Form 497K VALIC Co I
Summary Prospectus
October 1, 2022
VALIC Company I
High Yield Bond Fund
(Ticker: VHYLX)
The Fund’s
Statutory Prospectus and Statement of Additional Information, each dated October 1, 2022, as amended and supplemented from time to time, and the most recent shareholder
reports are incorporated into and made part of this Summary Prospectus by reference. The Fund is offered
only to registered and unregistered separate accounts of The Variable Annuity Life Insurance Company and its affiliates and to qualifying retirement plans and IRAs and is not
intended for use by other investors.
Before you invest, you may want to review the Fund’s Statutory Prospectus, which contains more
information about the Fund and its risks. You can find the Statutory Prospectus and the above-incorporated information online at
http://valic.onlineprospectus.net/VALIC/FundDocuments/index.html. You can also get this information at no cost by calling 800-448-2542 or by sending an e-mail request to [email protected].
The Securities and Exchange Commission has not approved or disapproved these securities, nor has it
determined that this Summary Prospectus is accurate or complete. It is a criminal offense to state otherwise.
Investment Objective
The Fund seeks the highest possible total return and income consistent with conservation of capital through
investment in a diversified portfolio of high yielding, high risk fixed-income securities.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Fund.
The table and the example below do not reflect the separate account fees charged in the variable annuity or variable life insurance policy
(“Variable Contracts”) in which the Fund is offered. If separate account fees were
shown, the Fund’s annual operating expenses would be higher. Please see your Variable Contract prospectus
for more details on the separate account fees.
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
| Management Fees |
0.60% |
| Other Expenses |
0.11% |
| Total Annual Fund Operating Expenses |
0.71% |
| Fee Waivers and/or Expense Reimbursements1
|
0.03% |
| Total Annual Fund Operating Expenses
After Fee Waivers and/or Expense
Reimbursements1 |
0.68% |
1
Pursuant to an Expense Limitation Agreement, The Variable Annuity Life Insurance Company (“VALIC”) has contractually agreed to reimburse the expenses of the Fund until September 30, 2023, so that the Fund’s Total
Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements do not exceed 0.68%. For purposes
of the Expense Limitation Agreement, “Total Annual Fund Operating Expenses” shall not include extraordinary expenses (i.e.,
expenses that are unusual in nature and infrequent in occurrence, such as litigation), or acquired fund fees
and expenses, brokerage commissions and other transactional expenses relating to the purchase and sale of
portfolio securities, interest, taxes and governmental fees, and other expenses not incurred in the ordinary
course of the Fund’s business. This agreement will be renewed annually for one-year terms unless terminated
by the Board of Directors of VALIC Company I prior to any such renewal.
Expense Example
This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in
other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and
then redeem or hold all of your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund’s operating expenses include expense
reimbursements for year one. The Example does not reflect charges imposed by the Variable Contract. If the
Variable Contract fees were reflected, the expenses would be higher. See the Variable Contract prospectus for
information on such charges. Although your actual costs may be higher or lower, based on these assumptions and
the net expenses shown in the fee table, your costs would be:
| 1 Year |
3 Years |
5 Years |
10 Years |
| $69 |
$224 |
$392 |
$880 |
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns
over” its portfolio). These costs, which are not reflected in annual fund operating expenses or in the
Example, affect the Fund’s performance.
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High Yield Bond Fund
During the most
recent fiscal year, the Fund’s portfolio turnover rate was 40% of the average value of its portfolio.
Principal Investment Strategies of the Fund
At least 80% of the Fund’s net assets are invested, under normal circumstances, in high-yield,
below-investment grade fixed-income securities (often referred to as “junk bonds”). These
securities are rated below Baa3 by Moody’s Investor Services, Inc. (“Moody’s”) or BBB– by S&P Global Ratings (“S&P”) or determined to be of comparable quality by the subadviser. Up to 15% of the
Fund’s net assets can be rated below Caa3 by Moody’s or CCC– by S&P or its equivalent
rating by another Nationally Recognized Statistical Ratings Organization. The Fund may also invest up to 35% of
its net assets in below-investment grade foreign fixed-income securities.
The Fund may also invest up to 20% of its net assets in investment grade fixed-income securities, those rated Baa3 or higher by Moody’s and BBB– or higher by S&P.
Although the Fund does not routinely invest in equity securities, it may invest in equity securities from
time-to-time up to 20% of the Fund’s net assets.
The subadviser analyzes macroeconomic trends to develop an overall picture of a country, market, or market
segment and combines that analysis with research on individual securities to achieve the Fund’s
objective.
In order to generate additional income, the Fund may lend portfolio securities to broker-dealers and other
financial institutions provided that the value of the loaned securities does not exceed 30% of the Fund’s
total assets. These loans earn income for the Fund and are collateralized by cash and securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities.
Investors will be given at least 60 days’ written notice in advance of any change to the Fund’s 80% investment policy set forth above.
Principal Risks
of Investing in the Fund
As with any mutual fund, there can be no assurance that the Fund’s investment objective will be met or that the net return on an investment in the Fund will exceed what could
have been obtained through other investment or savings vehicles. Shares of the Fund are not bank deposits and are not guaranteed or insured by any bank, government entity or the Federal Deposit Insurance Corporation. If the value of the assets of the Fund goes down, you could lose money.
The following is a summary of the principal risks of investing in the Fund.
Management Risk.
The investment style or strategy used by the Fund may fail to produce the intended result. A subadviser’s
assessment of a particular security or company may prove incorrect, resulting in losses or
underperformance.
Call or Prepayment Risk. During periods of falling interest rates, a bond issuer may “call” a bond to repay it before its maturity date. The Fund may only be able
to invest the bond’s proceeds at lower interest rates, resulting in a decline in the Fund’s
income.
Credit Risk. The Fund may suffer losses if the issuer of a fixed-income security owned by the Fund is unable to make interest or principal payments.
Currency Risk. Because the Fund’s foreign investments are generally held in foreign currencies, the Fund could experience gains or losses based solely on changes in the exchange rate between foreign currencies and the U.S. dollar. Such gains or losses may be substantial.
Foreign Investment Risk. Investment in foreign securities involves risks due to several factors, such as illiquidity, the lack of public information, changes in the exchange rates between foreign currencies and the U.S. dollar, unfavorable political, social and legal developments, or economic and financial instability. Foreign companies are not subject to the U.S. accounting and financial reporting standards and may have riskier settlement procedures. U.S. investments that are denominated in foreign currencies or that are traded in foreign markets, or securities of U.S. companies that have significant foreign operations may be subject to foreign investment risk.
Interest Rate Risk. The value of fixed-income securities may decline when interest rates go up or increase when interest rates go down. The interest earned on fixed-income securities may decline when interest rates go down or increase when interest rates go up. Longer-term and lower coupon bonds tend to be more sensitive to changes in interest rates. The Fund may be subject to a greater risk of rising interest rates due to the current period of historically low rates and the effect of potential
government fiscal policy initiatives and resulting market reaction to these initiatives.
Junk Bond Risk.
High yielding, high risk fixed-income securities (often referred to as “junk bonds”) may involve
significantly greater credit risk, market risk and interest rate risk compared to higher rated fixed-income
securities. Issuers of junk bonds are less secure financially and their securities are more sensitive to
downturns in the economy.
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High Yield Bond Fund
The market for
junk bonds may not be as liquid as that for more highly rated securities.
Market Risk. The
Fund’s share price can fall because of weakness in the broad market, a particular industry, or specific
holdings or due to adverse political or economic developments here or abroad, changes in investor psychology,
or heavy institutional selling and other conditions or events (including, for example, military confrontations,
war, terrorism, disease/virus, outbreaks and epidemics). The prices of individual securities may fluctuate,
sometimes dramatically, from day to day. The prices of stocks and other equity securities tend to be more
volatile than those of fixed-income securities.
The coronavirus pandemic and the related
governmental and public responses have had and may continue to have an impact on the Fund’s investments
and net asset value and have led and may continue to lead to increased market volatility and the potential for
illiquidity in certain classes of securities and sectors of the market. Preventative or protective actions that
governments may take in respect of pandemic or epidemic diseases may result in periods of business disruption,
business closures, inability to obtain raw materials, supplies and component parts, and reduced or disrupted
operations for the issuers in which the Fund invests. Government intervention in markets may impact interest
rates, market volatility and security pricing. The occurrence, reoccurrence and pendency of such diseases could
adversely affect the economies (including through changes in business activity and increased unemployment) and financial markets either in specific countries or worldwide.
Securities Lending Risk. Engaging in securities lending could increase the market and credit risk for Fund investments. The Fund may lose money if it does not recover borrowed securities, the value of the collateral falls, or the value of investments made with cash collateral declines. The Fund’s loans will be collateralized by
securities issued or guaranteed by the U.S. Government or its agencies and instrumentalities, which subjects
the Fund to the credit risk of the U.S. Government or the issuing federal agency or instrumentality. If the
value of either the cash collateral or the Fund’s investments of the cash collateral falls below the
amount owed to a borrower, the Fund also may incur losses that exceed the amount it
earned on lending
the security. Securities lending also involves the risks of delay in receiving additional collateral or
possible loss of rights in the collateral if the borrower fails. Another risk of securities lending is the risk that the loaned portfolio securities may not be available to the Fund on a timely basis and the Fund may therefore lose the opportunity to sell the securities at a desirable price.
Performance Information
As a result of a reorganization which occurred on May 24, 2021 (the “Reorganization”), the Fund
acquired all of the assets and liabilities of the High Yield Bond Fund (the “Predecessor Fund”), a
series of VALIC Company II. The returns presented for the Fund reflect the performance of the Predecessor Fund.
The Fund had not yet commenced operations prior to the Reorganization. The performance information below is
based on the performance of the Predecessor Fund for periods prior to the date of the Reorganization. The
Fund and the Predecessor Fund had the same investment objectives, strategies and portfolio management team as
of the date of the Reorganization.
The following Risk/Return Bar Chart and Table illustrate
the risks of investing in the Fund by showing changes in the Fund’s performance from calendar year to
calendar year and comparing the Fund’s average annual returns to those of the FTSE High-Yield Market
Index.Fees and expenses incurred at the contract level are not reflected in the bar chart or table. If these amounts were reflected, returns would be less than those shown. Of course, past performance of the Fund is not necessarily an indication of how the Fund will perform in the future.
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High Yield Bond Fund
During the period shown in the
bar chart:
| Highest Quarterly
Return: |
June 30, 2020 |
10.19% |
| Lowest Quarterly
Return: |
March 31, 2020 |
-13.13% |
| Year to Date Most
Recent Quarter: |
June 30, 2022 |
-13.67% |
Average Annual Total Returns (For the periods ended December 31, 2021)
| |
1
Year |
5
Years |
10 Years |
| Fund |
4.29% |
5.97% |
5.99%
|
| FTSE High-Yield Market Index (reflects no
deduction for fees, expenses or taxes) |
5.39% |
6.01% |
6.48%
|
Investment Adviser
The Fund’s investment adviser is VALIC.
The Fund is subadvised by Wellington Management Company LLP.
Portfolio
Manager
| Name and Title |
Portfolio Manager of the Fund
Since |
| Christopher A. Jones, CFA*
Senior Managing Director and
Fixed-Income Portfolio Manager |
2009**
|
| Michael V. Barry* Senior Managing Director and Fixed-
Income Portfolio Manager |
2021 |
* Christopher Jones has announced his plan to retire on June 30, 2023.
Upon his retirement, Michael Barry will assume sole portfolio management responsibilities for the Fund.
** Includes management of the Predecessor Fund.
** Includes management of the Predecessor Fund.
Purchases and Sales of Fund Shares
Shares of the Funds may only be purchased or redeemed through Variable Contracts offered by the separate
accounts of VALIC or other participating life insurance companies and through qualifying retirement plans
(“Plans”) and IRAs. Shares of each Fund may be purchased and redeemed each day the New York Stock
Exchange is open, at the Fund’s net asset value determined after receipt of a request in good
order.
The Funds do not have any initial or subsequent investment minimums. However, your insurance company may impose investment or account value minimums. The prospectus (or other offering document) for your Variable Contract contains additional information about purchases and redemptions of the Funds’ shares.
Tax Information
A Fund will not be subject to U.S. federal income tax so long as it qualifies as a regulated investment
company and distributes its income and gains each year to its shareholders. However, contractholders may be
subject to federal income tax (and a federal Medicare tax of 3.8% that applies to net income, including taxable
annuity payments, if applicable) upon withdrawal from a Variable Contract. Contractholders should consult the
prospectus (or other offering document) for the Variable Contract for additional information regarding
taxation.
Payments to Broker-Dealers and
Other Financial Intermediaries
Other Financial Intermediaries
The Funds are not sold directly to the general public but instead are offered to registered and unregistered
separate accounts of VALIC and its affiliates and to Plans and IRAs. The Funds and their related companies may
make payments to the sponsoring insurance company or its affiliates for recordkeeping and distribution. These
payments may create a conflict of interest as they may be a factor that the insurance company considers in
including the Funds as underlying investment options in a variable contract. Visit your sponsoring insurance
company’s website for more information.
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