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: March 31, 2018
-------------------------
Item 1. Reports to Stockholders
ANNUAL REPORT 2018
SUNAMERICA
Income Funds
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Table of Contents
SHAREHOLDER LETTER...................................... 2
EXPENSE EXAMPLE......................................... 4
STATEMENTS OF ASSETS AND LIABILITIES.................... 6
STATEMENTS OF OPERATIONS................................ 8
STATEMENTS OF CHANGES IN NET ASSETS..................... 9
FINANCIAL HIGHLIGHTS.................................... 10
PORTFOLIO OF INVESTMENTS................................ 13
NOTES TO FINANCIAL STATEMENTS........................... 69
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. 84
TRUSTEE AND OFFICER INFORMATION......................... 85
SHAREHOLDER TAX INFORMATION............................. 88
COMPARISONS: PORTFOLIO vs. INDICES...................... 89
Shareholder Letter -- (unaudited)
Dear Shareholders,
We are pleased to present this annual update for the SunAmerica Income Funds
(the "Income Funds") for the 12 month period ended March 31, 2018.
From a broad perspective, the 12 months ended March 31, 2018 was a period
wherein fixed income market performance was primarily driven by improving
economic growth around the world, geopolitical events and shifting investor
expectations about central bank monetary policy. Overall, most non-government
bond sectors outperformed U.S. Treasuries during the annual period.
As the annual period began in April 2017, non-government bond sectors generally
recorded positive returns. Credit-related sectors performed especially well,
responding positively to solid corporate earnings and to political
developments, such as the French election outcome. On the interest rate front,
heightened geopolitical tensions conspired along with a weak first quarter 2017
U.S. GDP release to drive U.S. Treasury yields to their lowest levels of 2017.
Non-government bond sectors maintained this trajectory in May, as investors saw
fresh record highs in equity markets, a benign U.S. Treasury yield backdrop and
a relatively light new issuance calendar. U.S. fixed income market performance
was mixed in June 2017, as investors had to contend with resurfacing volatility
in U.S. Treasury yields and oil markets and an interest rate increase by the
Federal Reserve (the "Fed").
Non-government bond sectors resumed their advance in July 2017 amid a sharp
climb in oil prices, a relatively stable backdrop for U.S. Treasury yields and
another record high in equity markets. However, investor concerns about
political discord in Washington, D.C., terrorist attacks in Spain, and an
emboldened North Korea combined to take U.S. Treasury yields lower and spreads,
or yield differentials to U.S. Treasuries, wider. This trajectory reversed
course again in September, as non-government bond sectors benefited from
optimism surrounding the release of a plan for U.S. tax reform, a firmer
support for oil prices, and fresh record highs in equity markets yet again. The
Fed kept its monetary policy unchanged but unveiled its plans for balance sheet
normalization.+
In October 2017, non-government bond sectors generally outperformed as the
optimism around corporate earnings and a pro-reflationary rise in equities more
than offset the impact of U.S. Treasury yield concerns. Volatility ensued in
the first two weeks of November, but this proved to be short-lived, as the U.S.
Congress made surprising progress on U.S. tax reform during the second half of
the month. In December, investors saw positive performance from the fixed
income asset class, as the market was able to easily absorb the passage of the
Republican tax reform bill, another interest rate hike by the Fed and
multi-year highs in oil prices.
The first quarter of 2018 was a tale of two halves for credit markets. In
January, the narrative for corporate fundamentals continued to improve with
upgrades to global economic growth expectations and optimism around the impact
of U.S. tax reform. However, enthusiasm began to wane, and early in February,
U.S. Treasury yields surged to reach the highest levels investors had seen
since 2014. Negative investor sentiment translated into investment outflows,
creating a negative technical, or supply/demand, environment. This continued in
March as evidence of stronger global economic growth and wage gains led to
concerns around inflation and the potential for a more accelerated pace of
central bank policy tightening. Indeed, investors had to contend with yet
another Fed interest rate increase in March, which brought the targeted federal
funds rate to a range of 1.50% - 1.75%. Softer global economic growth data,
negative headlines related to several large technology companies and the threat
of an escalating trade war between the U.S. and China also challenged
non-government bond sector performance during the first quarter of 2018.
For the annual period overall, the Bloomberg Barclays U.S. Aggregate Bond
Index,++ a broad measure of the U.S. fixed income market, returned 1.20%. U.S.
Treasuries eked out modestly positive returns, and the U.S. Treasury yield
curve flattened,/*/ with yields on shorter- and intermediate-term maturities
rising more than yields on most longer-term maturities. The yield on the
bellwether 10-year U.S. Treasury rose approximately 35 basis points/**/ to end
the annual period at 2.74%. Non-U.S. Treasury sectors generally
2
outperformed U.S. Treasuries, led by sovereign emerging markets debt, high
yield corporate bonds and investment grade corporate bonds. Commercial
mortgage-backed securities, agency securities, asset-backed securities and
mortgage-backed securities also outperformed U.S. Treasuries, albeit to a
lesser extent.
On the following pages, you will find financial statements and portfolio
information for each of the Income Funds during the annual period ended
March 31, 2018.
We thank you for being a part of AIG 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 at www.aig.com/funds.
Sincerely,
The SunAmerica Income Funds Investment Professionals
Timothy Campion Robert Vanden Assem David L. Albrycht
Andrew Sheridan Dana Burns Frank Ossino
Jane Algieri Anders Faergemann Jonathan Stanley
John Yovanovic
--------
Past performance is no guarantee of future results.
+ Balance sheet normalization refers to the steps the Fed began taking in
October 2017 to reverse quantitative easing and remove the substantial
monetary accommodation it has provided to the economy since the financial
crisis began in 2007.
++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 flattening yield curve is one wherein the differential in yields between
longer-term and shorter-term maturities narrows.
**A basis point is 1/100/th/ of a percentage point.
3
SunAmerica Income Funds
EXPENSE EXAMPLE -- March 31, 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 October 1, 2017 and held until March 31, 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 March 31, 2018" to estimate the expenses you paid on your account
during this period. The "Expenses Paid During the Six Months Ended March 31,
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 March 31, 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 March
31, 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 March 31, 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 March 31, 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 March 31, 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 -- March 31, 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 October 1, March 31, March 31, at October 1, March 31, March 31, Expense
Fund 2017 2018 2018* 2017 2018 2018* Ratio*
---- ------------- -------------- ------------- ------------- -------------- ------------- ----------
AIG U.S. Government Securities
Class A#..................... $1,000.00 $ 988.57 $ 4.91 $1,000.00 $1,020.00 $ 4.99 0.99%
Class C#..................... $1,000.00 $ 986.45 $ 8.12 $1,000.00 $1,016.75 $ 8.25 1.64%
AIG Strategic Bond
Class A...................... $1,000.00 $ 989.14 $ 6.60 $1,000.00 $1,018.30 $ 6.69 1.33%
Class B...................... $1,000.00 $ 982.79 $10.08 $1,000.00 $1,014.76 $10.25 2.04%
Class C...................... $1,000.00 $ 983.18 $ 9.84 $1,000.00 $1,015.01 $10.00 1.99%
Class W...................... $1,000.00 $ 987.59 $ 5.60 $1,000.00 $1,019.30 $ 5.69 1.13%
AIG Flexible Credit#
Class A...................... $1,000.00 $1,009.75 $ 6.21 $1,000.00 $1,018.75 $ 6.24 1.24%
Class C...................... $1,000.00 $1,006.57 $ 9.51 $1,000.00 $1,015.46 $ 9.55 1.90%
Class W...................... $1,000.00 $1,010.81 $ 5.16 $1,000.00 $1,019.80 $ 5.19 1.03%
--------
* Expenses are equal to each Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 182 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 March 31,
2018" and the "Annualized Expense Ratio" would have been higher.
5
SunAmerica Income Funds
STATEMENTS OF ASSETS AND LIABILITIES -- March 31, 2018
AIG U.S. Government AIG Strategic
Securities Bond
Fund Fund
------------------- -------------
ASSETS:
Investments at value (unaffiliated)*................................................. $138,684,453 $380,910,611
Repurchase agreements (cost approximates value)...................................... 6,890,000 --
Cash................................................................................. 565 1,517,138
Foreign cash*........................................................................ -- 3,364
Receivable for:
Shares of beneficial interest sold.................................................. 484,535 386,887
Dividends and interest.............................................................. 567,550 4,509,722
Investments sold.................................................................... -- 1,730
Investments sold on an extended settlement basis.................................... -- 391,056
Prepaid expenses and other assets.................................................... 4,533 5,821
Due from investment adviser for expense reimbursements/fee waivers................... 91,653 384
Unrealized appreciation on forward foreign currency contracts........................ -- 45,463
------------ ------------
TOTAL ASSETS......................................................................... 146,723,289 387,772,176
------------ ------------
LIABILITIES:
Payable for:
Shares of beneficial interest redeemed.............................................. 210,339 575,198
Investments purchased............................................................... -- 1,494,698
Investments purchased on an extended settlement basis............................... -- 25,096,865
Investment advisory and management fees............................................. 79,806 200,901
Distribution and service maintenance fees........................................... 49,043 160,606
Transfer agent fees and expenses.................................................... 38,668 82,745
Other accrued expenses.............................................................. 107,437 179,412
Dividends Payable.................................................................... 1,867 40,835
Due to Custodian..................................................................... -- --
Unrealized depreciation on forward foreign currency contracts........................ -- 12,539
------------ ------------
TOTAL LIABILITIES.................................................................... 487,160 27,843,799
------------ ------------
NET ASSETS........................................................................... $146,236,129 $359,928,377
============ ============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $0.01................................................. $ 163,412 $ 1,065,953
Paid-in capital...................................................................... 164,243,108 387,850,146
------------ ------------
164,406,520 388,916,099
Accumulated undistributed net investment income (loss)............................... 125,422 (596,107)
Accumulated undistributed net realized gain (loss) on investments, futures
contracts, options contracts, securities sold short, and foreign exchange
transactions........................................................................ (20,228,488) (22,083,446)
Unrealized appreciation (depreciation) on investments................................ 1,932,675 (6,346,874)
Unrealized foreign exchange gain (loss) on other assets and liabilities.............. -- 38,705
------------ ------------
NET ASSETS........................................................................... $146,236,129 $359,928,377
============ ============
*Cost
Investments (unaffiliated).......................................................... $136,751,778 $387,257,485
============ ============
Foreign cash........................................................................ $ -- $ 3,581
============ ============
AIG Flexible
Credit
Fund
------------
ASSETS:
Investments at value (unaffiliated)*................................................. $323,556,463
Repurchase agreements (cost approximates value)...................................... --
Cash................................................................................. --
Foreign cash*........................................................................ 7,855
Receivable for:
Shares of beneficial interest sold.................................................. 2,026,149
Dividends and interest.............................................................. 3,466,272
Investments sold.................................................................... 2,215,569
Investments sold on an extended settlement basis.................................... 3,455,002
Prepaid expenses and other assets.................................................... 5,287
Due from investment adviser for expense reimbursements/fee waivers................... 202,471
Unrealized appreciation on forward foreign currency contracts........................ --
------------
TOTAL ASSETS......................................................................... 334,935,068
------------
LIABILITIES:
Payable for:
Shares of beneficial interest redeemed.............................................. 800,885
Investments purchased............................................................... 4,659
Investments purchased on an extended settlement basis............................... 9,373,453
Investment advisory and management fees............................................. 203,687
Distribution and service maintenance fees........................................... 111,083
Transfer agent fees and expenses.................................................... 72,088
Other accrued expenses.............................................................. 168,940
Dividends Payable.................................................................... 300,288
Due to Custodian..................................................................... 475,543
Unrealized depreciation on forward foreign currency contracts........................ --
------------
TOTAL LIABILITIES.................................................................... 11,510,626
------------
NET ASSETS........................................................................... 323,424,442
============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $0.01................................................. $ 949,971
Paid-in capital...................................................................... 333,295,046
------------
334,245,017
Accumulated undistributed net investment income (loss)............................... 392,649
Accumulated undistributed net realized gain (loss) on investments, futures
contracts, options contracts, securities sold short, and foreign exchange
transactions........................................................................ (7,114,877)
Unrealized appreciation (depreciation) on investments................................ (4,098,204)
Unrealized foreign exchange gain (loss) on other assets and liabilities.............. (143)
------------
NET ASSETS........................................................................... $323,424,442
============
*Cost
Investments (unaffiliated).......................................................... $327,654,667
============
Foreign cash........................................................................ $ 7,998
============
See Notes to Financial Statements
6
SunAmerica Income Funds
STATEMENTS OF ASSETS AND LIABILITIES -- March 31, 2018 (continued)
AIG U.S. Government AIG Strategic
Securities Bond
Fund Fund
------------------- -------------
Class A (unlimited shares authorized):
Net assets........................................................................... $138,598,965 $196,711,525
Shares of beneficial interest issued and outstanding................................. 15,487,456 58,281,482
Net asset value and redemption price per share (excluding any applicable contingent
deferred sales charge) ............................................................. $ 8.95 $ 3.38
Maximum sales charge (4.75% of offering price)....................................... $ 0.45 $ 0.17
------------ ------------
Maximum offering price to public..................................................... $ 9.40 $ 3.55
============ ============
Class B (unlimited shares authorized):
Net assets........................................................................... $ -- $ 21,875,396
Shares of beneficial interest issued and outstanding................................. -- 6,484,584
Net asset value, offering and redemption price per share (excluding any applicable
contingent deferred sales charge)................................................... $ -- $ 3.37
============ ============
Class C (unlimited shares authorized):
Net assets........................................................................... $ 7,637,164 $ 71,102,502
Shares of beneficial interest issued and outstanding................................. 853,762 20,996,580
Net asset value, offering and redemption price per share (excluding any applicable
contingent deferred sales charge)................................................... $ 8.95 $ 3.39
============ ============
Class W (unlimited shares authorized):
Net assets........................................................................... $ -- $ 70,238,954
Shares of beneficial interest issued and outstanding................................. -- 20,832,621
Net asset value, offering and redemption price per share............................. $ -- $ 3.37
============ ============
AIG Flexible
Credit
Fund
------------
Class A (unlimited shares authorized):
Net assets........................................................................... $133,267,958
Shares of beneficial interest issued and outstanding................................. 39,207,654
Net asset value and redemption price per share (excluding any applicable contingent
deferred sales charge) ............................................................. $ 3.40
Maximum sales charge (4.75% of offering price)....................................... $ 0.17
------------
Maximum offering price to public..................................................... $ 3.57
============
Class B (unlimited shares authorized):
Net assets........................................................................... $ --
Shares of beneficial interest issued and outstanding................................. --
Net asset value, offering and redemption price per share (excluding any applicable
contingent deferred sales charge)................................................... $ --
============
Class C (unlimited shares authorized):
Net assets........................................................................... $ 58,993,641
Shares of beneficial interest issued and outstanding................................. 17,249,460
Net asset value, offering and redemption price per share (excluding any applicable
contingent deferred sales charge)................................................... $ 3.42
============
Class W (unlimited shares authorized):
Net assets........................................................................... $131,162,843
Shares of beneficial interest issued and outstanding................................. 38,540,035
Net asset value, offering and redemption price per share............................. $ 3.40
============
See Notes to Financial Statements
7
SunAmerica Income Funds
STATEMENTS OF OPERATIONS -- For the Year Ended March 31, 2018
AIG U.S. Government AIG Strategic
Securities Bond
Fund Fund
------------------- -------------
INVESTMENT INCOME:
Dividends (unaffiliated)............................................................ $ -- $ 19,466
Interest (unaffiliated)............................................................. 3,189,376 16,483,624
----------- -----------
Total investment income*........................................................... 3,189,376 16,503,090
----------- -----------
EXPENSES:
Investment advisory and management fees............................................. 1,025,621 2,385,436
Distribution and Service maintenance fees:
Class A............................................................................ 472,385 604,726
Class B............................................................................ -- 273,791
Class C............................................................................ 156,018 1,106,902
Service fee -- Class W.............................................................. -- 84,858
Transfer agent fees:
Class A............................................................................ 340,777 408,449
Class B............................................................................ -- 64,614
Class C............................................................................ 39,970 255,652
Class W............................................................................ -- 125,668
Registration fees:
Class A............................................................................ 23,957 23,586
Class B............................................................................ -- 13,526
Class C............................................................................ 13,776 18,949
Class W............................................................................ -- 16,269
Custodian and accounting fees....................................................... 34,485 103,571
Reports to shareholders............................................................. 47,344 75,583
Audit and tax fees.................................................................. 67,304 73,884
Legal fees.......................................................................... 19,763 31,038
Trustees' fees and expenses......................................................... 5,629 16,288
Interest expense.................................................................... -- 1,301
Other expenses...................................................................... 15,662 24,481
----------- -----------
Total expenses before fee waivers, expense reimbursements and expense recoupments.. 2,262,691 5,708,572
----------- -----------
Net (fees waived and expenses reimbursed)/recouped by investment advisor (Note 3).. (598,312) --
----------- -----------
Net expenses....................................................................... 1,664,379 5,708,572
----------- -----------
Net investment income (loss).......................................................... 1,524,997 10,794,518
----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments (unaffiliated).......................................................... (638,420) 6,353,762
Forward contracts................................................................... -- (3,300,757)
Net realized foreign exchange gain (loss) on other assets and liabilities............. -- (96,294)
----------- -----------
Net realized gain (loss) on investments and foreign currencies........................ (638,420) 2,956,711
----------- -----------
Change in unrealized appreciation (depreciation) on:
Investments (unaffiliated).......................................................... (1,565,538) (6,253,579)
Forward contracts................................................................... -- 85,467
Change in unrealized foreign exchange gain (loss) on other assets and liabilities..... -- 7,638
----------- -----------
Net unrealized gain (loss) on investments and foreign currencies...................... (1,565,538) (6,160,474)
----------- -----------
Net realized and unrealized gain (loss) on investments and foreign currencies......... (2,203,958) (3,203,763)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....................... (678,961) 7,590,755
=========== ===========
* Net of foreign withholding taxes on interest and dividends of....................... $ -- $ 1,410
=========== ===========
AIG Flexible
Credit
Fund
------------
INVESTMENT INCOME:
Dividends (unaffiliated)............................................................ $ 82,189
Interest (unaffiliated)............................................................. 21,552,679
-----------
Total investment income*........................................................... 21,634,868
-----------
EXPENSES:
Investment advisory and management fees............................................. 2,689,547
Distribution and Service maintenance fees:
Class A............................................................................ 501,431
Class B............................................................................ --
Class C............................................................................ 720,765
Service fee -- Class W.............................................................. 222,397
Transfer agent fees:
Class A............................................................................ 334,082
Class B............................................................................ --
Class C............................................................................ 164,330
Class W............................................................................ 328,943
Registration fees:
Class A............................................................................ 25,990
Class B............................................................................ --
Class C............................................................................ 20,400
Class W............................................................................ 21,820
Custodian and accounting fees....................................................... 89,599
Reports to shareholders............................................................. 94,584
Audit and tax fees.................................................................. 86,342
Legal fees.......................................................................... 28,520
Trustees' fees and expenses......................................................... 16,816
Interest expense.................................................................... 57,057
Other expenses...................................................................... 26,370
-----------
Total expenses before fee waivers, expense reimbursements and expense recoupments.. 5,428,993
-----------
Net (fees waived and expenses reimbursed)/recouped by investment advisor (Note 3).. (406,076)
-----------
Net expenses....................................................................... 5,022,917
-----------
Net investment income (loss).......................................................... 16,611,951
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments (unaffiliated).......................................................... 1,837,310
Forward contracts................................................................... --
Net realized foreign exchange gain (loss) on other assets and liabilities............. --
-----------
Net realized gain (loss) on investments and foreign currencies........................ 1,837,310
-----------
Change in unrealized appreciation (depreciation) on:
Investments (unaffiliated).......................................................... (5,217,698)
Forward contracts................................................................... --
Change in unrealized foreign exchange gain (loss) on other assets and liabilities..... 1,045
-----------
Net unrealized gain (loss) on investments and foreign currencies...................... (5,216,653)
-----------
Net realized and unrealized gain (loss) on investments and foreign currencies......... (3,379,343)
-----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....................... 13,232,608
===========
* 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 year For the year For the year For the year
ended ended ended ended
March 31, March 31, March 31, March 31,
2018 2017 2018 2017
------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)..................................... $ 1,524,997 $ 1,544,525 $ 10,794,518 $ 10,313,149
Net realized gain (loss) on investments and foreign currencies... (638,420) (3,707,604) 2,956,711 (1,494,836)
Net unrealized gain (loss) on investments and foreign
currencies...................................................... (1,565,538) (4,357,250) (6,160,474) 16,386,601
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting from operations.... (678,961) (6,520,329) 7,590,755 25,204,914
------------ ------------ ------------ ------------
Distributions to shareholders from:
Net investment income (Class A).................................. (2,487,089) (2,798,856) (5,155,583) (5,554,446)
Net investment income (Class B).................................. -- -- (637,563) (785,283)
Net investment income (Class C).................................. (174,406) (290,749) (2,616,763) (3,770,924)
Net investment income (Class W).................................. -- -- (1,770,057) (1,129,107)
Net realized gain on securities (Class A)........................ -- -- -- --
Net realized gain on securities (Class B)........................ -- -- -- --
Net realized gain on securities (Class C)........................ -- -- -- --
Net realized gain on securities (Class W)........................ -- -- -- --
------------ ------------ ------------ ------------
Total distributions to shareholders................................ (2,661,495) (3,089,605) (10,179,966) (11,239,760)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting from capital share
transactions (Note 6)............................................. (18,398,158) (10,548,448) 848,412 (39,982,323)
------------ ------------ ------------ ------------
Total increase (decrease) in net assets............................ (21,738,614) (20,158,382) (1,740,799) (26,017,169)
NET ASSETS:
Beginning of period................................................ 167,974,743 188,133,125 361,669,176 387,686,345
------------ ------------ ------------ ------------
End of period+..................................................... $146,236,129 $167,974,743 $359,928,377 $361,669,176
============ ============ ============ ============
+Includes accumulated undistributed net investment income
(loss) of......................................................... $ 125,422 $ 47,778 $ (596,107) $ (1,256,884)
============ ============ ============ ============
AIG Flexible Credit Fund
--------------------------
For the year For the year
ended ended
March 31, March 31,
2018 2017
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)..................................... $ 16,611,951 $ 13,687,344
Net realized gain (loss) on investments and foreign currencies... 1,837,310 2,673,462
Net unrealized gain (loss) on investments and foreign
currencies...................................................... (5,216,653) 10,941,400
------------ ------------
Net increase (decrease) in net assets resulting from operations.... 13,232,608 27,302,206
------------ ------------
Distributions to shareholders from:
Net investment income (Class A).................................. (6,747,881) (5,974,085)
Net investment income (Class B).................................. -- --
Net investment income (Class C).................................. (2,890,712) (2,514,450)
Net investment income (Class W).................................. (7,204,700) (5,460,071)
Net realized gain on securities (Class A)........................ -- --
Net realized gain on securities (Class B)........................ -- --
Net realized gain on securities (Class C)........................ -- --
Net realized gain on securities (Class W)........................ -- --
------------ ------------
Total distributions to shareholders................................ (16,843,293) (13,948,606)
------------ ------------
Net increase (decrease) in net assets resulting from capital share
transactions (Note 6)............................................. (49,463,029) 85,037,339
------------ ------------
Total increase (decrease) in net assets............................ (53,073,714) 98,390,939
NET ASSETS:
Beginning of period................................................ 376,498,156 278,107,217
------------ ------------
End of period+..................................................... $323,424,442 $376,498,156
============ ============
+Includes accumulated undistributed net investment income
(loss) of......................................................... $ 392,649 $ 249,849
============ ============
See Notes to Financial Statements
9
SunAmerica Income Funds
FINANCIAL HIGHLIGHTS
AIG U.S. GOVERNMENT SECURITIES FUND
-----------------------------------
Net gain
(loss) on
Net investments Distributions Net Net
Asset (both Dividends from net Asset Assets, Ratio of
Value, Net realized Total from from net realized Total Value, end of expenses
beginning investment and investment investment gains on Distri- end of Total period to average
Period Ended of period income(1) unrealized) operations income investments butions period Return(2) (000's) net assets(3)
------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -------- -------------
Class A
-------
03/31/14 $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
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
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
0.77% 122%
0.61 57
0.16 36
0.26 95
0.38 29
--------
(1)Calculated based upon average shares outstanding.
(2)Total return 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
-------- -------- -------- -------- --------
AIG U.S. Government Securities Fund Class A 0.40% 0.38% 0.37% 0.35% 0.37%
AIG U.S. Government Securities Fund
Class C................................... 0.57 0.50 0.39 0.40 0.46
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
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
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
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
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
1.97% 3.35% 158%
1.97 2.95 137
2.01 2.87 108
1.99 2.33 109
2.02 2.46 149
1.96% 3.37% 158%
1.94 2.98 137
1.98 2.90 108
1.97 2.35 109
1.98 2.50 149
1.20%(3)(5) 2.73%(3)(5) 137%
1.15 3.71 108
1.14 3.20 109
1.14 3.34 149
--------
(1)Calculated based upon average shares outstanding.
(2)Total return does not reflect sales load, but does include expense
reimbursements.
(3)Net of the following expense reimbursements, if applicable (based on average
net assets):
03/31/15
--------
AIG Strategic Bond Fund Class W......... 0.69%(5)
(4)Inception date of class.
(5)Annualized.
See Notes to Financial Statements
11
SunAmerica Income Funds
FINANCIAL HIGHLIGHTS -- (continued)
AIG FLEXIBLE CREDIT FUND
------------------------
Net gain
(loss) on
Net investments Distributions Net
Asset (both Dividends from net Asset Net Assets,
Value, Net realized Total from from net realized Total Value, end of
beginning investment and investment investment gains on Distri- end of Total period
Period Ended of period income(1) unrealized) operations income investment butions period Return(2) (000's)
-------------------- --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -----------
Class A
-------
03/31/14 $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
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
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
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
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
1.25%(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
--------
(1)Calculated based upon average shares outstanding.
(2)Total return 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
-------- -------- -------- --------
AIG Flexible Credit Fund Class A........ 0.17% 0.19% 0.03% 0.11%
AIG Flexible Credit Fund Class C........ 0.18 0.20 0.02 0.11
AIG Flexible Credit Fund Class W........ -- 1.12(5) 0.04 0.11
(4)Inception date of class.
(5)Annualized.
See Notes to Financial Statements
12
AIG U.S. Government Securities Fund
PORTFOLIO PROFILE -- March 31, 2018 -- (unaudited)
Industry Allocation*
United States Treasury Notes.... 34.6%
Government National Mtg. Assoc.. 25.3
Federal Home Loan Bank.......... 13.4
United States Treasury Bonds.... 12.2
Federal Home Loan Mtg. Corp..... 7.2
Repurchase Agreements........... 4.7
Federal National Mtg. Assoc..... 2.1
----
99.5%
====
Credit Quality+#
Aaa........ 98.8%
Not Rated@. 1.2
-----
100.0%
=====
--------
*Calculated as a percentage of net assets
+Source: Moody's
#Calculated as a percentage of total debt issues
@Represents debt issues that either have no rating, or the rating is
unavailable from the data source.
13
AIG U.S. Government Securities Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018
Principal Value
Security Description Amount (Note 2)
U.S. GOVERNMENT AGENCIES -- 48.0%
Federal Home Loan Bank -- 13.4%
1.50% due 08/15/2019(1)........... $ 2,250,000 $ 2,242,667
1.69% due 02/26/2021.............. 480,000 465,551
2.14% due 12/05/2022.............. 372,093 361,532
4.50% due 09/13/2019.............. 1,490,000 1,536,291
Federal Home Loan Bank FRS
1.83% (1 ML+0.03%)
due 05/17/2018.................... 15,000,000 15,002,804
-----------
19,608,845
-----------
Federal Home Loan Mtg. Corp. -- 7.2%
3.50% due 08/01/2030.............. 2,914,349 2,977,002
3.50% due 12/01/2044.............. 4,387,170 4,420,441
4.00% due 04/01/2034.............. 1,418,255 1,466,452
Federal Home Loan Mtg. Corp. REMIC
Series 3747, Class WA
3.50% due 10/15/2030(2)........... 1,613,891 1,636,914
-----------
10,500,809
-----------
Federal National Mtg. Assoc. -- 2.1%
2.50% due 11/01/2027.............. 3,153,559 3,115,042
-----------
Government National Mtg. Assoc. -- 25.3%
3.50% due 03/15/2042.............. 303,867 308,509
3.50% due 06/15/2042.............. 1,573,911 1,597,703
3.50% due 07/15/2042.............. 518,933 526,835
3.50% due 02/20/2045.............. 900,616 910,819
4.00% due 03/15/2039.............. 172,311 177,358
4.00% due 04/15/2039.............. 105,791 108,893
4.00% due 06/15/2039.............. 433,178 445,747
4.00% due 12/15/2039.............. 244,711 251,862
4.00% due 08/15/2040.............. 180,852 186,516
4.00% due 09/15/2040.............. 190,488 196,996
4.00% due 11/15/2040.............. 327,303 337,643
4.00% due 12/15/2040.............. 255,057 263,266
4.00% due 02/15/2041.............. 126,616 130,805
4.00% due 03/15/2041.............. 171,357 177,163
4.00% due 07/15/2041.............. 315,631 325,520
4.00% due 08/15/2041.............. 265,373 274,289
4.00% due 09/15/2041.............. 1,054,941 1,090,628
4.00% due 10/15/2041.............. 404,108 417,208
4.00% due 11/15/2041.............. 587,549 605,148
4.00% due 12/15/2041.............. 507,849 524,354
4.00% due 01/15/2042.............. 1,553,970 1,604,314
4.00% due 02/15/2042.............. 637,024 658,134
4.00% due 03/15/2042.............. 173,502 178,697
4.00% due 06/15/2042.............. 139,347 143,390
4.50% due 05/15/2018.............. 1,676 1,675
4.50% due 08/15/2018.............. 5,510 5,510
4.50% due 09/15/2018.............. 36,804 36,794
4.50% due 10/15/2018.............. 59,080 59,088
4.50% due 09/15/2033.............. 280,677 294,224
4.50% due 03/15/2039.............. 84,315 87,671
4.50% due 04/15/2039.............. 60,788 64,281
4.50% due 05/15/2039.............. 163,960 172,824
4.50% due 06/15/2039.............. 1,205,504 1,274,145
4.50% due 07/15/2039.............. 553,044 582,456
4.50% due 09/15/2039.............. 158,091 167,145
4.50% due 11/15/2039.............. 111,791 118,186
Principal Value
Security Description Amount (Note 2)
Government National Mtg. Assoc. (continued)
4.50% due 12/15/2039...... $ 458,957 $ 484,293
4.50% due 01/15/2040...... 131,263 138,823
4.50% due 02/15/2040...... 782,453 824,558
4.50% due 03/15/2040...... 561,967 590,956
4.50% due 04/15/2040...... 147,500 156,015
4.50% due 05/15/2040...... 124,768 131,991
4.50% due 06/15/2040...... 146,521 154,920
4.50% due 07/15/2040...... 376,039 397,815
4.50% due 01/15/2041...... 150,706 159,330
4.50% due 03/15/2041...... 1,162,888 1,229,535
4.50% due 04/15/2041...... 474,500 498,838
4.50% due 06/15/2041...... 244,045 254,150
4.50% due 08/15/2041...... 141,564 147,147
4.50% due 04/20/2044...... 661,416 696,922
5.00% due 04/15/2018...... 3,149 3,161
5.00% due 08/15/2033...... 361,753 388,573
5.00% due 10/15/2033...... 600,927 638,226
5.00% due 05/15/2035...... 79,712 84,037
5.00% due 08/15/2035...... 317,497 341,085
5.00% due 03/15/2036...... 166,012 175,511
5.00% due 05/15/2036...... 72,665 77,385
5.00% due 09/15/2036...... 121,471 130,527
5.00% due 01/15/2037...... 158,786 170,603
5.00% due 02/15/2037...... 133,294 140,560
5.00% due 03/15/2037...... 46,702 50,183
5.00% due 04/15/2037...... 334,428 357,556
5.00% due 04/15/2038...... 359,468 384,922
5.00% due 05/15/2038...... 199,785 214,628
5.00% due 08/15/2038...... 497,274 534,641
5.00% due 01/15/2039...... 184,260 197,868
5.00% due 02/15/2039...... 94,211 101,197
5.00% due 03/15/2039...... 112,094 120,519
5.00% due 04/15/2039...... 88,413 93,500
5.00% due 07/20/2039...... 906,052 975,944
5.00% due 08/15/2039...... 247,377 263,439
5.00% due 09/20/2039...... 2,952,105 3,167,823
5.00% due 10/15/2039...... 595,896 640,182
5.00% due 11/15/2039...... 482,365 515,374
5.00% due 12/15/2039...... 434,587 466,785
5.00% due 04/15/2040...... 457,664 485,473
5.00% due 05/15/2040...... 855,621 912,138
5.00% due 07/20/2045...... 383,428 409,206
5.50% due 06/15/2033...... 548,083 600,270
5.50% due 07/15/2033...... 98,754 108,827
5.50% due 10/15/2033...... 145,604 160,309
5.50% due 01/15/2034...... 429,438 471,824
5.50% due 02/15/2034...... 245,335 268,235
5.50% due 04/20/2035...... 427,227 470,754
5.50% due 09/15/2035...... 374,691 422,679
5.50% due 10/15/2035...... 295,552 325,750
5.50% due 02/15/2038...... 134,525 146,387
5.50% due 04/15/2038...... 79,939 86,988
5.50% due 09/15/2039...... 68,636 74,834
5.50% due 03/15/2040...... 267 293
6.00% due 04/15/2028...... 132,535 148,820
6.00% due 08/15/2033...... 231,712 260,397
6.00% due 12/15/2033...... 89,266 99,929
14
AIG U.S. Government Securities Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 2)
U.S. GOVERNMENT AGENCIES (continued)
Government National Mtg. Assoc. (continued)
6.00% due 09/20/2038............... $ 936,906 $ 1,044,252
6.50% due 10/15/2031............... 53,155 59,457
------------
36,962,140
------------
Total U.S. Government Agencies
(cost $71,279,991)................. 70,186,836
------------
U.S. GOVERNMENT TREASURIES -- 46.8%
United States Treasury Bonds -- 12.2%
2.38% due 12/31/2020............... 2,000,000 1,999,922
2.50% due 02/15/2045............... 1,000,000 913,086
4.25% due 11/15/2040............... 8,000,000 9,766,875
4.75% due 02/15/2041............... 4,000,000 5,222,969
------------
17,902,852
------------
United States Treasury Notes -- 34.6%
1.38% due 12/15/2019............... 3,000,000 2,955,234
1.38% due 05/31/2021............... 28,000,000 27,100,937
1.50% due 06/15/2020............... 3,000,000 2,947,148
1.63% due 08/31/2019............... 2,000,000 1,983,359
2.00% due 01/31/2020............... 3,000,000 2,985,703
2.00% due 08/31/2021............... 2,000,000 1,969,922
2.00% due 02/15/2025............... 5,000,000 4,784,180
2.00% due 08/15/2025............... 3,000,000 2,858,906
2.25% due 02/29/2020............... 2,000,000 1,999,063
3.13% due 05/15/2019............... 1,000,000 1,010,313
------------
50,594,765
------------
Total U.S. Government Treasuries
(cost $65,471,787)................. 68,497,617
------------
Total Long-Term Investment Securities
(cost $136,751,778)................ 138,684,453
------------
Principal Value
Security Description Amount (Note 2)
REPURCHASE AGREEMENTS -- 4.7%
Agreement with Fixed Income Clearing Corp.,
bearing interest at 0.28%, dated
03/29/2018, to be repurchased 04/02/2018
in the amount $6,890,214 and collateralized
by $7,145,000 of United States Treasury
Notes, bearing interest at 2.38%, due
08/15/2024 and having an approximate
value of $7,031,595.
(cost $6,890,000)............................ $6,890,000 $ 6,890,000
------------
TOTAL INVESTMENTS
(cost $143,641,778)(3)....................... 99.5% 145,574,453
Other assets less liabilities................... 0.5 661,676
---------- ------------
NET ASSETS 100.0% $146,236,129
========== ============
--------
(1)"Step-up" security where the rate increases ("steps up") at a predetermined
rate. The rate reflected is as of March 31, 2018.
(2)Collateralized Mortgage Obligation
(3)See Note 5 for cost of investments on a tax basis.
REMIC --Real Estate Mortgage Investment Conduit
FRS --Floating Rate Security
The rates shown on FRS are the current interest rates as of March 31, 2018 and
unless noted otherwise, the dates shown are the original maturity dates.
Index Legend
1 ML -- 1 Month USD LIBOR
The following is a summary of the inputs used to value the Fund's net assets as
of March 31, 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.... $-- $ 70,186,836 $-- $ 70,186,836
U.S. Government Treasuries.. -- 68,497,617 -- 68,497,617
Repurchase Agreements....... -- 6,890,000 -- 6,890,000
--- ------------ --- ------------
Total Investments at Value.. $-- $145,574,453 $-- $145,574,453
=== ============ === ============
--------
* 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 -- March 31, 2018 -- (unaudited)
Industry Allocation*
Sovereign.............................. 17.4%
Federal National Mtg. Assoc............ 5.4
Registered Investment Companies........ 5.2
Diversified Banking Institutions....... 4.0
Oil Companies-Integrated............... 4.0
Federal Home Loan Mtg. Corp............ 3.6
Banks-Commercial....................... 3.3
Oil Companies-Exploration & Production. 3.2
Pipelines.............................. 3.1
Cable/Satellite TV..................... 2.6
Cellular Telecom....................... 2.1
Real Estate Investment Trusts.......... 1.8
Telephone-Integrated................... 1.5
Transport-Marine....................... 1.2
Building & Construction-Misc........... 1.2
Finance-Other Services................. 1.2
Transport-Rail......................... 1.1
Electric-Integrated.................... 1.0
Petrochemicals......................... 1.0
Banks-Export/Import.................... 1.0
Finance-Consumer Loans................. 1.0
Diversified Financial Services......... 1.0
Medical-Drugs.......................... 0.9
Satellite Telecom...................... 0.9
Enterprise Software/Service............ 0.8
Oil-Field Services..................... 0.8
Electric-Distribution.................. 0.8
Computer Services...................... 0.7
Metal Processors & Fabrication......... 0.7
Chemicals-Diversified.................. 0.7
Oil & Gas Drilling..................... 0.7
Auto-Cars/Light Trucks................. 0.7
Insurance-Multi-line................... 0.6
Oil Refining & Marketing............... 0.6
Metal-Copper........................... 0.6
Computers-Integrated Systems........... 0.6
Electric-Generation.................... 0.6
Computers.............................. 0.6
Paper & Related Products............... 0.6
Diversified Manufacturing Operations... 0.5
Real Estate Management/Services........ 0.5
Computers-Memory Devices............... 0.5
Medical-Hospitals...................... 0.5
Chemicals-Specialty.................... 0.5
Central Bank........................... 0.4
Containers-Paper/Plastic............... 0.4
Steel-Producers........................ 0.4
Aerospace/Defense-Equipment............ 0.4
Building-Residential/Commercial........ 0.4
Banks-Super Regional................... 0.4
Airlines............................... 0.4
Building-Heavy Construction............ 0.4
Finance-Auto Loans..................... 0.4
Savings & Loans/Thrifts................ 0.4
Containers-Metal/Glass................. 0.4
Television............................. 0.4
Marine Services........................ 0.4
Insurance-Property/Casualty............ 0.3
Retail-Restaurants..................... 0.3
Physicians Practice Management......... 0.3
Brewery................................ 0.3%
Publishing-Books....................... 0.3
Metal-Diversified...................... 0.3
Auto-Heavy Duty Trucks................. 0.3
Circuit Boards......................... 0.3
Finance-Credit Card.................... 0.3
Building Products-Wood................. 0.3
Retail-Office Supplies................. 0.3
Insurance-Life/Health.................. 0.3
Auto/Truck Parts & Equipment-Original.. 0.3
Rental Auto/Equipment.................. 0.3
Real Estate Operations & Development... 0.3
Building & Construction Products-Misc.. 0.3
Internet Connectivity Services......... 0.3
Diversified Minerals................... 0.3
Finance-Investment Banker/Broker....... 0.3
Printing-Commercial.................... 0.3
E-Commerce/Services.................... 0.3
Platinum............................... 0.3
Agricultural Chemicals................. 0.3
Distribution/Wholesale................. 0.3
Dialysis Centers....................... 0.3
Gambling (Non-Hotel)................... 0.3
Energy-Alternate Sources............... 0.3
Food-Retail............................ 0.3
Cosmetics & Toiletries................. 0.3
Coal................................... 0.3
Telecom Services....................... 0.2
Broadcast Services/Program............. 0.2
Internet Content-Entertainment......... 0.2
Diversified Operations................. 0.2
Finance-Mortgage Loan/Banker........... 0.2
Gas-Distribution....................... 0.2
Batteries/Battery Systems.............. 0.2
Radio.................................. 0.2
Cruise Lines........................... 0.2
Retail-Appliances...................... 0.2
Travel Services........................ 0.2
Machinery-General Industrial........... 0.2
Hotels/Motels.......................... 0.2
Building Societies..................... 0.2
Food-Meat Products..................... 0.2
Building Products-Cement............... 0.2
Machinery-Thermal Process.............. 0.2
Metal-Iron............................. 0.2
Retail-Automobile...................... 0.2
Pharmacy Services...................... 0.2
Food-Dairy Products.................... 0.2
Oil Field Machinery & Equipment........ 0.2
Medical-HMO............................ 0.2
Poultry................................ 0.2
Electronic Parts Distribution.......... 0.2
Retail-Discount........................ 0.2
Medical-Generic Drugs.................. 0.2
Hazardous Waste Disposal............... 0.2
Non-Ferrous Metals..................... 0.2
Banks-Money Center..................... 0.2
Water.................................. 0.1
Racetracks............................. 0.1
Commercial Services.................... 0.1
Internet Application Software.......... 0.1
16
AIG Strategic Bond Fund
PORTFOLIO PROFILE -- March 31, 2018 -- (unaudited) (continued)
Industry Allocation* (continued)
Retail-Pawn Shops............. 0.1%
Transport-Services............ 0.1
Finance-Commercial............ 0.1
Diamonds/Precious Stones...... 0.1
Food-Wholesale/Distribution... 0.1
Semiconductor Equipment....... 0.1
Medical-Biomedical/Gene....... 0.1
Banks-Special Purpose......... 0.1
Building Products-Air &
Heating...................... 0.1
Consumer Products-Misc........ 0.1
Insurance-Mutual.............. 0.1
Machinery-Farming............. 0.1
Telecommunication Equipment... 0.1
Computer Data Security........ 0.1
Medical Products.............. 0.1
Transport-Truck............... 0.1
Leisure Products.............. 0.1
Insurance Brokers............. 0.1
Media......................... 0.1
Internet Financial Services... 0.1
Building Products-Doors &
Windows...................... 0.1
Retail-Petroleum Products..... 0.1
Commercial Services-Finance... 0.1
Soap & Cleaning Preparation... 0.1
Computer Software............. 0.1
Resorts/Theme Parks........... 0.1
X-Ray Equipment............... 0.1
Retail-Sporting Goods......... 0.1
Retail-Hypermarkets........... 0.1
Footwear & Related Apparel.... 0.1
Theaters...................... 0.1
Beverages-Non-alcoholic....... 0.1
Tools-Hand Held............... 0.1
Coatings/Paint................ 0.1
Electronic
Components-Semiconductors.... 0.1
Semiconductor
Components-Integrated
Circuits..................... 0.1
Trucking/Leasing.............. 0.1
Food-Misc./Diversified........ 0.1
Machinery-Electrical.......... 0.1
-----
105.8%
=====
Credit Quality+#
Aaa........................... 9.7%
Aa............................ 1.1
A............................. 8.0
Baa........................... 19.3
Ba............................ 19.6
B............................. 26.3
Caa........................... 4.8
Ca............................ 0.1
Not Rated@.................... 11.1
-----
100.0%
=====
--------
*Calculated as a percentage of net assets.
+Source: Moody's
#Calculated as a percentage of total debt issues, excluding short-term
securities.
@Represents debt issues that either have no rating, or the rating is
unavailable from the data source.
17
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018
Principal Value
Security Description Amount(17) (Note 2)
ASSET BACKED SECURITIES -- 0.9%
Diversified Financial Services -- 0.9%
American Express Credit Account Master Trust
Series 2018-1, Class A
2.67% due 10/17/2022......................... $325,000 $ 324,467
CarMax Auto Owner Trust
Series 2016-3, Class A4
1.60% due 01/18/2022......................... 150,000 145,879
Chase Issuance Trust
Series 2016-A2, Class A
1.37% due 06/15/2021......................... 200,000 197,167
Chase Mtg. Finance Trust VRS
Series 2016-2, Class M2
3.75% due 12/25/2045*(1)(2).................. 372,328 371,478
Citibank Credit Card Issuance Trust
Series 2017-A3, Class A3
1.92% due 04/07/2022......................... 81,000 79,769
Citibank Credit Card Issuance Trust FRS
Series 2018-A2, Class A2
2.15% (1 ML+0.33%)
due 01/21/2025............................... 100,000 100,000
Citibank Credit Card Issuance Trust
Series 2014-A1, Class A1
2.88% due 01/23/2023......................... 78,000 78,150
COMM Mtg. Trust VRS
Series 2016-787S, Class B
3.83% due 02/10/2036*(2)(3).................. 132,000 131,756
Discover Card Execution Note Trust
Series 2015-A4, Class A4
2.19% due 04/17/2023......................... 117,000 115,332
Ford Credit Auto Owner Trust
Series 2014-C, Class B
1.97% due 04/15/2020......................... 81,000 80,661
Ford Credit Auto Owner Trust
Series 2015-2, Class A
2.44% due 01/15/2027*........................ 50,000 49,577
GS Mtg. Securities Trust
Series 2015-GC28, Class A2
2.90% due 02/10/2048(3)...................... 102,000 102,149
Honda Auto Receivables Owner Trust
Series 2016-2, Class A4
1.62% due 08/15/2022......................... 104,000 102,725
JPMDB Commercial Mtg. Securities Trust
Series 2016-C2, Class A2
2.66% due 06/15/2049(3)...................... 990,000 980,020
Morgan Stanley Capital Barclays Bank Trust
Series 2016-MART, Class A
2.20% due 09/13/2031*(3)..................... 185,000 179,195
Synchrony Credit Card Master Note Trust
Series 2016-2, Class A
2.21% due 05/15/2024......................... 100,000 97,855
Toyota Auto Receivables Owner Trust
Series 2018-A, Class A3
2.35% due 05/16/2022......................... 125,000 124,115
----------
Total Asset Backed Securities
(cost $3,335,485)............................ 3,260,295
----------
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES -- 37.5%
Advertising Agencies -- 0.0%
Interpublic Group of Cos., Inc.
Senior Notes
4.20% due 04/15/2024............... $107,000 $ 109,056
----------
Aerospace/Defense-Equipment -- 0.3%
Triumph Group, Inc.
Company Guar. Notes
4.88% due 04/01/2021............... 956,000 934,490
United Technologies Corp.
Senior Notes
1.90% due 05/04/2020............... 122,000 119,533
----------
1,054,023
----------
Agricultural Chemicals -- 0.1%
Mosaic Co.
Senior Notes
3.25% due 11/15/2022............... 87,000 85,179
Mosaic Co.
Senior Notes
4.05% due 11/15/2027............... 119,000 116,062
Mosaic Co.
Senior Notes
4.88% due 11/15/2041............... 52,000 49,888
----------
251,129
----------
Airlines -- 0.3%
Atlas Air, Inc.
Pass-Through Certs.
Series 1999-1, Class B
7.63% due 01/02/2019(4)............ 24,546 24,634
United Airlines Pass-Through Trust
Pass-Through Certs.
Series 2014-2, Class B
4.63% due 03/03/2024............... 573,605 581,062
United Airlines Pass-Through Trust
Pass-Through Certs.
Series 2013-1, Class B
5.38% due 02/15/2023............... 373,545 383,817
----------
989,513
----------
Applications Software -- 0.0%
Microsoft Corp.
Senior Notes
4.10% due 02/06/2037............... 94,000 99,676
----------
Auto-Cars/Light Trucks -- 0.4%
American Honda Finance Corp.
Senior Notes
1.20% due 07/12/2019............... 23,000 22,582
Daimler Finance North America LLC
Company Guar. Notes
2.00% due 07/06/2021*.............. 78,000 75,117
Daimler Finance North America LLC
Company Guar. Notes
2.45% due 05/18/2020*.............. 277,000 273,071
Ford Motor Credit Co. LLC
Senior Notes
2.34% due 11/02/2020............... 282,000 274,587
18
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Auto-Cars/Light Trucks (continued)
Ford Motor Credit Co. LLC
Senior Notes
3.82% due 11/02/2027........... $ 190,000 $ 178,767
Nissan Motor Acceptance Corp.
Senior Notes
2.15% due 09/28/2020*.......... 271,000 265,394
Nissan Motor Acceptance Corp.
Senior Notes
2.65% due 07/13/2022*.......... 252,000 245,983
----------
1,335,501
----------
Auto-Heavy Duty Trucks -- 0.3%
JB Poindexter & Co., Inc.
Senior Notes
9.00% due 04/01/2022*.......... 1,063,000 1,096,219
PACCAR Financial Corp.
Senior Notes
2.05% due 11/13/2020........... 85,000 83,299
----------
1,179,518
----------
Auto/Truck Parts & Equipment-Original -- 0.0%
Lear Corp.
Senior Notes
3.80% due 09/15/2027........... 63,000 60,458
----------
Banks-Commercial -- 0.9%
BankUnited, Inc.
Senior Notes
4.88% due 11/17/2025........... 546,000 561,928
BB&T Corp
Senior Notes
2.15% due 02/01/2021........... 118,000 115,017
Citizens Financial Group, Inc.
Sub. Notes
4.15% due 09/28/2022*.......... 575,000 581,611
First Horizon National Corp.
Senior Notes
3.50% due 12/15/2020........... 370,000 371,993
PNC Bank NA
Senior Notes
2.00% due 05/19/2020........... 250,000 244,855
Regions Financial Corp.
Senior Notes
2.75% due 08/14/2022........... 188,000 182,672
Regions Financial Corp.
Sub. Notes
7.38% due 12/10/2037........... 519,000 683,346
Santander Holdings USA, Inc.
Senior Notes
3.40% due 01/18/2023........... 118,000 115,263
Santander Holdings USA, Inc.
Senior Notes
3.70% due 03/28/2022........... 169,000 169,356
Synovus Financial Corp.
Senior Notes
3.13% due 11/01/2022........... 87,000 84,313
----------
3,110,354
----------
Principal Value
Security Description Amount(17) (Note 2)
Banks-Fiduciary -- 0.0%
Bank of New York Mellon Corp.
Senior Notes
2.66% due 05/16/2023................... $ 85,000 $ 82,722
----------
Banks-Super Regional -- 0.3%
Capital One Financial Corp.
Sub. Notes
4.20% due 10/29/2025................... 119,000 117,912
Wells Fargo & Co.
Senior Notes
3.07% due 01/24/2023................... 648,000 637,228
Wells Fargo & Co.
Sub. Notes
4.40% due 06/14/2046................... 22,000 21,353
Wells Fargo & Co.
Sub. Notes
4.75% due 12/07/2046................... 224,000 229,537
Wells Fargo & Co.
Sub. Notes
4.90% due 11/17/2045................... 28,000 29,354
----------
1,035,384
----------
Batteries/Battery Systems -- 0.2%
EnerSys
Company Guar. Notes
5.00% due 04/30/2023*.................. 781,000 793,691
----------
Brewery -- 0.2%
Anheuser-Busch InBev Finance, Inc.
Company Guar. Notes
2.65% due 02/01/2021................... 271,000 268,878
Anheuser-Busch InBev Finance, Inc.
Company Guar. Notes
4.70% due 02/01/2036................... 100,000 105,807
Anheuser-Busch InBev Finance, Inc.
Company Guar. Notes
4.90% due 02/01/2046................... 359,000 387,185
Anheuser-Busch InBev Worldwide, Inc.
Company Guar. Notes
4.60% due 04/15/2048................... 130,000 134,474
----------
896,344
----------
Broadcast Services/Program -- 0.1%
Clear Channel Worldwide Holdings, Inc.
Company Guar. Notes
6.50% due 11/15/2022................... 450,000 459,315
Discovery Communications LLC
Company Guar. Notes
5.00% due 09/20/2037................... 64,000 63,784
----------
523,099
----------
Building & Construction Products-Misc. -- 0.2%
Owens Corning
Company Guar. Notes
4.30% due 07/15/2047................... 242,000 221,072
Owens Corning
Company Guar. Notes
4.40% due 01/30/2048................... 72,000 66,487
19
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Building & Construction Products-Misc. (continued)
Standard Industries, Inc.
Senior Notes
5.00% due 02/15/2027*................... $479,000 $ 464,961
----------
752,520
----------
Building & Construction-Misc. -- 0.2%
Weekley Homes LLC/Weekley Finance Corp.
Senior Notes
6.00% due 02/01/2023.................... 764,000 760,180
----------
Building Products-Air & Heating -- 0.0%
Lennox International, Inc.
Company Guar. Notes
3.00% due 11/15/2023.................... 82,000 79,898
----------
Building Products-Cement -- 0.1%
Martin Marietta Materials, Inc.
Senior Notes
4.25% due 12/15/2047.................... 52,000 48,079
Vulcan Materials Co.
Senior Notes
4.70% due 03/01/2048*................... 157,000 153,267
----------
201,346
----------
Building Products-Wood -- 0.3%
Boise Cascade Co.
Company Guar. Notes
5.63% due 09/01/2024*................... 855,000 874,238
Masco Corp.
Senior Notes
4.45% due 04/01/2025.................... 203,000 207,628
Masco Corp.
Senior Notes
4.50% due 05/15/2047.................... 89,000 84,871
----------
1,166,737
----------
Building-Heavy Construction -- 0.4%
New Enterprise Stone & Lime Co, Inc.
Senior Sec. Notes
6.25% due 03/15/2026*................... 484,000 484,605
Tutor Perini Corp.
Company Guar. Notes
6.88% due 05/01/2025*................... 915,000 942,450
----------
1,427,055
----------
Building-Residential/Commercial -- 0.2%
Lennar Corp.
Company Guar. Notes
4.13% due 01/15/2022.................... 52,000 51,140
Toll Brothers Finance Corp.
Company Guar. Notes
4.35% due 02/15/2028.................... 148,000 138,380
William Lyon Homes, Inc.
Senior Notes
6.00% due 09/01/2023*................... 625,000 622,656
----------
812,176
----------
Principal Value
Security Description Amount(17) (Note 2)
Cable/Satellite TV -- 1.2%
Block Communications, Inc.
Senior Notes
6.88% due 02/15/2025*.......................... $ 903,000 $ 908,039
CCO Holdings LLC/CCO Holdings Capital Corp.
Senior Notes
5.00% due 02/01/2028*.......................... 980,000 918,750
Cequel Communications Holdings I LLC/Cequel
Capital Corp.
Senior Notes
7.50% due 04/01/2028*.......................... 250,000 255,625
Charter Communications Operating LLC/Charter
Communications Operating Capital
Senior Sec. Notes
3.75% due 02/15/2028........................... 79,000 72,596
Charter Communications Operating LLC/Charter
Communications Operating Capital
Senior Sec. Notes
5.38% due 05/01/2047........................... 47,000 45,460
Charter Communications Operating LLC/Charter
Communications Operating Capital
Senior Sec. Notes
6.38% due 10/23/2035........................... 111,000 123,993
Comcast Corp.
Company Guar. Notes
3.90% due 03/01/2038........................... 101,000 97,910
CSC Holdings LLC
Company Guar. Notes
5.50% due 04/15/2027*.......................... 905,000 866,538
DISH DBS Corp.
Company Guar. Notes
5.00% due 03/15/2023........................... 455,000 408,931
DISH DBS Corp.
Company Guar. Notes
5.88% due 11/15/2024........................... 485,000 432,256
DISH DBS Corp.
Company Guar. Notes
7.75% due 07/01/2026........................... 128,000 120,032
----------
4,250,130
----------
Cellular Telecom -- 1.5%
Sprint Corp.
Company Guar. Notes
7.13% due 06/15/2024........................... 625,000 609,375
Sprint Corp.
Company Guar. Notes
7.63% due 03/01/2026........................... 1,298,000 1,266,459
Sprint Corp.
Company Guar. Notes
7.88% due 09/15/2023........................... 1,502,000 1,532,040
Sprint Spectrum Co. LLC/Sprint Spectrum Co. II
LLC/Sprint Spectrum Co. III LLC
Senior Sec. Notes
4.74% due 03/20/2025*.......................... 413,000 414,549
T-Mobile USA, Inc.
Company Guar. Notes
4.75% due 02/01/2028........................... 990,000 951,637
20
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Cellular Telecom (continued)
United States Cellular Corp.
Senior Notes
6.70% due 12/15/2033........................ $ 519,000 $ 541,057
----------
5,315,117
----------
Chemicals-Diversified -- 0.0%
Westlake Chemical Corp.
Company Guar. Notes
4.38% due 11/15/2047........................ 64,000 61,829
----------
Chemicals-Specialty -- 0.4%
GCP Applied Technologies, Inc.
Senior Notes
5.50% due 04/15/2026*....................... 576,000 574,560
Kraton Polymers LLC/Kraton Polymers Capital
Corp.
Company Guar. Notes
7.00% due 04/15/2025*....................... 600,000 621,000
Lubrizol Corp.
Company Guar. Notes
6.50% due 10/01/2034........................ 107,000 140,232
----------
1,335,792
----------
Circuit Boards -- 0.2%
TTM Technologies, Inc.
Company Guar. Notes
5.63% due 10/01/2025*....................... 820,000 815,900
----------
Coal -- 0.3%
SunCoke Energy Partners LP/SunCoke Energy
Partners Finance Corp.
Company Guar. Notes
7.50% due 06/15/2025*....................... 900,000 927,000
----------
Coatings/Paint -- 0.1%
RPM International, Inc.
Senior Notes
3.75% due 03/15/2027........................ 55,000 53,582
RPM International, Inc.
Senior Notes
4.25% due 01/15/2048........................ 53,000 50,107
Sherwin-Williams Co.
Senior Notes
2.25% due 05/15/2020........................ 49,000 48,187
Sherwin-Williams Co.
Senior Notes
2.75% due 06/01/2022........................ 100,000 97,397
----------
249,273
----------
Commercial Services -- 0.1%
Ecolab, Inc.
Senior Notes
1.00% due 01/15/2024........................ EUR 250,000 311,603
Ecolab, Inc.
Senior Notes
2.38% due 08/10/2022........................ 179,000 173,298
----------
484,901
----------
Principal Value
Security Description Amount(17) (Note 2)
Computer Services -- 0.6%
Harland Clarke Holdings Corp.
Senior Sec. Notes
8.38% due 08/15/2022*..................... $1,555,000 $1,582,213
IBM Credit LLC
Senior Notes
1.63% due 09/06/2019...................... 171,000 168,703
IBM Credit LLC
Senior Notes
2.65% due 02/05/2021...................... 575,000 571,986
----------
2,322,902
----------
Computers -- 0.6%
Apple, Inc.
Senior Notes
2.45% due 08/04/2026...................... 157,000 145,540
Apple, Inc.
Senior Notes
2.85% due 05/06/2021...................... 154,000 154,093
Diamond 1 Finance Corp./Diamond 2 Finance
Corp.
Senior Sec. Notes
6.02% due 06/15/2026*..................... 1,160,000 1,249,229
Diamond 1 Finance Corp./Diamond 2 Finance
Corp.
Senior Sec. Notes
8.10% due 07/15/2036*..................... 316,000 384,185
Hewlett Packard Enterprise Co.
Senior Notes
6.20% due 10/15/2035...................... 55,000 59,068
----------
1,992,115
----------
Computers-Integrated Systems -- 0.6%
Diebold Nixdorf, Inc.
Company Guar. Notes
8.50% due 04/15/2024...................... 825,000 868,312
Everi Payments, Inc.
Company Guar. Notes
7.50% due 12/15/2025*..................... 1,120,000 1,136,800
----------
2,005,112
----------
Computers-Memory Devices -- 0.2%
Western Digital Corp.
Company Guar. Notes
4.75% due 02/15/2026...................... 787,000 785,269
----------
Consumer Products-Misc. -- 0.1%
Central Garden & Pet Co.
Company Guar. Notes
5.13% due 02/01/2028...................... 400,000 380,000
----------
Containers-Metal/Glass -- 0.4%
Ball Corp.
Company Guar. Notes
4.88% due 03/15/2026...................... 52,000 52,135
Crown Cork & Seal Co., Inc.
Company Guar. Notes
7.38% due 12/15/2026...................... 374,000 417,010
Owens-Brockway Glass Container, Inc.
Company Guar. Notes
5.38% due 01/15/2025*..................... 786,000 788,948
----------
1,258,093
----------
21
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Containers-Paper/Plastic -- 0.4%
Crown Americas LLC/Crown Americas Capital
Corp. VI
Company Guar. Notes
4.75% due 02/01/2026*..................... $ 278,000 268,965
Multi-Color Corp.
Company Guar. Notes
4.88% due 11/01/2025*..................... 775,000 724,625
Multi-Color Corp.
Company Guar. Notes
6.13% due 12/01/2022*..................... 546,000 562,380
---------
1,555,970
---------
Cosmetics & Toiletries -- 0.3%
Coty, Inc.
Senior Notes
6.50% due 04/15/2026*..................... 443,000 445,215
First Quality Finance Co., Inc.
Company Guar. Notes
5.00% due 07/01/2025*..................... 548,000 524,710
---------
969,925
---------
Dialysis Centers -- 0.2%
DaVita HealthCare Partners, Inc.
Company Guar. Notes
5.00% due 05/01/2025...................... 650,000 628,257
---------
Distribution/Wholesale -- 0.2%
H&E Equipment Services, Inc.
Company Guar. Notes
5.63% due 09/01/2025...................... 625,000 630,469
---------
Diversified Banking Institutions -- 1.6%
Bank of America Corp.
Senior Notes
3.55% due 03/05/2024...................... 126,000 126,521
Bank of America Corp.
Senior Bonds
3.95% due 01/23/2049...................... 105,000 100,905
Bank of America Corp.
Sub. Notes
4.18% due 11/25/2027...................... 475,000 470,889
Citigroup, Inc.
Senior Notes
2.88% due 07/24/2023...................... 184,000 179,042
Citigroup, Inc.
Senior Notes
3.67% due 07/24/2028...................... 104,000 101,392
Citigroup, Inc.
Sub. Notes
4.45% due 09/29/2027...................... 622,000 629,363
Citigroup, Inc.
Sub. Notes
6.00% due 10/31/2033...................... 87,000 102,254
Goldman Sachs Group, Inc.
Senior Notes
1.25% due 05/01/2025...................... EUR 305,000 372,640
Goldman Sachs Group, Inc.
Senior Notes
2.13% due 09/30/2024...................... EUR 260,000 337,911
Principal Value
Security Description Amount(17) (Note 2)
Diversified Banking Institutions (continued)
Goldman Sachs Group, Inc.
Senior Notes
2.91% due 06/05/2023...................... $ 179,000 $ 174,209
Goldman Sachs Group, Inc.
Senior Notes
3.63% due 01/22/2023...................... 79,000 79,273
Goldman Sachs Group, Inc.
Senior Notes
4.02% due 10/31/2038...................... 215,000 207,536
Goldman Sachs Group, Inc.
Senior Notes
6.13% due 02/15/2033...................... 272,000 326,909
Goldman Sachs Group, Inc.
Sub. Notes
6.75% due 10/01/2037...................... 206,000 258,059
JPMorgan Chase & Co.
Senior Notes
2.55% due 03/01/2021...................... 171,000 168,254
JPMorgan Chase & Co.
Senior Notes
3.88% due 07/24/2038...................... 348,000 338,133
Morgan Stanley
Senior Notes
1.75% due 03/11/2024...................... EUR 415,000 527,986
Morgan Stanley
Senior Notes
2.75% due 05/19/2022...................... 332,000 323,773
Morgan Stanley
Senior Notes
3.59% due 07/22/2028...................... 113,000 109,300
Morgan Stanley
Senior Notes
3.77% due 01/24/2029...................... 103,000 101,406
Morgan Stanley
Senior Notes
3.97% due 07/22/2038...................... 87,000 84,993
Morgan Stanley
Sub. Notes
4.10% due 05/22/2023...................... 248,000 251,336
Morgan Stanley
Sub. Notes
5.00% due 11/24/2025...................... 491,000 513,444
----------
5,885,528
----------
Diversified Manufacturing Operations -- 0.1%
Carlisle Cos., Inc.
Senior Notes
3.75% due 12/01/2027...................... 138,000 133,915
Parker-Hannifin Corp.
Senior Notes
1.13% due 03/01/2025...................... EUR 300,000 370,187
----------
504,102
----------
Electric Products-Misc. -- 0.0%
WESCO Distribution, Inc.
Company Guar. Notes
5.38% due 06/15/2024...................... 92,000 92,345
----------
22
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Electric-Distribution -- 0.2%
Entergy Louisiana LLC
Collateral Trust Bonds
4.00% due 03/15/2033................. $ 72,000 $ 73,422
NextEra Energy Operating Partners LP
Company Guar. Notes
4.25% due 09/15/2024*................ 482,000 467,540
NextEra Energy Operating Partners LP
Company Guar. Notes
4.50% due 09/15/2027*................ 262,000 246,935
----------
787,897
----------
Electric-Generation -- 0.1%
Basin Electric Power Cooperative
1st Mtg. Notes
4.75% due 04/26/2047*................ 322,000 343,398
----------
Electric-Integrated -- 0.6%
Dominion Energy, Inc.
Junior Sub. Notes
2.58% due 07/01/2020................. 85,000 83,926
Dominion Resources, Inc.
Senior Notes
5.25% due 08/01/2033................. 326,000 369,927
Duke Energy Progress LLC
1st Mtg. Notes
2.80% due 05/15/2022................. 126,000 124,452
Exelon Corp.
Junior Sub. Notes
3.50% due 06/01/2022................. 156,000 154,501
FirstEnergy Corp.
Senior Notes
3.90% due 07/15/2027................. 69,000 67,763
FirstEnergy Corp.
Senior Notes
4.85% due 07/15/2047................. 194,000 204,058
FirstEnergy Corp.
Senior Notes
7.38% due 11/15/2031................. 421,000 553,753
Georgia Power Co.
Senior Notes
2.00% due 09/08/2020................. 109,000 106,559
Massachusetts Electric Co.
Notes
4.00% due 08/15/2046*................ 213,000 211,542
South Carolina Electric & Gas Co.
1st Mtg. Bonds
5.10% due 06/01/2065................. 203,000 216,337
----------
2,092,818
----------
Electronic Components-Misc. -- %
Jabil, Inc.
Senior Notes
3.95% due 01/12/2028................. 86,000 83,272
----------
Electronic Components-Semiconductors -- 0.1%
Intel Corp.
Senior Notes
2.45% due 07/29/2020................. 243,000 241,617
----------
Principal Value
Security Description Amount(17) (Note 2)
Electronic Parts Distribution -- 0.2%
Ingram Micro, Inc.
Senior Notes
5.45% due 12/15/2024................ $ 615,000 $ 595,387
----------
Energy-Alternate Sources -- 0.3%
Pattern Energy Group, Inc.
Company Guar. Notes
5.88% due 02/01/2024*............... 960,000 981,600
----------
Enterprise Software/Service -- 0.7%
BMC Software Finance, Inc.
Senior Notes
8.13% due 07/15/2021*............... 635,000 634,206
Donnelley Financial Solutions, Inc.
Company Guar. Notes
8.25% due 10/15/2024................ 1,205,000 1,275,794
Oracle Corp.
Senior Notes
1.90% due 09/15/2021................ 176,000 169,920
Oracle Corp.
Senior Notes
3.80% due 11/15/2037................ 109,000 107,785
Oracle Corp.
Senior Notes
3.85% due 07/15/2036................ 303,000 300,179
Oracle Corp.
Senior Notes
3.90% due 05/15/2035................ 41,000 40,995
----------
2,528,879
----------
Finance-Auto Loans -- 0.4%
Ally Financial, Inc.
Sub. Notes
5.75% due 11/20/2025................ 710,000 731,513
Credit Acceptance Corp.
Company Guar. Notes
7.38% due 03/15/2023................ 591,000 615,379
----------
1,346,892
----------
Finance-Consumer Loans -- 0.8%
Enova International, Inc.
Company Guar. Notes
8.50% due 09/01/2024*............... 955,000 1,007,525
Enova International, Inc.
Company Guar. Notes
9.75% due 06/01/2021................ 86,000 90,515
SLM Corp.
Senior Notes
5.63% due 08/01/2033................ 1,086,000 950,250
Springleaf Finance Corp.
Company Guar. Notes
6.88% due 03/15/2025................ 775,000 777,906
----------
2,826,196
----------
Finance-Credit Card -- 0.3%
Alliance Data Systems Corp.
Company Guar. Notes
5.88% due 11/01/2021*............... 750,000 765,000
23
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Finance-Credit Card (continued)
American Express Co.
Senior Notes
2.50% due 08/01/2022............................... $420,000 $ 405,128
----------
1,170,128
----------
Finance-Investment Banker/Broker -- 0.3%
Jefferies Group LLC/Jefferies Group Capital
Finance, Inc.
Senior Notes
4.15% due 01/23/2030............................... 103,000 95,841
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*.............................. 740,000 730,528
TD Ameritrade Holding Corp.
Senior Notes
2.95% due 04/01/2022............................... 122,000 120,903
----------
947,336
----------
Finance-Leasing Companies -- 0.0%
Washington Prime Group LP
Senior Notes
5.95% due 08/15/2024............................... 84,000 80,101
----------
Finance-Mortgage Loan/Banker -- 0.2%
Quicken Loans, Inc.
Company Guar. Notes
5.75% due 05/01/2025*.............................. 850,000 847,875
----------
Finance-Other Services -- 0.3%
National Rural Utilities Cooperative Finance Corp.
Collateral Trust Bonds
2.30% due 11/01/2020............................... 239,000 234,558
National Rural Utilities Cooperative Finance Corp.
Senior Notes
2.30% due 09/15/2022............................... 121,000 116,747
National Rural Utilities Cooperative Finance Corp.
Collateral Trust Notes
2.40% due 04/25/2022............................... 73,000 70,547
Oxford Finance LLC/Oxford Finance
Co-Issuer II, Inc.
Senior Notes
6.38% due 12/15/2022*.............................. 616,000 629,860
----------
1,051,712
----------
Food-Meat Products -- 0.2%
JBS USA LLC/JBS USA Finance, Inc.
Company Guar. Notes
5.88% due 07/15/2024*.............................. 428,000 417,428
JBS USA LUX SA / JBS USA Finance, Inc.
Company Guar. Notes
5.75% due 06/15/2025*.............................. 222,000 207,015
Principal Value
Security Description Amount(17) (Note 2)
Food-Meat Products (continued)
Smithfield Foods, Inc.
Senior Notes
2.65% due 10/03/2021*................. $ 68,000 $ 65,109
--------
689,552
--------
Food-Misc./Diversified -- 0.1%
Kraft Heinz Foods Co.
Sec. Notes
4.88% due 02/15/2025*................. 174,000 181,415
--------
Food-Retail -- 0.3%
Albertsons Cos. LLC/Safeway, Inc./New
Albertson's, Inc./Albertson's LLC
Company Guar. Notes
5.75% due 03/15/2025.................. 950,000 810,160
Kroger Co.
Senior Notes
4.65% due 01/15/2048.................. 176,000 171,261
--------
981,421
--------
Food-Wholesale/Distribution -- 0.1%
C&S Group Enterprises LLC
Senior Sec. Notes
5.38% due 07/15/2022*................. 475,000 447,626
--------
Gambling (Non-Hotel) -- 0.1%
Mohegan Gaming & Entertainment
Company Guar. Notes
7.88% due 10/15/2024*................. 359,000 357,205
Waterford Gaming LLC/Waterford Gaming
Financial Corp.
Escrow Notes
8.63% due 09/15/2014+*(4)(5).......... 478,062 7,745
--------
364,950
--------
Gas-Distribution -- 0.0%
NiSource, Inc.
Senior Notes
4.38% due 05/15/2047.................. 58,000 58,240
--------
Hazardous Waste Disposal -- 0.2%
Clean Harbors, Inc.
Company Guar. Notes
5.13% due 06/01/2021.................. 543,000 549,787
--------
Hotels/Motels -- 0.2%
Wyndham Worldwide Corp.
Senior Notes
4.50% due 04/01/2027.................. 710,000 705,246
--------
Insurance-Life/Health -- 0.1%
Brighthouse Financial, Inc.
Senior Notes
4.70% due 06/22/2047*................. 53,000 48,573
Lincoln National Corp.
Senior Notes
3.80% due 03/01/2028.................. 52,000 51,553
Prudential Financial, Inc.
Senior Notes
3.88% due 03/27/2028.................. 123,000 124,665
--------
224,791
--------
24
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Insurance-Multi-line -- 0.1%
Assurant, Inc.
Senior Notes
4.90% due 03/27/2028.................... $ 185,000 $ 189,208
Assurant, Inc.
Senior Notes
6.75% due 02/15/2034.................... 168,000 202,521
Hartford Financial Services Group, Inc.
Senior Notes
4.40% due 03/15/2048.................... 125,000 127,560
----------
519,289
----------
Insurance-Mutual -- 0.1%
Massachusetts Mutual Life Insurance Co.
Sub. Notes
4.50% due 04/15/2065*................... 80,000 77,321
New York Life Global Funding
Sec. Notes
1.95% due 09/28/2020*................... 303,000 295,676
----------
372,997
----------
Insurance-Property/Casualty -- 0.2%
Chubb INA Holdings, Inc.
Company Guar. Notes
1.55% due 03/15/2028.................... EUR 200,000 246,494
Chubb INA Holdings, Inc.
Company Guar. Notes
2.50% due 03/15/2038.................... EUR 360,000 449,810
Markel Corp.
Senior Notes
4.30% due 11/01/2047.................... 101,000 98,694
----------
794,998
----------
Internet Connectivity Services -- 0.3%
Cogent Communications Group, Inc.
Senior Sec. Notes
5.38% due 03/01/2022*................... 687,000 702,457
Zayo Group LLC/Zayo Capital, Inc.
Company Guar. Notes
6.38% due 05/15/2025.................... 385,000 398,475
----------
1,100,932
----------
Internet Content-Entertainment -- 0.2%
Netflix, Inc.
Senior Notes
5.88% due 02/15/2025.................... 829,000 868,377
----------
Machinery-Construction & Mining -- 0.0%
Caterpillar Financial Services Corp.
Senior Notes
2.55% due 11/29/2022.................... 119,000 115,611
----------
Machinery-Electrical -- 0.1%
ABB Finance USA, Inc.
Company Guar. Notes
3.38% due 04/03/2023.................... 79,000 79,207
ABB Finance USA, Inc.
Company Guar. Notes
3.80% due 04/03/2028.................... 100,000 100,949
----------
180,156
----------
Principal Value
Security Description Amount(17) (Note 2)
Machinery-Farming -- 0.1%
CNH Industrial Capital LLC
Company Guar. Notes
4.38% due 04/05/2022................. $ 83,000 $ 84,038
John Deere Capital Corp.
Senior Notes
2.35% due 01/08/2021................. 142,000 139,789
--------
223,827
--------
Machinery-Thermal Process -- 0.2%
Cleaver-Brooks, Inc.
Senior Sec. Notes
7.88% due 03/01/2023*................ 634,000 658,567
--------
Marine Services -- 0.3%
Great Lakes Dredge & Dock Corp.
Company Guar. Notes
8.00% due 05/15/2022................. 905,000 927,625
--------
Medical Instruments -- 0.0%
Boston Scientific Corp.
Senior Notes
4.00% due 03/01/2028................. 71,000 71,098
--------
Medical Labs & Testing Services -- 0.0%
Laboratory Corp. of America Holdings
Senior Notes
3.20% due 02/01/2022................. 52,000 51,749
Laboratory Corp. of America Holdings
Senior Notes
3.25% due 09/01/2024................. 76,000 74,020
--------
125,769
--------
Medical-Biomedical/Gene -- 0.1%
Amgen, Inc.
Senior Notes
2.65% due 05/11/2022................. 155,000 151,237
Celgene Corp.
Senior Notes
3.63% due 05/15/2024................. 124,000 122,428
Celgene Corp.
Senior Notes
4.55% due 02/20/2048................. 160,000 156,851
--------
430,516
--------
Medical-Drugs -- 0.1%
Endo Finance LLC/Endo Finco, Inc.
Company Guar. Notes
5.38% due 01/15/2023*................ 500,000 378,750
--------
Medical-Generic Drugs -- 0.1%
Actavis, Inc.
Company Guar. Notes
3.25% due 10/01/2022................. 105,000 102,812
Mylan, Inc.
Company Guar. Notes
5.20% due 04/15/2048*................ 105,000 105,950
--------
208,762
--------
25
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Medical-HMO -- 0.1%
UnitedHealth Group, Inc.
Senior Bonds
1.95% due 10/15/2020.......................... $125,000 $ 122,115
UnitedHealth Group, Inc.
Senior Notes
2.13% due 03/15/2021.......................... 125,000 121,890
----------
244,005
----------
Medical-Hospitals -- 0.5%
HCA, Inc.
Senior Sec. Notes
5.25% due 06/15/2026.......................... 419,000 424,447
Tenet Healthcare Corp.
Senior Sec. Notes
4.63% due 07/15/2024*......................... 545,000 523,881
Tenet Healthcare Corp.
Senior Notes
6.75% due 06/15/2023.......................... 775,000 758,531
----------
1,706,859
----------
Medical-Wholesale Drug Distribution -- 0.0%
Allergan Sales LLC
Company Guar. Notes
4.88% due 02/15/2021*......................... 122,000 126,093
----------
Metal Processors & Fabrication -- 0.4%
Grinding Media, Inc./Moly-Cop AltaSteel, Ltd.
Senior Sec. Notes
7.38% due 12/15/2023*......................... 805,000 845,250
Novelis Corp.
Company Guar. Notes
5.88% due 09/30/2026*......................... 300,000 294,000
Novelis Corp.
Company Guar. Notes
6.25% due 08/15/2024*......................... 396,000 405,900
----------
1,545,150
----------
Metal-Copper -- 0.1%
Freeport-McMoRan Copper & Gold, Inc.
Company Guar. Notes
3.88% due 03/15/2023.......................... 470,000 454,208
----------
Metal-Diversified -- 0.0%
Glencore Funding LLC
Company Guar. Notes
3.88% due 10/27/2027*......................... 74,000 70,194
Glencore Funding LLC
Company Guar. Notes
4.00% due 03/27/2027*......................... 28,000 27,030
----------
97,224
----------
Metal-Iron -- 0.2%
Cliffs Natural Resources, Inc.
Company Guar. Notes
5.75% due 03/01/2025*......................... 675,000 644,625
----------
Multimedia -- 0.0%
Time Warner, Inc.
Company Guar. Notes
4.85% due 07/15/2045.......................... 33,000 33,725
----------
Principal Value
Security Description Amount(17) (Note 2)
Networking Products -- 0.0%
Cisco Systems, Inc.
Senior Notes
2.20% due 02/28/2021...................... $ 139,000 $ 136,487
----------
Oil Companies-Exploration & Production -- 2.1%
Anadarko Petroleum Corp.
Senior Notes
6.45% due 09/15/2036...................... 207,000 248,186
Carrizo Oil & Gas, Inc.
Company Guar. Notes
6.25% due 04/15/2023...................... 575,000 575,000
Concho Resources, Inc.
Company Guar. Notes
4.38% due 01/15/2025...................... 77,000 78,006
Continental Resources, Inc.
Company Guar. Notes
3.80% due 06/01/2024...................... 525,000 505,312
Continental Resources, Inc.
Senior Notes
4.38% due 01/15/2028*..................... 147,000 143,325
Continental Resources, Inc.
Company Guar. Notes
5.00% due 09/15/2022...................... 625,000 633,594
Devon Energy Corp.
Senior Notes
5.00% due 06/15/2045...................... 60,000 63,770
Devon Energy Corp.
Senior Notes
5.60% due 07/15/2041...................... 75,000 84,434
Endeavor Energy Resources LP/EER Finance,
Inc.
Senior Notes
5.50% due 01/30/2026*..................... 525,000 522,375
Hess Corp.
Senior Notes
5.60% due 02/15/2041...................... 154,000 157,302
Hilcorp Energy I LP/Hilcorp Finance Co.
Senior Notes
5.00% due 12/01/2024*..................... 1,060,000 1,044,100
Lonestar Resources America, Inc.
Company Guar. Notes
11.25% due 01/01/2023*.................... 500,000 498,750
Marathon Oil Corp.
Senior Notes
4.40% due 07/15/2027...................... 126,000 127,934
Marathon Oil Corp.
Senior Notes
6.60% due 10/01/2037...................... 166,000 200,236
Newfield Exploration Co.
Senior Notes
5.38% due 01/01/2026...................... 559,000 577,167
QEP Resources, Inc.
Senior Notes
5.63% due 03/01/2026...................... 450,000 425,250
Sanchez Energy Corp.
Company Guar. Notes
6.13% due 01/15/2023...................... 906,000 660,814
26
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Oil Companies-Exploration & Production (continued)
Southwestern Energy Co.
Senior Notes
7.50% due 04/01/2026.................. $ 625,000 $ 631,250
WPX Energy, Inc.
Senior Notes
7.50% due 08/01/2020.................. 503,000 538,210
----------
7,715,015
----------
Oil Companies-Integrated -- 0.1%
Chevron Corp.
Senior Notes
2.50% due 03/03/2022.................. 184,000 180,996
----------
Oil Field Machinery & Equipment -- 0.2%
Forum Energy Technologies, Inc.
Company Guar. Notes
6.25% due 10/01/2021.................. 610,000 603,900
----------
Oil Refining & Marketing -- 0.5%
Andeavor
Senior Notes
4.50% due 04/01/2048.................. 53,000 49,582
Murphy Oil USA, Inc.
Company Guar. Notes
5.63% due 05/01/2027.................. 197,000 197,492
PBF Holding Co. LLC/PBF Finance Corp.
Company Guar. Notes
7.25% due 06/15/2025.................. 1,280,000 1,329,600
Phillips 66
Company Guar. Notes
3.90% due 03/15/2028.................. 169,000 168,387
----------
1,745,061
----------
Oil-Field Services -- 0.4%
Halliburton Co.
Senior Notes
4.85% due 11/15/2035.................. 45,000 48,460
Pioneer Energy Services Corp.
Company Guar. Notes
6.13% due 03/15/2022.................. 825,000 715,688
USA Compression Partners LP/USA
Compression Finance Corp.
Senior Notes
6.88% due 04/01/2026*................. 575,000 583,625
----------
1,347,773
----------
Paper & Related Products -- 0.3%
Domtar Corp.
Company Guar. Notes
6.75% due 02/15/2044.................. 159,000 177,426
Georgia-Pacific LLC
Senior Notes
3.60% due 03/01/2025*................. 128,000 128,769
Georgia-Pacific LLC
Senior Notes
3.73% due 07/15/2023*................. 409,000 417,010
Georgia-Pacific LLC
Company Guar. Notes
5.40% due 11/01/2020*................. 167,000 176,549
Principal Value
Security Description Amount(17) (Note 2)
Paper & Related Products (continued)
International Paper Co.
Senior Notes
5.00% due 09/15/2035........................... $ 64,000 $ 68,248
----------
968,002
----------
Petrochemicals -- 0.0%
Chevron Phillips Chemical Co. LLC/Chevron
Phillips Chemical Co. LP
Senior Notes
3.30% due 05/01/2023*.......................... 117,000 117,450
----------
Pharmacy Services -- 0.2%
CVS Health Corp.
Senior Notes
4.78% due 03/25/2038........................... 163,000 165,205
CVS Health Corp.
Senior Notes
5.05% due 03/25/2048........................... 105,000 110,438
CVS Pass-Through Trust
Pass-Through Certs.
4.70% due 01/10/2036*.......................... 107,430 106,699
CVS Pass-Through Trust
Pass-Through Certs.
5.77% due 01/10/2033*.......................... 87,026 92,808
CVS Pass-Through Trust
Pass-Through Certs.
5.93% due 01/10/2034*.......................... 139,476 153,269
----------
628,419
----------
Physicians Practice Management -- 0.3%
MEDNAX, Inc.
Company Guar. Notes
5.25% due 12/01/2023*.......................... 1,245,000 1,251,225
----------
Pipelines -- 2.9%
Andeavor Logistics LP/Tesoro Logistics Finance
Corp.
Company Guar. Notes
3.50% due 12/01/2022........................... 65,000 63,877
Andeavor Logistics LP/Tesoro Logistics Finance
Corp.
Company Guar. Notes
5.20% due 12/01/2047........................... 163,000 160,486
Antero Midstream Partners LP/Antero
Midstream Finance Corp.
Company Guar. Notes
5.38% due 09/15/2024........................... 507,000 510,802
Cheniere Corpus Christi Holdings LLC
Senior Sec. Notes
7.00% due 06/30/2024........................... 1,240,000 1,371,750
Cheniere Energy Partners LP
Senior Sec. Notes
5.25% due 10/01/2025*.......................... 702,000 692,347
Duke Energy Field Services LLC
Company Guar. Notes
6.45% due 11/03/2036*.......................... 590,000 634,250
Energy Transfer Equity LP
Senior Sec. Notes
4.25% due 03/15/2023........................... 655,000 635,350
27
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Pipelines (continued)
Energy Transfer Partners LP
Senior Notes
4.90% due 03/15/2035........................... $ 70,000 $ 66,035
Energy Transfer Partners LP
Senior Notes
6.05% due 06/01/2041........................... 18,000 18,258
Energy Transfer Partners LP
Senior Notes
6.63% due 10/15/2036........................... 223,000 246,832
EnLink Midstream Partners LP
Senior Notes
4.85% due 07/15/2026........................... 115,000 116,188
EnLink Midstream Partners LP
Senior Notes
5.05% due 04/01/2045........................... 114,000 106,004
Enterprise Products Operating LLC
Company Guar. Notes
4.25% due 02/15/2048........................... 146,000 142,299
Genesis Energy LP/Genesis Energy Finance Corp.
Company Guar. Notes
5.63% due 06/15/2024........................... 847,000 798,297
Genesis Energy LP/Genesis Energy Finance Corp.
Company Guar. Notes
6.00% due 05/15/2023........................... 532,000 524,020
Holly Energy Partners LP/Holly Energy Finance
Corp.
Company Guar. Notes
6.00% due 08/01/2024*.......................... 672,000 685,440
MPLX LP
Senior Notes
4.13% due 03/01/2027........................... 50,000 49,540
MPLX LP
Senior Notes
4.70% due 04/15/2048........................... 102,000 99,358
NGPL PipeCo LLC
Senior Notes
4.38% due 08/15/2022*.......................... 140,000 139,125
ONEOK, Inc.
Company Guar. Notes
4.00% due 07/13/2027........................... 142,000 139,895
Phillips 66 Partners LP
Senior Notes
4.90% due 10/01/2046........................... 53,000 53,205
SemGroup Corp.
Company Guar. Notes
7.25% due 03/15/2026........................... 546,000 544,635
SemGroup Corp./Rose Rock Finance Corp.
Company Guar. Notes
5.63% due 07/15/2022........................... 731,000 709,070
SemGroup Corp./Rose Rock Finance Corp.
Company Guar. Notes
5.63% due 11/15/2023........................... 235,000 222,075
Summit Midstream Holdings LLC/Summit
Midstream Finance Corp.
Company Guar. Notes
5.50% due 08/15/2022........................... 742,000 723,450
Principal Value
Security Description Amount(17) (Note 2)
Pipelines (continued)
Tallgrass Energy Partners LP/Tallgrass Energy
Finance Corp.
Company Guar. Notes
5.50% due 09/15/2024*......................... $523,000 $ 532,152
Western Gas Partners LP
Senior Notes
4.65% due 07/01/2026.......................... 123,000 124,523
Williams Cos., Inc.
Senior Notes
3.70% due 01/15/2023.......................... 251,000 244,098
Williams Partners LP
Senior Notes
5.10% due 09/15/2045.......................... 118,000 119,760
-----------
10,473,121
-----------
Platinum -- 0.3%
Stillwater Mining Co.
Company Guar. Notes
7.13% due 06/27/2025*......................... 560,000 563,864
Stillwater Mining Co.
Company Guar. Notes
7.13% due 06/27/2025.......................... 450,000 453,105
-----------
1,016,969
-----------
Poultry -- 0.2%
Pilgrim's Pride Corp.
Senior Notes
5.88% due 09/30/2027*......................... 635,000 598,360
-----------
Publishing-Books -- 0.2%
McGraw-Hill Global Education Holdings LLC/
McGraw-Hill Global Education Finance
Senior Notes
7.88% due 05/15/2024*......................... 630,000 602,293
-----------
Racetracks -- 0.1%
GLP Capital LP/GLP Financing II, Inc.
Company Guar. Notes
5.38% due 04/15/2026.......................... 490,000 497,350
-----------
Radio -- 0.2%
Sirius XM Radio, Inc.
Company Guar. Notes
5.38% due 07/15/2026*......................... 795,000 785,062
-----------
Real Estate Investment Trusts -- 1.7%
Brandywine Operating Partnership LP
Company Guar. Notes
3.95% due 11/15/2027.......................... 73,000 70,812
CTR Partnership LP/CareTrust Capital Corp.
Company Guar. Notes
5.25% due 06/01/2025.......................... 869,000 869,000
ESH Hospitality, Inc.
Company Guar. Notes
5.25% due 05/01/2025*......................... 960,000 933,888
GEO Group, Inc.
Company Guar. Notes
5.13% due 04/01/2023.......................... 625,000 617,188
Goodman US Finance Three LLC
Company Guar. Notes
4.50% due 10/15/2037*......................... 62,000 61,777
28
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Real Estate Investment Trusts (continued)
Iron Mountain, Inc.
Company Guar. Notes
4.88% due 09/15/2027*..................... $ 635,000 $ 588,963
iStar, Inc.
Senior Notes
5.25% due 09/15/2022...................... 692,000 669,510
iStar, Inc.
Senior Notes
6.00% due 04/01/2022...................... 310,000 310,775
Life Storage LP
Company Guar. Notes
3.88% due 12/15/2027...................... 52,000 50,082
MPT Operating Partnership LP/MPT Finance
Corp.
Company Guar. Notes
5.00% due 10/15/2027...................... 1,044,000 1,023,433
Starwood Property Trust, Inc.
Senior Notes
4.75% due 03/15/2025*..................... 1,100,000 1,072,500
----------
6,267,928
----------
Real Estate Management/Services -- 0.5%
Kennedy-Wilson, Inc.
Company Guar. Notes
5.88% due 04/01/2024...................... 925,000 916,906
Realogy Group LLC/Realogy Co-Issuer Corp.
Company Guar. Notes
4.88% due 06/01/2023*..................... 865,000 828,238
----------
1,745,144
----------
Real Estate Operations & Development -- 0.2%
Greystar Real Estate Partners LLC
Senior Sec. Notes
5.75% due 12/01/2025*..................... 650,000 648,375
----------
Rental Auto/Equipment -- 0.2%
Ahern Rentals, Inc.
Sec. Notes
7.38% due 05/15/2023*..................... 790,000 766,300
----------
Retail-Appliances -- 0.2%
Conn's, Inc.
Company Guar. Notes
7.25% due 07/15/2022...................... 768,000 762,240
----------
Retail-Auto Parts -- 0.0%
O'Reilly Automotive, Inc.
Senior Notes
3.60% due 09/01/2027...................... 108,000 104,647
----------
Retail-Automobile -- 0.2%
Asbury Automotive Group, Inc.
Company Guar. Notes
6.00% due 12/15/2024...................... 477,000 485,348
AutoNation, Inc.
Company Guar. Notes
3.80% due 11/15/2027...................... 163,000 156,031
----------
641,379
----------
Principal Value
Security Description Amount(17) (Note 2)
Retail-Discount -- 0.2%
Wal-Mart Stores, Inc.
Senior Bonds
1.90% due 12/15/2020................ $ 303,000 $ 297,094
Wal-Mart Stores, Inc.
Senior Notes
2.55% due 04/08/2026................ EUR 210,000 290,626
----------
587,720
----------
Retail-Office Supplies -- 0.3%
Arch Merger Sub, Inc.
Company Guar. Notes
8.50% due 09/15/2025*............... 1,225,000 1,133,125
----------
Retail-Pawn Shops -- 0.1%
FirstCash, Inc.
Company Guar. Notes
5.38% due 06/01/2024*............... 470,000 477,497
----------
Retail-Restaurants -- 0.3%
Brinker International, Inc.
Company Guar. Notes
5.00% due 10/01/2024*............... 490,000 480,200
Darden Restaurants, Inc.
Senior Notes
4.55% due 02/15/2048................ 35,000 34,851
Golden Nugget, Inc.
Company Guar. Notes
8.75% due 10/01/2025*............... 715,000 741,813
----------
1,256,864
----------
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 -- 0.3%
Hughes Satellite Systems Corp.
Senior Sec. Notes
5.25% due 08/01/2026................ 780,000 764,400
Hughes Satellite Systems Corp.
Company Guar. Notes
6.63% due 08/01/2026................ 162,000 161,190
----------
925,590
----------
Savings & Loans/Thrifts -- 0.4%
Astoria Financial Corp.
Senior Notes
3.50% due 06/08/2020................ 296,000 294,770
First Niagara Financial Group, Inc.
Senior Notes
6.75% due 03/19/2020................ 477,000 508,556
First Niagara Financial Group, Inc.
Sub. Notes
7.25% due 12/15/2021................ 434,000 487,738
----------
1,291,064
----------
Semiconductor Components-Integrated Circuits -- 0.1%
QUALCOMM, Inc.
Senior Notes
2.10% due 05/20/2020................ 132,000 130,495
29
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Semiconductor Components-Integrated Circuits (continued)
QUALCOMM, Inc.
Senior Notes
4.30% due 05/20/2047......... $ 104,000 $ 100,770
----------
231,265
----------
Steel-Producers -- 0.4%
AK Steel Corp.
Company Guar. Notes
6.38% due 10/15/2025......... 650,000 612,625
United States Steel Corp.
Senior Notes
6.25% due 03/15/2026......... 322,000 321,195
United States Steel Corp.
Senior Notes
6.88% due 08/15/2025......... 600,000 616,500
----------
1,550,320
----------
Telecom Services -- 0.1%
Embarq Corp.
Senior Notes
8.00% due 06/01/2036......... 515,000 485,387
----------
Telecommunication Equipment -- 0.1%
Plantronics, Inc.
Company Guar. Notes
5.50% due 05/31/2023*........ 367,000 363,807
----------
Telephone-Integrated -- 1.0%
AT&T, Inc.
Senior Notes
2.85% due 02/14/2023......... 221,000 222,025
AT&T, Inc.
Senior Notes
3.15% due 09/04/2036......... EUR 350,000 437,216
AT&T, Inc.
Senior Notes
4.35% due 06/15/2045......... 183,000 167,231
AT&T, Inc.
Senior Notes
4.50% due 05/15/2035......... 224,000 220,003
AT&T, Inc.
Senior Notes
4.75% due 05/15/2046......... 20,000 19,425
AT&T, Inc.
Senior Notes
4.90% due 08/14/2037......... 532,000 535,004
AT&T, Inc.
Senior Notes
5.30% due 08/14/2058......... 160,000 161,338
CenturyLink, Inc.
Senior Notes
5.80% due 03/15/2022......... 640,000 624,800
Citizens Communications Co.
Senior Notes
9.00% due 08/15/2031......... 910,000 552,825
Verizon Communications, Inc.
Senior Bonds
2.88% due 01/15/2038......... EUR 100,000 122,797
Principal Value
Security Description Amount(17) (Note 2)
Telephone-Integrated (continued)
Verizon Communications, Inc.
Senior Notes
3.38% due 02/15/2025.......................... $137,000 $ 134,659
Verizon Communications, Inc.
Senior Notes
4.40% due 11/01/2034.......................... 90,000 88,884
Verizon Communications, Inc.
Senior Notes
5.25% due 03/16/2037.......................... 217,000 233,993
------------
3,520,200
------------
Television -- 0.2%
Belo Corp.
Company Guar. Notes
7.75% due 06/01/2027.......................... 652,000 720,460
------------
Theaters -- 0.1%
Live Nation Entertainment, Inc.
Company Guar. Notes
5.63% due 03/15/2026*......................... 337,000 341,213
------------
Transport-Equipment & Leasing -- 0.0%
GATX Corp.
Senior Notes
3.25% due 09/15/2026.......................... 110,000 103,407
GATX Corp.
Senior Notes
3.50% due 03/15/2028.......................... 29,000 27,508
GATX Corp.
Senior Notes
3.85% due 03/30/2027.......................... 32,000 31,418
------------
162,333
------------
Transport-Marine -- 0.0%
Kirby Corp.
Senior Notes
4.20% due 03/01/2028.......................... 123,000 123,042
------------
Travel Services -- 0.2%
Sabre GLBL, Inc.
Senior Sec. Notes
5.38% due 04/15/2023*......................... 735,000 741,431
------------
Trucking/Leasing -- 0.1%
Penske Truck Leasing Co. LP/PTL Finance Corp.
Senior Notes
3.95% due 03/10/2025*......................... 195,000 195,418
------------
Total U.S. Corporate Bonds & Notes
(cost $135,894,000)........................... 134,837,940
------------
FOREIGN CORPORATE BONDS & NOTES -- 24.0%
Aerospace/Defense-Equipment -- 0.0%
Airbus Finance BV
Company Guar. Notes
2.70% due 04/17/2023*......................... 129,000 126,138
------------
Agricultural Chemicals -- 0.2%
Consolidated Energy Finance SA
Senior Notes
6.88% due 06/15/2025*......................... 730,000 764,675
------------
30
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Airlines -- 0.1%
Gol Finance, Inc.
Company Guar. Notes
7.00% due 01/31/2025*............... $ 480,000 $ 472,200
----------
Auto-Cars/Light Trucks -- 0.2%
Hyundai Capital Services, Inc.
Senior Notes
3.00% due 08/29/2022*............... 201,000 195,252
Volkswagen International Finance NV
Company Guar. Notes
1.88% due 03/30/2027................ EUR 400,000 497,988
----------
693,240
----------
Auto/Truck Parts & Equipment-Original -- 0.3%
Delphi Jersey Holdings PLC
Company Guar. Notes
5.00% due 10/01/2025*............... 770,000 738,238
Toyota Industries Corp.
Senior Notes
3.24% due 03/16/2023*............... 329,000 328,301
----------
1,066,539
----------
Banks-Commercial -- 2.2%
ABN AMRO Bank NV
Sub. Notes
7.13% due 07/06/2022................ EUR 160,000 246,794
Banco Bilbao Vizcaya Argentaria SA
Sub. Notes
3.50% due 02/10/2027................ EUR 200,000 273,153
Bank of China, Ltd.
Sub. Notes
5.00% due 11/13/2024................ 450,000 463,474
Bank of Montreal
Sub. Notes
3.80% due 12/15/2032................ 111,000 105,158
Bank of Nova Scotia
Senior Notes
2.50% due 01/08/2021................ 177,000 174,351
Barclays Bank PLC
Sub. Notes
6.63% due 03/30/2022................ EUR 255,000 377,697
BPCE SA
Sub. Notes
2.88% due 04/22/2026................ EUR 200,000 264,680
BPCE SA
Sub. Notes
4.50% due 03/15/2025*............... 265,000 266,093
Canadian Imperial Bank of Commerce
Senior Notes
2.10% due 10/05/2020................ 296,000 289,313
Credit Suisse AG
Senior Notes
3.00% due 10/29/2021................ 254,000 251,494
Credit Suisse AG
Sub. Notes
5.75% due 09/18/2025................ EUR 750,000 1,028,713
DVB Bank SE
Senior Notes
2.38% due 12/02/2020................ EUR 200,000 256,692
Principal Value
Security Description Amount(17) (Note 2)
Banks-Commercial (continued)
Fidelity Bank PLC
Senior Notes
10.50% due 10/16/2022.......... $ 450,000 $ 464,517
HBOS PLC
Sub. Notes
5.37% due 06/30/2021........... EUR 600,000 853,303
Intesa Sanpaolo SpA
Sub. Notes
3.93% due 09/15/2026........... EUR 175,000 231,385
Intesa Sanpaolo SpA
Senior Notes
4.00% due 10/30/2023........... EUR 200,000 286,700
Intesa Sanpaolo SpA
Sub. Notes
5.71% due 01/15/2026*.......... 255,000 255,909
Santander Issuances SAU
Company Guar. Notes
3.25% due 04/04/2026........... EUR 200,000 267,844
Standard Chartered PLC
Sub. Notes
3.13% due 11/19/2024........... EUR 285,000 377,516
Standard Chartered PLC
Sub. Notes
5.13% due 06/06/2034........... GBP 125,000 188,516
Yapi ve Kredi Bankasi AS
Senior Notes
5.75% due 02/24/2022........... 480,000 477,615
Zenith Bank PLC
Senior Notes
7.38% due 05/30/2022........... 450,000 463,806
----------
7,864,723
----------
Banks-Money Center -- 0.1%
Bank of Scotland PLC
Sub. Notes
9.38% due 05/15/2021........... GBP 200,000 338,621
----------
Beverages-Non-alcoholic -- 0.1%
Coca-Cola Femsa SAB de CV
Company Guar. Notes
2.38% due 11/26/2018........... 292,000 291,664
----------
Brewery -- 0.1%
Anheuser-Busch InBev SA/NV
Company Guar. Notes
2.75% due 03/17/2036........... EUR 250,000 326,017
----------
Building Products-Cement -- 0.1%
CIMPOR Financial Operations BV
Company Guar. Notes
5.75% due 07/17/2024........... 480,000 457,680
----------
Building Societies -- 0.1%
Nationwide Building Society
Sub. Notes
2.00% due 07/25/2029........... EUR 190,000 233,945
Nationwide Building Society
Sub. Notes
4.13% due 10/18/2032*.......... 250,000 237,635
----------
471,580
----------
31
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Building-Residential/Commercial -- 0.2%
Mattamy Group Corp.
Senior Notes
6.50% due 10/01/2025*........................ $ 706,000 $ 713,060
----------
Cable/Satellite TV -- 1.3%
Altice Financing SA
Senior Sec. Notes
7.50% due 05/15/2026*........................ 630,000 617,400
Altice Luxembourg SA
Company Guar. Notes
7.63% due 02/15/2025*........................ 965,000 825,075
SFR Group SA
Senior Sec. Notes
7.38% due 05/01/2026*........................ 1,834,000 1,746,885
UPCB Finance IV, Ltd.
Senior Sec. Notes
5.38% due 01/15/2025*........................ 619,000 597,335
Ziggo Secured Finance BV
Senior Sec. Notes
5.50% due 01/15/2027*........................ 800,000 751,768
----------
4,538,463
----------
Cellular Telecom -- 0.6%
C&W Senior Financing Designated Activity Co.
Senior Notes
6.88% due 09/15/2027*........................ 667,000 665,332
Digicel Group, Ltd.
Senior Notes
8.25% due 09/30/2020......................... 235,000 202,100
GTH Finance BV
Company Guar. Notes
7.25% due 04/26/2023*........................ 200,000 217,464
Millicom International Cellular SA
Senior Notes
6.00% due 03/15/2025......................... 440,000 452,650
VEON Holdings BV
Senior Notes
4.95% due 06/16/2024......................... 500,000 492,185
----------
2,029,731
----------
Chemicals-Diversified -- 0.7%
Braskem Netherlands Finance BV
Company Guar. Notes
4.50% due 01/10/2028*........................ 209,000 203,441
Cydsa SAB de CV
Company Guar. Notes
6.25% due 10/04/2027......................... 490,000 485,713
NOVA Chemicals Corp.
Senior Notes
5.00% due 05/01/2025*........................ 695,000 666,991
Petkim Petrokimya Holding AS
Senior Notes
5.88% due 01/26/2023*........................ 470,000 460,521
Trinseo Materials Operating SCA/Trinseo
Materials Finance, Inc.
Company Guar. Notes
5.38% due 09/01/2025*........................ 615,000 604,237
----------
2,420,903
----------
Principal Value
Security Description Amount(17) (Note 2)
Computers-Memory Devices -- 0.3%
Seagate HDD Cayman
Company Guar. Notes
4.75% due 01/01/2025................. $ 955,000 $930,180
--------
Cruise Lines -- 0.2%
Silversea Cruise Finance, Ltd.
Senior Sec. Notes
7.25% due 02/01/2025*................ 730,000 771,975
--------
Diamonds/Precious Stones -- 0.1%
Petra Diamonds US Treasury PLC
Sec. Notes
7.25% due 05/01/2022................. 460,000 460,000
--------
Diversified Banking Institutions -- 1.7%
Barclays PLC
Sub. Notes
4.84% due 05/09/2028................. 200,000 196,672
Credit Agricole SA
Sub. Notes
2.63% due 03/17/2027................. EUR 325,000 422,356
Credit Suisse Group AG
Senior Notes
4.28% due 01/09/2028*................ 198,000 198,465
HSBC Holdings PLC
Senior Notes
4.04% due 03/13/2028................. 201,000 200,863
Lloyds Banking Group PLC
Sub. Notes
4.58% due 12/10/2025................. 336,000 335,983
Macquarie Group, Ltd.
Senior Notes
3.76% due 11/28/2028*................ 60,000 56,629
Mitsubishi UFJ Financial Group, Inc.
Senior Notes
2.67% due 07/25/2022................. 148,000 143,389
Mitsubishi UFJ Financial Group, Inc.
Senior Notes
2.95% due 03/01/2021................. 314,000 312,023
Mitsubishi UFJ Financial Group, Inc.
Senior Notes
3.78% due 03/02/2025................. 202,000 202,179
Mizuho Financial Group, Inc.
Senior Notes
2.27% due 09/13/2021................. 206,000 198,315
Mizuho Financial Group, Inc.
Senior Notes
3.55% due 03/05/2023................. 304,000 302,498
Royal Bank of Scotland Group PLC
Senior Notes
2.00% due 03/08/2023................. EUR 275,000 352,095
Royal Bank of Scotland Group PLC
Senior Notes
2.50% due 03/22/2023................. EUR 185,000 242,773
Royal Bank of Scotland Group PLC
Senior Notes
3.88% due 09/12/2023................. 201,000 198,500
UBS AG
Senior Notes
2.45% due 12/01/2020*................ 207,000 203,243
32
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Diversified Banking Institutions (continued)
UBS AG
Sub. Notes
4.75% due 02/12/2026..................... EUR 600,000 $ 812,097
UniCredit SpA
Senior Notes
1.00% due 01/18/2023..................... EUR 375,000 458,152
UniCredit SpA
Senior Notes
2.13% due 10/24/2026..................... EUR 250,000 322,382
UniCredit SpA
Sub. Notes
4.38% due 01/03/2027..................... EUR 250,000 332,852
UniCredit SpA
Sub. Notes
5.86% due 06/19/2032*.................... 548,000 555,847
----------
6,047,313
----------
Diversified Financial Services -- 0.1%
GE Capital International Funding Co. ULC
Company Guar. Notes
4.42% due 11/15/2035..................... 263,000 257,096
----------
Diversified Manufacturing Operations -- 0.3%
Bombardier, Inc.
Senior Notes
5.75% due 03/15/2022*.................... 775,000 768,219
Siemens Financieringsmaatschappij NV
Company Guar. Notes
2.20% due 03/16/2020*.................... 400,000 395,300
----------
1,163,519
----------
Diversified Minerals -- 0.3%
Anglo American Capital PLC
Company Guar. Notes
3.25% due 04/03/2023..................... EUR 360,000 486,851
FMG Resources August 2006 Pty, Ltd.
Company Guar. Notes
4.75% due 05/15/2022*.................... 609,000 601,387
----------
1,088,238
----------
Diversified Operations -- 0.2%
Grupo KUO SAB De CV
Senior Notes
5.75% due 07/07/2027..................... 460,000 460,000
Grupo KUO SAB De CV
Senior Notes
5.75% due 07/07/2027*.................... 400,000 400,000
----------
860,000
----------
Electric-Distribution -- 0.5%
State Grid Overseas Investment, Ltd.
Company Guar. Notes
3.13% due 05/22/2023*.................... 1,500,000 1,471,453
State Grid Overseas Investment, Ltd.
Company Guar. Notes
4.13% due 05/07/2024*.................... 200,000 203,555
----------
1,675,008
----------
Principal Value
Security Description Amount(17) (Note 2)
Electric-Generation -- 0.2%
Electricite de France SA
Senior Notes
2.35% due 10/13/2020*................. $ 123,000 $ 120,963
Electricite de France SA
Senior Notes
6.00% due 01/22/2114*................. 102,000 109,143
Genneia SA
Senior Notes
8.75% due 01/20/2022.................. 430,000 463,170
----------
693,276
----------
Electric-Integrated -- 0.4%
Capex SA
Senior Notes
6.88% due 05/15/2024.................. 450,000 452,250
EDP Finance BV
Senior Notes
2.00% due 04/22/2025.................. EUR 200,000 256,048
EDP Finance BV
Senior Notes
3.63% due 07/15/2024*................. 295,000 290,179
Enel Finance International NV
Company Guar. Notes
3.50% due 04/06/2028*................. 200,000 186,418
Enel Finance International NV
Company Guar. Notes
3.63% due 05/25/2027*................. 425,000 404,775
----------
1,589,670
----------
Finance-Commercial -- 0.1%
Unifin Financiera SAB de CV SOFOM ENR
Company Guar. Notes
7.25% due 09/27/2023.................. 460,000 468,050
----------
Finance-Consumer Loans -- 0.2%
goeasy, Ltd.
Company Guar. Notes
7.88% due 11/01/2022*................. 650,000 696,930
----------
Finance-Other Services -- 0.8%
Charming Light Investments, Ltd.
Company Guar. Notes
4.38% due 12/21/2027.................. 2,500,000 2,382,350
Travelport Corporate Finance PLC
Senior Sec. Notes
6.00% due 03/15/2026*................. 431,000 432,616
----------
2,814,966
----------
Gambling (Non-Hotel) -- 0.2%
International Game Technology PLC
Senior Sec. Notes
6.50% due 02/15/2025*................. 578,000 619,183
----------
Gas-Distribution -- 0.1%
China Resources Gas Group, Ltd.
Senior Notes
4.50% due 04/05/2022.................. 350,000 360,039
----------
33
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Gold Mining -- 0.0%
Goldcorp, Inc.
Senior Notes
3.70% due 03/15/2023......................... $ 60,000 $ 59,666
Kinross Gold Corp.
Company Guar. Notes
4.50% due 07/15/2027*........................ 95,000 93,034
----------
152,700
----------
Insurance-Life/Health -- 0.1%
Athene Holding, Ltd.
Senior Bonds
4.13% due 01/12/2028......................... 383,000 367,530
----------
Insurance-Multi-line -- 0.1%
Willow No 2 Ireland PLC for Zurich Insurance
Co., Ltd.
Senior Sec. Notes
3.38% due 06/27/2022......................... EUR 175,000 241,414
XLIT, Ltd.
Company Guar. Notes
5.50% due 03/31/2045......................... 111,000 121,754
----------
363,168
----------
Insurance-Property/Casualty -- 0.0%
Enstar Group, Ltd.
Senior Notes
4.50% due 03/10/2022......................... 74,000 74,333
----------
Internet Application Software -- 0.1%
Tencent Holdings, Ltd.
Senior Notes
3.60% due 01/19/2028*........................ 500,000 481,590
----------
Machinery-Farming -- 0.0%
CNH Industrial NV
Senior Notes
3.85% due 11/15/2027......................... 150,000 145,745
----------
Machinery-Pumps -- 0.0%
Nvent Finance SARL
Company Guar. Notes
4.55% due 04/15/2028*........................ 101,000 101,466
----------
Medical-Drugs -- 0.7%
Endo, Ltd./Endo Finance LLC/Endo Finco, Inc.
Company Guar. Notes
6.00% due 02/01/2025*........................ 275,000 197,313
Shire Acquisitions Investments Ireland DAC
Company Guar. Notes
2.88% due 09/23/2023......................... 118,000 112,652
Valeant Pharmaceuticals International, Inc.
Company Guar. Notes
5.88% due 05/15/2023*........................ 1,650,000 1,456,108
Valeant Pharmaceuticals International, Inc.
Senior Sec. Notes
7.00% due 03/15/2024*........................ 613,000 639,053
----------
2,405,126
----------
Metal-Copper -- 0.5%
First Quantum Minerals, Ltd.
Company Guar. Notes
6.50% due 03/01/2024*........................ 331,000 314,036
Principal Value
Security Description Amount(17) (Note 2)
Metal-Copper (continued)
First Quantum Minerals, Ltd.
Company Guar. Notes
6.88% due 03/01/2026*............. $ 349,000 $ 331,550
First Quantum Minerals, Ltd.
Company Guar. Notes
7.25% due 04/01/2023*............. 457,000 451,288
Hudbay Minerals, Inc.
Company Guar. Notes
7.25% due 01/15/2023*............. 575,000 596,562
----------
1,693,436
----------
Metal-Diversified -- 0.3%
Glencore Canada Financial Corp.
Company Guar. Notes
7.38% due 05/27/2020.............. GBP 100,000 156,626
Glencore Finance Europe, Ltd.
Company Guar. Notes
1.75% due 03/17/2025.............. EUR 380,000 472,361
Vedanta Resources PLC
Senior Notes
6.13% due 08/09/2024.............. 470,000 459,256
----------
1,088,243
----------
Non-Ferrous Metals -- 0.2%
Codelco, Inc.
Senior Notes
3.63% due 08/01/2027.............. 550,000 534,210
----------
Oil & Gas Drilling -- 0.7%
Noble Holding International, Ltd.
Company Guar. Notes
7.75% due 01/15/2024.............. 422,000 391,405
Noble Holding International, Ltd.
Company Guar. Notes
7.88% due 02/01/2026*............. 494,000 486,590
Pacific Drilling SA
Senior Sec. Notes
5.38% due 06/01/2020*+(7)(18)..... 1,050,000 346,500
Shelf Drilling Holdings, Ltd.
Senior Notes
8.25% due 02/15/2025*............. 500,000 501,250
Trinidad Drilling, Ltd.
Company Guar. Notes
6.63% due 02/15/2025*............. 800,000 746,000
----------
2,471,745
----------
Oil Companies-Exploration & Production -- 0.9%
Anadarko Finance Co.
Company Guar. Notes
7.50% due 05/01/2031.............. 72,000 91,985
Empresa Nacional del Petroleo
Senior Notes
3.75% due 08/05/2026*............. 500,000 481,250
Geopark, Ltd.
Senior Sec. Notes
6.50% due 09/21/2024.............. 460,000 461,725
Medco Platinum Road Pte, Ltd.
Senior Sec. Notes
6.75% due 01/30/2025*............. 480,000 457,120
34
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Oil Companies-Exploration & Production (continued)
MEG Energy Corp.
Company Guar. Notes
6.38% due 01/30/2023*........ $ 909,000 $ 759,015
MEG Energy Corp.
Sec. Notes
6.50% due 01/15/2025*........ 537,000 520,890
Nostrum Oil & Gas Finance BV
Company Guar. Notes
7.00% due 02/16/2025*........ 510,000 495,720
----------
3,267,705
----------
Oil Companies-Integrated -- 3.7%
BP Capital Markets PLC
Company Guar. Notes
2.97% due 02/27/2026......... EUR 230,000 320,672
BP Capital Markets PLC
Company Guar. Notes
3.25% due 05/06/2022......... 83,000 83,156
Cenovus Energy, Inc.
Senior Notes
4.25% due 04/15/2027......... 51,000 49,712
Cenovus Energy, Inc.
Senior Bonds
5.40% due 06/15/2047......... 114,000 114,746
Pertamina Persero PT
Senior Notes
4.30% due 05/20/2023......... 1,650,000 1,664,756
Pertamina Persero PT
Senior Notes
4.88% due 05/03/2022*........ 300,000 309,490
Pertamina Persero PT
Senior Notes
6.45% due 05/30/2044......... 400,000 452,313
Petrobras Global Finance BV
Company Guar. Notes
6.00% due 01/27/2028......... 470,000 465,300
Petroleos del Peru SA
Senior Notes
5.63% due 06/19/2047......... 1,550,000 1,546,512
Petroleos Mexicanos
Company Guar. Notes
4.88% due 01/24/2022......... 500,000 512,450
Petroleos Mexicanos
Senior Notes
6.35% due 02/12/2048*........ 88,000 85,030
Petroleos Mexicanos
Company Guar. Notes
6.63% due 06/15/2035......... 1,400,000 1,446,452
Petroleos Mexicanos
Company Guar. Notes
6.75% due 09/21/2047......... 2,313,000 2,340,478
Petronas Capital, Ltd.
Company Guar. Notes
5.25% due 08/12/2019......... 1,000,000 1,030,312
Petronas Capital, Ltd.
Company Guar. Notes
7.88% due 05/22/2022......... 2,000,000 2,337,784
Principal Value
Security Description Amount(17) (Note 2)
Oil Companies-Integrated (continued)
Shell International Finance BV
Company Guar. Notes
2.13% due 05/11/2020................... $ 134,000 $ 131,973
Suncor Energy, Inc.
Senior Notes
4.00% due 11/15/2047................... 78,000 76,480
YPF SA
Senior Notes
6.95% due 07/21/2027................... 450,000 451,845
-----------
13,419,461
-----------
Oil Refining & Marketing -- 0.1%
Empresa Nacional del Petroleo
Senior Notes
3.75% due 08/05/2026................... 480,000 462,000
-----------
Oil-Field Services -- 0.4%
KCA Deutag UK Finance PLC
Senior Sec. Notes
9.88% due 04/01/2022*.................. 876,000 914,956
Weatherford International, Ltd.
Company Guar. Notes
9.88% due 02/15/2024................... 450,000 410,625
-----------
1,325,581
-----------
Paper & Related Products -- 0.3%
Cascades, Inc.
Company Guar. Notes
5.50% due 07/15/2022*.................. 67,000 67,419
Cascades, Inc.
Company Guar. Notes
5.75% due 07/15/2023*.................. 384,000 389,760
Fibria Overseas Finance, Ltd.
Company Guar. Notes
5.50% due 01/17/2027................... 480,000 496,080
-----------
953,259
-----------
Printing-Commercial -- 0.3%
Cimpress NV
Company Guar. Notes
7.00% due 04/01/2022*.................. 1,013,000 1,056,052
-----------
Real Estate Operations & Development -- 0.1%
Future Land Development Holdings, Ltd.
Senior Sec. Notes
5.00% due 02/16/2020................... 470,000 463,382
-----------
Satellite Telecom -- 0.6%
Inmarsat Finance PLC
Company Guar. Notes
6.50% due 10/01/2024*.................. 945,000 959,175
Intelsat Jackson Holdings SA
Company Guar. Notes
5.50% due 08/01/2023................... 860,000 692,300
Intelsat Luxembourg SA
Company Guar. Notes
8.13% due 06/01/2023................... 795,000 381,600
-----------
2,033,075
-----------
35
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Semiconductor Equipment -- 0.1%
Sensata Technologies BV
Company Guar. Notes
4.88% due 10/15/2023*................... $ 444,000 $ 444,688
-----------
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%
Telecom Italia Capital SA
Company Guar. Notes
7.72% due 06/04/2038.................... 208,000 254,321
Telefonica Emisiones SAU
Company Guar. Notes
1.46% due 04/13/2026.................... EUR 300,000 369,910
Telefonica Emisiones SAU
Company Guar. Notes
2.93% due 10/17/2029.................... EUR 200,000 271,348
Telefonica Emisiones SAU
Company Guar. Notes
4.67% due 03/06/2038.................... 260,000 262,993
Telefonica Emisiones SAU
Company Guar. Notes
5.21% due 03/08/2047.................... 205,000 217,869
-----------
1,376,441
-----------
Transport-Marine -- 1.2%
PT Pelabuhan Indonesia II
Senior Notes
4.25% due 05/05/2025.................... 2,000,000 1,960,000
PT Pelabuhan Indonesia II
Senior Notes
4.25% due 05/05/2025*................... 300,000 294,000
SCF Capital Designated Activity Co.
Company Guar. Notes
5.38% due 06/16/2023.................... 2,100,000 2,134,860
-----------
4,388,860
-----------
Transport-Rail -- 1.1%
Canadian Pacific Railway Co.
Senior Notes
6.13% due 09/15/2115.................... 93,000 116,150
Kazakhstan Temir Zholy Finance BV
Company Guar. Notes
6.95% due 07/10/2042.................... 3,000,000 3,354,840
Transnet SOC, Ltd.
Senior Notes
4.00% due 07/26/2022.................... 400,000 390,056
-----------
3,861,046
-----------
Transport-Services -- 0.1%
Rumo Luxembourg SARL
Company Guar. Notes
7.38% due 02/09/2024.................... 440,000 470,888
-----------
Total Foreign Corporate Bonds & Notes
(cost $89,552,824)...................... 86,472,407
-----------
Principal Value
Security Description Amount(17) (Note 2)
FOREIGN GOVERNMENT OBLIGATIONS -- 18.9%
Banks-Export/Import -- 1.0%
Export Credit Bank of Turkey
Senior Notes
4.25% due 09/18/2022*......... $1,100,000 $1,043,931
Export-Import Bank of India
Senior Notes
2.75% due 08/12/2020.......... 1,050,000 1,035,618
Export-Import Bank of India
Senior Notes
4.00% due 01/14/2023.......... 1,500,000 1,499,752
----------
3,579,301
----------
Banks-Special Purpose -- 0.1%
Hungarian Development Bank
Government Guar. Notes
6.25% due 10/21/2020.......... 400,000 427,682
----------
Central Bank -- 0.4%
Central Bank of Tunisia
Senior Notes
5.75% due 01/30/2025.......... 1,700,000 1,617,125
----------
Sovereign -- 17.4%
Dominican Republic
Senior Bonds
5.50% due 01/27/2025*......... 415,000 426,861
Dominican Republic
Senior Bonds
5.88% due 04/18/2024.......... 380,000 399,008
Dominican Republic
Senior Bonds
5.95% due 01/25/2027*......... 250,000 261,250
Dominican Republic
Senior Bonds
6.85% due 01/27/2045.......... 1,250,000 1,346,875
Dominican Republic
Senior Bonds
7.45% due 04/30/2044.......... 950,000 1,073,500
Dominican Republic
Senior Bonds
8.63% due 04/20/2027.......... 350,000 413,000
Federative Republic of Brazil
Senior Notes
5.00% due 01/27/2045.......... 800,000 718,808
Government of Egypt
Senior Notes
5.58% due 02/21/2023*......... 600,000 608,520
Government of Egypt
Senior Notes
8.50% due 01/31/2047.......... 250,000 278,625
Government of Romania
Senior Notes
6.13% due 01/22/2044.......... 780,000 936,852
Government of Ukraine
Senior Notes
7.38% due 09/25/2032*......... 1,000,000 964,000
Kingdom of Jordan
Senior Notes
5.75% due 01/31/2027*......... 450,000 437,688
36
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
FOREIGN GOVERNMENT OBLIGATIONS (continued)
Sovereign (continued)
Kingdom of Jordan
Senior Notes
5.75% due 01/31/2027......... $ 400,000 $ 389,056
Kingdom of Jordan
Senior Notes
7.38% due 10/10/2047......... 800,000 808,000
Oriental Republic of Uruguay
Senior Notes
4.38% due 10/27/2027......... 900,000 926,370
Oriental Republic of Uruguay
Senior Notes
5.10% due 06/18/2050......... 900,000 922,500
Republic of Argentina
Senior Notes
2.50% due 12/31/2038......... 1,300,000 863,200
Republic of Argentina
Senior Notes
4.63% due 01/11/2023......... 1,200,000 1,156,812
Republic of Argentina
Senior Notes
5.88% due 01/11/2028......... 360,000 338,580
Republic of Argentina
Senior Bonds
6.88% due 01/11/2048......... 600,000 547,500
Republic of Argentina
Senior Notes
8.28% due 12/31/2033......... 1,051,529 1,151,423
Republic of Chile
Senior Notes
3.24% due 02/06/2028......... 1,006,000 986,383
Republic of Colombia
Senior Notes
4.38% due 07/12/2021......... 300,000 310,500
Republic of Colombia
Senior Notes
4.50% due 01/28/2026......... 1,200,000 1,240,200
Republic of Colombia
Senior Bonds
7.38% due 09/18/2037......... 2,400,000 3,072,000
Republic of Colombia
Senior Notes
8.13% due 05/21/2024......... 500,000 611,250
Republic of Croatia
Senior Notes
6.38% due 03/24/2021......... 3,000,000 3,242,118
Republic of Ecuador
Senior Notes
7.88% due 01/23/2028*........ 1,290,000 1,241,883
Republic of Ecuador
Senior Notes
9.63% due 06/02/2027......... 1,250,000 1,338,375
Republic of Ecuador
Senior Notes
9.65% due 12/13/2026*........ 700,000 738,500
Republic of Guatemala
Senior Notes
4.38% due 06/05/2027*........ 460,000 447,350
Principal Value
Security Description Amount(17) (Note 2)
Sovereign (continued)
Republic of Guatemala
Senior Notes
4.38% due 06/05/2027.... $1,000,000 $ 972,500
Republic of Guatemala
Senior Notes
4.88% due 02/13/2028.... 800,000 797,384
Republic of Guatemala
Senior Notes
5.75% due 06/06/2022.... 250,000 263,432
Republic of Honduras
Senior Notes
6.25% due 01/19/2027.... 1,600,000 1,691,152
Republic of Hungary
Senior Notes
5.38% due 02/21/2023.... 600,000 647,940
Republic of Hungary
Senior Notes
6.38% due 03/29/2021.... 500,000 544,400
Republic of Indonesia
Senior Notes
3.70% due 01/08/2022.... 700,000 702,604
Republic of Ireland
Bonds
2.00% due 02/18/2045.... EUR 250,000 331,077
Republic of Ivory Coast
Senior Notes
6.13% due 06/15/2033*... 1,600,000 1,520,384
Republic of Ivory Coast
Senior Notes
6.13% due 06/15/2033.... 500,000 475,120
Republic of Kazakhstan
Senior Notes
6.50% due 07/21/2045.... 900,000 1,086,640
Republic of Lebanon
Senior Notes
8.25% due 04/12/2021.... 700,000 736,890
Republic of Lithuania
Senior Notes
6.63% due 02/01/2022.... 500,000 561,856
Republic of Lithuania
Senior Notes
7.38% due 02/11/2020.... 550,000 595,375
Republic of Namibia
Senior Notes
5.25% due 10/29/2025.... 570,000 565,759
Republic of Nigeria
Senior Notes
6.50% due 11/28/2027*... 600,000 607,836
Republic of Nigeria
Senior Notes
7.14% due 02/23/2030*... 1,350,000 1,400,625
Republic of Panama
Senior Notes
3.75% due 03/16/2025.... 600,000 603,900
Republic of Paraguay
Senior Notes
4.63% due 01/25/2023.... 500,000 513,400
37
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
FOREIGN GOVERNMENT OBLIGATIONS (continued)
Sovereign (continued)
Republic of Paraguay
Senior Notes
6.10% due 08/11/2044........ $ 650,000 $ 698,750
Republic of Poland
Senior Notes
5.13% due 04/21/2021........ 950,000 1,009,375
Republic of Senegal
Bonds
6.25% due 05/23/2033........ 1,100,000 1,083,500
Republic of Senegal
Senior Notes
6.75% due 03/13/2048*....... 740,000 724,756
Republic of South Africa
Senior Notes
4.67% due 01/17/2024........ 400,000 401,536
Republic of South Africa
Senior Notes
5.65% due 09/27/2047........ 700,000 691,390
Republic of South Africa
Senior Notes
6.25% due 03/08/2041........ 800,000 859,389
Republic of Sri Lanka
Senior Notes
6.25% due 10/04/2020........ 200,000 207,318
Republic of Sri Lanka
Senior Notes
6.83% due 07/18/2026*....... 265,000 272,432
Republic of Sri Lanka
Senior Notes
6.83% due 07/18/2026........ 1,500,000 1,542,067
Republic of Sri Lanka
Senior Notes
6.85% due 11/03/2025*....... 400,000 413,932
Republic of Sri Lanka
Senior Notes
6.85% due 11/03/2025........ 700,000 724,382
Republic of the Philippines
Senior Notes
4.00% due 01/15/2021........ 1,350,000 1,381,189
Republic of Turkey
Senior Notes
5.75% due 05/11/2047........ 460,000 408,710
Republic of Turkey
Notes
6.63% due 02/17/2045........ 1,700,000 1,681,045
Republic of Turkey
Senior Notes
8.00% due 02/14/2034........ 400,000 462,048
Republic of Zambia
Senior Notes
8.50% due 04/14/2024........ 1,300,000 1,358,500
Russian Federation
Senior Notes
4.38% due 03/21/2029*....... 1,200,000 1,183,982
Russian Federation
Senior Notes
4.75% due 05/27/2026........ 2,000,000 2,066,432
Principal Value
Security Description Amount(17) (Note 2)
Sovereign (continued)
Socialist Republic of Vietnam
Senior Notes
4.80% due 11/19/2024................... $ 1,350,000 $ 1,376,488
United Kingdom Gilt Treasury
Bonds
3.50% due 01/22/2045................... GBP 60,000 115,951
United Kingdom Gilt Treasury
Bonds
4.50% due 09/07/2034................... GBP 310,000 613,760
United Mexican States
Senior Notes
3.75% due 01/11/2028................... 231,000 223,377
United Mexican States
Senior Notes
4.35% due 01/15/2047................... 228,000 208,365
United Mexican States
Senior Bonds
4.75% due 03/08/2044................... 43,000 41,818
-----------
62,565,753
-----------
Total Foreign Government Obligations
(cost $69,935,034)..................... 68,189,861
-----------
U.S. GOVERNMENT AGENCIES -- 9.0%
Federal Home Loan Mtg. Corp. -- 3.6%
2.50% due 01/01/2028................... 222,807 219,821
2.50% due 04/01/2028................... 74,672 73,670
2.50% due 03/01/2031................... 124,332 121,825
3.00% due 10/01/2032................... 1,022,216 1,020,885
3.00% due 07/01/2045................... 2,249,835 2,200,999
3.00% due 10/01/2045................... 767,776 750,484
3.50% due 03/01/2042................... 321,772 324,213
3.50% due 04/01/2042................... 327,796 330,282
3.50% due 09/01/2043................... 310,762 313,118
3.50% due 07/01/2045................... 3,105,153 3,119,813
3.50% due 11/01/2047................... 1,591,078 1,595,869
4.00% due 01/01/2046................... 364,561 376,556
4.50% due 02/01/2020................... 1,711 1,721
4.50% due 08/01/2020................... 5,275 5,305
4.50% due 03/01/2039................... 1,444,742 1,526,559
4.50% due 12/01/2039................... 7,079 7,485
5.00% due 02/01/2034................... 20,935 22,577
5.00% due 05/01/2034................... 30,477 33,056
5.00% due 11/01/2043................... 212,894 229,726
5.50% due 05/01/2037................... 48,177 52,792
6.00% due 03/01/2040................... 39,027 43,706
6.50% due 02/01/2035................... 6,731 7,580
Federal Home Loan Mtg. Corp. FRS
3.11% (6 ML+1.49%)
due 02/01/2037......................... 14,601 15,028
3.69% (12 ML+1.89%)
due 11/01/2037......................... 104,427 109,989
Federal Home Loan Mtg. Corp. REMIC FRS
Series 3572, Class JS
5.02% (6.80% -- 1 ML)
due 09/15/2039(1)(9)(10)............... 437,401 46,602
38
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
U.S. GOVERNMENT AGENCIES (continued)
Federal Home Loan Mtg. Corp. (continued)
Federal Home Loan Mtg. Corp. REMIC
Series 1103, Class N
11.50% due 06/15/2021(1)(9)........ $ 292 $ 22
Series 4740, Class BA
3.00% due 09/15/2045(1)............ 270,725 268,263
-----------
12,817,946
-----------
Federal National Mtg. Assoc. -- 5.4%
2.50% due 12/01/2026............... 524,567 518,490
3.00% due 10/01/2027............... 259,778 261,013
3.00% due 10/01/2030............... 200,955 201,169
3.00% due 10/01/2032............... 1,229,158 1,228,577
3.00% due 12/01/2042............... 132,759 130,710
3.00% due 01/01/2047............... 838,727 818,756
3.00% due 02/01/2048............... 1,993,506 1,945,928
3.50% due 03/01/2033............... 1,926,852 1,966,677
3.50% due 02/01/2043............... 123,756 124,850
3.50% due 08/01/2026............... 90,253 92,095
3.50% due 08/01/2027............... 57,657 58,834
3.50% due 10/01/2028............... 35,248 36,001
3.50% due 10/01/2045............... 268,895 270,041
3.50% due 11/01/2045............... 236,505 237,305
3.50% due 12/01/2045............... 1,215,206 1,219,317
3.50% due 03/01/2046............... 2,698,516 2,707,216
3.50% due 07/01/2046............... 164,219 165,021
4.00% due 11/01/2025............... 137,557 142,181
4.00% due 10/01/2043............... 318,122 328,938
4.00% due 02/01/2045............... 1,775,251 1,836,020
4.00% due 05/01/2047............... 645,959 663,593
4.00% due 08/01/2047............... 1,142,316 1,173,769
4.50% due 06/01/2019............... 5,961 6,006
4.50% due 11/01/2022............... 25,466 25,801
4.50% due 06/01/2023............... 15,944 16,611
4.50% due 08/01/2045............... 1,860,864 1,980,478
4.50% due 04/01/2047............... 403,136 422,578
5.00% due 06/01/2019............... 5,346 5,430
5.00% due 01/01/2023............... 8,897 9,340
5.00% due 03/01/2034............... 19,286 20,802
5.00% due 05/01/2035............... 11,181 12,068
5.00% due 05/01/2040............... 80,379 86,870
5.00% due 07/01/2040............... 82,558 89,234
5.50% due 06/01/2038............... 25,484 27,967
6.00% due 02/01/2032............... 4,739 5,269
6.00% due 05/01/2034............... 1,744 1,958
6.00% due 10/01/2034............... 19,228 21,371
7.50% due 01/01/2030............... 1,145 1,166
8.00% due 11/01/2028............... 3,167 3,488
Federal National Mtg. Assoc. FRS
3.22% (6 ML+1.54%)
due 09/01/2035..................... 70,761 73,197
3.22% (1 Yr USTYCR+2.26%)
due 11/01/2036..................... 41,972 44,442
3.35% (1 Yr USTYCR+2.19%)
due 10/01/2035..................... 78,594 82,688
3.36% (12 ML+1.57%)
due 05/01/2037..................... 21,579 22,502
3.45% (12 ML+1.66%)
due 07/01/2039..................... 68,399 71,738
Principal Value
Security Description Amount(17) (Note 2)
Federal National Mtg. Assoc. (continued)
3.54% (12 ML+1.77%)
due 05/01/2040....................... $ 92,805 $ 96,842
3.57% (12 ML+1.82%)
due 10/01/2040....................... 24,117 25,227
3.58% (12 ML+1.83%)
due 10/01/2040....................... 47,478 49,634
3.69% (12 ML+1.91%)
due 08/01/2035....................... 61,613 65,217
Federal National Mtg. Assoc. REMIC
Series 1989-2, Class D
8.80% due 01/25/2019(1).............. 422 428
Series 2017-94, Class DA
3.00% due 06/25/2045(1) 232,653 230,984
-----------
19,625,837
-----------
Total U.S. Government Agencies
(cost $33,405,485)................... 32,443,783
-----------
U.S. GOVERNMENT TREASURIES -- 0.0%
United States Treasury Notes -- 0.0%
2.13% due 07/31/2024
(cost $50,414)....................... 50,000 48,441
-----------
LOANS(12)(13)(14) -- 6.9%
Advanced Materials -- 0.0%
Filtration Group Corp. FRS
BTL
coupon TBD
due 03/29/2025....................... 42,954 42,847
-----------
Aerospace/Defense-Equipment -- 0.1%
Wesco Aircraft Hardware Corp. FRS
BTL
coupon TBD
due 02/28/2021....................... 355,000 345,238
Univision Communications, Inc. FRS
BTL
coupon TBD
due 03/15/2024....................... 355,000 349,287
-----------
694,525
-----------
Building & Construction Products-Misc. -- 0.1%
Forterra Finance LLC FRS
BTL
coupon TBD
due 10/25/2023....................... 385,000 354,842
-----------
Building & Construction-Misc. -- 1.0%
American Traffic Solutions, Inc. FRS
1st Lien
coupon TBD
due 02/28/2025....................... 3,550,000 3,576,625
-----------
Building Products-Air & Heating -- 0.1%
Thermasys Corp. FRS
BTL
coupon TBD
due 05/03/2019....................... 355,000 345,238
-----------
Building Products-Doors & Windows -- 0.1%
CHI Doors Holding Corp. FRS
BTL
coupon TBD
due 07/29/2022....................... 355,000 355,000
-----------
39
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
LOANS(12)(13)(14) (continued)
Cable/Satellite TV -- 0.1%
CSC Holdings LLC FRS
BTL
coupon TBD
due 01/25/2026.................... $ 355,000 $ 354,778
----------
Chemicals-Specialty -- 0.1%
LTI Holdings, Inc. FRS
BTL
coupon TBD
due 05/16/2024.................... 355,000 355,000
----------
Circuit Boards -- 0.1%
LUX Finco FRS
BTL
coupon TBD
due 10/14/2022.................... 355,000 355,000
----------
Commercial Services-Finance -- 0.1%
MoneyGram International, Inc. FRS
BTL-B
coupon TBD
due 03/27/2020.................... 355,000 354,468
----------
Computer Data Security -- 0.1%
McAfee LLC FRS
BTL
coupon TBD
due 09/30/2024.................... 355,000 358,550
----------
Computer Services -- 0.1%
Alion Science & Tech Corp. FRS
BTL
coupon TBD
due 08/19/2021.................... 355,000 355,333
----------
Computer Software -- 0.1%
Rackspace Hosting, Inc. FRS
BTL-B
coupon TBD
due 11/03/2023.................... 355,000 353,613
----------
Dialysis Centers -- 0.1%
U.S. Renal Care, Inc. FRS
BTL
coupon TBD
due 12/31/2022.................... 355,000 356,442
----------
Distribution/Wholesale -- 0.1%
Univar USA, Inc. FRS
BTL-B3
coupon TBD
due 07/01/2024.................... 355,000 357,163
----------
Diversified Manufacturing Operations -- 0.1%
MW Industries, Inc. FRS
BTL-B3
coupon TBD
due 09/27/2024.................... 355,000 358,106
----------
E-Commerce/Services -- 0.3%
RentPath LLC FRS
2nd Lien
10.37% (1 ML+9.00%)
due 12/17/2022.................... 1,062,906 1,053,605
----------
Shares/
Principal Value
Security Description Amount(17) (Note 2)
Enterprise Software/Service -- 0.1%
Focus Financial Partners LLC FRS
BTL
coupon TBD
due 08/05/2022........................... $355,000 $356,997
--------
Finance-Investment Banker/Broker -- 0.0%
Deerfield Holdings Corp. Acquisition FRS
BTL
coupon TBD
due 02/13/2025........................... 120,209 120,359
--------
Footwear & Related Apparel -- 0.1%
Calceus Acquisition, Inc. FRS
BTL
coupon TBD
due 02/01/2020........................... 355,000 348,788
--------
Insurance Brokers -- 0.1%
USI, Inc. FRS
BTL-B
coupon TBD
due 05/16/2024........................... 355,000 355,887
--------
Insurance-Multi-line -- 0.1%
York Risk Services Holdings Corp. FRS
BTL
coupon TBD
due 10/01/2021........................... 355,000 347,368
--------
Insurance-Property/Casualty -- 0.1%
Asurion LLC FRS
BTL-B6
coupon TBD
due 11/03/2023........................... 355,000 357,282
--------
Internet Financial Services -- 0.1%
Diamond U.S. Holdings LLC FRS
BTL
coupon TBD
due 12/23/2024........................... 355,000 355,222
--------
Leisure Products -- 0.1%
Hayward Industries, Inc. FRS
BTL-B
coupon TBD
due 08/05/2024........................... 355,000 356,109
--------
Machinery-General Industrial -- 0.2%
Duravant LLC FRS
BTL
coupon TBD
due 07/19/2024........................... 355,000 354,852
Titan Acquisition, Ltd. FRS
BTL-B
coupon TBD
due 03/28/2025........................... 355,000 354,223
--------
709,075
--------
Marine Services -- 0.1%
Drew Marine Group, Inc. FRS
BTL
coupon TBD
due 11/19/2020........................... 255,177 255,815
--------
40
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Shares/
Principal Value
Security Description Amount(17) (Note 2)
LOANS(12)(13)(14) (continued)
Media -- 0.1%
Cineworld, Ltd. FRS
BTL-B
coupon TBD
due 02/28/2025........................ $ 355,000 $ 355,444
----------
Medical Products -- 0.1%
Greatbatch, Ltd. FRS
BTL-B
coupon TBD
due 10/27/2022........................ 355,000 357,662
----------
Medical-Drugs -- 0.1%
Akorn, Inc. FRS
BTL
coupon TBD
due 04/16/2021........................ 355,000 353,003
----------
Medical-Generic Drugs -- 0.1%
Alvogen Pharma U.S. Inc. FRS
BTL
coupon TBD
due 04/02/2022........................ 355,000 355,000
----------
Medical-HMO -- 0.1%
MultiPlan, Inc. FRS
BTL-B
coupon TBD
due 06/07/2023........................ 355,000 356,553
----------
Metal Processors & Fabrication -- 0.3%
CIRCOR International, Inc. FRS
1st Lien
coupon TBD
due 12/11/2024........................ 355,000 355,887
Crosby US Acquisition Corp. FRS
1st Lien
coupon TBD
due 11/23/2020........................ 355,000 348,433
Doncasters Group, Ltd. FRS
BTL-B
coupon TBD
due 04/09/2020........................ 355,000 347,900
----------
1,052,220
----------
Oil Companies-Exploration & Production -- 0.2%
Medallion Midland Acquisition LLC FRS
1st Lien
coupon TBD
due 10/30/2024........................ 355,000 355,000
Osum Production Corp. FRS
BTL
coupon TBD
due 07/28/2020........................ 415,000 348,600
----------
703,600
----------
Petrochemicals -- 1.0%
OCI Beaumont LLC FRS
BTL
coupon TBD
due 02/14/2025........................ 3,550,000 3,578,844
----------
Shares/
Principal Value
Security Description Amount(17) (Note 2)
Publishing-Books -- 0.1%
Houghton Mifflin Harcourt Publishers, Inc. FRS
BTL-B
4.37% (1 ML+3.00%)
due 05/31/2021................................. 673,079 613,904
-------
Real Estate Investment Trusts -- 0.1%
QCP West Reit LLC FRS
BTL
coupon TBD
due 10/31/2022................................. 355,000 358,550
-------
Rental Auto/Equipment -- 0.1%
Bakercorp International Holdings, Inc. FRS
BTL
coupon TBD
due 02/07/2020................................. 355,000 349,083
-------
Resort/Theme Parks -- 0.1%
SW Acquisitions Co., Inc. FRS
BTL
coupon TBD
due 03/31/2024................................. 355,000 353,373
-------
Retail-Hypermarkets -- 0.1%
Smart & Final Stores LLC FRS
BTL
coupon TBD
due 11/15/2022................................. 355,000 349,823
-------
Retail-Petroleum Products -- 0.1%
EG Finaqnce Co., Ltd. FRS
BTL
coupon TBD
due 06/30/2025................................. 355,000 354,556
Bass Pro Group LLC FRS
BTL-B
coupon TBD
due 09/25/2024................................. 355,000 351,361
-------
705,917
-------
Soap & Cleaning Preparation -- 0.1%
Diamond BC BV FRS
BTL
coupon TBD
due 09/06/2024................................. 355,000 354,334
-------
Telecom Services -- 0.1%
CenturyLink, Inc. FRS
BTL-B
coupon TBD
due 01/31/2025................................. 355,000 349,305
West Corp. FRS
BTL
coupon TBD
due 10/10/2024................................. 167,453 168,779
-------
518,084
-------
Transport-Truck -- 0.1%
Aplpd Bidco LLC FRS
BTL
coupon TBD
due 12/06/2024................................. 355,000 357,219
-------
41
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Shares/
Principal Value
Security Description Amount(17) (Note 2)
LOANS(12)(13)(14) (continued)
X-Ray Equipment -- 0.1%
Ziggo Secured Finance FRS
BTL-E
coupon TBD
due 04/15/2025...................... $ 355,000 $ 352,338
-----------
Total Loans
(cost $25,093,820).................. 24,968,988
-----------
COMMON STOCKS -- 0.2%
Television -- 0.2%
ION Media Networks, Inc.+(4)(5)(15)
(cost $6)........................... 655 528,044
-----------
PREFERRED SECURITIES -- 0.1%
Electric-Distribution -- 0.1%
Entergy Louisiana LLC
4.70%............................... 6,500 155,285
-----------
Sovereign Agency -- 0.0%
Federal Home Loan Mtg. Corp.+
Series Z
8.38%............................... 5,875 33,781
-----------
Telecom Services -- 0.0%
Qwest Corp.
6.13%............................... 6,225 127,862
-----------
Total Preferred Securities
(cost $408,835)..................... 316,928
-----------
PREFERRED SECURITIES/CAPITAL SECURITIES -- 3.1%
Auto-Cars/Light Trucks -- 0.1%
Volkswagen International Finance NV
2.70% due 12/14/2022(11)............ EUR 200,000 249,037
-----------
Banks-Commercial -- 0.2%
Banco Bilbao Vizcaya Argentaria SA
6.13% due 11/16/2027(11)............ 200,000 193,900
Bank of Nova Scotia
4.65% due 10/12/2022(11)............ 341,000 321,819
Rabobank Nederland
11.00% due 06/30/2019*(11).......... 152,000 166,213
-----------
681,932
-----------
Banks-Money Center -- 0.1%
BBVA Bancomer SA
5.13% due 01/18/2033*............... 201,000 192,960
-----------
Banks-Super Regional -- 0.1%
Huntington Bancshares, Inc.
Series E
5.70% due 04/15/2023(11)............ 112,000 112,560
SunTrust Banks, Inc.
5.05% due 06/15/2022(11)............ 217,000 215,644
Wells Fargo Capital X
5.95% due 12/01/2086................ 97,000 104,760
-----------
432,964
-----------
Building Societies -- 0.1%
Nationwide Building Society
6.88% due 06/20/2019(11)............ GBP 150,000 218,868
-----------
Principal Value
Security Description Amount(17) (Note 2)
Diversified Banking Institutions -- 0.7%
BAC Capital Trust XIII
Series F
4.00% due 04/19/2018(11)..................... $ 463,000 $ 399,337
Bank of America Corp.
5.88% due 03/15/2028(11)..................... 182,000 183,148
Goldman Sachs Group, Inc.
Series P
5.00% due 11/10/2022(11)..................... 296,000 287,860
HSBC Holdings PLC
6.00% due 05/22/2027(11)..................... 273,000 266,039
HSBC Holdings PLC
6.25% due 03/23/2023(11)..................... 427,000 436,607
JPMorgan Chase & Co.
Series CC
4.63% due 11/01/2022(11)..................... 261,000 248,603
JPMorgan Chase & Co.
Series U
6.13% due 04/30/2024(11)..................... 311,000 325,773
Societe Generale SA
7.88% due 12/18/2023*(11).................... 356,000 385,815
----------
2,533,182
----------
Electric-Generation -- 0.3%
Electricite de France SA
5.38% due 01/29/2025(11)..................... EUR 400,000 538,957
Engie SA
4.63% due 01/10/2019(11)..................... GBP 300,000 429,318
----------
968,275
----------
Electric-Integrated -- 0.0%
Dominion Resources, Inc.
5.75% due 10/01/2054......................... 137,000 144,741
----------
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......................... 236,000 241,179
----------
Food-Dairy Products -- 0.2%
Land O'Lakes Capital Trust I
7.45% due 03/15/2028*........................ 550,000 625,625
----------
Gas-Distribution -- 0.1%
Centrica PLC
3.00% due 04/10/2076......................... EUR 325,000 411,147
----------
Insurance-Life/Health -- 0.1%
Aviva PLC
6.13% due 07/05/2043......................... EUR 315,000 469,079
Prudential Financial, Inc.
4.50% due 09/15/2047......................... 72,000 68,616
----------
537,695
----------
42
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount(17) (Note 2)
PREFERRED SECURITIES/CAPITAL SECURITIES (continued)
Insurance-Multi-line -- 0.3%
Assurant, Inc.
7.00% due 03/27/2048....................... 256,000 $ 261,691
Demeter Investments BV for Zurich
Insurance Co., Ltd.
3.50% due 10/01/2046....................... EUR 300,000 398,370
MetLife, Inc.
6.40% due 12/15/2066....................... 231,000 253,234
Zurich Finance UK PLC
6.63% due 10/02/2022(11)................... GBP 150,000 240,995
------------
1,154,290
------------
Insurance-Property/Casualty -- 0.0%
Progressive Corp.
5.38% due 03/15/2023(11)................... 105,000 106,181
------------
Oil Companies-Integrated -- 0.2%
TOTAL SA
2.63% due 02/26/2025(11)................... EUR 210,000 264,854
TOTAL SA
3.88% due 05/18/2022(11)................... EUR 305,000 411,277
------------
676,131
------------
Pipelines -- 0.2%
Enbridge, Inc.
5.50% due 07/15/2077....................... 196,000 186,200
Energy Transfer Partners LP
6.25% due 02/15/2023(11)................... 130,000 124,394
EnLink Midstream Partners LP
6.00% due 12/15/2022(11)................... 116,000 108,170
Enterprise Products Operating LLC
4.88% due 08/16/2077....................... 98,000 96,138
Enterprise Products Operating LLC
5.25% due 08/16/2077....................... 86,000 83,635
TransCanada Trust
5.30% due 03/15/2077....................... 86,000 84,925
TransCanada Trust
5.63% due 05/20/2075....................... 72,000 73,800
------------
757,262
------------
Telephone-Integrated -- 0.1%
Telefonica Europe BV
3.75% due 03/15/2022(11)................... EUR 200,000 256,227
------------
Tools-Hand Held -- 0.1%
Stanley Black & Decker, Inc.
5.75% due 12/15/2053....................... 272,000 274,720
------------
Water -- 0.1%
Suez
3.00% due 06/23/2020(11)................... EUR 400,000 513,664
------------
Total Preferred Securities/Capital Securities
(cost $10,713,760)......................... 10,976,102
------------
Total Long-Term Investment Securities
(cost $368,389,663)........................ 362,042,789
------------
Principal Value
Security Description Amount(17) (Note 2)
SHORT-TERM INVESTMENT SECURITIES -- 5.2%
Registered Investment Companies -- 5.2%
State Street Institutional U.S. Government
Money Market Fund
Premier Class
1.58%(8)
(cost $18,867,822)......................... $18,867,822 $ 18,867,822
------------
TOTAL INVESTMENTS --
(cost $387,257,485)(16).................... 105.8% 380,910,611
Liabilities in excess of other assets......... (5.8) (20,982,234)
----------- ------------
NET ASSETS -- 100.0% $359,928,377
=========== ============
--------
* 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 March 31, 2018, the
aggregate value of these securities was $102,753,389 representing 28.6% 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 March 31, 2018, the aggregate value of these
securities was $535,875 representing 0.2% of net assets.
(6) Security in default of interest and principal at maturity.
(7) Company has filed for bankruptcy protection.
(8) The rate shown is a 7-day yield as of March 31, 2018.
(9) Interest Only
(10) 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 March 31, 2018.
(11) Perpetual maturity -- maturity date reflects the next call date.
(12) 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.
(13) 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.
(14) All loans in the Fund were purchased through assignment agreements unless
otherwise indicated.
(15) 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
43
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
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 March 31, 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..... 12/16/2016 655 $6 $528,044 $806.17 0.15%
======== ====
(16) See Note 5 for cost of investments on a tax basis.
(17) Denominated in United States dollars unless otherwise indicated.
(18) Security in default of interest.
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 rates at March 31, 2018 and
unless noted otherwise, the dates shown are the original maturity dates.
Currency Legend
EUR --Euro Currency
GBP --British Pound
Index Legend
1 ML -- 1 Month USD LIBOR
1 Yr USTYCR -- 1 Year US Treasury Yield Curve Rate
6 ML -- 6 Month USD LIBOR
12 ML -- 12 Month USD LIBOR
Forward Foreign Currency Contracts
Contract to In Exchange Delivery Unrealized Unrealized
Counterparty Deliver For Date Appreciation Depreciation
------------------------------------------------------------------------------------------
JPMorgan Chase Bank N.A EUR 8,075,000 USD 9,981,897 04/26/2018 $30,486 $ --
EUR 7,737,000 USD 9,568,931 05/24/2018 14,977 --
GBP 2,230,000 USD 3,127,422 04/26/2018 -- (4,190)
USD 1,446,170 EUR 1,167,000 04/26/2018 -- (7,991)
USD 787,333 GBP 560,400 04/26/2018 -- (358)
------- --------
Net Unrealized Appreciation/(Depreciation).... $45,463 $(12,539)
======= ========
--------
EUR --Euro Currency
GBP --Pound Sterling
USD --United States Dollar
44
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
The following is a summary of the inputs used to value the Fund's net assets as
of March 31, 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.................. $ -- $ 3,260,295 $ -- $ 3,260,295
U.S. Corporate Bonds & Notes:
Airlines............................... -- 964,879 24,634 989,513
Finance-Investment Banker/Broker....... -- 947,272 64 947,336
Gambling (Non-Hotel)................... -- 357,205 7,745 364,950
Rubber/Plastic Products................ -- -- 0 0
Other Industries....................... -- 132,536,141 -- 132,536,141
Foreign Corporate Bonds & Notes:
Special Purpose Entity................. -- -- 0 0
Other Industries....................... -- 86,472,407 -- 86,472,407
Foreign Government Obligation............ -- 68,189,861 -- 68,189,861
U.S. Government Agencies................. -- 32,443,783 -- 32,443,783
U.S. Government Treasuries............... -- 48,441 -- 48,441
Loans.................................... -- 24,968,988 -- 24,968,988
Common Stocks............................ -- -- 528,044 528,044
Preferred Securities..................... 316,928 -- -- 316,928
Preferred Securities/Capital Securities:
Finance-Investment Banker/Broker....... -- -- 22 22
Other Industries....................... -- 10,976,080 -- 10,976,080
Short-Term Investment Securities......... 18,867,822 -- -- 18,867,822
----------- ------------ -------- ------------
Total Investments at Value............... $19,184,750 $361,165,352 $560,509 $380,910,611
=========== ============ ======== ============
Other Financial Instruments:+
Forward Foreign Currency Contracts....... $ -- $ 45,463 $ -- $ 45,463
=========== ============ ======== ============
LIABILITIES:
Other Financial Instruments:+
Forward Foreign Currency Contracts....... $ -- $ 12,539 $ -- $ 12,539
=========== ============ ======== ============
--------
* 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
45
AIG Flexible Credit Fund
PORTFOLIO PROFILE -- March 31, 2018 -- (unaudited)
Industry Allocation*
Oil Companies-Exploration & Production. 4.8%
Cable/Satellite TV..................... 3.8
Medical-Hospitals...................... 3.6
Chemicals-Specialty.................... 3.2
Building-Residential/Commercial........ 2.4
Medical-Drugs.......................... 2.4
Auto/Truck Parts & Equipment-Original.. 2.1
Broadcast Services/Program............. 2.1
Enterprise Software/Service............ 2.0
Registered Investment Companies........ 2.0
Containers-Metal/Glass................. 1.9
Commercial Services.................... 1.9
Real Estate Investment Trusts.......... 1.6
Pipelines.............................. 1.6
Gambling (Non-Hotel)................... 1.4
Telephone-Integrated................... 1.3
Telecom Services....................... 1.3
Building & Construction Products-Misc.. 1.3
Oil-Field Services..................... 1.2
Casino Hotels.......................... 1.2
Containers-Paper/Plastic............... 1.2
Finance-Mortgage Loan/Banker........... 1.1
Oil & Gas Drilling..................... 1.1
Machinery-General Industrial........... 1.1
Finance-Consumer Loans................. 1.1
Aerospace/Defense-Equipment............ 1.1
Distribution/Wholesale................. 1.0
Applications Software.................. 1.0
Diagnostic Equipment................... 1.0
Theaters............................... 0.9
Coal................................... 0.9
Television............................. 0.9
Independent Power Producers............ 0.9
Food-Retail............................ 0.9
Chemicals-Diversified.................. 0.9
Auto-Heavy Duty Trucks................. 0.8
Soap & Cleaning Preparation............ 0.8
Cellular Telecom....................... 0.8
Machinery-Pumps........................ 0.8
Investment Companies................... 0.8
Medical Labs & Testing Services........ 0.7
Retail-Building Products............... 0.7
Schools................................ 0.7
Food-Misc./Diversified................. 0.7
Security Services...................... 0.7
Rubber/Plastic Products................ 0.7
Casino Services........................ 0.7
Food-Meat Products..................... 0.7
Building-Heavy Construction............ 0.7
Computer Services...................... 0.7
Extended Service Contracts............. 0.7
Cosmetics & Toiletries................. 0.7
Commercial Services-Finance............ 0.7
Data Processing/Management............. 0.6
Medical-HMO............................ 0.6
Banks-Super Regional................... 0.6
Electric-Generation.................... 0.6
Dialysis Centers....................... 0.6
Finance-Auto Loans..................... 0.6
Publishing-Periodicals................. 0.6
Private Equity......................... 0.6%
Investment Management/Advisor Services. 0.6
Non-Hazardous Waste Disposal........... 0.6
Professional Sports.................... 0.6
Steel-Producers........................ 0.5
Advertising Services................... 0.5
Medical-Generic Drugs.................. 0.5
Food-Dairy Products.................... 0.5
Hotels/Motels.......................... 0.5
Pharmacy Services...................... 0.5
Medical Products....................... 0.5
Computer Software...................... 0.5
Diversified Manufacturing Operations... 0.5
Retail-Propane Distribution............ 0.5
Computers-Integrated Systems........... 0.5
Publishing-Books....................... 0.5
Educational Software................... 0.4
Disposable Medical Products............ 0.4
Electric-Integrated.................... 0.4
Building Products-Cement............... 0.4
Oil Companies-Integrated............... 0.4
Retail-Sporting Goods.................. 0.4
Energy-Alternate Sources............... 0.4
Bicycle Manufacturing.................. 0.4
Transport-Services..................... 0.4
Printing-Commercial.................... 0.3
Direct Marketing....................... 0.3
Food-Flour & Grain..................... 0.3
Diversified Banking Institutions....... 0.3
Telecommunication Equipment............ 0.3
Appliances............................. 0.3
Food-Baking............................ 0.3
Building & Construction-Misc........... 0.3
Diversified Minerals................... 0.3
Retail-Major Department Stores......... 0.3
Airlines............................... 0.3
Machinery-Electrical................... 0.3
Real Estate Operations & Development... 0.3
Cruise Lines........................... 0.3
Retail-Restaurants..................... 0.3
Retail-Bedding......................... 0.3
Retail-Misc./Diversified............... 0.3
Retail-Drug Store...................... 0.3
Environmental Consulting & Engineering. 0.3
Retail-Convenience Store............... 0.3
Housewares............................. 0.3
Wireless Equipment..................... 0.2
Internet Connectivity Services......... 0.2
Transport-Marine....................... 0.2
Retail-Office Supplies................. 0.2
Oil Refining & Marketing............... 0.2
Internet Gambling...................... 0.2
Paper & Related Products............... 0.2
Radio.................................. 0.2
Insurance-Multi-line................... 0.2
Retail-Automobile...................... 0.2
Athletic Equipment..................... 0.2
Diversified Financial Services......... 0.2
Apparel Manufacturers.................. 0.2
Machinery-Construction & Mining........ 0.2
46
AIG Flexible Credit Fund
PORTFOLIO PROFILE -- March 31, 2018 -- (unaudited) (continued)
Industry Allocation* (continued)
Medical-Outpatient/Home Medical.... 0.2%
Financial Guarantee Insurance...... 0.2
Resorts/Theme Parks................ 0.2
Retail-Apparel/Shoe................ 0.2
Human Resources.................... 0.2
Medical-Nursing Homes.............. 0.2
E-Commerce/Services................ 0.2
Oil Field Machinery & Equipment.... 0.2
Medical Instruments................ 0.2
Rubber-Tires....................... 0.1
Retail-Pet Food & Supplies......... 0.1
Gas-Distribution................... 0.1
Pollution Control.................. 0.1
Metal-Diversified.................. 0.1
Sovereign.......................... 0.1
Veterinary Diagnostics............. 0.1
Leisure Products................... 0.1
Finance-Other Services............. 0.1
Medical Information Systems........ 0.1
Consumer Products-Misc............. 0.1
Banks-Money Center................. 0.1
Recycling.......................... 0.1
Research & Development............. 0.1
Health Care Cost Containment....... 0.1
Medical-Biomedical/Gene............ 0.1
-----
100.0%
=====
Credit Quality+#
Baa................................ 0.5%
Ba................................. 20.5
B.................................. 57.4
Caa................................ 16.3
Not Rated@......................... 5.3
-----
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.
47
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018
Principal Value
Security Description Amount (Note 2)
ASSET BACKED SECURITIES -- 0.2%
Diversified Financial Services -- 0.2%
Home Equity Loan Trust VRS
Series 2007-HSA3, Class AI4
6.11% due 06/25/2037(1)
(cost $606,674)............................. $ 615,718 $ 616,494
----------
U.S. CORPORATE BONDS & NOTES -- 35.7%
Aerospace/Defense-Equipment -- 0.4%
TransDigm, Inc.
Company Guar. Notes
6.50% due 07/15/2024........................ 445,000 456,125
TransDigm, Inc.
Company Guar. Notes
6.50% due 05/15/2025........................ 695,000 701,950
----------
1,158,075
----------
Apparel Manufacturers -- 0.2%
Under Armour, Inc.
Senior Notes
3.25% due 06/15/2026........................ 691,000 609,314
----------
Athletic Equipment -- 0.2%
Vista Outdoor, Inc.
Company Guar. Notes
5.88% due 10/01/2023........................ 700,000 652,750
----------
Auto-Heavy Duty Trucks -- 0.3%
Navistar International Corp.
Senior Notes
6.63% due 11/01/2025*....................... 1,035,000 1,035,000
----------
Auto/Truck Parts & Equipment-Original -- 0.7%
American Axle & Manufacturing, Inc.
Company Guar. Notes
6.25% due 03/15/2026........................ 60,000 59,532
Cooper-Standard Automotive, Inc.
Company Guar. Notes
5.63% due 11/15/2026*....................... 910,000 907,725
Tenneco, Inc.
Company Guar. Notes
5.00% due 07/15/2026........................ 545,000 528,813
TI Group Automotive Systems LLC
Company Guar. Notes
8.75% due 07/15/2023*....................... 771,000 809,550
----------
2,305,620
----------
Broadcast Services/Program -- 0.9%
Clear Channel Worldwide Holdings, Inc.
Company Guar. Notes
7.63% due 03/15/2020........................ 1,340,000 1,338,325
iHeartCommunications, Inc.
Senior Sec. Notes
9.00% due 12/15/2019+(2)(3)................. 810,000 638,887
Univision Communications, Inc.
Senior Sec. Notes
5.13% due 05/15/2023*....................... 1,070,000 1,019,282
----------
2,996,494
----------
Building & Construction Products-Misc. -- 0.3%
CPG Merger Sub LLC
Company Guar. Notes
8.00% due 10/01/2021*....................... 295,000 297,581
Principal Value
Security Description Amount (Note 2)
Building & Construction Products-Misc. (continued)
Standard Industries, Inc.
Senior Notes
6.00% due 10/15/2025*....................... $ 620,000 $ 635,500
----------
933,081
----------
Building & Construction-Misc. -- 0.3%
Weekley Homes LLC/Weekley Finance Corp.
Senior Notes
6.63% due 08/15/2025*....................... 1,060,000 1,046,750
----------
Building-Heavy Construction -- 0.2%
New Enterprise Stone & Lime Co., Inc.
Senior Sec. Notes
6.25% due 03/15/2026*....................... 410,000 410,512
New Enterprise Stone & Lime Co., Inc.
Senior Notes
10.13% due 04/01/2022*...................... 325,000 348,563
----------
759,075
----------
Building-Residential/Commercial -- 2.4%
Beazer Homes USA, Inc.
Company Guar. Notes
5.88% due 10/15/2027........................ 560,000 518,700
Beazer Homes USA, Inc.
Company Guar. Notes
6.75% due 03/15/2025........................ 620,000 613,800
Lennar Corp.
Company Guar. Notes
5.25% due 06/01/2026*....................... 1,325,000 1,308,437
M/I Homes, Inc.
Company Guar. Notes
5.63% due 08/01/2025........................ 855,000 832,300
MDC Holdings, Inc.
Company Guar. Notes
5.50% due 01/15/2024........................ 830,000 842,450
PulteGroup, Inc.
Company Guar. Notes
5.50% due 03/01/2026........................ 605,000 623,452
TRI Pointe Group Inc./TRI Pointe Homes Inc.
Company Guar. Notes
5.88% due 06/15/2024........................ 1,730,000 1,755,431
William Lyon Homes, Inc.
Senior Notes
6.00% due 09/01/2023*....................... 1,175,000 1,170,594
----------
7,665,164
----------
Cable/Satellite TV -- 1.9%
Altice US Finance I Corp.
Senior Sec. Notes
5.38% due 07/15/2023*....................... 630,000 638,190
Cablevision Systems Corp.
Senior Notes
5.88% due 09/15/2022........................ 1,120,000 1,111,264
CCO Holdings LLC/CCO Holdings
Capital Corp.
Senior Notes
5.13% due 05/01/2027*....................... 835,000 792,749
48
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Cable/Satellite TV (continued)
Cequel Communications Holdings I
LLC/Cequel Capital Corp.
Senior Notes
7.50% due 04/01/2028*.................... $ 585,000 $ 598,162
CSC Holdings LLC
Senior Notes
5.25% due 06/01/2024..................... 535,000 508,919
DISH DBS Corp.
Company Guar. Notes
6.75% due 06/01/2021..................... 1,185,000 1,192,406
DISH DBS Corp.
Company Guar. Notes
7.75% due 07/01/2026..................... 400,000 375,100
Radiate Holdco LLC/Radiate Finance, Inc.
Senior Notes
6.63% due 02/15/2025*.................... 910,000 837,200
Radiate Holdco LLC/Radiate Finance, Inc.
Senior Notes
6.88% due 02/15/2023*.................... 100,000 96,750
----------
6,150,740
----------
Cellular Telecom -- 0.8%
Sprint Corp.
Company Guar. Notes
7.88% due 09/15/2023..................... 1,725,000 1,759,500
Sprint Nextel Corp.
Senior Notes
6.00% due 11/15/2022..................... 885,000 868,406
----------
2,627,906
----------
Chemicals-Diversified -- 0.3%
Hexion, Inc.
Senior Sec. Notes
10.38% due 02/01/2022*................... 500,000 483,750
Hexion, Inc.
Sec. Notes
13.75% due 02/01/2022*................... 400,000 340,000
----------
823,750
----------
Chemicals-Specialty -- 1.0%
Cornerstone Chemical Co.
Senior Sec. Notes
6.75% due 08/15/2024*.................... 800,000 795,760
Kraton Polymers LLC/Kraton
Polymers Capital Corp.
Company Guar. Notes
7.00% due 04/15/2025*.................... 625,000 646,875
Platform Specialty Products Corp.
Company Guar. Notes
5.88% due 12/01/2025*.................... 1,190,000 1,163,225
PQ Corp.
Company Guar. Notes
5.75% due 12/15/2025*.................... 635,000 628,650
----------
3,234,510
----------
Principal Value
Security Description Amount (Note 2)
Coal -- 0.3%
Alliance Resource Operating Partners
LP/Alliance Resource Finance Corp.
Company Guar. Notes
7.50% due 05/01/2025*................ $992,000 $1,041,600
----------
Commercial Services -- 0.2%
ServiceMaster Co. LLC
Company Guar. Notes
5.13% due 11/15/2024*................ 625,000 604,688
----------
Computer Services -- 0.2%
West Corp.
Company Guar. Notes
8.50% due 10/15/2025*................ 635,000 614,363
----------
Computer Software -- 0.1%
Rackspace Hosting, Inc.
Company Guar. Notes
8.63% due 11/15/2024*................ 315,000 311,063
----------
Computers-Integrated Systems -- 0.1%
Everi Payments, Inc.
Company Guar. Notes
7.50% due 12/15/2025*................ 295,000 299,425
----------
Consumer Products-Misc. -- 0.1%
Prestige Brands, Inc.
Company Guar. Notes
6.38% due 03/01/2024*................ 270,000 276,750
----------
Containers-Metal/Glass -- 0.2%
BWAY Holding Co.
Senior Notes
7.25% due 04/15/2025*................ 75,000 76,500
Owens-Brockway Glass Container, Inc.
Company Guar. Notes
6.38% due 08/15/2025*................ 675,000 710,438
----------
786,938
----------
Containers-Paper/Plastic -- 0.2%
Flex Acquisition Co, Inc.
Senior Notes
6.88% due 01/15/2025*................ 485,000 480,150
----------
Diagnostic Equipment -- 0.3%
Avantor, Inc.
Senior Sec. Notes
6.00% due 10/01/2024*................ 450,000 447,750
Ortho-Clinical Diagnostics, Inc.
Senior Notes
6.63% due 05/15/2022*................ 525,000 511,875
----------
959,625
----------
Dialysis Centers -- 0.2%
DaVita HealthCare Partners, Inc.
Company Guar. Notes
5.13% due 07/15/2024................. 645,000 629,681
----------
Disposable Medical Products -- 0.2%
Sotera Health Holdings LLC
Senior Notes
6.50% due 05/15/2023*................ 720,000 725,400
----------
49
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Educational Software -- 0.0%
Blackboard, Inc.
Sec. Notes
9.75% due 10/15/2021*....................... $ 170,000 $ 144,500
----------
Electric-Integrated -- 0.0%
Texas Competitive Electric Holdings
Co. LLC/TCEH Finance, Inc.
Escrow Notes
11.50% due 10/01/2020+(4)................... 1,667,835 12,509
----------
Energy-Alternate Sources -- 0.4%
TerraForm Power Operating LLC
Company Guar. Notes
4.25% due 01/31/2023*....................... 660,000 634,425
TerraForm Power Operating LLC
Company Guar. Notes
5.00% due 01/31/2028*....................... 690,000 654,637
----------
1,289,062
----------
Enterprise Software/Service -- 0.3%
BMC Software Finance, Inc.
Senior Notes
8.13% due 07/15/2021*....................... 380,000 379,525
Infor US, Inc.
Company Guar. Notes
6.50% due 05/15/2022........................ 675,000 686,813
----------
1,066,338
----------
Finance-Auto Loans -- 0.2%
Ally Financial, Inc.
Sub. Notes
5.75% due 11/20/2025........................ 630,000 649,089
----------
Finance-Consumer Loans -- 1.1%
Navient Corp.
Senior Notes
6.50% due 06/15/2022........................ 862,000 891,093
Navient Corp.
Senior Notes
6.75% due 06/25/2025........................ 735,000 745,106
Navient Corp.
Senior Notes
7.25% due 09/25/2023........................ 185,000 193,325
Springleaf Finance Corp.
Company Guar. Notes
6.13% due 05/15/2022........................ 1,140,000 1,158,924
Springleaf Finance Corp.
Company Guar. Notes
6.88% due 03/15/2025........................ 455,000 456,706
----------
3,445,154
----------
Finance-Mortgage Loan/Banker -- 0.4%
Ladder Capital Finance Holdings LLLP/Ladder
Capital Finance Corp.
Senior Notes
5.25% due 03/15/2022*....................... 375,000 375,000
Principal Value
Security Description Amount (Note 2)
Finance-Mortgage Loan/Banker (continued)
Ladder Capital Finance Holdings LLLP/Ladder
Capital Finance Corp.
Company Guar. Notes
5.88% due 08/01/2021*......................... $ 935,000 $ 951,325
----------
1,326,325
----------
Finance-Other Services -- 0.1%
Nationstar Mtg. LLC/Nationstar Capital Corp.
Company Guar. Notes
6.50% due 07/01/2021.......................... 370,000 375,550
----------
Food-Flour & Grain -- 0.3%
Post Holdings, Inc.
Company Guar. Notes
5.00% due 08/15/2026*......................... 585,000 555,750
Post Holdings, Inc.
Company Guar. Notes
5.50% due 03/01/2025*......................... 440,000 433,400
----------
989,150
----------
Food-Misc./Diversified -- 0.4%
Dole Food Co., Inc.
Senior Sec. Notes
7.25% due 06/15/2025*......................... 1,255,000 1,286,375
----------
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.......................... 705,000 601,224
Safeway, Inc.
Senior Notes
7.25% due 02/01/2031.......................... 680,000 550,800
----------
1,152,024
----------
Gambling (Non-Hotel) -- 0.9%
Caesars Resort Collection LLC/CRC Finco, Inc.
Company Guar. Notes
5.25% due 10/15/2025*......................... 1,185,000 1,136,036
Downstream Development Authority of the
Quapaw Tribe of Oklahoma
Senior Sec. Notes
10.50% due 02/15/2023*........................ 485,000 497,125
Pinnacle Entertainment, Inc.
Senior Notes
5.63% due 05/01/2024.......................... 840,000 877,800
Scientific Games International, Inc.
Company Guar. Notes
6.63% due 05/15/2021.......................... 445,000 455,569
----------
2,966,530
----------
Gas-Distribution -- 0.1%
AmeriGas Partners LP/AmeriGas Finance Corp.
Senior Notes
5.50% due 05/20/2025.......................... 455,000 439,075
----------
Independent Power Producers -- 0.9%
Calpine Corp.
Senior Notes
5.38% due 01/15/2023.......................... 1,332,000 1,275,124
50
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Independent Power Producers (continued)
Dynegy, Inc.
Company Guar. Notes
7.38% due 11/01/2022........................... $620,000 $ 653,325
NRG Energy, Inc.
Company Guar. Notes
5.75% due 01/15/2028*.......................... 260,000 254,150
NRG Energy, Inc.
Company Guar. Notes
7.25% due 05/15/2026........................... 565,000 597,657
----------
2,780,256
----------
Internet Connectivity Services -- 0.2%
Zayo Group LLC/Zayo Capital, Inc.
Company Guar. Notes
5.75% due 01/15/2027*.......................... 165,000 161,288
Zayo Group LLC/Zayo Capital, Inc.
Company Guar. Notes
6.38% due 05/15/2025........................... 600,000 621,000
----------
782,288
----------
Machinery-Electrical -- 0.3%
Vertiv Intermediate Holding Corp.
Senior Notes
12.00% due 02/15/2022*(5)...................... 930,000 984,638
----------
Medical Information Systems -- 0.1%
Change Healthcare Holdings LLC/Change
Healthcare Finance, Inc.
Senior Notes
5.75% due 03/01/2025*.......................... 310,000 307,381
----------
Medical Labs & Testing Services -- 0.5%
Charles River Laboratories International, Inc.
Senior Notes
5.50% due 04/01/2026*.......................... 410,000 415,637
Eagle Holding Co. II LLC
Senior Notes
7.63% due 05/15/2022*(5)....................... 740,000 745,550
West Street Merger Sub, Inc.
Senior Notes
6.38% due 09/01/2025*.......................... 825,000 785,812
----------
1,946,999
----------
Medical Products -- 0.2%
DJO Finco, Inc./DJO Finance LLC/DJO
Finance Corp.
Sec. Notes
8.13% due 06/15/2021*.......................... 705,000 706,763
----------
Medical-Drugs -- 0.2%
Endo Finance LLC/Endo Finco, Inc.
Company Guar. Notes
5.38% due 01/15/2023*.......................... 410,000 310,575
Valeant Pharmaceuticals International, Inc.
Company Guar. Notes
7.25% due 07/15/2022*.......................... 265,000 265,000
----------
575,575
----------
Principal Value
Security Description Amount (Note 2)
Medical-HMO -- 0.5%
MPH Acquisition Holdings LLC
Company Guar. Notes
7.13% due 06/01/2024*.............. $ 785,000 $ 810,512
Polaris Intermediate Corp.
Senior Notes
8.50% due 12/01/2022*(5)........... 315,000 321,303
WellCare Health Plans, Inc.
Senior Notes
5.25% due 04/01/2025............... 525,000 526,969
----------
1,658,784
----------
Medical-Hospitals -- 1.8%
CHS/Community Health Systems, Inc.
Senior Sec. Notes
6.25% due 03/31/2023............... 885,000 815,306
CHS/Community Health Systems, Inc.
Company Guar. Notes
6.88% due 02/01/2022............... 485,000 280,694
Envision Healthcare Corp.
Company Guar. Notes
6.25% due 12/01/2024*.............. 310,000 320,075
HCA, Inc.
Company Guar. Notes
5.38% due 02/01/2025............... 1,305,000 1,308,262
SP Finco LLC
Company Guar. Notes
6.75% due 07/01/2025*.............. 125,000 121,250
Surgery Center Holdings, Inc.
Company Guar. Notes
8.88% due 04/15/2021*.............. 420,000 437,850
Tenet Healthcare Corp.
Senior Notes
8.13% due 04/01/2022............... 320,000 333,600
THC Escrow Corp. III
Sec. Notes
5.13% due 05/01/2025*.............. 335,000 322,019
THC Escrow Corp. III
Senior Notes
7.00% due 08/01/2025*.............. 1,875,000 1,844,531
----------
5,783,587
----------
Medical-Nursing Homes -- 0.2%
Kindred Healthcare, Inc.
Company Guar. Notes
8.00% due 01/15/2020............... 515,000 545,256
----------
Non-Hazardous Waste Disposal -- 0.4%
Advanced Disposal Services, Inc.
Company Guar. Notes
5.63% due 11/15/2024*.............. 590,000 595,900
Wrangler Buyer Corp.
Senior Notes
6.00% due 10/01/2025*.............. 623,000 612,098
----------
1,207,998
----------
51
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Oil & Gas Drilling -- 0.2%
Rowan Cos., Inc.
Company Guar. Notes
5.40% due 12/01/2042............................ $ 780,000 $ 546,000
----------
Oil Companies-Exploration & Production -- 3.2%
Alta Mesa Holdings LP/Alta Mesa Finance
Services Corp.
Company Guar. Notes
7.88% due 12/15/2024............................ 910,000 947,537
Berry Petroleum Co. LLC
Company Guar. Notes
7.00% due 02/15/2026*........................... 230,000 231,794
Callon Petroleum Co.
Company Guar. Notes
6.13% due 10/01/2024............................ 626,000 640,273
Carrizo Oil & Gas, Inc.
Company Guar. Notes
6.25% due 04/15/2023............................ 1,010,000 1,010,000
Chesapeake Energy Corp.
Company Guar. Notes
8.00% due 06/15/2027*........................... 1,595,000 1,523,225
CrownRock LP/CrownRock Finance, Inc.
Senior Notes
5.63% due 10/15/2025*........................... 1,025,000 1,014,750
Denbury Resources, Inc.
Sec. Notes
9.25% due 03/31/2022*........................... 283,000 288,306
EP Energy LLC/Everest Acquisition Finance, Inc.
Senior Sec. Notes
8.00% due 11/29/2024*........................... 370,000 371,850
EP Energy LLC/Everest Acquisition Finance, Inc.
Sec. Bonds
8.00% due 02/15/2025*........................... 240,000 160,200
EP Energy LLC/Everest Acquisition Finance, Inc.
Sec. Notes
9.38% due 05/01/2024*........................... 429,000 305,126
Oasis Petroleum, Inc.
Company Guar. Notes
6.88% due 01/15/2023............................ 845,000 855,562
Range Resources Corp.
Company Guar. Notes
4.88% due 05/15/2025............................ 680,000 630,700
Sanchez Energy Corp.
Senior Sec. Notes
7.25% due 02/15/2023*........................... 415,000 417,075
SM Energy Co.
Senior Notes
5.63% due 06/01/2025............................ 285,000 270,038
SRC Energy, Inc.
Senior Notes
6.25% due 12/01/2025*........................... 455,000 456,138
Tapstone Energy LLC/Tapstone Energy Finance
Corp.
Senior Notes
9.75% due 06/01/2022*........................... 515,000 427,450
Ultra Resources, Inc.
Company Guar. Notes
6.88% due 04/15/2022*........................... 44,000 38,280
Principal Value
Security Description Amount (Note 2)
Oil Companies-Exploration & Production (continued)
Ultra Resources, Inc.
Company Guar. Notes
7.13% due 04/15/2025*............................ $ 196,000 $ 161,700
Vine Oil & Gas LP / Vine Oil & Gas Finance Corp.
Company Guar. Notes
8.75% due 04/15/2023*............................ 675,000 629,438
-----------
10,379,442
-----------
Oil Field Machinery & Equipment -- 0.1%
Forum Energy Technologies, Inc.
Company Guar. Notes
6.25% due 10/01/2021............................. 340,000 336,600
-----------
Oil Refining & Marketing -- 0.2%
Sunoco LP/Sunoco Finance Corp.
Company Guar. Notes
4.88% due 01/15/2023*............................ 245,000 236,119
Sunoco LP/Sunoco Finance Corp.
Company Guar. Notes
5.50% due 02/15/2026*............................ 540,000 521,100
-----------
757,219
-----------
Oil-Field Services -- 0.6%
Bristow Group, Inc.
Senior Sec. Notes
8.75% due 03/01/2023*............................ 375,000 378,750
SESI LLC
Company Guar. Notes
7.75% due 09/15/2024*............................ 880,000 910,800
USA Compression Partners LP/USA
Compression Finance Corp.
Senior Notes
6.88% due 04/01/2026*............................ 780,000 791,700
-----------
2,081,250
-----------
Paper & Related Products -- 0.1%
Mercer International, Inc.
Senior Notes
5.50% due 01/15/2026*............................ 355,000 352,338
-----------
Pipelines -- 1.3%
American Midstream Partners LP/American
Midstream Finance Corp.
Company Guar. Notes
8.50% due 12/15/2021*............................ 615,000 619,613
Blue Racer Midstream LLC/Blue Racer Finance
Corp.
Company Guar. Notes
6.13% due 11/15/2022*............................ 785,000 798,737
Cheniere Corpus Christi Holdings LLC
Senior Sec. Notes
5.88% due 03/31/2025............................. 1,250,000 1,307,812
Crestwood Midstream Partners LP/Crestwood
Midstream Finance Corp.
Company Guar. Notes
5.75% due 04/01/2025............................. 370,000 366,763
Crestwood Midstream Partners LP/Crestwood
Midstream Finance Corp.
Company Guar. Notes
6.25% due 04/01/2023............................. 540,000 544,050
52
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Pipelines (continued)
Energy Transfer Equity LP
Senior Sec. Notes
7.50% due 10/15/2020........................... $ 511,000 $ 550,283
----------
4,187,258
----------
Private Equity -- 0.6%
Icahn Enterprises LP/Icahn Enterprises Finance
Corp.
Company Guar. Notes
5.88% due 02/01/2022........................... 1,005,000 1,007,512
Icahn Enterprises LP/Icahn Enterprises Finance
Corp.
Company Guar. Notes
6.38% due 12/15/2025........................... 830,000 834,150
----------
1,841,662
----------
Publishing-Books -- 0.2%
McGraw-Hill Global Education Holdings LLC/
McGraw-Hill Global Education Finance
Senior Notes
7.88% due 05/15/2024*.......................... 580,000 554,492
----------
Publishing-Periodicals -- 0.3%
Meredith Corp.
Senior Notes
6.88% due 02/01/2026*.......................... 920,000 944,150
----------
Radio -- 0.2%
Sirius XM Radio, Inc.
Company Guar. Notes
5.38% due 07/15/2026*.......................... 750,000 740,625
----------
Real Estate Investment Trusts -- 1.4%
Corrections Corp. of America
Company Guar. Notes
5.00% due 10/15/2022........................... 550,000 556,875
ESH Hospitality, Inc.
Company Guar. Notes
5.25% due 05/01/2025*.......................... 700,000 680,960
iStar, Inc.
Senior Notes
5.25% due 09/15/2022........................... 1,185,000 1,146,487
MGM Growth Properties Operating Partnership
LP/MGP Finance Co-Issuer, Inc.
Company Guar. Notes
4.50% due 01/15/2028........................... 645,000 604,881
MGM Growth Properties Operating Partnership
LP/MGP Finance Co-Issuer, Inc.
Company Guar. Notes
5.63% due 05/01/2024........................... 250,000 257,500
MPT Operating Partnership LP/MPT Finance
Corp.
Company Guar. Notes
5.00% due 10/15/2027........................... 530,000 519,559
MPT Operating Partnership LP/MPT Finance
Corp.
Company Guar. Notes
6.38% due 03/01/2024........................... 280,000 294,006
Principal Value
Security Description Amount (Note 2)
Real Estate Investment Trusts (continued)
Uniti Group, Inc./CSL Capital LLC
Company Guar. Notes
7.13% due 12/15/2024*.............................. $535,000 $ 484,175
----------
4,544,443
----------
Real Estate Operations & Development -- 0.2%
Greystar Real Estate Partners LLC
Senior Sec. Notes
5.75% due 12/01/2025*.............................. 540,000 538,650
----------
Resort/Theme Parks -- 0.2%
Boyne USA, Inc.
Sec. Notes
7.25% due 05/01/2025*.............................. 545,000 559,306
----------
Retail-Apparel/Shoe -- 0.2%
L Brands, Inc.
Company Guar. Notes
6.88% due 11/01/2035............................... 574,000 556,780
----------
Retail-Automobile -- 0.2%
Sonic Automotive, Inc.
Company Guar. Notes
6.13% due 03/15/2027............................... 715,000 689,975
----------
Retail-Building Products -- 0.1%
Beacon Escrow Corp.
Company Guar. Notes
4.88% due 11/01/2025*.............................. 470,000 447,675
----------
Retail-Convenience Store -- 0.3%
Cumberland Farms, Inc.
Senior Notes
6.75% due 05/01/2025*.............................. 830,000 863,200
----------
Retail-Drug Store -- 0.3%
Rite Aid Corp.
Company Guar. Notes
6.13% due 04/01/2023*.............................. 505,000 508,788
Rite Aid Corp.
Company Guar. Notes
6.75% due 06/15/2021............................... 355,000 361,656
----------
870,444
----------
Retail-Major Department Stores -- 0.1%
Neiman Marcus Group, Ltd. LLC
Company Guar. Notes
8.00% due 10/15/2021*.............................. 600,000 379,500
----------
Retail-Propane Distribution -- 0.5%
Ferrellgas LP/Ferrellgas Finance Corp.
Company Guar. Notes
6.75% due 06/15/2023............................... 525,000 477,750
Ferrellgas Partners LP/Ferrellgas Partners Finance
Corp.
Senior Notes
8.63% due 06/15/2020............................... 570,000 522,975
Suburban Propane Partners LP/Suburban Energy
Finance Corp.
Senior Notes
5.50% due 06/01/2024............................... 500,000 481,250
----------
1,481,975
----------
53
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Retail-Restaurants -- 0.3%
Golden Nugget, Inc.
Senior Notes
6.75% due 10/15/2024*................. $900,000 $ 904,491
----------
Rubber-Tires -- 0.1%
Goodyear Tire & Rubber Co.
Company Guar. Notes
4.88% due 03/15/2027.................. 495,000 476,175
----------
Rubber/Plastic Products -- 0.0%
Venture Holdings Co. LLC
Company Guar. Notes
11.00% due 06/01/2007+(3)(4)(6)(7).... 550,000 0
----------
Schools -- 0.2%
Laureate Education, Inc.
Company Guar. Notes
8.25% due 05/01/2025*................. 670,000 718,575
----------
Security Services -- 0.3%
Altegrity, Inc.
Senior Sec. Notes
9.50% due 07/01/2019*................. 865,000 903,925
----------
Soap & Cleaning Preparation -- 0.2%
Kronos Acquisition Holdings, Inc.
Company Guar. Notes
9.00% due 08/15/2023*................. 845,000 802,750
----------
Steel-Producers -- 0.4%
AK Steel Corp.
Senior Sec. Notes
7.50% due 07/15/2023.................. 445,000 469,475
United States Steel Corp.
Senior Notes
6.25% due 03/15/2026.................. 835,000 832,912
----------
1,302,387
----------
Telecom Services -- 0.1%
Qwest Corp.
Senior Notes
7.25% due 09/15/2025.................. 370,000 399,201
----------
Telephone-Integrated -- 1.1%
CenturyLink, Inc.
Senior Notes
7.50% due 04/01/2024.................. 585,000 589,387
Cincinnati Bell, Inc.
Company Guar. Notes
7.00% due 07/15/2024*................. 320,000 286,400
Consolidated Communications, Inc.
Company Guar. Notes
6.50% due 10/01/2022.................. 493,000 436,305
Frontier Communications Corp.
Senior Notes
7.13% due 01/15/2023.................. 300,000 202,407
Frontier Communications Corp.
Senior Notes
8.50% due 04/15/2020.................. 640,000 644,000
Principal Value
Security Description Amount (Note 2)
Telephone-Integrated (continued)
Frontier Communications Corp.
Sec. Notes
8.50% due 04/01/2026*....................... $ 300,000 $ 290,250
Level 3 Financing, Inc.
Company Guar. Notes
5.25% due 03/15/2026........................ 520,000 490,100
Level 3 Financing, Inc.
Company Guar. Notes
5.38% due 01/15/2024........................ 165,000 160,773
Windstream Services LLC/Windstream Finance
Corp.
Company Guar. Notes
6.38% due 08/01/2023*....................... 560,000 319,200
------------
3,418,822
------------
Television -- 0.1%
Sinclair Television Group, Inc.
Company Guar. Notes
5.13% due 02/15/2027*....................... 270,000 250,425
------------
Theaters -- 0.3%
Live Nation Entertainment, Inc.
Company Guar. Notes
5.63% due 03/15/2026*....................... 990,000 1,002,375
------------
Wireless Equipment -- 0.2%
ViaSat, Inc.
Senior Notes
5.63% due 09/15/2025*....................... 830,000 799,124
------------
Total U.S. Corporate Bonds & Notes
(cost $117,944,457)......................... 115,780,352
------------
FOREIGN CORPORATE BONDS & NOTES -- 8.6%
Airlines -- 0.3%
Latam Finance, Ltd.
Company Guar. Notes
6.88% due 04/11/2024*....................... 945,000 988,706
------------
Building & Construction Products-Misc. -- 0.2%
James Hardie International Finance DAC
Senior Notes
4.75% due 01/15/2025*....................... 655,000 641,900
------------
Cable/Satellite TV -- 1.2%
Altice Luxembourg SA
Company Guar. Notes
7.63% due 02/15/2025*....................... 1,390,000 1,188,450
SFR Group SA
Senior Sec. Notes
7.38% due 05/01/2026*....................... 1,210,000 1,152,525
Telenet Finance Luxembourg Notes SARL
Senior Sec. Notes
5.50% due 03/01/2028*....................... 1,200,000 1,147,500
Virgin Media Finance PLC
Company Guar. Notes
6.00% due 10/15/2024*....................... 400,000 396,000
------------
3,884,475
------------
54
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Casino Services -- 0.3%
Gateway Casinos & Entertainment, Ltd.
Sec. Notes
8.25% due 03/01/2024*......................... $ 940,000 $ 999,337
----------
Chemicals-Diversified -- 0.4%
NOVA Chemicals Corp.
Senior Notes
4.88% due 06/01/2024*......................... 455,000 435,663
NOVA Chemicals Corp.
Senior Notes
5.00% due 05/01/2025*......................... 745,000 714,976
----------
1,150,639
----------
Chemicals-Specialty -- 0.3%
Alpha 3 BV/Alpha US Bidco, Inc.
Company Guar. Notes
6.25% due 02/01/2025*......................... 950,000 961,875
----------
Containers-Metal/Glass -- 0.6%
ARD Securities Finance SARL
Senior Sec. Notes
8.75% due 01/31/2023*(8)...................... 555,000 581,362
Ardagh Packaging Finance PLC/Ardagh Holdings
USA, Inc.
Company Guar. Notes
6.00% due 02/15/2025*......................... 1,320,000 1,326,600
----------
1,907,962
----------
Cruise Lines -- 0.3%
Viking Cruises, Ltd.
Company Guar. Notes
5.88% due 09/15/2027*......................... 1,000,000 947,500
----------
Diversified Manufacturing Operations -- 0.5%
Bombardier, Inc.
Senior Notes
6.13% due 01/15/2023*......................... 915,000 912,703
Bombardier, Inc.
Senior Notes
7.50% due 12/01/2024*......................... 600,000 621,000
----------
1,533,703
----------
Diversified Minerals -- 0.3%
FMG Resources August 2006 Pty, Ltd.
Company Guar. Notes
5.13% due 03/15/2023*......................... 840,000 834,246
Teck Resources, Ltd.
Company Guar. Notes
8.50% due 06/01/2024*......................... 185,000 205,572
----------
1,039,818
----------
Food-Meat Products -- 0.2%
MARB BondCo PLC
Company Guar. Notes
7.00% due 03/15/2024*......................... 740,000 695,600
----------
Machinery-Pumps -- 0.2%
Titan Acquisition, Ltd./Titan Co-Borrower LLC
Senior Notes
7.75% due 04/15/2026*......................... 535,000 533,328
----------
Principal Value
Security Description Amount (Note 2)
Medical Products -- 0.1%
Mallinckrodt International Finance SA/
Mallinckrodt CB LLC
Company Guar. Notes
5.63% due 10/15/2023*.......................... $ 415,000 $ 332,000
----------
Medical-Biomedical/Gene -- 0.1%
Concordia International Corp.
Senior Sec. Notes
9.00% due 04/01/2022*.......................... 220,000 199,100
----------
Medical-Drugs -- 1.2%
Teva Pharmaceutical Finance Netherlands III BV
Company Guar. Notes
3.15% due 10/01/2026........................... 385,000 309,064
Teva Pharmaceutical Finance Netherlands III BV
Company Guar. Notes
6.75% due 03/01/2028*.......................... 330,000 326,082
Valeant Pharmaceuticals International, Inc.
Senior Sec. Notes
5.50% due 11/01/2025*.......................... 1,010,000 983,235
Valeant Pharmaceuticals International, Inc.
Company Guar. Notes
5.88% due 05/15/2023*.......................... 1,150,000 1,014,863
Valeant Pharmaceuticals International, Inc.
Company Guar. Notes
6.13% due 04/15/2025*.......................... 730,000 629,990
Valeant Pharmaceuticals International, Inc.
Senior Sec. Notes
7.00% due 03/15/2024*.......................... 165,000 172,013
Valeant Pharmaceuticals International, Inc.
Company Guar. Notes
9.00% due 12/15/2025*.......................... 295,000 293,156
----------
3,728,403
----------
Metal-Diversified -- 0.1%
Vedanta Resources PLC
Senior Notes
6.38% due 07/30/2022*.......................... 405,000 410,063
----------
Oil & Gas Drilling -- 0.3%
Transocean, Inc.
Company Guar. Notes
6.80% due 03/15/2038........................... 465,000 362,700
Transocean, Inc.
Company Guar. Notes
7.50% due 01/15/2026*.......................... 300,000 295,500
Transocean, Inc.
Company Guar. Notes
9.00% due 07/15/2023*.......................... 270,000 287,213
----------
945,413
----------
Oil Companies-Exploration & Production -- 0.5%
Geopark, Ltd.
Senior Sec. Notes
6.50% due 09/21/2024*.......................... 735,000 737,756
Seven Generations Energy, Ltd.
Company Guar. Notes
5.38% due 09/30/2025*.......................... 805,000 768,775
----------
1,506,531
----------
55
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Oil Companies-Integrated -- 0.4%
Petrobras Global Finance BV
Company Guar. Notes
5.30% due 01/27/2025*................... $ 706,000 $ 697,175
Petrobras Global Finance BV
Company Guar. Notes
6.00% due 01/27/2028*................... 160,000 158,400
YPF SA
Senior Notes
6.95% due 07/21/2027*................... 445,000 446,824
----------
1,302,399
----------
Oil-Field Services -- 0.1%
Weatherford International, Ltd.
Company Guar. Notes
8.25% due 06/15/2023.................... 435,000 379,307
Weatherford International, Ltd.
Company Guar. Notes
9.88% due 02/15/2024.................... 125,000 114,062
----------
493,369
----------
Paper & Related Products -- 0.1%
Cascades, Inc.
Company Guar. Notes
5.50% due 07/15/2022*................... 150,000 150,938
Cascades, Inc.
Company Guar. Notes
5.75% due 07/15/2023*................... 240,000 243,600
----------
394,538
----------
Security Services -- 0.2%
Garda World Security Corp.
Senior Notes
8.75% due 05/15/2025*................... 595,000 623,263
----------
Special Purpose Entity -- 0.0%
Hellas Telecommunications
Luxembourg II SCA
Sub. Notes
6.26% due 01/15/2015+*(3)(4)(6)(7)...... 1,025,000 0
----------
Steel-Producers -- 0.1%
BlueScope Steel Finance, Ltd./BlueScope
Steel Finance USA LLC
Company Guar. Notes
6.50% due 05/15/2021*................... 440,000 456,267
----------
Telecom Services -- 0.2%
Digicel, Ltd.
Company Guar. Notes
6.75% due 03/01/2023*................... 550,000 495,622
----------
Transport-Marine -- 0.2%
Topaz Marine SA
Company Guar. Notes
9.13% due 07/26/2022*................... 740,000 767,380
----------
Principal Value
Security Description Amount (Note 2)
Transport-Services -- 0.2%
JSL Europe SA
Company Guar. Notes
7.75% due 07/26/2024*................. $ 755,000 $ 767,269
-----------
Total Foreign Corporate Bonds & Notes
(cost $29,464,065).................... 27,706,460
-----------
LOANS(9)(10)(11) -- 52.0%
Advertising Services -- 0.5%
Advantage Sales & Marketing, Inc. FRS
1st Lien
5.02% (3 ML+3.25%)
due 07/23/2021........................ 361,256 353,128
Advantage Sales & Marketing, Inc. FRS
BTL-B2
5.02% (3 ML+3.25%)
due 07/25/2021........................ 680,262 664,956
Advantage Sales & Marketing, Inc. FRS
2nd Lien
8.27% (3 ML+6.50%)
due 07/25/2022........................ 758,000 720,100
-----------
1,738,184
-----------
Aerospace/Defense-Equipment -- 0.7%
Accudyne Industries Borrower SCA FRS
BTL-B
5.13% (1 ML+3.25%)
due 08/18/2024........................ 1,174,100 1,179,604
TransDigm, Inc. FRS
BTL-G
4.38% (1 ML+2.50%)
due 08/22/2024........................ 141,515 141,928
TransDigm, Inc. FRS
BTL-F
4.63% (1 ML+2.75%)
due 06/09/2023........................ 307,151 308,255
TransDigm, Inc. FRS
BTL-G
4.80% (3 ML+2.50%)
due 08/22/2024........................ 488,730 490,156
TransDigm, Inc. FRS
BTL-F
5.05% (3 ML+2.75%)
due 06/09/2023........................ 160,851 161,429
-----------
2,281,372
-----------
Appliances -- 0.3%
Global Appliance, Inc. FRS
BTL-B
5.88% (1 ML+4.00%)
due 09/29/2024........................ 1,039,775 1,054,722
-----------
Applications Software -- 1.0%
Impala Private Holdings II LLC FRS
1st Lien
5.88% (1 ML+4.00%)
due 11/11/2024........................ 1,032,413 1,034,563
56
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 2)
LOANS(9)(10)(11) (continued)
Applications Software (continued)
SS&C Technologies Holdings Europe SARL FRS
BTL
coupon TBD
due 04/16/2025............................. $ 554,793 $ 557,394
SS&C Technologies, Inc. FRS
BTL-B3
coupon TBD
due 04/16/2025............................. 1,555,207 1,562,498
----------
3,154,455
----------
Auto-Heavy Duty Trucks -- 0.5%
Deck Chassis Acquisition, Inc. FRS
2nd Lien
7.88% (1 ML+6.00%)
due 06/15/2023............................. 225,000 228,375
Navistar, Inc. FRS
BTL-B
5.21% (1 ML+3.50%)
due 11/06/2024............................. 1,465,000 1,474,156
----------
1,702,531
----------
Auto/Truck Parts & Equipment-Original -- 1.4%
Accuride Corp. FRS
BTL
7.55% (3 ML+5.25%)
due 11/17/2023............................. 1,181,548 1,193,363
Dexko Global, Inc. FRS
BTL-B
5.80% (3 ML+3.50%)
due 07/24/2024............................. 1,406,475 1,415,265
Federal-Mogul Holdings Corp. FRS
BTL-C
5.53%-5.63% (1 ML+3.75%)
due 04/15/2021............................. 2,071,675 2,083,329
----------
4,691,957
----------
Bicycle Manufacturing -- 0.4%
SRAM LLC FRS
BTL-B
4.97%-5.21% (2 ML+3.25%)
due 03/15/2024............................. 1,277,757 1,277,757
SRAM LLC FRS
BTL-B
7.00% (USFRBPLR+2.25%)
due 03/15/2024............................. 4,169 4,169
----------
1,281,926
----------
Broadcast Services/Program -- 1.2%
iHeartCommunications, Inc.
BTL-D-EXT
6.75% due 01/30/2019+(2)(3)................ 1,555,000 1,236,467
Nexstar Broadcasting, Inc. FRS
BTL-B2
4.16% (1 ML+2.50%)
due 01/17/2024............................. 510,419 511,823
Principal Value
Security Description Amount (Note 2)
Broadcast Services/Program (continued)
Univision Communications, Inc. FRS
BTL
4.63% (1 ML+2.75%)
due 03/15/2024.............................. $2,220,748 $2,185,007
----------
3,933,297
----------
Building & Construction Products-Misc. -- 0.8%
CPG International, Inc. FRS
BTL
5.59% (3 ML+3.75%)
due 05/03/2024.............................. 1,485,975 1,498,977
Summit Materials LLC FRS
BTL-B
4.13% (1 ML+2.25%)
due 11/21/2024.............................. 997,500 1,003,735
----------
2,502,712
----------
Building Products-Cement -- 0.4%
Quikrete Holdings, Inc. FRS
BTL-B
4.63% (1 ML+2.75%)
due 11/15/2023.............................. 1,326,136 1,331,523
----------
Building-Heavy Construction -- 0.5%
Brand Energy & Infrastructure
Services, Inc. FRS
1st Lien
5.99%-6.55% (3 ML+4.25%)
due 06/21/2024.............................. 1,483,788 1,494,710
----------
Building-Residential/Commercial -- 0.0%
TOUSA, Inc.
Escrow Loans
12.25% due 08/15/2011+(4)(6)................ 2,037,810 0
----------
Cable/Satellite TV -- 0.7%
Radiate Holdco LLC FRS
BTL
4.88% (1 ML+3.00%)
due 02/01/2024.............................. 922,114 916,466
UPC Financing Partnership FRS
BTL
4.28% (1 ML+2.50%)
due 01/15/2026.............................. 1,285,000 1,288,671
----------
2,205,137
----------
Casino Hotels -- 1.2%
Caesars Resort Collection LLC FRS
BTL-B
4.63% (1 ML+2.75%)
due 12/22/2024.............................. 2,039,888 2,053,365
CityCenter Holdings LLC FRS
BTL-B
4.38% (1 ML+2.50%)
due 04/18/2024.............................. 1,305,138 1,310,439
Golden Nugget, Inc. FRS
BTL
4.90% (3 ML+3.25%)
due 10/04/2023.............................. 270,880 273,039
57
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 2)
LOANS(9)(10)(11) (continued)
Casino Hotels (continued)
Golden Nugget, Inc. FRS
BTL
5.04% (2 ML+3.25%)
due 10/04/2023............................ $ 354,356 $ 357,179
----------
3,994,022
----------
Casino Services -- 0.4%
CBAC Borrower LLC FRS
BTL-B
5.88% (1 ML+4.00%)
due 07/07/2024............................ 706,450 710,424
Gateway Casinos & Entertainment, Ltd. FRS
BTL-B
4.75% (3 ML+3.00%)
due 12/01/2023............................ 550,000 553,437
----------
1,263,861
----------
Chemicals-Diversified -- 0.2%
New Arclin US Holding Corp. FRS
BTL
5.80% (3 ML+3.50%)
due 02/14/2024............................ 492,850 497,162
----------
Chemicals-Specialty -- 1.9%
Alpha 3 BV/Alpha US Bidco, Inc. FRS
BTL-B1
5.30% (3 ML+3.00%)
due 01/31/2024............................ 466,475 469,974
Encapsys LLC FRS
BTL-B
5.13% (1 ML+3.25%)
due 11/07/2024............................ 600,000 604,500
Graftech International, Ltd. FRS
BTL-B
5.24% (1 ML+3.50%)
due 02/12/2025............................ 705,000 704,119
KMG Chemicals, Inc. FRS
BTL-B
4.63% (1 ML+2.75%)
due 06/15/2024............................ 205,855 207,398
Kraton Polymers LLC FRS
BTL
4.38% (1 ML+2.50%)
due 03/05/2025............................ 211,268 212,522
MacDermid, Inc. FRS
BTL-B7
4.38% (1 ML+2.50%)
due 06/07/2020............................ 646,708 649,295
OMNOVA Solutions, Inc. FRS
2nd Lien
5.13% (1 ML+3.25%)
due 08/25/2023............................ 1,373,987 1,382,574
PQ Corp. FRS
BTL-B1
4.29% (3 ML+2.50%)
due 02/08/2025............................ 383,488 384,516
Principal Value
Security Description Amount (Note 2)
Chemicals-Specialty (continued)
Tronox Blocked Brower LLC FRS
Blocked Dollar
5.30% (3 ML+3.00%)
due 09/22/2024................... $ 110,073 $ 110,967
Tronox Finance LLC FRS
Initial Dollar
5.30% (3 ML+3.00%)
due 09/22/2024................... 254,015 256,078
Venator Materials Corp. FRS
BTL-B
4.88% (1 ML+3.00%)
due 08/08/2024................... 1,004,950 1,009,347
----------
5,991,290
----------
Coal -- 0.6%
Blackhawk Mining LLC FRS
BTL
11.78% (3 ML+10.00%)
due 02/17/2022................... 817,126 717,028
Contura Energy, Inc. FRS
BTL-B
6.88% (1 ML+5.00%)
due 03/18/2024................... 1,104,925 1,103,544
----------
1,820,572
----------
Commercial Services -- 1.7%
Brickman Group, Ltd. FRS
BTL-B
4.81%-4.88% (1 ML+3.00%)
due 12/18/2020................... 1,339,578 1,346,904
Brickman Group, Ltd. FRS
2nd Lien
8.31% (1 ML+6.50%)
due 12/17/2021................... 363,234 365,050
CPI Acquisition, Inc. FRS
BTL-B
6.36% (3 ML+4.50%)
due 08/17/2022................... 2,470,685 1,675,947
PAE Holding Corp. FRS
BTL-B
7.49% (2 ML+5.50%)
due 10/20/2022................... 534,446 537,119
ServiceMaster Co. LLC FRS
BTL-B
4.38% (1 ML+2.50%)
due 11/08/2023................... 1,411,319 1,415,140
----------
5,340,160
----------
Commercial Services-Finance -- 0.7%
Element Materials Tech Group FRS
BTL-B
5.80% (3 ML+3.50%)
due 06/28/2024................... 753,113 756,878
NAB Holdings LLC FRS
BTL
5.30% (3 ML+3.00%)
due 07/01/2024................... 1,393,000 1,399,965
----------
2,156,843
----------
58
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 2)
LOANS(9)(10)(11) (continued)
Computer Services -- 0.5%
Presidio LLC FRS
BTL-B1
4.45% (3 ML+2.75%)
due 02/02/2024............................ $ 618,660 $ 619,875
Presidio LLC FRS
BTL-B1
4.63% (1 ML+2.75%)
due 02/02/2024............................ 13,715 13,742
Tempo Acquisition LLC FRS
BTL-B
4.88% (1 ML+3.00%)
due 05/01/2024............................ 977,613 981,584
----------
1,615,201
----------
Computer Software -- 0.4%
Rackspace Hosting, Inc. FRS
BTL-B
4.79% (3 ML+3.00%)
due 11/03/2023............................ 1,243,244 1,238,388
----------
Computers-Integrated Systems -- 0.4%
Everi Payments, Inc. FRS
BTL-B
5.49% (2 ML+3.50%)
due 05/09/2024............................ 1,146,338 1,153,024
----------
Containers-Metal/Glass -- 1.1%
Anchor Glass Container Corp. FRS
1st Lien
4.49%-4.63% (1 ML+2.75%)
due 12/07/2023............................ 584,622 567,084
Anchor Glass Container Corp. FRS
2nd Lien
9.49% (1 ML+7.75%)
due 12/07/2024............................ 796,000 772,120
Berlin Packaging LLC FRS
BTL-B
4.92%-5.13% (1 ML+3.25%)
due 10/01/2021............................ 858,314 861,104
BWAY Corp. FRS
BTL-B
4.96% (3 ML+3.25%)
due 04/03/2024............................ 1,260,475 1,265,727
----------
3,466,035
----------
Containers-Paper/Plastic -- 1.0%
Kloeckner Pentaplast of America, Inc. FRS
BTL-B
6.13% (1 ML+4.25%)
due 06/30/2022............................ 1,960,150 1,885,827
Reynolds Group Holdings, Inc. FRS
BTL-B
4.63% (1 ML+2.75%)
due 02/05/2023............................ 1,112,110 1,117,418
Tekni Plex, Inc. FRS
BTL-B
5.13% (1 ML+3.25%)
due 10/17/2024............................ 349,125 349,779
----------
3,353,024
----------
Principal Value
Security Description Amount (Note 2)
Cosmetics & Toiletries -- 0.7%
Parfums Holding Co., Inc. FRS
BTL
7.05% (3 ML+4.75%)
due 06/30/2024......................... $1,126,599 $1,139,625
Revlon Consumer Products Corp. FRS
BTL-B
5.38% (1 ML+3.50%)
due 09/07/2023......................... 1,301,947 1,028,176
----------
2,167,801
----------
Data Processing/Management -- 0.6%
First Data Corp. FRS
1st Lien
4.12% (1 ML+2.25%)
due 04/26/2024......................... 2,037,298 2,040,268
----------
Diagnostic Equipment -- 0.7%
Immucor, Inc. FRS
BTL-B3
7.30% (3 ML+5.00%)
due 06/15/2021......................... 109,175 111,631
Ortho-Clinical Diagnostics, Inc. FRS
BTL-B
5.63% (1 ML+3.75%)
due 06/30/2021......................... 2,025,282 2,040,472
----------
2,152,103
----------
Dialysis Centers -- 0.4%
U.S. Renal Care, Inc. FRS
BTL
6.55% (3 ML+4.25%)
due 12/31/2022......................... 1,332,817 1,338,231
----------
Direct Marketing -- 0.3%
Red Ventures LLC FRS
BTL-B
5.88% (1 ML+4.00%)
due 11/08/2024......................... 1,109,425 1,118,855
----------
Disposable Medical Products -- 0.2%
Sterigenics-Nordion Holdings LLC FRS
BTL-B
4.88% (1 ML+3.00%)
due 05/15/2022......................... 662,894 664,275
----------
Distribution/Wholesale -- 1.0%
American Builders & Contractors Supply
Co., Inc. FRS
BTL-B1
4.38% (1 ML+2.50%)
due 10/31/2023......................... 1,123,730 1,125,134
Spin Holdco, Inc. FRS
BTL
5.08% (3 ML+3.25%)
due 11/14/2022......................... 1,163,987 1,170,049
Univar USA, Inc. FRS
BTL-B3
4.38% (1 ML+2.50%)
due 07/01/2024......................... 887,930 893,341
59
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 2)
LOANS(9)(10)(11) (continued)
Distribution/Wholesale (continued)
Wastequip LLC FRS
1st Lien
5.32% (1 ML+3.50%)
due 03/13/2025................... $ 80,000 $ 80,200
----------
3,268,724
----------
E-Commerce/Services -- 0.2%
Hoya Midco LLC FRS
BTL-B
5.38% (1 ML+3.50%)
due 06/30/2024................... 516,100 516,423
----------
Educational Software -- 0.4%
Blackboard, Inc. FRS
BTL-B4
6.73% (3 ML+5.00%)
due 06/30/2021................... 1,553,483 1,447,975
----------
Electric-Generation -- 0.6%
APLP Holdings LP FRS
BTL
5.38% (1 WL+3.50%)
due 04/13/2023................... 1,034,571 1,043,107
TEX Operations Co. LLC FRS
BTL-B
4.38% (1 ML+2.50%)
due 08/04/2023................... 773,878 778,908
TEX Operations Co. LLC FRS
BTL-C
4.38% (1 ML+2.50%)
due 08/04/2023................... 137,755 138,650
----------
1,960,665
----------
Electric-Integrated -- 0.4%
Talen Energy Supply LLC FRS
BTL-B1
5.88% (1 ML+4.00%)
due 07/15/2023................... 613,253 602,265
Talen Energy Supply LLC FRS
BTL-B2
5.88% (1 ML+4.00%)
due 04/15/2024................... 741,000 726,551
----------
1,328,816
----------
Enterprise Software/Service -- 1.7%
Applied Systems, Inc. FRS
BTL-B
5.55% (3 ML+3.25%)
due 09/19/2024................... 179,100 180,415
Applied Systems, Inc. FRS
2nd Lien
9.30% (3 ML+7.00%)
due 09/19/2025................... 205,000 211,534
BMC Software Finance, Inc. FRS
BTL-B2
5.13% (1 ML+3.25%)
due 09/10/2022................... 1,475,511 1,480,876
Principal Value
Security Description Amount (Note 2)
Enterprise Software/Service (continued)
Kronos, Inc. FRS
1st Lien
4.88% (3 ML+3.00%)
due 11/01/2023................................ $2,205,762 $2,215,964
Kronos, Inc. FRS
2nd Lien
10.02% (3 ML+8.25%)
due 11/01/2024................................ 440,000 455,767
Veritas US, Inc. FRS
BTL-B
6.80% (3 ML+4.50%)
due 01/27/2023................................ 996,288 991,929
----------
5,536,485
----------
Environmental Consulting & Engineering -- 0.3%
Robertshaw US Holding Corp. FRS
1st Lien
5.44% (1 ML+3.50%)
due 02/28/2025................................ 860,000 866,450
----------
Extended Service Contracts -- 0.7%
Sedgwick Claims Management Services, Inc. FRS
1st Lien
4.63% (1 ML+2.75%)
due 03/01/2021................................ 1,251,355 1,250,103
Sedgwick Claims Management Services, Inc. FRS
2nd Lien
7.63% (1 ML+5.75%)
due 02/28/2022................................ 970,000 972,425
----------
2,222,528
----------
Finance-Auto Loans -- 0.4%
Capital Automotive LP FRS
BTL-B
4.38% (1 ML+2.50%)
due 03/24/2024................................ 308,283 309,825
Capital Automotive LP FRS
2nd Lien
7.88% (1 ML+6.00%)
due 03/24/2025................................ 900,549 905,052
----------
1,214,877
----------
Finance-Mortgage Loan/Banker -- 0.7%
Walter Investment Management Corp. FRS
BTL-B
7.88% (1 ML+6.00%)
due 06/30/2022................................ 2,452,945 2,379,356
----------
Financial Guarantee Insurance -- 0.2%
VF Holdings Corp. FRS
BTL-B1
5.13% (1 ML+3.25%)
due 06/30/2023................................ 592,307 596,667
----------
Food-Baking -- 0.3%
Hostess Brands LLC FRS
BTL-B
4.13% (1 ML+2.25%)
due 08/03/2022................................ 1,047,321 1,051,031
----------
60
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 2)
LOANS(9)(10)(11) (continued)
Food-Dairy Products -- 0.5%
Chobani LLC FRS
BTL-B
5.38% (1 ML+3.50%)
due 10/10/2023...................... $ 726,604 $ 730,237
Milk Specialties Co. FRS
BTL
6.30% (3 ML+4.00%)
due 08/16/2023...................... 991,895 995,614
----------
1,725,851
----------
Food-Flour & Grain -- 0.0%
C.H. Guenther & Son, Inc. FRS
BTL-B
coupon TBD
due 03/31/2025...................... 120,000 120,525
----------
Food-Meat Products -- 0.5%
Informatica LLC FRS
BTL-B
4.68% (3 ML+2.50%)
due 10/30/2022...................... 1,570,564 1,564,282
----------
Food-Misc./Diversified -- 0.3%
Dole Food Co., Inc. FRS
BTL-B
4.61% (1 ML+2.75%)
due 04/06/2024...................... 23,074 23,095
Dole Food Co., Inc. FRS
BTL-B
4.69%-4.88% (1 ML+3.00%)
due 04/06/2024...................... 648,947 649,557
Dole Food Co., Inc. FRS
BTL-B
6.75% (USFRBPLR+2.00%)
due 04/06/2024...................... 135 135
Sigma Bidco BV FRS
BTL-B
coupon TBD
due 02/23/2025...................... 385,000 385,642
----------
1,058,429
----------
Food-Retail -- 0.5%
Albertson's LLC FRS
BTL-B4
4.63% (1 ML+2.75%)
due 08/25/2021...................... 1,041,853 1,029,988
Albertson's LLC FRS
BTL-B5
5.29% (3 ML+3.00%)
due 12/21/2022...................... 462,000 457,380
----------
1,487,368
----------
Gambling (Non-Hotel) -- 0.5%
Greektown Holdings LLC FRS
BTL
4.88% (1 ML+3.00%)
due 03/21/2024...................... 515,198 515,519
Mohegan Tribal Gaming Authority FRS
BTL-B
5.88% (1 ML+4.00%)
due 10/13/2023...................... 817,886 817,068
Principal Value
Security Description Amount (Note 2)
Gambling (Non-Hotel) (continued)
Scientific Games International, Inc. FRS
BTL-B4
4.63% (1 ML+2.75%)
due 08/14/2024........................... $ 2,875 $ 2,884
Scientific Games International, Inc. FRS
BTL-B4
4.74% (2 ML+2.75%)
due 08/14/2024........................... 12,125 12,163
Wyndham Hotels & Resorts, Inc. FRS
BTL-B
coupon TBD
due 03/28/2025........................... 130,000 130,000
----------
1,477,634
----------
Health Care Cost Containment -- 0.1%
Concentra, Inc. FRS
BTL-B
4.53% (3 ML+2.75%)
due 06/01/2022........................... 200,000 200,250
----------
Hotels/Motels -- 0.5%
Playa Resorts Holding BV FRS
BTL-B
5.00% (3 ML+3.25%)
due 04/29/2024........................... 1,643,500 1,652,950
----------
Housewares -- 0.3%
Libbey Glass, Inc. FRS
BTL-B
4.72% (1 ML+3.00%)
due 04/09/2021........................... 871,720 859,734
----------
Human Resources -- 0.2%
Team Health, Inc. FRS
1st Lien
4.63% (1 ML+2.75%)
due 02/06/2024........................... 579,348 553,278
----------
Insurance-Multi-line -- 0.0%
Genworth Financial, Inc. FRS
BTL
6.20% (1 ML+4.50%)
due 02/22/2023........................... 155,000 157,422
----------
Internet Gambling -- 0.2%
GVC Holdings PLC FRS
BTL-B2
coupon TBD
due 03/15/2024........................... 755,000 755,000
----------
Investment Companies -- 0.8%
TKC Holdings, Inc. FRS
BTL
6.03% (3 ML+4.25%)
due 02/01/2023........................... 1,678,448 1,693,658
UFC Holdings LLC FRS
BTL-B
5.13% (1 ML+3.25%)
due 08/18/2023........................... 823,776 827,638
----------
2,521,296
----------
61
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 2)
LOANS(9)(10)(11) (continued)
Investment Management/Advisor Services -- 0.6%
AlixPartners LLP FRS
BTL-B
5.05% (3 ML+2.75%)
due 04/04/2024............................ $1,574,100 $1,580,003
Focus Financial Partners LLC FRS
BTL-B1
5.05% (3 ML+2.75%)
due 07/03/2024............................ 234,275 235,007
----------
1,815,010
----------
Leisure Products -- 0.1%
Hayward Industries, Inc. FRS
BTL-B
5.38% (1 ML+3.50%)
due 08/05/2024............................ 378,100 379,282
----------
Machinery-Construction & Mining -- 0.2%
International Equipment Solutions LLC FRS
BTL-B
7.80% (3 ML+5.50%)
due 08/15/2022............................ 600,943 605,450
----------
Machinery-General Industrial -- 1.1%
Gardner Denver, Inc. FRS
BTL-B1
5.05% (3 ML+2.75%)
due 07/30/2024............................ 1,965,916 1,974,926
Pro Mach Group, Inc. FRS
BTL-B
5.03% (3 ML+3.00%)
due 03/07/2025............................ 180,000 180,161
Zodiac Pool Solutions LLC FRS
BTL-B
coupon TBD
due 03/31/2025............................ 320,000 320,520
Zodiac Pool Solutions LLC FRS
BTL
6.30% (3 ML+4.00%)
due 12/20/2023............................ 1,012,213 1,012,846
----------
3,488,453
----------
Machinery-Pumps -- 0.6%
NN, Inc. FRS
BTL
5.13% (1 ML+3.25%)
due 04/02/2021............................ 542,400 541,044
NN, Inc. FRS
BTL-B
5.63% (1 ML+3.75%)
due 10/19/2022............................ 712,005 715,565
Titan Acquisition, Ltd. FRS
BTL-B
coupon TBD
due 03/28/2025............................ 780,000 778,293
----------
2,034,902
----------
Principal Value
Security Description Amount (Note 2)
Medical Instruments -- 0.2%
CryoLife, Inc. FRS
BTL-B
6.30% (3 ML+4.00%)
due 11/14/2024.................................. $ 488,775 $ 493,663
----------
Medical Labs & Testing Services -- 0.2%
Explorer Holdings, Inc. FRS
BTL
5.52% (3 ML+3.75%)
due 05/02/2023.................................. 262,992 265,294
Jaguar Holding Co. II FRS
BTL
4.38% (1 ML+2.50%)
due 08/18/2022.................................. 251,619 252,217
Jaguar Holding Co. II FRS
BTL
4.80% (3 ML+2.50%)
due 08/18/2022.................................. 277,313 277,971
----------
795,482
----------
Medical Products -- 0.2%
Greatbatch, Ltd. FRS
BTL-B
4.99% (1 ML+3.25%)
due 10/27/2022.................................. 571,885 576,174
----------
Medical-Drugs -- 1.0%
Endo Luxembourg Finance Co. I SARL FRS
BTL-B
6.19% (1 ML+4.25%)
due 04/29/2024.................................. 769,188 767,649
HLF Financing SARL FRS
BTL-B
7.38% (1 ML+5.50%)
due 02/15/2023.................................. 527,250 532,523
PharMerica Corp. FRS
BTL
5.21% (1 ML+3.50%)
due 12/06/2024.................................. 785,000 787,453
PharMerica Corp. FRS
2nd Lien
9.46% (1 ML+7.75%)
due 12/07/2025.................................. 75,000 75,000
Valeant Pharmaceuticals International, Inc. FRS
BTL-BF1
5.24% (1 ML+3.50%)
due 04/01/2022.................................. 954,152 963,813
----------
3,126,438
----------
Medical-Generic Drugs -- 0.5%
Amneal Pharmaceuticals LLC FRS
BTL-B
coupon TBD
due 03/07/2025.................................. 1,065,000 1,065,887
Amneal Pharmaceuticals LLC FRS
BTL-B2
5.38% (1 ML+3.50%)
due 11/01/2019.................................. 662,623 662,899
----------
1,728,786
----------
62
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 2)
LOANS(9)(10)(11) (continued)
Medical-HMO -- 0.1%
MultiPlan, Inc. FRS
BTL-B
5.05% (3 ML+2.75%)
due 06/07/2023......................... $ 368,150 $ 369,761
----------
Medical-Hospitals -- 1.8%
Acadia Healthcare Co., Inc. FRS
BTL-B2
4.38% (1 ML+ 2.50%)
due 02/16/2023......................... 595,423 599,889
Ardent Legacy Acquisitions, Inc. FRS
BTL-B
7.38% (1 ML+5.50%)
due 08/04/2021......................... 482,275 483,481
CHS/Community Health Systems, Inc. FRS
BTL-H
5.23% (3 ML+3.25%)
due 01/27/2021......................... 1,121,994 1,077,114
Envision Healthcare Corp. FRS
BTL-C
4.88% (1 ML+3.00%)
due 12/01/2023......................... 1,010,997 1,014,788
Prospect Medical Holdings, Inc. FRS
BTL-B
7.19% (1 ML+5.50%)
due 02/22/2024......................... 495,000 495,000
Quorum Health Corp. FRS
BTL
8.63% (1 ML+6.75%)
due 04/29/2022......................... 534,659 545,575
Select Medical Corp. FRS
BTL-B
4.46% (3 ML+2.75%)
due 03/01/2021......................... 949,983 954,139
Select Medical Corp. FRS
BTL-B
6.50% (USFRBPLR+1.75%)
due 03/01/2021......................... 417 419
Surgery Center Holdings, Inc. FRS
1st Lien
5.13% (1 ML+3.25%)
due 09/02/2024......................... 731,325 730,411
----------
5,900,816
----------
Medical-Outpatient/Home Medical -- 0.2%
21st Century Oncology, Inc. FRS
BTL-B
7.86% (3 ML+6.13%)
due 01/16/2023......................... 362,131 348,551
Air Medical Group Holdings, Inc. FRS
BTL-B
6.01% (1 ML+4.25%)
due 03/14/2025......................... 249,375 251,557
----------
600,108
----------
Principal Value
Security Description Amount (Note 2)
Non-Hazardous Waste Disposal -- 0.2%
Wrangler Buyer Corp. FRS
BTL-B
4.88% (1 ML+3.00%)
due 09/27/2024........................ $ 583,538 $ 586,577
----------
Oil & Gas Drilling -- 0.6%
Paragon Offshore Finance Co.
Escrow Loans
6.50% due 07/18/2021+(4)(6)........... 2,157 0
Seadrill Operating LP FRS
BTL-B
8.30% (3 ML+6.00%)
due 02/21/2021........................ 2,467,784 2,058,544
----------
2,058,544
----------
Oil Companies-Exploration & Production -- 1.1%
California Resources Corp. FRS
1st Lien
6.57% (1 ML+4.75%)
due 12/31/2022........................ 650,000 660,156
Chesapeake Energy Corp. FRS
BTL
9.44% (3 ML+7.50%)
due 08/23/2021........................ 181,000 191,916
Fieldwood Energy LLC
2nd Lien
8.82% due 09/30/2020(2)(3)............ 211,234 38,726
Fieldwood Energy LLC FRS
1st Lien
8.88% (1 ML+7.00%)
due 08/31/2020(3)..................... 480,382 478,881
Fieldwood Energy LLC FRS
1st Lien
9.00% (1 ML+7.13%)
due 09/30/2020(3)..................... 128,766 120,397
Gavilan Resources LLC FRS
2nd Lien
7.79% (1 ML+6.00%)
due 03/01/2024........................ 470,000 470,196
Medallion Midland Acquisition LLC FRS
1st Lien
5.13% (1 ML+3.25%)
due 10/30/2024........................ 553,613 553,613
MEG Energy Corp. FRS
BTL
5.81% (3 ML+3.50%)
due 12/31/2023........................ 219,571 219,502
Ultra Resources, Inc. FRS
1st Lien
4.76% (1 ML+3.00%)
due 04/12/2024........................ 705,000 697,950
----------
3,431,337
----------
63
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 2)
LOANS(9)(10)(11) (continued)
Oil Field Machinery & Equipment -- 0.1%
Thermon Industries, Inc. FRS
BTL-B
5.41% (1 ML+3.75%)
due 10/24/2024....................... $ 162,000 $ 162,810
----------
Oil-Field Services -- 0.5%
McJunkin Red Man Corp. FRS
BTL-B
5.39% (1 ML+3.50%)
due 09/20/2024....................... 1,007,475 1,012,512
Weatherford International, Ltd. FRS
BTL
4.18% (1 ML+2.30%)
due 07/13/2020....................... 701,613 691,089
----------
1,703,601
----------
Pharmacy Services -- 0.5%
Change Healthcare Holdings LLC FRS
BTL-B
4.63% (1 ML+2.75%)
due 03/01/2024....................... 1,616,032 1,619,173
----------
Pipelines -- 0.3%
Traverse Midstream Partner LLC FRS
BTL
5.85% (3 ML+4.00%)
due 09/27/2024....................... 1,085,000 1,091,556
----------
Pollution Control -- 0.1%
Filtration Group Corp. FRS
BTL
coupon TBD
due 03/29/2025....................... 410,000 411,025
----------
Printing-Commercial -- 0.3%
Fort Dearborn Co. FRS
1st Lien
5.69% (1 ML+4.00%)
due 10/19/2023....................... 9,178 9,075
Fort Dearborn Co. FRS
1st Lien
5.70% (3 ML+4.00%)
due 10/19/2023....................... 1,129,055 1,116,353
----------
1,125,428
----------
Professional Sports -- 0.6%
Delta 2 Luxembourg SARL FRS
BTL
4.38% (1 ML+2.50%)
due 02/21/2024....................... 1,779,690 1,781,915
----------
Publishing-Books -- 0.3%
McGraw-Hill Global Education
Holdings LLC FRS
BTL
5.88% (1 ML+4.00%)
due 05/04/2022....................... 864,600 852,036
----------
Principal Value
Security Description Amount (Note 2)
Publishing-Periodicals -- 0.3%
Meredith Corp. FRS
BTL-B
4.88% (1 ML+3.00%)
due 01/31/2025............................ $ 910,000 $ 914,929
----------
Real Estate Investment Trusts -- 0.2%
Uniti Group, Inc. FRS
BTL
4.88% (1 ML+3.00%)
due 10/24/2022............................ 765,313 735,895
----------
Real Estate Operations & Development -- 0.1%
Lightstone Generation LLC FRS
BTL-B
5.63% (1 ML+3.75%)
due 01/30/2024............................ 410,837 412,699
Lightstone Generation LLC FRS
BTL-C
5.63% (1 ML+3.75%)
due 01/30/2024............................ 26,087 26,205
----------
438,904
----------
Recycling -- 0.1%
Gopher Resource LLC FRS
1st Lien
5.48% (3 ML+3.25%)
due 03/06/2025............................ 235,000 236,909
----------
Research & Development -- 0.1%
PAREXEL International Corp. FRS
BTL-B
4.63% (1 ML+2.75%)
due 09/27/2024............................ 228,850 228,907
----------
Retail-Bedding -- 0.3%
Serta Simmons Bedding LLC FRS
1st Lien
5.19%-5.29% (3 ML+3.50%)
due 11/08/2023............................ 970,200 881,972
----------
Retail-Building Products -- 0.6%
84 Lumber Co. FRS
BTL-B1
7.12% (1 ML+5.25%)
due 10/25/2023............................ 1,233,234 1,246,337
SiteOne Landscape Supply Holding LLC FRS
BTL-D
4.63% (1 ML+2.75%)
due 04/29/2022............................ 745,371 749,098
----------
1,995,435
----------
Retail-Major Department Stores -- 0.2%
Neiman Marcus Group, Ltd. LLC FRS
BTL
4.94% (1 ML+3.25%)
due 10/25/2020............................ 759,070 654,223
----------
64
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 2)
LOANS(9)(10)(11) (continued)
Retail-Misc./Diversified -- 0.3%
Leslie's Poolmart, Inc. FRS
BTL-B
5.28% (2 ML+3.50%)
due 08/16/2023........................... $ 874,637 $ 879,011
----------
Retail-Office Supplies -- 0.2%
Staples, Inc. FRS
BTL
5.79% (3 ML+4.00%)
due 09/12/2024........................... 773,063 765,654
----------
Retail-Pet Food & Supplies -- 0.1%
PetSmart, Inc. FRS
BTL-B
4.68% (1 ML+3.00%)
due 03/11/2022........................... 572,803 458,600
----------
Retail-Sporting Goods -- 0.4%
Bass Pro Group LLC FRS
BTL-B
6.88% (1 ML+5.00%)
due 09/25/2024........................... 1,308,425 1,295,014
----------
Rubber/Plastic Products -- 0.7%
Gates Global LLC FRS
BTL-B2
5.05% (3 ML+2.75%)
due 04/01/2024........................... 1,221,890 1,228,152
U.S. Farathane LLC FRS
BLT-B4
5.80% (3 ML+3.50%)
due 12/23/2021........................... 1,042,300 1,047,511
----------
2,275,663
----------
Schools -- 0.5%
Laureate Education, Inc. FRS
BTL-B
5.38% (1 ML+3.50%)
due 04/26/2024........................... 1,424,416 1,430,201
St. George's University Scholastic
Services LLC FRS
BTL
5.63% (1 ML+3.75%)
due 07/06/2022........................... 198,870 200,113
----------
1,630,314
----------
Security Services -- 0.2%
Garda World Security Corp. FRS
BTL-B
5.51% (3 ML+3.50%)
due 05/24/2024........................... 491,781 496,330
Garda World Security Corp. FRS
BTL-B
7.25% (USFRBPLR+2.50%)
due 05/24/2024........................... 1,242 1,253
Prime Security Services Borrower LLC FRS
BTL-B1
4.63% (1 ML+2.75%)
due 05/02/2022........................... 287,105 289,139
----------
786,722
----------
Principal Value
Security Description Amount (Note 2)
Soap & Cleaning Preparation -- 0.6%
Diamond BC BV FRS
BTL
4.99% (2 ML+3.00%)
due 09/06/2024.......................... $1,102,238 $1,100,171
Zep, Inc. FRS
BTL
5.77% (3 ML+4.00%)
due 08/12/2024.......................... 761,175 765,456
----------
1,865,627
----------
Telecom Services -- 1.0%
Digicel International Finance, Ltd. FRS
BTL-B
5.02% (3 ML+3.25%)
due 05/28/2024.......................... 462,675 460,555
Securus Technologies Holdings, Inc. FRS
1st Lien
6.38% (1 ML+4.50%)
due 11/01/2024.......................... 1,346,625 1,360,091
Securus Technologies Holdings, Inc. FRS
2nd Lien
10.13% (1 ML+8.25%)
due 11/01/2025.......................... 670,000 676,365
Telenet BIDCO NV FRS
BTL
coupon TBD
due 03/01/2026.......................... 50,000 50,215
West Corp. FRS
BTL-B
5.88% (1 ML+4.00%)
due 10/10/2024.......................... 689,254 693,945
----------
3,241,171
----------
Telecommunication Equipment -- 0.3%
Global Tel*Link Corp. FRS
1st Lien
6.30% (3 ML+4.00%)
due 05/23/2020.......................... 954,481 958,459
Sorenson Communications LLC FRS
BTL-B
8.06% (3 ML+5.75%)
due 04/30/2020.......................... 99,227 99,475
----------
1,057,934
----------
Telephone-Integrated -- 0.2%
CenturyLink, Inc. FRS
BTL-B
4.63% (1 ML+2.75%)
due 01/31/2025.......................... 773,063 760,661
----------
Television -- 0.6%
Mission Broadcasting, Inc. FRS
BTL-B2
4.16% (1 ML+2.50%)
due 01/17/2024.......................... 65,712 65,892
Sinclair Television Group, Inc. FRS
BTL-B1
coupon TBD
due 12/12/2024.......................... 1,225,000 1,230,206
65
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
Shares/
Principal Value
Security Description Amount (Note 2)
LOANS(9)(10)(11) (continued)
Television (continued)
Tribune Media Co. FRS
BTL-B
4.88% (1 ML+3.00%)
due 12/27/2020........................... $ 53,618 $ 53,685
Tribune Media Co. FRS
BTL-C
4.88% (1 ML+3.00%)
due 01/27/2024........................... 668,275 668,693
------------
2,018,476
------------
Theaters -- 0.6%
CDS U.S. Intermediate Holdings, Inc. FRS
BTL-B
6.05% (3 ML+3.75%)
due 07/08/2022........................... 1,233,437 1,233,180
Cineworld, Ltd. FRS
BTL-B
4.38% (1 ML+2.50%)
due 02/28/2025........................... 535,000 534,064
SMG Holding, Inc. FRS
First Lien
5.14% (1 ML+3.25%)
due 01/23/2025........................... 250,000 252,187
------------
2,019,431
------------
Transport-Services -- 0.2%
Transplace Holdings, Inc. FRS
BTL
5.96% (1 ML+4.25%)
due 10/07/2024........................... 508,725 512,540
------------
Veterinary Diagnostics -- 0.1%
NVA Holdings, Inc. FRS
BTL-B3
5.05% (3 ML+2.75%)
due 02/02/2025........................... 390,000 390,487
------------
Total Loans
(cost $168,581,924)...................... 168,050,463
------------
FOREIGN GOVERNMENT OBLIGATIONS -- 0.1%
Sovereign -- 0.1%
Republic of Argentina
Senior Notes
4.63% due 01/11/2023
(cost $415,616).......................... 415,000 400,064
------------
COMMON STOCKS -- 0.2%
Electric-Generation -- 0.0%
Vistra Energy Corp. CVR+(4)(12)........... 27,942 14,251
------------
Multimedia -- 0.0%
Haights Cross Communication, Inc.+(4)(6).. 19,388 0
------------
Oil Companies-Exploration & Production -- 0.0%
Bonanza Creek Energy, Inc.+............... 5 139
Fieldwood Energy LLC+(6)(12).............. 2,894 67,517
------------
67,656
------------
Shares/
Principal Value
Security Description Amount (Note 2)
Television -- 0.2%
ION Media Networks, Inc.+(4)(6)(12)......... 660 $ 532,074
------------
Total Common Stocks
(cost $234,829)............................ 613,981
------------
PREFERRED SECURITIES -- 0.3%
Diversified Banking Institutions -- 0.3%
GMAC Capital Trust I FRS
Series 2
7.62% (3 ML+5.79%)
(cost $1,064,237).......................... 41,500 1,078,170
------------
PREFERRED SECURITIES/CAPITAL SECURITIES -- 0.9%
Banks-Money Center -- 0.1%
BBVA Bancomer SA
5.13% due 01/18/2033*...................... $ 260,000 249,600
------------
Banks-Super Regional -- 0.6%
Huntington Bancshares, Inc.
Series E
5.70% due 04/15/2023(13)................... 1,005,000 1,010,025
KeyCorp.
5.00% due 09/15/2026(13)................... 1,030,000 1,014,550
------------
2,024,575
------------
Insurance-Multi-line -- 0.2%
Voya Financial, Inc.
5.65% due 05/15/2053....................... 540,000 550,800
------------
Total Preferred Securities/Capital Securities
(cost $2,857,361).......................... 2,824,975
------------
Total Long-Term Investment Securities
(cost $321,169,163)........................ 317,070,959
------------
SHORT-TERM INVESTMENT SECURITIES -- 2.0%
Registered Investment Companies -- 2.0%
State Street Institutional U.S. Government
Money Market Fund
Premier Class
1.58%(14)
(cost $6,485,504).......................... 6,485,504 6,485,504
------------
TOTAL INVESTMENTS
(cost $327,654,667)(15).................... 100.0% 323,556,463
Liabilities in excess of other assets......... (0.0) (132,021)
---------- ------------
NET ASSETS 100.0% $323,424,442
========== ============
--------
* 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 March 31, 2018, the aggregate value of
these securities was $90,301,327 representing 27.9% of net assets. Unless
otherwise indicated, these securities are not considered to be illiquid.
+ Non-income producing security
(1)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.
(2)Security in default of interest.
(3)Company has filed for bankruptcy protection.
66
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
(4)Illiquid security. At March 31, 2018, the aggregate value of these
securities was $558,834 representing 0.2% of net assets.
(5)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.
(6)Securities classified as Level 3 (see Note 2).
(7)Security in default of interest and principal at maturity.
(8)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.
(9)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.
(10)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.
(11)All loans in the Fund were purchased through assignment agreements unless
otherwise indicated.
(12)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 March 31, 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 $ -- $ 14,251 $ 0.51 0.01%
Fieldwood Energy,
Inc................ 03/31/2018 2,894 67,517 67,517 23.33 0.02
ION Media Networks,
Inc................ 12/21/2016 660 7 532,074 806.17 0.16
-------- ----
$613,842 0.19%
======== ====
(13) Perpetual maturity -- maturity date reflects the next call date.
(14) The rate shown is the 7-day yield as of March 31, 2018.
(15) 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 March 31, 2018
and unless noted otherwise, the dates shown are the original maturity dates.
Index Legend
1 ML -- 1 Month USD Libor
1 WL -- 1 Week USD Libor
2 ML -- 2 Month USD Libor
3 ML -- 3 Month USD Libor
USFRBPLR --US Federal Reserve Bank Prime Loan Rate
67
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2018 -- (continued)
The following is a summary of the
inputs used to value the Fund's net
assets as of March 31, 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................. $ -- $ 616,494 $ -- $ 616,494
U.S. Corporate Bonds & Notes:
Rubber/Plastic Products............... -- -- 0 0
Other Industries...................... -- 115,780,352 -- 115,780,352
Foreign Corporate Bonds & Notes:
Special Purpose Entity................ -- -- 0 0
Other Industries...................... -- 27,706,460 -- 27,706,460
Loans:
Building-Residential/Commercial....... -- -- 0 0
Oil & Gas Drilling.................... -- -- 0 0
Other Industries...................... -- 168,050,463 -- 168,050,463
Foreign Government Obligations.......... -- 400,064 -- 400,064
Common Stocks:
Electric-Generation................... -- 14,251 -- 14,251
Multimedia............................ -- -- 0 0
Television............................ -- -- 532,074 532,074
Other Industries...................... 139 -- 67,517 67,656
Preferred Securities.................... 1,078,170 -- -- 1,078,170
Preferred Securities/Capital Securities. -- 2,824,975 -- 2,824,975
Short-Term Investment Securities........ 6,485,504 -- -- 6,485,504
---------- ------------ -------- ------------
Total Investments at Value.............. $7,563,813 $315,393,059 $599,591 $323,556,463
========== ============ ======== ============
--------
* 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
68
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2018
Note 1. Organization
The SunAmerica Income Funds (the "Trust") is a diversified open-end
management investment company organized as a Massachusetts business trust.
The Trust currently consists of three different series (each, a "Fund" and
collectively, the "Funds"). Each Fund is a separate series of the Trust with
distinct investment objectives and/or strategies. Each Fund is managed by
SunAmerica Asset Management, LLC (the "Adviser" or "SunAmerica"), an
indirect wholly-owned subsidiary of American International Group, Inc.
("AIG"). An investor may invest in one or more of the following Funds: AIG
U.S. Government Securities Fund ("U.S. Government Securities Fund"), AIG
Strategic Bond Fund ("Strategic Bond Fund"), and AIG Flexible Credit Fund
("Flexible Credit Fund"). The Funds are considered to be separate entities
for financial and tax reporting purposes.
The investment goals and principal investment techniques for each of the
Funds are as follows:
U.S. Government Securities Fund seeks high current income consistent with
relative safety of capital by the active trading of U.S. Government
securities, without regard to the maturities of such securities. Under
normal market conditions, at least 80% of the Fund's net assets plus any
borrowing for investment purposes will be invested in such securities.
Strategic Bond Fund seeks a high level of total return by the active trading
of a broad range of bonds, including both investment grade and
non-investment grade U.S. and foreign bonds (which may include "junk
bonds"), U.S. and foreign government and agency obligations, and
mortgage-backed securities, without regard to the maturities of such
securities. Under normal market conditions, at least 80% of the Fund's net
assets plus any borrowing for investment purposes will be invested in bonds.
Flexible Credit Fund seeks a high level of total return by the active
trading in credit instruments. Under normal circumstances, at least 80% of
the Fund's net assets, plus any borrowings for investment purposes, will be
invested in credit instruments and derivative instruments and
exchange-traded funds ("ETFs") that are linked to, or provide investment
exposure to, credit instruments. The Fund considers a credit instrument to
be any debt instrument or instrument with debt-like characteristics,
including but not limited to, corporate and sovereign bonds, secured
floating rate loans and other institutionally traded secured floating rate
debt obligations ("Loans"), and securitized instruments, which are
securities backed by pools of assets such as mortgages, loans, or other
receivables. The credit instruments in which the Fund intends to primarily
invest are U.S. and non-U.S. below investment grade, high yield bonds
(commonly referred to as "junk bonds") and Loans.
Each Fund offers multiple classes of shares. The classes within each Fund
are presented in the Statements of Assets and Liabilities. The cost
structure for each class is as follows:
Class A shares are offered at net asset value per share plus an initial
sales charge. Additionally, purchases of Class A shares in amounts of
$1,000,000 or more will be purchased at net asset value but will be subject
to a contingent deferred sales charge on redemptions made within two years
of purchase.
Class B shares are offered without an initial sales charge, although a
declining contingent deferred sales charge may be imposed on redemptions
made within six years of purchase. Class B shares convert automatically to
Class A shares on the first business day of the month following the eighth
anniversary of the issuance of such Class B shares and at such time will be
subject to the lower distribution fee applicable to Class A shares. The U.S.
Government Fund and the Flexible Credit Fund stopped offering Class B shares
for sale as of the close of business December 2, 2014. As of the close of
business January 27, 2015, Class B shares of each of the U.S. Government
Securities Fund and the Flexible Credit Fund converted to Class A shares of
each respective Fund.
Class C shares are offered at net asset value per share without an initial
sales charge and may be subject to a contingent deferred sales charge on
redemptions made within 12 months of purchase. Effective March 1, 2018,
Class C shares convert automatically to Class A shares on the 19th day (or
next business day following the 19th) of the month following the tenth
anniversary of the issuance of Class C shares 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.
69
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2018 -- (continued)
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions except as may otherwise be provided in the Trust's
registration statement. Class A, Class B and Class C shares each makes
distribution and account maintenance and service fee payments under the
distribution plan pursuant to Rule 12b-1 under the Investment Company Act of
1940, as amended (the "1940 Act"), 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.
70
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2018 -- (continued)
The summary of each Fund's asset and liabilities classified in the fair
value hierarchy as of March 31, 2018 is reported on a schedule following
each Fund's Portfolio of Investments.
Stocks are generally valued based upon closing sales prices reported on
recognized securities exchanges on which the securities are principally
traded and are generally categorized as Level 1. Stocks listed on the NASDAQ
are valued using the NASDAQ Official Closing Price ("NOCP"). Generally, the
NOCP will be the last sale price unless the reported trade for the stock is
outside the range of the bid/ask price. In such cases, the NOCP will be
normalized to the nearer of the bid or ask price. For listed securities
having no sales reported and for unlisted securities, such securities will
be valued based upon the last reported bid price.
As of the close of regular trading on the New York Stock Exchange ("NYSE"),
securities traded primarily on security exchanges outside the United States
are valued at the last sale price on such exchanges on the day of valuation,
or if there is no sale on the day of valuation, at the last-reported bid
price. If a security's price is available from more than one exchange, the
Funds use the exchange that is the primary market for the security. Such
securities are generally categorized as Level 1. However, depending on the
foreign market, closing prices may be up to 15 hours old when they are used
to price a Fund's shares, and a Fund may determine that certain closing
prices do not reflect the fair value of the security. This determination
will be based on review of a number of factors, including developments in
foreign markets, the performance of U.S. securities markets, and the
performance of instruments trading in U.S. markets that represent foreign
securities and baskets of foreign securities. If a Fund determines that
closing prices do not reflect the fair value of the securities, the Fund
will adjust the previous closing prices in accordance with pricing
procedures approved by the Board to reflect what it believes to be the fair
value of the securities as of the close of regular trading on the NYSE. The
Funds may also fair value securities in other situations, for example, when
a particular foreign market is closed but a Fund is open. For foreign equity
securities and foreign equity futures contracts, the Funds use an outside
pricing service to provide it with closing market prices and information
used for adjusting those prices and when so adjusted, such securities and
futures are generally categorized as Level 2.
Bonds, debentures and other debt securities are valued at evaluated bid
prices obtained for the day of valuation from a Board-approved pricing
service, and are generally categorized as Level 2. The pricing service may
use valuation models or matrix pricing which considers information with
respect to comparable bond and note transactions, quotations from bond
dealers, or by reference to other securities that are considered comparable
in such characteristics as rating, interest rate, and maturity date, option
adjusted spread models, prepayments projections, interest rate spreads, and
yield curves to determine current value. If a price is unavailable from a
Board-approved pricing service, the securities may be priced at the mean of
two independent quotes obtained from brokers.
Senior floating rate loans ("Loans") are valued at the average of available
bids in the market for such Loans, as provided by a Board-approved loan
pricing service, and are generally categorized as Level 2.
Investments in registered investment companies that do not trade on an
exchange are valued at the end of day net asset value per share. Investments
in registered investment companies that trade on an exchange are valued at
the last sales price or official closing price as of the close of the
customary trading session on the exchange where the security is principally
traded. Investments in registered investment companies are generally
categorized as Level 1.
Forward foreign currency contracts ("forward contracts") are valued at the
4:00 p.m. Eastern Time forward rate and are generally categorized as Level 2.
Other securities are valued on the basis of last sale or bid price (if a
last sale price is not available) which is, in the opinion of the Adviser,
the broadest and most representative market, that may be either a securities
exchange or over-the-counter market and are generally categorized as Level 1
or Level 2.
The Board is responsible for the share valuation process and has adopted
policies and procedures (the "PRC Procedures") for valuing the securities
and other assets held by the Funds, including procedures for the fair
valuation of securities and other assets for which market quotations are not
readily available or are unreliable. The PRC Procedures provide for the
establishment of a pricing review committee, which is responsible for, among
other things, making certain determinations in connection with the
71
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2018 -- (continued)
Trust's fair valuation procedures. Securities for which market quotations
are not readily available or the values of which may be significantly
impacted by the occurrence of developments or significant events are
generally categorized as Level 3. There is no single standard for making
fair value determinations, which may result in prices that vary from those
of other funds.
Derivative Instruments:
Forward Foreign Currency Contracts: During the period, the Strategic Bond
Fund used forward contracts to attempt to protect securities and related
receivables and payables against changes in future foreign exchange rates.
A forward contract is an agreement between two parties to buy or sell
currency at a set price on a future date. The market value of the contract
will fluctuate with changes in currency exchange rates. The contract is
marked-to-market daily using the forward rate and the cumulative change in
market value is recorded by a Fund as unrealized appreciation or
depreciation. On the settlement date, a Fund records either realized gains
or losses equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
Risks to the Funds of entering into forward contracts include counterparty
risk, market risk and illiquidity risk. Counterparty risk arises upon
entering into these contracts from the potential inability of counterparties
to meet the terms of their contracts. If the counterparty defaults, a Fund's
loss will generally consist of the net amount of contractual payments that
the Fund has not yet received though the Fund's maximum exposure due to
counterparty risk could extend to the notional amount of the contract.
Market risk is the risk that the value of the forward contract will
depreciate due to unfavorable changes in the exchange rates. These contracts
may involve market risk in excess of the unrealized appreciation or
depreciation reported on the Statements of Assets and Liabilities.
Illiquidity risk arises because the secondary market for forwards may have
less liquidity relative to markets for other securities. Currency
transactions are also subject to risks different from those of other
portfolio transactions. Because currency control is of great importance to
the issuing governments and influences economic planning and policy,
purchases and sales of currency and related instruments can be adversely
affected by government exchange controls, limitations or restrictions on
repatriation of currency, and manipulations or exchange restrictions imposed
by governments.
Forward foreign currency contracts outstanding at the end of the period, if
any, are reported on a schedule following each Fund's Portfolio of
Investments.
Master Agreements: Certain Funds that hold derivative instruments and other
financial instruments may be a party to ISDA (International Swaps and
Derivatives Association, Inc.) Master Agreements or similar agreements
("Master Agreements") with certain counterparties that govern certain
instruments. Master Agreements may contain provisions regarding, among other
things, the parties' general obligations, representations, agreements,
collateral requirements, events of default and early termination. Collateral
can be in the form of cash or securities as agreed to by the Fund and
applicable counterparty. Collateral requirements are generally determined
based on a Fund's net position with each counterparty. Master Agreements may
also include certain provisions that require a Fund to post additional
collateral upon the occurrence of certain events, such as when a Fund's net
assets fall below a specified level. In addition, Master Agreements
typically specify certain standard termination events, such as failure of a
party to pay or deliver, credit support defaults and other events of
default. Termination events applicable to a Fund may also occur upon a
decline in the Fund's net assets below a specified level over a certain
period of time. Additional termination events applicable to counterparties
may occur upon a decline in a counterparty's long-term and short-term credit
ratings below a specified level, or upon a decline in the ratings of a
counterparty's credit support provider. Upon the occurrence of a termination
event, the other party may elect to terminate early and cause settlement of
all instruments outstanding pursuant to a particular Master Agreement,
including the payment of any losses and costs resulting from such early
termination, as reasonably determined by the terminating party. Any decision
by one or more of a Fund's counterparties to elect early termination could
cause a Fund to accelerate the payment of liabilities, which settlement
amounts could be in excess of the amount of assets that are already posted
as collateral. Typically, the Master Agreement will permit a single net
payment in the event of default. Note, however, that bankruptcy or
insolvency laws of a particular jurisdiction may impose restrictions on or
prohibitions against the right of offset in bankruptcy, insolvency or other
events. As a result, the early termination with respect to derivative
instruments subject to Master Agreements that are in a net liability
position could be material to a Fund's financial statements. The Funds do
not offset derivative assets and derivative liabilities that are subject to
netting arrangements in the Statements of Asset and Liabilities.
72
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2018 -- (continued)
The following tables represent the value of derivatives held as of March 31,
2018, by their primary underlying risk exposure and respective location on
the Statements of Assets and Liabilities and the effect of derivatives on
the Statements of Operations for the year ended March 31, 2018. 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 March 31, 2018, please refer to 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. $45,463 $12,539
======= =======
--------
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. $(3,300,757) $85,467
=========== =======
--------
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 year ended March 31, 2018:
Average Amount
Outstanding
During the Year
---------------
Forward
Foreign
Currency
Fund Contracts(1)
---- ---------------
Strategic Bond. $27,221,534
===========
--------
(1)Amounts represent notional amounts in US dollars.
There were no derivative assets and liabilities subject to Master Agreements
outstanding at March 31, 2018. The repurchase agreements held by the Funds
as of March 31, 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.
73
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2018 -- (continued)
Mortgage-Backed Dollar Rolls: During the year ended March 31, 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 year ended March 31, 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.
74
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2018 -- (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
2014 -- 2016 or expected to be taken in each Fund's 2017 tax return. The
Funds are not aware of any tax provisions for which it is
75
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2018 -- (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 2014.
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 Pronouncement: In October 2016, the SEC adopted amendments to
rules under the 1940 Act ("final rules") intended to modernize the reporting
and disclosure of information by registered investment companies. The final
rules amend Regulation S-X and require funds to provide standardized,
enhanced derivative disclosure in fund financial statements in a format
designed for individual investors. The amendments to Regulation S-X also
update the disclosures for other investments and investments in and advances
to affiliates and amend the rules regarding the general form and content of
fund financial statements. The compliance date for the amendments to
Regulation S-X was August 1, 2017. All required changes have been made in
accordance with Regulation S-X.
Note 3. Investment Advisory and Management Agreement, Distribution Agreement
and Service Agreement
The Trust, on behalf of each Fund, has an Investment Advisory and Management
Agreement (the "Agreement") with SunAmerica. Under the Agreement, SunAmerica
provides continuous supervision of a Fund's portfolio and administers its
corporate affairs, subject to general review by the Trustees. In connection
therewith, SunAmerica furnishes the Funds with office facilities, maintains
certain of the Funds' books and records, and pays the salaries and expenses
of all personnel, including officers of the Funds, who are employees of
SunAmerica and its affiliates.
The Funds pay SunAmerica a monthly investment advisory and management fee
calculated daily at the following annual percentages of each Fund's average
daily net assets:
Management
Fund Assets Fees
---- ---------------------------- ----------
U.S. Government Securities........................ $0 - $200 million 0.650%
(greater than) $200 million 0.620
(greater than) $400 million 0.550
Strategic Bond.................................... $0 - $350 million 0.650
(greater than) $350 million 0.600
Flexible Credit(1)................................ $0 - $200 million 0.750
(greater than) $200 million 0.720
(greater than) $400 million 0.550
--------
(1)Effective December 7, 2017, 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 period ended March 31, 2018, the amount of the investment advisory
fees waived for Flexible Credit Fund was $406,076 this amount is reflected
in the Statement of Operations.
76
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2018 -- (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.................................... $0 - $200 million 0.350%
(greater than) $200 million 0.250
(greater than) $500 million 0.200
Flexible Credit(1)................................ $0 - $200 million 0.300
(greater than) $200 million 0.250
(greater than) $400 million 0.150
--------
(1)Effective December 7, 2017, 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 year ended March 31, 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......... $180,779
Class Specific
Fund Expenses
---- --------------
U.S. Government Securities Class A. $362,838
U.S. Government Securities Class C. 54,695
77
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2018 -- (continued)
At March 31, 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
---- -------------- --------------
U.S. Government Securities......... $190,664 $180,779
Class Specific Expenses
Reimbursed
-----------------------------
Fund March 31, 2019 March 31, 2020
---- -------------- --------------
U.S. Government Securities Class A. $402,860 $362,838
U.S. Government Securities Class C. 81,730 54,695
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 year ended March 31,
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 year
ended March 31, 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 year
ended March 31, 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. $ 27,090 $ 3,526 $ 18,870 $ 145 $ -- $ 519
Strategic Bond............. 311,110 104,999 173,064 9,108 33,276 2,363
Flexible Credit............ 271,490 56,372 174,959 8,223 -- 10,910
78
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2018 -- (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 year ended March 31, 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 March 31, 2018
---- -------- --------------
U.S. Government Securities Class A. $310,381 $24,957
U.S. Government Securities Class C. 34,295 2,055
Strategic Bond Class A............. 380,854 33,534
Strategic Bond Class B............. 60,277 4,162
Strategic Bond Class C............. 243,493 17,479
Strategic Bond Class W............. 124,458 13,039
Flexible Credit Class A............ 317,689 24,643
Flexible Credit Class C............ 158,674 12,244
Flexible Credit Class W............ 326,182 23,794
At March 31, 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. 9.47% 18.38%
Strategic Bond............. 2.32 1.66
Flexible Credit............ 3.01 4.04
Note 4. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales and maturities of long-term
investments during the year ended March 31, 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. $ -- $ -- $44,553,867 $ 66,921,414
Strategic Bond............. 460,418,574 410,269,940 87,246,243 119,639,651
Flexible Credit............ 230,306,382 282,729,977 -- --
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.
79
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2018 -- (continued)
Tax Distributions
For the year ended March 31, 2017
---------------------------------
Ordinary Long-Term
Fund Income Capital Gains
---- ----------- -------------
U.S. Government Securities. $ 3,089,605 $ --
Strategic Bond............. 11,239,760 --
Flexible Credit............ 13,948,606 --
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.
The Funds indicated below had expired or utilized capital loss carryforwards
in the year ended March 31, 2018:
Capital Loss Capital Loss
Carryforward Carryforward
Fund Expired Utilized
---- ------------ ------------
U.S. Government Securities. $ -- $ --
Strategic Bond............. 49,688,392 4,007,027
Flexible Credit............ 41,322,811 1,530,724
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
For the period ended March 31, 2018 the reclassifications arising from
book/tax differences resulted in increases (decreases) that were primarily
due to net paydown adjustments, amortization of discount/premium, treatment
of litigation payments, expiring capital loss carryforwards and treatment of
foreign currency to the components of net assets as follows:
Accumulated Accumulated
Undistributed Net Undistributed Net
Investment Income Realized Gain
Fund (Loss) (Loss) Capital Paid-in
---- ----------------- ----------------- ---------------
U.S. Government Securities. $1,214,142 $(1,214,142) $ --
Strategic Bond............. 46,225 49,642,167 (49,688,392)
Flexible Credit............ 374,142 40,948,669 (41,322,811)
80
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2018 -- (continued)
At March 31, 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....... $4,488,923 $ (3,028,337) $ 1,460,586 $144,113,867
Strategic Bond................... 4,548,650 (12,185,387) (7,636,737) 388,547,348
Flexible Credit Bond............. 4,067,455 (8,790,986) (4,723,531) 328,279,994
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 For the
year ended year ended
March 31, 2018 March 31, 2017
------------------------ ------------------------
Shares Amount Shares Amount
---------- ------------ ---------- ------------
Shares
sold(1).... 2,316,337 $ 20,988,914 4,055,893 $ 39,020,448
Reinvested
dividends.. 244,835 2,226,713 266,885 2,514,822
Shares
redeemed... (3,295,222) (29,980,480) (4,412,102) (41,347,823)
---------- ------------ ---------- ------------
Net
increase
(decrease). (734,050) $ (6,764,853) (89,324) $ 187,447
========== ============ ========== ============
U.S. Government Securities
--------------------------------------------------
Class C
--------------------------------------------------
For the For the
year ended year ended
March 31, 2018 March 31, 2017
------------------------ ------------------------
Shares Amount Shares Amount
---------- ------------ ---------- ------------
Shares
sold....... 166,535 $ 1,513,933 496,877 $ 4,737,214
Reinvested
dividends.. 16,706 152,011 25,679 242,231
Shares
redeemed(1) (1,472,671) (13,299,249) (1,682,466) (15,715,340)
---------- ------------ ---------- ------------
Net
increase
(decrease). (1,289,430) $(11,633,305) (1,159,910) $(10,735,895)
========== ============ ========== ============
--------
(1)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 For the For the
year ended year ended year ended year ended
March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017
------------------------- ------------------------- ------------------------ -----------------------
Shares Amount Shares Amount Shares Amount Shares Amount
----------- ------------ ----------- ------------ ---------- ------------ ---------- -----------
Shares
sold(1)(2)(3). 19,972,035 $ 68,107,643 6,511,015 $ 22,000,676 869,650 $ 2,985,386 1,716,827 $ 5,807,472
Reinvested
dividends..... 1,317,545 4,531,780 1,469,857 4,968,423 159,576 548,783 193,765 654,711
Shares
redeemed(1)(2) (11,040,002) (37,839,522) (13,504,442) (45,597,698) (3,310,957) (11,372,010) (2,625,938) (8,845,950)
----------- ------------ ----------- ------------ ---------- ------------ ---------- -----------
Net
increase
(decrease).... 10,249,578 $ 34,799,901 (5,523,570) $(18,628,599) (2,281,731) $ (7,837,841) (715,346) $(2,383,767)
=========== ============ =========== ============ ========== ============ ========== ===========
81
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2018 -- (continued)
Strategic Bond
--------------------------------------------------------------------------------------------------------
Class C Class W
---------------------------------------------------- --------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017
------------------------- ------------------------- ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------
Shares
sold....... 3,141,993 $ 10,844,054 3,384,955 $ 11,494,689 14,598,225 $ 50,166,169 7,913,680 $ 26,786,702
Reinvested
dividends.. 598,701 2,067,953 769,650 2,610,522 317,651 1,091,699 210,770 711,987
Shares
redeemed(3) (20,387,026) (69,770,025) (12,514,751) (42,349,618) (5,987,746) (20,513,498) (5,405,846) (18,224,239)
----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------
Net
increase
(decrease). (16,646,332) $(56,858,018) (8,360,146) $(28,244,407) 8,928,130 $ 30,744,370 2,718,604 $ 9,274,450
=========== ============ =========== ============ ========== ============ ========== ============
--------
(1)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.
(2)For the year ended March 31, 2017, includes automatic conversion of 157,947
shares of Class B shares in the amount of $532,049 to 157,920 shares of
Class A shares in the amount of $532,049.
(3)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 For the
year ended year ended
March 31, 2018 March 31, 2017
------------------------- -------------------------
Shares Amount Shares Amount
----------- ------------ ----------- ------------
Shares
sold(1).... 15,263,536 $ 52,432,452 22,917,210 $ 77,775,794
Reinvested
dividends.. 1,805,509 6,214,632 1,592,354 5,426,357
Shares
redeemed... (20,023,513) (68,775,062) (20,582,379) (69,973,319)
----------- ------------ ----------- ------------
Net
increase
(decrease). (2,954,468) $(10,127,978) 3,927,185 $ 13,228,832
=========== ============ =========== ============
Flexible Credit
-----------------------------------------------------------------------------------------------------------
Class C Class W
---------------------------------------------------- -----------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017
------------------------- ------------------------- -------------------------- -------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
----------- ------------ ----------- ------------ ----------- ------------- ----------- ------------
Shares
sold....... 4,346,092 $ 15,053,291 7,200,951 $ 24,617,203 21,898,961 $ 75,416,969 32,285,891 $110,087,850
Reinvested
dividends.. 619,069 2,143,889 543,420 1,863,435 1,071,044 3,689,146 855,066 2,917,568
Shares
redeemed(1) (9,187,515) (31,714,471) (4,970,934) (16,999,023) (30,165,932) (103,923,875) (14,858,846) (50,678,526)
----------- ------------ ----------- ------------ ----------- ------------- ----------- ------------
Net
increase
(decrease). (4,222,354) $(14,517,291) 2,773,437 $ 9,481,615 (7,195,927) $ (24,817,760) 18,282,111 $ 62,326,892
=========== ============ =========== ============ =========== ============= =========== ============
--------
(1)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.
82
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2018 -- (continued)
For the year ended March 31, 2018, the following Funds had borrowings:
Days Interest Debt Average
Fund Outstanding Charges Utilized Interest
---- ----------- -------- ---------- --------
Strategic Bond.. 11 $ 1,301 $1,497,857 2.81%
Flexible Credit. 93 57,057 8,031,849 2.67
At March 31, 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 year
ended March 31, 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 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.
83
SunAmerica Income Funds
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of SunAmerica Income Funds and Shareholders of each of
the funds listed in the table below
Opinions on the Financial Statements
We have audited the financial statements and financial highlights of each of
the funds listed in the table below (three funds constituting SunAmerica Income
Funds, hereafter collectively referred to as the "Funds") as of the date listed
in the table below and for the periods listed in the table below (collectively
referred to as the "financial statements"). In our opinion, the financial
statements present fairly, in all material respects, the financial position of
each of the Funds as of the date listed in the table below, the results of each
of their operations, the changes in each of their net assets and each of the
financial highlights for each of the periods listed in the table below in
conformity with accounting principles generally accepted in the United States
of America.
AIG Flexible Credit Fund (1)
AIG Strategic Bond Fund (1)
AIG U.S. Government Securities Fund (2)
--------
(1)The statement of assets and liabilities, including the portfolio of
investments, as of March 31, 2018, the related statement of operations for
the year then ended, the statements of changes in net assets for each of the
two years in the period ended March 31, 2018, including the related notes,
and the financial highlights for each of the periods indicated therein
(2)The statement of assets and liabilities, including the portfolio of
investments, as of March 31, 2018, the related statement of operations for
the year then ended, the statements of changes in net assets for each of the
two years in the period ended March 31, 2018, including the related notes,
and the financial highlights for each of the five years in the period ended
March 31, 2018
Basis for Opinions
These financial statements are the responsibility of the Funds' management. Our
responsibility is to express an opinion on the Funds' financial statements
based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) ("PCAOB") and are required
to be independent with respect to the Funds in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. Our procedures
included confirmation of securities owned as of March 31, 2018 by
correspondence with the custodian and brokers; when replies were not received
from brokers, we performed other auditing procedures. We believe that our
audits provide a reasonable basis for our opinions.
/s/ PricewaterhouseCoopers LLP
Houston, Texas
May 25, 2018
We have served as the auditor of one or more investment companies in the AIG
Funds family of funds since 1984.
84
SunAmerica Income Funds
TRUSTEE AND OFFICER INFORMATION -- March 31, 2018 -- (unaudited)
The following table contains basic information regarding the Trustees and
Officers who oversee operations of the Funds and other investment companies
within the Fund Complex.
Number of
Term of Funds in
Position(s) Office and Fund Complex
Held With Length of Principal Occupation(s) Overseen by Other Trusteeship(s)
Name and Age* the Fund Time Served(4) During Past 5 years Trustee(1) Held by Trustee(2)
-------------------- ----------- -------------- ------------------------------ ------------ -----------------------------
Disinterested
Trustees
Dr. Judith L. Craven Trustee 2001 to Retired. 77 Director, Sysco Corporation
Age: 72 present (1996 to present); Director,
Luby's Inc. (1998 to
present).
William F. Devin Trustee 2001 to Retired. 77 None
Age: 79 present
Richard W. Grant Trustee; 2011 to Retired. Prior to that, 28 None
Age: 72 Chairman present Attorney and Partner at
of the Morgan Lewis and Bockius
Board (1989 to 2011).
Stephen J. Gutman Trustee 1985 to Senior Vice President and 28 None
Age: 74 present Associate Broker, The
Corcoran Group (real estate)
(2002 to present); President,
SJG Marketing, Inc. (2009
to present).
Eileen A. Kamerick Director 2018 to National Association of 28 Hochschild Mining plc
Age: 59 present Corporate Directors Board (2016 to Present); Director
Leadership Fellow and of Associated Banc-Corp
financial expert; Adjunct (2007 to Present); Legg
Professor of Law, Mason Closed End Funds
University of Chicago, (2013 to Present); Westell
Washington University in Technologies, Inc. (2003 to
St. Louis and University of 2016)
Iowa law schools (2007 to
Present); formerly, Senior
Advisor to the Chief
Executive Officer and
Executive Vice President
and Chief Financial Officer
of ConnectWise, Inc. (2015
to 2016); Chief Financial
Officer, Press Ganey
Associates (2012 to 2014).
85
SunAmerica Income Funds
TRUSTEE AND OFFICER INFORMATION -- March 31, 2018 -- (unaudited)
(continued)
Number of
Term of Funds in
Position(s) Office and Fund Complex
Held With Length of Principal Occupation(s) Overseen by Other Trusteeship(s)
Name and Age* the Fund Time Served(4) During Past 5 years Trustee(1) Held by Trustee(2)
------------------- ----------- -------------- ----------------------------- ------------ --------------------
Interested Trustee
Peter A. Harbeck(3) Trustee 1995 to President, CEO and 152 None
Age: 64 present Director, SunAmerica,
(1995 to present); Director,
AIG Capital Services, Inc.
("ACS") (1993 to present).
Officers
John T. Genoy President 2007 to Chief Financial Officer, N/A N/A
Age: 49 present SunAmerica (2002 to
present); Senior Vice
President, SunAmerica
(2003 to present); Chief
Operating Officer,
SunAmerica (2006 to
present).
Gregory R. Kingston Treasurer 2014 to Vice President, SunAmerica N/A N/A
Age: 52 present (2001 to present); Head of
Mutual Fund
Administration,
SunAmerica (2014 to
present).
Donna McManus Vice 2014 to Vice President, SunAmerica N/A N/A
Age: 57 President present (2014 to present); Managing
and Director, BNY Mellon
Assistant (2009 to 2014).
Treasurer
Shawn Parry Vice 2014 to Vice President, SAAMCo N/A N/A
Age: 45 President present (2014 to present); Assistant
and Vice President, SAAMCo
Assistant (2005 to 2014).
Treasurer
Gregory N. Bressler Secretary 2005 to Senior Vice President and N/A N/A
Age: 51 present General Counsel,
SunAmerica (2005 to
present).
James Nichols Vice 2006 to Director, President and N/A N/A
Age: 51 President present CEO, ACS (2006 to
present); Senior Vice
President, SunAmerica
(2002 to present).
86
SunAmerica Income Funds
TRUSTEE AND OFFICER INFORMATION -- March 31, 2018 -- (unaudited)
(continued)
Number of
Term of Funds in
Position(s) Office and Fund Complex
Held With the Length of Principal Occupation(s) Overseen by Other Trusteeship(s)
Name and Age* Fund Time Served(4) During Past 5 years Trustee(1) Held by Trustee(2)
-------------------- ------------- -------------- ----------------------------- ------------ --------------------
Christopher Joe Chief 2017 to Chief Compliance Officer, N/A N/A
Age: 48 Compliance present AIG Funds, Seasons Series
Officer Trust, SunAmerica Series
Trust, VALIC Company I
and VALIC Company II
(2017 to present); Chief
Compliance Officer,
VALIC Retirement Services
Company (2017 to present);
Chief Compliance Officer,
Invesco PowerShares (2012
to 2017); Chief Compliance
Officer, Invesco Investment
Advisers, LLC (2010 to
2013); U.S. Compliance
Director, Invesco Ltd. (2006
to 2014); Deputy Chief
Compliance Officer,
Invesco Advisers, LLC
(2014 to 2015).
Kathleen D. Fuentes Chief Legal 2013 to Vice President and Deputy N/A N/A
Age: 49 Officer and present General Counsel,
Assistant SunAmerica (2006 to
Secretary present).
Matthew J. Hackethal Anti- 2006 to Acting Chief Compliance N/A N/A
Age: 46 Money present Officer (2016 to 2017);
Laundering Chief Compliance Officer,
Compliance SunAmerica (2006 to
Officer present).
--------
* The business address for each Trustee and Officer is Harborside 5, 185
Hudson Street, Suite 3300, Jersey City, NJ 07311.
(1)The term "Fund Complex" means two or more registered investment companies
that hold themselves out to investors as related companies for purposes of
investment services or have a common investment adviser or an investment
adviser that is an affiliated person of the investment adviser. The "Fund
Complex" includes the Trust (3 funds), SunAmerica Equity Funds (2 funds),
SunAmerica Series, Inc. (6 funds), SunAmerica Money Market Funds, Inc. (1
fund); Anchor Series Trust (8 portfolios), SunAmerica Senior Floating Rate
Fund, Inc. (1 fund), SunAmerica Series Trust (55 portfolios), VALIC
Company I (34 funds), VALIC Company II (15 funds), Seasons Series Trust
(20 portfolios) and SunAmerica Specialty Series (7 funds).
(2)Trusteeships of companies required to report to the Commission under the
Securities Exchange Act of 1934 (i.e. "public companies") or other
investment companies regulated under the 1940 Act.
(3)Mr. Harbeck is an "interested person" of the Funds, as defined within the
1940 Act, because he is an officer and a director of the Adviser and a
director of the principal underwriter of the Trust.
(4)Trustees serve until their successors are duly elected and qualified. Each
officer will hold office for an indefinite term, until the date he or she
resigns or retires or until his/her successor is duly elected and qualifies.
Additional information concerning the Trustees and Officers is contained in the
Statement of Additional Information and is available without charge by calling
(800) 858-8850.
87
SunAmerica Income Funds
SHAREHOLDER TAX INFORMATION -- March 31, 2018 -- (unaudited)
Certain tax information regarding the Fund is required to be provided to
shareholders based upon each Fund's income and distributions for the taxable
year ended March 31, 2018. The information and distributions reported herein
may differ from the information and distributions taxable to the shareholders
for the calendar year ending December 31, 2018. The information necessary to
complete your income tax returns will be included with your Form 1099-DIV which
will be sent to shareholders in early 2019.
For the year ended March 31, 2018, the Funds paid the following long-term
capital gains dividends along with percentage of ordinary income dividends that
qualified for the dividends received deduction for corporations:
Net Qualifying % for the
Long-Term Dividends
Capital Gains Received Deduction
------------- --------------------
U.S. Government Securities Fund Class A. $-- --%
U.S. Government Securities Fund Class C. -- --
Strategic Bond Fund Class A............. -- 0.10
Strategic Bond Fund Class B............. -- 0.10
Strategic Bond Fund Class C............. -- 0.10
Strategic Bond Fund Class W............. -- 0.10
Flexible Credit Fund Class A............ -- 0.12
Flexible Credit Fund Class C............ -- 0.12
Flexible Credit Fund Class W............ -- 0.12
For the year ended March 31, 2018, certain dividends paid by the Strategic Bond
Fund and Flexible Credit Fund may be subject to a maximum tax rate of 15%, as
provided by the Jobs and Growth Tax Relief Reconciliation Act of 2003. Of the
distributions paid during the fiscal year, the following represents the maximum
amount that may be considered qualified dividend income:
Amount
-------
Strategic Bond Fund.. $19,466
Flexible Credit Fund. 82,189
88
SunAmerica Income Funds
COMPARISONS: PORTFOLIOS vs. INDICES -- (unaudited)
As required by the Securities and Exchange Commission, the graphs on the
following pages compare the performance of a $10,000 investment in the
SunAmerica Income Funds' portfolios to a similar investment in an index. Please
note that "inception," as used herein, reflects the date on which a specific
class of shares commenced operations. It is important to note that the
SunAmerica Income Funds are professionally managed mutual funds, while the
indices are not available for investment and are unmanaged. The comparison is
shown for illustrative purposes only. The graphs present the performance of the
largest class of that particular Fund. The performance of the other classes
will vary based upon the difference in sales charges and fees assessed to
shareholders of that class.
89
SunAmerica Income Funds
COMPARISONS: PORTFOLIOS vs. INDICES -- (unaudited) (continued)
AIG U.S. Government Securities Fund
The AIG U.S. Government Securities Fund Class A shares returned -0.46% (before
maximum sales charge) for the 12-month period ended March 31, 2018. The Fund
trailed its benchmark, the ICE BofAML U.S. Treasury Index,/*/ which returned
0.51% during the same period.
The U.S. Treasury market struggled during the annual period. The Federal
Reserve (the "Fed") raised the targeted federal funds rate 25 basis points/**/
three times during the annual period. The rate increases caused short-term U.S.
Treasury rates to rise throughout. They also led to a flattening of the yield
curve,+ or spectrum of maturities, especially toward the end of the annual
period, with short-term U.S. Treasury yields increasing more than most
longer-term U.S. Treasury yields.
Amid this backdrop, the Fund maintained a significant exposure to agency
mortgage-backed securities, which are not components of the ICE BofAML U.S.
Treasury Index and which outperformed U.S. Treasuries during the annual period.
The Fund had positions in FNMAs, FHLBs, FHLMCs and Federal Farm Credit Bonds.
The Fund especially had an emphasis on GNMAs, which rallied during the annual
period and provided more income versus other securities, boosting the Fund's
performance. The Fund's positions in U.S. Treasuries also contributed
positively to the Fund's performance during the annual period, particularly
positions in securities with maturities of 10 years or more, where yields rose
less than those on shorter-term maturities. The market value of longer maturity
securities, then, rose, buoying their value and return.
Conversely, the Fund's exposure to FHLMC, or Freddie Mac, mortgage-backed
securities, detracted from its relative performance. During the annual period,
the market value of the position diminished causing the securities to perform
poorly. Persistently low volatility and the Fed selling its mortgage-backed
securities positions as part of its balance sheet normalization++ caused the
securities' spreads to widen, creating a lack of market support for Freddie
Macs.
The Fund's duration and yield curve positioning generated mixed results.
Duration positioning contributed positively overall, as the Fund held a shorter
duration position than the ICE BofAML U.S. Treasury Index throughout the annual
period as we sought to be prudently positioned amid the rising interest rate
environment and the flattening yield curve. We shortened the Fund's duration
during the annual period by purchasing shorter-maturing securities while the
U.S. economy grew and the market waited for inflation to meet the Fed's 2%
target. On the other hand, yield curve positioning generally detracted.
Investments in U.S. Treasuries, the largest allocation in the Fund, were
heavily focused in the three- to five-year maturity range. This positioning on
the yield curve hurt, as short-term securities prices fell throughout the
second half of the annual period. Long-term U.S. Treasury prices declined as
well, but not at the same rate as shorter maturities. Thus, as longer-term U.S.
Treasuries performed better than their shorter-term counterparts, the Fund's
underweighted exposure to this yield curve segment detracted from its relative
performance.
At the end of the annual period, the Fund had approximately 49% of its total
net assets invested in U.S. Treasuries, 37% in GNMAs and other mortgage-related
securities and 14% in government-related agency securities. As of March 31,
2018, the Fund had a shorter duration than that of the ICE BofAML U.S. Treasury
Index.
--------
Past performance is no guarantee of future results.
U.S. Government guarantee applies only to the underlying securities of the
Fund's portfolio and not to the Fund shares. Interest rates and bond prices
typically move inversely to each other; therefore, as with any bond fund, the
value of your investment in this Fund may go up or down in response to changes
in interest rates.
* The ICE BofAML U.S. Treasury Index tracks the performance of U.S. dollar
denominated sovereign debt publicly issued by the U.S. government in its
domestic market. Indices are not managed and an investor cannot invest
directly into an index.
**A basis point is 1/100/th/ of a percentage point.
+ A flattening yield curve is one wherein the differential in yields between
longer-term and shorter-term maturities narrows.
++Balance sheet normalization refers to the steps the Fed will take to reverse
quantitative easing and remove the substantial monetary accommodation it has
provided to the economy since the financial crisis began in 2007.
Securities listed may or may not be a part of current Fund construction.
90
SunAmerica Income Funds
COMPARISONS: PORTFOLIOS vs. INDICES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in AIG U.S. Government Securities
Fund Class A shares would have increased to $11,317. The same amount invested
in securities mirroring the performance of the ICE BofAML US Treasury Index
would be valued at $13,203.
[CHART]
AIG U.S. Government ICE BofAML
Date Securities Fund Class A/#/ US Treasury Index/*/*/
---------- -------------------------- ----------------------
3/31/2008 $ 9527 $10000
4/30/2008 9404 9831
5/31/2008 9271 9712
6/30/2008 9336 9793
7/31/2008 9343 9832
8/31/2008 9479 9956
9/30/2008 9554 10021
10/31/2008 9488 10007
11/30/2008 9973 10545
12/31/2008 10304 10919
1/31/2009 10020 10582
2/28/2009 9966 10525
3/31/2009 10169 10763
4/30/2009 10006 10558
5/31/2009 9906 10452
6/30/2009 9918 10431
7/31/2009 9988 10473
8/31/2009 10069 10570
9/30/2009 10159 10653
10/31/2009 10169 10647
11/30/2009 10247 10798
12/31/2009 10009 10513
1/31/2010 10128 10679
2/28/2010 10152 10721
3/31/2010 10092 10630
4/30/2010 10191 10742
5/31/2010 10375 10927
6/30/2010 10547 11131
7/31/2010 10570 11206
8/31/2010 10775 11436
9/30/2010 10692 11436
10/31/2010 10609 11416
11/30/2010 10571 11338
12/31/2010 10433 11131
1/31/2011 10354 11132
2/28/2011 10396 11122
3/31/2011 10408 11116
4/30/2011 10518 11244
5/31/2011 10662 11422
6/30/2011 10605 11387
7/31/2011 10768 11595
8/31/2011 11080 11919
9/30/2011 11299 12110
10/31/2011 11220 12018
11/30/2011 11317 12106
12/31/2011 11418 12221
1/31/2012 11427 12276
2/29/2012 11367 12189
3/31/2012 11275 12063
4/30/2012 11418 12247
5/31/2012 11585 12471
6/30/2012 11548 12424
7/31/2012 11657 12557
8/31/2012 11642 12540
9/30/2012 11603 12497
10/31/2012 11567 12475
11/30/2012 11598 12547
12/31/2012 11561 12485
1/31/2013 11432 12366
2/28/2013 11485 12440
3/31/2013 11482 12453
4/30/2013 11607 12584
5/31/2013 11302 12331
6/30/2013 11112 12176
7/31/2013 11038 12152
8/31/2013 10985 12087
9/30/2013 11024 12179
10/31/2013 11085 12246
11/30/2013 11018 12193
12/31/2013 10928 12067
1/31/2014 11096 12259
2/28/2014 11145 12298
3/31/2014 11125 12263
4/30/2014 11198 12340
5/31/2014 11284 12474
6/30/2014 11287 12455
7/31/2014 11279 12436
8/31/2014 11438 12587
9/30/2014 11371 12508
10/31/2014 11494 12644
11/30/2014 11557 12760
12/31/2014 11554 12793
1/31/2015 11678 13162
2/28/2015 11622 12932
3/31/2015 11674 13017
4/30/2015 11643 12937
5/31/2015 11611 12906
6/30/2015 11507 12778
7/31/2015 11549 12898
8/31/2015 11542 12905
9/30/2015 11583 13021
10/31/2015 11564 12975
11/30/2015 11532 12920
12/31/2015 11527 12899
1/31/2016 11655 13183
2/29/2016 11708 13313
3/31/2016 11713 13331
4/30/2016 11717 13315
5/31/2016 11734 13320
6/30/2016 11861 13630
7/31/2016 11890 13688
8/31/2016 11857 13610
9/30/2016 11861 13585
10/31/2016 11719 13428
11/30/2016 11391 13061
12/31/2016 11345 13046
1/31/2017 11337 13076
2/28/2017 11377 13144
3/31/2017 11370 13136
4/30/2017 11425 13228
5/31/2017 11455 13316
6/30/2017 11422 13296
7/31/2017 11440 13317
8/31/2017 11494 13467
9/30/2017 11448 13349
10/31/2017 11428 13334
11/30/2017 11407 13318
12/31/2017 11422 13364
1/31/2018 11325 13178
2/28/2018 11264 13074
3/31/2018 11317 13203
AIG U.S. Government Securities Fund
Class A@ Class C
----------------- ------------------ ------------------
Average Average
Annual Cumulative Annual Cumulative
Return Return+ Return Return+
----------------- ------- ---------- ------- ----------
1 Year Return -5.23% -0.46% -1.98% -1.00%
-------------------------------------------------------
5 Year Return -1.25% -1.44% -0.93% -4.58%
-------------------------------------------------------
10 Year Return 1.25% 18.80% 1.08% 11.34%
-------------------------------------------------------
Since Inception* 3.80% 161.84% 2.94% 72.48%
-------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 10/1/93; Class C: 06/1/99.
# For the purposes of the graph, it has been assumed that the maximum sales
charge of 4.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares, was deducted
from the initial investment in the Fund and that the CDSCs with respect to
the Class C shares has been deducted, as applicable.
@ As of the close of business on December 2, 2014, Class B shares of the Fund
were no longer offered to new or existing shareholders, except that
dividends and/or capital gain distributions received by a shareholder from
the Fund continued to be automatically reinvested in additional Class B
shares of the Fund, at the net asset value per share in effect on the
payable date, unless the shareholder had elected to receive them in cash or
automatically reinvest them in any retail fund distributed by AIG Capital
Services, Inc. As of the close of business on January 27, 2015, all
outstanding Class B shares of the Funds were converted to Class A shares.
For the 12-month period ended March 31, 2018, the AIG U.S. Government
Securities Fund Class A returned -5.23%, compared to 0.51% for the ICE BofAML
US Treasury Index. (The performance table and graph do not reflect the
deduction of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares.)
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 4.75%, Class C: 1.00% CDSC. The
fund's daily net asset values are not guaranteed and shares are not insured by
the FDIC, the Federal Reserve Board or any other agency. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be higher or lower than the original cost. Current
performance may be higher or lower than that shown. Performance as of the most
recent month end is available at www.aig.com/funds.
** The ICE BofAML U.S. Treasury Index tracks the performance of U.S. dollar
denominated sovereign debt publicly issued by the U.S. government in its
domestic market. Indices are not managed and an investor cannot invest
directly into an index.
91
SunAmerica Income Funds
COMPARISONS: PORTFOLIOS vs. INDICES -- (unaudited) (continued)
AIG Strategic Bond Fund
The AIG Strategic Bond Fund Class A shares returned 2.41% (before maximum sales
charge) for the 12-month period ended March 31, 2018. The Fund outperformed its
benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index,/*/ which returned
1.20% during the same annual period. The Fund also outperformed the LIBOR
3-Month Index,/*/ a widely-recognized benchmark of interest rate performance,
which returned 1.46% for the same annual period.
The Fund's outperformance relative to its benchmark can be attributed primarily
to increased allocations to segments of the fixed income market with higher
spreads, or yield differentials, to U.S. Treasuries. Specifically, greater
allocations to high yield bonds and emerging markets debt contributed most
positively to the Fund's relative results. These two sectors, as measured by
the Bloomberg Barclays U.S. Corporate High Yield Index/*/ and the JPMorgan
Emerging Markets Bond Index-Global,/*/ respectively, posted returns of 3.78%
and 3.34%, respectively, performing well amid a macroeconomic backdrop that
favored risk assets. The Fund also benefited from having an underweight
allocation to U.S. government securities during the annual period, as these
bonds were negatively impacted by rising U.S. Treasury rates. Stronger economic
growth and inflation expectations led to a more hawkish policy tone from the
U.S. Federal Reserve (the "Fed") and from other major central banks around the
globe. This caused U.S. Treasury rates to increase across most of the yield
curve, or spectrum of maturities.
Security selection overall also contributed positively to the Fund's returns
relative to the Bloomberg Barclays U.S. Aggregate Bond Index during the annual
period. Generally speaking, security selection within the investment grade
corporate bond, high yield bond and emerging market debt sectors boosted the
Fund's relative results, more than offsetting weaker issue selection amongst
securitized products, which detracted. Within the investment grade corporate
bond sector, issue selection was strongest among financial institutions. Within
the high yield bond sector, security selection proved most beneficial in the
retail, technology and finance company market segments.
Within sectors, industry allocation positioning was slightly positive but had a
muted effect on Fund performance overall. For example, within the high yield
bond sector, the Fund benefited from underweight allocations to the wirelines
and healthcare market segments and from an overweight allocation to what is
known as "other industrials." These positive contributors modestly more than
offset the detracting effect of a small cash position within the Fund and an
underweight allocation to the pharmaceuticals industry. Similarly, country
exposure as a whole had a minimal impact on the Fund's results during the
annual period. While the Fund remained U.S.-centric, portions of the Fund were
allocated to non-U.S. dollar denominated sovereign and emerging market bonds,
which meant country exposure had an impact on results during the annual period.
Outside of the U.S., holdings within Ghana and Ivory Coast contributed
positively, while holdings in Venezuela and Lebanon detracted from the Fund's
performance.
Duration positioning detracted from the Fund's performance during the annual
period. The Fund maintained a longer duration profile than that of the
Bloomberg Barclays U.S. Aggregate Bond Index. Such positioning dampened
relative results, as five-year and 10-year U.S. Treasury rates moved 64 basis
points+ and 35 basis points higher, respectively, during the annual period,
while longer-term U.S. Treasury rates increased more modestly and 30-year U.S.
Treasury yields actually declined modestly. Thus, the yield curve flattened.++
Partially offsetting the detracting effect of duration positioning was yield
curve positioning, which contributed positively. The Fund benefited modestly
from positioning that favored a flatter yield curve, as we maintained a
preference for 10-year and 30-year maturities.
92
SunAmerica Income Funds
COMPARISONS: PORTFOLIOS vs. INDICES -- (unaudited) (continued)
The Fund began the annual period with target allocations of 30% to investment
grade corporate bonds, 15% to securitized products, 40% to high yield bonds and
15% to emerging markets debt. As market conditions, including macroeconomic,
political, geopolitical and monetary policy factors, shifted, we adjusted
target allocations accordingly throughout the annual period. As of March 31,
2018, the Fund had target allocations of 20% to investment grade corporate
bonds, 10% to securitized products, 40% to high yield bonds and 30% to emerging
markets debt.
--------
Past performance is no guarantee of future results.
Interest rates and bond prices typically move inversely to each other;
therefore, as with any bond fund, the value of an investment in this Fund may
go up or down in response to changes in interest rates. High-yield bonds tend
to have lower interest rate risk than higher-quality bonds of similar maturity
but carry greater credit and default risk. Investing internationally involves
special risks, such as currency fluctuations and economic and political
instability.
* 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. The LIBOR 3-Month Index is a benchmark interest rate that some of
the world's leading banks charge each other for short-term loans. It serves
as the first step to calculating interest rates on various loans throughout
the world and is published each day in five currencies: the Swiss franc, the
euro, the pound sterling, the Japanese yen, and the U.S. dollar. The
Bloomberg Barclays U.S. Corporate High Yield Index is comprised of
fixed-rate, publicly issued, non-investment grade debt. The JPMorgan Emerging
Markets Bond Index-Global ("EMBI Global") tracks total returns for traded
external debt instruments in the emerging markets. It includes U.S.
dollar-denominated Brady bonds, loans and Eurobonds with an outstanding face
value of at least $500 million. Indices are not managed and an investor
cannot invest directly into an index.
+ A basis point is 1/100/th/ of a percentage point.
++A flattening yield curve is one in which the differential between yields on
shorter-term and longer-term maturities narrows.
Securities listed may or may not be a part of current Fund construction.
93
SunAmerica Income Funds
COMPARISONS: PORTFOLIOS vs. INDICES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in AIG Strategic Bond Fund Class A
shares would have increased to $15,125. The same amount invested in securities
mirroring the performance of the Bloomberg Barclays U.S. Aggregate Bond Index
and the LIBOR 3-Month Index would be valued at $14,284 and $10,753,
respectively.
[CHART]
AIG Strategic Bloomberg Barclays
Bond Fund U.S. Aggregate LIBOR
Date Class A/#/ Bond Index/*/*/ 3-Month Index/*/*/*/
---------- ------------- ------------------ --------------------
3/31/2008 $ 9,537 $10,000 $10,000
4/30/2008 9,662 9,979 10,022
5/31/2008 9,652 9,906 10,045
6/30/2008 9,531 9,898 10,068
7/31/2008 9,468 9,890 10,091
8/31/2008 9,462 9,984 10,113
9/30/2008 8,950 9,850 10,138
10/31/2008 7,901 9,617 10,172
11/30/2008 7,749 9,930 10,195
12/31/2008 8,056 10,301 10,216
1/31/2009 8,134 10,210 10,227
2/28/2009 8,030 10,171 10,237
3/31/2009 8,137 10,313 10,248
4/30/2009 8,574 10,362 10,258
5/31/2009 8,957 10,437 10,266
6/30/2009 9,129 10,496 10,272
7/31/2009 9,516 10,666 10,277
8/31/2009 9,661 10,776 10,281
9/30/2009 10,019 10,889 10,284
10/31/2009 10,100 10,943 10,287
11/30/2009 10,240 11,085 10,289
12/31/2009 10,275 10,912 10,292
1/31/2010 10,355 11,078 10,294
2/28/2010 10,397 11,120 10,296
3/31/2010 10,604 11,106 10,298
4/30/2010 10,779 11,222 10,300
5/31/2010 10,475 11,316 10,303
6/30/2010 10,654 11,493 10,308
7/31/2010 11,000 11,616 10,313
8/31/2010 11,120 11,766 10,317
9/30/2010 11,336 11,778 10,319
10/31/2010 11,553 11,820 10,322
11/30/2010 11,341 11,752 10,324
12/31/2010 11,472 11,625 10,327
1/31/2011 11,588 11,639 10,329
2/28/2011 11,698 11,668 10,332
3/31/2011 11,746 11,674 10,335
4/30/2011 11,962 11,823 10,337
5/31/2011 12,010 11,977 10,339
6/30/2011 11,887 11,942 10,341
7/31/2011 12,074 12,131 10,344
8/31/2011 11,815 12,309 10,346
9/30/2011 11,486 12,398 10,349
10/31/2011 11,886 12,412 10,353
11/30/2011 11,692 12,401 10,357
12/31/2011 11,880 12,537 10,361
1/31/2012 12,175 12,647 10,367
2/29/2012 12,362 12,644 10,371
3/31/2012 12,332 12,575 10,375
4/30/2012 12,481 12,714 10,379
5/31/2012 12,416 12,829 10,383
6/30/2012 12,527 12,834 10,387
7/31/2012 12,857 13,011 10,391
8/31/2012 12,935 13,020 10,395
9/30/2012 13,084 13,038 10,398
10/31/2012 13,163 13,063 10,402
11/30/2012 13,241 13,084 10,404
12/31/2012 13,313 13,065 10,406
1/31/2013 13,318 12,974 10,409
2/28/2013 13,356 13,039 10,411
3/31/2013 13,397 13,050 10,414
4/30/2013 13,662 13,182 10,416
5/31/2013 13,368 12,946 10,419
6/30/2013 12,922 12,746 10,421
7/31/2013 13,040 12,763 10,423
8/31/2013 12,894 12,698 10,426
9/30/2013 13,087 12,818 10,428
10/31/2013 13,321 12,922 10,430
11/30/2013 13,288 12,874 10,432
12/31/2013 13,355 12,801 10,434
1/31/2014 13,400 12,990 10,436
2/28/2014 13,630 13,059 10,438
3/31/2014 13,711 13,037 10,440
4/30/2014 13,833 13,147 10,442
5/31/2014 14,034 13,297 10,444
6/30/2014 14,119 13,303 10,446
7/31/2014 14,008 13,270 10,448
8/31/2014 14,173 13,417 10,450
9/30/2014 13,900 13,326 10,452
10/31/2014 13,985 13,457 10,454
11/30/2014 13,948 13,552 10,456
12/31/2014 13,793 13,565 10,459
1/31/2015 13,956 13,849 10,461
2/28/2015 14,077 13,719 10,463
3/31/2015 14,082 13,783 10,465
4/30/2015 14,167 13,733 10,468
5/31/2015 14,132 13,700 10,470
6/30/2015 13,934 13,551 10,473
7/31/2015 13,897 13,645 10,475
8/31/2015 13,737 13,625 10,478
9/30/2015 13,574 13,717 10,481
10/31/2015 13,782 13,720 10,484
11/30/2015 13,660 13,683 10,487
12/31/2015 13,414 13,639 10,491
1/31/2016 13,332 13,827 10,497
2/29/2016 13,373 13,925 10,502
3/31/2016 13,797 14,053 10,508
4/30/2016 14,052 14,107 10,513
5/31/2016 14,098 14,110 10,519
6/30/2016 14,269 14,364 10,525
7/31/2016 14,522 14,455 10,531
8/31/2016 14,692 14,438 10,538
9/30/2016 14,731 14,430 10,546
10/31/2016 14,644 14,319 10,553
11/30/2016 14,336 13,981 10,561
12/31/2016 14,455 14,000 10,570
1/31/2017 14,574 14,028 10,579
2/28/2017 14,778 14,122 10,588
3/31/2017 14,769 14,115 10,598
4/30/2017 14,900 14,224 10,607
5/31/2017 15,034 14,333 10,618
6/30/2017 15,034 14,319 10,629
7/31/2017 15,166 14,380 10,641
8/31/2017 15,252 14,509 10,653
9/30/2017 15,291 14,440 10,664
10/31/2017 15,375 14,449 10,677
11/30/2017 15,316 14,430 10,689
12/31/2017 15,391 14,496 10,703
1/31/2018 15,377 14,329 10,719
2/28/2018 15,181 14,193 10,734
3/31/2018 15,125 14,284 10,753
AIG Strategic Bond Fund
Class A Class B Class C Class W
----------------- ------------------ ------------------ ------------------ ------------------
Average Average Average Average
Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
Return Return+ Return Return+ Return Return+ Return Return+
----------------- ------- ---------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -2.47% 2.41% -2.56% 1.41% 0.76% 1.75% 2.65% 2.65%
---------------------------------------------------------------------------------------------
5 Year Return 1.46% 12.90% 1.41% 9.15% 1.80% 9.35% N/A N/A
---------------------------------------------------------------------------------------------
10 Year Return 4.22% 58.60% 4.13% 49.89% 4.05% 48.73% N/A N/A
---------------------------------------------------------------------------------------------
Since Inception* 5.90% 325.07% 6.18% 321.88% 5.75% 282.14% 2.70% 8.81%
---------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 11/1/93; Class B: 04/1/94; Class C: 04/1/94; Class
W: 01/29/15.
# For the purposes of the graph, it has been assumed that the maximum sales
charge of 4.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares, was deducted
from the initial investment in the Fund and that the CDSCs with respect to
the Class B and Class C shares have been deducted, as applicable.
For the 12-month period ended March 31, 2018, the AIG Strategic Bond Fund Class
A returned -2.47%, compared to 1.20% for the Bloomberg Barclays U.S. Aggregate
Bond Index and 1.46% for the LIBOR 3-Month Index. (The performance table and
graph do not reflect the deduction of taxes that a shareholder would pay on
fund distributions or the redemption of fund shares.)
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 4.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. Class B shares of the Fund
convert automatically to Class A shares approximately eight years after
purchase. The fund's daily net asset values are not guaranteed and shares are
not insured by the FDIC, the Federal Reserve Board or any other agency. The
investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be higher or lower than the original
cost. Current performance may be higher or lower than that shown. Performance
as of the most recent month end is available at www.aig.com/funds.
** 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.
***The LIBOR 3-Month Index is a benchmark interest rate that some of the
world's leading banks charge each other for short-term loans. It serves as
the first step to calculating interest rates on various loans throughout the
world and is published each day in five currencies: the Swiss franc, the
euro, the pound sterling, the Japanese yen, and the U.S. dollar.
Indices are not managed and an investor cannot invest directly into an index.
94
SunAmerica Income Funds
COMPARISONS: PORTFOLIOS vs. INDICES -- (unaudited) (continued)
AIG Flexible Credit Fund
The AIG Flexible Credit Fund Class A shares returned 3.54% (before maximum
sales charge) for the 12-month period ended March 31, 2018. The Fund modestly
underperformed its benchmark, the Flexible Credit Blended Benchmark, composed
50% of the Bloomberg Barclays U.S. High Yield 2% Issuer Capped Index/*/ and 50%
of the S&P/LSTA Leveraged Loan Index,/*/ which returned 4.11% during the same
annual period. The Fund significantly outperformed the ICE BofAML USD 3-Mo Dep
OR CM Index,/*/ a broad measure of market performance, which returned 1.21% for
the same annual period.
The Fund actively invests in high yield bonds and floating rate loans and has
the flexibility to allocate 0% to 100% of its portfolio to either sector of the
leveraged finance market. During the annual period, lower quality credit
sectors generally outperformed higher quality, and thus the Fund's higher
credit quality positioning detracted from its results relative to the Flexible
Credit Blended Benchmark. To a lesser extent, the Fund's modest underweight to
high yield bonds during the third quarter of 2017 and its underweight to
floating rate loans and overweight to high yield bonds during the fourth
quarter of 2017 also detracted from relative performance.
Industry and security selection overall contributed positively to the Fund's
relative results. Within the Fund's high yield bond allocation, overweights to
basic industry and banking companies and an underweight to communications
companies were additive to relative performance. Issue selection proved most
effective in finance, consumer cyclical and basic industry companies within the
Fund's high yield bond allocation and in the energy and financials industries
within its floating rate loan allocation. Such positive contributors were
somewhat offset by underweights to the financials and information technology
industries within the Fund's floating rate loan allocation, which detracted.
Issue selection within the communications and energy industries within the
Fund's high yield bond allocation and within the manufacturing and information
technology industries amongst the Fund's floating rate loan allocation also
dampened results.
Among individual securities, positions in the loans of offshore drilling rig
operator Seadrill Partners and the bonds of electric utility Dynegy were among
the best performers. The loans of asset manager and mortgage servicer Ditech
Holding, formerly known as Walter Investment Management, also proved to be a
top contributor. Detractors included positions in retail gift and loyalty card
services provider CPI Card Group, Brazilian meat/protein producer JBS
Investments and communication services provider Frontier Communications.
The Fund began the annual period with a near 50/50 split between floating rate
loans and high yield bonds. We began adding to the Fund's high yield bond
position in the second half of 2017, bringing the allocation to a 45/55
loans/high yield mix, as we believed valuation levels were more attractive
amongst high yield bonds and their fundamentals remained generally favorable.
By the end of calendar year 2017, market conditions shifted, as prospects for
further interest rate increases by the Federal Reserve, combined with
tightening valuation levels in high yield, informed our decision to rotate out
of high yield bonds and back into loans during the first quarter of 2018. More
specifically, though spreads had tightened due to high levels
95
SunAmerica Income Funds
COMPARISONS: PORTFOLIOS vs. INDICES -- (unaudited) (continued)
of demand, price weakness appeared to have been more than offset by the steady
increase in three-month LIBOR. The technical, or supply/demand, picture also
remained supportive, in our view, for loans, as a rising interest rate
environment and what we saw as attractive current yield relative to other fixed
income options stoked investor demand. Given this combination of factors, we
migrated the Fund's portfolio toward a 60/40 loans/high yield mix at the end of
the annual period. As of March 31, 2018, the Fund had approximately a 53%
allocation to loans and approximately a 47% allocation to high yield bonds.
--------
Past performance is no guarantee of future results.
Interest rates and bond prices typically move inversely to each other;
therefore, as with any bond fund, the value of an investment in this Fund may
go up or down in response to changes in interest rates. High-yield bonds tend
to have lower interest-rate risk but may be subject to greater market
fluctuations and risk of default or loss of income and principal than
securities in higher rating categories. High-yield debt instruments carry a
greater default risk, may be more volatile, less liquid, more difficult to
value and more susceptible to adverse economic conditions or investor
perceptions than other debt instruments. Investments in floating rate loans
involve certain risks, including, among others risks of nonpayment of principal
and interest; collateral impairment; non-diversification and borrower industry
concentration; and lack of full liquidity.
*The Bloomberg Barclays U.S. High Yield 2% Issuer Capped Index is a component
of the U.S. Corporate High-Yield Bond Index, which covers the universe of
fixed-rate, non-investment grade corporate debt of issuers in non-emerging
market countries. It is not market capitalization-weighted and each issuer is
capped at 2% of the index. The S&P/LSTA Leveraged Loan Index (LLI) reflects
the market-weighted performance of U.S. dollar-denominated institutional
leveraged loan portfolios. The LLI is the only domestic leveraged loan index
that utilizes real-time market weightings spreads and interest payments. The
ICE BofAML US Dollar 3-Month Deposit Offered Rate Constant Maturity (USD 3-Mo
Dep OR CM) Index tracks the performance of a synthetic asset paying LIBOR to a
stated maturity. Indices are not managed and an investor cannot invest
directly into an index.
Securities listed may or may not be a part of current Fund construction.
96
SunAmerica Income Funds
COMPARISONS: PORTFOLIOS vs. INDICES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in AIG Flexible Credit Fund Class A
shares would have increased to $14,924. The same amount invested in securities
mirroring the performance of the Blended Benchmark (50% Bloomberg Barclays U.S.
High-Yield 2% Issuer Capped Index/50% S&P/LSTA Leveraged Loan Index), the
Bloomberg Barclays U.S. High-Yield 2% Issuer Capped Index, the S&P/LSTA
Leveraged Loan Index and the ICE BofAML USD 3-Mo Dep OR CM Index would be
valued at $19,675, $22,246, $17,283, and $10,766, respectively.
[CHART]
Blended Benchmark
(50% Bloomberg
Barclays U.S.
High-Yield 2% S&P/LSTA
Issuer Capped Bloomberg Leveraged
Index/50% Barclays U.S. Loan
AIG Flexible S&P/LSTA High-Yield 2% Index ICE BofAML USD
Credit Fund Leveraged Issuer /DAGGER/ 3-Mo Dep OR
Date Class A/#/ Loan Index) Capped Index@ /DAGGER/ CM Index***
---------- ------------ ------------------ ------------- ---------- --------------
3/31/2008 $ 9,519 $10,000 $10,000 $10,000 $10,000
4/30/2008 9,893 10,391 10,411 10,370 10,019
5/31/2008 9,972 10,461 10,453 10,468 10,047
6/30/2008 9,865 10,345 10,195 10,494 10,067
7/31/2008 9,621 10,240 10,067 10,414 10,091
8/31/2008 9,611 10,249 10,098 10,400 10,115
9/30/2008 8,842 9,541 9,323 9,761 10,110
10/31/2008 7,236 8,143 7,823 8,471 10,171
11/30/2008 6,355 7,439 7,136 7,750 10,211
12/31/2008 6,376 7,591 7,639 7,522 10,246
1/31/2009 6,580 8,125 8,148 8,079 10,263
2/28/2009 6,430 8,047 7,927 8,142 10,271
3/31/2009 6,410 8,215 8,144 8,259 10,284
4/30/2009 7,003 9,057 9,105 8,977 10,298
5/31/2009 7,478 9,637 9,715 9,525 10,315
6/30/2009 7,672 9,990 10,001 9,942 10,322
7/31/2009 8,131 10,526 10,601 10,413 10,329
8/31/2009 8,172 10,746 10,805 10,649 10,336
9/30/2009 8,557 11,225 11,422 10,990 10,340
10/31/2009 8,731 11,358 11,629 11,051 10,343
11/30/2009 8,822 11,428 11,743 11,079 10,346
12/31/2009 9,100 11,783 12,128 11,405 10,348
1/31/2010 9,193 11,981 12,287 11,638 10,351
2/28/2010 9,224 12,006 12,302 11,671 10,353
3/31/2010 9,515 12,323 12,675 11,934 10,354
4/30/2010 9,750 12,560 12,977 12,109 10,355
5/31/2010 9,329 12,194 12,513 11,837 10,354
6/30/2010 9,420 12,241 12,667 11,781 10,359
7/31/2010 9,748 12,550 13,113 11,962 10,366
8/31/2010 9,756 12,573 13,117 12,003 10,373
9/30/2010 10,056 12,847 13,505 12,172 10,376
10/31/2010 10,268 13,112 13,850 12,362 10,378
11/30/2010 10,150 13,061 13,692 12,406 10,380
12/31/2010 10,343 13,260 13,939 12,560 10,383
1/31/2011 10,555 13,537 14,247 12,807 10,386
2/28/2011 10,701 13,657 14,435 12,867 10,388
3/31/2011 10,760 13,679 14,482 12,865 10,391
4/30/2011 10,879 13,828 14,706 12,947 10,394
5/31/2011 10,940 13,856 14,778 12,935 10,397
6/30/2011 10,811 13,763 14,634 12,887 10,399
7/31/2011 10,933 13,852 14,803 12,906 10,401
8/31/2011 10,394 13,269 14,208 12,338 10,402
9/30/2011 10,134 13,079 13,741 12,391 10,404
10/31/2011 10,635 13,660 14,566 12,749 10,406
11/30/2011 10,465 13,479 14,251 12,686 10,408
12/31/2011 10,727 13,693 14,631 12,751 10,411
1/31/2012 11,009 14,051 15,075 13,029 10,417
2/29/2012 11,224 14,272 15,434 13,130 10,423
3/31/2012 11,214 14,317 15,414 13,231 10,428
4/30/2012 11,334 14,444 15,572 13,328 10,432
5/31/2012 11,190 14,299 15,365 13,238 10,436
6/30/2012 11,409 14,499 15,689 13,330 10,440
7/31/2012 11,599 14,721 15,988 13,484 10,445
8/31/2012 11,688 14,890 16,175 13,635 10,449
9/30/2012 11,844 15,076 16,400 13,787 10,454
10/31/2012 11,868 15,166 16,544 13,830 10,458
11/30/2012 11,991 15,250 16,676 13,873 10,461
12/31/2012 12,154 15,431 16,939 13,982 10,464
1/31/2013 12,281 15,616 17,166 14,131 10,467
2/28/2013 12,298 15,672 17,253 14,161 10,470
3/31/2013 12,494 15,816 17,429 14,277 10,472
4/30/2013 12,655 16,007 17,744 14,363 10,475
5/31/2013 12,537 15,975 17,641 14,390 10,478
6/30/2013 12,239 15,719 17,179 14,305 10,480
7/31/2013 12,471 15,945 17,504 14,446 10,483
8/31/2013 12,347 15,894 17,398 14,441 10,485
9/30/2013 12,470 15,992 17,571 14,476 10,488
10/31/2013 12,741 16,250 18,010 14,581 10,490
11/30/2013 12,758 16,332 18,101 14,653 10,492
12/31/2013 12,813 16,414 18,199 14,722 10,494
1/31/2014 12,904 16,525 18,327 14,818 10,497
2/28/2014 13,175 16,706 18,697 14,844 10,498
3/31/2014 13,194 16,756 18,741 14,898 10,501
4/30/2014 13,285 16,819 18,860 14,915 10,503
5/31/2014 13,377 16,954 19,032 15,018 10,505
6/30/2014 13,503 17,074 19,192 15,104 10,507
7/31/2014 13,261 16,958 18,937 15,100 10,509
8/31/2014 13,465 17,106 19,238 15,123 10,511
9/30/2014 13,179 16,875 18,834 15,033 10,513
10/31/2014 13,382 16,997 19,058 15,072 10,515
11/30/2014 13,279 16,978 18,920 15,147 10,517
12/31/2014 13,088 16,749 18,647 14,957 10,519
1/31/2015 13,133 16,832 18,769 15,006 10,521
2/28/2015 13,404 17,153 19,221 15,218 10,523
3/31/2015 13,373 17,138 19,116 15,274 10,525
4/30/2015 13,493 17,321 19,348 15,415 10,527
5/31/2015 13,500 17,363 19,406 15,444 10,530
6/30/2015 13,427 17,198 19,118 15,379 10,532
7/31/2015 13,433 17,147 19,007 15,378 10,534
8/31/2015 13,282 16,937 18,674 15,271 10,537
9/30/2015 13,090 16,665 18,194 15,172 10,540
10/31/2015 13,253 16,878 18,693 15,144 10,542
11/30/2015 13,139 16,618 18,280 15,011 10,543
12/31/2015 12,963 16,321 17,820 14,854 10,543
1/31/2016 12,887 16,137 17,533 14,757 10,549
2/29/2016 12,927 16,140 17,634 14,679 10,554
3/31/2016 13,210 16,722 18,417 15,083 10,559
4/30/2016 13,492 17,215 19,138 15,383 10,565
5/31/2016 13,538 17,345 19,257 15,520 10,569
6/30/2016 13,581 17,426 19,434 15,523 10,576
7/31/2016 13,791 17,787 19,959 15,745 10,579
8/31/2016 13,962 18,039 20,377 15,863 10,585
9/30/2016 14,009 18,177 20,513 16,001 10,592
10/31/2016 14,060 18,288 20,592 16,133 10,599
11/30/2016 13,984 18,268 20,494 16,175 10,606
12/31/2016 14,177 18,543 20,872 16,362 10,613
1/31/2017 14,312 18,729 21,175 16,454 10,621
2/28/2017 14,444 18,912 21,483 16,536 10,629
3/31/2017 14,414 18,899 21,435 16,550 10,637
4/30/2017 14,550 19,049 21,683 16,622 10,647
5/31/2017 14,606 19,166 21,870 16,683 10,657
6/30/2017 14,574 19,175 21,900 16,676 10,666
7/31/2017 14,712 19,348 22,143 16,790 10,677
8/31/2017 14,683 19,339 22,134 16,783 10,689
9/30/2017 14,780 19,464 22,333 16,849 10,700
10/31/2017 14,837 19,563 22,428 16,949 10,712
11/30/2017 14,806 19,550 22,371 16,969 10,722
12/31/2017 14,872 19,618 22,438 17,036 10,731
1/31/2018 15,064 19,771 22,573 17,200 10,745
2/28/2018 14,992 19,707 22,381 17,234 10,754
3/31/2018 14,924 19,675 22,246 17,283 10,766
AIG Flexible Credit Fund
Class A## Class C Class W
----------------- ------------------ ------------------ ------------------
Average Average Average
Annual Cumulative Annual Cumulative Annual Cumulative
Return Return+ Return Return+ Return Return+
----------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -1.33% 3.54% 1.89% 2.88% 3.76% 3.76%
--------------------------------------------------------------------------
5 Year Return 2.61% 19.45% 2.96% 15.68% N/A N/A
--------------------------------------------------------------------------
10 Year Return 4.09% 56.78% 3.93% 47.10% N/A N/A
--------------------------------------------------------------------------
Since Inception* 4.76% 158.98% 4.55% 119.02% 3.83% 14.06%
--------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 11/2/98; Class C: 08/21/00; Class W: 10/01/14.
# For the purposes of the graph, it has been assumed that the maximum sales
charge of 4.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares, was deducted
from the initial investment in the Fund and that the CDSCs with respect to
the Class C shares has been deducted, as applicable.
## As of the close of business on December 2, 2014, Class B shares of the Fund
were no longer offered to new or existing shareholders, except that
dividends and/or capital gain distributions received by a shareholder from
the Fund continued to be automatically reinvested in additional Class B
shares of the Fund, at the net asset value per share in effect on the
payable date, unless the shareholder had elected to receive them in cash or
automatically reinvest them in any retail fund distributed by AIG Capital
Services, Inc. As of the close of business on January 27, 2015, all
outstanding Class B shares of the Funds were converted to Class A shares.
For the 12 month period ended March 31, 2018, the AIG Flexible Credit Fund
Class A returned -1.33%, compared to 4.11% for the Blended Benchmark (50%
Bloomberg Barclays U.S. High-Yield 2% Issuer Capped Index/50% S&P/LSTA
Leveraged Loan Index), 3.78% for the Bloomberg Barclays U.S. High-Yield 2%
Issuer Capped Index, 4.43% for the S&P/LSTA Leveraged Loan Index and 1.21% for
the ICE BofAML USD 3-Mo Dep OR CM Index. (The performance data and graph do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.)
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 4.75%, Class C: 1.00% CDSC. The
fund's daily net asset values are not guaranteed and shares are not insured by
the FDIC, the Federal Reserve Board or any other agency. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be higher or lower than the original cost. Current
performance may be higher or lower than that shown. Performance as of the most
recent month end is available at www.aig.com/funds.
@ The Bloomberg Barclays U.S. High-Yield 2% Issuer Capped Index is a component
of the U.S. Corporate High Yield Bond Index, which covers the universe of
fixed-rate, non-investment grade corporate debt of issuers in non-emerging
market countries. It is not market capitalization-weighted and each issuer
is capped at 2% of the index.
++ The S&P/LSTA Leveraged Loan Index (LLI) reflects the market-weighted
performance of U.S. dollar-denominated institutional leveraged loan
portfolios. The LLI is the only domestic leveraged loan index that utilizes
real-time market weightings spreads and interest payments.
*** The ICE BofAML US Dollar 3-Month Deposit Offered Rate Constant Maturity
(USD 3-Mo Dep OR CM) Index tracks the performance of a synthetic asset
paying LIBOR to a stated maturity.
Indices are not managed and an investor cannot invest directly into an index.
97
[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)
and your account
number(s) to AIG Funds
c/o DST, P.O. Box
219186, Kansas City
MO, 64121-9186. We
will resume
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
INANN - 3/18
[LOGO]
Item 2. Code of Ethics.
The SunAmerica Income Funds (the "registrant") has adopted a Code of
Ethics applicable to its Principal Executive and Principal Accounting
Officers pursuant to Section 406 of the Sarbanes-Oxley Act of 2002
(the "Code"). During the fiscal year ended March 31, 2018, there were
no reportable waivers or implicit waivers to a provision of the Code
that applies to the registrant's Principal Executive and Principal
Accounting Officers (the "Covered Officers").
Item 3. Audit Committee Financial Expert.
As of January 16, 2018, the registrant's Board of Trustees has
determined that Eileen A. Kamerick, a Trustee of the registrant,
qualifies as an audit committee financial expert, as defined in
Item 3(b) of Form N-CSR. Ms. Kamerick is considered to be "independent"
for purposes of Item 3(a)(2) of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a)--(d) Aggregate fees billed to the registrant for the last two
fiscal years for professional services rendered by the registrant's
principal accountant were as follows:
2017 2018
(a) Audit Fees ....................$ 154,143 $ 158,770
(b) Audit-Related Fees ............$ 0 $ 0
(c) Tax Fees ......................$ 49,924 $ 51,806
(d) All Other Fees ................$ 0 $ 0
Audit Fees include amounts related to the audit of the registrant's
annual financial statements and services normally provided by the
principal accountant in connection with statutory and regulatory
filings. Tax Fees principally include tax compliance, tax advice, tax
planning and preparation of tax returns.
Aggregate fees billed to the investment adviser and Adviser Affiliates
(as defined below in Item 4(e)) that are required to be pre-approved
pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X for
the last two fiscal years for services rendered by the registrant's
principal accountant were as follows:
2017 2018
(b) Audit-Related Fees ............$ 0 $ 0
(c) Tax Fees ......................$ 0 $ 0
(d) All Other Fees ................$ 0 $ 0
(e) (1) The registrant's audit committee pre-approves all audit services
provided by the registrant's principal accountant for the registrant
and all non-audit services provided by the registrant's principal
accountant for the registrant, its investment adviser and any entity
controlling, controlled by, or under common control with the
investment adviser ("Adviser Affiliates") that provides ongoing
services to the registrant, if the engagement by the investment
adviser or Adviser Affiliates relates directly to the operations and
financial reporting of the registrant. The audit committee has not
presently established any pre-approval policies and procedures that
permit the pre-approval of the above services other than by the full
audit committee. Certain de minimis exceptions are allowed for non-
audit services in accordance with Rule 2-01(c)(7)(i)(C) of Regulation
S-X as set forth in the registrant's audit committee charter.
(2) No services included in (b)-(d) above in connection with fees
billed to the registrant or the investment adviser or Adviser
Affiliates were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-
01 of Regulation S-X.
(f) Not applicable.
(g) The aggregate fees billed for the most recent fiscal year and the
preceding fiscal year by the registrant's principal accountant for
non-audit services rendered to the registrant, its investment adviser,
and Adviser Affiliates that provides ongoing services to the registrant
for 2017 and 2018 were $49,924 and $51,806 respectively.
(h) 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) Code of Ethics applicable to its Principal Executive and
Principle Accounting Officers pursuant to Section 406 of the
Sarbanes-Oxley Act of 2002 attached hereto as Exhibit 99.406.
Code of Ethics.
(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: June 08, 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: June 08, 2018
By: /s/ Gregory R. Kingston
-----------------------
Gregory R. Kingston
Treasurer
Date: June 08, 2018
Exhibit 99.406
ANCHOR SERIES TRUST
SUNAMERICA EQUITY FUNDS
SUNAMERICA INCOME FUNDS
SUNAMERICA MONEY MARKET FUNDS, INC.
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
SUNAMERICA SERIES, INC.
SUNAMERICA SPECIALTY SERIES
(collectively, the "Funds")
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE
AND PRINCIPAL ACCOUNTING OFFICERS
I. Introduction
The Boards of Directors/Trustees of the Funds (the "Boards") have
adopted this Code of Ethics (this "Code") pursuant to Section 406 of the
Sarbanes-Oxley Act applicable to the Funds' Principal Executive Officer and
Principal Accounting Officer (the "Covered Officers" as set forth in Exhibit A)
for the purpose of deterring wrongdoing and promoting:
o Honest and ethical conduct, including the ethical handling of
conflicts of interest between personal and professional relationships;
o Full, fair, accurate, timely and understandable disclosure;
o Compliance with applicable laws and governmental rules and
regulations;
o The prompt internal reporting of violations of the Code to an
appropriate person or persons identified in the Code; and
o Accountability for adherence to the Code.
Each Covered Officer must comply with applicable law. Each Covered
Officer also has a responsibility to conduct himself or herself in an honest and
ethical manner and to adhere to a high standard of business ethics. Each Covered
Officer has leadership responsibilities that include promoting a culture of high
ethical standards and a commitment to compliance, maintaining a work environment
that encourages the internal reporting of compliance concerns and promptly
addressing compliance concerns. Each Covered Officer should also be sensitive to
situations that may give rise to conflicts of interest.
II. Honest and Ethical Conduct
a. Honesty, Diligence, and Professional Responsibility
Covered Officers are expected to observe both the form and the spirit
of the ethical principles contained in this Code. In particular, Covered
Officers must perform their duties and responsibilities for the Funds:
o with honesty, diligence, and a commitment to professional and ethical
responsibility;
o carefully, thoroughly and in a timely manner; and
o in conformity with applicable professional and technical standards.
b. Ethical Handling of Actual and Apparent Conflicts of Interest
A "conflict of interest" occurs when a Covered Officer's private
interest improperly interferes with the interests of, or his or her service to,
a Fund. For example, a conflict of interest would arise if a Covered Officer,
or a member of his or her immediate family, receives improper personal benefits
as a result of his or her position with the Fund.
Certain conflicts of interest arise out of the relationships between
Covered Officers and the Funds and already are subject to conflict of interest
provisions in the Investment Company Act of 1940, as amended (the "Investment
Company Act") and the Investment Advisers Act of 1940, as amended (the
"Investment Advisers Act"). For example, Covered Officers may not individually
engage in certain transactions (such as the purchase or sale of securities or
other property) with the Funds because of their status as "affiliated persons"
of the Funds. The compliance programs and procedures of the Funds and the Funds'
investment adviser, SunAmerica Asset Management, LLC ("SAAMCo"), are designed to
prevent, or identify and correct, violations of these provisions. This Code does
not, and is not intended to, repeat or replace these programs and procedures,
and such conflicts fall outside of the parameters of this Code.
Although typically not presenting an opportunity for improper personal
benefit, conflicts may arise from, or as a result of, the contractual
relationship between, the Funds and SAAMCo, of which the Covered Officers may
also be officers or employees. As a result, this Code recognizes that the
Covered Officers will, in the normal course of their duties (whether formally
for the Funds or for SAAMCo, or for both), be involved in establishing policies
and implementing decisions that will have different effects on the Funds and
SAAMCo. The participation of the Covered Officers in such activities is inherent
in the contractual relationship between the Funds and SAAMCo, and is consistent
with the performance by the Covered Officers of their duties as officers of the
Funds. Thus, if performed in conformity with the provisions of the Investment
Company Act and the Investment Advisers Act, such activities will be deemed to
have been handled ethically. In addition, it is recognized by the Boards that
the Covered Officers may also be officers or employees of other investment
companies advised by SAAMCo.
In particular, each Covered Officer must:
2
o Not use his or her personal influence or personal relationships to
influence investment decisions or financial reporting by a Fund
whereby the Covered Officer would benefit personally to the detriment
of the Fund;
o Not cause a Fund to take action, or fail to take action, for the
individual personal benefit of the Covered Officer rather than the
benefit of the Fund; and
o Report at least annually to the Funds' Ethics Committee any material
transaction or relationship that could reasonably be expected to give
rise to a conflict of interest.
There are certain potential conflict of interest situations that
should be discussed with the Ethics Committee if material. Examples of these
include:
o Service as a director on the board of any company;
o The receipt of any non-nominal gifts;
o The receipt of any entertainment from any company with which a Fund
has current or prospective business dealings unless such entertainment
is business-related, reasonable in cost, appropriate as to time and
place, and not so frequent as to raise any question of impropriety;
o Any ownership interest in, or any consulting or employment
relationship with, any of the Funds' service providers, other than
SAAMCo, the Funds' principal underwriter or any affiliated person
thereof;
o A direct or indirect financial interest in commissions, transaction
charges or spreads paid by a Fund for effecting portfolio transactions
or for selling or redeeming shares other than an interest arising from
the Covered Officer's employment, such as compensation or equity
ownership.
c. Conduct in the Preparation of Financial Statements
Covered Officers must not knowingly make any misrepresentations
regarding the Funds' financial statements or any facts used in the preparation
of the Funds' financial statements. This section is intended to prohibit:
o making, or permitting or directing another to make, materially false
or misleading entries in the Funds' financial statements or records;
o failing to correct the Funds' financial statements or records that are
materially false or misleading; and
o signing, or permitting or directing another to sign, a document
containing materially false or misleading financial information.
3
d. Obligations to the Independent Auditor of the Funds
In dealing with the Funds' independent auditor, Covered Officers must
be candid and not knowingly misrepresent facts or knowingly fail to disclose
material facts, and must respond to specific inquiries and requests by the
Funds' independent auditor.
Covered Officers must not take any action, or direct any person to
take any action, to fraudulently influence, coerce, manipulate or mislead the
Funds' independent auditor in the performance of an audit of the Funds'
financial statements for the purpose of rendering such financial statements
materially misleading.
III. Disclosure and Compliance
o Each Covered Officer will familiarize himself or herself with the
disclosure requirements generally applicable to the Funds;
o Each Covered Officer will not knowingly misrepresent, or cause others
to misrepresent, facts about the Funds to others, whether within or
outside the Funds, including to the Boards and auditors, or to
governmental regulators and self-regulatory organizations;
o Each Covered Officer will, to the extent appropriate within his or her
area of responsibility, consult with other officers and employees of
the Funds and SAAMCo with the goal of promoting full, fair, accurate,
timely and understandable disclosure in the reports and documents that
the Funds file with, or submit to, the SEC and in other public
communications made by the Funds; and
o It is the responsibility of each Covered Officer to promote compliance
with the standards and restrictions imposed by applicable laws, rules
and regulations.
IV. Reporting and Accountability
Each Covered Officer must:
o Upon adoption of the Code (or thereafter as applicable, upon becoming
a Covered Officer), affirm in writing to the Boards that he or she has
received, read and understands the Code;
o Annually thereafter affirm to the Boards that he or she has complied
with the requirements of the Code;
o Not retaliate against any other Covered Officer or affiliated person
of the Funds for reports of potential violations of this Code,
provided the reports are made in good faith; and
4
o Notify the Ethics Committee promptly if he or she knows of any
violation of this Code. Failure to do so is itself a violation of this
Code.
The Ethics Committee is responsible for applying this Code to specific
situations in which questions are presented to it and has the authority to
interpret this Code in any particular situation. The Ethics Committee will also
consider waivers sought by the Covered Officers.
The Funds will act according to the following procedures in
investigating and enforcing this Code:
o The Ethics Committee will take all appropriate action to investigate
any potential violations reported to it;
o If, after such investigation, the Ethics Committee believes that no
violation has occurred, the Ethics Committee is not required to take
any further action;
o If the Ethics Committee determines that a violation has occurred, it
will consider appropriate action, which may include review of, and
appropriate modifications to, applicable policies and procedures;
notification to appropriate personnel of SAAMCo or its board; or a
recommendation to dismiss the Covered Officer;
o The Ethics Committee will be responsible for granting waivers, as
appropriate;
o The Ethics Committee will inform the Boards of violations or waivers
of this Code; and
o Any changes to or waivers of this Code will, to the extent required,
be disclosed as provided by SEC rules.
V. Other Policies and Procedures
This Code shall be the sole Code of Ethics adopted by the Funds for
purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms
applicable to investment companies thereunder. Insofar as other policies or
procedures of the Funds, SAAMCo, the Funds' principal underwriter or other
service providers govern or purport to govern the behavior or activities of the
Covered Officers who are subject to this Code, they are superseded by this Code
to the extent that they overlap or conflict with the provisions of this Code.
The Code of Ethics of the Funds, SAAMCo and the Funds' principal underwriter,
under Rule 17j-1 of the Investment Company Act, and SAAMCo's more detailed
policies and procedures set forth in the SAAMCo Compliance Procedures Manual are
separate requirements applying to Covered Officers and others, and are not part
of this Code.
VI. Amendments
5
Any amendments to this Code, other than amendments to Exhibit A, must be
approved or ratified by a majority vote of the Boards.
VII. Confidentiality
All reports and records prepared or maintained pursuant to this Code shall
be considered confidential and shall be maintained and protected accordingly.
Except as otherwise required by law or this Code, such matters shall not be
disclosed to anyone other than the Funds, the Ethics Committee, SAAMCo and the
Boards and their independent counsel.
VIII. Internal Use
The Code is intended solely for internal use by the Funds and does not
constitute an admission, by or on behalf of the Funds, as to any fact,
circumstance or legal conclusion.
Date: January 1, 2017
6
Exhibit A
John T. Genoy, Principal Executive Officer
Gregory R. Kingston, Principal Accounting Officer
7
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: June 07, 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: June 07, 2018
/s/ Gregory R. Kingston
-----------------------
Gregory R. Kingston
Treasurer
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: June 07, 2018
/s/ John T. Genoy
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John T. Genoy
President
/s/ Gregory R. Kingston
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Gregory R. Kingston
Treasurer
