JERSEY CITY, N.J.--(BUSINESS WIRE)--SunAmerica Asset Management Corp. announced the recent launch of its SunAmerica Global Trends Fund. The Fund allocates assets across 10 global asset classes, including global equity and fixed income markets, currencies and commodities, by using an innovative, rules-based strategy that seeks to move the Fund in and out of changing markets. Exposures to each individual asset class are adjusted based upon technical analysis and the positive or negative signals identified by Wellington Management Company, LLP, the Fund’s sub-adviser. The Fund generally seeks to implement its investment strategy by investing in futures contracts and futures-related instruments that provide the Fund with exposure to the 10 asset classes.
“One of the greatest challenges for investors is deciding when to move in and out of changing markets,” said Steve Maginn, Chief Distribution Officer of the SunAmerica Companies. “With the SunAmerica Global Trends Fund, investors can leave these tough decisions to professional managers. The Fund’s unique rules-based process, which Wellington Management uses to determine when to move in and out of global markets, eliminates the need for investors to make difficult buy and sell decisions because the Fund actively manages the decisions for them.”
The Fund’s investment objective is to seek to achieve capital appreciation. The Fund also has the potential to reduce volatility through broad diversification across global markets and through the ability to adjust its exposure to multiple asset classes based on market conditions which include reducing or eliminating positions in downward-trending asset classes.
“Many mutual funds are actively managed using fundamental analysis that focuses on the intrinsic value of a security or market,” said Rick Wurster, Portfolio Manager with Wellington Management. “However, only a few use technical analysis to determine exposures to such a diverse group of global markets.” The Fund has the flexibility to move out of an asset class completely in response to signals of a negative trend. Its investment exposure to each of the 10 global asset classes (based on the notional exposure of the futures) will generally be between 0-10% of the value of the Fund’s net assets.1 If there are negative signals, the Fund may decrease the asset class weight to 0%, keeping the position in high-quality, short-term securities. If strong positive signals are identified, the Fund can overweight one or more asset classes to a maximum of 20%.
The SunAmerica Global Trends Fund is subadvised by Wellington Management Company, LLP, a leading global asset manager with more than $663 billion in assets under management, spanning more than 50 countries as of March 31, 2011. Wellington manages assets for some of the world’s leading funds, banks, endowments and foundations. The Fund’s management team is led by Rick Wurster, CFA, CMT and a portfolio manager within Wellington Management’s 24-member Asset Allocation group that is dedicated to providing sophisticated investment solutions to clients. In managing the Fund, Mr. Wurster can draw upon the breadth and depth of Wellington Management's firm-wide resources, which include proprietary research across all asset classes.
SunAmerica Asset Management Corp., the investment adviser to the Fund, offers a broad range of retail mutual fund offerings, including unique investment products designed to meet targeted objectives such as alternative strategies, asset allocation and focused dividend strategies. The company’s investment management approach combines strong in-house talent with highly respected independent money managers. As of April 30, 2011, SunAmerica Asset Management Corp. managed and/or administered approximately $46.5 billion of assets.
The Fund expects to invest a significant portion of its assets in repurchase agreements collateralized by the U.S. government and its agencies, and may also invest in other high-quality short-term securities (“money market instruments”). The primary purpose of the repurchase agreements and other money market instruments held by the Fund will be to serve as collateral for the futures instruments. The Fund's return is expected to be derived principally from changes in the value of the assets underlying the futures instruments held by the Fund.
Notes on Risk: Futures and forward contracts are contractual agreements that involve the right to receive, or obligation to deliver, assets or money depending on the performance of one or more underlying assets, currencies or a market or economic index. The risks associated with the Fund’s use of futures contracts include the risk that: (i) changes in the price of a futures contract may not always track the changes in market value of the underlying reference asset; (ii) trading restrictions or limitations may be imposed by an exchange, and government regulations may restrict trading in futures contracts; and (iii) if the Fund has insufficient cash to meet margin requirements, the Fund may need to sell other investments, including at disadvantageous times. Forwards are not exchange-traded and therefore no clearinghouse or exchange stands ready to meet the obligations of the contracts. Thus, the Fund faces the risk that its counterparties may not perform their obligations. Forward contracts are also not regulated by the Commodity Futures Trading Commission (“CFTC”) and therefore the Fund will not receive any benefit of CFTC regulation when trading forwards. The Fund’s investment in futures may provide leveraged exposure which may cause the Fund to lose more than the amount it invested in those instruments.
The Fund also has exposure to the commodities markets, which may subject the Fund to greater volatility than investments in traditional securities. The value of commodity futures instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or events affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments.
Investments that provide exposure to foreign markets involve special risks, such as currency fluctuations, differing financial reporting and regulatory standards, and economic and political instability. These risks are highlighted when the issuer is in an emerging market. Fixed income securities and currency and fixed income futures are subject to changes in their value when prevailing interest rates change. Adverse changes in currency exchange rates (relative to the U.S. dollar) may erode or reverse any potential gains from futures instruments that are tied to foreign instruments or currencies. Emerging market exposure generally has a higher level of currency risk. Credit risk (i.e., the risk that an issuer might not pay interest when due or repay principal at maturity of the obligation) could affect the value of the investments in the Fund’s portfolio exposed to fixed income securities. The Fund’s investments in repurchase agreements involve certain risks involving the default or insolvency of the seller and counterparty risk (i.e. the risk that the counterparty will not perform its obligations).
Active trading of the Fund’s portfolio may result in high portfolio turnover and correspondingly greater brokerage commissions and other transaction costs, which will be borne directly by the Fund and which will affect the Fund’s performance. Active trading may also result in increased tax liability for Fund shareholders. Diversification does not guarantee a profit nor does it protect against loss.
Wellington Management is an independent and unaffiliated investment sub-adviser to SunAmerica.
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 advisor, the SunAmerica Sales Desk at 800-858-8850, ext. 6003, or at www.sunamericafunds.com. Read the prospectus carefully before investing.
Funds distributed by SunAmerica Capital Services, Inc.
1 The exposure percentages are based on the notional exposure of the futures instruments divided by the Fund’s net assets. Notional values represent the aggregate exposure that a futures or forward contract provides to the underlying reference asset or currency.