0001193125-18-344778.txt : 20181207 0001193125-18-344778.hdr.sgml : 20181207 20181207142705 ACCESSION NUMBER: 0001193125-18-344778 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20180930 FILED AS OF DATE: 20181207 DATE AS OF CHANGE: 20181207 EFFECTIVENESS DATE: 20181207 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: 181223124 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 d604627dncsrs.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, 2018 ------------------------- Item 1. Reports to Stockholders SEMI-ANNUAL REPORT 2018 SUNAMERICA Income Funds [PHOTO] [LOGO] aig.com/funds Table of Contents SHAREHOLDER LETTER................... 2 EXPENSE EXAMPLE...................... 4 STATEMENTS OF ASSETS AND LIABILITIES. 6 STATEMENTS OF OPERATIONS............. 8 STATEMENTS OF CHANGES IN NET ASSETS.. 9 FINANCIAL HIGHLIGHTS................. 10 PORTFOLIO OF INVESTMENTS............. 13 NOTES TO FINANCIAL STATEMENTS........ 66 APPROVAL OF ADVISORY AGREEMENTS...... 81 SUPPLEMENTS TO THE PROSPECTUS........ 86
Shareholder Letter -- (unaudited) Dear Shareholders, We are pleased to present this semi-annual report for the SunAmerica Income Funds for the six-month period ended September 30, 2018. From a broad perspective, it was a period wherein fixed income market performance was primarily influenced by economic data, central bank monetary policy and geopolitics. For the semi-annual period overall, the Bloomberg Barclays U.S. Aggregate Bond Index,/*/ a broad measure of the U.S. fixed income market, returned -0.14%. In the second quarter of 2018, when the semi-annual period began, global fixed income sectors generated mixed results. Sovereign yields outside of Europe generally moved higher, driven by continued global economic growth momentum and rising inflation expectations. Government bonds, including U.S. Treasuries, enjoyed short-lived periods of strength, however, amid escalating tensions between the U.S. and its trade partners and bouts of elevated political uncertainty in Europe. Concerns about increased leverage and heavy supply from a pickup in mergers and acquisitions weighed on investment grade corporate bonds. Emerging markets debt also underperformed government bonds, while high yield corporate bonds outperformed - supported by continued demand for income and a scarcity of supply. Global monetary policies also diverged during the second quarter. The U.S. Federal Reserve (the "Fed") raised its target rate by 25 basis points+ in June 2018 as expected, and forecast two additional raises within the calendar year - one more than was projected at its March 2018 meeting. Meanwhile, the European Central Bank (ECB) announced its quantitative easing would end in December 2018 but pledged to keep its policy rates unchanged at least through the summer of 2019. The People's Bank of China unexpectedly cut its reserve-requirement ratio, the amount of cash banks must keep on reserve, by 100 basis points to free up lending for small businesses. The Bank of England maintained its policy rate and asset purchase program after U.K. economic growth fell shy of its forecasts. Global fixed income sectors again generated mixed returns during the third quarter of 2018. Despite lingering trade war concerns, sovereign yields across most markets moved higher, driven by supportive global economic growth data and rising inflation expectations. Weighing on emerging markets debt were sharp declines in the Turkish lira and the Argentine peso, which sparked fears of emerging markets contagion before policymakers intervened with various stabilization measures. On the other hand, investment grade corporate bonds rebounded amid favorable earnings trends, positive economic data and light supply. High yield corporate bonds recorded their best quarterly performance since the first quarter of 2017. Global monetary policy turned more hawkish/**/ overall. The Fed upgraded its projection for U.S. economic growth, raised its target interest rate by 25 basis points in September 2018 and forecast four additional rate increases through the end of 2019. The Bank of England and Bank of Canada each raised their respective rates by 25 basis points as well. The Bank of Japan amended its yield curve targeting policy to allow longer-term bond yields to fluctuate more freely around its 0% target. The People's Bank of China announced a 20% reserve requirement for banks to help stabilize its currency. Meanwhile, the ECB remained dovish, leaving rates unchanged and reiterating its pledge to keep them low at least through next summer. For the semi-annual period overall, U.S. Treasury securities posted negative returns, with the yield on the 10-year U.S. Treasury rising approximately 32 basis points to 3.06% by the end of September 2018. The U.S. Treasury yield curve, or spectrum of maturities, flattened++ during the six months ended September 30, 2018, as yields on shorter-term and intermediate-term maturities rose more than those on longer-term maturities. Non-U.S. Treasury sectors generally outperformed U.S. Treasuries. High yield corporate bonds performed best. Commercial mortgage-backed securities, investment grade corporate bonds, asset-backed securities, mortgage-backed securities and agency securities also outperformed U.S. Treasuries, albeit to a lesser extent. Sovereign emerging markets debt underperformed U.S. Treasury securities during the semi-annual period overall. 2 On the following pages, you will find financial statements and portfolio information for each of the SunAmerica Income Funds during the semi-annual period ended September 30, 2018. Thank you for being a part of the SunAmerica Income Funds. We value your ongoing confidence in us and look forward to serving your investment needs in the future. As always, if you have any questions regarding your investments, please contact your financial advisor or get in touch with us directly at 800-858-8850 or via our website, www.aig.com/funds. Sincerely, The SunAmerica Income Funds Investment Professionals Tim Pettee Robert Vanden Assem David L. Albrycht Timothy Campion Anders Faergemann Frank Ossino Andrew Sheridan Dana Burns Jonathan Stanley Jane Bayar Algieri John Yovanovic -------- Past performance is no guarantee of future results. * The Bloomberg Barclays U.S. Aggregate Bond Index represents securities that are SEC-registered, taxable and dollar denominated. The index covers the U.S. investment-grade fixed-rate bond market, with index components for government and corporate securities, mortgage pass-through securities and asset-backed securities. Indices are not managed and an investor cannot invest directly in an index. + A basis point is 1/100/th/ of a percentage point. **Hawkish policy tends to suggest higher interest rates; opposite of dovish. ++A flattening yield curve is one wherein the differential in yields between longer-term and shorter-term maturities narrows. 3 SunAmerica Income Funds EXPENSE EXAMPLE -- September 30, 2018 -- (unaudited) Disclosure of Portfolio Expenses in Shareholder Reports As a shareholder of a fund (each, a "Fund" and collectively the "Funds") in the SunAmerica Income Funds (the "Trust"), you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, contingent deferred sales charges and (2) ongoing costs, including management fees, distribution and service fees and other Fund expenses. The example set forth below is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at April 1, 2018 and held until September 30, 2018. Actual Expenses The "Actual" section of the table provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the column under the heading entitled "Expenses Paid During the Six Months Ended September 30, 2018" to estimate the expenses you paid on your account during this period. The "Expenses Paid During the Six Months Ended September 30, 2018" column and the "Annualized Expense Ratio" column do not include small account fees that may be charged if your account balance is below $500 ($250 for retirement plan accounts). In addition, the "Expenses Paid During the Six Months Ended September 30, 2018" column and the "Annualized Expense Ratio" column do not include administrative fees that may apply to qualified retirement plan accounts. See the Funds' prospectuses, your retirement plan document and/or materials from your financial adviser for a full description of these fees. Had these fees been included, the "Expenses Paid During the Six Months Ended September 30, 2018" column would have been higher and the "Ending Account Value" column would have been lower. Hypothetical Example for Comparison Purposes The "Hypothetical" section of the table provides information about hypothetical account values and hypothetical expenses based on each Fund's actual expense ratio and an annual rate of return of 5% before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. The "Expenses Paid During the Six Months Ended September 30, 2018" column and the "Annualized Expense Ratio" column do not include small account fees that may be charged if your account balance is below $500 ($250 for retirement plan accounts). In addition, the "Expenses Paid During the Six Months Ended September 30, 2018" column and the "Annualized Expense Ratio" column do not include administrative fees that may apply to qualified retirement plan accounts and accounts held through financial institutions. See the Funds' prospectuses, your retirement plan document and/or materials from your financial adviser for a full description of these fees. Had these fees been included, the "Expenses Paid During the Six Months Ended September 30, 2018" column would have been higher and the "Ending Account Value" column would have been lower. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, including sales charges on purchase payments, contingent deferred sales charges, small account fees and administrative fees, if applicable to your account. Please refer to the Funds' prospectus, your retirement plan document and/or material from your financial adviser, for more information. Therefore, the "Hypothetical" example is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs and other fees were included, your costs would have been higher. 4 SunAmerica Income Funds EXPENSE EXAMPLE -- September 30, 2018 -- (unaudited) (continued)
Actual Hypothetical ------------------------------------------ ------------------------------------------ Ending Account Ending Account Expenses Paid Value using Expenses Paid Value using During the a Hypothetical During the Beginning Actual Six Months Beginning 5% Annual Six Months Account Value Return at Ended Account Value Return at Ended Annualized at April 1, September 30, September 30, at April 1, September 30, September 30, Expense Fund 2018 2018 2018* 2018 2018 2018* Ratio* ---- ------------- -------------- ------------- ------------- -------------- ------------- ---------- AIG U.S. Government Securities# Class A....................... $1,000.00 $ 994.70 $4.95 $1,000.00 $1,020.10 $5.01 0.99% Class C....................... $1,000.00 $ 991.47 $8.19 $1,000.00 $1,016.85 $8.29 1.64% AIG Strategic Bond# Class A....................... $1,000.00 $1,001.16 $5.77 $1,000.00 $1,019.30 $5.82 1.15% Class B....................... $1,000.00 $1,000.54 $9.33 $1,000.00 $1,015.74 $9.40 1.86% Class C....................... $1,000.00 $ 997.88 $9.07 $1,000.00 $1,015.99 $9.15 1.81% Class W....................... $1,000.00 $1,002.04 $4.82 $1,000.00 $1,020.26 $4.86 0.96% AIG Flexible Credit# Class A....................... $1,000.00 $1,022.58 $5.27 $1,000.00 $1,019.85 $5.27 1.04% Class C....................... $1,000.00 $1,022.00 $8.72 $1,000.00 $1,016.44 $8.69 1.72% Class W....................... $1,000.00 $1,026.51 $4.27 $1,000.00 $1,020.86 $4.26 0.84%
-------- * Expenses are equal to each Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 183 days then divided by 365 days (to reflect the one-half year period). These ratios do not reflect transaction costs, including sales charges on purchase payments, contingent deferred sales charges, small account fees and administrative fees, if applicable to your account. Please refer to your Prospectus, your retirement plan documents and/or materials from your financial adviser for more information. # During the stated period, the investment advisor either waived a portion of or all of the fees and assumed a portion of or all expenses for the Funds. As a result, if these fees and expenses had not been waived or assumed, the "Actual/Hypothetical Ending Account Value" would have been lower and the "Actual/Hypothetical Expenses Paid During the Six Months Ended September, 2018" and the "Annualized Expense Ratio" would have been higher. 5 SunAmerica Income Funds STATEMENTS OF ASSETS AND LIABILITIES -- September 30, 2018 -- (unaudited)
AIG U.S. Government AIG Strategic AIG Flexible Securities Bond Credit Fund Fund Fund ------------------- ------------- ------------ ASSETS: Investments at value (unaffiliated)*........................ $133,126,810 $290,721,255 $362,674,364 Repurchase agreements (cost approximates value)............. 2,636,000 -- -- Cash........................................................ 437 -- 388,555 Foreign cash*............................................... -- -- 7,412 Receivable for: Shares of beneficial interest sold......................... 7,551 313,188 2,639,245 Dividends and interest..................................... 663,855 3,326,754 3,510,618 Investments sold........................................... -- 3,168,662 1,192,212 Investments sold on an extended settlement basis........... -- 3,016,197 2,966,870 Prepaid expenses and other assets........................... 5,607 6,572 6,214 Due from investment adviser for expense reimbursements/fee waivers.................................................... 47,596 60,959 108,912 Unrealized appreciation on forward foreign currency contracts.................................................. -- 180,727 -- ------------ ------------ ------------ TOTAL ASSETS................................................ 136,487,856 300,794,314 373,494,402 ------------ ------------ ------------ LIABILITIES: Payable for: Shares of beneficial interest redeemed..................... 109,279 1,001,734 415,598 Investments purchased...................................... -- 1,739,420 1,603,467 Investments purchased on an extended settlement basis...... -- 4,047,595 13,776,654 Investment advisory and management fees.................... 73,259 158,495 212,893 Distribution and service maintenance fees.................. 42,996 117,006 106,318 Transfer agent fees and expenses........................... 27,815 58,700 69,412 Other accrued expenses..................................... 69,070 104,609 100,973 Dividends Payable........................................... 4,106 65,745 364,281 Due to custodian............................................ -- 427,300 -- Due to custodian for foreign cash*.......................... -- 620 -- Unrealized depreciation on forward foreign currency contracts.................................................. -- 6,980 -- ------------ ------------ ------------ TOTAL LIABILITIES........................................... 326,525 7,728,204 16,649,596 ------------ ------------ ------------ NET ASSETS.................................................. $136,161,331 $293,066,110 $356,844,806 ============ ============ ============ NET ASSETS REPRESENTED BY: Shares of beneficial interest, $0.01........................ $ 154,146 $ 883,116 $ 1,049,552 Paid-in capital............................................. 156,012,443 327,174,295 366,953,900 ------------ ------------ ------------ 156,166,589 328,057,411 368,003,452 Accumulated undistributed net investment income (loss)...... (33,490) (496,491) 445,696 Accumulated undistributed net realized gain (loss) on investments, futures contracts, options contracts, securities sold short, and foreign exchange transactions... (20,473,023) (26,143,448) (8,334,517) Unrealized appreciation (depreciation) on investments....... 501,255 (8,522,340) (3,269,239) Unrealized foreign exchange gain (loss) on other assets and liabilities................................................ -- 170,978 (586) ------------ ------------ ------------ NET ASSETS.................................................. $136,161,331 $293,066,110 $356,844,806 ============ ============ ============ *Cost Investments (unaffiliated)................................. $132,625,555 $299,243,595 $365,943,603 ============ ============ ============ Foreign cash............................................... $ -- $ (536) $ 7,998 ============ ============ ============
See Notes to Financial Statements 6 SunAmerica Income Funds STATEMENTS OF ASSETS AND LIABILITIES -- September 30, 2018 -- (unaudited) (continued)
AIG U.S. Government AIG Strategic AIG Flexible Securities Bond Credit Fund Fund Fund ------------------- ------------- ------------ Class A (unlimited shares authorized): Net assets.................................................. $129,579,973 $164,072,505 $138,009,922 Shares of beneficial interest issued and outstanding........ 14,669,212 49,460,922 40,656,042 Net asset value and redemption price per share (excluding any applicable contingent deferred sales charge) .......... $ 8.83 $ 3.32 $ 3.39 Maximum sales charge (4.75% of offering price).............. $ 0.44 $ 0.17 $ 0.17 ------------ ------------ ------------ Maximum offering price to public............................ $ 9.27 $ 3.49 $ 3.56 ============ ============ ============ Class B (unlimited shares authorized): Net assets.................................................. $ -- $ 17,270,439 $ -- Shares of beneficial interest issued and outstanding........ -- 5,209,722 -- Net asset value, offering and redemption price per share (excluding any applicable contingent deferred sales charge) $ -- $ 3.32 $ -- ============ ============ ============ Class C (unlimited shares authorized): Net assets.................................................. $ 6,581,358 $ 57,300,534 $ 57,549,134 Shares of beneficial interest issued and outstanding........ 745,377 17,216,618 16,847,986 Net asset value, offering and redemption price per share (excluding any applicable contingent deferred sales charge) $ 8.83 $ 3.33 $ 3.42 ============ ============ ============ Class W (unlimited shares authorized): Net assets.................................................. $ -- $ 54,422,632 $161,285,750 Shares of beneficial interest issued and outstanding........ -- 16,424,302 47,451,214 Net asset value, offering and redemption price per share.... $ -- $ 3.31 $ 3.40 ============ ============ ============
See Notes to Financial Statements 7 SunAmerica Income Funds STATEMENTS OF OPERATIONS -- For the Six Months Ended September 30, 2018 -- (unaudited)
AIG U.S. Government AIG Strategic Securities Bond Fund Fund ------------------- ------------- INVESTMENT INCOME: Dividends (unaffiliated)............................................................ $ -- $ 7,821 Interest (unaffiliated)............................................................. 1,696,595 8,090,916 ----------- ----------- Total investment income*........................................................... 1,696,595 8,098,737 ----------- ----------- EXPENSES: Investment advisory and management fees............................................. 459,935 1,054,086 Distribution and Service maintenance fees: Class A............................................................................ 220,535 317,641 Class B............................................................................ -- 100,456 Class C............................................................................ 35,616 318,607 Service fee -- Class W.............................................................. -- 43,513 Transfer agent fees: Class A............................................................................ 158,028 212,220 Class B............................................................................ -- 23,781 Class C............................................................................ 9,818 74,550 Class W............................................................................ -- 64,376 Registration fees: Class A............................................................................ 11,494 14,733 Class B............................................................................ -- 7,812 Class C............................................................................ 7,918 8,992 Class W............................................................................ -- 11,300 Custodian and accounting fees....................................................... 18,202 55,756 Reports to shareholders............................................................. 24,429 36,558 Audit and tax fees.................................................................. 31,500 36,693 Legal fees.......................................................................... 11,599 16,989 Trustees' fees and expenses......................................................... 3,653 8,833 Interest expense.................................................................... -- 1,826 Other expenses...................................................................... 8,924 13,611 ----------- ----------- Total expenses before fee waivers, expense reimbursements and expense recoupments.. 1,001,651 2,422,333 ----------- ----------- Net (fees waived and expenses reimbursed)/recouped by investment advisor (Note 3).. (277,840) (332,304) ----------- ----------- Net expenses....................................................................... 723,811 2,090,029 ----------- ----------- Net investment income (loss).......................................................... 972,784 6,008,708 ----------- ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES: Net realized gain (loss) on: Investments (unaffiliated).......................................................... (244,535) (5,212,044) Forward contracts................................................................... -- 1,161,074 Net realized foreign exchange gain (loss) on other assets and liabilities............. -- (9,032) ----------- ----------- Net realized gain (loss) on investments and foreign currencies........................ (244,535) (4,060,002) ----------- ----------- Change in unrealized appreciation (depreciation) on: Investments (unaffiliated).......................................................... (1,431,420) (2,175,466) Forward contracts................................................................... -- 140,823 Change in unrealized foreign exchange gain (loss) on other assets and liabilities..... -- (8,550) ----------- ----------- Net unrealized gain (loss) on investments and foreign currencies...................... (1,431,420) (2,043,193) ----------- ----------- Net realized and unrealized gain (loss) on investments and foreign currencies......... (1,675,955) (6,103,195) ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....................... (703,171) (94,487) =========== =========== * Net of foreign withholding taxes on interest and dividends of....................... $ -- $ (291) =========== ===========
AIG Flexible Credit Fund ------------ INVESTMENT INCOME: Dividends (unaffiliated)............................................................ $ 30,322 Interest (unaffiliated)............................................................. 10,125,116 ----------- Total investment income*........................................................... 10,155,438 ----------- EXPENSES: Investment advisory and management fees............................................. 1,226,945 Distribution and Service maintenance fees: Class A............................................................................ 232,320 Class B............................................................................ -- Class C............................................................................ 289,674 Service fee -- Class W.............................................................. 104,297 Transfer agent fees: Class A............................................................................ 154,978 Class B............................................................................ -- Class C............................................................................ 65,718 Class W............................................................................ 154,215 Registration fees: Class A............................................................................ 14,895 Class B............................................................................ -- Class C............................................................................ 11,721 Class W............................................................................ 14,741 Custodian and accounting fees....................................................... 42,136 Reports to shareholders............................................................. 33,722 Audit and tax fees.................................................................. 36,032 Legal fees.......................................................................... 16,378 Trustees' fees and expenses......................................................... 8,608 Interest expense.................................................................... 1,205 Other expenses...................................................................... 13,293 ----------- Total expenses before fee waivers, expense reimbursements and expense recoupments.. 2,420,878 ----------- Net (fees waived and expenses reimbursed)/recouped by investment advisor (Note 3).. (628,514) ----------- Net expenses....................................................................... 1,792,364 ----------- Net investment income (loss).......................................................... 8,363,074 ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES: Net realized gain (loss) on: Investments (unaffiliated).......................................................... (1,219,640) Forward contracts................................................................... -- Net realized foreign exchange gain (loss) on other assets and liabilities............. -- ----------- Net realized gain (loss) on investments and foreign currencies........................ (1,219,640) ----------- Change in unrealized appreciation (depreciation) on: Investments (unaffiliated).......................................................... 828,965 Forward contracts................................................................... -- Change in unrealized foreign exchange gain (loss) on other assets and liabilities..... (443) ----------- Net unrealized gain (loss) on investments and foreign currencies...................... 828,522 ----------- Net realized and unrealized gain (loss) on investments and foreign currencies......... (391,118) ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....................... 7,971,956 =========== * Net of foreign withholding taxes on interest and dividends of....................... $ -- ===========
See Notes to Financial Statements 8 SunAmerica Income Funds STATEMENTS OF CHANGES IN NET ASSETS
AIG U.S. Government Securities Fund AIG Strategic Bond Fund -------------------------- -------------------------- For the For the six months six months ended For the year ended For the year September 30, ended September 30, ended 2018 March 31, 2018 March 31, (unaudited) 2018 (unaudited) 2018 ------------- ------------ ------------- ------------ INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss)............................... $ 972,784 $ 1,524,997 $ 6,008,708 $ 10,794,518 Net realized gain (loss) on investments and foreign currencies................................................ (244,535) (638,420) (4,060,002) 2,956,711 Net unrealized gain (loss) on investments and foreign currencies................................................ (1,431,420) (1,565,538) (2,043,193) (6,160,474) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations.................................................. (703,171) (678,961) (94,487) 7,590,755 ------------ ------------ ------------ ------------ Distributions to shareholders from: Net investment income (Class A)............................ (1,096,582) (2,487,089) (3,455,621) (5,155,583) Net investment income (Class B)............................ -- -- (309,125) (637,563) Net investment income (Class C)............................ (35,114) (174,406) (995,066) (2,616,763) Net investment income (Class W)............................ -- -- (1,149,280) (1,770,057) Net realized gain on securities (Class A).................. -- -- -- -- Net realized gain on securities (Class B).................. -- -- -- -- Net realized gain on securities (Class C).................. -- -- -- -- Net realized gain on securities (Class W).................. -- -- -- -- ------------ ------------ ------------ ------------ Total distributions to shareholders.......................... (1,131,696) (2,661,495) (5,909,092) (10,179,966) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from capital share transactions (Note 6)................................. (8,239,931) (18,398,158) (60,858,688) 848,412 ------------ ------------ ------------ ------------ Total increase (decrease) in net assets...................... (10,074,798) (21,738,614) (66,862,267) (1,740,799) NET ASSETS: Beginning of period.......................................... 146,236,129 167,974,743 359,928,377 361,669,176 ------------ ------------ ------------ ------------ End of period+............................................... $136,161,331 $146,236,129 $293,066,110 $359,928,377 ============ ============ ============ ============ +Includes accumulated undistributed net investment income (loss) of................................................... $ (33,490) $ 125,422 $ (496,491) $ (596,107) ============ ============ ============ ============
AIG Flexible Credit Fund -------------------------- For the six months ended For the year September 30, ended 2018 March 31, (unaudited) 2018 ------------- ------------ INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss)............................... $ 8,363,074 $ 16,611,951 Net realized gain (loss) on investments and foreign currencies................................................ (1,219,640) 1,837,310 Net unrealized gain (loss) on investments and foreign currencies................................................ 828,522 (5,216,653) ------------ ------------ Net increase (decrease) in net assets resulting from operations.................................................. 7,971,956 13,232,608 ------------ ------------ Distributions to shareholders from: Net investment income (Class A)............................ (3,418,231) (6,747,881) Net investment income (Class B)............................ -- -- Net investment income (Class C)............................ (1,259,780) (2,890,712) Net investment income (Class W)............................ (3,632,016) (7,204,700) Net realized gain on securities (Class A).................. -- -- Net realized gain on securities (Class B).................. -- -- Net realized gain on securities (Class C).................. -- -- Net realized gain on securities (Class W).................. -- -- ------------ ------------ Total distributions to shareholders.......................... (8,310,027) (16,843,293) ------------ ------------ Net increase (decrease) in net assets resulting from capital share transactions (Note 6)................................. 33,758,435 (49,463,029) ------------ ------------ Total increase (decrease) in net assets...................... 33,420,364 (53,073,714) NET ASSETS: Beginning of period.......................................... 323,424,442 376,498,156 ------------ ------------ End of period+............................................... $356,844,806 $323,424,442 ============ ============ +Includes accumulated undistributed net investment income (loss) of................................................... $ 445,696 $ 392,649 ============ ============
See Notes to Financial Statements 9 SunAmerica Income Funds FINANCIAL HIGHLIGHTS
AIG U.S. GOVERNMENT SECURITIES FUND ----------------------------------- Net gain (loss) on Net investments Distributions Net Net Asset (both Dividends from net Asset Assets, Ratio of Value, Net realized Total from from net realized Total Value, end of expenses beginning investment and investment investment gains on Distri- end of Total period to average Period Ended of period income(1) unrealized) operations income investments butions period Return(2) (000's) net assets(3) ------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -------- ------------- Class A ------- 03/31/14 $9.91 $0.14 $(0.45) $(0.31) $(0.17) $-- $(0.17) $9.43 (3.11)% $106,747 0.99% 03/31/15 9.43 0.12 0.34 0.46 (0.16) -- (0.16) 9.73 4.94 187,417 0.99 03/31/16 9.73 0.08 (0.05) 0.03 (0.17) -- (0.17) 9.59 0.33 156,468 0.99 03/31/17 9.59 0.09 (0.37) (0.28) (0.16) -- (0.16) 9.15 (2.93) 148,382 0.99 03/31/18 9.15 0.09 (0.13) (0.04) (0.16) -- (0.16) 8.95 (0.46) 138,599 0.99 09/30/2018# 8.95 0.06 (0.11) (0.05) (0.07) -- (0.07) 8.83 (0.53) 129,580 0.99(4) Class C ------- 03/31/14 $9.91 $0.08 $(0.46) $(0.38) $(0.11) $-- $(0.11) $9.42 (3.84)% $ 7,295 1.64% 03/31/15 9.42 0.06 0.34 0.40 (0.10) -- (0.10) 9.72 4.27 23,999 1.64 03/31/16 9.72 0.01 (0.03) (0.02) (0.11) -- (0.11) 9.59 (0.22) 31,665 1.64 03/31/17 9.59 0.02 (0.37) (0.35) (0.10) -- (0.10) 9.14 (3.66) 19,592 1.64 03/31/18 9.14 0.04 (0.13) (0.09) (0.10) -- (0.10) 8.95 (1.00) 7,637 1.64 09/30/2018# 8.95 0.03 (0.11) (0.08) (0.04) -- (0.04) 8.83 (0.85) 6,581 1.64(4)
Ratio of net investment income to average Portfolio net assets(3) Turnover ------------- --------- 1.42% 122% 1.24 57 0.81 36 0.91 95 1.03 29 1.41(4) 18 0.77% 122% 0.61 57 0.16 36 0.26 95 0.38 29 0.76(4) 18
-------- # Unaudited (1)Calculated based upon average shares outstanding. (2)Total return is not annualized and does not reflect sales load, but does include expense reimbursements. (3)Net of the following expense reimbursements, if applicable (based on average net assets):
03/31/14 03/31/15 03/31/16 03/31/17 03/31/18 09/30/18#(4) -------- -------- -------- -------- -------- ------------ AIG U.S. Government Securities Fund Class A 0.40% 0.38% 0.37% 0.35% 0.37% 0.38% AIG U.S. Government Securities Fund Class C................................... 0.57 0.50 0.39 0.40 0.46 0.64
(4)Annualized See Notes to Financial Statements 10 SunAmerica Income Funds FINANCIAL HIGHLIGHTS -- (continued)
AIG STRATEGIC BOND FUND ----------------------- Net gain (loss) on Net investments Distributions Net Net Asset (both Dividends from net Asset Assets, Value, Net realized Total from from net realized Total Value, end of beginning investment and investment investment gains on Distri- end of Total period Period Ended of period income(1) unrealized) operations income investments butions period Return(2) (000's) -------------------- --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -------- Class A ------- 03/31/14 $3.60 $0.14 $(0.06) $ 0.08 $(0.15) $-- $(0.15) $3.53 2.34% $255,821 03/31/15 3.53 0.13 (0.04) 0.09 (0.13) -- (0.13) 3.49 2.70 235,093 03/31/16 3.49 0.12 (0.20) (0.08) (0.14) -- (0.14) 3.27 (2.32) 175,386 03/31/17 3.27 0.10 0.14 0.24 (0.11) -- (0.11) 3.40 7.38 163,163 03/31/18 3.40 0.11 (0.03) 0.08 (0.10) -- (0.10) 3.38 2.41 196,712 09/30/2018# 3.38 0.06 (0.06) 0.00 (0.06) -- (0.06) 3.32 0.12 164,073 Class B ------- 03/31/14 $3.59 $0.12 $(0.05) $ 0.07 $(0.13) $-- $(0.13) $3.53 1.95% $ 46,462 03/31/15 3.53 0.10 (0.03) 0.07 (0.11) -- (0.11) 3.49 2.01 39,733 03/31/16 3.49 0.10 (0.20) (0.10) (0.12) -- (0.12) 3.27 (2.97) 31,038 03/31/17 3.27 0.08 0.14 0.22 (0.09) -- (0.09) 3.40 6.66 29,762 03/31/18 3.40 0.09 (0.04) 0.05 (0.08) -- (0.08) 3.37 1.41 21,875 09/30/2018# 3.37 0.05 (0.05) (0.00) (0.05) -- (0.05) 3.32 0.05 17,270 Class C ------- 03/31/14 $3.61 $0.12 $(0.06) $ 0.06 $(0.13) $-- $(0.13) $3.54 1.69% $197,904 03/31/15 3.54 0.11 (0.04) 0.07 (0.11) -- (0.11) 3.50 2.05 184,282 03/31/16 3.50 0.10 (0.19) (0.09) (0.12) -- (0.12) 3.29 (2.63) 151,197 03/31/17 3.29 0.08 0.13 0.21 (0.09) -- (0.09) 3.41 6.35 128,332 03/31/18 3.41 0.09 (0.03) 0.06 (0.08) -- (0.08) 3.39 1.75 71,103 09/30/2018# 3.39 0.05 (0.06) (0.01) (0.05) -- (0.05) 3.33 (0.21) 57,301 Class W ------- 01/29/15(4)-03/31/15 $3.48 $0.01 $ 0.02 $ 0.03 $(0.02) $-- $(0.02) $3.49 0.99% $ 15,664 03/31/16 3.49 0.12 (0.20) (0.08) (0.14) -- (0.14) 3.27 (2.14) 30,065 03/31/17 3.27 0.11 0.13 0.24 (0.12) -- (0.12) 3.39 7.26 40,412 03/31/18 3.39 0.11 (0.02) 0.09 (0.11) -- (0.11) 3.37 2.65 70,239 09/30/2018# 3.37 0.07 (0.06) 0.01 (0.07) -- (0.07) 3.31 0.20 54,423
Ratio of net Ratio of investment expenses income to to average average Portfolio net assets net assets Turnover ---------- ---------- --------- 1.31% 4.01% 158% 1.30 3.62 137 1.34 3.54 108 1.32 3.00 109 1.33 3.15 149 1.15(3)(5) 3.85(3)(5) 57 1.97% 3.35% 158% 1.97 2.95 137 2.01 2.87 108 1.99 2.33 109 2.02 2.46 149 1.86(3)(5) 3.13(3)(5) 57 1.96% 3.37% 158% 1.94 2.98 137 1.98 2.90 108 1.97 2.35 109 1.98 2.50 149 1.81(3)(5) 3.18(3)(5) 57 1.20%(3)(5) 2.73%(3)(5) 137% 1.15 3.71 108 1.14 3.20 109 1.14 3.34 149 0.96(3)(5) 4.03(3)(5) 57
-------- # Unaudited (1)Calculated based upon average shares outstanding. (2)Total return is not annualized and does not reflect sales load, but does include expense reimbursements. (3)Net of the following expense reimbursements and waivers, if applicable (based on average net assets):
03/31/14 03/31/15 03/31/16 03/31/17 03/31/18 09/30/18#(5) -------- -------- -------- -------- -------- ------------ AIG Strategic Bond Fund Class A......... -- -- -- -- -- 0.25% AIG Strategic Bond Fund Class B......... -- -- -- -- -- 0.25 AIG Strategic Bond Fund Class C......... -- -- -- -- -- 0.25 AIG Strategic Bond Fund Class W......... -- 0.69%(5) -- -- -- 0.25
(4)Inception date of class. (5)Annualized. See Notes to Financial Statements 11 SunAmerica Income Funds FINANCIAL HIGHLIGHTS -- (continued)
AIG FLEXIBLE CREDIT FUND ------------------------ Net gain (loss) on Net investments Distributions Net Asset (both Dividends from net Asset Net Assets, Value, Net realized Total from from net realized Total Value, end of beginning investment and investment investment gains on Distri- end of Total period Period Ended of period income(1) unrealized) operations income investment butions period Return(2) (000's) -------------------- --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- ----------- Class A ------- 03/31/14 $3.58 $0.19 $ 0.00 $ 0.19 $(0.18) $-- $(0.18) $3.59 5.60% $ 70,713 03/31/15 3.59 0.15 (0.11) 0.04 (0.17) -- (0.17) 3.46 1.06 127,508 03/31/16 3.46 0.13 (0.16) (0.03) (0.14) -- (0.14) 3.29 (0.93) 125,775 03/31/17 3.29 0.14 0.16 0.30 (0.15) -- (0.15) 3.44 9.11 144,880 03/31/18 3.44 0.16 (0.04) 0.12 (0.16) -- (0.16) 3.40 3.54 133,268 09/30/2018# 3.40 0.09 (0.01) 0.08 (0.09) -- (0.09) 3.39 2.26 138,010 Class C ------- 03/31/14 $3.60 $0.17 $ 0.00 $ 0.17 $(0.16) $-- $(0.16) $3.61 4.92% $ 30,595 03/31/15 3.61 0.13 (0.11) 0.02 (0.15) -- (0.15) 3.48 0.43 45,411 03/31/16 3.48 0.11 (0.16) (0.05) (0.12) -- (0.12) 3.31 (1.54) 61,891 03/31/17 3.31 0.12 0.15 0.27 (0.12) -- (0.12) 3.46 8.38 74,241 03/31/18 3.46 0.14 (0.04) 0.10 (0.14) -- (0.14) 3.42 2.88 58,994 09/30/2018# 3.42 0.08 (0.01) 0.07 (0.07) -- (0.07) 3.42 2.20 57,549 Class W ------- 10/01/14(4)-03/31/15 $3.50 $0.06 $(0.01) $ 0.05 $(0.08) $-- $(0.08) $3.47 1.57% $ 13,632 03/31/16 3.47 0.13 (0.17) (0.04) (0.14) -- (0.14) 3.29 (1.02) 90,441 03/31/17 3.29 0.15 0.15 0.30 (0.15) -- (0.15) 3.44 9.34 157,377 03/31/18 3.44 0.17 (0.04) 0.13 (0.17) -- (0.17) 3.40 3.76 131,163 09/30/2018# 3.40 0.09 (0.00) 0.09 (0.09) -- (0.09) 3.40 2.65 161,286
Ratio of net Ratio of investment expenses income to to average average Portfolio net assets net assets Turnover ---------- ---------- --------- 1.36%(3) 5.41%(3) 49% 1.41(3) 4.50(3) 74 1.45(3) 3.92(3) 52 1.43 4.21 69 1.33(3) 4.60(3) 63 1.04(3)(5) 5.07(3)(5) 24 2.01%(3) 4.76%(3) 49% 2.06(3) 3.88(3) 74 2.10(3) 3.27(3) 52 2.07 3.57 69 1.99(3) 3.94(3) 63 1.72(3)(5) 4.40(3)(5) 24 1.25%(3)(5) 4.25%(3)(5) 74% 1.25(3) 4.11(3) 52 1.21 4.44 69 1.12(3) 4.79(3) 63 0.84(3)(5) 5.26(3)(5) 24
-------- # Unaudited (1)Calculated based upon average shares outstanding. (2)Total return is not annualized and does not reflect sales load, but does include expense reimbursements. (3)Net of the following expense reimbursements and waivers, if applicable (based on average net assets):
03/31/14 03/31/15 03/31/16 03/31/18 09/30/18#(5) -------- -------- -------- -------- ------------ AIG Flexible Credit Fund Class A........ 0.17% 0.19% 0.03% 0.11% 0.38% AIG Flexible Credit Fund Class C........ 0.18 0.20 0.02 0.11 0.38 AIG Flexible Credit Fund Class W........ -- 1.12(5) 0.04 0.11 0.38
(4)Inception date of class. (5)Annualized. See Notes to Financial Statements 12 AIG U.S. Government Securities Fund PORTFOLIO PROFILE -- September 30, 2018 -- (unaudited) Industry Allocation* United States Treasury Notes.... 49.9% Government National Mtg. Assoc.. 21.4 United States Treasury Bonds.... 14.1 Federal Home Loan Mtg. Corp..... 7.0 Federal Home Loan Bank.......... 3.4 Federal National Mtg. Assoc..... 2.0 Repurchase Agreements........... 1.9 ---- 99.7% ====
Credit Quality+# Aaa........ 98.9% Not Rated@. 1.1 ----- 100.0% =====
-------- *Calculated as a percentage of net assets +Source: Moody's #Calculated as a percentage of total debt issues @Represents debt issues that either have no rating, or the rating is unavailable from the data source. 13 AIG U.S. Government Securities Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
Principal Value Security Description Amount (Note 2) U.S. GOVERNMENT AGENCIES -- 33.8% Federal Home Loan Bank -- 3.4% 1.69% due 02/26/2021.................. $ 480,000 $ 466,737 2.00% due 08/15/2019(1)............... 2,250,000 2,246,596 2.14% due 12/05/2022.................. 372,093 356,799 4.50% due 09/13/2019.................. 1,490,000 1,515,196 ---------- 4,585,328 ---------- Federal Home Loan Mtg. Corp. -- 7.0% 3.50% due 08/01/2030.................. 2,620,443 2,637,896 3.50% due 12/01/2044.................. 4,141,736 4,108,373 4.00% due 04/01/2034.................. 1,319,624 1,342,908 Federal Home Loan Mtg. Corp. REMIC Series 3747, Class WA 3.50% due 10/15/2030(2)............... 1,467,838 1,466,160 ---------- 9,555,337 ---------- Federal National Mtg. Assoc. -- 2.0% 2.50% due 11/01/2027.................. 2,880,743 2,802,463 ---------- Government National Mtg. Assoc. -- 21.4% 3.50% due 03/15/2042.................. 279,123 278,816 3.50% due 06/15/2042.................. 1,477,430 1,475,804 3.50% due 07/15/2042.................. 410,109 408,040 3.50% due 02/20/2045.................. 818,292 815,808 4.00% due 03/15/2039.................. 156,362 159,096 4.00% due 06/15/2039.................. 385,515 392,232 4.00% due 12/15/2039.................. 222,715 226,596 4.00% due 08/15/2040.................. 153,593 156,717 4.00% due 11/15/2040.................. 320,614 328,207 4.00% due 09/15/2041.................. 909,367 929,700 4.00% due 10/15/2041.................. 112,606 114,810 4.00% due 11/15/2041.................. 533,059 544,403 4.00% due 12/15/2041.................. 468,582 478,607 4.00% due 01/15/2042.................. 1,436,386 1,469,102 4.00% due 02/15/2042.................. 350,360 358,585 4.00% due 03/15/2042.................. 147,001 149,989 4.50% due 04/20/2044.................. 596,358 624,745 4.50% due 09/15/2033.................. 238,789 248,290 4.50% due 04/15/2039.................. 55,125 57,515 4.50% due 05/15/2039.................. 103,900 108,400 4.50% due 06/15/2039.................. 1,094,838 1,141,999 4.50% due 07/15/2039.................. 321,720 335,045 4.50% due 09/15/2039.................. 147,320 153,721 4.50% due 11/15/2039.................. 92,711 96,620 4.50% due 12/15/2039.................. 294,336 307,026 4.50% due 02/15/2040.................. 729,032 760,792 4.50% due 03/15/2040.................. 332,467 346,791 4.50% due 04/15/2040.................. 134,521 140,372 4.50% due 07/15/2040.................. 371,118 387,317 4.50% due 03/15/2041.................. 1,056,667 1,102,359 4.50% due 04/15/2041.................. 176,544 182,753 4.50% due 06/15/2041.................. 181,955 188,173 4.50% due 08/15/2041.................. 139,643 144,415 5.00% due 08/15/2033.................. 307,282 324,646 5.00% due 10/15/2033.................. 552,747 580,225 5.00% due 05/15/2035.................. 78,022 81,296 5.00% due 08/15/2035.................. 290,802 308,853 5.00% due 05/15/2036.................. 69,865 74,219 5.00% due 09/15/2036.................. 112,843 119,860 5.00% due 01/15/2037.................. 155,179 164,731
Principal Value Security Description Amount (Note 2) Government National Mtg. Assoc. (continued) 5.00% due 03/15/2037..................... $ 40,970 $ 43,499 5.00% due 04/15/2037..................... 273,529 285,564 5.00% due 04/15/2038..................... 353,293 373,949 5.00% due 05/15/2038..................... 178,771 189,811 5.00% due 08/15/2038..................... 488,872 519,498 5.00% due 02/15/2039..................... 79,994 84,483 5.00% due 03/15/2039..................... 110,642 117,575 5.00% due 04/15/2039..................... 78,605 83,530 5.00% due 07/20/2039..................... 815,900 872,528 5.00% due 08/15/2039..................... 230,312 244,593 5.00% due 09/20/2039..................... 2,659,124 2,833,156 5.00% due 10/15/2039..................... 549,448 583,471 5.00% due 11/15/2039..................... 420,595 446,683 5.00% due 12/15/2039..................... 401,248 426,272 5.00% due 04/15/2040..................... 375,147 392,304 5.00% due 05/15/2040..................... 804,739 849,599 5.00% due 07/20/2045..................... 338,934 359,097 5.50% due 06/15/2033..................... 493,217 535,395 5.50% due 07/15/2033..................... 90,695 98,431 5.50% due 10/15/2033..................... 132,387 143,771 5.50% due 01/15/2034..................... 387,757 420,502 5.50% due 02/15/2034..................... 238,549 256,980 5.50% due 04/20/2035..................... 391,168 421,451 5.50% due 09/15/2035..................... 350,978 387,889 5.50% due 10/15/2035..................... 164,493 178,672 5.50% due 02/15/2038..................... 126,328 136,902 5.50% due 04/15/2038..................... 70,752 75,861 5.50% due 09/15/2039..................... 64,074 68,828 5.50% due 03/15/2040..................... 241 262 6.00% due 04/15/2028..................... 118,653 129,548 6.00% due 08/15/2033..................... 208,799 228,007 6.00% due 12/15/2033..................... 68,399 73,900 6.00% due 09/20/2038..................... 842,594 915,476 6.50% due 10/15/2031..................... 51,714 56,735 ----------- 29,100,897 ----------- Total U.S. Government Agencies (cost $47,195,214)....................... 46,044,025 ----------- U.S. GOVERNMENT TREASURIES -- 64.0% United States Treasury Bonds -- 14.1% 2.00% due 08/31/2021..................... 2,000,000 1,951,094 2.38% due 12/31/2020..................... 2,000,000 1,979,453 2.50% due 02/15/2045..................... 1,000,000 875,820 4.25% due 11/15/2040..................... 8,000,000 9,361,875 4.75% due 02/15/2041..................... 4,000,000 5,004,844 ----------- 19,173,086 ----------- United States Treasury Notes -- 49.9% 1.38% due 12/15/2019..................... 3,000,000 2,952,891 1.38% due 04/30/2020..................... 2,500,000 2,445,801 1.38% due 05/31/2021..................... 21,000,000 20,196,094 1.39% due 04/15/2019..................... 2,500,000 2,479,297 1.50% due 06/15/2020..................... 3,000,000 2,935,781 1.50% due 02/28/2023..................... 2,000,000 1,881,094 1.63% due 08/31/2019..................... 2,000,000 1,981,797 1.88% due 03/31/2022..................... 2,500,000 2,414,258 2.00% due 01/31/2020..................... 3,000,000 2,971,406 2.00% due 09/30/2020..................... 3,000,000 2,951,836 2.00% due 02/15/2025..................... 5,000,000 4,708,984
14 AIG U.S. Government Securities Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. GOVERNMENT TREASURIES (continued) United States Treasury Notes (continued) 2.00% due 08/15/2025.................. $3,000,000 $ 2,811,328 2.00% due 11/15/2026.................. 2,700,000 2,497,922 2.13% due 08/31/2020.................. 2,500,000 2,467,480 2.13% due 03/31/2024.................. 2,000,000 1,914,531 2.25% due 02/29/2020.................. 2,000,000 1,986,094 2.25% due 11/15/2027.................. 2,000,000 1,872,031 2.63% due 02/28/2023.................. 3,000,000 2,961,562 2.75% due 11/15/2023.................. 2,500,000 2,475,684 3.13% due 05/15/2019.................. 1,000,000 1,003,828 ------------ 67,909,699 ------------ Total U.S. Government Treasuries (cost $85,430,341).................... 87,082,785 ------------ Total Long-Term Investment Securities (cost $132,625,555)................... 133,126,810 ------------
Principal Value Security Description Amount (Note 2) REPURCHASE AGREEMENTS -- 1.9% Agreement with Fixed Income Clearing Corp., bearing interest at 0.42%, dated 09/28/2018, to be repurchased 10/01/2018 in the amount of $2,636,092 and collateralized by $2,680,000 of United States Treasury Bonds, bearing interest at 3.13%, due 08/15/2044 and by $30,000 of United States Treasury Bonds, bearing interest at 3.00%, due 11/15/2044 having an approximate combined value of $2,691,109. (cost $2,636,000).............................. $2,636,000 2,636,000 ------------ TOTAL INVESTMENTS (cost $135,261,555)(3)......................... 99.7% 135,762,810 Other assets less liabilities..................... 0.3 398,521 ---------- ------------ NET ASSETS 100.0% $136,161,331 ========== ============
-------- (1)"Step-up" security where the rate increases ("steps-up") at a predetermined rate. The rate reflected is as of September 30, 2018. (2)Collateralized Mortgage Obligation (3)See Note 5 for cost of investments on a tax basis. REMIC --Real Estate Investment Conduit The following is a summary of the inputs used to value the Fund's net assets as of September 30, 2018 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant Quoted Prices Observable Inputs Unobservable Inputs Total --------------------- ----------------- ---------------------- ------------ ASSETS: Investments at Value:* U.S. Government Agencies.... $-- $ 46,044,025 $-- $ 46,044,025 U.S. Government Treasuries.. -- 87,082,785 -- 87,082,785 Repurchase Agreements....... -- 2,636,000 -- 2,636,000 --- ------------ --- ------------ Total Investments at Value.. $-- $135,762,810 $-- $135,762,810 === ============ === ============
-------- * For a detailed presentation of investments, please refer to the Portfolio of Investments. The Fund's policy is to recognize transfers between Levels as of the end of the reporting period. There were no transfers between Levels during the reporting period. See Notes to Financial Statements 15 AIG Strategic Bond Fund PORTFOLIO PROFILE -- September 30, 2018 -- (unaudited) Industry Allocation* Sovereign.............................. 17.0% Federal National Mtg. Assoc............ 12.3 Federal Home Loan Mtg. Corp............ 6.2 Oil Companies-Exploration & Production. 3.0 Oil Companies-Integrated............... 2.8 Diversified Banking Institutions....... 2.6 Cable/Satellite TV..................... 2.5 Banks-Commercial....................... 2.0 United States Treasury Notes........... 1.9 Pipelines.............................. 1.8 Real Estate Investment Trusts.......... 1.7 Telephone-Integrated................... 1.6 Registered Investment Companies........ 1.4 Cellular Telecom....................... 1.3 Electric-Integrated.................... 1.3 Transport-Rail......................... 1.2 Diversified Financial Services......... 1.1 Medical-Drugs.......................... 1.0 Chemicals-Diversified.................. 0.9 Government National Mtg. Assoc......... 0.9 Satellite Telecom...................... 0.9 Oil-Field Services..................... 0.8 Finance-Consumer Loans................. 0.8 Gambling (Non-Hotel)................... 0.6 Oil & Gas Drilling..................... 0.6 Television............................. 0.6 Steel-Producers........................ 0.6 Metal-Copper........................... 0.6 Auto-Cars/Light Trucks................. 0.5 Transport-Marine....................... 0.5 Metal Processors & Fabrication......... 0.5 Chemicals-Specialty.................... 0.5 Real Estate Management/Services........ 0.5 Central Bank........................... 0.5 Non-Ferrous Metals..................... 0.5 Electric-Distribution.................. 0.4 Paper & Related Products............... 0.4 Computer Services...................... 0.4 Building-Residential/Commercial........ 0.4 Building & Construction-Misc........... 0.4 Insurance-Property/Casualty............ 0.4 Broadcast Services/Program............. 0.4 Building & Construction Products-Misc.. 0.4 Enterprise Software/Service............ 0.4 Cosmetics & Toiletries................. 0.4 Metal-Diversified...................... 0.4 Rental Auto/Equipment.................. 0.4 Finance-Investment Banker/Broker....... 0.4 Finance-Other Services................. 0.4 Computer Software...................... 0.4 Computers-Integrated Systems........... 0.3 Retail-Office Supplies................. 0.3 Agricultural Chemicals................. 0.3 Computers.............................. 0.3 Auto-Heavy Duty Trucks................. 0.3 Batteries/Battery Systems.............. 0.3 Medical-HMO............................ 0.3 Containers-Metal/Glass................. 0.3 Auto/Truck Parts & Equipment-Original.. 0.3 Commercial Services-Finance............ 0.3 Hotels/Motels.......................... 0.3
Aerospace/Defense-Equipment.......... 0.3% Physicians Practice Management....... 0.3 Finance-Credit Card.................. 0.3 Computers-Memory Devices............. 0.3 Machinery-General Industrial......... 0.3 Marine Services...................... 0.3 E-Commerce/Services.................. 0.3 Building Societies................... 0.3 Insurance-Life/Health................ 0.2 Savings & Loans/Thrifts.............. 0.2 Food-Retail.......................... 0.2 Containers-Paper/Plastic............. 0.2 Building-Heavy Construction.......... 0.2 Quarrying............................ 0.2 Printing-Commercial.................. 0.2 Coal................................. 0.2 Insurance-Multi-line................. 0.2 Security Services.................... 0.2 Food-Meat Products................... 0.2 Electronic Parts Distribution........ 0.2 Machinery-Construction & Mining...... 0.2 Multimedia........................... 0.2 Food-Misc./Diversified............... 0.2 Finance-Mortgage Loan/Banker......... 0.2 Poultry.............................. 0.2 Internet Financial Services.......... 0.2 Energy-Alternate Sources............. 0.2 Transport-Equipment & Leasing........ 0.2 Real Estate Operations & Development. 0.2 Electric-Generation.................. 0.2 Medical-Nursing Homes................ 0.2 Metal-Iron........................... 0.2 Machinery-Pumps...................... 0.2 Insurance Brokers.................... 0.2 Retail-Appliances.................... 0.2 Transport-Services................... 0.2 Retail-Automobile.................... 0.2 Retail-Major Department Stores....... 0.2 Circuit Boards....................... 0.2 Medical-Generic Drugs................ 0.2 Internet Connectivity Services....... 0.2 Building Products-Cement............. 0.2 Radio................................ 0.2 Distribution/Wholesale............... 0.2 Internet Application Software........ 0.2 Retail-Pawn Shops.................... 0.2 Telecom Services..................... 0.2 Independent Power Producers.......... 0.2 Schools.............................. 0.2 Finance-Commercial................... 0.2 Consumer Products-Misc............... 0.2 Retail-Leisure Products.............. 0.2 Banks-Super Regional................. 0.2 Investment Companies................. 0.2 Publishing-Books..................... 0.2 Leisure Products..................... 0.2 Machinery-Farming.................... 0.2 Platinum............................. 0.1 Banks-Special Purpose................ 0.1 Airlines............................. 0.1 Commercial Services.................. 0.1
16 AIG Strategic Bond Fund PORTFOLIO PROFILE -- September 30, 2018 -- (unaudited) (continued) Industry Allocation* (continued) Medical-Hospitals.................... 0.1% Brewery.............................. 0.1 Machinery-Thermal Process............ 0.1 Water................................ 0.1 Food-Dairy Products.................. 0.1 Applications Software................ 0.1 Retail-Sporting Goods................ 0.1 Retail-Petroleum Products............ 0.1 Building Products-Doors & Windows.... 0.1 Transport-Truck...................... 0.1 Theaters............................. 0.1 Resorts/Theme Parks.................. 0.1 Retail-Hypermarkets.................. 0.1 Racetracks........................... 0.1 Soap & Cleaning Preparation.......... 0.1 Diversified Manufacturing Operations. 0.1 Dialysis Centers..................... 0.1 Footwear & Related Apparel........... 0.1 Oil Field Machinery & Equipment...... 0.1 Internet Content-Entertainment....... 0.1 Building Products-Air & Heating...... 0.1 Diversified Minerals................. 0.1 Pharmacy Services.................... 0.1 Beverages-Non-alcoholic.............. 0.1 Tools-Hand Held...................... 0.1 Gas-Distribution..................... 0.1 Diamonds/Precious Stones............. 0.1 Finance-Auto Loans................... 0.1 Retail-Restaurants................... 0.1 Electronic Components-Misc........... 0.1 Retail-Mail Order.................... 0.1 Machinery-Electrical................. 0.1 Trucking/Leasing..................... 0.1 Banks-Money Center................... 0.1 Medical Labs & Testing Services...... 0.1 Medical Instruments.................. 0.1 Retail-Discount...................... 0.1 United States Treasury Bonds......... 0.1 ---- 99.2% ====
Credit Quality+# Aaa........ 22.0% Aa......... 1.9% A.......... 6.8% Baa........ 15.6% Ba......... 14.1% B.......... 27.1% Caa........ 5.1% Not Rated@. 7.4% ----- 100.0% =====
-------- *Calculated as a percentage of net assets +Source: Moody's #Calculated as a percentage of total debt issues @Represents debt issues that either have no rating, or the rating is unavailable from the data source. 17 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
Principal Value Security Description Amount(17) (Note 2) ASSET BACKED SECURITIES -- 1.0% Diversified Financial Services -- 1.0% American Express Credit Account Master Trust Series 2018-4, Class A 2.99% due 12/15/2023......................... $100,000 $ 99,664 American Express Credit Account Master Trust Series 2018-8, Class A 3.18% due 04/15/2024......................... 167,000 166,759 Avis Budget Rental Car Funding AESOP LLC Series 2015-1A, Class A 2.50% due 07/20/2021*........................ 100,000 98,677 BA Credit Card Trust Series 2018-A2, Class A2 3.00% due 09/15/2023......................... 104,000 103,726 CarMax Auto Owner Trust Series 2016-3, Class A4 1.60% due 01/18/2022......................... 150,000 146,159 Chase Mtg. Finance Trust VRS Series 2016-2, Class M2 3.75% due 12/25/2045*(1)(2).................. 353,589 345,976 Citibank Credit Card Issuance Trust Series 2018-A6, Class A6 3.21% due 12/07/2024......................... 100,000 99,685 COMM Mtg. Trust VRS Series 2016-787S, Class B 3.96% due 02/10/2036*(2)(3).................. 132,000 129,387 DBGS Mtg. Trust FRS Series 2018-BIOD, Class A 2.96% (3 ML+0.80%) due 05/15/2035*(3)........................... 946,651 946,641 Discover Card Execution Note Trust Series 2015-A4, Class A4 2.19% due 04/17/2023......................... 117,000 114,897 Ford Credit Auto Owner Trust/Ford Credit Series 2018-2, Class A 3.47% due 01/15/2030*........................ 100,000 99,833 Ford Credit Floorplan Master Owner Trust Series 2017-1, Class A1 2.07% due 05/15/2022......................... 81,000 79,690 GS Mtg. Securities Trust Series 2015-GC28, Class A2 2.90% due 02/10/2048(3)...................... 102,000 101,805 Morgan Stanley Capital Barclays Bank Trust Series 2016-MART, Class A 2.20% due 09/13/2031*(3)..................... 185,000 178,733 Synchrony Credit Card Master Note Trust Series 2016-2, Class A 2.21% due 05/15/2024......................... 100,000 97,330 Toyota Auto Receivables Owner Trust Series 2018-C, Class A4 3.13% due 02/15/2024......................... 125,000 124,689 World Financial Network Credit Card Master Trust Series 2017-C, Class A 2.31% due 08/15/2024......................... 100,000 98,080 ---------- Total Asset Backed Securities (cost $3,068,657)............................ 3,031,731 ----------
Principal Value Security Description Amount(17) (Note 2) U.S. CORPORATE BONDS & NOTES -- 30.8% Advertising Agencies -- 0.0% Interpublic Group of Cos., Inc. Senior Notes 4.20% due 04/15/2024............... $ 61,000 $ 61,081 Interpublic Group of Cos., Inc. Senior Notes 4.65% due 10/01/2028............... 50,000 50,075 -------- 111,156 -------- Aerospace/Defense -- 0.0% General Dynamics Corp. Company Guar. Notes 2.88% due 05/11/2020............... 92,000 91,778 -------- Aerospace/Defense-Equipment -- 0.3% Harris Corp. Senior Notes 4.40% due 06/15/2028............... 77,000 77,277 Triumph Group, Inc. Company Guar. Notes 4.88% due 04/01/2021............... 439,000 423,635 United Technologies Corp. Senior Notes 1.15% due 05/18/2024............... EUR 100,000 116,695 United Technologies Corp. Senior Notes 1.90% due 05/04/2020............... 122,000 119,520 United Technologies Corp. Senior Notes 3.95% due 08/16/2025............... 60,000 59,716 -------- 796,843 -------- Airlines -- 0.0% Atlas Air, Inc. Pass-Through Certs. Series 1999-1, Class B 7.63% due 01/02/2019(4)............ 24,546 24,634 -------- Applications Software -- 0.1% CDK Global, Inc. Senior Notes 5.88% due 06/15/2026............... 346,000 356,511 -------- Auto-Cars/Light Trucks -- 0.4% Daimler Finance North America LLC Company Guar. Notes 2.00% due 07/06/2021*.............. 78,000 74,878 Daimler Finance North America LLC Company Guar. Notes 3.10% due 05/04/2020*.............. 274,000 273,168 General Motors Co. Senior Notes 5.00% due 10/01/2028............... 213,000 210,353 Nissan Motor Acceptance Corp. Senior Notes 2.15% due 09/28/2020*.............. 271,000 264,223 Nissan Motor Acceptance Corp. Senior Notes 2.65% due 07/13/2022*.............. 203,000 194,828
18 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Auto-Cars/Light Trucks (continued) Toyota Motor Credit Corp. Senior Notes 2.95% due 04/13/2021.................. $189,000 $ 188,134 ---------- 1,205,584 ---------- Auto-Heavy Duty Trucks -- 0.3% Allison Transmission, Inc. Senior Notes 5.00% due 10/01/2024*................. 361,000 359,195 JB Poindexter & Co., Inc. Senior Notes 7.13% due 04/15/2026*................. 440,000 456,500 ---------- 815,695 ---------- Banks-Commercial -- 0.6% Associated Bank NA Senior Notes 3.50% due 08/13/2021.................. 80,000 79,599 BankUnited, Inc. Senior Notes 4.88% due 11/17/2025.................. 313,000 317,933 Citizens Financial Group, Inc. Sub. Notes 4.15% due 09/28/2022*................. 375,000 373,121 First Horizon National Corp. Senior Notes 3.50% due 12/15/2020.................. 212,000 212,312 Regions Financial Corp. Senior Notes 2.75% due 08/14/2022.................. 155,000 149,470 Regions Financial Corp. Sub. Notes 7.38% due 12/10/2037.................. 319,000 410,359 Santander Holdings USA, Inc. Senior Notes 3.40% due 01/18/2023.................. 230,000 221,795 SunTrust Bank Senior Notes 3.50% due 08/02/2022.................. 108,000 107,633 ---------- 1,872,222 ---------- Banks-Super Regional -- 0.1% Capital One Financial Corp. Sub. Notes 3.75% due 07/28/2026.................. 64,000 59,723 Wells Fargo & Co. Senior Notes 3.00% due 02/19/2025.................. 233,000 220,556 ---------- 280,279 ---------- Batteries/Battery Systems -- 0.3% Energizer Gamma Acquisition, Inc. Senior Sec. Notes 6.38% due 07/15/2026*................. 550,000 568,562 EnerSys Company Guar. Notes 5.00% due 04/30/2023*................. 331,000 334,310 ---------- 902,872 ----------
Principal Value Security Description Amount(17) (Note 2) Beverages-Non-alcoholic -- 0.1% Keurig Dr Pepper, Inc. Company Guar. Notes 4.06% due 05/25/2023*....................... $ 66,000 $ 66,115 Keurig Dr Pepper, Inc. Company Guar. Notes 4.42% due 05/25/2025*....................... 178,000 178,751 Keurig Dr Pepper, Inc. Company Guar. Notes 4.60% due 05/25/2028*....................... 31,000 31,151 -------- 276,017 -------- Brewery -- 0.1% Anheuser-Busch InBev Finance, Inc. Company Guar. Notes 3.65% due 02/01/2026........................ 75,000 72,877 Anheuser-Busch InBev Finance, Inc. Company Guar. Notes 4.70% due 02/01/2036........................ 57,000 57,076 Anheuser-Busch InBev Finance, Inc. Company Guar. Notes 4.90% due 02/01/2046........................ 180,000 182,038 Anheuser-Busch InBev Worldwide, Inc. Company Guar. Notes 4.60% due 04/15/2048........................ 58,000 56,184 -------- 368,175 -------- Broadcast Services/Program -- 0.3% Discovery Communications LLC Company Guar. Notes 3.50% due 06/15/2022*....................... 73,000 71,812 Discovery Communications LLC Company Guar. Notes 3.90% due 11/15/2024*....................... 129,000 126,330 Discovery Communications LLC Company Guar. Notes 5.00% due 09/20/2037........................ 37,000 36,078 Univision Communications, Inc. Senior Sec. Notes 5.13% due 05/15/2023*....................... 695,000 663,725 -------- 897,945 -------- Building & Construction Products-Misc. -- 0.3% Owens Corning Senior Notes 4.30% due 07/15/2047........................ 242,000 195,251 Owens Corning Senior Notes 4.40% due 01/30/2048........................ 72,000 59,626 Standard Industries, Inc. Senior Notes 6.00% due 10/15/2025*....................... 575,000 587,937 -------- 842,814 -------- Building & Construction-Misc. -- 0.3% Frontdoor, Inc. Senior Notes 6.75% due 08/15/2026*....................... 419,000 431,570
19 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Building & Construction-Misc. (continued) Weekley Homes LLC/Weekley Finance Corp. Senior Notes 6.00% due 02/01/2023......................... $456,000 $441,180 -------- 872,750 -------- Building Products-Cement -- 0.1% Martin Marietta Materials, Inc. Senior Notes 4.25% due 12/15/2047......................... 52,000 44,409 Vulcan Materials Co. Senior Notes 4.70% due 03/01/2048*........................ 126,000 115,661 -------- 160,070 -------- Building Products-Wood -- 0.0% Masco Corp. Senior Notes 4.50% due 05/15/2047......................... 89,000 76,462 -------- Building-Heavy Construction -- 0.2% Tutor Perini Corp. Company Guar. Notes 6.88% due 05/01/2025*........................ 690,000 708,975 -------- Building-Residential/Commercial -- 0.2% Toll Brothers Finance Corp. Company Guar. Notes 4.35% due 02/15/2028......................... 148,000 135,834 William Lyon Homes, Inc. Company Guar. Notes 6.00% due 09/01/2023......................... 456,000 440,040 -------- 575,874 -------- Cable/Satellite TV -- 1.2% Block Communications, Inc. Senior Notes 6.88% due 02/15/2025*........................ 844,000 865,100 CCO Holdings LLC/CCO Holdings Capital Corp. Senior Notes 5.00% due 02/01/2028*........................ 203,000 190,800 CCO Holdings LLC/CCO Holdings Capital Corp. Senior Notes 5.38% due 05/01/2025*........................ 300,000 297,750 CCO Holdings LLC/CCO Holdings Capital Corp. Senior Notes 5.88% due 04/01/2024*........................ 378,000 384,142 Charter Communications Operating LLC/Charter Communications Operating Capital Senior Sec. Notes 5.38% due 04/01/2038......................... 14,000 13,618 Charter Communications Operating LLC/Charter Communications Operating Capital Senior Sec. Notes 5.38% due 05/01/2047......................... 27,000 25,583 Charter Communications Operating LLC/Charter Communications Operating Capital Senior Sec. Notes 5.75% due 04/01/2048......................... 43,000 43,027
Principal Value Security Description Amount(17) (Note 2) Cable/Satellite TV (continued) Charter Communications Operating LLC/Charter Communications Operating Capital Senior Sec. Notes 6.38% due 10/23/2035........................... $ 48,000 $ 51,624 Comcast Corp. Company Guar. Notes 3.60% due 03/01/2024........................... 110,000 109,173 Comcast Corp. Company Guar. Notes 3.90% due 03/01/2038........................... 33,000 30,246 CSC Holdings LLC Company Guar. Notes 5.50% due 04/15/2027*.......................... 630,000 611,100 CSC Holdings LLC Senior Notes 6.75% due 11/15/2021........................... 330,000 347,737 DISH DBS Corp. Company Guar. Notes 6.75% due 06/01/2021........................... 390,000 398,287 ---------- 3,368,187 ---------- Cellular Telecom -- 1.0% Sprint Corp. Company Guar. Notes 7.25% due 09/15/2021........................... 435,000 460,013 Sprint Corp. Company Guar. Notes 7.88% due 09/15/2023........................... 1,972,000 2,127,295 Sprint Spectrum Co. LLC/Sprint Spectrum Co. II LLC/Sprint Spectrum Co. III LLC Senior Sec. Notes 4.74% due 09/20/2029*.......................... 213,000 212,904 ---------- 2,800,212 ---------- Chemicals-Specialty -- 0.3% GCP Applied Technologies, Inc. Company Guar. Notes 5.50% due 04/15/2026*.......................... 375,000 368,906 International Flavors & Fragrances, Inc. Senior Notes 5.00% due 09/26/2048........................... 47,000 47,135 Kraton Polymers LLC/Kraton Polymers Capital Corp. Company Guar. Notes 7.00% due 04/15/2025*.......................... 450,000 462,375 Lubrizol Corp. Company Guar. Notes 6.50% due 10/01/2034........................... 107,000 136,317 ---------- 1,014,733 ---------- Circuit Boards -- 0.2% TTM Technologies, Inc. Company Guar. Notes 5.63% due 10/01/2025*.......................... 520,000 521,300 ----------
20 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Coal -- 0.2% SunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp. Company Guar. Notes 7.50% due 06/15/2025*..................... $ 675,000 $ 695,250 ---------- Coatings/Paint -- 0.0% RPM International, Inc. Senior Notes 4.25% due 01/15/2048...................... 25,000 21,921 ---------- Commercial Services -- 0.1% Ecolab, Inc. Senior Notes 1.00% due 01/15/2024...................... EUR 250,000 293,398 Ecolab, Inc. Senior Notes 2.38% due 08/10/2022...................... 103,000 98,740 ---------- 392,138 ---------- Commercial Services-Finance -- 0.2% Refinitiv US Holdings, Inc. Senior Sec. Notes 6.25% due 05/15/2026*..................... 137,000 137,506 Refinitiv US Holdings, Inc. Company Guar. Notes 8.25% due 11/15/2026*..................... 330,000 328,000 ---------- 465,506 ---------- Computer Services -- 0.3% Harland Clarke Holdings Corp. Senior Sec. Notes 8.38% due 08/15/2022*..................... 707,000 677,836 IBM Credit LLC Senior Notes 2.65% due 02/05/2021...................... 330,000 326,282 ---------- 1,004,118 ---------- Computer Software -- 0.2% Rackspace Hosting, Inc. Company Guar. Notes 8.63% due 11/15/2024*..................... 450,000 437,670 ---------- Computers -- 0.3% Apple, Inc. Senior Notes 1.38% due 05/24/2029...................... EUR 185,000 217,216 Apple, Inc. Senior Notes 2.85% due 05/06/2021...................... 88,000 87,560 Diamond 1 Finance Corp./Diamond 2 Finance Corp. Senior Sec. Notes 6.02% due 06/15/2026*..................... 370,000 395,468 Diamond 1 Finance Corp./Diamond 2 Finance Corp. Senior Sec. Notes 8.10% due 07/15/2036*..................... 181,000 217,216
Principal Value Security Description Amount(17) (Note 2) Computers (continued) Hewlett Packard Enterprise Co. Senior Notes 6.20% due 10/15/2035...................... $ 32,000 $ 32,898 ---------- 950,358 ---------- Computers-Integrated Systems -- 0.3% Diebold Nixdorf, Inc. Company Guar. Notes 8.50% due 04/15/2024...................... 738,000 527,670 Everi Payments, Inc. Company Guar. Notes 7.50% due 12/15/2025*..................... 470,000 474,700 ---------- 1,002,370 ---------- Consumer Products-Misc. -- 0.2% Central Garden & Pet Co. Company Guar. Notes 5.13% due 02/01/2028...................... 475,000 451,250 ---------- Containers-Metal/Glass -- 0.3% Crown Cork & Seal Co., Inc. Company Guar. Notes 7.38% due 12/15/2026...................... 374,000 406,725 Owens-Brockway Glass Container, Inc. Company Guar. Notes 5.38% due 01/15/2025*..................... 486,000 481,140 ---------- 887,865 ---------- Containers-Paper/Plastic -- 0.2% Crown Americas LLC/Crown Americas Capital Corp. VI Company Guar. Notes 4.75% due 02/01/2026*..................... 278,000 265,490 Multi-Color Corp. Company Guar. Notes 4.88% due 11/01/2025*..................... 475,000 444,125 ---------- 709,615 ---------- Cosmetics & Toiletries -- 0.4% Coty, Inc. Company Guar. Notes 6.50% due 04/15/2026*..................... 625,000 582,422 First Quality Finance Co., Inc. Company Guar. Notes 5.00% due 07/01/2025*..................... 548,000 512,380 ---------- 1,094,802 ---------- Data Processing/Management -- 0.0% Fiserv, Inc. Senior Notes 4.20% due 10/01/2028...................... 69,000 69,145 ---------- Distribution/Wholesale -- 0.2% H&E Equipment Services, Inc. Company Guar. Notes 5.63% due 09/01/2025...................... 475,000 473,813 ----------
21 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Diversified Banking Institutions -- 1.1% Bank of America Corp. Senior Notes 0.75% due 07/26/2023...................... EUR 325,000 $ 375,824 Bank of America Corp. Senior Notes 3.55% due 03/05/2024...................... 72,000 71,173 Bank of America Corp. Senior Notes 3.86% due 07/23/2024...................... 88,000 87,999 Bank of America Corp. Sub. Notes 4.18% due 11/25/2027...................... 273,000 266,457 Citigroup, Inc. Senior Notes 2.88% due 07/24/2023...................... 106,000 102,476 Citigroup, Inc. Sub. Notes 4.45% due 09/29/2027...................... 301,000 297,522 Citigroup, Inc. Senior Notes 4.65% due 07/23/2048...................... 59,000 59,669 Citigroup, Inc. Sub. Notes 4.75% due 05/18/2046...................... 30,000 29,263 Citigroup, Inc. Sub. Notes 6.00% due 10/31/2033...................... 50,000 55,931 Goldman Sachs Group, Inc. Senior Notes 1.25% due 05/01/2025...................... EUR 250,000 286,590 Goldman Sachs Group, Inc. Senior Notes 2.13% due 09/30/2024...................... EUR 215,000 261,258 Goldman Sachs Group, Inc. Senior Notes 4.02% due 10/31/2038...................... 123,000 114,012 Goldman Sachs Group, Inc. Sub. Notes 6.75% due 10/01/2037...................... 118,000 141,949 JPMorgan Chase & Co. Senior Notes 2.55% due 03/01/2021...................... 171,000 167,931 Morgan Stanley Senior Notes 1.75% due 03/11/2024...................... EUR 140,000 167,781 Morgan Stanley Sub. Notes 5.00% due 11/24/2025...................... 606,000 627,626 ---------- 3,113,461 ---------- Diversified Manufacturing Operations -- 0.0% Carlisle Cos., Inc. Senior Notes 3.75% due 12/01/2027...................... 79,000 74,872 ---------- Electric-Generation -- 0.1% Basin Electric Power Cooperative 1st Mtg. Notes 4.75% due 04/26/2047*..................... 259,000 262,216 ----------
Principal Value Security Description Amount(17) (Note 2) Electric-Integrated -- 0.6% Dominion Resources, Inc. Senior Notes 5.25% due 08/01/2033.................... $187,000 $ 197,420 Duke Energy Progress LLC 1st Mtg. Notes 2.80% due 05/15/2022.................... 72,000 70,621 Exelon Corp. Junior Sub. Notes 3.50% due 06/01/2022.................... 90,000 88,429 FirstEnergy Corp. Senior Notes 7.38% due 11/15/2031.................... 321,000 414,325 Georgia Power Co. Senior Notes 2.00% due 09/08/2020.................... 109,000 106,271 Pacific Gas & Electric Co. Senior Notes 3.30% due 12/01/2027.................... 200,000 182,846 Public Service Co. of Colorado 1st Mtg. Bonds 3.70% due 06/15/2028.................... 128,000 128,014 Public Service Co. of Colorado 1st Mtg. Bonds 4.10% due 06/15/2048.................... 88,000 87,247 South Carolina Electric & Gas Co. 1st Mtg. Notes 4.35% due 02/01/2042.................... 62,000 59,305 South Carolina Electric & Gas Co. 1st Mtg. Bonds 5.10% due 06/01/2065.................... 228,000 228,362 Southern California Edison Co. 1st Mtg. Notes 4.13% due 03/01/2048.................... 83,000 79,340 ---------- 1,642,180 ---------- Electronic Components-Misc. -- 0.0% Jabil, Inc. Senior Notes 3.95% due 01/12/2028.................... 20,000 18,738 ---------- Electronic Measurement Instruments -- 0.0% Trimble, Inc. Senior Notes 4.75% due 12/01/2024.................... 10,000 10,126 Trimble, Inc. Senior Notes 4.90% due 06/15/2028.................... 119,000 119,676 ---------- 129,802 ---------- Electronic Parts Distribution -- 0.2% Ingram Micro, Inc. Senior Notes 5.45% due 12/15/2024.................... 666,000 656,091 ---------- Electronic Security Devices -- 0.0% Allegion US Holding Co., Inc. Company Guar. Notes 3.20% due 10/01/2024.................... 31,000 28,968 ----------
22 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Energy-Alternate Sources -- 0.2% Pattern Energy Group, Inc. Company Guar. Notes 5.88% due 02/01/2024*....................... $630,000 $ 636,300 ---------- Enterprise Software/Service -- 0.4% Donnelley Financial Solutions, Inc. Company Guar. Notes 8.25% due 10/15/2024........................ 660,000 696,712 Infor US, Inc. Company Guar. Notes 6.50% due 05/15/2022........................ 255,000 258,455 Oracle Corp. Senior Notes 2.95% due 11/15/2024........................ 177,000 170,948 ---------- 1,126,115 ---------- Finance-Auto Loans -- 0.1% Credit Acceptance Corp. Company Guar. Notes 7.38% due 03/15/2023........................ 227,000 237,783 ---------- Finance-Consumer Loans -- 0.8% Enova International, Inc. Company Guar. Notes 8.50% due 09/01/2024*....................... 638,000 639,595 Enova International, Inc. Company Guar. Notes 8.50% due 09/15/2025*....................... 300,000 298,500 SLM Corp. Senior Notes 5.63% due 08/01/2033........................ 836,000 700,150 Springleaf Finance Corp. Company Guar. Notes 6.88% due 03/15/2025........................ 650,000 648,375 Springleaf Finance Corp. Company Guar. Notes 7.13% due 03/15/2026........................ 183,000 182,085 ---------- 2,468,705 ---------- Finance-Credit Card -- 0.3% Alliance Data Systems Corp. Company Guar. Notes 5.88% due 11/01/2021*....................... 750,000 765,000 ---------- Finance-Investment Banker/Broker -- 0.3% Jefferies Group LLC/Jefferies Group Capital Finance, Inc. Senior Notes 4.15% due 01/23/2030........................ 103,000 92,536 Lehman Brothers Holdings, Inc. Escrow Notes 6.75% due 12/28/2017+(4)(5)................. 280,000 28 Lehman Brothers Holdings, Inc. Escrow Notes 7.50% due 05/11/2038+(4)(5)................. 361,000 36 LPL Holdings, Inc. Company Guar. Notes 5.75% due 09/15/2025*....................... 740,000 722,425 ---------- 815,025 ----------
Principal Value Security Description Amount(17) (Note 2) Finance-Mortgage Loan/Banker -- 0.2% Quicken Loans, Inc. Company Guar. Notes 5.75% due 05/01/2025*.............................. $650,000 $649,187 -------- Finance-Other Services -- 0.1% National Rural Utilities Cooperative Finance Corp. Senior Notes 2.30% due 09/15/2022............................... 121,000 116,129 National Rural Utilities Cooperative Finance Corp. Collateral Trust Notes 2.40% due 04/25/2022............................... 73,000 70,543 -------- 186,672 -------- Food-Meat Products -- 0.0% Smithfield Foods, Inc. Senior Notes 2.65% due 10/03/2021*.............................. 68,000 64,818 -------- Food-Misc./Diversified -- 0.2% Kraft Heinz Foods Co. Sec. Notes 4.88% due 02/15/2025*.............................. 174,000 176,848 Nestle Holdings, Inc. Company Guar. Notes 3.50% due 09/24/2025*.............................. 152,000 150,896 Nestle Holdings, Inc. Company Guar. Notes 3.90% due 09/24/2038*.............................. 178,000 175,101 Nestle Holdings, Inc. Company Guar. Notes 4.00% due 09/24/2048*.............................. 150,000 146,639 -------- 649,484 -------- Food-Retail -- 0.2% Albertsons Cos. LLC/Safeway, Inc./New Albertson's, Inc./Albertson's LLC Company Guar. Notes 5.75% due 03/15/2025............................... 793,000 713,700 -------- Gambling (Non-Hotel) -- 0.3% Delta Merger Sub, Inc. Senior Notes 6.00% due 09/15/2026*.............................. 435,000 440,437 Scientific Games International, Inc. Senior Sec. Notes 5.00% due 10/15/2025*.............................. 465,000 441,750 Waterford Gaming LLC/Waterford Gaming Financial Corp. Escrow Notes 8.63% due 09/15/2014*+(4)(5)....................... 478,062 8,510 -------- 890,697 -------- Hotels/Motels -- 0.3% Wyndham Worldwide Corp. Senior Sec. Notes 4.15% due 04/01/2024............................... 355,000 344,350
23 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Hotels/Motels (continued) Wyndham Worldwide Corp. Senior Sec. Notes 4.50% due 04/01/2027.................... $ 501,000 $472,192 -------- 816,542 -------- Independent Power Producers -- 0.2% NRG Yield Operating LLC Company Guar. Notes 5.38% due 08/15/2024.................... 465,000 467,325 -------- Insurance Brokers -- 0.0% Willis North America, Inc. Company Guar. Notes 5.05% due 09/15/2048.................... 60,000 59,905 -------- Insurance-Life/Health -- 0.0% AXA Equitable Holdings, Inc. Senior Notes 5.00% due 04/20/2048*................... 29,000 27,089 Brighthouse Financial, Inc. Senior Notes 4.70% due 06/22/2047.................... 85,000 70,345 -------- 97,434 -------- Insurance-Multi-line -- 0.0% Assurant, Inc. Senior Notes 6.75% due 02/15/2034.................... 77,000 88,276 -------- Insurance-Mutual -- 0.0% Massachusetts Mutual Life Insurance Co. Sub. Notes 4.50% due 04/15/2065*................... 64,000 59,821 -------- Insurance-Property/Casualty -- 0.3% ACE INA Holdings, Inc. Company Guar. Notes 2.88% due 11/03/2022.................... 75,000 73,414 AmWINS Group, Inc. Company Guar. Notes 7.75% due 07/01/2026*................... 470,000 488,800 Chubb INA Holdings, Inc. Company Guar. Notes 2.50% due 03/15/2038.................... EUR 260,000 304,366 -------- 866,580 -------- Internet Connectivity Services -- 0.2% Cogent Communications Group, Inc. Senior Sec. Notes 5.38% due 03/01/2022*................... 507,000 514,605 -------- Internet Content-Entertainment -- 0.1% Netflix, Inc. Senior Notes 5.88% due 02/15/2025.................... 322,000 332,868 -------- Investment Companies -- 0.2% FS Energy & Power Fund Senior Sec. Notes 7.50% due 08/15/2023*................... 437,000 445,740 --------
Principal Value Security Description Amount(17) (Note 2) Machinery-Construction & Mining -- 0.2% Caterpillar Financial Services Corp. Senior Notes 2.55% due 11/29/2022................. $ 68,000 $ 65,990 Caterpillar Financial Services Corp. Senior Notes 3.15% due 09/07/2021................. 49,000 48,942 Caterpillar Financial Services Corp. Senior Notes 3.45% due 05/15/2023................. 85,000 85,006 Terex Corp. Company Guar. Notes 5.63% due 02/01/2025*................ 454,000 451,163 -------- 651,101 -------- Machinery-Electrical -- 0.0% ABB Finance USA, Inc. Company Guar. Notes 3.38% due 04/03/2023................. 108,000 107,593 -------- Machinery-Farming -- 0.1% CNH Industrial Capital LLC Company Guar. Notes 4.20% due 01/15/2024................. 180,000 179,384 -------- Machinery-General Industrial -- 0.1% Roper Technologies, Inc. Senior Notes 4.20% due 09/15/2028................. 182,000 180,550 Stevens Holding Co, Inc. Company Guar. Notes 6.13% due 10/01/2026*................ 113,000 114,836 -------- 295,386 -------- Machinery-Thermal Process -- 0.1% Cleaver-Brooks, Inc. Senior Sec. Notes 7.88% due 03/01/2023*................ 359,000 367,078 -------- Marine Services -- 0.2% Great Lakes Dredge & Dock Corp. Company Guar. Notes 8.00% due 05/15/2022................. 430,000 441,825 -------- Medical Instruments -- 0.1% Medtronic, Inc. Company Guar. Notes 2.50% due 03/15/2020................. 152,000 150,988 -------- Medical Labs & Testing Services -- 0.1% Laboratory Corp. of America Holdings Senior Notes 3.25% due 09/01/2024................. 187,000 179,112 -------- Medical-Biomedical/Gene -- 0.0% Celgene Corp. Senior Notes 3.63% due 05/15/2024................. 71,000 70,008 Celgene Corp. Senior Notes 4.55% due 02/20/2048................. 68,000 63,270 -------- 133,278 --------
24 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Medical-Drugs -- 0.3% AbbVie, Inc. Senior Notes 4.88% due 11/14/2048.......................... $ 74,000 $ 72,808 Bayer US Finance II LLC Company Guar. Notes 4.63% due 06/25/2038*......................... 208,000 199,137 Endo Finance LLC/Endo Finco, Inc. Company Guar. Notes 5.38% due 01/15/2023*......................... 260,000 228,800 GlaxoSmithKline Capital, Inc. Company Guar. Notes 3.38% due 05/15/2023.......................... 64,000 63,736 Johnson & Johnson Senior Notes 1.65% due 05/20/2035.......................... EUR 125,000 147,812 Pfizer, Inc. Senior Notes 3.00% due 09/15/2021.......................... 53,000 52,988 -------- 765,281 -------- Medical-Generic Drugs -- 0.1% Actavis, Inc. Company Guar. Notes 3.25% due 10/01/2022.......................... 60,000 58,909 Mylan, Inc. Company Guar. Notes 5.20% due 04/15/2048*......................... 283,000 261,525 -------- 320,434 -------- Medical-HMO -- 0.2% Halfmoon Parent, Inc. Senior Sec. Notes 4.80% due 08/15/2038*......................... 87,000 87,244 Halfmoon Parent, Inc. Senior Notes 4.90% due 12/15/2048*......................... 85,000 84,386 UnitedHealth Group, Inc. Senior Bonds 2.38% due 10/15/2022.......................... 302,000 289,624 UnitedHealth Group, Inc. Senior Notes 3.75% due 07/15/2025.......................... 107,000 107,509 -------- 568,763 -------- Medical-Hospitals -- 0.1% CHS/Community Health Systems, Inc. Senior Sec. Notes 5.13% due 08/01/2021.......................... 299,000 290,778 -------- Medical-Wholesale Drug Distribution -- 0.0% Allergan Sales LLC Company Guar. Notes 4.88% due 02/15/2021*......................... 56,000 57,657 -------- Metal Processors & Fabrication -- 0.2% Grinding Media, Inc./Moly-Cop AltaSteel, Ltd. Senior Sec. Notes 7.38% due 12/15/2023*......................... 42,000 43,711
Principal Value Security Description Amount(17) (Note 2) Metal Processors & Fabrication (continued) Novelis Corp. Company Guar. Notes 5.88% due 09/30/2026*.......................... $ 300,000 $293,100 Novelis Corp. Company Guar. Notes 6.25% due 08/15/2024*.......................... 196,000 200,655 Timken Co. Senior Notes 4.50% due 12/15/2028........................... 50,000 49,105 -------- 586,571 -------- Metal-Copper -- 0.2% Southern Copper Corp. Senior Notes 6.75% due 04/16/2040........................... 440,000 520,848 -------- Metal-Iron -- 0.2% Cleveland-Cliffs, Inc. Company Guar. Notes 5.75% due 03/01/2025........................... 625,000 607,812 -------- Multimedia -- 0.2% E.W. Scripps Co. Company Guar. Notes 5.13% due 05/15/2025*.......................... 444,000 426,795 Time Warner, Inc. Company Guar. Notes 4.85% due 07/15/2045........................... 33,000 30,776 Warner Media LLC Company Guar. Notes 1.95% due 09/15/2023........................... EUR 160,000 193,228 -------- 650,799 -------- Networking Products -- 0.0% Cisco Systems, Inc. Senior Notes 2.20% due 02/28/2021........................... 80,000 78,333 -------- Oil Companies-Exploration & Production -- 1.9% Anadarko Petroleum Corp. Senior Notes 6.45% due 09/15/2036........................... 69,000 78,734 Apache Corp. Senior Notes 4.38% due 10/15/2028........................... 48,000 47,077 Callon Petroleum Co. Company Guar. Notes 6.38% due 07/01/2026........................... 575,000 585,063 Chaparral Energy, Inc. Senior Notes 8.75% due 07/15/2023*.......................... 450,000 448,875 Continental Resources, Inc. Company Guar. Notes 4.50% due 04/15/2023........................... 81,000 82,426 Endeavor Energy Resources LP/EER Finance, Inc. Senior Notes 5.50% due 01/30/2026*.......................... 475,000 475,000 Extraction Oil & Gas, Inc. Company Guar. Notes 5.63% due 02/01/2026*.......................... 550,000 486,750
25 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Oil Companies-Exploration & Production (continued) Hess Corp. Senior Notes 5.60% due 02/15/2041.................... $ 88,000 $ 89,353 Hilcorp Energy I LP/Hilcorp Finance Co. Senior Notes 5.00% due 12/01/2024*................... 702,000 684,976 Lonestar Resources America, Inc. Company Guar. Notes 11.25% due 01/01/2023*.................. 546,000 599,235 QEP Resources, Inc. Senior Notes 5.63% due 03/01/2026.................... 625,000 597,656 Sanchez Energy Corp. Company Guar. Notes 6.13% due 01/15/2023.................... 386,000 220,020 Southwestern Energy Co. Company Guar. Notes 7.50% due 04/01/2026.................... 450,000 471,375 WildHorse Resource Development Corp. Company Guar. Notes 6.88% due 02/01/2025.................... 565,000 583,363 ---------- 5,449,903 ---------- Oil Companies-Integrated -- 0.0% Chevron Corp. Senior Notes 3.19% due 06/24/2023.................... 104,000 103,246 ---------- Oil Field Machinery & Equipment -- 0.1% Forum Energy Technologies, Inc. Company Guar. Notes 6.25% due 10/01/2021.................... 335,000 334,163 ---------- Oil Refining & Marketing -- 0.0% PBF Holding Co. LLC/PBF Finance Corp. Company Guar. Notes 7.25% due 06/15/2025.................... 135,000 141,750 ---------- Oil-Field Services -- 0.6% Apergy Corp. Company Guar. Notes 6.38% due 05/01/2026*................... 298,000 306,195 Calfrac Holdings LP Senior Notes 8.50% due 06/15/2026*................... 605,000 564,163 Halliburton Co. Senior Notes 4.85% due 11/15/2035.................... 26,000 27,197 Pioneer Energy Services Corp. Company Guar. Notes 6.13% due 03/15/2022.................... 390,000 341,250 USA Compression Partners LP/USA Compression Finance Corp. Senior Notes 6.88% due 04/01/2026*................... 575,000 593,687 ---------- 1,832,492 ----------
Principal Value Security Description Amount(17) (Note 2) Paper & Related Products -- 0.1% Domtar Corp. Company Guar. Notes 6.75% due 02/15/2044........................... $204,000 $213,078 Georgia-Pacific LLC Senior Notes 3.73% due 07/15/2023*.......................... 110,000 110,540 Georgia-Pacific LLC Company Guar. Notes 5.40% due 11/01/2020*.......................... 96,000 99,884 -------- 423,502 -------- Petrochemicals -- 0.0% Chevron Phillips Chemical Co. LLC/Chevron Phillips Chemical Co. LP Senior Notes 3.30% due 05/01/2023*.......................... 67,000 66,115 -------- Pharmacy Services -- 0.1% CVS Health Corp. Senior Notes 4.78% due 03/25/2038........................... 94,000 93,550 CVS Pass-Through Trust Pass-Through Certs. 4.70% due 01/10/2036*.......................... 60,522 59,614 CVS Pass-Through Trust Pass-Through Certs. 5.77% due 01/10/2033*.......................... 49,211 52,227 CVS Pass-Through Trust Pass-Through Certs. 5.93% due 01/10/2034*.......................... 78,624 84,256 -------- 289,647 -------- Physicians Practice Management -- 0.3% MEDNAX, Inc. Company Guar. Notes 5.25% due 12/01/2023*.......................... 770,000 770,962 -------- Pipelines -- 1.6% Andeavor Logistics LP/Tesoro Logistics Finance Corp. Company Guar. Notes 5.20% due 12/01/2047........................... 132,000 131,816 Cheniere Corpus Christi Holdings LLC Senior Sec. Notes 7.00% due 06/30/2024........................... 640,000 700,800 Energy Transfer Equity LP Senior Sec. Notes 4.25% due 03/15/2023........................... 480,000 477,000 Energy Transfer Partners LP Company Guar. Notes 4.90% due 03/15/2035........................... 55,000 51,714 EnLink Midstream Partners LP Senior Notes 5.05% due 04/01/2045........................... 17,000 14,106 Genesis Energy LP/Genesis Energy Finance Corp. Company Guar. Notes 6.00% due 05/15/2023........................... 532,000 524,685
26 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Pipelines (continued) Holly Energy Partners LP/Holly Energy Finance Corp. Company Guar. Notes 6.00% due 08/01/2024*......................... $ 448,000 $ 458,080 Kinder Morgan Energy Partners LP Company Guar. Notes 4.30% due 05/01/2024.......................... 94,000 94,909 Kinder Morgan Energy Partners LP Company Guar. Notes 6.95% due 01/15/2038.......................... 95,000 115,157 Kinder Morgan, Inc. Company Guar. Notes 1.50% due 03/16/2022.......................... EUR 275,000 328,533 MPLX LP Senior Notes 4.00% due 03/15/2028.......................... 150,000 144,273 NGPL PipeCo LLC Senior Notes 4.38% due 08/15/2022*......................... 140,000 141,050 SemGroup Corp./Rose Rock Finance Corp. Company Guar. Notes 5.63% due 07/15/2022.......................... 706,000 700,705 Summit Midstream Holdings LLC/Summit Midstream Finance Corp. Company Guar. Notes 5.50% due 08/15/2022.......................... 467,000 465,249 Western Gas Partners LP Senior Notes 4.65% due 07/01/2026.......................... 123,000 120,563 Williams Cos., Inc. Senior Notes 3.70% due 01/15/2023.......................... 251,000 248,387 Williams Cos., Inc. Senior Notes 5.75% due 06/24/2044.......................... 104,000 111,297 ---------- 4,828,324 ---------- Platinum -- 0.1% Stillwater Mining Co. Company Guar. Notes 7.13% due 06/27/2025.......................... 450,000 431,010 ---------- Poultry -- 0.2% Pilgrim's Pride Corp. Senior Notes 5.88% due 09/30/2027*......................... 685,000 647,325 ---------- Publishing-Books -- 0.2% McGraw-Hill Global Education Holdings LLC/ McGraw-Hill Global Education Finance Senior Notes 7.88% due 05/15/2024*......................... 490,000 439,163 ---------- Quarrying -- 0.2% Hi-Crush Partners LP Senior Notes 9.50% due 08/01/2026*......................... 675,000 627,750 ----------
Principal Value Security Description Amount(17) (Note 2) Racetracks -- 0.1% GLP Capital LP/GLP Financing II, Inc. Company Guar. Notes 5.38% due 04/15/2026....................... $ 340,000 $ 345,273 ---------- Radio -- 0.2% Sirius XM Radio, Inc. Company Guar. Notes 5.38% due 07/15/2026*...................... 483,000 479,378 ---------- Real Estate Investment Trusts -- 1.7% American Tower Corp. Senior Notes 1.95% due 05/22/2026....................... EUR 130,000 151,562 CTR Partnership LP/CareTrust Capital Corp. Company Guar. Notes 5.25% due 06/01/2025....................... 624,000 608,400 Duke Realty LP Senior Notes 4.00% due 09/15/2028....................... 69,000 68,022 EPR Properties Company Guar. Notes 4.95% due 04/15/2028....................... 28,000 27,514 ESH Hospitality, Inc. Company Guar. Notes 5.25% due 05/01/2025*...................... 710,000 686,925 GEO Group, Inc. Company Guar. Notes 5.13% due 04/01/2023....................... 350,000 335,125 Iron Mountain, Inc. Company Guar. Notes 4.88% due 09/15/2027*...................... 635,000 582,613 iStar, Inc. Senior Notes 5.25% due 09/15/2022....................... 692,000 681,620 Kimco Realty Corp. Senior Notes 4.25% due 04/01/2045....................... 55,000 49,262 MPT Operating Partnership LP/MPT Finance Corp. Company Guar. Notes 5.00% due 10/15/2027....................... 506,000 487,658 National Retail Properties, Inc. Senior Notes 4.80% due 10/15/2048....................... 31,000 31,094 Sabra Health Care LP Company Guar. Notes 5.13% due 08/15/2026....................... 392,000 383,753 Starwood Property Trust, Inc. Senior Notes 4.75% due 03/15/2025....................... 625,000 598,506 Washington Prime Group LP Senior Notes 5.95% due 08/15/2024....................... 84,000 79,501 Welltower, Inc. Senior Notes 3.95% due 09/01/2023....................... 61,000 60,958 ---------- 4,832,513 ----------
27 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Real Estate Management/Services -- 0.5% Kennedy-Wilson, Inc. Company Guar. Notes 5.88% due 04/01/2024...................... $ 700,000 $ 689,500 Realogy Group LLC/Realogy Co-Issuer Corp. Company Guar. Notes 4.88% due 06/01/2023*..................... 690,000 646,012 ---------- 1,335,512 ---------- Real Estate Operations & Development -- 0.2% Greystar Real Estate Partners LLC Senior Sec. Notes 5.75% due 12/01/2025*..................... 650,000 633,750 ---------- Rental Auto/Equipment -- 0.4% Ahern Rentals, Inc. Sec. Notes 7.38% due 05/15/2023*..................... 470,000 462,950 Jurassic Holdings III, Inc. Sec. Notes 6.88% due 02/15/2021*..................... 575,000 560,625 ---------- 1,023,575 ---------- Retail-Appliances -- 0.2% Conn's, Inc. Company Guar. Notes 7.25% due 07/15/2022...................... 563,000 558,778 ---------- Retail-Automobile -- 0.2% Asbury Automotive Group, Inc. Company Guar. Notes 6.00% due 12/15/2024...................... 177,000 178,770 AutoNation, Inc. Company Guar. Notes 3.50% due 11/15/2024...................... 107,000 101,383 Lithia Motors, Inc. Company Guar. Notes 5.25% due 08/01/2025*..................... 275,000 263,312 ---------- 543,465 ---------- Retail-Discount -- 0.1% Wal-Mart Stores, Inc. Senior Notes 2.55% due 04/08/2026...................... EUR 110,000 141,920 ---------- Retail-Leisure Products -- 0.2% Party City Holdings, Inc. Company Guar. Notes 6.63% due 08/01/2026*..................... 445,000 450,563 ---------- Retail-Mail Order -- 0.1% QVC, Inc. Senior Sec. Notes 4.85% due 04/01/2024...................... 205,000 202,885 ---------- Retail-Office Supplies -- 0.3% Staples, Inc. Company Guar. Notes 8.50% due 09/15/2025*..................... 1,051,000 990,567 ----------
Principal Value Security Description Amount(17) (Note 2) Retail-Pawn Shops -- 0.2% FirstCash, Inc. Company Guar. Notes 5.38% due 06/01/2024*................. $470,000 $ 472,350 ---------- Retail-Restaurants -- 0.1% Golden Nugget, Inc. Company Guar. Notes 8.75% due 10/01/2025*................. 204,000 213,849 ---------- Rubber/Plastic Products -- 0.0% Venture Holdings Co. LLC Company Guar. Notes 11.00% due 06/01/2007+(4)(5)(6)(7).... 100,000 0 ---------- Satellite Telecom -- 0.2% Hughes Satellite Systems Corp. Company Guar. Notes 6.63% due 08/01/2026.................. 481,000 465,368 ---------- Savings & Loans/Thrifts -- 0.2% Astoria Financial Corp. Senior Notes 3.50% due 06/08/2020.................. 238,000 237,203 First Niagara Financial Group, Inc. Sub. Notes 7.25% due 12/15/2021.................. 434,000 478,153 ---------- 715,356 ---------- Schools -- 0.2% Graham Holdings Co. Company Guar. Notes 5.75% due 06/01/2026*................. 445,000 455,569 ---------- Security Services -- 0.2% ADT Corp. Senior Sec. Notes 4.13% due 06/15/2023.................. 600,000 573,738 ADT Corp. Senior Sec. Notes 6.25% due 10/15/2021.................. 113,000 118,538 ---------- 692,276 ---------- Semiconductor Components-Integrated Circuits -- 0.0% QUALCOMM, Inc. Senior Notes 3.45% due 05/20/2025.................. 126,000 122,235 ---------- Steel-Producers -- 0.5% AK Steel Corp. Company Guar. Notes 6.38% due 10/15/2025.................. 250,000 237,812 Commercial Metals Co. Senior Notes 5.75% due 04/15/2026*................. 505,000 489,850 United States Steel Corp. Senior Notes 6.88% due 08/15/2025.................. 600,000 612,750 ---------- 1,340,412 ----------
28 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Telephone-Integrated -- 0.9% AT&T, Inc. Senior Notes 3.15% due 09/04/2036.................. EUR 265,000 $ 308,619 AT&T, Inc. Senior Notes 4.50% due 05/15/2035.................. 383,000 357,823 AT&T, Inc. Senior Notes 4.90% due 08/15/2037*................. 95,000 91,167 CenturyLink, Inc. Senior Notes 6.75% due 12/01/2023.................. 630,000 654,412 Citizens Communications Co. Senior Notes 9.00% due 08/15/2031.................. 996,000 632,460 Verizon Communications, Inc. Senior Bonds 2.88% due 01/15/2038.................. EUR 100,000 116,225 Verizon Communications, Inc. Senior Notes 4.40% due 11/01/2034.................. 90,000 87,767 Verizon Communications, Inc. Senior Notes 5.25% due 03/16/2037.................. 229,000 244,153 ---------- 2,492,626 ---------- Television -- 0.4% Belo Corp. Company Guar. Notes 7.75% due 06/01/2027.................. 652,000 699,270 CBS Corp. Company Guar. Notes 3.70% due 08/15/2024.................. 75,000 72,917 Gray Television, Inc. Company Guar. Notes 5.13% due 10/15/2024*................. 307,000 296,639 Gray Television, Inc. Company Guar. Notes 5.88% due 07/15/2026*................. 111,000 110,029 ---------- 1,178,855 ---------- Transport-Marine -- 0.0% Kirby Corp. Senior Notes 4.20% due 03/01/2028.................. 123,000 120,235 ---------- Transport-Rail -- 0.1% Kansas City Southern Company Guar. Notes 4.70% due 05/01/2048.................. 105,000 104,463 Norfolk Southern Corp. Senior Notes 5.10% due 08/01/2118.................. 117,000 115,508 ---------- 219,971 ---------- Transport-Services -- 0.0% CH Robinson Worldwide, Inc. Senior Notes 4.20% due 04/15/2028.................. 67,000 65,979
Principal Value Security Description Amount(17) (Note 2) Transport-Services (continued) FedEx Corp. Company Guar. Notes 4.05% due 02/15/2048.................... $ 42,000 $ 38,112 ----------- 104,091 ----------- Trucking/Leasing -- 0.1% Penske Truck Leasing Co. LP/PTL Finance Corp. Senior Notes 3.95% due 03/10/2025*................... 195,000 191,058 ----------- Vitamins & Nutrition Products -- 0.0% HLF Financing SARL LLC/Herbalife International, Inc. Company Guar. Notes 7.25% due 08/15/2026*................... 68,000 69,105 ----------- Total U.S. Corporate Bonds & Notes (cost $91,835,508)...................... 90,205,727 ----------- FOREIGN CORPORATE BONDS & NOTES -- 19.0% Agricultural Chemicals -- 0.3% Consolidated Energy Finance SA Senior Notes 6.88% due 06/15/2025*................... 480,000 498,600 OCI NV Senior Sec. Notes 6.63% due 04/15/2023*................... 470,000 486,450 ----------- 985,050 ----------- Airlines -- 0.1% Gol Finance, Inc. Company Guar. Notes 7.00% due 01/31/2025*................... 480,000 387,605 ----------- Auto-Cars/Light Trucks -- 0.1% Hyundai Capital Services, Inc. Senior Notes 3.00% due 08/29/2022*................... 201,000 193,453 Volkswagen International Finance NV Company Guar. Notes 1.88% due 03/30/2027.................... EUR 200,000 229,099 ----------- 422,552 ----------- Auto/Truck Parts & Equipment-Original -- 0.3% Delphi Jersey Holdings PLC Company Guar. Notes 5.00% due 10/01/2025*................... 595,000 560,044 Toyota Industries Corp. Senior Notes 3.24% due 03/16/2023*................... 329,000 323,798 ----------- 883,842 ----------- Banks-Commercial -- 1.3% Banco Bilbao Vizcaya Argentaria SA Senior Notes 1.38% due 05/14/2025.................... EUR 300,000 340,358 Banco de Credito e Inversiones SA Senior Notes 3.50% due 10/12/2027.................... 490,000 447,125
29 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Banks-Commercial (continued) Barclays Bank PLC Sub. Notes 6.63% due 03/30/2022................. EUR 200,000 $ 270,610 BPCE SA Sub. Notes 4.63% due 07/18/2023................. EUR 200,000 267,070 Credit Suisse AG Senior Notes 3.00% due 10/29/2021................. 254,000 250,436 Credit Suisse AG Sub. Notes 5.75% due 09/18/2025................. EUR 430,000 546,681 Danske Bank A/S Senior Notes 3.88% due 09/12/2023*................ 200,000 195,887 HSBC France SA Senior Notes 0.60% due 03/20/2023................. EUR 200,000 232,455 Intesa Sanpaolo SpA Senior Notes 4.00% due 10/30/2023................. EUR 100,000 126,497 Intesa Sanpaolo SpA Sub. Notes 5.71% due 01/15/2026*................ 255,000 231,971 National Australia Bank, Ltd. Senior Notes 3.63% due 06/20/2023................. 250,000 248,620 Standard Chartered PLC Senior Notes 1.63% due 10/03/2027................. EUR 175,000 199,435 Westpac Banking Corp. Senior Notes 3.05% due 05/15/2020................. 105,000 104,713 Yapi ve Kredi Bankasi AS Senior Notes 5.75% due 02/24/2022................. 480,000 434,400 ---------- 3,896,258 ---------- Building Products-Cement -- 0.1% CIMPOR Financial Operations BV Company Guar. Notes 5.75% due 07/17/2024................. 480,000 338,405 ---------- Building Societies -- 0.2% Nationwide Building Society Sub. Notes 2.00% due 07/25/2029................. EUR 200,000 226,591 Nationwide Building Society Sub. Notes 4.13% due 10/18/2032*................ 250,000 229,279 ---------- 455,870 ---------- Building-Residential/Commercial -- 0.2% Mattamy Group Corp. Senior Notes 6.50% due 10/01/2025*................ 706,000 684,820 ----------
Principal Value Security Description Amount(17) (Note 2) Cable/Satellite TV -- 1.0% Altice Financing SA Senior Sec. Notes 7.50% due 05/15/2026*........................ $ 675,000 $ 658,125 Altice France SA Senior Sec. Notes 8.13% due 02/01/2027*........................ 213,000 219,390 Altice Luxembourg SA Company Guar. Notes 7.63% due 02/15/2025*........................ 965,000 879,501 SFR Group SA Senior Sec. Notes 7.38% due 05/01/2026*........................ 550,000 550,000 UPCB Finance IV, Ltd. Senior Sec. Notes 5.38% due 01/15/2025*........................ 475,000 474,406 ---------- 2,781,422 ---------- Cellular Telecom -- 0.3% C&W Senior Financing Designated Activity Co. Senior Notes 6.88% due 09/15/2027*........................ 467,000 465,833 Millicom International Cellular SA Senior Notes 6.00% due 03/15/2025......................... 440,000 442,473 Vodafone Group PLC Senior Notes 4.13% due 05/30/2025......................... 39,000 38,698 ---------- 947,004 ---------- Chemicals-Diversified -- 0.9% Braskem Netherlands Finance BV Company Guar. Notes 4.50% due 01/10/2028*........................ 209,000 199,324 Cydsa SAB de CV Company Guar. Notes 6.25% due 10/04/2027......................... 490,000 466,725 NOVA Chemicals Corp. Senior Notes 5.00% due 05/01/2025*........................ 695,000 660,250 Petkim Petrokimya Holding AS Senior Notes 5.88% due 01/26/2023*........................ 470,000 432,400 Solvay SA Senior Notes 1.63% due 12/02/2022......................... EUR 300,000 364,210 Trinseo Materials Operating SCA/Trinseo Materials Finance, Inc. Company Guar. Notes 5.38% due 09/01/2025*........................ 465,000 448,283 ---------- 2,571,192 ---------- Chemicals-Specialty -- 0.1% Starfruit Finco BV/Starfruit US Holdco LLC Senior Notes 8.00% due 10/01/2026*........................ 309,000 313,635 ----------
30 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Computers-Memory Devices -- 0.3% Seagate HDD Cayman Company Guar. Notes 4.75% due 01/01/2025...................... $ 780,000 $ 747,886 ---------- Diamonds/Precious Stones -- 0.1% Petra Diamonds US Treasury PLC Sec. Notes 7.25% due 05/01/2022...................... 260,000 253,500 ---------- Diversified Banking Institutions -- 1.1% Credit Agricole SA Senior Notes 1.88% due 12/20/2026...................... EUR 200,000 234,086 HSBC Holdings PLC Senior Notes 4.29% due 09/12/2026...................... 200,000 198,035 Mitsubishi UFJ Financial Group, Inc. Senior Notes 2.67% due 07/25/2022...................... 148,000 142,739 Mizuho Financial Group, Inc. Senior Notes 2.27% due 09/13/2021...................... 206,000 198,203 Mizuho Financial Group, Inc. Senior Notes 3.55% due 03/05/2023...................... 304,000 300,279 Natwest Markets PLC Senior Notes 0.63% due 03/02/2022...................... EUR 150,000 171,702 Royal Bank of Scotland Group PLC Senior Notes 1.75% due 03/02/2026...................... EUR 175,000 197,807 Royal Bank of Scotland Group PLC Senior Notes 2.50% due 03/22/2023...................... EUR 185,000 224,897 Royal Bank of Scotland Group PLC Senior Notes 4.52% due 06/25/2024...................... 200,000 199,432 UBS AG Sub. Notes 4.75% due 02/12/2026...................... EUR 400,000 503,260 UBS Group Funding Switzerland AG Company Guar. Notes 3.49% due 05/23/2023*..................... 210,000 205,770 UniCredit SpA Sub. Notes 5.86% due 06/19/2032*..................... 548,000 488,585 Woori Bank Sub. Notes 5.13% due 08/06/2028...................... 200,000 200,997 ---------- 3,265,792 ---------- Diversified Financial Services -- 0.1% GE Capital International Funding Co. ULC Company Guar. Notes 2.34% due 11/15/2020...................... 260,000 254,050 ---------- Diversified Manufacturing Operations -- 0.1% Siemens Financieringsmaatschappij NV Company Guar. Notes 2.88% due 03/10/2028...................... EUR 200,000 268,693 ----------
Principal Value Security Description Amount(17) (Note 2) Diversified Minerals -- 0.1% Anglo American Capital PLC Company Guar. Notes 3.25% due 04/03/2023................. EUR 245,000 $ 305,529 ---------- Electric-Distribution -- 0.4% State Grid Overseas Investment, Ltd. Company Guar. Notes 3.13% due 05/22/2023*................ 1,100,000 1,072,157 State Grid Overseas Investment, Ltd. Company Guar. Notes 4.13% due 05/07/2024*................ 200,000 202,377 ---------- 1,274,534 ---------- Electric-Generation -- 0.1% Electricite de France SA Senior Notes 1.00% due 10/13/2026................. EUR 200,000 225,914 ---------- Electric-Integrated -- 0.6% Capex SA Senior Notes 6.88% due 05/15/2024................. 450,000 381,375 EDP Finance BV Senior Notes 2.00% due 04/22/2025................. EUR 335,000 399,567 Enel Finance International NV Company Guar. Notes 3.50% due 04/06/2028*................ 200,000 176,047 Enel Finance International NV Company Guar. Notes 3.63% due 05/25/2027*................ 225,000 203,786 Gas Natural Fenosa Finance BV Company Guar. Notes 1.38% due 01/21/2025................. EUR 200,000 235,366 Iberdrola Finanzas SA Company Guar. Notes 1.00% due 03/07/2025................. EUR 300,000 348,438 ---------- 1,744,579 ---------- Finance-Commercial -- 0.2% Unifin Financiera SAB de CV SOFOM Company Guar. Notes 7.25% due 09/27/2023................. 460,000 454,255 ---------- Finance-Leasing Companies -- 0.0% Aircastle, Ltd. Senior Notes 4.40% due 09/25/2023................. 39,000 39,005 ---------- Finance-Other Services -- 0.2% Travelport Corporate Finance PLC Senior Sec. Notes 6.00% due 03/15/2026*................ 431,000 437,754 ---------- Food-Meat Products -- 0.2% JBS USA LUX SA/JBS USA Finance, Inc. Company Guar. Notes 5.88% due 07/15/2024*................ 632,000 622,520 ----------
31 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Gambling (Non-Hotel) -- 0.3% International Game Technology PLC Senior Sec. Notes 6.50% due 02/15/2025*.............. $ 378,000 $392,175 LHMC Finco SARL Senior Sec. Notes 7.88% due 12/20/2023*.............. 590,000 599,735 -------- 991,910 -------- Gold Mining -- 0.0% Kinross Gold Corp. Company Guar. Notes 4.50% due 07/15/2027............... 95,000 84,911 -------- Insurance-Life/Health -- 0.1% Athene Holding, Ltd. Senior Notes 4.13% due 01/12/2028............... 193,000 180,320 -------- Insurance-Multi-line -- 0.0% XLIT, Ltd. Company Guar. Notes 5.50% due 03/31/2045............... 111,000 116,817 -------- Insurance-Property/Casualty -- 0.0% Enstar Group, Ltd. Senior Notes 4.50% due 03/10/2022............... 34,000 34,149 -------- Internet Application Software -- 0.2% Tencent Holdings, Ltd. Senior Notes 3.60% due 01/19/2028*.............. 500,000 473,256 -------- Machinery-Farming -- 0.1% CNH Industrial NV Senior Notes 3.85% due 11/15/2027............... 150,000 141,925 CNH Industrial NV Senior Notes 4.50% due 08/15/2023............... 77,000 78,186 -------- 220,111 -------- Machinery-Pumps -- 0.0% Nvent Finance SARL Company Guar. Notes 4.55% due 04/15/2028*.............. 76,000 73,991 -------- Medical-Drugs -- 0.5% Bausch Health Cos., Inc. Company Guar. Notes 5.88% due 05/15/2023*.............. 800,000 780,000 Bayer Capital Corp BV Company Guar. Notes 1.50% due 06/26/2026............... EUR 100,000 115,647 Novartis Finance SA Company Guar. Notes 1.63% due 11/09/2026............... EUR 250,000 304,427
Principal Value Security Description Amount(17) (Note 2) Medical-Drugs (continued) Shire Acquisitions Investments Ireland DAC Company Guar. Notes 2.88% due 09/23/2023....................... $ 118,000 $ 112,376 ---------- 1,312,450 ---------- Metal-Copper -- 0.4% First Quantum Minerals, Ltd. Company Guar. Notes 6.50% due 03/01/2024*...................... 331,000 302,865 First Quantum Minerals, Ltd. Company Guar. Notes 7.25% due 04/01/2023*...................... 257,000 245,595 Hudbay Minerals, Inc. Company Guar. Notes 7.25% due 01/15/2023*...................... 575,000 590,876 ---------- 1,139,336 ---------- Metal-Diversified -- 0.3% Glencore Canada Financial Corp. Company Guar. Notes 7.38% due 05/27/2020....................... GBP 100,000 141,771 Glencore Finance Europe, Ltd. Company Guar. Notes 1.75% due 03/17/2025....................... EUR 280,000 318,539 Vedanta Resources PLC Senior Notes 6.13% due 08/09/2024....................... 470,000 436,663 ---------- 896,973 ---------- Non-Ferrous Metals -- 0.5% Codelco, Inc. Senior Notes 3.00% due 07/17/2022....................... 200,000 194,557 Codelco, Inc. Senior Notes 4.50% due 09/16/2025....................... 1,100,000 1,116,665 ---------- 1,311,222 ---------- Oil & Gas Drilling -- 0.6% Noble Holding International, Ltd. Company Guar. Notes 7.75% due 01/15/2024....................... 422,000 418,835 Noble Holding International, Ltd. Company Guar. Notes 7.88% due 02/01/2026*...................... 269,000 279,087 Shelf Drilling Holdings, Ltd. Company Guar. Notes 8.25% due 02/15/2025*...................... 600,000 618,750 Trinidad Drilling, Ltd. Company Guar. Notes 6.63% due 02/15/2025*...................... 525,000 519,750 ---------- 1,836,422 ---------- Oil Companies-Exploration & Production -- 1.0% Anadarko Finance Co. Company Guar. Notes 7.50% due 05/01/2031....................... 41,000 50,298
32 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Oil Companies-Exploration & Production (continued) Medco Platinum Road Pte, Ltd. Senior Sec. Notes 6.75% due 01/30/2025*.................... $ 480,000 $ 453,164 MEG Energy Corp. Company Guar. Notes 6.38% due 01/30/2023*.................... 509,000 463,190 MEG Energy Corp. Sec. Notes 6.50% due 01/15/2025*.................... 837,000 828,630 Nostrum Oil & Gas Finance BV Company Guar. Notes 7.00% due 02/16/2025*.................... 510,000 448,902 Sinopec Group Overseas Development 2015, Ltd. Company Guar. Notes 2.50% due 04/28/2020..................... 750,000 737,835 ---------- 2,982,019 ---------- Oil Companies-Integrated -- 2.8% BP Capital Markets PLC Company Guar. Notes 2.97% due 02/27/2026..................... EUR 300,000 392,842 BP Capital Markets PLC Company Guar. Notes 3.25% due 05/06/2022..................... 48,000 47,687 Cenovus Energy, Inc. Senior Notes 4.25% due 04/15/2027..................... 87,000 84,099 Eni SpA Senior Notes 4.75% due 09/12/2028*.................... 201,000 199,085 Pertamina Persero PT Senior Notes 4.30% due 05/20/2023..................... 1,650,000 1,636,892 Pertamina Persero PT Senior Notes 4.88% due 05/03/2022*.................... 300,000 306,281 Petrobras Global Finance BV Company Guar. Notes 6.00% due 01/27/2028..................... 235,000 216,788 Petroleos del Peru SA Senior Notes 5.63% due 06/19/2047..................... 800,000 795,008 Petroleos Mexicanos Company Guar. Notes 4.88% due 01/24/2022..................... 500,000 505,750 Petroleos Mexicanos Company Guar. Notes 6.63% due 06/15/2035..................... 1,400,000 1,390,900 Petroleos Mexicanos Company Guar. Notes 6.75% due 09/21/2047..................... 1,705,000 1,626,894 Petronas Capital, Ltd. Company Guar. Notes 7.88% due 05/22/2022..................... 450,000 511,151 Suncor Energy, Inc. Senior Notes 5.95% due 12/01/2034..................... 48,000 54,971
Principal Value Security Description Amount(17) (Note 2) Oil Companies-Integrated (continued) YPF SA Senior Notes 6.95% due 07/21/2027.................... $ 450,000 $ 393,615 ---------- 8,161,963 ---------- Oil-Field Services -- 0.2% KCA Deutag UK Finance PLC Senior Sec. Notes 9.88% due 04/01/2022*................... 651,000 647,745 ---------- Paper & Related Products -- 0.3% Cascades, Inc. Company Guar. Notes 5.50% due 07/15/2022*................... 67,000 67,502 Cascades, Inc. Company Guar. Notes 5.75% due 07/15/2023*................... 384,000 384,000 Fibria Overseas Finance, Ltd. Company Guar. Notes 5.50% due 01/17/2027.................... 480,000 475,776 ---------- 927,278 ---------- Printing-Commercial -- 0.2% Cimpress NV Company Guar. Notes 7.00% due 06/15/2026*................... 690,000 701,130 ---------- Retail-Major Department Stores -- 0.1% El Puerto de Liverpool SAB de CV Company Guar. Notes 3.88% due 10/06/2026.................... 460,000 428,950 ---------- Satellite Telecom -- 0.7% Inmarsat Finance PLC Company Guar. Notes 6.50% due 10/01/2024*................... 340,000 345,100 Intelsat Jackson Holdings SA Company Guar. Notes 5.50% due 08/01/2023.................... 1,010,000 930,462 Intelsat Jackson Holdings SA Company Guar. Notes 8.50% due 10/15/2024*................... 296,000 299,256 Telesat Canada/Telesat LLC Company Guar. Notes 8.88% due 11/15/2024*................... 425,000 454,750 ---------- 2,029,568 ---------- Special Purpose Entity -- 0.0% Hellas Telecommunications Luxembourg II SCA Sub. Notes 8.46% due 01/15/2015*+(4)(5)(6)(7)...... 1,330,000 0 ---------- Telephone-Integrated -- 0.4% Orange SA Senior Notes 1.38% due 03/20/2028.................... EUR 100,000 114,712 Telecom Italia Capital SA Company Guar. Notes 7.72% due 06/04/2038.................... 299,000 316,940
33 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Telephone-Integrated (continued) Telefonica Emisiones SAU Company Guar. Notes 2.93% due 10/17/2029............... EUR 300,000 $ 370,069 Telefonica Emisiones SAU Company Guar. Notes 4.67% due 03/06/2038............... 260,000 244,269 ----------- 1,045,990 ----------- Transport-Equipment & Leasing -- 0.1% Avolon Holdings Funding, Ltd. Company Guar. Notes 5.13% due 10/01/2023*.............. 425,000 429,582 ----------- Transport-Marine -- 0.5% PT Pelabuhan Indonesia II Senior Notes 4.25% due 05/05/2025*.............. 300,000 289,050 PT Pelabuhan Indonesia II Senior Notes 4.25% due 05/05/2025............... 1,250,000 1,204,375 ----------- 1,493,425 ----------- Transport-Rail -- 1.1% Canadian National Railway Co. Senior Notes 2.85% due 12/15/2021............... 56,000 55,227 Canadian Pacific Railway Co. Senior Notes 6.13% due 09/15/2115............... 93,000 109,846 Kazakhstan Temir Zholy Finance BV Company Guar. Notes 6.95% due 07/10/2042............... 2,500,000 2,756,250 Transnet SOC, Ltd. Senior Notes 4.00% due 07/26/2022............... 400,000 375,000 ----------- 3,296,323 ----------- Transport-Services -- 0.2% Rumo Luxembourg SARL Company Guar. Notes 7.38% due 02/09/2024............... 440,000 449,526 ----------- Total Foreign Corporate Bonds & Notes (cost $59,096,786)................. 55,827,033 ----------- FOREIGN GOVERNMENT OBLIGATIONS -- 17.6% Banks-Special Purpose -- 0.1% Hungarian Development Bank Government Guar. Notes 6.25% due 10/21/2020............... 400,000 419,142 ----------- Central Bank -- 0.5% Central Bank of Tunisia Senior Notes 5.75% due 01/30/2025............... 1,500,000 1,320,000 ----------- Sovereign -- 17.0% Abu Dhabi Government Senior Notes 3.13% due 10/11/2027............... 1,600,000 1,512,000
Principal Value Security Description Amount(17) (Note 2) Sovereign (continued) Dominican Republic Senior Bonds 5.88% due 04/18/2024.......... $ 200,000 $ 205,908 Dominican Republic Senior Bonds 6.85% due 01/27/2045.......... 1,250,000 1,265,625 Dominican Republic Senior Bonds 7.45% due 04/30/2044.......... 1,350,000 1,437,750 Dominican Republic Senior Bonds 8.63% due 04/20/2027.......... 350,000 398,125 Federative Republic of Brazil Senior Notes 8.25% due 01/20/2034.......... 300,000 351,750 Government of Egypt Senior Notes 6.59% due 02/21/2028.......... 800,000 764,000 Government of Egypt Senior Notes 7.50% due 01/31/2027.......... 900,000 915,808 Government of Egypt Senior Notes 8.50% due 01/31/2047.......... 1,450,000 1,453,129 Government of Ukraine Senior Notes 7.38% due 09/25/2032*......... 1,000,000 868,300 Government of Ukraine Senior Notes 7.75% due 09/01/2027.......... 2,200,000 2,043,360 Kingdom of Jordan Senior Notes 5.75% due 01/31/2027.......... 400,000 378,640 Kingdom of Jordan Senior Notes 5.75% due 01/31/2027*......... 450,000 425,970 Kingdom of Saudi Arabia Senior Notes 4.00% due 04/17/2025.......... 1,200,000 1,200,600 Kingdom of Saudi Arabia Senior Notes 5.00% due 04/17/2049.......... 1,200,000 1,218,000 Lebanese Republic Senior Notes 6.38% due 03/09/2020.......... 375,000 354,037 Oriental Republic of Uruguay Senior Notes 4.38% due 10/27/2027.......... 350,000 356,478 Republic of Argentina Senior Notes 5.88% due 01/11/2028.......... 360,000 284,940 Republic of Argentina Senior Notes 6.88% due 01/26/2027.......... 1,100,000 935,000 Republic of Argentina Senior Notes 8.28% due 12/31/2033.......... 1,752,548 1,581,675
34 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) FOREIGN GOVERNMENT OBLIGATIONS (continued) Sovereign (continued) Republic of Colombia Senior Notes 4.00% due 02/26/2024.... $1,200,000 $1,200,000 Republic of Colombia Senior Notes 4.38% due 07/12/2021.... 300,000 305,400 Republic of Colombia Senior Notes 8.13% due 05/21/2024.... 900,000 1,080,000 Republic of Croatia Senior Notes 6.38% due 03/24/2021.... 1,500,000 1,590,000 Republic of Ecuador Senior Notes 9.63% due 06/02/2027.... 1,000,000 988,700 Republic of Ecuador Senior Notes 9.65% due 12/13/2026*... 700,000 696,990 Republic of Ecuador Senior Notes 10.75% due 03/28/2022... 500,000 531,250 Republic of Guatemala Senior Notes 4.88% due 02/13/2028.... 560,000 544,600 Republic of Honduras Senior Notes 6.25% due 01/19/2027.... 1,150,000 1,180,302 Republic of Hungary Senior Notes 5.38% due 02/21/2023.... 350,000 370,827 Republic of Indonesia Senior Notes 3.70% due 01/08/2022.... 500,000 496,904 Republic of Ivory Coast Senior Notes 6.13% due 06/15/2033*... 1,600,000 1,460,512 Republic of Lithuania Senior Notes 6.63% due 02/01/2022.... 200,000 220,230 Republic of Lithuania Senior Notes 7.38% due 02/11/2020.... 550,000 581,328 Republic of Nigeria Senior Notes 7.14% due 02/23/2030*... 450,000 438,885 Republic of Nigeria Senior Notes 7.63% due 11/28/2047.... 650,000 622,037 Republic of Panama Senior Notes 3.75% due 03/16/2025.... 400,000 398,204 Republic of Poland Senior Notes 5.13% due 04/21/2021.... 700,000 731,892 Republic of Senegal Bonds 6.25% due 05/23/2033.... 800,000 745,128
Principal Value Security Description Amount(17) (Note 2) Sovereign (continued) Republic of Senegal Senior Notes 6.75% due 03/13/2048*........ $ 740,000 $ 661,590 Republic of South Africa Senior Notes 5.65% due 09/27/2047......... 600,000 547,236 Republic of South Africa Senior Notes 5.88% due 05/30/2022......... 200,000 207,872 Republic of South Africa Senior Notes 5.88% due 09/16/2025......... 700,000 711,270 Republic of South Africa Senior Notes 6.25% due 03/08/2041......... 700,000 695,467 Republic of Sri Lanka Senior Notes 5.75% due 04/18/2023*........ 1,000,000 972,951 Republic of Sri Lanka Senior Notes 6.83% due 07/18/2026*........ 265,000 260,136 Republic of Sri Lanka Senior Notes 6.83% due 07/18/2026......... 1,000,000 981,645 Republic of Sri Lanka Senior Notes 6.85% due 11/03/2025......... 700,000 690,984 Republic of the Philippines Senior Notes 4.00% due 01/15/2021......... 1,000,000 1,016,785 Republic of Turkey Senior Notes 5.75% due 05/11/2047......... 460,000 358,469 Republic of Turkey Senior Notes 6.63% due 02/17/2045......... 700,000 607,012 Republic of Turkey Senior Notes 7.00% due 06/05/2020......... 1,500,000 1,514,475 Russian Federation Senior Notes 4.75% due 05/27/2026......... 1,800,000 1,797,433 State of Qatar Senior Notes 4.50% due 01/20/2022......... 1,200,000 1,236,240 State of Qatar Senior Notes 4.50% due 04/23/2028......... 1,200,000 1,234,800 Sultanate of Oman Senior Notes 4.75% due 06/15/2026......... 1,800,000 1,707,840 Sultanate of Oman Senior Notes 6.75% due 01/17/2048......... 1,800,000 1,750,716 United Kingdom Gilt Treasury Bonds 3.50% due 01/22/2045......... GBP 50,000 86,019
35 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) FOREIGN GOVERNMENT OBLIGATIONS (continued) Sovereign (continued) United Kingdom Gilt Treasury Bonds 4.50% due 09/07/2034................... GBP 230,000 $ 412,006 United Mexican States Senior Bonds 4.75% due 03/08/2044................... 165,000 157,658 ----------- 49,742,888 ----------- Total Foreign Government Obligations (cost $53,465,785)..................... 51,482,030 ----------- U.S. GOVERNMENT AGENCIES -- 19.4% Federal Home Loan Mtg. Corp. -- 6.2% 2.50% due 01/01/2028................... 204,116 198,295 2.50% due 04/01/2028................... 67,247 65,328 2.50% due 03/01/2031................... 114,466 110,422 2.50% due 11/01/2032................... 817,467 788,516 3.00% due 07/01/2045................... 2,123,507 2,039,410 3.00% due 10/01/2045................... 725,522 696,197 3.00% due 11/01/2046................... 3,050,022 2,923,909 3.50% due 03/01/2042................... 306,842 304,369 3.50% due 04/01/2042................... 318,603 316,036 3.50% due 09/01/2043................... 279,464 277,213 3.50% due 07/01/2045................... 2,844,733 2,807,715 3.50% due 11/01/2047................... 1,550,185 1,526,867 3.50% due 03/01/2048................... 3,833,709 3,782,607 4.00% due 01/01/2046................... 337,214 342,186 4.50% due 02/01/2020................... 1,021 1,033 4.50% due 08/01/2020................... 4,194 4,246 4.50% due 03/01/2039................... 1,353,114 1,407,162 4.50% due 12/01/2039................... 6,185 6,443 5.00% due 02/01/2034................... 19,175 20,348 5.00% due 05/01/2034................... 29,759 31,676 5.00% due 11/01/2043................... 195,010 207,093 5.50% due 05/01/2037................... 45,103 48,604 6.00% due 03/01/2040................... 35,098 38,832 6.50% due 02/01/2035................... 6,591 7,292 Federal Home Loan Mtg. Corp. FRS 3.99% (6 ML+1.49%) due 02/01/2037......................... 10,935 11,257 4.17% (12 ML+1.89%) due 11/01/2037......................... 85,888 90,374 Federal Home Loan Mtg. Corp. REMIC FRS Series 3572, Class JS 4.64% (6.80% -1 ML) due 09/15/2039(1)(8)(9)................ 379,579 40,289 Federal Home Loan Mtg. Corp. REMIC Series 1103, Class N 11.57% due 06/15/2021(1)(8)............ 207 12 Series 4740, Class BA 3.00% due 09/15/2045(1)................ 261,793 255,846 ----------- 18,349,577 ----------- Federal National Mtg. Assoc. -- 12.3% 2.50% due 12/01/2026................... 466,692 454,313 2.50% due 08/01/2031................... 1,877,580 1,813,100 2.50% due 02/01/2032................... 743,177 717,655 3.00% due 10/01/2027................... 245,158 243,612 3.00% due 03/01/2030................... 2,115,574 2,097,031
Principal Value Security Description Amount(17) (Note 2) Federal National Mtg. Assoc. (continued) 3.00% due 10/01/2030.................. $ 182,295 $ 180,697 3.00% due 12/01/2042.................. 124,499 120,287 3.00% due 08/01/2046.................. 4,081,331 3,912,522 3.00% due 01/01/2047.................. 401,090 384,127 3.00% due 02/01/2048.................. 1,962,029 1,878,939 3.50% due 08/01/2026.................. 79,921 80,371 3.50% due 08/01/2027.................. 54,903 55,212 3.50% due 10/01/2028.................. 31,578 31,870 3.50% due 03/01/2033.................. 1,810,314 1,820,505 3.50% due 02/01/2043.................. 117,950 117,123 3.50% due 10/01/2045.................. 260,093 257,060 3.50% due 11/01/2045.................. 214,947 212,475 3.50% due 03/01/2046.................. 2,503,362 2,469,544 3.50% due 07/01/2046.................. 151,182 149,419 3.50% due 12/01/2047.................. 4,491,698 4,429,177 3.50% due 04/01/2048.................. 1,429,283 1,409,288 4.00% due 11/01/2025.................. 121,969 124,855 4.00% due 10/01/2043.................. 303,508 308,323 4.00% due 02/01/2045.................. 1,622,801 1,651,902 4.00% due 05/01/2047.................. 614,928 621,356 4.00% due 07/01/2047.................. 3,019,033 3,050,440 4.00% due 08/01/2047.................. 2,877,623 2,907,410 4.00% due 06/01/2048.................. 979,614 993,025 4.50% due 06/01/2019.................. 2,514 2,546 4.50% due 11/01/2022.................. 18,783 19,117 4.50% due 06/01/2023.................. 12,802 13,190 4.50% due 08/01/2045.................. 1,701,580 1,783,659 4.50% due 04/01/2047.................. 355,016 366,574 5.00% due 06/01/2019.................. 2,831 2,917 5.00% due 01/01/2023.................. 6,716 6,930 5.00% due 03/01/2034.................. 17,202 18,261 5.00% due 05/01/2035.................. 10,065 10,682 5.00% due 05/01/2040.................. 72,934 77,598 5.00% due 07/01/2040.................. 74,566 79,329 5.50% due 06/01/2038.................. 23,112 24,945 6.00% due 02/01/2032.................. 4,603 4,971 6.00% due 05/01/2034.................. 1,522 1,673 6.00% due 10/01/2034.................. 18,558 20,040 7.50% due 01/01/2030.................. 1,088 1,104 8.00% due 11/01/2028.................. 2,772 2,991 Federal National Mtg. Assoc. FRS 3.59% (12 ML+1.76%) due 05/01/2040........................ 72,452 75,867 3.64% (12 ML + 1.82%) due 10/01/2040........................ 19,970 20,841 3.79% (12 ML + 1.57%) due 05/01/2037........................ 17,094 17,800 3.81% (12 ML+1.83%) due 10/01/2040........................ 43,129 45,271 3.87% (6 ML + 1.54%) due 09/01/2035........................ 58,760 60,757 3.92% (12 ML + 1.66%) due 07/01/2039........................ 57,416 59,958 4.12% (1 Yr USTYCR + 2.19%) due 10/01/2035........................ 68,296 71,761 4.24% (1 Yr USTYCR + 2.26%) due 11/01/2036........................ 35,351 37,198
36 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) U.S. GOVERNMENT AGENCIES (continued) Federal National Mtg. Assoc. (continued) 4.29% (12 ML + 1.91%) due 08/01/2035......................... $ 54,406 $ 57,323 Federal National Mtg. Assoc., REMIC Series 1989-2, Class D 8.80% due 01/25/2019(1)................ 71 71 Series 2017-94, Class DA 3.00% due 06/25/2045(1)................ 225,081 219,670 Series 2018-27, Class EA 3.00% due 05/25/2048(1)................ 386,726 369,403 ----------- 35,964,085 ----------- Government National Mtg. Assoc. -- 0.9% 4.50% due 10/20/2045................... 1,509,400 1,581,008 4.50% due 04/20/2047................... 963,935 1,001,441 ----------- 2,582,449 ----------- Total U.S. Government Agencies (cost $58,401,855)..................... 56,896,111 ----------- U.S. GOVERNMENT TREASURIES -- 2.0% United States Treasury Bonds -- 0.1% 3.13% due 05/15/2048................... 100,000 98,668 ----------- United States Treasury Notes -- 1.9% 1.00% due 06/30/2019................... 3,650,000 3,609,080 1.63% due 07/31/2019................... 1,000,000 992,070 1.63% due 08/31/2019................... 1,000,000 990,899 2.13% due 07/31/2024................... 50,000 47,705 ----------- 5,639,754 ----------- Total U.S. Government Treasuries (cost $5,748,942)...................... 5,738,422 ----------- LOANS(14)(15)(16) -- 5.9% Auto-Heavy Duty Trucks -- 0.0% Navistar Financial Corp. FRS BTL-B 6.00% (1 ML + 3.75%) due 08/03/2025......................... 90,583 90,866 ----------- Broadcast Services/Program -- 0.1% Univision Communications, Inc. FRS BTL 4.99% (1 ML + 2.75%) due 03/15/2024......................... 353,070 342,919 ----------- Building & Construction Products-Misc. -- 0.1% Forterra Finance LLC FRS BTL 5.24% (1 ML + 3.00%) due 10/25/2023......................... 382,076 365,169 ----------- Building & Construction-Misc. -- 0.1% ATS Consolidated, Inc. FRS BTL-B 5.99% (1 ML + 3.75%) due 02/28/2025......................... 353,225 354,771 ATS Consolidated, Inc. FRS BTL-B coupon TBD due 02/28/2025......................... 27,047 27,165 ----------- 381,936 -----------
Principal Value Security Description Amount(17) (Note 2) Building Products-Air & Heating -- 0.1% Thermasys Corp. FRS BTL 6.33% (3 ML + 4.00%) due 05/03/2019............................ $349,964 $311,468 Thermasys Corp. FRS BTL 8.25% (USFRBPLR + 3.00%) due 05/03/2019............................ 2,518 2,241 -------- 313,709 -------- Building Products-Doors & Windows -- 0.1% CHI Doors Holding Corp. FRS BTL 5.49% (1 ML + 3.25%) due 07/29/2022............................ 352,284 353,311 -------- Cable/Satellite TV -- 0.3% Altice France SA FRS BTL-B13 6.16% (1 ML + 4.00%) due 08/14/2026............................ 175,000 173,337 Cogeco Communications USA II LP FRS BTL-B 4.62% (1 ML + 2.38%) due 01/03/2025............................ 84,788 84,735 CSC Holdings LLC FRS BTL-B 4.66% (1 ML + 2.50%) due 01/25/2026............................ 354,113 354,024 Ziggo Secured Finance FRS BTL-E 4.66% (1 ML + 2.50%) due 04/15/2025............................ 355,000 348,344 -------- 960,440 -------- Casino Services -- 0.0% Stars Group Holdings BV FRS BTL 5.89% (3 ML + 3.50%) due 07/10/2025............................ 62,241 62,742 -------- Chemicals-Diversified -- 0.0% Schenectady International Group, Inc. FRS 1st Lien coupon TBD due 08/10/2025............................ 48,445 48,384 -------- Chemicals-Specialty -- 0.1% LTI Holdings, Inc. FRS BTL coupon TBD due 09/06/2025............................ 35,621 35,769 LTI Holdings, Inc. FRS 2nd Lien 8.99% (3 ML + 6.75%) due 08/10/2026............................ 6,322 6,324 Starfruit Finco BV FRS BTL-B coupon TBD due 09/20/2025............................ 70,499 70,782 -------- 112,875 --------
37 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) LOANS(14)(15)(16) (continued) Commercial Services-Finance -- 0.1% MoneyGram International, Inc. FRS BTL-B 5.64% (3 ML + 3.25%) due 03/27/2020...................... $ 352,142 $343,338 Verscend Holding Corp. FRS BTL 6.74% (1 ML + 4.50%) due 08/27/2025...................... 33,953 34,066 -------- 377,404 -------- Computer Services -- 0.1% Alion Science & Tech Corp. FRS BTL 6.74% (1 ML + 4.50%) due 08/19/2021...................... 180,000 180,825 Banff Merger Sub, Inc. FRS BTL coupon TBD due 09/01/2025...................... 114,981 116,018 -------- 296,843 -------- Computer Software -- 0.2% Rackspace Hosting, Inc. FRS BTL-B 5.35% (3 ML + 3.00%) due 11/03/2023...................... 352,324 347,543 Vertafore, Inc. FRS BTL 9.49% (1 ML + 7.25%) due 07/02/2026...................... 42,934 43,135 -------- 390,678 -------- Computers-Integrated Systems -- 0.0% Verifone Systems, Inc. FRS BTL 6.32% (3 ML + 4.00%) due 08/20/2025...................... 82,533 83,028 -------- Consulting Services -- 0.0% Stiphout Finance LLC FRS BTL 5.24% (1 ML + 3.00%) due 10/26/2022...................... 32,722 33,009 -------- Dialysis Centers -- 0.1% U.S. Renal Care, Inc. FRS BTL 6.64% (3 ML + 4.25%) due 12/31/2022...................... 352,283 343,036 -------- E-Commerce/Services -- 0.3% RentPath LLC FRS 2nd Lien 11.25% (1 ML + 9.00%) due 12/17/2022...................... 1,062,906 680,260 -------- Electronic Components-Misc. -- 0.1% AI Ladder Luxembourg Subco SARL FRS BTL 7.02% (3 ML + 4.50%) due 07/09/2025...................... 193,923 194,650 --------
Principal Value Security Description Amount(17) (Note 2) Finance-Investment Banker/Broker -- 0.1% Advisor Group, Inc. FRS BTL 5.91% (1 ML + 3.75%) due 08/15/2025........................... $ 25,747 $ 25,860 Deerfield Holdings Corp. Acquisition FRS BTL 5.49% (3 ML + 3.25%) due 02/13/2025........................... 119,608 119,664 -------- 145,524 -------- Finance-Other Services -- 0.0% Pi US Mergerco, Inc. FRS 1st Lien 5.74% (1 ML + 3.50%) due 12/20/2024........................... 89,203 88,891 -------- Footwear & Related Apparel -- 0.1% Calceus Acquisition, Inc. FRS BTL 6.25% (1 ML + 4.00%) due 02/01/2020........................... 339,523 337,259 -------- Hotels/Motels -- 0.0% Marriott Ownership Resorts, Inc . FRS BTL-B 4.49% (1 ML + 2.25%) due 08/29/2025........................... 16,356 16,486 -------- Insurance Brokers -- 0.2% Financial & Risk Holdings, Inc. FRS BTL coupon TBD due 10/01/2025........................... 72,662 72,493 HUB International, Ltd. FRS BTL-B1 5.34% (3 ML + 3.00%) due 04/25/2025........................... 97,191 97,328 USI, Inc. FRS BTL-B 5.39% (3 ML + 3.00%) due 05/16/2024........................... 352,331 352,205 -------- 522,026 -------- Insurance-Multi-line -- 0.1% York Risk Services Holdings Corp. FRS BTL 5.99% (1 ML + 3.75%) due 10/01/2021........................... 352,248 340,360 -------- Insurance-Property/Casualty -- 0.1% Asurion LLC FRS BTL-B6 5.24% (1 ML + 3.00%) due 11/03/2023........................... 342,014 344,294 Asurion LLC FRS 2nd Lien 8.74% (1 ML + 6.50%) due 08/04/2025........................... 7,101 7,299 -------- 351,593 --------
38 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) LOANS(14)(15)(16) (continued) Internet Financial Services -- 0.2% Diamond U.S. Holdings LLC FRS BTL 6.24% (1 ML + 4.00%) due 12/23/2024.................... $349,886 $350,324 ION Trading Finance, Ltd. FRS BTL 6.39% (3 ML + 4.00%) due 11/21/2024.................... 294,990 293,638 -------- 643,962 -------- Leisure Products -- 0.2% Hayward Industries, Inc. FRS BTL-B 5.74% (1 ML + 3.50%) due 08/05/2024.................... 352,331 354,313 Hayward Industries, Inc. FRS BTL-B coupon TBD due 08/05/2024.................... 50,302 50,585 -------- 404,898 -------- Machinery-Electrical -- 0.1% Brookfield Wec Holdings, Inc. FRS BTL 5.99% (1 ML + 3.75%) due 08/01/2025.................... 92,340 93,437 -------- Machinery-General Industrial -- 0.2% Duravant LLC FRS BTL 5.64% (3 ML + 3.25%) due 07/19/2024.................... 352,338 347,052 Waterjet Holdings, Inc. FRS BTL 5.18% (1 ML + 3.00%) due 04/21/2025.................... 75,564 75,470 Waterjet Holdings, Inc. FRS BTL 5.31% (3 ML + 3.00%) due 04/21/2025.................... 9,475 9,463 Waterjet Holdings, Inc. FRS BTL 5.50% (6 ML + 3.00%) due 04/21/2025.................... 9,475 9,463 -------- 441,448 -------- Machinery-Pumps -- 0.2% STS Operating, Inc. FRS 1st Lien 6.49% (1 ML + 4.25%) due 12/11/2024.................... 182,277 181,821 Titan Acquisition, Ltd. FRS BTL-B 5.24% (1 ML + 3.00%) due 03/28/2025.................... 353,225 341,855 -------- 523,676 --------
Principal Value Security Description Amount(17) (Note 2) Marine Services -- 0.1% Drew Marine Group, Inc. FRS BTL 5.47%-5.49% (1 ML + 3.25%) due 11/19/2020...................... $253,845 $252,575 -------- Medical Products -- 0.0% Auris Luxembourg III SARL FRS BTL-B coupon TBD due 07/20/2025...................... 19,898 20,134 -------- Medical-Drugs -- 0.2% Akorn, Inc. FRS BTL 7.00% (1 ML + 4.75%) due 04/16/2021...................... 355,000 343,463 Alphabet Holding Co., Inc. FRS BTL 5.74% (1 ML + 3.50%) due 09/26/2024...................... 141,535 136,581 Alphabet Holding Co., Inc. FRS BTL coupon TBD due 09/26/2024...................... 33,108 31,949 -------- 511,993 -------- Medical-Generic Drugs -- 0.1% Alvogen Pharma US, Inc. FRS 1st Lien 6.99% (1 ML + 4.75%) due 04/02/2022...................... 196,287 197,514 -------- Medical-HMO -- 0.1% MultiPlan, Inc. FRS BTL-B 5.14% (3 ML + 2.75%) due 06/07/2023...................... 326,530 327,040 -------- Medical-Hospitals -- 0.0% Envision Healthcare Corp. FRS 1st Lien coupon TBD due 09/26/2025...................... 83,362 83,154 -------- Medical-Nursing Homes -- 0.2% Kindred Healthcare, Inc. FRS 1st Lien 7.25% (1 ML + 5.00%) due 06/19/2025...................... 608,027 609,547 -------- Metal Processors & Fabrication -- 0.3% CIRCOR International, Inc. FRS 1st Lien 5.64% (1 ML + 3.50%) due 12/11/2024...................... 352,338 354,099 Crosby US Acquisition Corp. FRS 1st Lien 5.21% (1 ML + 3.00%) due 11/23/2020...................... 352,227 348,557
39 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) LOANS(14)(15)(16) (continued) Metal Processors & Fabrication (continued) Doncasters Group, Ltd. FRS BTL 5.89% (3 ML + 3.50%) due 04/09/2020.............................. $255,591 $237,274 -------- 939,930 -------- Metal-Diversified -- 0.1% Unimin Corp. FRS BTL 6.14% (3 ML + 3.75%) due 06/01/2025.............................. 164,588 154,136 -------- Oil Companies-Exploration & Production -- 0.1% Osum Production Corp. FRS BTL 7.89% (3 ML + 5.50%) due 07/28/2020(4)........................... 411,783 378,840 -------- Pipelines -- 0.1% Medallion Midland Acquisition LLC FRS 1st Lien 5.49% (1 ML + 3.25%) due 10/30/2024.............................. 352,338 349,034 -------- Quarrying -- 0.0% US Silica Co. FRS BTL-B 6.25% (1 ML + 4.00%) due 05/01/2025.............................. 77,542 75,652 -------- Real Estate Management/Services -- 0.0% DTZ U. S. Borrower LLC FRS BTL 5.49% (1 ML + 3.25%) due 08/21/2025.............................. 62,105 62,260 -------- Resort/Theme Parks -- 0.1% SW Acquisitions Co., Inc. FRS BTL 5.24% (1 ML + 3.00%) due 03/31/2024.............................. 352,317 351,437 -------- Retail-Hypermarkets -- 0.1% Smart & Final Stores LLC FRS BTL 5.74% (1 ML + 3.50%) due 11/15/2022.............................. 355,000 347,723 -------- Retail-Major Department Stores -- 0.1% Hudson's Bay Co. FRS BTL-B 5.49% (1 ML + 3.25%) due 09/30/2022.............................. 100,005 97,655 -------- Retail-Petroleum Products -- 0.1% EG Dutch Finance Co. FRS BTL 6.39% (3 ML + 4.00%) due 02/07/2025.............................. 353,225 354,550 --------
Principal Value Security Description Amount(17) (Note 2) Retail-Sporting Goods -- 0.1% Bass Pro Group LLC FRS BTL-B 7.24% (1 ML + 5.00%) due 09/25/2024....................... $352,331 $355,744 -------- Soap & Cleaning Preparation -- 0.1% Diamond BC BV FRS BTL 5.24% (1 ML + 3.00%) due 09/06/2024....................... 352,338 345,071 -------- Steel-Producers -- 0.1% Helix Acquisition Holdings, Inc. FRS 1st Lien 5.89% (3 ML + 3.50%) due 09/29/2024....................... 375,229 376,637 -------- Storage/Warehousing -- 0.0% Moda Midstream LLC FRS BTL-B coupon TBD due 09/26/2025....................... 11,404 11,504 -------- Telecom Services -- 0.1% GTT Communications, Inc. FRS BTL 4.99% (1 ML + 2.75%) due 05/31/2025....................... 164,588 163,070 West Corp. FRS BTL-B1 5.74% (1 ML + 3.50%) due 10/10/2024....................... 167,034 165,603 -------- 328,673 -------- Telephone-Integrated -- 0.2% CenturyLink, Inc. FRS BTL-B 4.99% (1 ML + 2.75%) due 01/31/2025....................... 352,338 349,842 TDC A/S FRS BTL-B2 5.84% (3 ML + 3.50%) due 05/31/2025....................... 124,502 125,872 -------- 475,714 -------- Theaters -- 0.1% Cineworld, Ltd. FRS BTL-B 4.74% (1 ML + 2.50%) due 02/28/2025....................... 353,225 352,587 -------- Transport-Equipment & Leasing -- 0.1% Goodpack, Ltd. FRS 1st Lien 6.09% (3 ML + 3.75%) due 09/11/2023....................... 179,310 180,356 Goodpack, Ltd. FRS 2nd Lien 9.34% (3 ML + 7.00%) due 09/11/2024....................... 25,868 26,062 -------- 206,418 --------
40 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Shares/ Principal Value Security Description Amount(17) (Note 2) LOANS(14)(15)(16) (continued) Transport-Truck -- 0.1% Pods LLC FRS BTL-B4 4.88% (1 ML + 2.75%) due 12/06/2024........................ $ 352,331 $ 352,948 ----------- Total Loans (cost $17,720,994).................... 17,259,289 ----------- COMMON STOCKS -- 0.2% Television -- 0.2% ION Media Networks, Inc.+(4)(5)(10) (cost $6)............................. 655 550,318 ----------- PREFERRED SECURITIES -- 0.1% Electric-Distribution -- 0.0% Entergy Louisiana LLC 4.70%................................. 5,200 118,300 ----------- Sovereign Agency -- 0.0% Federal Home Loan Mtg. Corp. Series Z 8.38%................................. 5,875 31,314 ----------- Telecom Services -- 0.1% Qwest Corp. 6.13%................................. 6,225 140,249 ----------- Total Preferred Securities (cost $376,335)....................... 289,863 ----------- PREFERRED SECURITIES/CAPITAL SECURITIES -- 1.8% Banks-Commercial -- 0.1% Banco Bilbao Vizcaya Argentaria SA 6.13% due 11/16/2027(11).............. 200,000 179,750 Cooperatieve Rabobank UA 11.00% due 06/30/2019*(11)............ 152,000 160,436 ----------- 340,186 ----------- Banks-Money Center -- 0.1% BBVA Bancomer SA 5.13% due 01/18/2033*................. 201,000 182,659 ----------- Banks-Super Regional -- 0.1% Huntington Bancshares, Inc. Series E 5.70% due 04/15/2023(11).............. 64,000 63,440 Wells Fargo Capital X 5.95% due 12/01/2086.................. 97,000 103,790 ----------- 167,230 ----------- Building Societies -- 0.1% Nationwide Building Society 6.88% due 06/20/2019(11).............. GBP 150,000 199,237 ----------- Diversified Banking Institutions -- 0.4% BAC Capital Trust XIII Series F 4.00% due 10/17/2018(11).............. 266,000 224,770 Bank of Nova Scotia 4.65% due 10/12/2022(11).............. 196,000 183,873 HSBC Holdings PLC 5.88% due 09/28/2026(11).............. GBP 225,000 293,998
Principal Value Security Description Amount(17) (Note 2) Diversified Banking Institutions (continued) HSBC Holdings PLC 6.00% due 05/22/2027(11)..................... $ 273,000 $ 261,875 JPMorgan Chase & Co. Series CC 4.63% due 11/01/2022(11)..................... 161,000 152,167 JPMorgan Chase & Co. Series U 6.13% due 04/30/2024(11)..................... 311,000 322,663 ---------- 1,439,346 ---------- Electric-Generation -- 0.0% Engie SA 4.63% due 01/10/2019(11)..................... GBP 100,000 131,155 ---------- Electric-Integrated -- 0.1% Dominion Resources, Inc. 5.75% due 10/01/2054......................... 79,000 82,211 Gas Natural Fenosa Finance BV 3.38% due 04/24/2024(11)..................... EUR 100,000 115,670 ---------- 197,881 ---------- Finance-Investment Banker/Broker -- 0.0% Lehman Brothers Holdings Capital Trust VII Escrow Security 0.00%+(4)(5)................................. 222,000 22 ---------- Finance-Other Services -- 0.1% National Rural Utilities Cooperative Finance Corp. 4.75% due 04/30/2043......................... 236,000 237,655 ---------- Food-Dairy Products -- 0.1% Land O'Lakes Capital Trust I 7.45% due 03/15/2028*........................ 328,000 356,700 ---------- Gas-Distribution -- 0.1% Centrica PLC 3.00% due 04/10/2076......................... EUR 225,000 267,130 ---------- Insurance-Life/Health -- 0.1% Aviva PLC 6.13% due 07/05/2043......................... EUR 215,000 290,762 Hanwha Life Insurance Co., Ltd. 4.70% due 04/23/2048*........................ 250,000 237,817 Prudential Financial, Inc. 4.50% due 09/15/2047......................... 72,000 66,420 ---------- 594,999 ---------- Insurance-Multi-line -- 0.1% Assurant, Inc. 7.00% due 03/27/2048......................... 147,000 149,205 ---------- Pipelines -- 0.1% Energy Transfer Partners LP 6.25% due 02/15/2023(11)..................... 75,000 72,188 EnLink Midstream Partners LP 6.00% due 12/15/2022(11)..................... 67,000 60,572 Enterprise Products Operating LLC 5.25% due 08/16/2077......................... 49,000 45,663 TransCanada Trust 5.30% due 03/15/2077......................... 86,000 81,807
41 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount(17) (Note 2) PREFERRED SECURITIES/CAPITAL SECURITIES (continued) Pipelines (continued) TransCanada Trust 5.63% due 05/20/2075....................... $ 72,000 $ 70,561 ------------ 330,791 ------------ Telephone-Integrated -- 0.1% Orange SA 5.25% due 02/07/2024(11)................... EUR 140,000 182,464 ------------ Tools-Hand Held -- 0.1% Stanley Black & Decker, Inc. 5.75% due 12/15/2053....................... 272,000 275,400 ------------ Water -- 0.1% Suez 3.00% due 06/23/2020(11)................... EUR 300,000 360,070 ------------ Total Preferred Securities/Capital Securities (cost $5,500,126).......................... 5,412,130 ------------ Total Long-Term Investment Securities (cost $295,214,994)........................ 286,692,654 ------------ SHORT-TERM INVESTMENT SECURITIES -- 1.4% Registered Investment Companies -- 1.4% State Street Institutional U.S. Government Money Market Fund, Premier Class 1.97%(12) (cost $4,028,601).......................... 4,028,601 4,028,601 ------------ TOTAL INVESTMENTS (cost $299,243,595)(13).................... 99.5% 290,721,255 Other assets less liabilities................. 0.5 2,344,855 ------------ ------------ NET ASSETS 100.0% $293,066,110 ============ ============
-------- * Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in transactions exempt from registration, normally to qualified institutional buyers. The Fund has no right to demand registration of these securities. At September 30, 2018, the aggregate value of these securities was $73,454,604 representing 25.1% of net assets. Unless otherwise indicated, these securities are not considered to be illiquid. + Non-income producing security (1) Collateralized Mortgage Obligation (2) Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above. (3) Commercial Mortgage Backed Security (4) Securities classified as Level 3 (see Note 2). (5) Illiquid security. At September 30, 2018, the aggregate value of these securities was $558,914 representing 0.2% of net assets. (6) Company has filed for bankruptcy protection. (7) Security in default of interest and principal at maturity. (8) Interest Only (9) Inverse Floating Rate Security that pays interest that varies inversely to changes in the market interest rates. The interest rate shown is the current interest rate at September 30, 2018. (10) Denotes a restricted security that: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933, as amended (the "1933 Act"); (b) is subject to a contractual restriction on public sales; or (c) is otherwise subject to a restriction on sales by operation of applicable law. Restricted securities are valued pursuant to Note 2. Certain restricted securities held by the Fund may not be sold except in exempt transactions or in a public offering registered under the 1933 Act. The Fund has no right to demand registration of these securities. The risk of investing in certain restricted securities is greater than the risk of investing in the securities of widely held, publicly traded companies. To the extent applicable, lack of a secondary market and resale restrictions may result in the inability of a Fund to sell a security at a fair price and may substantially delay the sale of the security. In addition, certain restricted securities may exhibit greater price volatility than securities for which secondary markets exist. As of September 30, 2018, the Fund held the following restricted securities:
Value % of Acquisition Acquisition Per Net Description Date Shares Cost Value Share Assets ----------- ----------- ------ ----------- -------- ------- ------ Common Stocks ION Media Networks, Inc................ 12/16/2016 655 $6.00 $550,318 $840.18 0.19% === ===== ======== ====
(11) Perpetual maturity -- maturity date reflects the next call date. (12) The rate shown is the 7-day yield as of September 30, 2018. (13) See Note 5 for cost of investments on a tax basis. (14) Senior loans in the Fund are generally subject to mandatory and/or optional prepayment. Because of these mandatory prepayment conditions and because there may be significant economic incentives for a borrower to prepay, prepayments may occur. As a result, the actual remaining maturity may be substantially less than the stated maturities shown. (15) The Fund invests in senior loans which generally pay interest at rates which are periodically re-determined by reference to a base lending rate plus a premium. These base lending rates are generally either the lending rate offered by one or more major European banks, such as the London Inter-Bank Offer Rate ("LIBOR") or the prime rate offered by one or more major United States banks, or the certificate of deposit rate. Senior loans are generally considered to be restrictive in that the Fund is ordinarily contractually obligated to receive approval from the Agent Bank and/or borrower prior to the disposition of a senior loan. (16) All loans in the Fund were purchased through assignment agreements unless otherwise indicated. (17) Denominated in United States dollars unless otherwise indicated. BTL --Bank Term Loan REMIC --Real Estate Mortgage Investment Conduit TBD --Senior loan purchased on a when issued or delayed-delivery basis. Certain details associated with this purchase are not known prior to the settlement date of the transaction. In addition, senior loans typically trade without accrued interest and therefore a coupon rate is not available prior to the settlement. ULC --Unlimited Liability Corp. FRS --Floating Rate Security VRS --Variable Rate Security The rates shown on FRS and VRS are the current interest rates at September 30, 2018 and unless noted otherwise, the dates shown are the original maturity dates. 42 AIG Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued) Currency Legend EUR --Euro Currency GBP --Pound Sterling Index Legend 1 ML -- 1 Month USD LIBOR 1 Yr USTYCR -- 1 Year US Treasury Yield Curve Rate 3 ML -- 3 Month USD LIBOR 6 ML -- 6 Month USD LIBOR 12 ML -- 12 Month USD LIBOR USFRBPLR --US Federal Reserve Bank Prime Loan Rate Forward Foreign Currency Contracts
Contract to In Exchange Delivery Unrealized Unrealized Counterparty Deliver For Date Appreciation Depreciation ------------------------------------------------------------------------------------------ JPMorgan Chase Bank N.A EUR 5,255,000 USD 6,175,410 10/25/2018 $ 63,129 $ -- EUR 6,570,000 USD 7,767,875 11/29/2018 105,066 -- GBP 995,000 USD 1,310,735 10/25/2018 12,532 -- USD 895,023 EUR 764,700 10/25/2018 -- (5,573) USD 211,347 EUR 180,000 11/29/2018 -- (1,407) -------- ------- Net Unrealized Appreciation/(Depreciation).... 180,727 (6,980) ======== =======
-------- EUR --Euro Currency GBP --Pound Sterling USD --United States Dollar The following is a summary of the inputs used to value the Fund's net assets as of September 30, 2018 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant Quoted Prices Observable Inputs Unobservable Inputs Total --------------------- ----------------- ---------------------- ------------ ASSETS: Investments at Value:* Asset Backed Securities.................. $ -- $ 3,031,731 $ -- 3,031,731 U.S. Corporate Bonds & Notes: Airlines............................... -- -- 24,634 24,634 Finance-Investment Banker/Broker....... -- 814,961 64 815,025 Gambling (Non-Hotel)................... -- 882,187 8,510 890,697 Rubber/Plastic Products................ -- -- 0 0 Other Industries....................... -- 88,475,371 -- 88,475,371 Foreign Corporate Bonds & Notes: Special Purpose Entity................. -- -- 0 0 Other Industries....................... -- 55,827,033 -- 55,827,033 Foreign Government Obligations........... -- 51,482,030 -- 51,482,030 U.S. Government Agencies................. -- 56,896,111 -- 56,896,111 U.S. Government Treasuries............... -- 5,738,422 -- 5,738,422 Loans: Oil Companies-Exploration & Production. -- -- 378,840 378,840 Other Industries....................... -- 16,880,449 -- 16,880,449 Common Stocks............................ -- -- 550,318 550,318 Preferred Securities..................... 289,863 -- -- 289,863 Preferred Securities/Capital Securities: Finance-Investment Banker/Broker....... -- -- 22 22 Other Industries....................... -- 5,412,108 -- 5,412,108 Short-Term Investment Securities......... 4,028,601 -- -- 4,028,601 ---------- ------------ -------- ------------ Total Investments at Value............... $4,318,464 $285,440,403 $962,388 290,721,255 ========== ============ ======== ============ Other Financial Instruments:+ Forward Foreign Currency Contracts....... $ -- $ 180,727 $ -- $ 180,727 ========== ============ ======== ============ LIABILITIES: Other Financial Instruments:+ Forward Foreign Currency Contracts....... $ -- $ 6,980 $ -- $ 6,980 ========== ============ ======== ============
-------- * For a detailed presentation of investments, please refer to the Portfolio of Investments. + Other financial instruments are derivative instruments, not reflected in the Portfolio of Investments, such as futures, forward, swap and written option contracts, which are valued at the unrealized appreciation (depreciation) on the instrument. The Fund's policy is to recognize transfers between Levels as of the end of the reporting period. There were no material transfers between Levels during the reporting period. At the beginning and end of the reporting period, Level 3 investments were not considered a material portion of the Fund. See Notes to Financial Statements 43 AIG Flexible Credit Fund PORTFOLIO PROFILE -- September 30, 2018 -- (unaudited) Industry Allocation* Oil Companies-Exploration & Production. 4.4% Cable/Satellite TV..................... 3.8 Medical-Hospitals...................... 3.2 Chemicals-Specialty.................... 2.5 Telephone-Integrated................... 2.2 Casino Hotels.......................... 2.1 Hotels/Motels.......................... 2.0 Diversified Financial Services......... 2.0 Auto/Truck Parts & Equipment-Original.. 1.9 Pipelines.............................. 1.8 Medical Labs & Testing Services........ 1.8 Computer Services...................... 1.7 Broadcast Services/Program............. 1.7 Building-Residential/Commercial........ 1.7 Registered Investment Companies........ 1.7 Containers-Metal/Glass................. 1.7 Real Estate Investment Trusts.......... 1.7 Medical-Drugs.......................... 1.6 Enterprise Software/Service............ 1.5 Oil-Field Services..................... 1.4 Food-Misc./Diversified................. 1.4 Applications Software.................. 1.3 Building & Construction Products-Misc.. 1.2 Gambling (Non-Hotel)................... 1.2 Finance-Commercial..................... 1.2 Finance-Consumer Loans................. 1.2 Computer Software...................... 1.2 Schools................................ 1.2 Oil & Gas Drilling..................... 1.1 Telecom Services....................... 1.1 Finance-Mortgage Loan/Banker........... 1.1 Cellular Telecom....................... 1.0 Containers-Paper/Plastic............... 1.0 Aerospace/Defense-Equipment............ 1.0 Distribution/Wholesale................. 1.0 Auto-Heavy Duty Trucks................. 1.0 Theaters............................... 0.9 Soap & Cleaning Preparation............ 0.9 Machinery-General Industrial........... 0.8 Investment Companies................... 0.8 Commercial Services.................... 0.8 Food-Retail............................ 0.8 Machinery-Electrical................... 0.7 Electric-Generation.................... 0.7 Diagnostic Equipment................... 0.7 Casino Services........................ 0.7 Commercial Services-Finance............ 0.7 Machinery-Pumps........................ 0.7 Independent Power Producers............ 0.7 Medical-HMO............................ 0.6 Chemicals-Diversified.................. 0.6 Security Services...................... 0.6 Rubber/Plastic Products................ 0.6 Insurance-Property/Casualty............ 0.6 Housewares............................. 0.6 Retail-Building Products............... 0.6 Cosmetics & Toiletries................. 0.6 Building Products-Cement............... 0.6 Data Processing/Management............. 0.6 Diagnostic Kits........................ 0.6 Building-Heavy Construction............ 0.5
Medical-Generic Drugs................... 0.5% Metal-Diversified....................... 0.5 Publishing-Periodicals.................. 0.5 Medical Products........................ 0.5 Motion Pictures & Services.............. 0.5 Dialysis Centers........................ 0.5 Banks-Super Regional.................... 0.5 Consulting Services..................... 0.5 Private Equity.......................... 0.5 Food-Dairy Products..................... 0.5 Medical Information Systems............. 0.5 Food-Meat Products...................... 0.5 Television.............................. 0.5 Pharmacy Services....................... 0.4 Non-Hazardous Waste Disposal............ 0.4 Paper & Related Products................ 0.4 Oil Refining & Marketing................ 0.4 Steel-Producers......................... 0.4 Retail-Major Department Stores.......... 0.4 Human Resources......................... 0.4 Veterinary Diagnostics.................. 0.4 Computers-Integrated Systems............ 0.4 Disposable Medical Products............. 0.4 Electric-Integrated..................... 0.4 Aerospace/Defense....................... 0.4 Finance-Credit Card..................... 0.4 Retail-Sporting Goods................... 0.4 Publishing-Books........................ 0.3 Energy-Alternate Sources................ 0.3 Bicycle Manufacturing................... 0.3 Finance-Auto Loans...................... 0.3 Consumer Products-Misc.................. 0.3 E-Commerce/Products..................... 0.3 Educational Software.................... 0.3 Vitamins & Nutrition Products........... 0.3 Coal.................................... 0.3 Printing-Commercial..................... 0.3 Instruments-Controls.................... 0.3 Retail-Convenience Store................ 0.3 Telecommunication Equipment............. 0.3 Food-Baking............................. 0.3 Retail-Propane Distribution............. 0.3 Building & Construction-Misc............ 0.3 E-Commerce/Services..................... 0.3 Appliances.............................. 0.3 Cruise Lines............................ 0.3 Advertising Services.................... 0.3 Retail-Vitamins & Nutrition Supplements. 0.3 Direct Marketing........................ 0.3 Retail-Restaurants...................... 0.3 Retail-Bedding.......................... 0.2 Retail-Misc./Diversified................ 0.2 Finance-Other Services.................. 0.2 Athletic Equipment...................... 0.2 Transport-Services...................... 0.2 Diversified Banking Institutions........ 0.2 Racetracks.............................. 0.2 Transport-Marine........................ 0.2 Internet Gambling....................... 0.2 Specified Purpose Acquisitions.......... 0.2
44 AIG Flexible Credit Fund PORTFOLIO PROFILE -- September 30, 2018 -- (unaudited) (continued) Industry Allocation* (continued) Diversified Minerals................... 0.2% Transport-Equipment & Leasing.......... 0.2 Internet Connectivity Services......... 0.2 Resorts/Theme Parks.................... 0.2 Machinery-Construction & Mining........ 0.2 Retail-Automobile...................... 0.2 Batteries/Battery Systems.............. 0.2 Insurance-Multi-line................... 0.1 Apparel Manufacturers.................. 0.1 Real Estate Operations & Development... 0.1 Gas-Distribution....................... 0.1 Retail-Pet Food & Supplies............. 0.1 Diversified Manufacturing Operations... 0.1 Medical Instruments.................... 0.1 Wireless Equipment..................... 0.1 Pollution Control...................... 0.1 Investment Management/Advisor Services. 0.1 Medical-Outpatient/Home Medical........ 0.1 Metal Processors & Fabrication......... 0.1 Recycling.............................. 0.1 Research & Development................. 0.1 Storage/Warehousing.................... 0.1 Cellular Telecom....................... 0.1 ----- 101.6% =====
Credit Quality+# Aaa........ 1.0% Baa........ 2.2 Ba......... 23.0 B.......... 53.7 Caa........ 15.1 Not Rated@. 5.0 ----- 100.0% =====
-------- *Calculated as a percentage of net assets +Source: Moody's #Calculated as a percentage of total debt issues, excluding short-term securities. @Represents debt issues that either have no rating, or the rating is unavailable from the data source. 45 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited)
Principal Value Security Description Amount (Note 2) ASSET BACKED SECURITIES -- 2.0% Diversified Financial Services -- 2.0% BBCMS Mtg. Trust FRS Series 2018-TALL, Class A 2.88% (1 ML + 0.72%) due 03/15/2037*(1)..................... $3,500,000 $3,497,809 Home Equity Loan Trust VRS Series 2007-HSA3, Class AI4 6.11% due 06/25/2037(2)................ 414,201 414,041 Sofi Consumer Loan Program Trust Series 2018-3, Class A1 3.20% due 08/25/2027*.................. 3,241,123 3,240,574 ---------- Total Asset Backed Securities (cost $7,149,211)...................... 7,152,424 ---------- U.S. CORPORATE BONDS & NOTES -- 34.1% Aerospace/Defense-Equipment -- 0.3% TransDigm, Inc. Company Guar. Notes 6.50% due 07/15/2024................... 380,000 389,310 TransDigm, Inc. Company Guar. Notes 6.50% due 05/15/2025................... 600,000 611,250 ---------- 1,000,560 ---------- Apparel Manufacturers -- 0.1% Under Armour, Inc. Senior Notes 3.25% due 06/15/2026................... 591,000 520,832 ---------- Applications Software -- 0.3% CDK Global, Inc. Senior Notes 5.88% due 06/15/2026................... 945,000 973,709 ---------- Athletic Equipment -- 0.2% Vista Outdoor, Inc. Company Guar. Notes 5.88% due 10/01/2023................... 810,000 793,800 ---------- Auto-Heavy Duty Trucks -- 0.3% Navistar International Corp. Company Guar. Notes 6.63% due 11/01/2025*.................. 1,050,000 1,092,000 ---------- Broadcast Services/Program -- 0.8% Clear Channel Worldwide Holdings, Inc. Company Guar. Notes 7.63% due 03/15/2020................... 1,680,000 1,684,200 iHeartCommunications, Inc. Senior Sec. Notes 9.00% due 12/15/2019+(3)(4)............ 690,000 519,225 Univision Communications, Inc. Senior Sec. Notes 5.13% due 05/15/2023*.................. 740,000 706,700 ---------- 2,910,125 ---------- Building & Construction-Misc. -- 0.3% Frontdoor, Inc. Senior Notes 6.75% due 08/15/2026*.................. 150,000 154,500
Principal Value Security Description Amount (Note 2) Building & Construction-Misc. (continued) Weekley Homes LLC/Weekley Finance Corp. Senior Notes 6.63% due 08/15/2025......................... $ 900,000 $ 857,250 ---------- 1,011,750 ---------- Building-Heavy Construction -- 0.1% New Enterprise Stone & Lime Co., Inc. Senior Notes 10.13% due 04/01/2022*....................... 375,000 401,484 ---------- Building-Residential/Commercial -- 1.7% Beazer Homes USA, Inc. Company Guar. Notes 5.88% due 10/15/2027......................... 560,000 476,000 Beazer Homes USA, Inc. Company Guar. Notes 6.75% due 03/15/2025......................... 720,000 666,756 Lennar Corp. Company Guar. Notes 5.25% due 06/01/2026......................... 815,000 807,869 M/I Homes, Inc. Company Guar. Notes 5.63% due 08/01/2025......................... 730,000 686,200 MDC Holdings, Inc. Company Guar. Notes 5.50% due 01/15/2024......................... 700,000 698,250 PulteGroup, Inc. Company Guar. Notes 5.50% due 03/01/2026......................... 660,000 656,700 TRI Pointe Group Inc./TRI Pointe Homes Inc. Company Guar. Notes 5.88% due 06/15/2024......................... 1,475,000 1,463,937 William Lyon Homes, Inc. Company Guar. Notes 6.00% due 09/01/2023......................... 700,000 675,500 ---------- 6,131,212 ---------- Cable/Satellite TV -- 2.0% Altice US Finance I Corp. Senior Sec. Notes 5.38% due 07/15/2023*........................ 630,000 637,088 Cablevision Systems Corp. Senior Notes 5.88% due 09/15/2022......................... 1,255,000 1,279,316 CCO Holdings LLC/CCO Holdings Capital Corp. Senior Notes 5.13% due 05/01/2027*........................ 825,000 781,687 Cequel Communications Holdings I LLC/Cequel Capital Corp. Senior Notes 7.50% due 04/01/2028*........................ 585,000 613,519 Charter Communications Operating LLC/Charter Communications Operating Capital Senior Sec. Notes 4.50% due 02/01/2024......................... 1,675,000 1,685,266 DISH DBS Corp. Company Guar. Notes 5.00% due 03/15/2023......................... 1,465,000 1,329,487
46 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Cable/Satellite TV (continued) DISH DBS Corp. Company Guar. Notes 7.75% due 07/01/2026.............................. $ 340,000 $ 320,722 Radiate Holdco LLC/Radiate Finance, Inc. Senior Notes 6.63% due 02/15/2025*............................. 590,000 551,650 Radiate Holdco LLC/Radiate Finance, Inc. Senior Notes 6.88% due 02/15/2023*............................. 100,000 96,250 ---------- 7,294,985 ---------- Casino Hotels -- 0.8% Boyd Gaming Corp. Company Guar. Notes 6.00% due 08/15/2026.............................. 260,000 261,950 Boyd Gaming Corp. Company Guar. Notes 6.38% due 04/01/2026.............................. 1,615,000 1,661,431 MGM Resorts International Company Guar. Notes 5.75% due 06/15/2025.............................. 780,000 782,925 ---------- 2,706,306 ---------- Cellular Telecom -- 1.0% Sprint Corp. Company Guar. Notes 7.88% due 09/15/2023.............................. 1,475,000 1,591,156 Sprint Nextel Corp. Senior Notes 6.00% due 11/15/2022.............................. 750,000 765,000 T-Mobile USA, Inc. Company Guar. Notes 4.50% due 02/01/2026.............................. 1,445,000 1,379,065 ---------- 3,735,221 ---------- Chemicals-Diversified -- 0.2% Hexion, Inc. Senior Sec. Notes 10.38% due 02/01/2022*............................ 495,000 481,387 Hexion, Inc. Sec. Notes 13.75% due 02/01/2022*............................ 395,000 342,663 ---------- 824,050 ---------- Chemicals-Specialty -- 0.7% Cornerstone Chemical Co. Senior Sec. Notes 6.75% due 08/15/2024*............................. 795,000 796,169 Kraton Polymers LLC/Kraton Polymers Capital Corp. Company Guar. Notes 7.00% due 04/15/2025*............................. 535,000 549,712 Platform Specialty Products Corp. Company Guar. Notes 5.88% due 12/01/2025*............................. 1,000,000 986,770 ---------- 2,332,651 ----------
Principal Value Security Description Amount (Note 2) Commercial Services -- 0.2% ServiceMaster Co. LLC Company Guar. Notes 5.13% due 11/15/2024*...................... $ 620,000 $ 610,700 ---------- Computer Services -- 0.6% Banff Merger Sub, Inc. Senior Notes 9.75% due 09/01/2026*...................... 530,000 537,685 Exela Intermediate LLC/Exela Finance, Inc. Senior Sec. Notes 10.00% due 07/15/2023*..................... 980,000 1,043,700 West Corp. Company Guar. Notes 8.50% due 10/15/2025*...................... 640,000 587,200 ---------- 2,168,585 ---------- Computers-Integrated Systems -- 0.1% Everi Payments, Inc. Company Guar. Notes 7.50% due 12/15/2025*...................... 250,000 252,500 ---------- Consumer Products-Misc. -- 0.3% Prestige Brands, Inc. Company Guar. Notes 6.38% due 03/01/2024*...................... 1,150,000 1,162,937 ---------- Containers-Metal/Glass -- 0.2% Owens-Brockway Glass Container, Inc. Company Guar. Notes 6.38% due 08/15/2025*...................... 665,000 683,288 ---------- Diagnostic Equipment -- 0.7% Avantor, Inc. Senior Sec. Notes 6.00% due 10/01/2024*...................... 1,155,000 1,172,325 Avantor, Inc. Senior Notes 9.00% due 10/01/2025*...................... 735,000 758,887 Ortho-Clinical Diagnostics, Inc. Senior Notes 6.63% due 05/15/2022*...................... 525,000 512,925 ---------- 2,444,137 ---------- Dialysis Centers -- 0.2% DaVita HealthCare Partners, Inc. Company Guar. Notes 5.13% due 07/15/2024....................... 635,000 612,775 ---------- Disposable Medical Products -- 0.2% Sotera Health Holdings LLC Senior Notes 6.50% due 05/15/2023*...................... 715,000 736,450 ---------- Diversified Manufacturing Operations -- 0.1% LSB Industries, Inc. Senior Sec. Notes 9.63% due 05/01/2023*...................... 475,000 497,563 ---------- Electric-Generation -- 0.1% Vistra Operations Co LLC Company Guar. Notes 5.50% due 09/01/2026*...................... 280,000 283,150 ----------
47 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Electric-Integrated -- 0.0% Texas Competitive Electric Holdings Co. LLC/ TCEH Finance, Inc. Escrow Notes 11.50% due 10/01/2020+(5).................... $1,667,835 $ 5,837 ---------- Energy-Alternate Sources -- 0.3% TerraForm Power Operating LLC Company Guar. Notes 4.25% due 01/31/2023*........................ 650,000 635,375 TerraForm Power Operating LLC Company Guar. Notes 5.00% due 01/31/2028*........................ 590,000 548,700 ---------- 1,184,075 ---------- Enterprise Software/Service -- 0.2% Infor US, Inc. Company Guar. Notes 6.50% due 05/15/2022......................... 665,000 674,011 ---------- Finance-Consumer Loans -- 1.2% Navient Corp. Senior Notes 6.50% due 06/15/2022......................... 1,007,000 1,046,505 Navient Corp. Senior Notes 6.75% due 06/25/2025......................... 850,000 853,187 Navient Corp. Senior Notes 7.25% due 09/25/2023......................... 310,000 328,600 Springleaf Finance Corp. Company Guar. Notes 6.13% due 05/15/2022......................... 1,040,000 1,072,500 Springleaf Finance Corp. Company Guar. Notes 6.88% due 03/15/2025......................... 455,000 453,863 Springleaf Finance Corp. Company Guar. Notes 7.13% due 03/15/2026......................... 390,000 388,050 ---------- 4,142,705 ---------- Finance-Mortgage Loan/Banker -- 0.5% Ladder Capital Finance Holdings LLLP/Ladder Capital Finance Corp. Company Guar. Notes 5.88% due 08/01/2021*........................ 1,235,000 1,251,981 Nationstar Mtg. LLC/Nationstar Capital Corp. Company Guar. Notes 6.50% due 07/01/2021......................... 350,000 350,420 ---------- 1,602,401 ---------- Finance-Other Services -- 0.2% Tempo Acquisition LLC/Tempo Acquisition Finance Corp. Senior Notes 6.75% due 06/01/2025*........................ 885,000 860,663 ---------- Food-Misc./Diversified -- 0.8% Dole Food Co., Inc. Senior Sec. Notes 7.25% due 06/15/2025*........................ 1,250,000 1,218,750
Principal Value Security Description Amount (Note 2) Food-Misc./Diversified (continued) Matterhorn Merger Sub LLC/Matterhorn Finance Sub, Inc. Senior Notes 8.50% due 06/01/2026*......................... $ 580,000 $ 564,050 Post Holdings, Inc. Company Guar. Notes 5.00% due 08/15/2026*......................... 435,000 411,314 Post Holdings, Inc. Company Guar. Notes 5.50% due 03/01/2025*......................... 590,000 585,575 ---------- 2,779,689 ---------- Food-Retail -- 0.4% Albertsons Cos. LLC/Safeway, Inc./New Albertson's, Inc./Albertson's LLC Company Guar. Notes 5.75% due 03/15/2025.......................... 705,000 634,500 Safeway, Inc. Senior Notes 7.25% due 02/01/2031.......................... 680,000 647,700 ---------- 1,282,200 ---------- Gambling (Non-Hotel) -- 0.9% Caesars Resort Collection LLC/CRC Finco, Inc. Company Guar. Notes 5.25% due 10/15/2025*......................... 1,160,000 1,104,900 Delta Merger Sub, Inc. Senior Notes 6.00% due 09/15/2026*......................... 455,000 460,688 Downstream Development Authority of the Quapaw Tribe of Oklahoma Senior Sec. Notes 10.50% due 02/15/2023*........................ 485,000 495,912 Pinnacle Entertainment, Inc. Senior Notes 5.63% due 05/01/2024.......................... 715,000 755,219 Scientific Games International, Inc. Company Guar. Notes 6.63% due 05/15/2021.......................... 440,000 437,800 ---------- 3,254,519 ---------- Gas-Distribution -- 0.1% AmeriGas Partners LP/AmeriGas Finance Corp. Senior Notes 5.50% due 05/20/2025.......................... 510,000 501,075 ---------- Hotels/Motels -- 0.5% Hilton Domestic Operating Co., Inc. Company Guar. Notes 5.13% due 05/01/2026*......................... 460,000 457,700 Marriott Ownership Resorts, Inc. Company Guar. Notes 6.50% due 09/15/2026*......................... 1,415,000 1,452,356 ---------- 1,910,056 ---------- Housewares -- 0.2% American Greetings Corp. Company Guar. Notes 8.75% due 04/15/2025*......................... 715,000 679,250 ----------
48 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Independent Power Producers -- 0.7% Calpine Corp. Senior Notes 5.38% due 01/15/2023.............................. $1,497,000 $1,414,665 Dynegy, Inc. Company Guar. Notes 7.38% due 11/01/2022.............................. 530,000 550,537 NRG Energy, Inc. Company Guar. Notes 5.75% due 01/15/2028*............................. 340,000 343,400 ---------- 2,308,602 ---------- Internet Connectivity Services -- 0.2% Zayo Group LLC/Zayo Capital, Inc. Company Guar. Notes 6.38% due 05/15/2025.............................. 600,000 622,662 ---------- Investment Companies -- 0.1% Compass Diversified Holdings/Compass Group Diversified Holdings LLC Senior Notes 8.00% due 05/01/2026*............................. 350,000 360,500 ---------- Machinery-Electrical -- 0.2% Vertiv Intermediate Holding Corp. Senior Notes 12.00% due 02/15/2022*(6)......................... 795,000 812,888 ---------- Medical Information Systems -- 0.1% Change Healthcare Holdings LLC/Change Healthcare Finance, Inc. Senior Notes 5.75% due 03/01/2025*............................. 340,000 337,447 ---------- Medical Labs & Testing Services -- 0.5% Charles River Laboratories International, Inc. Company Guar. Notes 5.50% due 04/01/2026*............................. 350,000 355,250 Eagle Holding Co. II LLC Senior Notes 7.63% due 05/15/2022*(6).......................... 735,000 744,187 West Street Merger Sub, Inc. Senior Notes 6.38% due 09/01/2025*............................. 810,000 767,475 ---------- 1,866,912 ---------- Medical Products -- 0.2% DJO Finco, Inc./DJO Finance LLC/DJO Finance Corp. Sec. Notes 8.13% due 06/15/2021*............................. 835,000 852,744 ---------- Medical-Drugs -- 0.5% Bausch Health Cos., Inc. Company Guar. Notes 8.50% due 01/31/2027*............................. 1,530,000 1,606,500 Endo Finance LLC/Endo Finco, Inc. Company Guar. Notes 5.38% due 01/15/2023*............................. 350,000 308,000 ---------- 1,914,500 ----------
Principal Value Security Description Amount (Note 2) Medical-HMO -- 0.4% Centene Corp. Senior Notes 5.38% due 06/01/2026*......... $ 195,000 $ 199,651 MPH Acquisition Holdings LLC Company Guar. Notes 7.13% due 06/01/2024*......... 465,000 482,437 Polaris Intermediate Corp. Senior Notes 8.50% due 12/01/2022*(6)...... 360,000 371,966 WellCare Health Plans, Inc. Senior Notes 5.25% due 04/01/2025.......... 450,000 457,313 ---------- 1,511,367 ---------- Medical-Hospitals -- 1.3% Envision Healthcare Corp. Company Guar. Notes 6.25% due 12/01/2024*......... 305,000 327,875 HCA, Inc. Company Guar. Notes 5.38% due 02/01/2025.......... 1,315,000 1,341,300 Surgery Center Holdings, Inc. Company Guar. Notes 6.75% due 07/01/2025*......... 125,000 119,687 Surgery Center Holdings, Inc. Company Guar. Notes 8.88% due 04/15/2021*......... 360,000 374,850 Tenet Healthcare Corp. Sec. Notes 5.13% due 05/01/2025.......... 285,000 280,725 Tenet Healthcare Corp. Senior Notes 7.00% due 08/01/2025.......... 1,850,000 1,826,875 Tenet Healthcare Corp. Senior Notes 8.13% due 04/01/2022.......... 365,000 384,637 ---------- 4,655,949 ---------- Metal Processors & Fabrication -- 0.1% Hillman Group, Inc. Senior Notes 6.38% due 07/15/2022*......... 325,000 293,313 ---------- Non-Hazardous Waste Disposal -- 0.2% Wrangler Buyer Corp. Senior Notes 6.00% due 10/01/2025*......... 858,000 823,680 ---------- Oil & Gas Drilling -- 0.3% Nabors Industries, Inc. Company Guar. Notes 5.75% due 02/01/2025.......... 535,000 512,885 Rowan Cos., Inc. Company Guar. Notes 5.40% due 12/01/2042.......... 875,000 651,875 ---------- 1,164,760 ----------
49 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Oil Companies-Exploration & Production -- 3.3% Alta Mesa Holdings LP/Alta Mesa Finance Services Corp. Company Guar. Notes 7.88% due 12/15/2024............................. $ 775,000 $ 736,250 California Resources Corp. Sec. Notes 8.00% due 12/15/2022*............................ 870,000 830,850 Callon Petroleum Co. Company Guar. Notes 6.13% due 10/01/2024............................. 641,000 652,217 Carrizo Oil & Gas, Inc. Company Guar. Notes 6.25% due 04/15/2023............................. 1,120,000 1,143,800 Chesapeake Energy Corp. Company Guar. Notes 8.00% due 06/15/2027............................. 1,595,000 1,626,900 CrownRock LP/CrownRock Finance, Inc. Senior Notes 5.63% due 10/15/2025*............................ 1,015,000 989,625 Denbury Resources, Inc. Sec. Notes 7.50% due 02/15/2024*............................ 410,000 422,300 Denbury Resources, Inc. Sec. Notes 9.25% due 03/31/2022*............................ 768,000 829,440 EP Energy LLC/Everest Acquisition Finance, Inc. Senior Sec. Notes 7.75% due 05/15/2026*............................ 505,000 516,994 EP Energy LLC/Everest Acquisition Finance, Inc. Senior Sec. Notes 8.00% due 11/29/2024*............................ 365,000 367,738 EP Energy LLC/Everest Acquisition Finance, Inc. Sec. Bonds 8.00% due 02/15/2025*............................ 260,000 198,900 Jagged Peak Energy LLC Company Guar. Notes 5.88% due 05/01/2026*............................ 755,000 751,225 Oasis Petroleum, Inc. Company Guar. Notes 6.88% due 01/15/2023............................. 845,000 859,787 Range Resources Corp. Company Guar. Notes 4.88% due 05/15/2025............................. 580,000 548,825 Range Resources Corp. Company Guar. Notes 5.00% due 03/15/2023............................. 350,000 343,000 Sanchez Energy Corp. Senior Sec. Notes 7.25% due 02/15/2023*............................ 405,000 398,925 Vine Oil & Gas LP / Vine Oil & Gas Finance Corp. Company Guar. Notes 8.75% due 04/15/2023*............................ 575,000 562,063 ----------- 11,778,839 ----------- Oil Refining & Marketing -- 0.4% Citgo Holding, Inc. Senior Sec. Notes 10.75% due 02/15/2020*........................... 785,000 832,100
Principal Value Security Description Amount (Note 2) Oil Refining & Marketing (continued) Sunoco LP/Sunoco Finance Corp. Company Guar. Notes 4.88% due 01/15/2023*................................ $ 285,000 $ 282,150 Sunoco LP/Sunoco Finance Corp. Company Guar. Notes 5.50% due 02/15/2026*................................ 440,000 425,040 ---------- 1,539,290 ---------- Oil-Field Services -- 0.5% Bristow Group, Inc. Senior Sec. Notes 8.75% due 03/01/2023*................................ 570,000 557,175 USA Compression Partners LP/USA Compression Finance Corp. Senior Notes 6.88% due 04/01/2026*................................ 1,150,000 1,187,375 ---------- 1,744,550 ---------- Paper & Related Products -- 0.3% Mercer International, Inc. Senior Notes 5.50% due 01/15/2026................................. 355,000 347,900 Schweitzer-Mauduit International, Inc. Senior Notes 6.88% due 10/01/2026*................................ 675,000 688,500 ---------- 1,036,400 ---------- Pipelines -- 1.1% American Midstream Partners LP/American Midstream Finance Corp. Company Guar. Notes 9.50% due 12/15/2021*................................ 525,000 525,000 Cheniere Corpus Christi Holdings LLC Senior Sec. Notes 5.88% due 03/31/2025................................. 1,065,000 1,119,581 Cheniere Energy Partners LP Company Guar. Notes 5.63% due 10/01/2026*................................ 665,000 669,788 Energy Transfer Equity LP Senior Sec. Notes 7.50% due 10/15/2020................................. 436,000 466,520 Targa Resources Partners LP/Targa Resources Partners Finance Corp. Company Guar. Notes 5.88% due 04/15/2026*................................ 1,000,000 1,031,250 ---------- 3,812,139 ---------- Private Equity -- 0.5% Icahn Enterprises LP/Icahn Enterprises Finance Corp. Company Guar. Notes 5.88% due 02/01/2022................................. 985,000 997,312 Icahn Enterprises LP/Icahn Enterprises Finance Corp. Company Guar. Notes 6.38% due 12/15/2025................................. 700,000 702,625 ---------- 1,699,937 ----------
50 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Publishing-Books -- 0.1% McGraw-Hill Global Education Holdings LLC/ McGraw-Hill Global Education Finance Senior Notes 7.88% due 05/15/2024*.......................... $ 500,000 $ 448,125 ---------- Publishing-Periodicals -- 0.3% Meredith Corp. Company Guar. Notes 6.88% due 02/01/2026*.......................... 1,000,000 1,025,000 ---------- Racetracks -- 0.2% GLP Capital LP/GLP Financing II, Inc. Company Guar. Notes 5.25% due 06/01/2025........................... 775,000 787,555 ---------- Real Estate Investment Trusts -- 1.1% ESH Hospitality, Inc. Company Guar. Notes 5.25% due 05/01/2025*.......................... 700,000 677,250 iStar, Inc. Senior Notes 5.25% due 09/15/2022........................... 1,010,000 994,850 MGM Growth Properties Operating Partnership LP/MGP Finance Co-Issuer, Inc. Company Guar. Notes 4.50% due 01/15/2028........................... 580,000 530,758 MGM Growth Properties Operating Partnership LP/MGP Finance Co-Issuer, Inc. Company Guar. Notes 5.63% due 05/01/2024........................... 330,000 338,250 MPT Operating Partnership LP/MPT Finance Corp. Company Guar. Notes 5.00% due 10/15/2027........................... 400,000 385,500 MPT Operating Partnership LP/MPT Finance Corp. Company Guar. Notes 6.38% due 03/01/2024........................... 280,000 292,600 Uniti Group, Inc./CSL Capital LLC Company Guar. Notes 7.13% due 12/15/2024*.......................... 595,000 544,425 ---------- 3,763,633 ---------- Resort/Theme Parks -- 0.2% Boyne USA, Inc. Sec. Notes 7.25% due 05/01/2025*.......................... 565,000 597,488 ---------- Retail-Automobile -- 0.2% Sonic Automotive, Inc. Company Guar. Notes 6.13% due 03/15/2027........................... 600,000 561,000 ---------- Retail-Convenience Store -- 0.3% Cumberland Farms, Inc. Senior Notes 6.75% due 05/01/2025*.......................... 1,025,000 1,050,625 ---------- Retail-Major Department Stores -- 0.1% Neiman Marcus Group, Ltd. LLC Company Guar. Notes 8.00% due 10/15/2021*.......................... 695,000 456,528 ----------
Principal Value Security Description Amount (Note 2) Retail-Propane Distribution -- 0.3% Ferrellgas Partners LP/Ferrellgas Partners Finance Corp. Senior Notes 8.63% due 06/15/2020..................................... $570,000 $ 541,500 Suburban Propane Partners LP/Suburban Energy Finance Corp. Senior Notes 5.50% due 06/01/2024..................................... 490,000 481,425 ---------- 1,022,925 ---------- Retail-Restaurants -- 0.3% Golden Nugget, Inc. Senior Notes 6.75% due 10/15/2024*.................................... 895,000 907,870 ---------- Rubber/Plastic Products -- 0.0% Venture Holdings Co. LLC Company Guar. Notes 11.00% due 06/01/2007+(4)(5)(7)(8)....................... 550,000 0 ---------- Schools -- 0.5% Graham Holdings Co. Company Guar. Notes 5.75% due 06/01/2026*.................................... 900,000 921,375 Laureate Education, Inc. Company Guar. Notes 8.25% due 05/01/2025*.................................... 660,000 706,748 ---------- 1,628,123 ---------- Soap & Cleaning Preparation -- 0.2% Kronos Acquisition Holdings, Inc. Company Guar. Notes 9.00% due 08/15/2023*.................................... 720,000 678,600 ---------- Specified Purpose Acquisitions -- 0.2% Trident Merger Sub, Inc. Senior Notes 6.63% due 11/01/2025*.................................... 790,000 748,525 ---------- Steel-Producers -- 0.2% United States Steel Corp. Senior Notes 6.25% due 03/15/2026..................................... 715,000 708,744 ---------- Telephone-Integrated -- 1.2% CenturyLink, Inc. Senior Notes 7.50% due 04/01/2024..................................... 660,000 704,550 Cincinnati Bell, Inc. Company Guar. Notes 7.00% due 07/15/2024*.................................... 535,000 490,862 Frontier Communications Corp. Senior Notes 7.63% due 04/15/2024..................................... 835,000 538,575 Frontier Communications Corp. Senior Notes 8.50% due 04/15/2020..................................... 740,000 747,400 Frontier Communications Corp. Sec. Notes 8.50% due 04/01/2026*.................................... 295,000 278,775
51 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Telephone-Integrated (continued) Level 3 Financing, Inc. Company Guar. Notes 5.25% due 03/15/2026....................... $ 530,000 $ 521,414 Level 3 Financing, Inc. Company Guar. Notes 5.38% due 01/15/2024....................... 670,000 669,491 Windstream Services LLC/Windstream Finance Corp. Senior Sec. Notes 8.63% due 10/31/2025*...................... 185,000 177,600 Windstream Services LLC/Windstream Finance Corp. Sec. Notes 10.50% due 06/30/2024*..................... 365,000 310,250 ------------ 4,438,917 ------------ Television -- 0.1% Sinclair Television Group, Inc. Company Guar. Notes 5.13% due 02/15/2027*...................... 250,000 229,688 ------------ Theaters -- 0.3% Live Nation Entertainment, Inc. Company Guar. Notes 5.63% due 03/15/2026*...................... 1,130,000 1,141,300 ------------ Transport-Equipment & Leasing -- 0.2% Fortress Transportation & Infrastructure Investors LLC Senior Notes 6.50% due 10/01/2025*...................... 700,000 695,065 ------------ Veterinary Diagnostics -- 0.1% Elanco Animal Health, Inc. Senior Notes 3.91% due 08/27/2021*...................... 111,000 111,105 Elanco Animal Health, Inc. Senior Notes 4.27% due 08/28/2023*...................... 277,000 278,122 ------------ 389,227 ------------ Vitamins & Nutrition Products -- 0.2% HLF Financing SARL LLC/Herbalife International, Inc. Company Guar. Notes 7.25% due 08/15/2026*...................... 820,000 833,325 ------------ Wireless Equipment -- 0.1% ViaSat, Inc. Senior Notes 5.63% due 09/15/2025*...................... 490,000 463,197 ------------ Total U.S. Corporate Bonds & Notes (cost $122,659,227)........................ 121,769,190 ------------ FOREIGN CORPORATE BONDS & NOTES -- 6.2% Aerospace/Defense -- 0.4% Bombardier, Inc. Senior Notes 6.13% due 01/15/2023*...................... 620,000 622,712
Principal Value Security Description Amount (Note 2) Aerospace/Defense (continued) Bombardier, Inc. Senior Notes 7.50% due 12/01/2024*........................ $ 675,000 $ 712,125 ---------- 1,334,837 ---------- Building & Construction Products-Misc. -- 0.2% James Hardie International Finance DAC Company Guar. Notes 4.75% due 01/15/2025*........................ 655,000 633,844 ---------- Cable/Satellite TV -- 1.1% Altice France SA Senior Sec. Notes 8.13% due 02/01/2027*........................ 200,000 206,000 Altice Luxembourg SA Company Guar. Notes 7.63% due 02/15/2025*........................ 1,190,000 1,084,566 SFR Group SA Senior Sec. Notes 7.38% due 05/01/2026*........................ 1,200,000 1,200,000 Telenet Finance Luxembourg Notes SARL Senior Sec. Notes 5.50% due 03/01/2028*........................ 600,000 564,000 Virgin Media Finance PLC Company Guar. Notes 6.00% due 10/15/2024*........................ 800,000 800,544 ---------- 3,855,110 ---------- Casino Services -- 0.2% Gateway Casinos & Entertainment, Ltd. Sec. Notes 8.25% due 03/01/2024*........................ 800,000 842,000 ---------- Chemicals-Diversified -- 0.3% NOVA Chemicals Corp. Senior Notes 4.88% due 06/01/2024*........................ 440,000 423,610 NOVA Chemicals Corp. Senior Notes 5.00% due 05/01/2025*........................ 630,000 598,500 ---------- 1,022,110 ---------- Chemicals-Specialty -- 0.4% Alpha 2 BV Senior Notes 8.75% due 06/01/2023*(6)..................... 325,000 329,875 Alpha 3 BV/Alpha US Bidco, Inc. Company Guar. Notes 6.25% due 02/01/2025*........................ 950,000 945,535 ---------- 1,275,410 ---------- Containers-Metal/Glass -- 0.6% ARD Securities Finance SARL Senior Sec. Notes 8.75% due 01/31/2023*(9)..................... 580,360 580,360 Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc. Company Guar. Notes 6.00% due 02/15/2025*........................ 1,520,000 1,487,700 ---------- 2,068,060 ----------
52 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Cruise Lines -- 0.3% Viking Cruises, Ltd. Company Guar. Notes 5.88% due 09/15/2027*.......................... $ 985,000 $ 961,163 ---------- Diversified Minerals -- 0.2% FMG Resources August 2006 Pty, Ltd. Company Guar. Notes 5.13% due 03/15/2023*.......................... 715,000 700,700 ---------- Machinery-Pumps -- 0.1% Titan Acquisition, Ltd./Titan Co-Borrower LLC Senior Notes 7.75% due 04/15/2026*.......................... 455,000 394,713 ---------- Medical Products -- 0.1% Mallinckrodt International Finance SA/ Mallinckrodt CB LLC Company Guar. Notes 5.63% due 10/15/2023*.......................... 350,000 309,750 ---------- Medical-Biomedical/Gene -- 0.0% Concordia International Corp. Senior Sec. Notes 8.00% due 09/06/2024........................... 142,136 138,938 ---------- Medical-Drugs -- 0.6% Bausch Health Cos., Inc. Senior Sec. Notes 5.50% due 11/01/2025*.......................... 1,010,000 1,010,000 Bausch Health Cos., Inc. Company Guar. Notes 9.00% due 12/15/2025*.......................... 385,000 414,356 Teva Pharmaceutical Finance Netherlands III BV Company Guar. Notes 3.15% due 10/01/2026........................... 505,000 420,170 Teva Pharmaceutical Finance Netherlands III BV Company Guar. Notes 6.75% due 03/01/2028........................... 330,000 348,106 ---------- 2,192,632 ---------- Metal-Diversified -- 0.2% Vedanta Resources PLC Senior Notes 6.38% due 07/30/2022*.......................... 805,000 774,813 ---------- Oil & Gas Drilling -- 0.3% Transocean, Inc. Company Guar. Notes 6.80% due 03/15/2038........................... 465,000 402,225 Transocean, Inc. Company Guar. Notes 7.50% due 01/15/2026*.......................... 335,000 345,887 Transocean, Inc. Company Guar. Notes 9.00% due 07/15/2023*.......................... 265,000 288,188 ---------- 1,036,300 ---------- Oil Companies-Exploration & Production -- 0.4% Geopark, Ltd. Senior Sec. Notes 6.50% due 09/21/2024*.......................... 535,000 537,675
Principal Value Security Description Amount (Note 2) Oil Companies-Exploration & Production (continued) Seven Generations Energy, Ltd. Company Guar. Notes 5.38% due 09/30/2025*....................... $ 795,000 $ 773,137 ----------- 1,310,812 ----------- Oil-Field Services -- 0.1% Weatherford International, Ltd. Company Guar. Notes 8.25% due 06/15/2023........................ 575,000 543,375 ----------- Paper & Related Products -- 0.1% Cascades, Inc. Company Guar. Notes 5.50% due 07/15/2022*....................... 150,000 151,125 Cascades, Inc. Company Guar. Notes 5.75% due 07/15/2023*....................... 360,000 360,000 ----------- 511,125 ----------- Security Services -- 0.2% Garda World Security Corp. Senior Notes 8.75% due 05/15/2025*....................... 830,000 808,213 ----------- Special Purpose Entity -- 0.0% Hellas Telecommunications Luxembourg II SCA Sub. Notes 6.26% due 01/15/2015+*(4)(5)(7)(8).......... 1,025,000 0 ----------- Steel-Producers -- 0.2% ArcelorMittal Senior Notes 6.13% due 06/01/2025........................ 715,000 776,832 ----------- Transport-Marine -- 0.2% Topaz Marine SA Company Guar. Notes 9.13% due 07/26/2022*....................... 740,000 758,470 ----------- Total Foreign Corporate Bonds & Notes (cost $23,722,923).......................... 22,249,207 ----------- LOANS(10)(11)(12) -- 56.6% Advertising Services -- 0.3% Advantage Sales & Marketing, Inc. FRS 1st Lien 5.49% (1 ML + 3.25%) due 07/23/2021.............................. 359,385 330,904 Advantage Sales & Marketing, Inc. FRS BTL-B 5.49% (1 ML + 3.25%) due 07/25/2021.............................. 676,834 623,195 ----------- 954,099 ----------- Aerospace/Defense-Equipment -- 0.7% Accudyne Industries Borrower SCA FRS BTL-B 5.24% (1 ML + 3.00%) due 08/18/2024.............................. 1,069,688 1,073,253 Transdigm, Inc. FRS BTL-E 4.74% (1 ML + 2.50%) due 05/30/2025.............................. 407,950 408,941
53 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS(10)(11)(12) (continued) Aerospace/Defense-Equipment (continued) TransDigm, Inc. FRS BTL-F 4.74% (1 ML + 2.50%) due 06/09/2023..................... $ 465,662 $ 467,059 TransDigm, Inc. FRS BTL-G 4.74% (1 ML + 2.50%) due 08/22/2024..................... 627,086 628,829 ---------- 2,578,082 ---------- Appliances -- 0.3% Global Appliance, Inc. FRS BTL-B 6.25% (1 ML + 4.00%) due 09/29/2024..................... 1,034,550 995,754 ---------- Applications Software -- 1.0% Impala Private Holdings II LLC FRS 1st Lien 6.25% (1 ML + 4.00%) due 11/11/2024..................... 997,141 998,636 SS&C European Holdings SARL FRS BTL-B4 4.49% (1 ML + 2.25%) due 04/16/2025..................... 535,499 535,750 SS&C Technologies, Inc. FRS BTL-B5 coupon TBD due 04/16/2025..................... 670,000 669,721 SS&C Technologies, Inc. FRS BTL-B3 4.49% (1 ML + 2.25%) due 04/16/2025..................... 1,379,560 1,380,207 ---------- 3,584,314 ---------- Auto-Heavy Duty Trucks -- 0.7% Deck Chassis Acquisition, Inc. FRS 2nd Lien 8.24% (1 ML + 6.00%) due 06/15/2023..................... 225,000 226,688 Navistar Financial Corp. FRS BTL-B 6.00% (1 ML + 3.75%) due 08/03/2025..................... 650,000 652,031 Navistar, Inc. FRS BTL-B 5.64% (1 ML + 3.50%) due 11/06/2024..................... 1,457,675 1,462,230 ---------- 2,340,949 ---------- Auto/Truck Parts & Equipment-Original -- 1.9% Accuride Corp. FRS BTL-B 7.64% (3 ML + 5.25%) due 11/17/2023..................... 1,175,565 1,187,321 Altra Industrial Motion Corp. FRS BTL-B coupon TBD due 10/01/2025..................... 320,000 320,600
Principal Value Security Description Amount (Note 2) Auto/Truck Parts & Equipment-Original (continued) Dexko Global, Inc. FRS BTL-B 5.73% (1 ML + 3.50%) due 07/24/2024..................... $1,399,443 $1,402,941 Federal-Mogul Holdings Corp. FRS BTL-C 5.83% (1 ML + 3.75%) due 04/15/2021..................... 515,160 515,267 Federal-Mogul Holdings Corp. FRS BTL-C 5.91% (3 ML + 3.75%) due 04/15/2021..................... 1,556,516 1,556,839 Tenneco, Inc. FRS BTL-B coupon TBD due 10/01/2025..................... 1,630,000 1,627,454 ---------- 6,610,422 ---------- Batteries/Battery Systems -- 0.2% Energizer Holdings, Inc. FRS BTL-B coupon TBD due 06/20/2025..................... 530,000 533,975 ---------- Bicycle Manufacturing -- 0.3% SRAM LLC FRS BTL-B 4.95%-5.01% (2 ML + 2.75%) due 03/15/2024..................... 1,155,435 1,161,212 SRAM LLC FRS BTL-B 7.00% (USFRBPLR + 1.75%) due 03/15/2024..................... 22,482 22,594 ---------- 1,183,806 ---------- Broadcast Services/Program -- 0.9% iHeartCommunications, Inc. BTL-D-EXT 6.75% due 01/30/2019+(3)(4)........ 1,555,000 1,155,883 Univision Communications, Inc. FRS BTL 4.99% (1 ML + 2.75%) due 03/15/2024..................... 2,208,675 2,145,175 ---------- 3,301,058 ---------- Building & Construction Products-Misc. -- 1.0% CPG International, Inc. FRS BTL 6.25% (6 ML + 3.75%) due 05/03/2024..................... 3,483,293 3,503,611 frontdoor, Inc. FRS BTL-B 4.89% (1 ML + 2.50%) due 08/14/2025..................... 95,000 95,594 ---------- 3,599,205 ----------
54 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS(10)(11)(12) (continued) Building Products-Cement -- 0.6% Quikrete Holdings, Inc. FRS BTL-B 4.99% (1 ML + 2.75%) due 11/15/2023...................... $1,326,136 $1,327,794 Summit Materials LLC FRS BTL-B 4.22% (1 ML + 2.00%) due 11/21/2024...................... 992,500 993,120 ---------- 2,320,914 ---------- Building-Heavy Construction -- 0.4% Brand Industrial Services, Inc. FRS 1st Lien 6.59%-6.64% (3 ML + 4.25%) due 06/21/2024...................... 1,476,313 1,484,868 ---------- Building-Residential/Commercial -- 0.0% TOUSA, Inc. Escrow Loans 12.25% due 08/15/2011+(5)(7)........ 2,037,810 0 ---------- Cable/Satellite TV -- 0.7% Altice France SA FRS BTL-B13 6.16% (1 ML + 4.00%) due 08/14/2026...................... 650,000 643,825 Radiate Holdco LLC FRS 1st Lien 5.24% (1 ML + 3.00%) due 02/01/2024...................... 917,457 915,267 UPC Financing Partnership FRS BTL-AR 4.66% (1 ML + 2.50%) due 01/15/2026...................... 1,070,291 1,069,176 ---------- 2,628,268 ---------- Casino Hotels -- 1.3% Caesars Resort Collection LLC FRS BTL-B 4.99% (1 ML + 2.75%) due 12/22/2024...................... 2,029,663 2,040,174 CityCenter Holdings LLC FRS BTL-B 4.49% (1 ML + 2.25%) due 04/18/2024...................... 1,796,044 1,797,006 Golden Nugget, Inc. FRS BTL-B 4.90%-4.99% (1 ML + 2.75%) due 10/04/2023...................... 612,891 615,036 Golden Nugget, Inc. FRS BTL-B 7.00% (USFRBPLR + 1.75%) due 10/04/2023...................... 1,584 1,590 ---------- 4,453,806 ---------- Casino Services -- 0.5% CBAC Borrower LLC FRS BTL-B 6.24% (1 ML + 4.00%) due 07/05/2024...................... 702,900 703,954
Principal Value Security Description Amount (Note 2) Casino Services (continued) Gateway Casinos & Entertainment Ltd. FRS BTL-B 5.39% (3 ML + 3.00%) due 12/01/2023........................... $ 548,625 $ 550,911 Stars Group Holdings BV FRS BTL 5.89% (3 ML + 3.50%) due 07/10/2025........................... 359,100 361,991 ---------- 1,616,856 ---------- Cellular Telecom -- 0.1% Digicel International Finance, Ltd. FRS BTL-B 5.57% (1 ML + 3.25%) due 05/28/2024........................... 460,351 437,717 ---------- Chemicals-Diversified -- 0.1% New Arclin US Holding Corp. FRS BTL 5.89% (3 ML + 3.50%) due 02/14/2024........................... 481,705 484,716 ---------- Chemicals-Specialty -- 1.4% Alpha 3 BV/Alpha US Bidco, Inc. FRS BTL-B1 5.39% (3 ML + 3.00%) due 01/31/2024........................... 521,991 523,786 Graftech International, Ltd. FRS BTL-B 5.74% (1 ML + 3.50%) due 02/12/2025........................... 1,130,688 1,137,754 Kraton Polymers LLC FRS BTL 4.74% (1 ML + 2.50%) due 03/05/2025........................... 298,202 299,041 MacDermid, Inc. FRS BTL-B7 4.74% (1 ML + 2.50%) due 06/07/2020........................... 646,708 649,335 OMNOVA Solutions, Inc. FRS 2nd Lien 5.49% (1 ML + 3.25%) due 08/25/2023........................... 1,366,097 1,366,097 Venator Materials LLC FRS BTL-B 5.24% (1 ML + 3.00%) due 08/08/2024........................... 999,900 999,900 ---------- 4,975,913 ---------- Coal -- 0.3% Contura Energy, Inc. FRS BTL-B 7.22% (2 ML + 5.00%) due 03/18/2024........................... 1,089,688 1,089,007 ---------- Commercial Services -- 0.6% CPI Acquisition, Inc. FRS BTL-B 6.84% (3 ML + 4.50%) due 08/17/2022........................... 2,470,685 1,643,006
55 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS(10)(11)(12) (continued) Commercial Services (continued) ServiceMaster Co. LLC FRS BTL-B 4.74% (1 ML + 2.50%) due 11/08/2023................... $ 557,165 $ 558,836 ---------- 2,201,842 ---------- Commercial Services-Finance -- 0.7% Element Materials Tech Group FRS BTL-B 5.74% (1 ML + 3.50%) due 06/28/2024................... 749,338 753,084 NAB Holdings LLC FRS BTL 5.39% (3 ML + 3.00%) due 07/01/2024................... 1,386,035 1,368,710 Trans Union LLC FRS BTL-A2 4.24% (1 ML + 2.00%) due 06/19/2025................... 284,288 284,840 ---------- 2,406,634 ---------- Computer Services -- 1.1% Banff Merger Sub, Inc. FRS BTL coupon TBD due 10/02/2025................... 2,455,000 2,477,161 Presidio LLC FRS BTL-B1 4.99% (1 ML + 2.75%) due 02/02/2024................... 7,415 7,429 Presidio LLC FRS BTL-B1 5.09% (3 ML + 2.75%) due 02/02/2024................... 601,850 602,979 Tempo Acquisition LLC FRS BTL-B 5.24% (1 ML + 3.00%) due 05/01/2024................... 972,688 975,849 ---------- 4,063,418 ---------- Computer Software -- 1.2% Rackspace Hosting, Inc. FRS BTL-B 5.35% (3 ML + 3.00%) due 11/03/2023(12)............... 1,236,980 1,220,193 Vertafore, Inc. FRS First Lien 5.49% (1 ML + 3.25%) due 07/02/2025................... 2,880,000 2,891,005 ---------- 4,111,198 ---------- Computers-Integrated Systems -- 0.3% Everi Payments, Inc. FRS BTL-B 5.24% (1 ML + 3.00%) due 05/09/2024................... 1,140,563 1,146,741 ---------- Consulting Services -- 0.5% AlixPartners LLP FRS BTL-B 4.99% (1 ML + 2.75%) due 04/04/2024................... 1,705,443 1,712,144 ----------
Principal Value Security Description Amount (Note 2) Containers-Metal/Glass -- 0.9% Anchor Glass Container Corp. FRS 1st Lien 4.91% (1 ML + 2.75%) due 12/07/2023........................... $ 364,308 $ 326,511 Anchor Glass Container Corp. FRS 1st Lien 5.14% (3 ML + 2.75%) due 12/07/2023........................... 217,369 194,817 Anchor Glass Container Corp. FRS 2nd Lien 9.91% (1 ML + 7.75%) due 12/07/2024........................... 796,000 533,320 Berlin Packaging LLC FRS BTL-B1 5.11%-5.25% (1 ML + 3.00%) due 11/07/2025........................... 900,184 899,762 Berlin Packaging LLC FRS BTL-B1 5.39% (3 ML + 3.00%) due 11/07/2025........................... 102,303 102,255 BWAY Corp. FRS BTL-B 5.58% (3 ML + 3.25%) due 04/03/2024........................... 1,254,125 1,252,782 ---------- 3,309,447 ---------- Containers-Paper/Plastic -- 1.0% Klockner Pentaplast of America, Inc. FRS BTL-B 6.49% (1 ML + 4.25%) due 06/30/2022........................... 1,950,300 1,891,791 Reynolds Group Holdings, Inc. FRS BTL-B 4.99% (1 ML + 2.75%) due 02/05/2023........................... 1,106,479 1,111,396 Trident TPI Holdings, Inc. FRS BTL-B1 5.49% (1 ML + 3.25%) due 10/17/2024........................... 620,997 618,085 ---------- 3,621,272 ---------- Cosmetics & Toiletries -- 0.6% Parfums Holding Co., Inc. FRS 1st Lien 6.53% (3 ML + 4.25%) due 06/30/2024........................... 1,120,952 1,125,623 Revlon Consumer Products Corp. FRS BTL-B 5.81%-5.89% (3 ML + 3.50%) due 09/07/2023........................... 1,295,338 985,807 ---------- 2,111,430 ---------- Data Processing/Management -- 0.6% First Data Corp. FRS 1st Lien 4.21% (1 ML + 2.00%) due 04/26/2024........................... 2,037,298 2,038,379 ----------
56 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS(10)(11)(12) (continued) Diagnostic Equipment -- 0.0% Immucor, Inc. FRS BTL-B3 7.39% (3 ML + 5.00%) due 06/15/2021....................................... $ 108,625 $ 110,481 ---------- Diagnostic Kits -- 0.6% Ortho-Clinical Diagnostics SA FRS BTL-B 5.49% (1 ML + 3.25%) due 06/30/2025....................................... 2,005,029 2,010,401 ---------- Dialysis Centers -- 0.3% U.S. Renal Care, Inc. FRS BTL-B 6.64% (3 ML + 4.25%) due 12/31/2022....................................... 1,151,448 1,121,223 ---------- Direct Marketing -- 0.3% Red Ventures LLC FRS BTL-B 6.24% (1 ML + 4.00%) due 11/08/2024....................................... 911,513 921,957 ---------- Disposable Medical Products -- 0.2% Sterigenics-Nordion Holdings LLC FRS BTL-B 5.24% (1 ML + 3.00%) due 05/15/2022....................................... 659,546 660,206 ---------- Distribution/Wholesale -- 1.0% American Builders & Contractors Supply Co., Inc. FRS BTL-B2 4.24% (1 ML + 2.00%) due 10/31/2023....................................... 1,118,054 1,114,624 Patriot Container Corp. FRS 1st Lien 5.71% (1 ML + 3.50%) due 03/20/2025....................................... 383,075 384,272 Spin Holdco, Inc. FRS BTL-B 5.59% (3 ML + 3.25%) due 11/14/2022....................................... 1,158,123 1,161,308 Univar USA, Inc. FRS BTL-B3 4.49% (1 ML + 2.25%) due 07/01/2024....................................... 784,671 786,088 ---------- 3,446,292 ---------- E-Commerce/Products -- 0.3% Rodan & Fields LLC FRS BTL-B 6.16% (1 ML + 4.00%) due 06/06/2025....................................... 1,147,125 1,157,879 Rodan & Fields LLC FRS BTL-B 8.25% (USFRBPLR + 3.00%) due 06/06/2025....................................... 2,875 2,902 ---------- 1,160,781 ----------
Principal Value Security Description Amount (Note 2) E-Commerce/Services -- 0.3% Hoya Midco LLC FRS BTL-B 5.72% (1 ML + 3.50%) due 06/30/2024................. $1,002,263 $ 997,251 ---------- Educational Software -- 0.3% Blackboard, Inc. FRS BTL-B4 7.33% (3 ML + 5.00%) due 06/30/2021................. 1,192,399 1,148,677 ---------- Electric-Generation -- 0.6% APLP Holdings LP FRS BTL 5.24% (1 ML + 3.00%) due 04/13/2023................. 953,429 956,606 TEX Operations Co. LLC FRS BTL-B 4.24% (1 ML + 2.00%) due 08/04/2023................. 769,959 769,959 Vistra Endergy Corp. FRS BTL-B 4.16%-4.24% (1 ML + 2.00%) due 12/31/2025................. 578,550 578,550 ---------- 2,305,115 ---------- Electric-Integrated -- 0.4% Talen Energy Supply LLC FRS BTL-B1 6.24% (1 ML + 4.00%) due 07/15/2023................. 610,156 613,969 Talen Energy Supply LLC FRS BTL-B2 6.24% (1 ML + 4.00%) due 04/15/2024................. 735,750 739,245 ---------- 1,353,214 ---------- Enterprise Software/Service -- 1.3% Applied Systems, Inc. FRS BTL-B 5.39% (3 ML + 3.00%) due 09/19/2024................. 178,200 179,140 Applied Systems, Inc. FRS 2nd Lien 9.39% (3 ML + 7.00%) due 09/19/2025................. 205,000 209,027 BMC Software Finance, Inc. FRS BTL-B2 5.49% (1 ML + 3.25%) due 09/10/2022................. 1,468,097 1,475,895 Kronos, Inc. FRS 1st Lien 5.34% (3 ML + 3.00%) due 11/01/2023................. 2,194,733 2,204,559 Kronos, Inc. FRS 2nd Lien 10.59% (3 ML + 8.25%) due 11/01/2024................. 440,000 448,800 ---------- 4,517,421 ----------
57 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS(10)(11)(12) (continued) Finance-Auto Loans -- 0.3% Capital Automotive LP FRS BTL-B 4.75% (1 ML + 2.50%) due 03/24/2024......................... $ 306,730 $ 306,730 Capital Automotive LP FRS 2nd Lien 8.25% (1 ML + 6.00%) due 03/24/2025......................... 855,674 868,509 ---------- 1,175,239 ---------- Finance-Commercial -- 1.2% Financial Risk US Holdings, Inc. FRS BTL coupon TBD due 10/01/2025......................... 1,735,000 1,730,973 Pi US Mergerco, Inc. FRS 1st Lien 5.74% (1 ML + 3.50%) due 12/20/2024......................... 2,452,675 2,444,091 ---------- 4,175,064 ---------- Finance-Credit Card -- 0.4% Blackhawk Network Holdings LLC FRS 1st Lien 5.39% (3 ML + 3.00%) due 06/15/2025......................... 1,311,713 1,318,818 ---------- Finance-Mortgage Loan/Banker -- 0.6% Walter Investment Management Corp. FRS BTL-B 8.24% (1 ML + 6.00%) due 06/30/2022......................... 2,295,209 2,158,931 ---------- Food-Baking -- 0.3% Hostess Brands LLC FRS BTL-B 4.49% (1 ML + 2.25%) due 08/03/2022......................... 1,042,072 1,042,593 ---------- Food-Dairy Products -- 0.5% Chobani LLC FRS BTL-B 5.72% (1 ML + 3.50%) due 10/10/2023......................... 722,928 704,854 Milk Specialties Co. FRS BTL-B 6.24% (1 ML + 4.00%) due 08/16/2023......................... 986,860 986,860 ---------- 1,691,714 ---------- Food-Fl our & Grain -- 0.0% C.H. Guenther & Son, Inc. FRS BTL-B 4.99% (1 ML + 2.75%) due 03/31/2025......................... 119,700 119,550 ---------- Food-Meat Products -- 0.5% Informatica LLC FRS BTL-B 4.84%-4.89% (3 ML + 2.50%) due 10/30/2022......................... 1,627,304 1,629,338 ----------
Principal Value Security Description Amount (Note 2) Food-Misc./Diversified -- 0.6% Dole Food Co., Inc. FRS BTL-B 4.88%-4.99% (1 ML + 2.75%) due 04/06/2024........................... $ 644,787 $ 644,082 Dole Food Co., Inc. FRS BTL-B 5.14% (3 ML + 2.75%) due 04/06/2024........................... 14,329 14,313 Dole Food Co., Inc. FRS BTL-B 7.00% (USFRBPLR + 1.75%) due 04/06/2024........................... 4,478 4,473 H Food Holdings LLC FRS First Lien 5.24% (1 ML + 3.00%) due 05/23/2025........................... 977,550 974,128 Sigma Bidco BV FRS BTL-B 5.11% (1 ML + 3.00%) due 07/02/2025........................... 385,000 384,519 ---------- 2,021,515 ---------- Food-Retail -- 0.4% Albertson's LLC FRS BTL-B4 4.99% (1 ML + 2.75%) due 08/25/2021........................... 1,036,604 1,037,382 Albertson's LLC FRS BTL-B5 5.38% (3 ML + 3.00%) due 12/21/2022........................... 459,673 459,902 ---------- 1,497,284 ---------- Gambling (Non-Hotel) -- 0.3% Scientific Games International, Inc. FRS BTL-B4 4.99% (1 ML + 2.75%) due 08/14/2024........................... 179,180 178,844 Scientific Games International, Inc. FRS BTL-B4 5.04% (2 ML + 2.75%) due 08/14/2024........................... 751,145 749,737 ---------- 928,581 ---------- Hotels/Motels -- 1.5% Playa Resorts Holding BV FRS BTL-B 4.99% (1 ML + 2.75%) due 04/29/2024........................... 2,107,845 2,090,281 Wyndham Hotels & Resorts, Inc. FRS BTL -B 3.99% (1 ML + 1.75%) due 05/30/2025........................... 3,375,000 3,384,281 ---------- 5,474,562 ----------
58 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS(10)(11)(12) (continued) Housewares -- 0.4% American Greetings Corp Term Loan FRS BTL 6.74% (1 ML + 4.50%) due 04/06/2024................................ $ 553,613 $ 554,996 American Greetings Corp Term Loan FRS BTL coupon TBD due 04/06/2024................................ 100,000 100,250 Libbey Glass, Inc. FRS BTL-B 5.13% (1 ML + 3.00%) due 04/09/2021................................ 866,719 865,636 ---------- 1,520,882 ---------- Human Resources -- 0.4% CHG Healthcare Services, Inc. FRS 1st Lien 5.24% (1 ML + 3.00%) due 06/07/2023................................ 319,965 321,498 CHG Healthcare Services, Inc. FRS 1st Lien 5.34% (3 ML + 3.00%) due 06/07/2023................................ 570,035 572,767 Team Health Holdings, Inc. FRS BTL-B 4.99% (1 ML + 2.75%) due 02/06/2024................................ 576,422 558,409 ---------- 1,452,674 ---------- Instruments-Controls -- 0.3% Deliver Buyer, Inc. FRS BTL-B 7.31% (3 ML + 5.00%) due 05/01/2024................................ 1,044,710 1,053,199 ---------- Insurance-Multi-line -- 0.0% Genworth Holdings, Inc. FRS BTL 6.65% (1 ML + 4.50%) due 03/07/2023................................ 154,613 157,705 ---------- Insurance-Property/Casualty -- 0.6% Sedgwick Claims Management Services, Inc. FRS 1st Lien 4.99% (1 ML + 2.75%) due 03/01/2021................................ 1,244,854 1,245,113 Sedgwick Claims Management Services, Inc. FRS 2nd Lien 7.99% (1 ML + 5.75%) due 02/28/2022................................ 749,281 751,388 Sedgwick Claims Management Services, Inc. FRS 2nd Lien 8.06% (3 ML + 5.75%) due 02/28/2022................................ 220,719 221,339 ---------- 2,217,840 ---------- Internet Gambling -- 0.2% GVC Holdings PLC FRS BTL-B2 4.74% (1 ML + 2.50%) due 03/29/2024................................ 751,225 752,790 ----------
Principal Value Security Description Amount (Note 2) Investment Companies -- 0.7% TKC Holdings, Inc. FRS 1st Lien 6.00% (1 ML + 3.75%) due 02/01/2023............................ $1,669,971 $1,668,719 UFC Holdings LLC FRS BTL-B 5.50% (1 ML + 3.25%) due 08/18/2023............................ 819,605 823,703 ---------- 2,492,422 ---------- Investment Management/Advisor Services -- 0.1% FB Income Advisor LLC FRS BTL-B 4.63% (1 ML + 2.50%) due 08/01/2025............................ 355,000 356,555 ---------- Machinery-Construction & Mining -- 0.2% International Equipment Solutions LLC FRS BTL-B 7.89% (3 ML + 5.50%) due 08/15/2022............................ 587,287 587,287 ---------- Machinery-Electrical -- 0.5% Brookfield Wec Holdings, Inc. FRS 1st Lien 5.99% (1 ML + 3.75%) due 08/01/2025............................ 1,290,000 1,305,319 Brookfield WEC Holdings, Inc. FRS 2nd Lien 8.99% (1 ML + 6.75%) due 08/03/2026............................ 515,000 523,154 ---------- 1,828,473 ---------- Machinery-General Industrial -- 0.8% Gardner Denver, Inc. FRS BTL-B1 4.99% (1 ML + 2.75%) due 07/30/2024............................ 1,576,733 1,585,711 Pro Mach Group, Inc. FRS BTL-B 5.13% (1 ML + 3.00%) due 03/07/2025............................ 975,100 971,931 Zodiac Pool Solutions LLC FRS BTL-B 4.49% (1 ML + 2.25%) due 07/02/2025............................ 319,200 320,663 ---------- 2,878,305 ---------- Machinery-Pumps -- 0.6% NN, Inc. FRS BTL 5.49% (1 ML + 3.25%) due 04/02/2021............................ 531,100 530,436 NN, Inc. FRS BTL-B 5.99% (1 ML + 3.75%) due 10/19/2022............................ 712,005 713,192
59 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS(10)(11)(12) (continued) Machinery-Pumps (continued) Titan Acquisition, Ltd. FRS BTL-B 5.24% (1 ML + 3.00%) due 03/28/2025.................................. $ 776,100 $ 751,119 ---------- 1,994,747 ---------- Medical Information Systems -- 0.4% Iqvia, Inc. FRS BTL-B 4.14% (3 ML + 1.75%) due 06/11/2025.................................. 1,296,750 1,296,102 ---------- Medical Instruments -- 0.1% CryoLife, Inc. FRS BTL-B 6.39% (3 ML + 4.00%) due 11/14/2024.................................. 486,325 490,580 ---------- Medical Labs & Testing Services -- 1.3% Enterprise Merger Sub, Inc. FRS BTL-B coupon TBD due 10/10/2025.................................. 3,744,578 3,735,216 Explorer Holdings, Inc. FRS BTL-B 6.14% (3 ML + 3.75%) due 05/02/2023.................................. 261,654 263,126 Jaguar Holding Co. II FRS BTL 4.74% (1 ML + 2.50%) due 08/18/2022.................................. 526,213 526,410 ---------- 4,524,752 ---------- Medical Products -- 0.2% Auris Luxembourg III SARL FRS BTL-B coupon TBD due 07/20/2025.................................. 165,000 166,960 Greatbatch, Ltd. FRS BTL-B 5.14% (1 ML + 3.00%) due 10/27/2022.................................. 453,414 456,005 ---------- 622,965 ---------- Medical-Drugs -- 0.5% PharMerica Corp. FRS 1st Lien 5.65% (1 ML + 3.50%) due 12/06/2024.................................. 781,075 785,224 Valeant Pharmaceuticals International, Inc. FRS BTL-B 5.10% (1 ML + 3.00%) due 06/02/2025.................................. 1,047,298 1,052,389 ---------- 1,837,613 ---------- Medical-Generic Drugs -- 0.5% Amneal Pharmaceuticals LLC FRS BTL-B 5.74% (1 ML + 3.50%) due 05/04/2025.................................. 1,062,091 1,071,053
Principal Value Security Description Amount (Note 2) Medical-Generic Drugs (continued) Endo Luxembourg Finance Co. I SARL FRS BTL-B 6.49% (1 ML + 4.25%) due 04/29/2024......................... $ 765,313 $ 770,335 ---------- 1,841,388 ---------- Medical-HMO -- 0.2% One Call Corp. FRS BTL-B1 7.38% (1 ML + 5.25%) due 11/25/2022......................... 872,620 826,444 ---------- Medical-Hospitals -- 1.9% Acadia Healthcare Co, Inc. FRS BTL-B2 4.74% (1 ML + 2.50%) due 02/16/2023......................... 586,046 589,709 AHP Health Partners, Inc. FRS BTL-B 6.74% (1 ML + 4.50%) due 06/30/2025......................... 1,002,488 1,013,765 CCS-CMGC Holdings, Inc. FRS 1st Lien coupon TBD due 09/20/2025......................... 810,000 810,000 CHS/Community Health Systems, Inc. FRS BTL-H 5.56% (3 ML + 3.25%) due 01/27/2021......................... 1,015,511 1,000,137 Envision Healthcare Corp. FRS BTL-C 5.25% (1 ML + 3.00%) due 12/01/2023......................... 1,010,997 1,009,733 Prospect Medical Holdings, Inc. FRS BTL-B 7.63% (1 ML + 5.50%) due 02/22/2024......................... 492,525 496,219 Quorum Health Corp. FRS BTL 8.99% (1 ML + 6.75%) due 04/29/2022......................... 325,264 328,679 Select Medical Corp. FRS BTL-B 4.90% (1 ML + 2.75%) due 03/01/2021......................... 942,574 948,080 Select Medical Corp. FRS BTL-B 7.00% (USFRBPLR + 1.75%) due 03/01/2021......................... 3,026 3,036 Surgery Center Holdings, Inc. FRS 1st Lien 5.57% (3 ML + 3.25%) due 09/02/2024......................... 727,650 727,832 ---------- 6,927,190 ----------
60 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS(10)(11)(12) (continued) Medical-Outpatient/Home Medical -- 0.1% 21st Century Oncology, Inc. FRS BTL-B 8.47% (3 ML + 6.13%) due 01/16/2023.................. $ 360,316 $ 338,697 ---------- Metal-Diversified -- 0.3% Unimin Corp. FRS BTL 6.14% (3 ML + 3.75%) due 06/01/2025.................. 1,137,150 1,064,941 ---------- Motion Pictures & Services -- 0.5% Delta 2 Lux SARL FRS BTL-B 4.74% (1 ML + 2.50%) due 02/01/2024.................. 1,779,690 1,764,118 ---------- Non-Hazardous Waste Disposal -- 0.2% Wrangler Buyer Corp. FRS BTL-B 4.99% (1 ML + 2.75%) due 09/27/2024.................. 729,861 733,358 ---------- Oil & Gas Drilling -- 0.5% Paragon Offshore Finance Co. Escrow Loans 7.00% due 07/18/2021+(5)(7)..... 1,745 0 Seadrill Operating LP FRS BTL-B 8.39% (3 ML + 6.00%) due 02/21/2021.................. 1,989,497 1,882,975 ---------- 1,882,975 ---------- Oil Companies-Exploration & Production -- 0.7% California Resources Corp. FRS 1st Lien 6.96% (1 ML + 4.75%) due 12/31/2022.................. 650,000 663,000 Fieldwood Energy LLC FRS First Lien 7.49% (1 ML + 5.25%) due 04/11/2022.................. 480,382 482,784 Fieldwood Energy LLC FRS 2nd Lien 9.49% (1 ML + 7.25%) due 04/11/2023.................. 128,766 124,582 Gavilan Resources LLC FRS 2nd Lien 8.17% (1 ML + 6.00%) due 03/01/2024.................. 470,000 442,975 Ultra Resources, Inc. FRS 1st Lien 5.17% (1 ML + 3.00%) due 04/12/2024.................. 705,000 633,619 ---------- 2,346,960 ---------- Oil Field Machinery & Equipment -- 0.0% Thermon Industries, Inc. FRS BTL-B 5.85% (2 ML + 3.75%) due 10/24/2024.................. 158,940 159,735 ----------
Principal Value Security Description Amount (Note 2) Oil-Field Services -- 0.8% McDermott Technology Americas, Inc. FRS 1st Lien 7.24% (1 ML + 5.00%) due 05/12/2025................................ $1,179,075 $1,192,929 MRC Global US, Inc. FRS BTL-B 5.24% (1 ML + 3.00%) due 09/20/2024................................ 1,002,425 1,004,931 Weatherford International, Ltd. FRS BTL 3.68% (1 ML + 1.43%) due 07/13/2020................................ 653,226 645,061 ---------- 2,842,921 ---------- Pharmacy Services -- 0.4% Change Healthcare Holdings LLC FRS BTL-B 4.99% (1 ML + 2.75%) due 03/01/2024................................ 1,591,546 1,596,189 ---------- Pipelines -- 0.7% Lotus Midstream LLC FRS BTL-B coupon TBD due 09/25/2025................................ 285,000 286,425 Medallion Midland Acquisition LLC FRS 1st Lien 5.49% (1 ML + 3.25%) due 10/30/2024................................ 1,109,430 1,099,030 Traverse Midstream Partners LLC FRS BTL-B 6.16% (3 ML + 4.00%) due 09/27/2024................................ 1,225,000 1,231,562 ---------- 2,617,017 ---------- Pollution Control -- 0.1% Filtration Group Corp. FRS 1st Lien 5.24% (1 ML + 3.00%) due 03/29/2025................................ 407,950 410,330 ---------- Printing-Commercial -- 0.3% Fort Dearborn Co. FRS 1st Lien 6.10% (1 ML + 4.00%) due 10/19/2023................................ 3,416 3,211 Fort Dearborn Co. FRS 1st Lien 6.34% (3 ML + 4.00%) due 10/19/2023................................ 1,129,055 1,061,312 ---------- 1,064,523 ---------- Publishing-Books -- 0.2% McGraw-Hill Global Education Holdings LLC FRS BTL-B 6.24% (1 ML + 4.00%) due 05/04/2022................................ 860,130 834,326 ----------
61 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS(10)(11)(12) (continued) Publishing-Periodicals -- 0.2% Meredith Corp. FRS BTL-B 5.24% (1 ML + 3.00%) due 01/31/2025........................... $ 806,614 $ 810,983 ---------- Real Estate Investment Trusts -- 0.6% iStar, Inc. FRS BTL-B 4.87%-4.92% (1 ML + 2.75%) due 06/28/2023........................... 1,441,387 1,441,387 Uniti Group, Inc. FRS BTL-B 5.24% (1 ML + 3.00%) due 10/24/2022........................... 761,437 727,554 ---------- 2,168,941 ---------- Real Estate Operations & Development -- 0.1% Lightstone Generation LLC FRS BTL-B 5.99% (1 ML + 3.75%) due 01/30/2024........................... 486,256 482,870 Lightstone Generation LLC FRS BTL-C 5.99% (1 ML + 3.75%) due 01/30/2024........................... 26,117 25,935 ---------- 508,805 ---------- Recycling -- 0.1% Gopher Resource LLC FRS BTL 5.49% (1 ML + 3.25%) due 03/06/2025........................... 260,120 260,607 ---------- Research & Development -- 0.1% PAREXEL International Corp. FRS BTL-B 4.99% (1 ML + 2.75%) due 09/27/2024........................... 227,700 226,206 ---------- Retail-Bedding -- 0.2% Serta Simmons Bedding LLC FRS 1st Lien 5.60%-5.63% (1 ML + 3.50%) due 11/08/2023........................... 965,300 870,278 ---------- Retail-Building Products -- 0.6% 84 Lumber Co. FRS BTL-B1 7.47% (1 ML + 5.25%) due 10/25/2023........................... 1,201,202 1,210,211 SiteOne Landscape Supply Holding LLC FRS BTL-E 4.89% (1 ML + 2.75%) due 10/29/2024........................... 896,252 901,854 ---------- 2,112,065 ---------- Retail-Major Department Stores -- 0.3% Neiman Marcus Group, Ltd. LLC FRS BTL 5.37% (1 ML + 3.25%) due 10/25/2020........................... 1,104,202 1,023,458 ----------
Principal Value Security Description Amount (Note 2) Retail-Misc./Diversified -- 0.2% Leslie's Poolmart, Inc. FRS BTL-B 5.70% (2 ML + 3.50%) due 08/16/2023........................... $ 870,253 $ 868,622 ---------- Retail-Pet Food & Supplies -- 0.1% PetSmart, Inc. FRS BTL-B 5.12% (1 ML + 3.00%) due 03/11/2022........................... 569,858 498,388 ---------- Retail-Sporting Goods -- 0.4% Bass Pro Group LLC FRS BTL-B 7.24% (1 ML + 5.00%) due 09/25/2024........................... 1,301,850 1,314,462 ---------- Retail-Vitamins & Nutrition Supplements -- 0.3% Isagenix International LLC FRS BTL 8.14% (3 ML + 5.75%) due 06/14/2025........................... 943,063 944,241 ---------- Rubber/Plastic Products -- 0.6% Gates Global LLC FRS BTL-B2 4.99% (1 ML + 2.75%) due 04/01/2024........................... 1,215,750 1,222,588 U.S. Farathane LLC FRS BLT-B4 5.89% (3 ML + 3.50%) due 12/23/2021........................... 1,015,574 1,019,383 ---------- 2,241,971 ---------- Schools -- 0.7% Laureate Education, Inc. FRS BTL-B 5.74% (1 ML + 3.50%) due 04/26/2024........................... 1,424,416 1,430,647 SSH Group Holdings, Inc. FRS 1st Lien 6.59% (3 ML + 4.25%) due 07/30/2025........................... 945,000 952,560 ---------- 2,383,207 ---------- Security Services -- 0.4% Prime Security Services Borrower LLC FRS BTL-B1 4.99% (1 ML + 2.75%) due 05/02/2022........................... 1,479,614 1,486,189 ---------- Soap & Cleaning Preparation -- 0.7% Diamond BC BV FRS BTL 5.24% (1 ML + 3.00%) due 09/06/2024........................... 1,096,713 1,074,093 KIK Custom Products, Inc. FRS BTL-B 6.24% (1 ML + 4.00%) due 05/15/2023........................... 809,167 804,615
62 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS(10)(11)(12) (continued) Soap & Cleaning Preparation (continued) Zep, Inc. FRS 1st Lien 6.38% (3 ML + 4.00%) due 08/12/2024.......................... $ 757,350 $ 719,798 ---------- 2,598,506 ---------- Storage/Warehousing -- 0.1% Moda Midstream LLC FRS BTL-B coupon TBD due 09/26/2025.......................... 175,000 176,531 ---------- Telecom Services -- 1.0% Securus Technologies Holdings, Inc. FRS 1st Lien 6.74% (1 ML + 4.50%) due 11/01/2024.......................... 1,038,551 1,040,499 Securus Technologies Holdings, Inc. FRS 2nd Lien 10.49% (1 ML + 8.25%) due 11/01/2025.......................... 505,000 505,000 Securus Technology Holdings LLC FRS Delayed Draw coupon TBD due 11/01/2024.......................... 132,000 132,247 Telenet Financing USD LLC FRS BTL-AN 4.41% (3 ML + 2.25%) due 08/15/2026.......................... 1,145,000 1,139,513 West Corp. FRS BTL-B 6.24% (1 ML + 4.00%) due 10/10/2024.......................... 685,799 683,418 ---------- 3,500,677 ---------- Telecommunication Equipment -- 0.3% Global Tel*Link Corp. FRS 1st Lien 6.39% (3 ML + 4.00%) due 05/23/2020.......................... 943,225 948,177 Sorenson Communications LLC FRS BTL-B 8.14% (3 ML + 5.75%) due 04/30/2020.......................... 98,711 98,958 ---------- 1,047,135 ---------- Telephone-Integrated -- 1.0% CenturyLink, Inc. FRS BTL-B 4.99% (1 ML + 2.75%) due 01/31/2025.......................... 2,037,797 2,023,363 Frontier Communications Corp. FRS BTL-B 6.00% (1 ML + 3.75%) due 06/15/2024.......................... 613,447 600,794
Shares/ Principal Value Security Description Amount (Note 2) Telephone-Integrated (continued) TDC A/S FRS BTL-B2 5.84% (3 ML + 3.50%) due 05/31/2025........................... $ 822,938 $ 831,990 ------------ 3,456,147 ------------ Television -- 0.2% Tribune Media Co. FRS BTL-B 5.24% (1 ML + 3.00%) due 12/27/2020........................... 53,618 53,886 Tribune Media Co. FRS BTL-C 5.24% (1 ML + 3.00%) due 01/27/2024........................... 668,275 669,945 ------------ 723,831 ------------ Theaters -- 0.6% CDS U.S. Intermediate Holdings, Inc. FRS BTL-B 6.14% (3 ML + 3.75%) due 07/08/2022........................... 1,227,223 1,205,747 Cineworld, Ltd. FRS BTL-B 4.74% (1 ML + 2.50%) due 02/28/2025........................... 1,009,925 1,008,101 ------------ 2,213,848 ------------ Transport-Services -- 0.2% Ceva Group PLC FRS BTL-B 6.14% (3 ML + 3.75%) due 07/24/2025........................... 790,000 789,012 ------------ Veterinary Diagnostics -- 0.3% NVA Holdings, Inc. FRS BTL-B3 4.99% (1 ML + 2.75%) due 02/02/2025........................... 1,034,800 1,032,213 ------------ Vitamins & Nutrition Products -- 0.1% HLF Financing SARL LLC FRS BTL-B 5.49% (1 ML + 3.25%) due 08/18/2025........................... 300,000 301,875 ------------ Web Hosting/Design -- 0.0% WEB.COM Group, Inc. FRS BTL-B Coupon TBD due 09/14/2025........................... 115,000 115,672 ------------ Total Loans (cost $203,177,506)...................... 201,872,315 ------------ COMMON STOCKS -- 0.2% Auto/Truck Parts & Equipment-Original -- 0.0% Lear Corp................................. 80 11,600 ------------ Electric-Generation -- 0.0% Vistra Energy Corp. CVR+(5)(13)........... 27,942 20,956 ------------
63 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued)
Shares/ Principal Value Security Description Amount (Note 2) COMMON STOCKS (continued) Multimedia -- 0.0% Haights Cross Communication, Inc.+(5)(7)(13)............................ 19,388 $ 0 ------------ Television -- 0.2% ION Media Networks, Inc.+(5)(7)(13)......... 660 554,519 ------------ Total Common Stocks (cost $167,312)............................ 587,075 ------------ PREFERRED SECURITIES -- 0.2% Diversified Banking Institutions -- 0.2% GMAC Capital Trust I FRS Series 2 8.10% (3 ML+5.79%) (cost $770,412)............................ 30,000 789,000 ------------ PREFERRED SECURITIES/CAPITAL SECURITIES -- 0.6% Banks-Super Regional -- 0.5% Huntington Bancshares, Inc. Series E 5.70% due 04/15/2023(14)................... $ 860,000 852,475 KeyCorp. Series D 5.00% due 09/15/2026(14)................... 880,000 862,400 ------------ 1,714,875 ------------ Insurance-Multi-line -- 0.1% Voya Financial, Inc. 5.65% due 05/15/2053....................... 460,000 463,450 ------------ Total Preferred Securities/Capital Securities (cost $2,220,184).......................... 2,178,325 ------------ Total Long-Term Investment Securities (cost $359,866,775)........................ 356,597,536 ------------ SHORT-TERM INVESTMENT SECURITIES -- 1.7% Registered Investment Companies -- 1.7% State Street Institutional U.S. Government Money Market Fund, Premier Class 1.97%(15) (cost $6,076,828).......................... 6,076,828 6,076,828 ------------ TOTAL INVESTMENTS (cost $365,943,603)(16).................... 101.6% 362,674,364 Liabilities in excess of other assets......... (1.6) (5,829,558) ---------- ------------ NET ASSETS 100.0% $356,844,806 ========== ============
-------- * Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in transactions exempt from registration, normally to qualified institutional buyers. The Fund has no right to demand registration of these securities. At September 30, 2018, the aggregate value of these securities was $89,436,183 representing 25.1% of net assets. Unless otherwise indicated, these securities are not considered to be illiquid. + Non-income producing security. (1) Commercial Mortgage Backed Security. (2) Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above. (3) Security in default of interest. (4) Company has filed for bankruptcy protection. (5) Illiquid security. At September 30, 2018, the aggregate value of these securities was $581,312 representing 0.2% of net assets. (6) PIK ("Payment-in-Kind") security -- Income may be paid in additional securities or cash at the discretion of the issuer. The security is currently paying interest in cash at the coupon rate listed. (7) Securities classified as Level 3 (see Note 2). (8) Security in default of interest and principal at maturity. (9) PIK ("Payment-in-Kind") security -- Income may be paid in additional securities or cash at the discretion of the issuer. The security is currently paying interest in the form of additional securities at the coupon rate listed. (10) Senior loans in the Fund are generally subject to mandatory and/or optional prepayment. Because of these mandatory prepayment conditions and because there may be significant economic incentives for a borrower to prepay, prepayments may occur. As a result, the actual remaining maturity may be substantially less than the stated maturities shown. (11) The Fund invests in senior loans which generally pay interest at rates which are periodically re-determined by reference to a base lending rate plus a premium. These base lending rates are generally either the lending rate offered by one or more major European banks, such as the London Inter-Bank Offer Rate ("LIBOR") or the prime rate offered by one or more major United States banks, or the certificate of deposit rate. Senior loans are generally considered to be restrictive in that the Fund is ordinarily contractually obligated to receive approval from the Agent Bank and/or borrower prior to the disposition of a senior loan. (12) All loans in the Fund were purchased through assignment agreements unless otherwise indicated. (13) Denotes a restricted security that: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933, as amended (the "1933 Act"); (b) is subject to a contractual restriction on public sales; or (c) is otherwise subject to a restriction on sales by operation of applicable law. Restricted securities are valued pursuant to Note 2. Certain restricted securities held by the Fund may not be sold except in exempt transactions or in a public offering registered under the 1933 Act. The Fund has no right to demand registration of these securities. The risk of investing in certain restricted securities is greater than the risk of investing in the securities of widely held, publicly traded companies. To the extent applicable, lack of a secondary market and resale restrictions may result in the inability of a Fund to sell a security at a fair price and may substantially delay the sale of the security. In addition, certain restricted securities may exhibit greater price volatility than securities for which secondary markets exist. As of September 30, 2018, the Fund held the following restricted securities:
Value % of Acquisition Acquisition Per Net Description Date Shares Cost Value Share Assets ----------- ----------- ------ ----------- -------- ------- ------ Common Stocks Vistra Energy Corp. CVR................ 10/06/2016 27,942 $ 0 $ 20,956 $ 0.75 0.00% Haights Cross Communications, Inc................ 01/27/2004 1,491 13,216 06/06/2005 17,897 154,089 ------ -------- 19,388 167,305 0 0.00 0.00 ION Media Networks, Inc................ 12/21/2016 660 7 554,519 840.18 0.16 -------- ---- $575,475 0.16% ======== ====
64 AIG Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2018 -- (unaudited) (continued) (14) Perpetual maturity -- maturity date reflects the next call date. (15) The rate shown is the 7-day yield as of September 30, 2018. (16) See Note 5 for cost of investments on a tax basis. BTL --Bank Term Loan CVR --Contingent Value Rights TBD --Senior loan purchased on a when-issued or delayed-delivery basis. Certain details associated with this purchase are not known prior to the settlement date of the transaction. In addition, senior loans typically trade without accrued interest and therefore a coupon rate is not available prior to the settlement. FRS --Floating Rate Security VRS --Variable Rate Security The rates shown on FRS and VRS are the current interest rates at September 30, 2018 and unless noted otherwise, the dates shown are the original maturity dates. Index Legend 1 ML -- 1 Month USD Libor 2 ML -- 2 Month USD Libor 3 ML -- 3 Month USD Libor 6 ML -- 6 Month USD Libor USFRBPLR --US Federal Reserve Bank Prime Loan Rate The following is a summary of the inputs used to value the Fund's net assets as of September 30, 2018 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant Quoted Prices Observable Inputs Unobservable Inputs Total --------------------- ----------------- ---------------------- ------------ ASSETS: Investments at Value:* Asset Backed Securities................. $ -- $ 7,152,424 $ -- $ 7,152,424 U.S. Corporate Bonds & Notes: Rubber/Plastic Products............... -- -- 0 0 Other Industries...................... -- 121,769,190 -- 121,769,190 Foreign Corporate Bonds & Notes: Special Purpose Entity................ -- -- 0 0 Other Industries...................... -- 22,249,207 -- 22,249,207 Loans: Building-Residential/Commercial....... -- -- 0 0 Oil & Gas Drilling.................... -- 1,882,975 0 1,882,975 Other Industries...................... -- 199,989,340 -- 199,989,340 Common Stocks: Auto/Truck Parts & Equipment-Original. 11,600 -- -- 11,600 Electric-Generation................... -- 20,956 -- 20,956 Other Industries...................... -- -- 554,519 554,519 Preferred Securities.................... 789,000 -- -- 789,000 Preferred Securities/Capital Securities. -- 2,178,325 -- 2,178,325 Short-Term Investment Securities........ 6,076,828 -- -- 6,076,828 ---------- ------------ -------- ------------ Total Investments at Value.............. $6,877,428 $355,242,417 $554,519 $362,674,364 ========== ============ ======== ============
-------- * For a detailed presentation of investments, please refer to the Portfolio of Investments. The Fund's policy is to recognize transfers between Levels as of the end of the reporting period. There were no transfers between Levels during the reporting period. At the beginning and end of the reporting period, Level 3 investments were not considered a material portion of the Fund. See Notes to Financial Statements 65 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited) Note 1. Organization The SunAmerica Income Funds (the "Trust") is a diversified open-end management investment company organized as a Massachusetts business trust. The Trust currently consists of three different series (each, a "Fund" and collectively, the "Funds"). Each Fund is a separate series of the Trust with distinct investment objectives and/or strategies. Each Fund is managed by SunAmerica Asset Management, LLC (the "Adviser" or "SunAmerica"), an indirect wholly-owned subsidiary of American International Group, Inc. ("AIG"). An investor may invest in one or more of the following Funds: AIG U.S. Government Securities Fund ("U.S. Government Securities Fund"), AIG Strategic Bond Fund ("Strategic Bond Fund"), and AIG Flexible Credit Fund ("Flexible Credit Fund"). The Funds are considered to be separate entities for financial and tax reporting purposes. The investment goals and principal investment techniques for each of the Funds are as follows: U.S. Government Securities Fund seeks high current income consistent with relative safety of capital by the active trading of U.S. Government securities, without regard to the maturities of such securities. Under normal market conditions, at least 80% of the Fund's net assets plus any borrowing for investment purposes will be invested in such securities. Strategic Bond Fund seeks a high level of total return by the active trading of a broad range of bonds, including both investment grade and non-investment grade U.S. and foreign bonds (which may include "junk bonds"), U.S. and foreign government and agency obligations, and mortgage-backed securities, without regard to the maturities of such securities. Under normal market conditions, at least 80% of the Fund's net assets plus any borrowing for investment purposes will be invested in bonds. Flexible Credit Fund seeks a high level of total return by the active trading in credit instruments. Under normal circumstances, at least 80% of the Fund's net assets, plus any borrowings for investment purposes, will be invested in credit instruments and derivative instruments and exchange-traded funds ("ETFs") that are linked to, or provide investment exposure to, credit instruments. The Fund considers a credit instrument to be any debt instrument or instrument with debt-like characteristics, including but not limited to, corporate and sovereign bonds, secured floating rate loans and other institutionally traded secured floating rate debt obligations ("Loans"), and securitized instruments, which are securities backed by pools of assets such as mortgages, loans, or other receivables. The credit instruments in which the Fund intends to primarily invest are U.S. and non-U.S. below investment grade, high yield bonds (commonly referred to as "junk bonds") and Loans. Each Fund offers multiple classes of shares. The classes within each Fund are presented in the Statements of Assets and Liabilities. The cost structure for each class is as follows: Class A shares are offered at net asset value per share plus an initial sales charge. Additionally, purchases of Class A shares in amounts of $1,000,000 or more will be purchased at net asset value but will be subject to a contingent deferred sales charge on redemptions made within two years of purchase. Class B shares are offered without an initial sales charge, although a declining contingent deferred sales charge may be imposed on redemptions made within six years of purchase. Class B shares convert automatically to Class A shares on the first business day of the month following the eighth anniversary of the issuance of such Class B shares and at such time will be subject to the lower distribution fee applicable to Class A shares. Class C shares are offered at net asset value per share without an initial sales charge and may be subject to a contingent deferred sales charge on redemptions made within 12 months of purchase. Class C shares convert automatically to Class A shares approximately ten years after purchase and at such time will be subject to the lower distribution fee applicable to Class A shares. Class W shares are offered at net asset value per share. The class is offered exclusively through advisory fee-based programs sponsored by certain financial intermediaries and other programs. Class W shares of the Flexible Credit Fund and the Strategic Bond Fund commenced operations effective October 1, 2014 and January 29, 2015, respectively. Each class of shares bears the same voting, dividend, liquidation and other rights and conditions except as may otherwise be provided in the Trust's registration statement. Class A, Class B and Class C shares each makes distribution and account 66 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited) (continued) maintenance and service fee payments under the distribution plan pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the "1940 Act"), with Class B and Class C shares being subject to higher distribution fee rates. Class W shares have not adopted 12b-1 Plans and make no payments thereunder, however, Class W shares pay a service fee to the Funds' distributor for administrative and shareholder services. Indemnifications: The Trust's organizational documents provide current and former officers and trustees with a limited indemnification against liabilities arising out of the performance of their duties to the Trust. In addition, pursuant to Indemnification Agreements between the Trust and each of the current trustees who is not an "interested person," as defined in Section 2(a)(19) of the 1940 Act, of the Trust (collectively, the "Disinterested Trustees"), the Trust provides the Disinterested Trustees with a limited indemnification against liabilities arising out of the performance of their duties to the Trust, whether such liabilities are asserted during or after their service as trustees. In addition, in the normal course of business, the Trust enters into contracts that contain the obligation to indemnify others. The Trust's maximum exposure under these arrangements is unknown. Currently, however, the Trust expects the risk of loss to be remote. Note 2. Significant Accounting Policies The preparation of financial statements in accordance with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates and those differences could be significant. The Funds are considered investment companies under GAAP and follow the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements: Security Valuation: In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the Funds disclose the fair value of their investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. In accordance with GAAP, fair value is defined as the price that the Funds would receive upon selling an asset or transferring a liability in a timely transaction to an independent third party in the principal or most advantageous market. GAAP establishes a three-tier hierarchy to provide more transparency around the inputs used to measure fair value and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-tiers are as follows: Level 1 -- Unadjusted quoted prices in active markets for identical securities Level 2 -- Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, referenced indices, quoted prices in inactive markets, adjusted quoted prices in active markets, adjusted quoted prices on foreign equity securities that were adjusted in accordance with pricing procedures approved by the Board of Trustees ("the Board"), etc.) Level 3 -- Significant unobservable inputs (includes inputs that reflect the Funds' own assumptions about the assumptions market participants would use in pricing the security, developed based on the best information available under the circumstances) Changes in valuation techniques may result in transfers in or out of an investment's assigned Level within the hierarchy. The methodology used for valuing investments is not necessarily an indication of the risk associated with investing in those investments and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to each security. The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is recently issued and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. 67 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited) (continued) The summary of each Fund's asset and liabilities classified in the fair value hierarchy as of September 30, 2018 is reported on a schedule at the end of each Fund's Portfolio of Investments. Stocks are generally valued based upon closing sales prices reported on recognized securities exchanges on which the securities are principally traded and are generally categorized as Level 1. Stocks listed on the NASDAQ are valued using the NASDAQ Official Closing Price ("NOCP"). Generally, the NOCP will be the last sale price unless the reported trade for the stock is outside the range of the bid/ask price. In such cases, the NOCP will be normalized to the nearer of the bid or ask price. For listed securities having no sales reported and for unlisted securities, such securities will be valued based upon the last reported bid price. As of the close of regular trading on the New York Stock Exchange ("NYSE"), securities traded primarily on security exchanges outside the United States are valued at the last sale price on such exchanges on the day of valuation, or if there is no sale on the day of valuation, at the last-reported bid price. If a security's price is available from more than one exchange, the Funds use the exchange that is the primary market for the security. Such securities are generally categorized as Level 1. However, depending on the foreign market, closing prices may be up to 15 hours old when they are used to price a Fund's shares, and a Fund may determine that certain closing prices do not reflect the fair value of the security. This determination will be based on review of a number of factors, including developments in foreign markets, the performance of U.S. securities markets, and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. If a Fund determines that closing prices do not reflect the fair value of the securities, the Fund will adjust the previous closing prices in accordance with pricing procedures approved by the Board to reflect what it believes to be the fair value of the securities as of the close of regular trading on the NYSE. The Funds may also fair value securities in other situations, for example, when a particular foreign market is closed but a Fund is open. For foreign equity securities and foreign equity futures contracts, the Funds use an outside pricing service to provide it with closing market prices and information used for adjusting those prices and when so adjusted, such securities and futures are generally categorized as Level 2. Bonds, debentures and other debt securities are valued at evaluated bid prices obtained for the day of valuation from a Board-approved pricing service, and are generally categorized as Level 2. The pricing service may use valuation models or matrix pricing which considers information with respect to comparable bond and note transactions, quotations from bond dealers, or by reference to other securities that are considered comparable in such characteristics as rating, interest rate, and maturity date, option adjusted spread models, prepayments projections, interest rate spreads, and yield curves to determine current value. If a price is unavailable from a Board-approved pricing service, the securities may be priced at the mean of two independent quotes obtained from brokers. Senior floating rate loans ("Loans") are valued at the average of available bids in the market for such Loans, as provided by a Board-approved loan pricing service, and are generally categorized as Level 2. Investments in registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded. Investments in registered investment companies are generally categorized as Level 1. Forward foreign currency contracts ("forward contracts") are valued at the 4:00 p.m. Eastern Time forward rate and are generally categorized as Level 2. Other securities are valued on the basis of last sale or bid price (if a last sale price is not available) which is, in the opinion of the Adviser, the broadest and most representative market, that may be either a securities exchange or over-the-counter market and are generally categorized as Level 1 or Level 2. The Board is responsible for the share valuation process and has adopted policies and procedures (the "PRC Procedures") for valuing the securities and other assets held by the Funds, including procedures for the fair valuation of securities and other assets for which market quotations are not readily available or are unreliable. The PRC Procedures provide for the establishment of a pricing review committee, which is responsible for, among other things, making certain determinations in connection with the 68 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited) (continued) Trust's fair valuation procedures. Securities for which market quotations are not readily available or the values of which may be significantly impacted by the occurrence of developments or significant events are generally categorized as Level 3. There is no single standard for making fair value determinations, which may result in prices that vary from those of other funds. Derivative Instruments: Forward Foreign Currency Contracts: During the period, the Strategic Bond Fund used forward contracts to attempt to protect securities and related receivables and payables against changes in future foreign exchange rates. A forward contract is an agreement between two parties to buy or sell currency at a set price on a future date. The market value of the contract will fluctuate with changes in currency exchange rates. The contract is marked-to-market daily using the forward rate and the cumulative change in market value is recorded by a Fund as unrealized appreciation or depreciation. On the settlement date, a Fund records either realized gains or losses equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Risks to the Funds of entering into forward contracts include counterparty risk, market risk and illiquidity risk. Counterparty risk arises upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts. If the counterparty defaults, a Fund's loss will generally consist of the net amount of contractual payments that the Fund has not yet received though the Fund's maximum exposure due to counterparty risk could extend to the notional amount of the contract. Market risk is the risk that the value of the forward contract will depreciate due to unfavorable changes in the exchange rates. These contracts may involve market risk in excess of the unrealized appreciation or depreciation reported on the Statements of Assets and Liabilities. Illiquidity risk arises because the secondary market for forwards may have less liquidity relative to markets for other securities. Currency transactions are also subject to risks different from those of other portfolio transactions. Because currency control is of great importance to the issuing governments and influences economic planning and policy, purchases and sales of currency and related instruments can be adversely affected by government exchange controls, limitations or restrictions on repatriation of currency, and manipulations or exchange restrictions imposed by governments. Forward foreign currency contracts outstanding at the end of the period, if any, are reported on a schedule at the end of each Fund's Portfolio of Investments. Master Agreements: Certain Funds that hold derivative instruments and other financial instruments may be a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements or similar agreements ("Master Agreements") with certain counterparties that govern certain instruments. Master Agreements may contain provisions regarding, among other things, the parties' general obligations, representations, agreements, collateral requirements, events of default and early termination. Collateral can be in the form of cash or securities as agreed to by the Fund and applicable counterparty. Collateral requirements are generally determined based on a Fund's net position with each counterparty. Master Agreements may also include certain provisions that require a Fund to post additional collateral upon the occurrence of certain events, such as when a Fund's net assets fall below a specified level. In addition, Master Agreements typically specify certain standard termination events, such as failure of a party to pay or deliver, credit support defaults and other events of default. Termination events applicable to a Fund may also occur upon a decline in the Fund's net assets below a specified level over a certain period of time. Additional termination events applicable to counterparties may occur upon a decline in a counterparty's long-term and short-term credit ratings below a specified level, or upon a decline in the ratings of a counterparty's credit support provider. Upon the occurrence of a termination event, the other party may elect to terminate early and cause settlement of all instruments outstanding pursuant to a particular Master Agreement, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of a Fund's counterparties to elect early termination could cause a Fund to accelerate the payment of liabilities, which settlement amounts could be in excess of the amount of assets that are already posted as collateral. Typically, the Master Agreement will permit a single net payment in the event of default. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy, insolvency or other events. As a result, the early termination with respect to derivative instruments subject to Master Agreements that are in a net liability position could be material to a Fund's financial statements. The Funds do not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statements of Asset and Liabilities. 69 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited) (continued) The following tables represent the value of derivatives held as of September 30, 2018, by their primary underlying risk exposure. The derivative contracts held during the period are not accounted for as hedging instruments under GAAP. For a detailed presentation of derivatives held as of September 30, 2018, please refer to the schedule at the end of each Fund's Portfolio of Investments.
Liability Asset Derivatives Derivatives ----------------- ------------ Foreign Foreign Exchange Exchange Contracts Contracts ----------------- ------------ Forward Forward Foreign Foreign Currency Currency Fund Contracts(1) Contracts(2) ---- ----------------- ------------ Strategic Bond............................... $180,727 $6,980 ======== ======
-------- Statement of Assets and Liabilities Location: (1)Unrealized appreciation on forward foreign currency contracts (2)Unrealized depreciation on forward foreign currency contracts
Change in Unrealized Realized Appreciation Gain (Loss) on (Depreciation) on Derivatives Derivatives Recognized in Recognized in Statement of Statement of Operations Operations -------------- ----------------- Foreign Foreign Exchange Exchange Contracts Contracts -------------- ----------------- Forward Forward Foreign Foreign Currency Currency Fund Contracts(1) Contracts(2) ---- -------------- ----------------- Strategic Bond............................... $1,161,074 $140,823 ========== ========
-------- Statement of Operations Location: (1)Net realized gain (loss) on forward contracts (2)Change in unrealized appreciation (depreciation) on forward contracts The following table represents the average monthly balances of derivatives held during the six months ended September 30, 2018:
Average Amount Outstanding During the Year --------------- Forward Foreign Currency Fund Contracts(1) ---- --------------- Strategic Bond............................... $17,785,502 ===========
-------- (1)Amounts represent notional amounts in US dollars. There were no derivative assets and liabilities subject to Master Agreements outstanding at September 30, 2018. The repurchase agreements held by the Funds as of September 30, 2018, are subject to Master Agreements. See the Portfolio of Investments and the Notes to the Financial Statements for more information about the Funds' holdings in repurchase agreements. 70 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited) (continued) Mortgage-Backed Dollar Rolls: During the six months ended September 30, 2018, the Strategic Bond Fund entered into dollar rolls using "to be announced" ("TBA") mortgage-backed securities ("TBA Rolls"). TBA Roll transactions involve the sale of mortgage or other asset backed securities with the commitment to purchase substantially similar securities on a specified future date. The Funds' policy is to record the components of TBA Rolls as purchase/sale transactions. Any difference between the purchase and sale price is recorded as a realized gain or loss on the date the transaction is entered into. TBA Roll transactions involve the risk that the market value of the securities held by a Fund may decline below the price of the securities that the Fund has sold but is obligated to repurchase under the agreement. In the event that the buyer of securities in a TBA Roll transaction files bankruptcy or becomes insolvent, a Fund's use of the proceeds from the sale of the securities may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund's obligation to repurchase the securities. Mortgage-Backed Dollar Rolls outstanding at the end of the period, if any, are included in investments purchased/sold on an extended settlement basis in the Statement of Assets and Liabilities. When-Issued Securities and Forward Commitments: Certain Funds may purchase or sell when-issued securities (including TBA securities) that have been authorized, but not yet issued in the market. In addition, a Fund may purchase or sell securities on a forward commitment basis. A forward commitment involves entering into a contract to purchase or sell securities, typically on an extended settlement basis, for a fixed price at a future date. The Funds may engage in when-issued or forward commitment transactions in order to secure what is considered to be an advantageous price and yield at the time of entering into the obligation. The purchase of securities on a when-issued or forward commitment basis involves a risk of loss if the value of the security to be purchased declines before the settlement date. Conversely, the sale of securities on a when-issued or forward commitment basis involves the risk that the value of the securities sold may increase before the settlement date. For the six months ended September 30, 2018, the Strategic Bond Fund purchased and/or sold when-issued securities. Securities purchased or sold on a when-issued or forward commitment basis outstanding at the end of the period, if any, are included in investments purchased/sold on an extended settlement basis in the Statement of Assets and Liabilities. Loans: The Fund invests in senior loans which generally consist of direct debt obligations of companies (collectively, "Borrowers"), primarily U.S. companies and their affiliates, undertaken to finance the growth of the Borrower's business internally and externally, or to finance a capital restructuring. Transactions in senior loans may settle on a delayed basis. Unsettled loans at the end of the period, if any, are included in investments purchased/sold on an extended settlement basis in the Statement of Assets and Liabilities. Stripped Mortgage-Backed Securities: Stripped Mortgage-Backed Securities ("SMBS") are multiple-class mortgage-backed securities. SMBS are often structured with two classes that receive different proportions of the interest and principal distributions on a pool of mortgage assets. SMBS have greater market volatility than other types of U.S. government securities in which a Fund invests. A common type of SMBS has one class receiving some of the interest and all or most of the principal (the "principal only" class) from the mortgage pool, while the other class will receive all or most of the interest (the "interest only" class). The yield to maturity on an interest only class is extremely sensitive not only to changes in prevailing interest rates, but also to the rate of principal payments, including principal prepayments, on the underlying pool of mortgage assets, and a rapid rate of principal payment may have a material adverse effect on a Fund's yield. Inflation-Indexed Bonds: Certain Funds may purchase inflation-indexed bonds. Inflation-indexed bonds are fixed income securities whose principal value is adjusted periodically according to the rate of inflation. Two structures are common. The U.S. Treasury and certain other issuers use a structure that reflects inflation in the principal value of the bond. Other issuers pay out any inflation related accruals as part of a semiannual coupon. The value of inflation-indexed bonds is expected to change in response to changes in real interest rates. Real interest rates, in turn, are tied to the relationship between nominal interest rates (i.e., stated interest rates) and the rate of inflation. Therefore, if the rate of inflation rises at a faster rate than nominal interest rates, real interest rates (i.e., nominal interest rates minus inflation) might decline, leading to an increase in value of inflation-indexed bonds. In contrast, if nominal interest rates increase at a faster rate than inflation, real interest rates might rise, leading to a decrease in value of inflation-indexed bonds. There can be no assurance, however, that the value of inflation-indexed bonds will be directly correlated to changes in nominal interest rates, and short-term increases in inflation may lead to a decline in their value. Coupon payments received from inflation-indexed bonds are recorded in the Statements of Operations as interest income. In addition, any increase or decrease in the principal amount of an inflation-indexed bond will be recorded in the Statements of Operations as an increase or decrease to interest income, even though principal is not paid until maturity. 71 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited) (continued) Repurchase Agreements: The Funds, along with other affiliated registered investment companies, pursuant to procedures adopted by the Board and applicable guidance from the Securities and Exchange Commission ("SEC"), may transfer uninvested cash balances into a single joint account, the daily aggregate balance of which is invested in one or more repurchase agreements collateralized by U.S. Treasury or federal agency obligations. In a repurchase agreement, the seller of a security agrees to repurchase the security at a mutually agreed-upon time and price, which reflects the effective rate of return for the term of the agreement. For repurchase agreements and joint repurchase agreements, the Trust's custodian takes possession of the collateral pledged for investments in such repurchase agreements ("repo" or collectively "repos"). The underlying collateral is valued daily on a mark to market basis, plus accrued interest to ensure that the value, at the time the agreement is entered into, is equal to at least 102% of the repurchase price, including accrued interest. In the event of default of the obligation to repurchase, a Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by a Fund may be delayed or limited. Securities Transactions, Investment Income, Expenses, Dividends and Distributions to Shareholders: Security transactions are recorded on a trade date basis. Interest income is accrued daily from settlement date except when collection is not expected. Dividend income is recorded on the ex-dividend date except for certain dividends from foreign securities, which are recorded as soon as the Trust is informed after the ex-dividend date. Paydown gains and losses on mortgage and asset-backed securities are recorded as components of interest income on the Statements of Operations. For financial statement purposes, the Funds amortize all premiums and accrete all discounts on fixed income securities. Realized gains and losses on the sale of investments are calculated on the identified cost basis. Funds which earn foreign income and capital gains may be subject to foreign withholding taxes and capital gains taxes at various rates. Under applicable foreign law, a withholding of tax may be imposed on interest, dividends, and capital gains from the sale of foreign securities at various rates. Net investment income, expenses other than class specific expenses, and realized and unrealized gains and losses are allocated daily to each class of shares based upon the relative net asset value of outstanding shares of each class of shares at the beginning of the day (after adjusting for current capital shares activity of the respective class). Expenses common to all Funds are allocated among the Funds based upon relative net assets or other appropriate allocation methods. In all other respects, expenses are charged to each Fund as incurred on a specific identification basis. Dividends from net investment income are accrued daily and paid monthly. Capital gain distributions, if any, are paid annually. The Funds record dividends and distributions to their shareholders on the ex-dividend date. The Funds reserve the right to declare and pay dividends less frequently than disclosed above, provided that the net realized capital gains and net investment income, if any, are paid at least annually. The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, which may differ from GAAP. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts at fiscal year end based on their federal tax-basis treatment; temporary differences do not require reclassification. Net assets are not affected by these reclassifications. Each Fund is considered a separate entity for tax purposes and intends to comply with the requirements of the Internal Revenue Code, as amended, applicable to regulated investment companies and distribute all of its taxable income, including any net capital gains on investments, to its shareholders. Each Fund also intends to distribute sufficient net investment income and net capital gains, if any, so that it will not be subject to excise tax on undistributed income and gains. Therefore, no federal income tax or excise tax provision is required. The Funds recognize the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained, assuming examination by tax authorities. Management has analyzed each Fund's tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years 2015 -- 2017 or expected to be taken in each Fund's 2018 tax return. The Funds are not aware of any tax provisions for which it is 72 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited) (continued) reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months. The Funds file U.S. federal and certain state income tax returns. With few exceptions, the Funds are no longer subject to U.S. federal and state tax examinations by tax authorities for tax returns ending before 2015. Foreign Currency Translation: The books and records of the Funds are maintained in U.S. dollars. Assets and liabilities denominated in foreign currencies and commitments under forward foreign currency contracts are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Funds do not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the changes in the market prices of securities held at the end of the period. Similarly, the Funds do not isolate the effect of changes in foreign exchange rates from the changes in the market prices of portfolio securities sold during the period. Realized foreign exchange gains and losses on other assets and liabilities and change in unrealized foreign exchange gains and losses on other assets and liabilities located in the Statements of Operations include realized foreign exchange gains and losses from currency gains or losses between the trade and the settlement dates of securities transactions, the difference between the amounts of interest, dividends and foreign withholding taxes recorded on the Funds' books and the U.S. dollar equivalent amounts actually received or paid and changes in the unrealized foreign exchange gains and losses relating to the other assets and liabilities arising as a result of changes in the exchange rates. New Accounting Pronouncements: In August 2018, the SEC adopted amendments to certain financial statement disclosure requirements of Regulation S-X to conform them to GAAP for investment companies. The final rule became effective on November 5, 2018. All required changes have been made in accordance with Regulation S-X. In August 2018, the FASB issued Accounting Standards Update ("ASU") No. 2018-13 "Disclosure Framework -- Changes to the Disclosure Requirements for Fair Value Measurement". The ASU eliminates, modifies, and adds disclosure requirements for fair value measurements and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Management is currently evaluating the amendments and their impact, if any, on the Funds' financial statements. Note 3. Investment Advisory and Management Agreement, Distribution Agreement and Service Agreement The Trust, on behalf of each Fund, has an Investment Advisory and Management Agreement (the "Agreement") with SunAmerica. Under the Agreement, SunAmerica provides continuous supervision of a Fund's portfolio and administers its corporate affairs, subject to general review by the Trustees. In connection therewith, SunAmerica furnishes the Funds with office facilities, maintains certain of the Funds' books and records, and pays the salaries and expenses of all personnel, including officers of the Funds, who are employees of SunAmerica and its affiliates. The Funds pay SunAmerica a monthly investment advisory and management fee calculated daily at the following annual percentages of each Fund's average daily net assets:
Management Fund Assets Fees ---- ---------------------------- ---------- U.S. Government Securities........................ $0 - $200 million 0.650% (greater than) $200 million 0.620 (greater than) $400 million 0.550 Strategic Bond(1)................................. $0 - $350 million 0.650 (greater than) $350 million 0.600 Flexible Credit(2)................................ $0 - $200 million 0.750 (greater than) $200 million 0.720 (greater than) $400 million 0.550
-------- (1)Effective May 1, 2018, the Advisor contractually agreed to waive its advisory fee with respect to the AIG Strategic Bond Fund through July 31, 2019 so that the advisory fee payable by the Fund to the Advisor under the agreement equals 0.40% on the first $350 million and 0.35% above $350 million of average daily net assets. (2)The Advisor contractually agreed to waive its advisory fee with respect to the AIG Flexible Credit Fund through July 31, 2019 so that the advisory fee payable by the Fund to the Advisor under the agreement equals 0.36% of average daily net assets. For the six months ended September 30, 2018 the amount of investment advisory fees waived for Strategic Bond Fund and Flexible Credit Fund were $332,304 and $628,514 respectively. These amounts are reflected in the Statement of Operations. 73 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited) (continued) The Strategic Bond Fund is subadvised by PineBridge Investments, LLC ("PineBridge") and the Flexible Credit Fund is subadvised by Newfleet Asset Management, LLC ("Newfleet"). Under the Subadvisory Agreements, PineBridge and Newfleet manage the investment and reinvestment of the assets of the Strategic Bond Fund and the Flexible Credit Fund, respectively. SunAmerica pays PineBridge and Newfleet fees out of the investment advisory fees it receives from the respective Funds. The portion of the investment advisory fees received by SunAmerica that are paid to PineBridge and Newfleet Asset Management, LLC with respect to the Strategic Bond Fund and Flexible Credit Fund are as follows:
Subadvisory Fund Assets Fees ---- ---------------------------- ----------- Strategic Bond(1)................................. $0 - $200 million 0.350% (greater than) $200 million 0.250 (greater than) $500 million 0.200 Flexible Credit(2)................................ $0 - $200 million 0.300 (greater than) $200 million 0.250 (greater than) $400 million 0.150
-------- (1)Effective May 1, 2018, PineBridge has contractually agreed to waive a portion of its subadvisory fee through July 31, 2019 so that the subadvisory fee rate paid to PineBridge is 0.17% of average daily net assets. (2)Newfleet has contractually agreed to waive a portion of its subadvisory fee through July 31, 2019 so that the subadvisory fee rate paid to Newfleet is 0.14% of average daily net assets. SunAmerica has contractually agreed to waive fees and/or reimburse expenses, to the extent necessary to cap the Funds' annual fund operating expenses at the following percentages of each Fund's average net assets. For the purposes of waived fees and/or reimbursed expense calculations, annual Fund operating expenses shall not include extraordinary expenses (i.e., expenses that are unusual in nature and/or infrequent in occurrence, such as litigation), or acquired Fund fees and expenses, brokerage commissions and other transactional expenses relating to the purchase and sale of portfolio securities, interest, taxes and governmental fees, and other expenses not incurred in the ordinary course of a Fund's business. The contractual fee waivers and expense reimbursements will continue indefinitely, subject to termination by the Trustees, including a majority of the Disinterested Trustees.
Fund Percentage ---- ---------- U.S. Government Securities Class A..... 0.99% U.S. Government Securities Class C..... 1.64 Strategic Bond Class A................. 1.40 Strategic Bond Class B................. 2.05 Strategic Bond Class C................. 2.05 Strategic Bond Class W................. 1.20 Flexible Credit Class A................ 1.45 Flexible Credit Class C................ 2.10 Flexible Credit Class W................ 1.25
For the U.S. Government Securities Fund, any contractual waivers and/or reimbursements made by SunAmerica are subject to recoupment from the Fund within two years after the occurrence of the waivers and/or reimbursements, provided that the Fund is able to effect such payment to SunAmerica and remain in compliance with the expense limitations in effect at the time the waivers and/or reimbursements were made. For the six months ended September 30, 2018, pursuant to the contractual expense limitations in the above tables SunAmerica has waived and/or reimbursed expenses as follows:
Other Expenses Fund Reimbursed ---- -------------- U.S. Government Securities......... $101,101 Class Specific Fund Expenses ---- -------------- U.S. Government Securities Class A. $159,003 U.S. Government Securities Class C. 17,736
74 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited) (continued) At September 30, 2018, expenses previously waived or reimbursed by SunAmerica that are subject to recoupment and expire during the time period indicated are as follows:
Other Expenses Reimbursed ------------------------------------------------ Fund March 31, 2019 March 31, 2020 September 30, 2020 ---- -------------- -------------- ------------------ U.S. Government Securities........................ $100,787 $180,779 $101,101 Class Specific Expenses Reimbursed ------------------------------------------------ Fund March 31, 2019 March 31, 2020 September 30, 2020 ---- -------------- -------------- ------------------ U.S. Government Securities Class A................ $190,687 $362,838 $159,003 U.S. Government Securities Class C................ 30,259 54,695 17,736
The Trust, on behalf of each Fund, has entered into a Distribution Agreement with AIG Capital Services, Inc. ("ACS" or "Distributor"), an affiliate of the Adviser. Each Fund has adopted a Distribution Plan on behalf of each Class (other than Class W shares of the Strategic Bond and Flexible Credit Funds), in accordance with the provisions of Rule 12b-1 under the 1940 Act (each, a "Plan," and collectively, the "Plans"), hereinafter referred to as the "Class A Plan," the "Class B Plan" and the "Class C Plan." In adopting the Class A Plan, the Class B Plan and the Class C Plan, the Trustees determined that there was a reasonable likelihood that each such Plan would benefit the Trust and the shareholders of the respective class. The sales charge and distribution fees of a particular class will not be used to subsidize the sale of shares of any other class. The Class A, Class B and Class C Plans provide that the Trust, on behalf of the respective classes, shall pay the Distributor a distribution fee at an annual rate of up to 0.10%, 0.75% and 0.75%, of average daily net assets of such Fund's Class A, Class B and Class C shares, respectively, to compensate the Distributor and certain securities firms for providing sales and promotional activities for distributing that class of shares. The distribution costs for which the Distributor may be compensated include fees paid to broker-dealers that have sold Fund shares, commissions, and other expenses such as those incurred for sales literature, prospectus printing and distribution and compensation to wholesalers. It is possible that in any given year, the amount paid to the Distributor under the Class A Plan, Class B Plan or Class C Plan may exceed the Distributor's distribution costs as described above. Except for Class W shares of the Strategic Bond and Flexible Credit Funds, the Plans also provide that each class of shares of the Trust will also pay the Distributor an account maintenance fee at the annual rate of up to 0.25% of the aggregate average daily net assets of such class of shares to compensate the Distributor and securities firms for account maintenance activities. The Distributor does not receive or retain any distribution and/or account maintenance fees for any shares when the shareholder does not have a broker of record. For the six months ended September 30, 2018, ACS received fees as reflected in the Statements of Operations based on the aforementioned rates. The Trust, on behalf of the Strategic Bond and Flexible Credit Funds, has entered into an Administrative and Shareholder Services Agreement with ACS, pursuant to which ACS is paid an annual fee of 0.15% of average daily net assets of Class W shares as compensation for providing additional shareholder services to Class W shareholders. The Distributor does not receive or retain any distribution and/or account maintenance fees for any shares when the shareholder does not have a broker of record. For the six months ended September 30, 2018, ACS earned fees as reflected in the Statements of Operations based on the aforementioned rate. ACS receives sales charges on each Fund's Class A shares, portions of which are reallowed to affiliated broker-dealers and non-affiliated broker-dealers. ACS also receives the proceeds of contingent deferred sales charges paid by investors in connection with certain redemptions of Class A, Class B and Class C shares. ACS has advised the Funds that for the six months ended September 30, 2018, the proceeds received from Class A sales (and paid out to affiliated and non-affiliated broker-dealers) and Class A, Class B and Class C redemptions were as follows:
Class A Class B Class C ---------------------------------------------------- ------------- ------------- Contingent Contingent Contingent Sales Affiliated Non-affiliated Deferred Deferred Deferred Fund Charges Broker-dealers Broker-dealers Sales Charges Sales Charges Sales Charges ---- -------- -------------- -------------- ------------- ------------- ------------- U.S. Government Securities......... $ 7,642 $ 938 $ 5,553 $ 59 $ -- $ 66 Strategic Bond..................... 62,148 40,137 10,527 35,035 17,159 3,111 Flexible Credit.................... 190,663 20,266 137,869 18,713 -- 4,717
75 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited) (continued) The Trust has entered into a Service Agreement with AIG Fund Services, Inc. ("AFS"), an affiliate of the Adviser. Under the Service Agreement, AFS performs certain shareholder account functions by assisting the Funds' transfer agent, DST Asset Manager Solutions, Inc. ("DST") in connection with the services that it offers to the shareholders of the Funds. The Service Agreement permits the Funds to compensate AFS for services rendered, based upon an annual rate of 0.22% of average daily net assets, which is approved annually by the Trustees. For the six months ended September 30, 2018, the Funds incurred the following expenses which are included in transfer agent fees and expenses in the Statements of Operations to compensate AFS pursuant to the terms of the Service Agreement:
Payable at Fund Expenses September 30, 2018 ---- -------- ------------------ U.S. Government Securities Class A........... $146,000 $21,807 U.S. Government Securities Class C........... 7,798 1,116 Strategic Bond Class A....................... 199,833 28,950 Strategic Bond Class B....................... 22,113 3,313 Strategic Bond Class C....................... 70,032 10,349 Strategic Bond Class W....................... 63,820 9,974 Flexible Credit Class A...................... 148,419 24,346 Flexible Credit Class C...................... 63,642 10,340 Flexible Credit Class W...................... 152,969 28,180
At September 30, 2018, AIG Active Allocation Portfolio and AIG Multi-Asset Allocation Portfolio, each a series of SunAmerica Series, Inc., owned a percentage of the outstanding shares of the following Funds:
Holder --------------------- AIG AIG Active Multi-Asset Allocation Allocation Fund Portfolio Portfolio ---- ---------- ----------- U.S. Government Securities................... 13.95% 18.28% Strategic Bond............................... 2.19 1.88 Flexible Credit.............................. 2.57 3.48
Note 4. Purchases and Sales of Investment Securities The cost of purchases and proceeds from sales and maturities of long-term investments during the six months ended September 30, 2018 were as follows:
Purchases of Investment Sales of Investment Purchase of U.S. Sales of U.S. Securities (Excluding U.S. Securities (Excluding U.S. Government Government Fund Government Securities) Government Securities) Securities Securities ---- -------------------------- -------------------------- ---------------- ------------- U.S. Government Securities......... $ -- $ -- $23,926,949 $30,074,155 Strategic Bond..................... 119,110,994 216,014,053 60,586,210 29,700,784 Flexible Credit.................... 119,472,902 80,056,906 -- --
Note 5. Federal Income Taxes The following details the tax basis of distributions as well as the components of distributable earnings. The tax basis components of distributable earnings differ from the amounts reflected in the Statements of Assets and Liabilities by temporary book/tax differences primarily arising from wash sales, post October capital losses, late year ordinary losses, distributions payable, straddle loss deferrals, amortization of premium/discount and treatment of defaulted securities.
Distributable Earnings Tax Distributions For the year ended March 31, 2018 For the year ended March 31, 2018 ---------------------------------------- --------------------------------- Long-term Unrealized Ordinary Gains/Capital Appreciation Ordinary Long-Term Fund Income Loss Carryover (Depreciation)* Income Capital Gains ---- ---------- -------------- --------------- ----------- ------------- U.S. Government Securities......... $ 481,565 $(19,632,848) $ 1,460,586 $ 2,661,495 $ -- Strategic Bond..................... 754,183 (20,384,604) (7,630,955) 10,179,966 -- Flexible Credit.................... 1,281,870 (7,003,721) (4,723,674) 16,843,293 --
-------- * Unrealized appreciation (depreciation) includes amounts for derivatives and other assets and liabilities denominated in foreign currency. 76 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited) (continued) As of March 31, 2018, for Federal income tax purposes, the Funds indicated below have capital loss carryforwards, which are available to offset future capital gains, if any:
Unlimited+ ----------------------- Fund ST LT ---- ----------- ----------- U.S. Government Securities............. $13,869,489 $ 5,763,359 Strategic Bond......................... 602,094 19,782,510 Flexible Credit........................ -- 7,003,721
-------- + On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the "Act") was enacted which changes various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective taxable years beginning after the date of enactment. Under the Act, the fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term losses rather than being considered all short-term as under previous law. Under the current law, capital losses realized after October 31 and late year ordinary losses may be deferred and treated as occurring on the first day of the following year. For the fiscal year ended March 31, 2018, the Funds elected to defer late year ordinary losses and post October capital losses as follows:
Deferred Deferred Deferred Post-October Post-October Late Year Short-Term Long-Term Fund Ordinary Loss Capital Loss Capital Loss ---- ------------- ------------ ------------ U.S. Government Securities............. $ -- $ -- $477,827 Strategic Bond......................... 212,069 1,402,544 19,844 Flexible Credit........................ -- -- 74,752
At September 30, 2018, the amounts of aggregate unrealized gain (loss) and the cost of investment securities for federal tax purposes, including short-term securities, repurchase agreements and derivatives, were as follows:
Aggregate Aggregate Unrealized Unrealized Unrealized Gain/(Loss) Cost of Fund Gain Loss Net Investments ---- ---------- ------------ ----------- ------------ U.S. Government Securities....... $3,584,028 $ (3,554,862) $ 29,166 $135,733,644 Strategic Bond................... 3,094,816 (12,758,934) (9,664,118) 301,405,571 Flexible Credit Bond............. 4,197,843 (8,092,409) (3,894,566) 366,568,930
On December 22, 2017, the Tax Cuts and Jobs Act (the "Act") was signed into law. Certain provisions of the Act were effective upon enactment with the remainder becoming effective for tax years beginning after December 31, 2017. Management is currently evaluating the impact, if any, on the financial statements and the accompanying notes to financial statements. Note 6. Capital Share Transactions Transactions in capital shares of each class of each Fund were as follows:
U.S. Government Securities -------------------------------------------------- Class A -------------------------------------------------- For the six months ended For the September 30, 2018 year ended (unaudited) March 31, 2018 ------------------------ ------------------------ Shares Amount Shares Amount ---------- ------------ ---------- ------------ Shares sold(1)(2)........ 891,570 $ 7,935,706 2,316,337 $ 20,988,914 Reinvested dividends..... 111,396 991,021 244,835 2,226,713 Shares redeemed.......... (1,821,210) $(16,202,795) (3,295,222) (29,980,480) ---------- ------------ ---------- ------------ Net increase (decrease).. (818,244) $ (7,276,068) (734,050) $ (6,764,853) ========== ============ ========== ============
77 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited) (continued)
U.S. Government Securities ----------------------------------------------- Class C ----------------------------------------------- For the six months ended For the September 30, 2018 year ended (unaudited) March 31, 2018 --------------------- ------------------------ Shares Amount Shares Amount -------- ----------- ---------- ------------ Shares sold.............. 48,650 $ 432,362 166,535 $ 1,513,933 Reinvested dividends..... 3,414 30,346 16,706 152,011 Shares redeemed(1)(2).... (160,449) (1,426,571) (1,472,671) (13,299,249) -------- ----------- ---------- ------------ Net increase (decrease).. (108,385) $ (963,863) (1,289,430) $(11,633,305) ======== =========== ========== ============
-------- (1)For the six months ended September 30, 2018, includes automatic conversion of 9,952 shares of Class C shares in the amount of $88,486 to 9,950 shares of Class A shares in the amount of $88,486. (2)For the year ended March 31, 2018, includes automatic conversion of 251,877 shares of Class C shares in the amount of $2,244,225 to 251,595 shares of Class A shares in the amount of $2,244,225.
Strategic Bond -------------------------------------------------------------------------------------------------------- Class A Class B ---------------------------------------------------- -------------------------------------------------- For the For the six months ended For the six months ended For the September 30, 2018 year ended September 30, 2018 year ended (unaudited) March 31, 2018 (unaudited) March 31, 2018 ------------------------- ------------------------- ------------------------ ------------------------ Shares Amount Shares Amount Shares Amount Shares Amount ----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------ Shares sold(1)(2)(3)(4) 3,544,844 $ 11,806,303 19,972,035 $ 68,107,643 379,110 $ 1,260,646 869,650 $ 2,985,386 Reinvested dividends... 916,396 3,046,100 1,317,545 4,531,780 79,664 264,653 159,576 548,783 Shares redeemed(1)(2).. (13,281,800) (44,201,614) (11,040,002) (37,839,522) (1,733,636) (5,760,263) (3,310,957) (11,372,010) ----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------ Net increase (decrease) (8,820,560) $(29,349,211) 10,249,578 $ 34,799,901 (1,274,862) $ (4,234,964) (2,281,731) $ (7,837,841) =========== ============ =========== ============ ========== ============ ========== ============ Strategic Bond -------------------------------------------------------------------------------------------------------- Class C Class W ---------------------------------------------------- -------------------------------------------------- For the For the six months ended For the six months ended For the September 30, 2018 year ended September 30, 2018 year ended (unaudited) March 31, 2018 (unaudited) March 31, 2018 ------------------------- ------------------------- ------------------------ ------------------------ Shares Amount Shares Amount Shares Amount Shares Amount ----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------ Shares sold............ 539,300 $ 1,806,876 3,141,993 $ 10,844,054 4,156,526 $ 13,806,360 14,598,225 $ 50,166,169 Reinvested dividends... 231,622 772,923 598,701 2,067,953 222,638 739,358 317,651 1,091,699 Shares redeemed(3)(4).. (4,550,884) (15,193,370) (20,387,026) (69,770,025) (8,787,483) (29,206,660) (5,987,746) (20,513,498) ----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------ Net increase (decrease) (3,779,962) $(12,613,571) (16,646,332) $(56,858,018) (4,408,319) $(14,660,942) 8,928,130 $ 30,744,370 =========== ============ =========== ============ ========== ============ ========== ============
-------- (1)For the six months ended September 30, 2018, includes automatic conversion of 67,687 shares of Class B shares in the amount of $225,243 to 67,646 shares of Class A shares in the amount of $225,243. (2)For the year ended March 31, 2018, includes automatic conversion of 146,651 shares of Class B shares in the amount of $502,679 to 146,509 shares of Class A shares in the amount of $502,679. (3)For the six months ended September 30, 2018, includes automatic conversion of 180,428 shares of Class C shares in the amount of $602,552 to 180,970 shares of Class A shares in the amount of $602,552. (4)For the year ended March 31, 2018, includes automatic conversion of 2,044,542 shares of Class C shares in the amount of $6,930,997 to 2,056,676 shares of Class A shares in the amount of $6,930,997.
Flexible Credit --------------------------------------------------- Class A --------------------------------------------------- For the six months ended For the September 30, 2018 year ended (unaudited) March 31, 2018 ------------------------ ------------------------- Shares Amount Shares Amount ---------- ------------ ----------- ------------ Shares sold(1)(2)........ 9,242,298 $ 31,345,040 15,263,536 $ 52,432,452 Reinvested dividends..... 917,514 3,108,637 1,805,509 6,214,632 Shares redeemed.......... (8,711,424) (29,539,320) (20,023,513) (68,775,062) ---------- ------------ ----------- ------------ Net increase (decrease).. 1,448,388 $ 4,914,357 (2,954,468) $(10,127,978) ========== ============ =========== ============
78 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited) (continued)
Flexible Credit ------------------------------------------------------------------------------------------------------- Class C Class W ------------------------------------------------- ---------------------------------------------------- For the For the six months ended For the six months ended For the September 30, 2018 year ended September 30, 2018 year ended (unaudited) March 31, 2018 (unaudited) March 31, 2018 ----------------------- ------------------------ ------------------------ -------------------------- Shares Amount Shares Amount Shares Amount Shares Amount ---------- ----------- ---------- ------------ ---------- ------------ ----------- ------------- Shares sold............ 1,784,386 $ 6,086,881 4,346,092 $ 15,053,291 17,720,336 $ 60,137,865 21,898,961 $ 75,416,969 Reinvested dividends... 266,428 908,886 619,069 2,143,889 596,598 2,024,217 1,071,044 3,689,146 Shares redeemed(1)(2).. (2,452,288) (8,370,339) (9,187,515) (31,714,471) (9,405,755) (31,943,432) (30,165,932) (103,923,875) ---------- ----------- ---------- ------------ ---------- ------------ ----------- ------------- Net increase (decrease) (401,474) $(1,374,572) (4,222,354) $(14,517,291) 8,911,179 $ 30,218,650 (7,195,927) $ (24,817,760) ========== =========== ========== ============ ========== ============ =========== =============
-------- (1)For the six months ended September 30, 2018, includes automatic conversion of 48,751 shares of Class C shares in the amount of $166,678 to 49,083 shares of Class A shares in the amount of $166,678. (2)For the year ended March 31, 2018, includes automatic conversion of 811,222 shares of Class C shares in the amount of $2,782,490 to 815,980 shares of Class A shares in the amount of $2,782,490. Note 7. Line of Credit The Trust has access to a $75 million committed unsecured line of credit and, along with certain other funds managed by the Adviser, a $50 million uncommitted unsecured line of credit. The committed and uncommitted lines of credit are renewable on an annual basis with State Street Bank and Trust Company ("State Street"), the Trust's custodian. Interest is currently payable on the committed line of credit at the higher of the Federal Funds Rate (but not less than zero) plus 125 basis points or the One-Month London Interbank Offered Rate (but not less than zero) plus 125 basis points and State Street's discretionary bid rate on the uncommitted line of credit. The Trust, on behalf of each of the Funds, has paid State Street for its own account, such Fund's ratable portion of an upfront fee in an amount equal to $25,000 in the aggregate for the uncommitted line of credit made available by State Street to certain other funds managed by the Adviser, which are also party to the uncommitted line of credit. There is also a commitment fee of 25 basis points per annum on the daily unused portion of the committed line of credit. Borrowings under the line of credit will commence when the respective Fund's cash shortfall exceeds $100,000.00. For the six months ended September 30, 2018, the following Funds had borrowings:
Days Interest Debt Average Fund Outstanding Charges Utilized Interest ---- ----------- -------- ---------- -------- Strategic Bond........... 3 $1,826 $6,574,420 3.32% Flexible Credit.......... 5 1,205 2,731,715 3.18
At September 30, 2018, there were no borrowings outstanding. Note 8. Interfund Lending Agreement Pursuant to the exemptive relief granted by the Securities and Exchange Commission, the Funds are permitted to participate in an interfund lending program among investment companies advised by SunAmerica or an affiliate. The interfund lending program allows the participating Funds to borrow money from and lend money to each other for temporary or emergency purposes. An interfund loan will be made under this facility only if the participating Funds receive a more favorable interest rate than would otherwise be available from a typical bank for a comparable transaction. For the six months ended September 30, 2018, none of the Funds participated in this program. Note 9. Investment Concentration The Flexible Credit Fund's investment in high yield securities, whether rated or unrated, may be considered speculative and subject to greater market fluctuations and risk of loss of income and principal than lower-yielding, higher-rated, fixed-income securities. The risk of loss due to default by the issuer may be significantly greater for the holders of high yield securities, because such securities are generally unsecured and are often subordinated to other creditors of the issuer. The Flexible Credit Fund and Strategic Bond Fund invest in participations and assignments, or act as a party to the primary lending syndicate of a variable rate senior loan interest to United States corporations, partnerships, and other entities. If the lead 79 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2018 -- (unaudited) (continued) lender in a typical lending syndicate becomes insolvent, enters receivership or, if not FDIC insured, enters into bankruptcy, a Fund may incur certain costs and delays in receiving payment, or may suffer a loss of principal and/or interest. When a Fund purchases a participation of a senior loan interest, the Fund typically enters into a contractual agreement with the lender or other third party selling the participation but not with the borrower directly. As such, a Fund is subject to the credit risk of the borrower, selling participant, lender or other persons positioned between the Funds and the borrower. Each Fund may invest in obligations issued by agencies and instrumentalities of the U.S. Government that may vary in the level of support they receive from the government. The government may choose not to provide financial support to government sponsored agencies or instrumentalities if it is not legally obligated to do so, and if the issuer defaulted, a fund holding securities of such issuer might not be able to recover its investment from the U.S. Government. As a result of the U.S. Government Fund's concentration in such investments, it may be subject to risks associated with U.S. Government agencies or instrumentalities. Note 10. Subsequent Event Effective November 19, 2018, pursuant to an Advisory Fee Waiver Agreement with AIG Strategic Bond Fund, SunAmerica is contractually obligated to waive its management fee with respect to the Fund so that the management fee payable by the Fund to SunAmerica equals 0.38% on the first $350 million of average daily net assets and 0.33% above $350 million of average daily net assets. This agreement will continue in effect through July 31, 2020, and from year to year thereafter provided such continuance is agreed to by SunAmerica and approved by a majority of the Independent Trustees. Effective November 19, 2018, pursuant to an Advisory Fee Waiver Agreement with AIG Flexible Credit Fund, SunAmerica is contractually obligated to waive its management fee with respect to the Fund so that the management fee payable by the Fund to SunAmerica equals 0.34% of average daily net assets. This agreement will continue in effect through July 31, 2020, and from year to year thereafter provided such continuance is agreed to by SunAmerica and approved by a majority of the Independent Trustees. 80 SunAmerica Income Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2018 -- (unaudited) Approval of the Investment Advisory and Management Agreement and Subadvisory Agreements The Board of Trustees (the "Board" the members of which are referred to as "Trustees") of SunAmerica Income Funds (the "Trust"), including the Trustees who are not "interested persons," as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the "1940 Act") (the "Independent Trustees"), of the Trust or its separate series (each, a "Fund," and collectively, the "Funds"), SunAmerica Asset Management, LLC ("SunAmerica"), PineBridge Investments LLC ("PineBridge") or Newfleet Asset Management, LLC ("Newfleet," and together with PineBridge, the "Subadvisers"), approved the continuation of the Investment Advisory and Management Agreement between the Trust, on behalf of the Funds, and SunAmerica (the "Advisory Agreement") for a one-year period ending June 30, 2019 at an in-person meeting held on June 5-6, 2018 (the "Meeting"). The Trust currently consists of the following three separate Funds: AIG Flexible Credit Fund ("Flexible Credit Fund"), AIG Strategic Bond Fund ("Strategic Bond Fund") and AIG U.S. Government Securities Fund ("U.S. Government Securities Fund"). At the Meeting, the Board, including the Independent Trustees, also approved the continuation of the Subadvisory Agreement between SunAmerica and PineBridge with respect to the Strategic Bond Fund and the Subadvisory Agreement between SunAmerica and Newfleet with respect to the Flexible Credit Fund (the "Subadvisory Agreements" and together with the Advisory Agreement, the "Agreements"), each for a one-year period ending June 30, 2019. In accordance with Section 15(c) of the 1940 Act, the Board requested, and SunAmerica and the Subadvisers provided, materials relating to the Board's consideration of whether to approve the continuation of the Agreements. These materials included, as applicable: (a) a summary of the services provided or to be provided, as applicable, by SunAmerica and its affiliates to the Funds and by the Subadvisers; (b) information independently compiled and prepared by Broadridge Financial Solutions, Inc. ("Broadridge"), an independent third-party provider of mutual fund data, on fees and expenses of the Funds, and the investment performance of the Funds as compared with a peer group of funds, along with fee and performance data with respect to the Funds and any other mutual funds or other accounts advised or subadvised by SunAmerica or the Subadvisers with similar investment objectives and/or strategies, as applicable; (c) information on the profitability of SunAmerica and its affiliates, and a discussion relating to indirect benefits; (d) information relating to economies of scale; (e) information about SunAmerica's general compliance policies and procedures and the services it provides in connection with its oversight of subadvisers; (f) information about SunAmerica's and the Subadvisers' risk management processes; (g) information regarding brokerage and soft dollar practices; and (h) information about the key personnel of SunAmerica and its affiliates, and the Subadvisers, that are involved in the investment management, administration, compliance and risk management activities with respect to the Funds, as well as current and projected staffing levels and compensation practices. In determining whether to approve the continuation of the Agreements, the Board, including the Independent Trustees, considered at the Meeting, and from time to time as appropriate, factors it deemed relevant, including the following information: Nature, Extent and Quality of Services Provided by SunAmerica and the Subadvisers. The Board, including the Independent Trustees, considered the nature, extent and quality of services provided by SunAmerica. The Board noted that the services include acting as investment manager and adviser to the Funds, managing the daily business affairs of the Funds, and obtaining and evaluating economic, statistical and financial information to formulate and implement investment policies. Additionally, the Board observed that SunAmerica provides office space, bookkeeping, accounting, legal, and compliance, clerical and administrative services and has authorized its officers and employees, if elected, to serve as officers or trustees of the Trust without compensation. The Board also noted that SunAmerica is responsible for monitoring and reviewing the activities of affiliated and unaffiliated third-party service providers, including the Subadvisers. In addition to the quality of the advisory services provided by SunAmerica, the Board considered the quality of the administrative and other services provided by SunAmerica to the Funds pursuant to the Advisory Agreement. In connection with the services provided by SunAmerica, the Board analyzed the structure and duties of SunAmerica's fund administration, accounting, operations, legal and compliance departments and concluded that they were adequate to meet the needs of the Funds. The Board also reviewed the personnel responsible for providing advisory services to the Funds and other key personnel of SunAmerica, in addition to current and projected staffing levels and compensation practices. The Board concluded, based on its experience and interaction with SunAmerica, that: (i) SunAmerica would continue to be able to retain quality investment and other personnel; (ii) SunAmerica has exhibited a high level of diligence and attention to detail in carrying out its advisory and other responsibilities under the Advisory Agreement; (iii) SunAmerica has been responsive to requests of the Board; and (iv) SunAmerica 81 SunAmerica Income Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2018 -- (unaudited) (continued) has kept the Board apprised of developments relating to the Funds and the industry in general. The Board concluded that the nature and extent of services provided under the Advisory Agreement were reasonable and appropriate in relation to the management fee and that the quality of services continues to be high. The Board also considered SunAmerica's reputation and long-standing relationship with the Funds and considered the benefit to shareholders of investing in funds that are part of a family of funds offering a variety of types of mutual funds and shareholder services. The Board considered SunAmerica's experience in providing management and investment advisory and administrative services to advisory clients and noted that as of March 31, 2018, SunAmerica managed, advised and/or administered approximately $89.5 billion in assets. In addition, the Board considered SunAmerica's code of ethics and its commitment to compliance generally and with respect to its management and administration of the Funds. The Board also considered SunAmerica's risk management processes. The Board further observed that SunAmerica has developed internal procedures for monitoring compliance with the investment objectives, policies and restrictions of the Funds as set forth in the Funds' prospectuses. The Board also reviewed SunAmerica's compliance and regulatory history and noted that there were no material legal, regulatory or compliance issues that would potentially impact SunAmerica in effectively serving as the investment adviser to the Funds. The Board also considered the nature, extent and quality of services provided by each Subadviser to the applicable Funds. The Board observed that the Subadvisers are responsible for providing day-to-day investment management services, including investment research, advice and supervision, and determining which securities will be purchased or sold by the Fund that each Subadviser manages, subject to the oversight and review of SunAmerica. The Board reviewed each Subadviser's history, structure, size, visibility and resources, which are needed to attract and retain highly qualified investment professionals. The Board reviewed the personnel that are responsible for providing subadvisory services to the Funds, and other key personnel of each Subadviser, in addition to current and projected staffing levels and compensation practices, and concluded, based on its experience with the Subadvisers, that each Subadviser: (i) has been able to retain high quality portfolio managers and other investment personnel; (ii) has exhibited a high level of diligence and attention to detail in carrying out its responsibilities under the applicable Subadvisory Agreement; and (iii) has been responsive to requests of the Board and of SunAmerica. In addition, the Board considered each Subadviser's code of ethics and risk management processes. The Board further observed that each Subadviser has developed internal policies and procedures for monitoring compliance with the investment objectives, policies and restrictions of the Funds as set forth in the Funds' prospectuses. The Board also reviewed each Subadviser's compliance and regulatory history and noted that there were no material legal, regulatory or compliance issues that would potentially impact the Subadvisers from effectively serving as Subadvisers to the Funds. The Board concluded that the nature and extent of services provided by each Subadviser under the respective Subadvisory Agreement were reasonable and appropriate in relation to the subadvisory fee and that the quality of services continues to be high. Investment Performance. The Board, including the Independent Trustees, also considered the investment performance of SunAmerica and the Subadvisers with respect to the Funds, as applicable. In connection with its review, the Board received and reviewed information regarding the investment performance of the Funds as compared to each Fund's peer group ("Peer Group") and/or peer universe ("Peer Universe") as independently determined by Broadridge and to an appropriate index or combination of indices, including the Funds' benchmarks. The Board was provided with a description of the methodology used by Broadridge to select the funds in each Peer Group and Peer Universe. The Board noted that performance information was for the periods ended March 31, 2018. The Board also noted that it regularly reviews the performance of the Funds throughout the year. The Board further noted that, while it monitors performance of the Funds closely, it generally attaches more importance to performance over relatively long periods of time, typically three to five years. Flexible Credit Fund. The Board considered that the Fund's performance was above the medians of its Peer Group and Peer Universe for the one-, three- and five-year periods. The Board further considered that the Fund outperformed its Broadridge Index for the one-, three- and five-year periods. The Board concluded that the Fund's performance was satisfactory. Strategic Bond Fund. The Board considered that the Fund's performance was below the medians of its Peer Group and Peer Universe for the one-, three- and five-year periods The Board further noted that the Fund underperformed its Broadridge Index for the one-, three- and five-year periods. The Board took into account management's discussion of the reasons for the Portfolio's recent underperformance and concluded that the Portfolio's performance was being appropriately monitored. 82 SunAmerica Income Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2018 -- (unaudited) (continued) U.S. Government Securities Fund. The Board considered that the Fund's performance was below the medians of its Peer Group and Peer Universe for the one-, three- and five-year periods. The Board also considered that the Fund underperformed its Broadridge Index for the one-, three- and five-year periods. The Board noted management's discussion of the Fund's performance and concluded that the Fund's performance was being appropriately monitored. Consideration of the Management Fees and Subadvisory Fee and the Cost of the Services and Profits to be Realized by SunAmerica, the Subadvisers and their Affiliates from the Relationship with the Funds. The Board, including the Independent Trustees, received and reviewed information regarding the fees paid by the Funds to SunAmerica pursuant to the Advisory Agreement and the fees to be paid by SunAmerica to the Subadvisers pursuant to the Subadvisory Agreements. The Board examined this information in order to determine the reasonableness of the fees in light of the nature and quality of services to be provided and any potential additional benefits to be received by SunAmerica, the Subadvisers or their affiliates in connection with providing such services to the Funds. To assist in analyzing the reasonableness of the management fee for each of the Funds, the Board received reports independently prepared by Broadridge. The reports showed comparative fee information for each Fund's Peer Group and/or Peer Universe as determined by Broadridge, including rankings within each category. In considering the reasonableness of the management fee to be paid by each Fund to SunAmerica, the Board reviewed a number of expense comparisons, including: (i) contractual and actual management fees; and (ii) actual total operating expenses. In considering each Fund's total operating expenses, the Board analyzed the level of fee waivers and expense reimbursements and the net expense caps contractually agreed upon by SunAmerica with respect to each Fund. The Board further considered that, unlike the funds in each Peer Group and Peer Universe, the fee waivers and/or reimbursements being made by SunAmerica with respect to the Funds are only reflected in the total expenses category of the Broadridge reports, rather than also being reflected as specific management fee waivers in the actual management fee category of the Broadridge reports. As a result, the Board took into account that the actual management fees presented by Broadridge for the funds in each Peer Group and Peer Universe may appear lower on a relative basis. The Board also considered the various expense components of the Funds and compared each Fund's net expense ratio (taking into account the contractual fee caps and waivers) to those of other funds within its Peer Group and/or Peer Universe as a guide to help assess the reasonableness of the management fee for the Funds. The Board acknowledged that it was difficult to make precise comparisons with other funds in the Peer Groups and Peer Universes since the exact nature of services provided under the various fund agreements is often not apparent. The Board noted, however, that the comparative fee information provided by Broadridge as a whole was useful in assessing whether SunAmerica was providing services at a cost that was competitive with other, similar funds. The Board also considered the management fees received by SunAmerica with respect to other mutual funds and accounts with similar investment strategies to the Funds, to the extent applicable. The Board noted, however, that the mutual funds identified as similar to the Funds are sold only in the variable annuity market and, accordingly, are in different Broadridge classifications, with peer groups consisting of funds underlying variable insurance products. The Board then noted the management fees paid by the Funds were reasonable as compared to the fees SunAmerica was receiving from other mutual funds and accounts for which it serves as adviser or subadviser. The Board also received and reviewed information regarding the fees paid by SunAmerica to the Subadvisers pursuant to the Subadvisory Agreements. To assist in analyzing the reasonableness of the subadvisory fees, the Board received a report independently prepared by Broadridge. The report showed comparative fee information of the Funds' Peer Groups and/or Peer Universes that the Board used as a guide to help assess the reasonableness of the subadvisory fees. The Board noted that Peer Group information as a whole was useful in assessing whether the Subadvisers were providing services at a cost that was competitive with other similar funds. The Board also considered that the subadvisory fees are paid by SunAmerica out of its management fee and not by the Funds, and that subadvisory fees may vary widely within a Peer Group for various reasons, including market pricing demands, existing relationships, experience and success, and individual client needs. The Board further considered the amount of subadvisory fees paid out by SunAmerica and the amount of the management fees which it retained and determined that these amounts were reasonable in light of the services performed by SunAmerica and the Subadvisers, respectively. The Board also considered fees received by the Subadvisers with respect to other mutual funds and accounts with similar investment strategies to the Funds for which they serve as adviser or subadviser, to the extent applicable. The Board then noted that the subadvisory fee paid by SunAmerica to PineBridge was reasonable as compared to fees PineBridge receives for other mutual funds and accounts for which it serves as adviser or subadviser. The Board also noted that Newfleet indicated that there are meaningful differences between the Flexible Credit Fund and another subadvised account with a similar strategy. 83 SunAmerica Income Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2018 -- (unaudited) (continued) Flexible Credit Fund. The Board considered that the Fund's actual management fees were below the medians of its Peer Group and Peer Universe. The Board also considered that the Fund's total expenses were below the medians of its Peer Group and Peer Universe. The Board noted that the Fund's advisory fee contains breakpoints and further noted management's discussion regarding the Fund's expenses. The Board also took into account recent actions to reduce Fund expenses through fee waivers. Strategic Bond Fund. The Board considered that the Fund's actual management fees were above the medians of its Peer Group and Peer Universe. The Board also considered that the Fund's total expenses were above the medians of its Peer Group and Peer Universe. The Board noted that the Fund's advisory fee contains breakpoints and further noted management's discussion regarding the Fund's expenses. The Board also took into account recent actions to reduce Fund expenses through fee waivers. U.S. Government Securities Fund. The Board considered that the Fund's actual management fees were above the medians of its Peer Group and Peer Universe. The Board also considered that the Fund's total expenses were below the median of its Peer Group and above the median of its Peer Universe. The Board noted that the Fund's advisory fee contains breakpoints and further noted management's discussion regarding the Fund's expenses. Profitability. The Board also considered SunAmerica's profitability and the benefits SunAmerica and its affiliates received from its relationship with the Funds. The Board received and reviewed financial statements relating to SunAmerica's financial condition and profitability with respect to the services it provided the Funds and considered how profit margins could affect SunAmerica's ability to attract and retain high quality investment professionals and other key personnel. The Board was also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by SunAmerica and its affiliates that provide services to the Funds on a Fund by Fund basis, as well as an Investment Management Profitability Analysis prepared by an independent information service, Broadridge. The Board also considered the contractual fee waivers and/or expense reimbursements agreed to by SunAmerica. The Board considered the profitability of SunAmerica under the Advisory Agreement, including the amount of management fees it retained after payment to the Subadvisers, and considered the profitability of SunAmerica's affiliates under the Rule 12b-1 Plans Service Agreements, and Administrative and Shareholder Services Agreements. Additionally, the Board considered whether SunAmerica, the Subadvisers and their affiliates received any indirect benefits from the relationship with the Funds. Specifically, the Board observed that AIG Federal Savings Bank, an affiliate of SunAmerica serves as custodian with respect to certain shareholder retirement accounts that are administered by SunAmerica and receives a fee payable by the qualifying shareholders. The Board further considered whether there were any collateral or "fall-out" benefits that SunAmerica and its affiliates may derive as a result of their relationship with the Funds. The Board noted that SunAmerica believes that any such benefits are de minimis and do not impact the reasonableness of the management fees. The Board also reviewed the Subadvisers' financial statements and/or other information and considered whether the Subadvisers had the financial resources necessary to attract and retain high quality investment management personnel and to provide a high quality of services. The Board concluded that SunAmerica and the Subadvisers had the financial resources necessary to perform their obligations under the Agreements and to continue to provide the Funds with the high quality services that they had provided in the past. The Board also concluded that the management fee and subadvisory fee were reasonable in light of the factors discussed above. Economies of Scale. The Board, including the Independent Trustees, considered whether the shareholders would benefit from economies of scale and whether there was potential for future realization of economies with respect to the Funds. The Board considered that as a result of being part of the AIG fund complex, the Funds share common resources and may share certain expenses, and if the size of the complex increases, each Fund could incur lower expenses than they otherwise would achieve as stand-alone entities. The Board also took into account that each of the Funds had management fee arrangements that included breakpoints that will adjust the fee downward as the size of the Fund increases, thereby allowing the shareholders to participate in any economies of scale. The Board further noted that SunAmerica has agreed to contractually cap the total annual operating expenses of each class of the Funds, at certain levels. The Board observed that those expense caps benefited shareholders by limiting total fees even in the absence of breakpoints or economies of scale. The Board concluded that the Funds' management fee structure was reasonable and that it would continue to review fees in connection with the renewal of the Advisory Agreement, including whether the implementation of additional breakpoints would be appropriate in the future due to an increase in asset size or otherwise. 84 SunAmerica Income Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2018 -- (unaudited) (continued) The Board noted that the Subadvisory Agreements included breakpoints, but did not review specific information regarding whether there have been economies of scale with respect to the Subadvisers' management of the Funds because it regards that information as less relevant at the subadviser level. Rather, the Board considered information regarding economies of scale in the context of the renewal of the Advisory Agreement. Other Factors. In consideration of the Agreements, the Board also received information regarding SunAmerica's and the Subadvisers' brokerage and soft dollar practices. The Board considered that SunAmerica and the Subadvisers are responsible for decisions to buy and sell securities for the applicable Funds, selection of broker-dealers and negotiation of commission rates. The Board noted that it receives reports from SunAmerica and from an independent third party which include information on brokerage commissions and execution throughout the year. The Board also considered the benefits SunAmerica and the Subadvisers derive from their soft dollar arrangements, including arrangements under which brokers provide brokerage and/or research services to SunAmerica and/or the Subadvisers in return for allocating brokerage; however, the Board noted that the securities in which the Funds invest are traded primarily in the over-the-counter market on a "net" basis with dealers acting as principal for their own accounts without a stated commission (although the price of the security usually includes a profit to the dealer) and, therefore, the Funds generally do not incur brokerage commissions. Accordingly, the Board observed that SunAmerica and the Subadvisers typically would not receive soft dollar benefits in return for allocating the Funds' brokerage transactions. The Board further observed that when making purchases of new issues with fixed underwriting fees, SunAmerica or the Subadvisers may designate the use of broker-dealers who have agreed to provide certain statistical, research and other information. Conclusion. After a full and complete discussion, the Board approved the Agreements, each for a one-year period ending June 30, 2019. Based upon their evaluation of all these factors in their totality, the Board, including the Independent Trustees, was satisfied that the terms of the Agreements were fair and reasonable and in the best interests of the Funds and the Funds' shareholders. In arriving at a decision to approve the Agreements, the Board did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and each Independent Trustee may have attributed different weights to different factors. The Independent Trustees were also assisted by the advice of independent legal counsel in making this determination. 85 SunAmerica Income Funds SUPPLEMENTS TO THE PROSPECTUS THESE SUPPLEMENTS ARE NOT PART OF THE SEMI-ANNUAL REPORT SunAmerica Income Funds AIG Strategic Bond Fund Class A, Class B, Class C, Class W (the "Fund") Supplement dated November 19, 2018, to the Summary Prospectus, Prospectus and Statement of Additional Information each dated July 30, 2018, as supplemented and amended to date Effective November 19, 2018, pursuant to an Amended and Restated Advisory Fee Waiver Agreement, SunAmerica Asset Management, LLC has contractually agreed to waive further a portion of its fees payable by the Fund through July 31, 2020. Accordingly, the following changes to the Summary Prospectus, Prospectus and Statement of Additional Information are effective as of November 19, 2018: The table in the section of the Fund's Summary Prospectus entitled "Fees and Expenses of the Fund" and the table in the subsection of the Fund's Prospectus entitled "Fund Highlights: AIG Strategic Bond Fund -- Fees and Expenses of the Fund" are deleted in their entirety and replaced with the following:
Class A Class B Class C Class W ------- ------- ------- ------- Shareholder Fees (fees paid directly from your investment) Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)... 4.75% None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lesser of the amount redeemed or original purchase cost)/(1)/................. None 4.00% 1.00% None Maximum Sales Charge (Load) Imposed on Reinvested Dividends....................................... None None None None Redemption Fee.................................... None None None None Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Management Fees................................... 0.65% 0.65% 0.65% 0.65% Distribution and/or Service (12b-1) Fees.......... 0.35% 1.00% 1.00% None Other Expenses.................................... 0.33% 0.37% 0.33% 0.49% Total Annual Fund Operating Expenses Before Fee Waiver and/or Expense Reimbursement............. 1.33% 2.02% 1.98% 1.14% Fee Waiver and/or Expense Reimbursement/(2)(3)/... 0.27% 0.27% 0.27% 0.27% Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement/(2)(3)/..... 1.06% 1.75% 1.71% 0.87%
-------- (1)Purchases of Class A shares of $1 million or more will be subject to a contingent deferred sales charge ("CDSC") on redemptions made within two years of purchase. The CDSC on Class B shares applies only if shares are redeemed within six years of their purchase. The CDSC on Class C shares applies only if shares are redeemed within twelve months of their purchase. See pages 19-21 of the Prospectus for more information about the CDSCs. (2)Pursuant to an Expense Limitation Agreement, SunAmerica Asset Management, LLC ("SunAmerica") is contractually obligated to waive its fees and/or reimburse expenses to the extent that the Total Annual Fund Operating Expenses exceed 1.40%, 2.05%, 2.05% and 1.20% for Class A, Class B, Class C and Class W shares, respectively. For purposes of the Expense Limitation Agreement, "Total Annual Fund Operating Expenses" shall not include extraordinary expenses (i.e., expenses that are unusual in nature and/or infrequent in occurrence, such as litigation), or acquired fund fees and expenses, brokerage commissions and other transactional expenses relating to the purchase and sale of portfolio securities, interest, taxes and governmental fees, and other expenses not incurred in the ordinary course of the Fund's business. This agreement will continue in effect indefinitely, unless terminated by the Board of Trustees, including a majority of the trustees of the Board of Trustees who are not "interested persons" of SunAmerica Income Funds as defined in the Investment Company Act of 1940, as amended (the "Independent Trustees"). (3)Pursuant to an Advisory Fee Waiver Agreement, effective November 19, 2018, SunAmerica is contractually obligated to waive its management fee with respect to the Fund so that the management fee payable by the Fund to SunAmerica equals 0.38% on the first $350 million of average daily net assets and 0.33% above $350 million of average daily net assets. This agreement will continue in effect through July 31, 2020, and from year to year thereafter provided such continuance is agreed to by SunAmerica and approved by a majority of the Independent Trustees. 86 SunAmerica Income Funds SUPPLEMENTS TO THE PROSPECTUS The subsection of the Fund's Summary Prospectus entitled "Fees and Expenses of the Fund -- Example" and the subsection of the Fund's Prospectus entitled "Fund Highlights: AIG Strategic Bond Fund -- Fees and Expenses of the Fund -- Example" are deleted in their entirety and replaced with the following: This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same and that all fee waivers and/or reimbursements remain in place through the term of the applicable waiver and/or expense reimbursement. Although your actual costs may be higher or lower, based on these assumptions and the net expenses shown in the fee table, your costs would be:
1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- Class A... $578 $851 $1,145 $1,978 Class B*.. 578 907 1,263 2,149 Class C... 274 595 1,043 2,285 Class W... 89 335 602 1,362
You would pay the following expenses if you did not redeem your shares:
1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- Class A... $578 $851 $1,145 $1,978 Class B*.. 178 607 1,063 2,149 Class C... 174 595 1,043 2,285 Class W... 89 335 602 1,362
-------- * Class B shares generally convert to Class A shares approximately eight years after purchase. Therefore, the expense ratios used in the calculations for years 9 and 10 are the same for both Class A and Class B shares. The last sentence of the fourth paragraph in the subsection of the Fund's Prospectus entitled "Fund Management -- Adviser" is deleted in its entirety and replaced with the following: Pursuant to an Advisory Fee Waiver Agreement, effective November 19, 2018, through July 31, 2020, SunAmerica has contractually agreed to waive its management fee with respect to the Strategic Bond Fund so that the management fee payable by the Strategic Bond Fund to SunAmerica equals 0.38% on the first $350 million of average daily net assets and 0.33% above $350 million of average daily net assets. The fifth paragraph in the subsection of the Fund's Statement of Additional Information entitled "Adviser, Subadviser, Personal Securities Trading, Distributor and Servicing Agent" is deleted in its entirety and replaced with the following: Effective November 19, 2018, SunAmerica has contractually agreed to waive its management fee with respect to the Strategic Bond Fund so that the management fee payable by the Strategic Bond Fund to SunAmerica equals 0.38% on the first $350 million of average daily net assets and 0.33% above $350 million of average daily net assets. The Advisory Fee Waiver Agreement is effective through July 31, 2020, and from year to year thereafter provided such continuance is agreed to by SunAmerica and approved by a majority of the Disinterested Trustees. From May 1, 2018, through November 18, 2018, SunAmerica contractually agreed to waive its management fee with respect to the Strategic Bond Fund so that the management fee payable by the Strategic Bond Fund to SunAmerica equaled 0.40% on the first $350 million of average daily net assets and 0.35% above $350 million of average daily net assets. Capitalized terms used but not defined herein shall have the meanings assigned to them by the Summary Prospectus, Prospectus and/or the Statement of Additional Information. PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE. 87 SunAmerica Income Funds SUPPLEMENTS TO THE PROSPECTUS SunAmerica Income Funds AIG Flexible Credit Fund Class A, Class C, Class W (the "Fund") Supplement dated November 19, 2018, to the Summary Prospectus, Prospectus and Statement of Additional Information each dated July 30, 2018, as supplemented and amended to date Effective November 19, 2018, pursuant to an Amended and Restated Advisory Fee Waiver Agreement, SunAmerica Asset Management, LLC has contractually agreed to waive further a portion of its fees payable by the Fund through July 31, 2020. Accordingly, the following changes to the Summary Prospectus, Prospectus and Statement of Additional Information are effective as of November 19, 2018: The table in the section of the Fund's Summary Prospectus entitled "Fees and Expenses of the Fund" and the table in the subsection of the Fund's Prospectus entitled "Fund Highlights: AIG Flexible Credit Fund -- Fees and Expenses of the Fund" are deleted in their entirety and replaced with the following:
Class A Class C Class W ------- ------- ------- Shareholder Fees (fees paid directly from your investment) Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)............................. 4.75% None None Maximum Deferred Sales Charge (Load) (as a percentage of the lesser of the amount redeemed or original purchase cost)/(1)/................................................ None 1.00% None Maximum Sales Charge (Load) Imposed on Reinvested Dividends. None None None Redemption Fee.............................................. None None None Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Management Fees............................................. 0.74% 0.74% 0.74% Distribution and/or Service (12b-1) Fees.................... 0.35% 1.00% None Other Expenses.............................................. 0.35% 0.36% 0.49% Total Annual Fund Operating Expenses Before Fee Waiver and/or Expense Reimbursement.............................. 1.44% 2.10% 1.23% Fee Waiver and/or Expense Reimbursement/(2)(3)/............. 0.40% 0.40% 0.40% Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement/(2)(3)/...................... 1.04% 1.70% 0.83%
-------- (1)Purchases of Class A shares of $1 million or more will be subject to a contingent deferred sales charge ("CDSC") on redemptions made within two years of purchase. The CDSC on Class C shares applies only if shares are redeemed within twelve months of their purchase. See pages 19-21 of the Prospectus for more information about the CDSCs. (2)Pursuant to an Expense Limitation Agreement, SunAmerica Asset Management, LLC ("SunAmerica") is contractually obligated to waive its fees and/or reimburse expenses to the extent that the Total Annual Fund Operating Expenses exceed 1.45%, 2.10% and 1.25% for Class A, Class C and Class W shares, respectively. For purposes of the Expense Limitation Agreement, "Total Annual Fund Operating Expenses" shall not include extraordinary expenses (i.e., expenses that are unusual in nature and/or infrequent in occurrence, such as litigation), or acquired fund fees and expenses, brokerage commissions and other transactional expenses relating to the purchase and sale of portfolio securities, interest, taxes and governmental fees, and other expenses not incurred in the ordinary course of the Fund's business. This agreement will continue in effect indefinitely, unless terminated by the Board of Trustees, including a majority of the trustees of the Board of Trustees who are not "interested persons" of SunAmerica Income Funds as defined in the Investment Company Act of 1940, as amended (the "Independent Trustees"). (3)Pursuant to an Advisory Fee Waiver Agreement, effective November 19, 2018, SunAmerica is contractually obligated to waive its management fee with respect to the Fund so that the management fee payable by the Fund to SunAmerica equals 0.34% of average daily net assets. This agreement will continue in effect through July 31, 2020, and from year to year thereafter provided such continuance is agreed to by SunAmerica and approved by a majority of the Independent Trustees. 88 SunAmerica Income Funds SUPPLEMENTS TO THE PROSPECTUS The subsection of the Fund's Summary Prospectus entitled "Fees and Expenses of the Fund -- Example" and the subsection of the Fund's Prospectus entitled "Fund Highlights: AIG Flexible Credit Fund -- Fees and Expenses of the Fund -- Example" are deleted in their entirety and replaced with the following: This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same and that all fee waivers and/or reimbursements remain in place through the term of the applicable waiver and/or expense reimbursement. Although your actual costs may be higher or lower, based on these assumptions and the net expenses shown in the fee table, your costs would be:
1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- Class A... $576 $871 $1,188 $2,085 Class C... 273 619 1,092 2,400 Class W... 85 351 637 1,453
You would pay the following expenses if you did not redeem your shares:
1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- Class A... $576 $871 $1,188 $2,085 Class C... 173 619 1,092 2,400 Class W... 85 351 637 1,453
The penultimate sentence of the fourth paragraph in the subsection of the Fund's Prospectus entitled "Fund Management -- Adviser" is deleted in its entirety and replaced with the following: Pursuant to an Advisory Fee Waiver Agreement, effective November 19, 2018, through July 31, 2020, SunAmerica has contractually agreed to waive its management fee with respect to the Flexible Credit Fund so that the management fee payable by the Flexible Credit Fund to SunAmerica equals 0.34% of average daily net assets. The sixth paragraph in the subsection of the Fund's Statement of Additional Information entitled "Adviser, Subadviser, Personal Securities Trading, Distributor and Servicing Agent" is deleted in its entirety and replaced with the following: Effective November 19, 2018, SunAmerica has contractually agreed to waive its management fee with respect to the Flexible Credit Fund so that the management fee payable by the Flexible Credit Fund to SunAmerica equals 0.34% of average daily net assets. The Advisory Fee Waiver Agreement is effective through July 31, 2020, and from year to year thereafter provided such continuance is agreed to by SunAmerica and approved by a majority of the Disinterested Trustees. From December 7, 2017, through November 18, 2018, SunAmerica contractually agreed to waive its management fee with respect to the Flexible Credit Fund so that the management fee payable by the Flexible Credit Fund to SunAmerica equaled 0.36% of average daily net assets. Capitalized terms used but not defined herein shall have the meanings assigned to them by the Summary Prospectus, Prospectus and/or the Statement of Additional Information. PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE. 89 [LOGO] AIG Funds Harborside 5 185 Hudson Street, Suite 3300 Jersey City, NJ 07311 Trustees VOTING PROXIES ON DISCLOSURE OF Richard W. Grant TRUST PORTFOLIO QUARTERLY PORTFOLIO Peter A. Harbeck SECURITIES HOLDINGS Dr. Judith L. Craven A description of the The Trust is required William F. Devin policies and to file its com-plete Stephen J. Gutman proce-dures that the schedule of portfolio Eileen A. Kamerick Trust uses to holdings with the U.S. Officers determine how to vote Securities and John T. Genoy, President proxies relating to Exchange Commission James Nichols, Vice secu-rities held in a for its first and President Fund's portfolio, third fiscal quarters Christopher C. Joe, which is available in on Form N-Q. The Chief Compliance the Trust's Statement Trust's Forms N-Q are Officer of Additional available on the Gregory N. Bressler, Information, may be U.S. Securities and Secretary ob-tained without Exchange Commis-sion Kathleen Fuentes, Chief charge upon request, website at Legal Officer and by calling (800) www.sec.gov. You can Assistant Secretary 858-8850. The also review and obtain Gregory R. Kingston, in-formation is also copies of the Forms Treasurer available from the N-Q at the U.S. Donna McManus, Vice EDGAR database on the Securities and President and U.S. Secu-rities and Exchange Commission Assistant Treasurer Exchange Commission's Public Refer-ence Room Shawn Parry, Vice website at in Washington DC President and http://www.sec.gov. (information on the Assistant Treasurer DELIVERY OF operation of the Matthew J. Hackethal, SHAREHOLDER DOCUMENTS Public Reference Room Anti-Money Laundering The Funds have adopted may be ob-tained by Compliance Officer a policy that allows calling Investment Adviser them to send only one 1-800-SEC-0330). SunAmerica Asset copy of a Fund's PROXY VOTING RECORD ON Management, LLC prospectus, proxy SUNAMERICA INCOME FUNDS Harborside 5 material, annual Information regarding 185 Hudson Street, Suite report and semi-annual how the Funds voted 3300 report (the proxies relating to Jersey City, NJ 07311 "shareholder securities held in the Distributor documents") to Funds during the most AIG Capital Services, shareholders with recent twelve month Inc. multiple accounts period ended June 30 Harborside 5 residing at the same is available, once 185 Hudson Street, Suite "household." This filed with the U.S. 3300 practice is called Securities and Jersey City, NJ 07311 householding and Exchange Commission, Shareholder Servicing reduces Fund expenses, without charge, upon Agent which benefits you and request, by calling AIG Fund Services, Inc. other shareholders. (800) 858-8850 or on Harborside 5 Unless the Funds the U.S. Securities 185 Hudson Street, Suite receive instructions and Exchange 3300 to the con-trary, you Commission's website Jersey City, NJ 07311 will only receive one at http://www.sec.gov. Custodian copy of the This report is State Street Bank and shareholder documents. submitted solely for Trust Company The Funds will the general One Lincoln Street continue to household information of Boston, MA 02111 the share-holder shareholders of the Transfer Agent documents Funds. Distribution of DST Asset Manager indefinitely, until we this report to persons Solutions, Inc. are instructed other than 303 W 11th Street otherwise. If you do shareholders of the Kansas City, MO 64105 not wish to Funds is authorized participate in only in con-nection householding please with a currently contact Shareholder effective pro-spectus, Services at (800) setting forth details 858-8850 ext. 6010 or of the Funds, which send a written request must precede or with your name, the accom-pany this report. name of your fund(s) The accompanying and your account report has not been number(s) to AIG Funds audited by independent c/o DST, P.O. Box accountants and 219186, Kansas City accordingly no opinion MO, 64121-9186. We has been expressed will resume thereon. in-dividual mailings for your account within thirty (30) days of receipt of your request. Go Paperless!! Did you know that you have the option to receive your shareholder reports online? By choosing this convenient service, you will no longer receive paper copies of Fund documents such as annual reports, semi-annual reports, prospectuses and proxy statements in the mail. Instead, you are provided with quick and easy access to this information via the Internet. Why Choose Electronic Delivery? It's Quick -- Fund documents will be received faster than via traditional mail. It's Convenient -- Elimination of bulky documents from personal files. It's Cost Effective -- Reduction of your Fund's printing and mailing costs. To sign up for electronic delivery, follow these simple steps: 1 Go to www.aig.com/funds 2 Click on the link to "Go Paperless!!"
The email address you provide will be kept strictly confidential. Once your enrollment has been processed, you will begin receiving email notifications when anything you receive electronically is available online. You can return to www.aig.com/funds at any time to change your email address, edit your preferences or to cancel this service if you choose to resume physical delivery of your Fund documents. Please note - this option is only available to accounts opened through the Funds. For information on receiving this report online, see inside back cover. AIG Funds are advised by SunAmerica Asset Management, LLC (SAAMCo) and distributed by AIG Capital Services, Inc. (ACS), Member FINRA. Harborside 5, 185 Hudson Street, Suite 3300, Jersey City, NJ 07311, 800-858-8850. SAAMCo and ACS are members of American International Group, Inc. (AIG). This fund report must be preceded by or accompanied by a prospectus. Investors should carefully consider a Fund's investment objectives, risks, charges and expenses before investing. The prospectus, containing this and other important information, can be obtained from your financial adviser, the AIG Funds Sales Desk at 800-858-8850, ext. 6003, or at aig.com/funds. Read the prospectus carefully before investing. aig.com/funds INSAN - 9/18 [LOGO] Item 2. Code of Ethics. Not applicable. Item 3. Audit Committee Financial Expert. Not applicable. Item 4. Principal Accountant Fees and Services. Not applicable. Item 5. Audit Committee of Listed Registrants. Not applicable. Item 6. Investments. Included in Item 1 to the Form. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not applicable. Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not applicable. Item 10. Submission of Matters to a Vote of Security Holders. There were no material changes to the procedures by which shareholders may recommend nominees to the registrant's Board of Trustees that were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by 22(b)(15)) of Schedule 14A (17 CFR 240.14a- 101), or this Item 10. Item 11. Controls and Procedures. (a) An evaluation was performed within 90 days of the filing of this report, under the supervision and with the participation of the registrant's management, including the President and Treasurer, of the effectiveness of the design and operation of the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))). Based on that evaluation, the registrant's management, including the President and Treasurer, concluded that the registrant's disclosure controls and procedures are effective. (b) There was no change in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 (17 CFR 270.30a-3(d))) that occurred during the registrant's last fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal contro1 over financial reporting. Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. Not applicable. Item 13. Exhibits. (a) (1) Not applicable. (2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT. (3) Not applicable. (b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) and Section 906 of the Sarbanes- Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SunAmerica Income Funds By: /s/ John T. Genoy ----------------------- John T. Genoy President Date: December 07, 2018 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ John T. Genoy ----------------------- John T. Genoy President Date: December 07, 2018 By: /s/ Gregory R. Kingston ----------------------- Gregory R. Kingston Treasurer Date: December 07, 2018 EX-99.CERT 2 d604627dex99cert.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, 2018 /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, 2018 /s/ Gregory R. Kingston ----------------------- Gregory R. Kingston Treasurer EX-99.906.CERT 3 d604627dex99906cert.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, 2018 /s/ John T. Genoy --------------- John T. Genoy President /s/ Gregory R. Kingston ------------------- Gregory R. Kingston Treasurer