AIG Flexible Credit Fund

Class A: SHNAX • Class C: SHNCX • Class W: SHNWX

A Dynamic "2-in-1" Approach to Income Investing

In today’s interest rate environment, many investors are looking for actively managed portfolios that provide exposure to higher-yielding fixed income markets. With the convergence of floating rate loans and high-yield bonds into one asset class, you may want to consider the actively managed AIG Flexible Credit Fund as a potential solution. It tactically manages the exposure to floating rate loans and high-yield bonds to potentially take advantage of relative value opportunities and to help lessen the impact of interest rate risk. 

The AIG Flexible Credit Fund seeks a high level of total return by investing in floating rate loans and high-yield bonds, two of the best-performing asset classes in the global financial markets since 2008:

  • High-yield bonds are debt obligations issued by below-investment grade companies. While exposing investors to more credit risk, high-yield bonds offer greater yields with lower interest rate sensitivity than investment grade bonds.
  • Floating rate loans are made by banks to below-investment grade companies. They are called "floating rate" securities because their rates adjust with the interest rate environment, moving up or down based on a benchmark such as the London Interbank Offered Rate (LIBOR).

The Fund’s ability to adjust the allocation to each asset class from 0% to 100% enables it to help generate attractive income and total return opportunities by being responsive to interest rate changes and other factors that could impact performance, including credit quality, market volatility and economic conditions.

Effective October 1, 2014, the name of the SunAmerica High Yield Bond Fund was changed to the SunAmerica Flexible Credit Fund and certain corresponding changes were made to the Fund's investment strategy and techniques. Prior to this date, the Fund was managed as a high-yield bond fund.

Interest rates and bond prices typically move inversely to each other. As interest rates rise, credit instruments typically fall, and as interest rates fall, credit instruments typically rise. Longer term and lower coupon bonds tend to be more sensitive to interest rate changes. Investments in loans and other floating-rate securities reduce interest rate risk. While interest rates on loans adjust periodically, these rates may not correlate to prevailing interest rates during the periods between rate adjustments. 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 those initiatives.

Investment in floating rate loans involves 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. Investments in non-investment-grade debt securities (“high-yield” or “junk” 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.