PORTFOLIO HIGHLIGHTS September 30, 2016 POLARIS FOR THOSE WHO WANT MORE Volatility Control Portfolios
SunAmerica Dynamic Portfolios The SunAmerica Dynamic Allocation Portfolio (SDAP) and the SunAmerica Dynamic Strategy Portfolio (SDSP) are actively managed funds-of-funds that draw on the expertise of leading Polaris money managers. Each Portfolio contains a fund-of-funds component and an overlay component that is used for volatility management. Each Portfolio s Net Equity Exposure may be increased or decreased to manage the Portfolio s volatility. Investment adviser: SunAmerica Asset Management, LLC (SAAMCo) Subadviser to the overlay component of each Portfolio: AllianceBernstein L.P. Portfolio Composition at Quarter End SunAmerica Dynamic Allocation Portfolio (SDAP) Net Equity Exposure 1 72.5%* 82.3%* Fund-of-Funds Component Equity Exposure 57.2% 57.5% Overlay Component Equity Exposure** 15.3% 24.8 % Net Assets: $11,455,556,725 SunAmerica Dynamic Strategy Portfolio (SDSP) Net Equity Exposure 1 72.6%* 82.3%* Fund-of-Funds Component Equity Exposure 64.6% 65.7% Overlay Component Equity Exposure** 8.0% 16.6% Net Assets: $6,211,489,701 Fund-of-Funds Component 2 (by asset class) SDAP % of Overall Portfolio SDSP % of Overall Portfolio Large Core 14.3% 17.5% Large Growth 13.2% 7.4% Large Value 10.7% 20.2% Small and Mid Cap Growth 2.6% 1.7% Small and Mid Cap Value 3.1% 3.4% Small Blend 1.0% 2.4% Specialty 0.8% 0.8% International Developed Markets 7.6% 9.8% International Emerging Markets 1.2% Global 3.0% 2.4% SUB-TOTAL: EQUITY 1 57.5% 65.7% Investment Grade Bonds 21.4% 15.1% High-Yield Bonds 0.9% 0.6% Inflation Protected Securities 0.8% 0.8% SUB-TOTAL: FIXED INCOME 1 24.5% 16.4% TOTAL: FUND-OF-FUNDS COMPONENT 1 82.0% 82.1% Overlay Component 17.9% 17.8% Other Assets/Liabilities 0.1% 0.1% PORTFOLIO TOTAL 1 100% 100% SunAmerica Dynamic Allocation Portfolio (SDAP) Target Asset Allocation SunAmerica Dynamic Strategy Portfolio (SDSP) Target Asset Allocation Overlay Component SAAMCo draws on research from Wilshire Funds Management in managing the SDAP fund-of-funds component Overlay Component SAAMCo draws on research from Morningstar Investment Management LLC in managing the SDSP fund-of-funds component * Note: If you elect an optional income protection feature, certain investment requirements apply, including a required allocation to the Secure Value Account (a fixed account with a one-year term). Assuming an investment made on 9/30/16, based on an allocation of 10% Secure Value Account/90% SunAmerica Dynamic Allocation Portfolio, the Net Equity Exposure of the SunAmerica Dynamic Allocation Portfolio with the Secure Value Account is 74.1%. Assuming an investment made on 9/30/16, based on an allocation of 10% Secure Value Account/90% SunAmerica Dynamic Strategy Portfolio, the Net Equity Exposure of the SunAmerica Dynamic Strategy Portfolio with the Secure Value Account is 74.1%. **Generally obtained through S&P 500 equity index futures contracts and options held in the overlay component of each Portfolio. 1 Percentages may not add to total shown due to rounding. 2 Based upon the primary asset class of each underlying portfolio as determined by SunAmerica Asset Management, LLC.
Fund-of-Funds Component (Underlying Portfolios*) PORTFOLIO (MONEY MANAGER) SDAP** SDSP** Equity Portfolios 1 57.5% 65.7% Aggressive Growth (Wells Capital Management Incorporated) 0.2% Blue Chip Growth (Massachusetts Financial Services Company) 3.4% Capital Appreciation (Wellington Management Company LLP) 1.7% Capital Growth (The Boston Company Asset Management, LLC) 0.8% 1.6% Dogs of Wall Street (SunAmerica Asset Management, LLC) 2.5% Emerging Markets (J.P. Morgan Investment Management Inc.) 1.2% Equity Index (SunAmerica Asset Management, LLC) 9.9% 8.6% Equity Opportunities (OppenheimerFunds, Inc.) 4.1% Foreign Value (Templeton Investment Counsel, LLC) 2.6% 4.0% Fundamental Growth (Wells Capital Management Incorporated) 0.2% Global Equities (J.P. Morgan Investment Management Inc.) 3.0% 2.4% Growth (Wellington Management Company LLP) 1.6% Growth and Income (Wellington Management Company LLP) 1.6% Growth-Income (J.P. Morgan Investment Management Inc.) 3.9% 5.0% Growth Opportunities (Invesco Advisers, Inc.) 0.8% International Diversified Equities (Morgan Stanley Investment Management Inc.) 2.4% International Equity (Janus Capital Management LLC/T.Rowe Price Associates, Inc./PineBridge Investments, LLC) 2.7% 3.3% International Growth and Income (Putnam Investment Management, LLC) 2.4% Large Cap Growth (Goldman Sachs Asset Management, L.P./Janus Capital Management, LLC/SunAmerica Asset Management, LLC) 1.5% 1.7% Large Cap Value (American Century Investment Management, Inc./SunAmerica Asset Management, LLC/Wellington Management Company LLP) 3.4% 6.6% Mid-Cap Growth (J.P. Morgan Investment Management Inc.) 0.8% 0.9% Mid Cap Growth (SunAmerica Asset Management, LLC/T. Rowe Price Associates, Inc./Wellington Management Company LLP) 0.8% 0.8% Mid Cap Value (Goldman Sachs Asset Management, L.P./Massachusetts Financial Services Company/SunAmerica Asset Management, LLC) 1.6% 0.9% Real Estate (FIAM, LLC) 0.8% 0.8% SA AB Growth (AllianceBernstein L.P.) 2.5% SA Columbia Focused Growth (Columbia Management Investment Advisers, LLC) 0.8% SA Columbia Focused Value (Columbia Management Investment Advisers, LLC) 1.7% 2.1% SA Legg Mason BW Large Cap Value (Brandywine Global Investment Management, LLC) 1.7% 4.1% SA Janus Focused Growth (Janus Capital Management, LLC.) 1.7% SA MFS Massachusetts Investors Trust (Massachusetts Financial Services Company) 2.8% 4.9% Small & Mid Cap Value (AllianceBernstein L.P.) 1.7% Small Cap (J.P. Morgan Investment Management Inc./PNC Capital Advisors, LLC/SunAmerica Asset Management, LLC) 1.0% 2.4% Small Company Value (Franklin Advisory Services, LLC.) 1.6% 0.8% Stock (T. Rowe Price Associates, Inc.) 3.0% Fixed Income Portfolios 1 24.5% 16.4% Corporate Bond (Federated Investment Management Company) 4.2% 3.2% Diversified Fixed Income (PineBridge Investments, LLC/ Wellington Management Company LLP) 5.7% 1.7% Global Bond (Goldman Sachs Asset Management International) 0.8% 2.4% Government and Quality Bond (Wellington Management Company LLP) 5.0% 2.4% High-Yield Bond (PineBridge Investments, LLC) 0.9% 0.6% Real Return (Wellington Management Company LLP) 0.8% 0.8% SA JPMorgan MFS Core Bond (J.P. Morgan Investment Management Inc./Massachusetts Financial Services Company.) 5.8% 4.9% Ultra Short Bond (Dimensional Fund Advisors LP) 1.3% 0.4% Fund-of-Funds Component Total 1 82.0% 82.1% * The universe of underlying portfolios and associated money managers is subject to change. ** Percentage of overall Portfolio Please see pages 8 and 9 for important risks and a definition of Net Equity Exposure. 1
VCP Managed Asset Allocation SAST Portfolio The VCP Managed Asset Allocation SAST Portfolio is a balanced portfolio that provides access to American Funds and diversification among equities (stocks), fixed income (bonds) and money market instruments through the underlying fund in which the Portfolio invests, while managing volatility. Investment adviser 3 : Capital Research and Management Company Subadviser to the Portfolio s risk-management overlay: Milliman Financial Risk Management LLC VCP Managed Asset Allocation SAST Portfolio* Equity Exposure at Quarter End Net Equity Exposure 52.5% 56.9% Asset Allocation Portfolio Statistics Net Assets $1.10 Billion Percent in Top 10 19.9% Average Life 5.0 Years Average Maturity 9.8 Years Equities 56.8% Bonds 26.5% Cash 16.6% Other Assets/Liabilities 0.1% Management Team Portfolio Manager Alan N. Berro James R. Mulally Adam Schenck Industry Experience 30 Years 40 Years 11 Years Top 10 Holdings (of the Master Fund) US TREASURY (FI) 13.5% MICROSOFT 3.6% TSMC 2.4% PHILIP MORRIS INTERNATIONAL 2.3% JPMORGAN CHASE 2.1% COMCAST 1.8% DUPONT 1.7% UNITEDHEALTH GROUP 1.7% LOCKHEED MARTIN 1.6% CHUBB 1.6% Source: Based on data supplied by the subadviser. * The VCP Managed Asset Allocation SAST Portfolio ( Feeder Fund ) does not invest directly in individual securities; instead it invests in shares of the American Funds Insurance Series Managed Risk Asset Allocation Fund SM (the Master Fund ). In turn, the Master Fund invests in shares of an underlying fund, the American Funds Insurance Series Asset Allocation Fund (the Underlying Fund ), hedge instruments (primarily exchangetraded futures) and cash or cash equivalents. Investing in a Feeder Fund will result in higher fees and expenses than investing in a portfolio that invests directly in securities. Please see the prospectus for more information regarding the master-feeder fund structure and related expenses. Applies to Portfolio s bond holdings only. Top 10 Holdings excludes Cash holdings. 3 SunAmerica Asset Management, LLC serves as investment adviser to the Feeder Fund ; Capital Research and Management Company serves as investment adviser to the Master Fund and the Underlying Fund. 2 Please see pages 8 and 9 for important risks, additional information and a glossary of financial terms.
VCP Total Return Balanced Portfolio The VCP Total Return Balanced Portfolio is a balanced portfolio that leverages the fixed income and equity investment expertise of Pacific Investment Management Company LLC (PIMCO), with volatility management. Investment adviser: SunAmerica Asset Management, LLC Subadviser: Pacific Investment Management Company LLC VCP Total Return Balanced Portfolio Equity Exposure at Quarter End Net Equity Exposure* 73.3% 78.9% Asset Allocation Portfolio Statistics Net Assets $917.9 Million Number of Holdings 365 Duration 2.1 Years Average Maturity 4.3 Years US Large and Mid Cap 59.4% US Small Caps 5.0% International 14.5% US Bonds** 21.1% Top 10 Holdings Management Team Portfolio Manager Josh Davis, PhD Josh Thimons Sudi Mariappa Graham Rennison Industry Experience 12 Years 17 Years 29 Years 14 Years EMINI S&P500 FUTURE EXPIRING 12/16/16 63.2% STIF FUND (USD) 24.2% US TREASURY REPO 23.4% US TREASURY REPO 9.2% EUR/USD FUTURE (CME) EXPIRING 12/19/16 9.0% US TREASURY NOTE 6.9% US AGENCY MORTGAGE REPO 5.4% EAFE TOTAL RETURN EQUITY SWAP 5.2% RUSSELL 2000 MINI FUTURE EXPIRING 12/16/16 5.0% EAFE TOTAL RETURN EQUITY SWAP 4.6% Source: Based on data supplied by the subadviser. *Generally obtained through exchange-traded futures contracts and equity swaps. **Net of Cash and Futures Applies to Portfolio s bond holdings only. Derivative exposures are based on the notional value. Top 10 Holdings excludes Cash holdings. Please see pages 8 and 9 for important risks, additional information and a glossary of financial terms. 3
VCP Value Portfolio The VCP Value Portfolio is a balanced portfolio that capitalizes on the value style investing expertise of Invesco Advisers, Inc., while managing volatility. Investment adviser: SunAmerica Asset Management, LLC Subadviser: Invesco Advisers, Inc. VCP Value Portfolio Equity Exposure at Quarter End Net Equity Exposure* 20.9% 62.1% Asset Allocation US Equity 56.6% Non US Equity 6.2% Non-Convertible Bonds 24.1% Convertible Bonds 8.5% Other 0.3% Cash 4.3% Top 10 Holdings US TREASURY NOTE @ 1.125% EXPIRING 8-31-21 5.1% US TREASURY NOTE @ 0.75% EXPIRING 08-2018 3.9% JP MORGAN CHASE & CO 3.0% CITIGROUP INC COM 2.9% BANK OF AMERICA CORP 2.0% Portfolio Statistics Net Assets $1.02 Billion Number of Holdings 392 Percent in Top 10 24.6% Duration 5.5 Years Average Maturity 8.2 Years P/E Ratio 17.7 P/B Ratio 2.6 Management Team Portfolio Manager Industry Experience Thomas Bastian 19 Years Chuck Burge 21 Years Brian Jurkash 16 Years Matthew Titus 14 Years Sergio Marcheli 21 Years Duy Nguyen 22 Years James Roeder 23 Years US TREASURY NOTE @ 0.5% EXPIRING 04-2017 1.8% MORGAN STANLEY 1.6% APACHE CORP 1.5% MERCK & CO. INC. 1.4% US TREASURY NOTE @ 0.875% EXPIRING 09-15-19 1.4% Source: Based on data supplied by the subadviser. * In addition to direct equity exposure, the Portfolio has 8.5% in convertible bonds as of 9/30/16. Convertible securities have both equity and fixed income characteristics and risks. Applies to Portfolio s bond holdings only. Top 10 Holdings excludes Cash holdings. 4 Please see pages 8 and 9 for important risks, additional information and a glossary of financial terms.
SA BlackRock VCP Global Multi Asset Portfolio The SA BlackRock VCP Global Multi Asset Portfolio is a global tactical asset allocation strategy that actively controls volatility to seek a more consistent investment experience. Investment adviser: SunAmerica Asset Management, LLC Subadviser: BlackRock Investment Management, LLC SA BlackRock VCP Global Multi Asset Portfolio Equity Exposure at Quarter End Net Equity Exposure 57.4% 55.7% Asset Allocation Portfolio Statistics Net Assets $337.3 Million Number of Holdings 644 Duration 7.0 Years Average Maturity 7.7 Years Equity 55.7% Fixed Income 44.3% Management Team Portfolio Manager Philip Green Michael Pensky, CFA Industry Experience 30 Years 7 Years Top 10 Holdings US TREASURY 10YR NOTE EXPIRING DEC 16 28.4% AUST 3YR BOND EXPIRING DEC 16 14.0% S&P500 EMINI EXPIRING DEC 16 11.4% EUR/USD FUTURE (CME) EXPIRING DEC 16 10.8% EURO STOXX 50 EXPIRING DEC 16 4.2% TOPIX INDEX EXPIRING DEC 16 3.4% US TREASURY NOTE 3.4% US TREASURY NOTE 3.4% US TREASURY NOTE 3.3% US TREASURY NOTE 3.3% Source: Based on data supplied by the subadviser. Applies to Portfolio s bond holdings only. Please see pages 8 and 9 for important risks, additional information and a glossary of financial terms. 5
SA Schroders VCP Global Allocation Portfolio The SA Schroders VCP Global Allocation Portfolio actively invests across markets and asset classes with the aim to provide growth potential and control volatility. Investment adviser: SunAmerica Asset Management, LLC Subadviser: Schroder Investment Management North America Inc. SA Schroders VCP Global Allocation Portfolio Equity Exposure at Quarter End Net Equity Exposure 44.7% 60.6% Asset Allocation Portfolio Statistics Net Assets $259.1 Million Number of Holdings 922 Duration 2.7 Years Average Maturity 4.1 Years US Equities 32.4% Developed Equities 25.6% Emerging Markets 2.4% Government Debt 0.5% Corporate Bonds 31.9% Inflation Linked Bonds 4.0% Cash 3.2% Management Team Portfolio Manager Johanna Kyrklund, CFA Michael Hodgson, PhD Industry Experience 19 Years 29 Years Top 10 Holdings S&P 500 EMINI INDEX FUTURE 16.0% FTSE 100 INDEX FUTURE 4.8% SPI 200 INDEX FUTURE 3.8% US TREASURY 2 YEAR FUTURES NOTE 3.1% S&P 500 CONSUMER DISCRETIONARY TRS 2.9% NIKKEI 225 MINI INDEX FUTURE 2.4% US TREASURY INFLATION SECURITY (TREASURY INFLATION INDEX) @ 0.25% 2.1% US TREASURY INFLATION NOTE/BOND @ 0.625% 1.9% FINANCIAL SELECT SECTOR SPDR FUND 1.9% MINI MSCI EMERGING MARKETS INDEX FUTURE 1.7% Source: Based on data supplied by the subadviser. Applies to Portfolio s bond holdings only. 6 Please see pages 8 and 9 for important risks, additional information and a glossary of financial terms.
SA T. Rowe Price VCP Balanced Portfolio The SA T. Rowe Price VCP Balanced Portfolio is a broadly diversified balanced portfolio, combining the value added from the firm s expertise in portfolio design, asset allocation and active management with an integrated approach for stabilizing the portfolio s volatility. Investment adviser: SunAmerica Asset Management, LLC Subadviser: T. Rowe Price Associates, Inc. SA T. Rowe Price VCP Balanced Portfolio Equity Exposure at Quarter End Net Equity Exposure 39.2% 65.1% Asset Allocation Portfolio Statistics Net Assets $428.7 Million Number of Holdings 999 Duration 5.3 Years Average Maturity 7.4 Years US Equities 45.1% US Bonds 35.5% International Equities 19.4% Management Team Portfolio Manager Anna A. Dreyer, PhD, CFA Toby M. Thompson, CFA, CAIA Charles M. Shriver, CFA Industry Experience 7 Years 22 Years 17 Years Top 10 Holdings S&P500 EMINI FUTURE EXPIRING 12/16 7.8% T. ROWE PRICE INST HIGH YIELD FUND 3.5% US TREASURY 2YR FUTURES NOTE EXPIRING 12/16 1.6% MINI MSCI EAFE FUTURE EXPIRING 12/16 1.6% AMAZON.COM 1.5% US TREASURY NOTE/BOND EXPIRING 9-15-18 1.4% US TREASURY 5YR FUTURES NOTE EXPIRING 12/16 1.3% FANNIE MAE 30 YR TBA OCT 1.2% MICROSOFT 1.1% FANNIE MAE 30 YR TBA OCT 0.9% Source: Based on data supplied by the subadviser. Applies to Portfolio s bond holdings only and excludes derivatives. Derivatives exposures are based on the notional value. Top 10 Holdings excludes Cash holdings. Please see pages 8 and 9 for important risks, additional information and a glossary of financial terms. 7
Important Risks and Additional Information Volatility Control Portfolios are available in select Polaris Variable Annuities. Information contained in this brochure is as of 9/30/16 and subject to change. Polaris Variable Annuities are long-term investments designed for retirement. In the Accumulation phase, they can help you build assets on a tax-deferred basis. In the Income phase, they can provide you with guaranteed income through standard or optional features. Variable annuities are subject to costs that include a separate account fee, a contract maintenance fee, expenses related to the operation of the variable portfolios and the costs associated with any optional features elected. Income protection features are optional and subject to additional fees, investment requirements and other limitations. All contract and optional benefit guarantees, including any fixed account crediting rates or annuity rates, are backed by the claims-paying ability of the issuing insurer. Early withdrawals may be subject to withdrawal charges. Partial withdrawals reduce the contract value and may also reduce certain benefits under the contract, such as the death benefit and the amount available upon a full surrender. Withdrawals of taxable amounts are subject to ordinary income tax and if taken prior to age 59½, an additional 10% federal tax may apply. An investment in Polaris involves investment risk, including possible loss of principal. The contract, when redeemed, may be worth more or less than the total amount invested. If you fund a retirement plan or account, such as your IRA or 401(k), with a variable annuity, you should realize that these retirement plans and accounts are already tax-deferred. A variable annuity provides no additional tax-deferred benefit beyond that provided by the retirement plan or account. You should only use a variable annuity in a retirement plan or account if you want to benefit from features other than tax deferral. Please consult with your financial and tax advisors regarding your individual situation. Net Equity Exposure: The Portfolio s overall level of exposure to the equity market. Depending on the Portfolio s investment strategy, equity exposure may be obtained through the companies, securities or underlying portfolios in which the Portfolio invests, plus or minus the notional amount of a long or short position in equities obtained through the use of exchange-traded futures contracts, options, or other investments. With certain portfolios, Net Equity Exposure is referred to in the trust prospectus as Net Economic Exposure to Equity Securities. Investment strategies, including minimum and maximum Net Equity Exposure, vary by Portfolio. Please see the applicable trust prospectus for complete details. Volatility Control Portfolios While diversification and asset allocation are both proven investment strategies, they cannot guarantee greater or more consistent returns over time and they cannot protect against loss. While Volatility Control Portfolios employ risk management processes that seek to manage volatility within the Portfolio, volatility may result from rapid or dramatic price swings. A Portfolio could experience high levels of volatility in both rising and falling markets. Due to market conditions or other factors, the actual or realized volatility of a Portfolio for any particular period of time may be materially higher or lower than the target level. Efforts to manage a Portfolio s volatility could limit a Portfolio s gains in rising markets, may expose the Portfolio to costs to which it would otherwise not have been exposed, and if unsuccessful may result in substantial losses. There is no assurance that a Portfolio s goal will be met or that investment decisions made in seeking to manage a portfolio s volatility will achieve the desired result. Each Portfolio is subject to derivative and leverage risks. These investment strategies may be riskier than other investment strategies and may result in gains or losses substantially greater than the cost of the position. While these strategies can be useful and inexpensive ways of reducing risk, they are sometimes ineffective due to unexpected changes in the market, exchange rates or other factors. When a Portfolio uses derivatives for leverage, the Portfolio will tend to be more volatile, resulting in larger gains or losses in response to the fluctuating prices of the Portfolio s investments. Each Portfolio is subject to other risks including short sales risk and counterparty risk. Losses from short sales are potentially unlimited, whereas losses from purchases can be no greater than the total amount invested. Counterparty risk is the risk that a counterparty will not perform its obligations. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities. These securities are also subject to risk of default, particularly during periods of economic downturn. 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 Portfolio. Each Portfolio is subject to risk of conflict with insurance company interests given certain aspects of portfolio management are intended to mitigate the financial risks the insurer faces in connection with optional income protection guarantees. Certain Portfolios and their underlying portfolios (if applicable) may engage in frequent trading of portfolio securities to achieve their investment goals. Active trading may result in high portfolio turnover and correspondingly greater transaction costs. Investments are subject to certain risks including stock market and interest rate fluctuations, as well as additional risks associated with investments in certain asset classes. See below. VCP Managed Asset Allocation SAST Portfolio Hedge assets include cash and liquid transparent financial futures contracts that are tailored to the underlying holdings in the American Funds Insurance Series Asset Allocation Fund. Futures contracts on major equity indices, U.S. Treasury bonds, and currencies are typically used. Futures contracts are used only to reduce risk relative to a long-equity portfolio. In situations of extreme market volatility, the exchange-traded futures could potentially reduce the Master Fund s net economic exposure to equity securities to 0%. The Portfolio is subject to the risk that the strategy that will be used to stabilize the volatility of the Master Fund and reduce its downside exposure may not produce the desired result. In addition, the use of the risk-management overlay may cause the Master Fund s return to lag that of the underlying fund in certain rising market conditions. Milliman Financial Risk Management LLC is not an affiliate or member of Capital Research and Management Company or The Capital Group Companies. VCP Total Return Balanced Portfolio The Portfolio may invest a significant portion of its assets in derivatives. As a result, performance could be primarily dependent on securities the Portfolio does not own. The Portfolio will generally achieve equity exposure by investing in derivatives rather than through direct investments in equity securities. The Portfolio may also invest directly in equity securities and ETFs to achieve its goal. 8
VCP Value Portfolio The Portfolio s target volatility level is not a total return performance target. Total return performance is not expected to be within any specified target range. The Portfolio s ability to achieve current income may be adversely affected if dividends on the Portfolio s equity securities are reduced or discontinued or if prevailing interest rates on the Portfolio s debt securities decline. Although the Portfolio seeks investments in undervalued companies, judgments that a particular security is undervalued may prove incorrect. SA BlackRock VCP Global Multi Asset Portfolio The Portfolio s volatility management strategy may adjust the composition of the Portfolio s riskier assets, such as equity and below investment grade fixed income securities, and/or may allocate assets away from riskier assets into cash or short-term fixed income securities. In selecting equity and fixed income investments, judgments that evaluate the attractiveness of countries and sectors may prove incorrect. The value of the Portfolio s foreign investments may fluctuate due to changes in currency exchange rates. SA Schroders VCP Global Allocation Portfolio The Portfolio may make substantial use of derivatives. As a result, performance could be primarily dependent on securities the Portfolio does not own. In selecting equity and fixed income investments, judgments that evaluate the attractiveness of countries and sectors may prove incorrect. The value of the Portfolio s foreign investments may fluctuate due to changes in currency exchange rates. SA T. Rowe Price VCP Balanced Portfolio The Portfolio s approach for stabilizing volatility may not produce the desired results. The value of the Portfolio s foreign investments may fluctuate due to changes in currency exchange rates. Additional Risks There is no assurance that a Portfolio s investment process will achieve its specific investment objectives. Portfolios that invest in stocks and bonds are subject to risk, including stock market and interest rate fluctuations. Portfolios that invest in bonds are subject to changes in their value when prevailing interest rates change. Portfolios that invest in non-u.s. stocks and bonds, including emerging market investments, are subject to additional risks such as political and social instability, differing securities regulations and accounting standards, limited public information, plus special risks that may include foreign taxation, currency risks, risks associated with possible differences in financial standards, and other monetary and political risks associated with future political and economic developments. Investments that concentrate on one economic sector or geographic region are generally subject to greater volatility than more diverse investments. Portfolios that invest in technology companies are subject to additional risks and may be affected by short product cycles, aggressive pricing, competition from new market entrants and obsolescence of existing technology. Portfolio returns may be considerably more volatile than a portfolio that does not invest in technology companies. Portfolios that invest in small and mid-size company stocks are generally riskier and more volatile than portfolios that invest in larger, more established companies. Portfolios that invest in high-yield bonds may be subject to greater price swings than portfolios that invest in higher-rated bonds. The payment of interest and principal is not assured. Portfolios that invest in real estate investment trusts (REITs) involve risks such as refinancing, economic conditions in the real estate industry, changes in property values, dependency on real estate management, and other risks associated with a concentration in one sector or geographic region. Investments in securities related to gold and other precious metals and minerals are speculative and impacted by a host of worldwide economic, financial and political factors. Money market instruments generally offer stability and income, but an investment in these securities, like investments in other portfolios, is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Additional Information The portfolio operating expenses for a fund-of-funds are typically higher than those of a traditional portfolio because you pay the expenses of that portfolio and indirectly pay a proportionate share of the expenses of the underlying portfolios. Money managers, with the exception of SunAmerica Asset Management, LLC, are not affiliated with American General Life, US Life or American International Group, Inc. (AIG). Glossary of Financial Terms Average life: Expressed in years, average life is time weighting the expected principal payments, taking into consideration the impact of calls and prepayments. In general, it is a better measure than average maturity for bonds that have the ability to prepay principal before they reach maturity (e.g., mortgages, mortgage-backed securities and asset-backed securities). Data shown is a weighted average of the bonds held in the fund s portfolio. Average maturity: Weighted average of maturities of the bonds in the Portfolio. The maturity for each bond is weighted by the market value of the bond as a percent of the market value of the Portfolio. Duration: A measure of the interest rate sensitivity of the bonds in the Portfolio. Duration refers to effective duration, which also takes into account the embedded options within a bond. Price to Earnings (P/E) Ratio: A stock s closing price divided by the previous twelve month s earnings per share (EPS) of the stock. Price to Book (P/B) Ratio: A stock s current market price divided by the company s most recent annual book value per share. 9
Polaris Variable Annuities are sold by prospectus only. The prospectus contains the investment objectives, risks, fees, charges, expenses and other information regarding the contract and underlying funds, which should be considered carefully before investing. A prospectus may be obtained by calling 1-800-445-7862. Investors should read the prospectus carefully before investing. Polaris Variable Annuities, form number AG-803 (7/13), are issued by American General Life Insurance Company (AGL). In New York, Polaris Variable Annuities, form number US-803 (12/15), are issued by The United States Life Insurance Company in the City of New York (US Life). The purchase of Polaris is not required for, and is not a term of, the provision of any banking service or activity. Distributed by AIG Capital Services, Inc. (ACS), Member FINRA, 21650 Oxnard Street, Suite 750, Woodland Hills, CA 91367-4997, 1-800-445-7862. AGL, US Life and ACS are members of American International Group, Inc. (AIG). Not FDIC or NCUA/NCUSIF Insured May Lose Value No Bank or Credit Union Guarantee Not a Deposit Not Insured by any Federal Government Agency M5328QT6.3 (11/16) 1-800-445-7862 aig.com/annuities