2% Voya Financial, Inc. 5.65% due 05/15/2053....................... 600,000 637,200 ------------ Total Preferred Securities/Capital Securities (cost $3,301,975).......................... 3,476,498 ------------ Total Long-Term Investment Securities (cost $369,402,179)........................ 370,696,501 ------------ SHORT-TERM INVESTMENT SECURITIES -- 0.1% Registered Investment Companies -- 0.1% State Street Institutional U.S. Government Money Market Fund, Premier Class 0.92%(12) (cost $406,600)............................ 406,600 406,600 ------------ TOTAL INVESTMENTS -- (cost $369,808,779)(1)..................... 100.9% 371,103,101 Liabilities in excess of other assets......... (0.9) (3,241,667) ---------- ------------ NET ASSETS -- 100.0% $367,861,434 ========== ============
-------- * 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, 2017, the aggregate value of these securities was $105,452,053 representing 28.7% of net assets. Unless otherwise indicated, these securities are not considered to be illiquid. + Non-income producing security (1) See Note 5 for cost of investments on a tax basis. (2) Illiquid security. At September 30, 2017, the aggregate value of these securities was $848,486 representing 0.2% of net assets. (3) 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. (4) Securities are classified as Level 3 (see Note 2). (5) Company has filed for bankruptcy protection. (6) Security in default of interest and principal at maturity. (7) Senior loans in the Fund are generally subject to mandatory and/or optional prepayment. Because of these mandatory prepayment conditions and because there may be significant economic incentives for a borrower to prepay, prepayments may occur. As a result, the actual remaining maturity may be substantially less than the stated maturities shown. (8) 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. (9) All loans in the Fund were purchased through assignment agreements unless otherwise indicated. (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, 2017, the Fund held the following restricted securities:
Shares/ Value % of Acquisition Principal Acquisition Per Net Description Date Amount Cost Value Share Assets ----------- ----------- --------- ----------- -------- ------- ------ Common Stocks ION Media Networks, Inc........ 12/21/2016 660 $6 $502,491 $761.35 0.14% ======== ====
(11) Perpetual maturity -- maturity date reflects the next call date. (12) The rate shown is the 7-day yield as of September 30, 2017. (13) 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. BTL --Bank Term Loan CVR --Contingent Value Rights DIP --Debtor-in-possession 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. 65 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited) (continued) FRS --Floating Rate Security VRS --Variable Rate Security The rates shown on FRS and VRS are the current interest rates at September 30, 2017 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 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, 2017 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant Quoted Prices Observable Inputs Unobservable Inputs Total - --------------------- ----------------- ---------------------- ------------ ASSETS: Asset Backed Securities................. $ -- $ 825,667 $ -- $ 825,667 U.S. Corporate Bonds & Notes: Rubber/Plastic Products............... -- -- 0 0 Other Industries...................... -- 147,230,456 -- 147,230,456 Foreign Corporate Bonds & Notes: Special Purpose Entity................ -- -- 0 0 Other Industries...................... -- 36,860,851 -- 36,860,851 Loans: Building-Residential/Commercial....... -- -- 0 0 Oil & Gas Drilling.................... -- 2,214,024 0 2,214,024 Other Industries...................... -- 175,649,209 -- 175,649,209 Foreign Government Obiligations......... -- 1,778,390 -- 1,778,390 Common Stocks: Electric-Generation................... 522,236 29,339 -- 551,575 Multimedia............................ -- -- 0 0 Television............................ -- -- 502,491 502,491 Other Industries...................... 379,740 -- -- 379,740 Preferred Securities.................... 1,227,600 -- -- 1,227,600 Preferred Securities/Capital Securities. -- 3,476,498 -- 3,476,498 Short-Term Investment Securities........ 406,600 -- -- 406,600 ---------- ------------ -------- ------------ Total Investments at Value.............. $2,536,176 $368,064,434 $502,491 $371,103,101 ========== ============ ======== ============
-------- * 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 66 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (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. The U.S. Government Fund and the Flexible Credit Fund stopped offering Class B shares for sale as of the close of business December 2, 2014. As of the close of business January 27, 2015, Class B shares of each of the U.S. Government Securities Fund and the Flexible Credit Fund converted to Class A shares of each respective Fund. 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 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. 67 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited) (continued) 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 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"), except that Class B and Class C shares are subject to higher distribution fees. 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 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. 68 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited) (continued) The summary of each Fund's asset and liabilities classified in the fair value hierarchy as of September 30, 2017 is reported on a schedule following 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 69 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (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 following 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. 70 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited) (continued) The following tables represent the value of derivatives held as of September 30, 2017, by their primary underlying risk exposure and respective location on the Statements of Assets and Liabilities and the effect of derivatives on the Statements of Operations for the period ended September 30, 2017. 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, 2017, please refer to each Fund's Portfolio of Investments.
Liability Asset Derivatives Derivatives ----------------- ------------ Foreign Foreign Exchange Exchange Contracts Contracts ----------------- ------------ Foreign Foreign Exchange Exchange Fund Contracts(1) Contracts(2) ---- ----------------- ------------ Strategic Bond. $143,363 $71,704 ======== =======
-------- 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 Gain Appreciation (Loss) on (Depreciation) on Derivatives Derivatives Recognized in Recognized in Statement of Statement of Operations Operations ------------- ----------------- Foreign Foreign Exchange Exchange Contracts Contracts ------------- ----------------- Foreign Foreign Exchange Exchange Fund Contracts(1) Contracts(2) ---- ------------- ----------------- Strategic Bond. $(2,582,670) $124,202 =========== ========
-------- 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, 2017:
Average Amount Outstanding During the Year --------------- Foreign Exchange Fund Contracts(1) ---- --------------- Strategic Bond. $27,589,958 ===========
-------- (1)Amounts represent notional amounts in US dollars. There were no derivative assets and liabilities subject to Master Agreements outstanding at September 30, 2017. The repurchase agreements held by the Funds as of September 30, 2017, 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. 71 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited) (continued) Mortgage-Backed Dollar Rolls: During the six months ended September 30, 2017, the Strategic Bond Fund entered into dollar rolls using "to be announced" ("TBA") mortgage-backed securities ("TBA Rolls"). TBA Roll transactions involve the sale of mortgage or other asset backed securities with the commitment to purchase substantially similar securities on a specified future date. The Funds' policy is to record the components of TBA Rolls as purchase/sale transactions. Any difference between the purchase and sale price is recorded as a realized gain or loss on the date the transaction is entered into. TBA Roll transactions involve the risk that the market value of the securities held by a Fund may decline below the price of the securities that the Fund has sold but is obligated to repurchase under the agreement. In the event that the buyer of securities in a TBA Roll transaction files bankruptcy or becomes insolvent, a Fund's use of the proceeds from the sale of the securities may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund's obligation to repurchase the securities. The return earned by a Fund with the proceeds of the TBA Roll transaction may not exceed the transaction costs. When-Issued Securities and Forward Commitments: Certain Funds may purchase or sell when-issued 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 period ended September 30, 2017, the Strategic Bond Fund purchased and/or sold when-issued securities. 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. 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 72 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited) (continued) 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. Securities purchased or sold on a when-issued or forward commitment basis are included in investments purchased/sold on an extended settlement basis in the Statement of Assets and Liabilities. 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 2013 -- 2015 or expected to be taken in each Fund's 2016 tax return. The Funds are not aware of any tax provisions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months. The Funds file U.S. federal and certain state income tax returns. With few exceptions, the Funds are no longer subject to U.S. federal and state tax examinations by tax authorities for tax returns ending before 2013. 73 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited) (continued) Foreign Currency Translation: The books and records of the Funds are maintained in U.S. dollars. Assets and liabilities denominated in foreign currencies and commitments under forward foreign currency contracts are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Funds do not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the changes in the market prices of securities held at the end of the period. Similarly, the Funds do not isolate the effect of changes in foreign exchange rates from the changes in the market prices of portfolio securities sold during the period. Realized foreign exchange gains and losses on other assets and liabilities and change in unrealized foreign exchange gains and losses on other assets and liabilities located in the Statements of Operations include realized foreign exchange gains and losses from currency gains or losses between the trade and the settlement dates of securities transactions, the difference between the amounts of interest, dividends and foreign withholding taxes recorded on the Funds' books and the U.S. dollar equivalent amounts actually received or paid and changes in the unrealized foreign exchange gains and losses relating to the other assets and liabilities arising as a result of changes in the exchange rates and realized gains and losses on forward foreign currency contracts. New Accounting Pronouncement: In October 2016, the SEC adopted amendments to rules under the 1940 Act ("final rules") intended to modernize the reporting and disclosure of information by registered investment companies. The final rules amend Regulation S-X and require funds to provide standardized, enhanced derivative disclosure in fund financial statements in a format designed for individual investors. The amendments to Regulation S-X also update the disclosures for other investments and investments in and advances to affiliates and amend the rules regarding the general form and content of fund financial statements. The compliance date for the amendments to Regulation S-X is August 1, 2017. All required changes have been made in accordance with Regulation S-X. Note 3. 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.................................... $0 - $350 million 0.650 (greater than) $350 million 0.600 Flexible Credit................................... $0 - $200 million 0.750 (greater than) $200 million 0.720 (greater than) $400 million 0.550
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. 74 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited) (continued) 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.................................... $0 - $200 million 0.350% (greater than) $200 million 0.250 (greater than) $500 million 0.200 Flexible Credit................................... $0 - $200 million 0.300 (greater than) $200 million 0.250 (greater than) $400 million 0.150
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 period ended September 30, 2017, 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......... $ 97,409 Class Specific Fund Expenses ---- -------------- U.S. Government Securities Class A. $185,758 U.S. Government Securities Class C. 35,577
75 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited) (continued) At September 30, 2017, 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, 2018 March 31, 2019 September 30, 2019 ---- -------------- -------------- ------------------ U.S. Government Securities......... $103,312 $190,664 $ 97,409 Class Specific Expenses Reimbursed ------------------------------------------------ Fund March 31, 2018 March 31, 2019 September 30, 2019 ---- -------------- -------------- ------------------ U.S. Government Securities Class A. $190,851 $402,860 $185,758 U.S. Government Securities Class C. 34,881 81,730 35,577
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. For the period ended September 30, 2017, 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. For the period ended September 30, 2017, 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 period ended September 30, 2017, 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. $ 10,574 $ 1,667 $ 7,140 $ 143 $ -- $ 341 Strategic Bond............. 227,650 57,087 151,461 426 18,897 1,482 Flexible Credit............ 143,417 21,971 103,191 3,627 -- 4,923
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, State Street Bank 76 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited) (continued) and Trust Company ("State Street") 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 period ended September 30, 2017, 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, 2017 ---- -------- ------------------ US Government Securities Class A. $160,103 $24,050 US Government Securities Class C. 19,124 2,641 Strategic Bond Class A........... 186,971 30,546 Strategic Bond Class B........... 32,186 5,168 Strategic Bond Class C........... 128,981 19,670 Strategic Bond Class W........... 52,561 9,885 Flexible Credit Class A.......... 162,314 25,728 Flexible Credit Class C.......... 82,342 13,225 Flexible Credit Class W.......... 172,967 27,392
At September 30, 2017, 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 . . . . . . . . . . . . .. 8.56% 17.07% Strategic Bond . . . . . . . . . . . ................ 3.00 -- Flexible Credit . . . . . . ......................... 2.82 3.39
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, 2017 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. $ -- $ -- $27,720,469 $34,837,886 Strategic Bond............. 212,303,178 194,826,722 42,107,552 52,452,945 Flexible Credit............ 125,730,121 133,649,991 -- --
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, 2017 For the year ended March 31, 2017 ---------------------------------------- --------------------------------- Long-term Unrealized Ordinary Gains/ Capital Appreciation Ordinary Long-Term Fund Income Loss Carryover (Depreciation)* Income Capital Gains ---- ---------- -------------- --------------- ----------- ------------- U.S. Government Securities. $ 530,181 $(13,576,279) $ 2,897,985 $ 3,089,605 $-- Strategic Bond............. 670,627 (74,079,874) (1,215,751) 11,239,760 -- Flexible Credit............ 1,074,824 (49,857,256) 654,033 13,948,606 --
-------- * Unrealized appreciation (depreciation) includes amounts for derivatives and other assets and liabilities denominated in foreign currency. 77 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited) (continued) As of March 31, 2017, for Federal income tax purposes, the Funds indicated below have capital loss carryforwards, which expire in the year indicated, which are available to offset future capital gains, if any:
Capital Loss Carryforward+ Unlimited+ ------------- ---------------------- Fund 2018 ST LT ---- ------------- ---------- ----------- U.S. Government Securities. $ -- $8,871,280 $ 4,704,999 Strategic Bond............. 49,688,392 2,697,374 21,694,108 Flexible Credit............ 41,322,811 984,379 7,550,066
-------- + 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, 2017, 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............. $ -- $4,219,268 $ 462,553 Strategic Bond......................... 759,467 619,329 (110,017) Flexible Credit........................ -- -- --
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. 5,556,987 (1,613,461) 3,943,526 154,733,787 Strategic Bond............. 10,677,061 (7,092,293) 3,584,768 364,909,784 Flexible Credit Bond....... 9,236,196 (8,406,146) 830,050 370,273,052
-------- @ Unrealized appreciation (depreciation) includes amounts for derivatives. 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, 2017 year ended (unaudited) March 31, 2017 ------------------------ ------------------------ Shares Amount Shares Amount ---------- ------------ ---------- ------------ Shares sold...... 1,127,061 $ 10,352,210 4,055,893 $ 39,020,448 Reinvested dividends. 129,616 1,187,725 266,885 2,514,822 Shares redeemed.. (1,843,204) (16,888,612) (4,412,102) (41,347,823) ---------- ------------ ---------- ------------ Net increase (decrease) (586,527) $ (5,348,677) (89,324) $ 187,447 ========== ============ ========== ============
78 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited) (continued)
U.S. Government Securities --------------------------------------------------- Class C --------------------------------------------------- For the six months ended For the September 30, 2017 year ended (unaudited) March 31, 2017 ------------------------ ------------------------- Shares Amount Shares Amount ---------- ------------ ----------- ------------ Shares sold.......... 84,905 $ 777,509 496,877 $ 4,737,214 Reinvested dividends..... 9,730 89,119 25,679 242,231 Shares redeemed...... (455,646) (4,176,024) (1,682,466) (15,715,340) ---------- ------------ ----------- ------------ Net increase (decrease).... (361,011) $ (3,309,396) (1,159,910) $(10,735,895) ========== ============ =========== ============ Strategic Bond ------------------------------------------------------------------------------------------------------ Class A Class B --------------------------------------------------- ------------------------------------------------- For the For the six months ended For the six months ended For the September 30, 2017 year ended September 30, 2017 year ended (unaudited) March 31, 2017 (unaudited) March 31, 2017 ------------------------ ------------------------- ----------------------- ------------------------ Shares Amount Shares Amount Shares Amount Shares Amount ---------- ------------ ----------- ------------ ---------- ----------- ---------- ------------ Shares sold(1)(2).... 6,366,009 $ 21,897,669 6,511,015 $ 22,000,676 536,661 $ 1,843,982 1,716,827 $ 5,807,472 Reinvested dividends..... 755,732 2,601,969 1,469,857 4,968,423 101,009 347,732 193,765 654,711 Shares redeemed(1)(2) (4,608,475) (15,841,668) (13,504,442) (45,597,698) (1,193,122) (4,100,573) (2,625,938) (8,845,950) ---------- ------------ ----------- ------------ ---------- ----------- ---------- ------------ Net increase (decrease).... 2,513,266 $ 8,657,970 (5,523,570) $(18,628,599) (555,452) $(1,908,859) (715,346) $ (2,383,767) ========== ============ =========== ============ ========== =========== ========== ============ Strategic Bond ------------------------------------------------------------------------------------------------------ Class C Class W --------------------------------------------------- ------------------------------------------------- For the For the six months ended For the six months ended For the September 30, 2017 year ended September 30, 2017 year ended (unaudited) March 31, 2017 (unaudited) March 31, 2017 ------------------------ ------------------------- ----------------------- ------------------------ Shares Amount Shares Amount Shares Amount Shares Amount ---------- ------------ ----------- ------------ ---------- ----------- ---------- ------------ Shares sold.......... 1,495,947 $ 5,164,330 3,384,955 $ 11,494,689 6,486,593 $22,299,248 7,913,680 $ 26,786,702 Reinvested dividends..... 370,503 1,280,853 769,650 2,610,522 156,321 538,515 210,770 711,987 Shares redeemed...... (7,957,029) (27,457,200) (12,514,751) (42,349,618) (2,403,451) (8,268,943) (5,405,846) (18,224,239) ---------- ------------ ----------- ------------ ---------- ----------- ---------- ------------ Net increase (decrease).... (6,090,579) $(21,012,017) (8,360,146) $(28,244,407) 4,239,463 $14,568,820 2,718,604 $ 9,274,450 ========== ============ =========== ============ ========== =========== ========== ============
-------- (1)For the six months ended September 30, 2017, includes automatic conversion of 87,663 shares of Class B shares in the amount of $300,871 to 87,567 shares of Class A shares in the amount of $300,871. (2)For the year ended March 31, 2017, includes automatic conversion of 157,947 shares of Class B shares in the amount of $532,049 to 157,920 shares of Class A shares in the amount of $532,049.
Flexible Credit --------------------------------------------------- Class A --------------------------------------------------- For the six months ended For the September 30, 2017 year ended (unaudited) March 31, 2017 ------------------------ ------------------------- Shares Amount Shares Amount ---------- ------------ ----------- ------------ Shares sold...... 7,484,469 $ 25,801,863 22,917,210 $ 77,775,794 Reinvested dividends. 876,708 3,025,811 1,592,354 5,426,357 Shares redeemed.. (7,828,571) (26,963,694) (20,582,379) (69,973,319) ---------- ------------ ----------- ------------ Net increase (decrease) 532,606 $ 1,863,980 3,927,185 $ 13,228,832 ========== ============ =========== ============
79 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited) (continued)
Flexible Credit -------------------------------------------------------------------------------------------------------- Class C Class W -------------------------------------------------- ---------------------------------------------------- For the For the six months ended For the six months ended For the September 30, 2017 year ended September 30, 2017 year ended (unaudited) March 31, 2017 (unaudited) March 31, 2017 ------------------------ ------------------------ ------------------------- ------------------------- Shares Amount Shares Amount Shares Amount Shares Amount ---------- ------------ ---------- ------------ ----------- ------------ ----------- ------------ Shares sold...... 2,669,900 $ 9,258,756 7,200,951 $ 24,617,203 10,084,703 $ 34,802,663 32,285,891 $110,087,850 Reinvested dividends. 302,970 1,051,706 543,420 1,863,435 530,766 1,831,934 855,066 2,917,568 Shares redeemed.. (3,405,372) (11,798,916) (4,970,934) (16,999,023) (13,497,201) (46,525,877) (14,858,846) (50,678,526) ---------- ------------ ---------- ------------ ----------- ------------ ----------- ------------ Net increase (decrease) (432,502) $ (1,488,454) 2,773,437 $ 9,481,615 (2,881,732) $ (9,891,280) 18,282,111 $ 62,326,892 ========== ============ ========== ============ =========== ============ =========== ============
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, 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, 2017, the following Funds had borrowings:
Days Interest Debt Average Fund Outstanding Charges Utilized Interest ---- ----------- -------- ---------- -------- Strategic Bond.. 2 $ 42 $ 302,934 2.48% Flexible Credit. 8 1,030 1,866,393 2.48
At September 30, 2017, the following fund had an outstanding loan balance:
Fund Amount ---- ---------- Flexible Credit. $1,258,824
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 period ended September 30, 2017, 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. 80 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited) (continued) 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 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. 81 SunAmerica Income Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2017 -- (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, 2018 at an in-person meeting held on June 6-7, 2017 (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") for a one-year period ending June 30, 2018. 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 82 SunAmerica Income Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2017 -- (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, 2017, SunAmerica managed, advised and/or administered approximately $83.9 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, 2017. 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 above the medians of its Peer Group and Peer Universe for the one-year period and below the medians of its Peer Group and Peer Universe for the 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 noted management's discussion of the Fund's performance, including the Fund's improved recent performance, and that the Board had approved certain changes to the Fund's principal investment strategy effective July 29, 2014. The Board concluded that the Fund's performance was being addressed. 83 SunAmerica Income Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2017 -- (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 considered that management recently made a portfolio manager change with respect to the Fund. The Board noted management's discussion of the Fund's performance, including continued monitoring of the Fund and potential actions to improve performance, and concluded that the Fund's performance was being addressed. 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 to be 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 84 SunAmerica Income Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2017 -- (unaudited) (continued) 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. Flexible Credit 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. 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. 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 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. 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. 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 SunAmerica 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 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. 85 SunAmerica Income Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2017 -- (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, 2018. 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. 86 [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 Officers Trust uses to holdings with the U.S. John T. Genoy, President determine how to vote Securities and James Nichols, Vice proxies relating to Exchange Commission President secu-rities held in a for its first and Kara Murphy, Vice Fund's portfolio, third fiscal quarters President which is available in on Form N-Q. The Christopher C. Joe, the Trust's Statement Trust's Forms N-Q are Chief Compliance of Additional available on the Officer Information, may be U.S. Securities and Gregory N. Bressler, ob-tained without Exchange Commis-sion Secretary charge upon request, website at Kathleen Fuentes, Chief by calling (800) www.sec.gov. You can Legal Officer and 858-8850. The also review and obtain Assistant Secretary in-formation is also copies of the Forms Gregory R. Kingston, available from the N-Q at the U.S. Treasurer EDGAR database on the Securities and Donna McManus, Vice U.S. Secu-rities and Exchange Commission President and Exchange Commission's Public Refer-ence Room Assistant Treasurer website at in Washington DC Shawn Parry, Vice http://www.sec.gov. (information on the President and DELIVERY OF operation of the Assistant Treasurer SHAREHOLDER DOCUMENTS Public Reference Room Matthew J. Hackethal, The Funds have adopted may be ob-tained by Anti-Money Laundering a policy that allows calling Compliance Officer them to send only one 1-800-SEC-0330). Investment Adviser copy of a Fund's PROXY VOTING RECORD ON SunAmerica Asset prospectus, proxy SUNAMERICA INCOME FUNDS Management, LLC material, annual Information regarding Harborside 5 report and semi-annual how the Funds voted 185 Hudson Street, Suite report (the proxies relating to 3300 "shareholder securities held in the Jersey City, NJ 07311 documents") to Funds during the most Distributor shareholders with recent twelve month AIG Capital Services, multiple accounts period ended June 30 Inc. residing at the same is available, once Harborside 5 "household." This filed with the U.S. 185 Hudson Street, Suite practice is called Securities and 3300 householding and Exchange Commission, Jersey City, NJ 07311 reduces Fund expenses, without charge, upon Shareholder Servicing which benefits you and request, by calling Agent other shareholders. (800) 858-8850 or on AIG Fund Services, Inc. Unless the Funds the U.S. Securities Harborside 5 receive instructions and Exchange 185 Hudson Street, Suite to the con-trary, you Commission's website 3300 will only receive one at http://www.sec.gov. Jersey City, NJ 07311 copy of the This report is Custodian and Transfer shareholder documents. submitted solely for Agent The Funds will the general State Street Bank and continue to household information of Trust Company the share-holder shareholders of the One Lincoln Street documents Funds. Distribution of Boston, MA 02111 indefinitely, until we this report to persons are instructed other than otherwise. If you do shareholders of the 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 BFDS, P.O. Box accountants and 219186, Kansas City accordingly no MO, 64121-9186. We opinions have been will resume expressed 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 - 9/17 [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, 2017 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ John T. Genoy ----------------------- John T. Genoy President Date: December 07, 2017 By: /s/ Gregory R. Kingston ----------------------- Gregory R. Kingston Treasurer Date: December 07, 2017 EX-99.CERT 2 d381951dex99cert.txt CERTIFICATION PURSUANT TO SECTION 302 CERTIFICATION PURSUANT TO SECTION 302 Exhibit 99.CERT CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT I, John T. Genoy, certify that: 1. I have reviewed this report on Form N-CSR of SunAmerica Income Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 06, 2017 /s/ John T. Genoy ------------------- John T. Genoy President CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT I, Gregory R. Kingston, certify that: 1. I have reviewed this report on Form N-CSR of SunAmerica Income Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 06, 2017 /s/ Gregory R. Kingston ----------------------- Gregory R. Kingston Treasurer EX-99.906.CERT 3 d381951dex99906cert.txt CERTIFICATIONS PURSUANT TO SECTION 906 CERTIFICATIONS PURSUANT TO SECTION 906 Exhibit 99.906.CERT CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT John T. Genoy, President, and Gregory R. Kingston, Treasurer of SunAmerica Income Funds (the "registrant"), each certify to the best of his knowledge that: 1. The attached Form N-CSR report of the registrant fully complies with the requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in such N-CSR report fairly represents, in all material respects, the financial conditions and results of operations of the registrant as of, and for, the periods presented in the report. Dated: December 06, 2017 /s/ John T. Genoy --------------- John T. Genoy President /s/ Gregory R. Kingston ------------------- Gregory R. Kingston Treasurer