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AIG SunAmerica Launches High Watermark Funds with Innovative Target Maturity Strategy

Strategic Insights

— 1 min read

AIG SunAmerica Asset Management Corp. has launched a series of target maturity funds designed to provide investors with a broad-based equity participation while minimizing risk. The High Watermark Funds are open-end mutual funds with a guarantee of return of principal plus any gains achieved to shareholders who remain invested until maturity. The funds are designed to meet various investor needs, including education and retirement funding.

Key Takeaways:

  • The High Watermark Funds are a series of target maturity funds launched by AIG SunAmerica Asset Management Corp. with a guaranteed return of principal plus any gains achieved to shareholders who remain invested until maturity.
  • The funds are designed to meet various investor needs, including education and retirement funding, with a broad-based equity participation and a lower-risk, core investment approach.
  • The High Watermark Funds feature a proprietary, dynamic approach that allocates assets to both equity and fixed income, becoming more conservative as the target maturity date approaches.
  • The funds are managed by SAAMCo, with Trajectory Asset Management LLC developing the proprietary methodology used to manage the portfolios.
  • The High Watermark Funds offer an attractive risk-adjusted return to investors, providing a solution for those hesitant to enter the markets in times of economic uncertainty.
  • The funds' risk profile is largely determined by the principal securities in which it invests and the investment techniques used, exposing investors to opportunity costs, interim redemptions, early Fund termination, interest rate fluctuations, and futures exposure.

Statistics:

  • As of December 31, 2003, SAAMCo managed and/or administered 38 retail mutual funds and more than $40 billion of assets, including $9.3 billion in retail mutual funds and $30.6 billion of investments in assets underlying variable annuities.
  • The S&P 500 Index is an unmanaged, broad-based, market-cap weighted index of 500 stocks.
  • The put agreement underlying the High Watermark Funds is backed by Prudential Global Funding, Inc., a subsidiary of Prudential Financial, Inc.
  • The guaranteed payout under the put agreement will be reduced by any redemptions of Fund shares or distributions taken in cash, sales charges, and extraordinary Fund expenses.

Sources:

  • "AIG SunAmerica Launches Innovative Target Maturity Funds," Press Release, AIG SunAmerica Asset Management Corp. (no date)
  • Neamtz, J. Steven, and Juan Ocampo, "High Watermark Funds: A New Option for Investors," (no date)
  • AIG Retirement Services, Inc., "AIG SunAmerica Announces the High Watermark Funds" (no date)
  • AIG SunAmerica Asset Management Corp., "High Watermark Funds Prospectus" (no date)

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