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Touchstone Funds Group Trust – ‘497’ on 4/16/21

On:  Friday, 4/16/21, at 8:49pm ET   ·   As of:  4/19/21   ·   Effective:  4/19/21   ·   Accession #:  1398344-21-8142   ·   File #:  333-254054

Previous ‘497’:  ‘497’ on 4/16/21   ·   Next:  ‘497’ on 4/21/21   ·   Latest:  ‘497’ on 3/20/24   ·   11 References:   To:  Sunamerica Series, Inc. – ‘497’ on 3/3/21 To:  Sunamerica Senior Floating Rate Fund Inc. – ‘N-CSR’ on 3/2/21 for 12/31/20 To:  SunAmerica Specialty Series – ‘485BPOS’ on 2/26/21 To:  Touchstone Funds Group Trust – ‘485BPOS’ on 1/27/21 To:  SunAmerica Specialty Series – ‘N-CSR’ on 1/7/21 for 10/31/20 To:  Sunamerica Series, Inc. – ‘N-CSR’ on 1/7/21 for 10/31/20 To:  Sunamerica Income Funds – ‘N-CSRS’ on 12/8/20 for 9/30/20 To:  Touchstone Funds Group Trust – ‘N-CSR’ on 12/1/20 for 9/30/20 To:  Sunamerica Income Funds – ‘485BPOS’ on 7/28/20 To:  Sunamerica Income Funds – ‘N-CSR’ on 6/8/20 for 3/31/20 To:  Sunamerica Senior Floating Rate Fund Inc. – ‘485BPOS’ on 4/27/20 

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 4/19/21  Touchstone Funds Group Trust      497         4/19/21    1:2.9M                                   FilePoint/FA
          → Touchstone Active Bond Fund ⇒ Class A (TOBAX) — Class C (TODCX)
          → Touchstone Ares Credit Opportunities Fund ⇒ Class A (TMARX) — Class C (TMACX) — Class Y (TMAYX)
          → Touchstone Dividend Equity Fund ⇒ Class A (TQCAX) — Class C (TQCCX) — Class Y (TQCYX)
          → Touchstone Sands Capital Select Growth Fund ⇒ Class A (TSNAX) — Class C (TSNCX) — Class Y (CFSIX)

Document/Exhibit                   Description                      Pages   Size 

 1: 497         Definitive Material                                 HTML   1.35M 

SUNAMERICA INCOME FUNDS

SUNAMERICA SENIOR FLOATING RATE FUND, INC.

SUNAMERICA SERIES, INC.

SUNAMERICA SPECIALTY SERIES

Harborside 5, 185 Hudson St., Suite 3300
Jersey City, NJ 07311-4992
800-858-8850

April 16, 2021

Dear Shareholder:

The Board of Directors or Trustees, as applicable (the “Board”), of each registered investment company listed in the table below under the heading Registrants (each, a “Registrant” and collectively, the “Registrants”) has called a Joint Special Meeting of Shareholders (the “Special Meeting”) of its respective series listed in the table below under the heading Target Funds (each, a “Target Fund” and collectively, the “Target Funds”) to be held virtually on June 10, 2021 at 3:00 p.m., Eastern time. The purpose of the Special Meeting is to vote on important proposals that affect your investment in your Target Fund.

On December 23, 2020, SunAmerica Asset Management, LLC (“SunAmerica”), investment advisor to the Target Funds, entered into an agreement to sell certain assets relating to its retail mutual fund asset management business to Touchstone Advisors, Inc. (“Touchstone Advisors”), investment advisor to the Touchstone family of mutual funds and an indirect, wholly-owned subsidiary of Western & Southern Mutual Holding Company (the “Transaction”). Currently, Touchstone Advisors’ retail mutual fund platform includes 38 separate mutual funds that are managed by Touchstone Advisors and sub-advised by various institutional investment managers (the “Touchstone Funds”).

In connection with SunAmerica’s decision to sell certain assets relating to its retail mutual fund asset management business, SunAmerica recommended and the Board of each Registrant approved an Agreement and Plan of Reorganization with respect to each Target Fund pursuant to which the Target Fund would be reorganized into a corresponding Touchstone Fund (each, a “Reorganization” and collectively, the “Reorganizations”) as set forth in the table below under the heading Acquiring Funds (each, an “Acquiring Fund” and collectively, the “Acquiring Funds”).

The Board of each Registrant believes that the proposed respective Reorganization is in the best interests of the Target Fund and recommends that you vote FOR the proposed Reorganization of your Target Fund.

We have enclosed a Joint Proxy Statement/Prospectus that describes each Reorganization proposal in greater detail, as well as important information about the Acquiring Funds. Your vote is extremely important, so please read the entire Joint Proxy Statement/Prospectus. Please contact our proxy solicitor, AST Fund Solutions, LLC, at 866-340-7108 with any questions.

Thank you for your consideration of these important proposals.

SunAmerica Income Funds

SunAmerica Senior Floating Rate Fund, Inc.

SunAmerica Series, Inc.

SunAmerica Specialty Series

Harborside 5, 185 Hudson St., Suite 3300
Jersey City, NJ 07311-4992
800-858-8850

NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON JUNE 10, 2021

To the Shareholders:

Notice is hereby given that a Joint Special Meeting of Shareholders (the “Special Meeting”) of each registered investment company listed in the table below under the heading Registrants (each, a “Registrant” and collectively, the “Registrants”), on behalf of its respective series listed in the table below under the heading Target Funds (each, a “Target Fund” and collectively, the “Target Funds”), will be held virtually on June 10, 2021 at 3:00 p.m., Eastern time, and any adjournment or postponement thereof.

At the Special Meeting, shareholders of each Target Fund will be asked to consider the following proposals:

1. To approve an Agreement and Plan of Reorganization (the “Plan”) between Touchstone Funds Group Trust, on behalf of the respective series thereof identified in the table below (each, an “Acquiring Fund” and collectively, the “Acquiring Funds”) and each Registrant, on behalf of the applicable Target Fund, providing for (i) the transfer of all the assets of the Target Fund to the Acquiring Fund in exchange solely for shares of the Acquiring Fund as set forth in the table below and the assumption by the Acquiring Fund of the liabilities (other than certain excluded liabilities) of the Target Fund, as described in the respective Plan; (ii) the pro rata distribution, by class, to the Target Fund’s shareholders of the shares of the Acquiring Fund as set forth in the table below; and (iii) the termination of the Target Fund (each, a “Reorganization” and collectively, the “Reorganizations”).

2. To transact such other business as may properly be presented at the Special Meeting or any postponement or adjournment thereof.

The share classes of the Target Funds are similar to the corresponding share class of the Acquiring Funds. The Target Funds’ Class A shares are subject to a sales charge (load) up to 5.75% and Acquiring Funds’ Class A shares are subject to a sales charge (load) up to 5.00%. The Target Funds’ and Acquiring Funds’ Class C shares and the Target Funds’ Class B shares are subject to a contingent deferred sales charge (load). The Target Funds’ and Acquiring Funds’ Class A and C shares and the Target Funds’ Class B shares are also subject to distribution and/or service (12b-1) fees. The Target Funds’ Class W shares and the Acquiring Funds’ Class Y shares are not subject to any sales charge (load) or 12b-1 fees. Share class selection was primarily based on shareholder eligibility requirements of each share class of both the Target Funds and the Acquiring Funds and on the presence of a distribution plan for each share class. In addition, similarities in shareholder services and expenses were considered.

The Board of Directors or Trustees, as applicable, of each Registrant has fixed the close of business on March 31, 2021 as the record date (the “Record Date”) for the determination of shareholders entitled to notice of and eligible to vote at the Special Meeting.

In light of public health concerns regarding the COVID-19 pandemic, the Special Meeting will be held in a virtual meeting format only. Shareholders will not be able to attend the meeting in person.

If your shares in your Target Fund(s) are held by a financial intermediary (such as a broker-dealer or a bank), and you wish to attend and vote at the Special Meeting, you must first obtain a legal proxy from your financial intermediary reflecting your Target Fund’s name, the number of shares you held as of the Record Date, as well as your name and address.  Please email your legal proxy to AST Fund Solutions, LLC (“AST”) at attendameeting@astfinancial.com with “Legal Proxy” in the subject line. After receiving this information, AST will then provide you with your credentials to attend the Special Meeting. If your shares in your Target Fund are held by a financial intermediary, and you wish to attend, but not vote at, the Special Meeting, please send an email to AST at attendameeting@astfinancial.com with your Target Fund(s) name(s) in the subject line and include your full name, address, and satisfactory proof of ownership. After receiving this information, AST will then provide you with your credentials to attend the Special Meeting.

If you are a shareholder of record of your Target Fund(s) – your shares are held in your name as reflected in your Target Fund’s records – and you wish to attend and/or vote at the Special Meeting, please send AST with your intention to attend the meeting, to AST at attendameeting@astfinancial.com with your Target Fund(s) name(s) in the subject line, your name and address in the body of the email.  After receiving this information, AST will then provide you with your credentials for attending the Special Meeting.

Even if you expect to attend the Special Meeting virtually, shareholders are requested to complete, sign, date and return the enclosed proxy card in the enclosed envelope, which needs no postage if mailed in the United States. Shareholders may also authorize a proxy by telephone or via the Internet. Instructions for the proper execution of the proxy card are set forth immediately following this notice or, with respect to telephone or Internet voting, on the proxy card. It is important that you vote promptly regardless of the number of shares owned.

Important Notice Regarding the Availability of Proxy Materials for the Special Meeting to be held virtually on June 10, 2021: The Notice of Special Meeting, Joint Proxy Statement/Prospectus, annual and semi-annual reports and form of proxy cards are available on the Internet at https://vote.proxyonline.com/aig/docs/tfgproxy2021.pdf. For more information, shareholders may contact SunAmerica Asset Management, LLC at Harborside 5, 185 Hudson St., Suite 3300 Jersey City, NJ 07311-4992 or 800-858-8850.

INSTRUCTIONS FOR SIGNING PROXY CARDS

The following general rules for signing proxy cards may be of assistance to you and avoid the time and expense in validating your vote if you fail to sign your proxy card properly.

1. Individual Accounts: Sign your name exactly as it appears in the registration on the proxy card.

2. Joint Accounts: Either party may sign, but the name of the party signing should conform exactly to the name shown in the registration on the proxy card.

3. All Other Accounts: The capacity of the individual signing the proxy card should be indicated unless it is reflected in the form of registration. For example:

Every shareholder’s vote is important!

Please complete, sign, date and return your proxy card today!

Your proxy vote is important!

JOINT PROXY STATEMENT

OF

SunAmerica Income Funds

SunAmerica Senior Floating Rate Fund, Inc.

SunAmerica Series, Inc.

SunAmerica Specialty Series

Harborside 5, 185 Hudson St., Suite 3300
Jersey City, NJ 07311-4992
800.858.8850

And

PROSPECTUS

OF

TOUCHSTONE FUNDS GROUP TRUST

303 Broadway, Suite 1100
Cincinnati, Ohio 45202
800.543.0407

April 16, 2021

This Joint Proxy Statement/Prospectus is being furnished to shareholders of each series listed in the table below under the heading Target Funds (each, a “Target Fund” and collectively, the “Target Funds”) of each registered investment company listed in the table below under the heading Registrants (each, a “Registrant” and collectively, the “Registrants”). The Board of Directors or Trustees, as applicable (the “Board”), of each Registrant has called a Joint Special Meeting of Shareholders (the “Special Meeting”) of its respective Target Fund(s) to be held virtually on June 10, 2021 at 3:00 p.m., Eastern time, and any adjournment or postponement thereof. This Joint Proxy Statement/Prospectus and the enclosed proxies are first being sent to shareholders of the Target Funds on or about April 19, 2021.

Shareholders of record of each Target Fund as of the close of business on March 31, 2021 (the “Record Date”) are entitled to notice of and eligible to vote at the Special Meeting. At the Special Meeting, shareholders of each Target Fund will be asked to consider the following proposals:

1. To approve an Agreement and Plan of Reorganization (the “Plan”) between Touchstone Funds Group Trust, on behalf of the applicable series thereof identified in the table below (each, an “Acquiring Fund” and collectively, the “Acquiring Funds”), and each Registrant, on behalf of the applicable Target Fund, providing for (i) the transfer of all the assets of the Target Fund to the Acquiring Fund in exchange solely for shares of the Acquiring Fund as set forth in the table below and the assumption by the Acquiring Fund of the liabilities (other than certain excluded liabilities) of the Target Fund, as described in the respective Plan; (ii) the pro rata distribution, by class, to the Target Fund’s shareholders of such shares of the Acquiring Fund; and (iii) the termination of the Target Fund (each, a “Reorganization” and collectively, the “Reorganizations”).

The following table shows each Target Fund and the corresponding Acquiring Fund, as well as the share class of the Acquiring Fund that will be issued to holders of each share class of the Target Fund.

2. To transact such other business as may properly be presented at the Special Meeting or any postponement or adjournment thereof.

Subject to the satisfaction or waiver of all closing conditions, the Reorganizations are expected to be completed on July 16, 2021, or as soon as practicable thereafter. Each Target Fund and each Acquiring Fund is a series of a registered open-end management investment company (mutual funds). The following Acquiring Funds are each currently operating mutual funds: Touchstone Sands Capital Select Growth Fund, Touchstone Credit Opportunities Fund, and Touchstone Active Bond Fund (each, an “Operating Fund” and collectively, the “Operating Funds”). Touchstone Dividend Equity Fund (the “Shell Fund”) is a newly organized series of Touchstone Funds Group Trust that has been created solely for the purpose of completing the applicable Reorganizations and will not commence operations prior to the closing of the Reorganizations. Touchstone Funds Group Trust is sometimes referred to in this Joint Proxy Statement/Prospectus as the “Acquiring Trust.” The Target Funds and the Acquiring Funds are sometimes referred to in this Joint Proxy Statement/Prospectus individually as a “Fund” and collectively as the “Funds.”

In light of public health concerns regarding the COVID-19 pandemic, the Special Meeting will be held in a virtual meeting format only. Shareholders will not be able to attend the meeting in person.

If your shares in your Target Fund(s) are held by a financial intermediary (such as a broker-dealer or a bank), and you wish to attend and vote at the Special Meeting, you must first obtain a legal proxy from your financial intermediary reflecting your Target Fund’s name, the number of shares you held as of the Record Date, as well as your name and address.  Please email your legal proxy to AST Fund Solutions, LLC (“AST”) at attendameeting@astfinancial.com with “Legal Proxy” in the subject line. After receiving this information, AST will then provide you with your credentials to attend the Special Meeting. If your shares in your Target Fund are held by a financial intermediary, and you wish to attend, but not vote at, the Special Meeting, please send an email to AST at attendameeting@astfinancial.com with your Target Fund(s) name(s) in the subject line and include your full name, address, and satisfactory proof of ownership. After receiving this information, AST will then provide you with your credentials to attend the Special Meeting.

If you are a shareholder of record of your Target Fund(s) – your shares are held in your name as reflected in your Target Fund’s records – and you wish to attend and/or vote at the Special Meeting, please send AST with your intention to attend the meeting, to AST at attendameeting@astfinancial.com with your Target Fund(s) name(s) in the subject line, your name and address in the body of the email.  After receiving this information, AST will then provide you with your credentials for attending the Special Meeting.

This Joint Proxy Statement/Prospectus, which you should read carefully and retain for future reference, presents the information that you should know about the Funds and the Reorganizations. This document also serves as a prospectus for the offering and issuance of the shares of each Acquiring Fund to be issued in the Reorganizations. A Statement of Additional Information (“SAI”) dated April 16, 2021 relating to this Joint Proxy Statement/Prospectus and the Reorganizations has been filed with the U.S. Securities and Exchange Commission (the “SEC”) and is incorporated by reference into this Joint Proxy Statement/Prospectus (meaning that they are legally considered to be part of this Joint Proxy Statement/Prospectus).

Additional information concerning the Target Funds and the Operating Funds is contained in the documents described below, all of which have been filed with the SEC. Each document is incorporated by reference into this Joint Proxy Statement/Prospectus only insofar as it relates to the Target Funds and the Operating Funds. No other parts of such documents are incorporated by reference herein. Because the Shell Fund has not yet commenced operations as of the date of this Joint Proxy Statement/Prospectus, no prospectus, SAI or annual or semi-annual reports are available for the Shell Fund at this time.

You can also obtain copies of any of the above-referenced documents without charge on the EDGAR database on the SEC’s Internet site at http://www.sec.gov. Copies are available for a fee by electronic request at the following e-mail address: publicinfo@sec.gov. Copies of above-referenced documents relating to the Target Funds may also be obtained upon oral or written request without charge by calling 800.858.8850, on the Target Funds’ website at http://aigfunds.onlineprospectus.net/AIGFunds/FundDocuments/index.html or by writing to AIG Fund Services, Inc. at Harborside 5, 185 Hudson St., Suite 3300, Jersey City, NJ 07311-4992. Copies of above-referenced documents relating to the Acquiring Funds may also be obtained upon oral or written request without charge by calling 800.543.0407, on the Acquiring Funds’ website at TouchstoneInvestments.com or by writing to Touchstone Funds Group Trust at P.O. Box 9878, Providence, Rhode Island 02940.

THE SEC HAS NOT DETERMINED THAT THE INFORMATION IN THIS JOINT PROXY STATEMENT/PROSPECTUS IS ACCURATE OR ADEQUATE, NOR HAS IT APPROVED OR DISAPPROVED THESE SECURITIES. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIMINAL OFFENSE.

An investment in the Acquiring Funds:

TABLE OF CONTENTS

BACKGROUND AND GENERAL SUMMARY

The following questions and answers provide a brief overview of the key features of the reorganizations of the Target Funds into each respective Acquiring Fund (the “Reorganizations”) and other matters typically of concern to shareholders considering a proposed combination of mutual funds. These questions and answers are qualified in their entirety by the more detailed information contained in the remainder of this Joint Proxy Statement/Prospectus, which you should read carefully and retain for future reference. The description of the Reorganizations is qualified by reference to the full texts of the respective Agreement and Plan of Reorganization (each a “Plan”). Forms of Plans are attached as Exhibit A to this Joint Proxy Statement/Prospectus.

Q.       What is being proposed?

A.       Following a strategic review, and with careful consideration, AIG Life & Retirement, a division of American International Group, Inc. (“AIG”), determined that the retail mutual fund asset management business of SunAmerica Asset Management, LLC (“SunAmerica”), an indirect wholly-owned subsidiary of AIG and the Target Funds’ investment advisor, was no longer core to AIG Life & Retirement’s offerings. As a result of this decision, following a process of identifying potential buyers, AIG, SunAmerica, Western & Southern Financial Group, Inc. (“W&S”), and Touchstone Advisors, Inc. (“Touchstone Advisors”), an indirect wholly-owned subsidiary of W&S, entered into an Asset Purchase Agreement pursuant to which SunAmerica has agreed to sell certain assets relating to its retail mutual fund asset management business to Touchstone Advisors in exchange for cash consideration (the “Transaction”). In connection with the Transaction, SunAmerica recommended and the Board of Directors or Trustees, as applicable, of each of SunAmerica Income Funds, SunAmerica Senior Floating Rate Fund, Inc., SunAmerica Series Inc., and SunAmerica Specialty Series (each, a “Target Funds Board”) considered and approved the reorganization of each respective Target Fund into the corresponding Acquiring Fund. At the Joint Special Meeting of Shareholders (“Special Meeting”) on June 10, 2021, shareholders of each Target Fund will be asked to vote on a proposal to reorganize their Target Fund into the corresponding Acquiring Fund, as set forth below, each with a similar investment goal and principal investment strategies:

The consummation of the Reorganization as to a Target Fund and its corresponding Acquiring Fund is not contingent upon the consummation of the Reorganization of any other Target Fund and its corresponding Acquiring Fund. The completion of the Transaction, however, is subject to the satisfaction or waiver of certain conditions including that (1) shareholders of the AIG Focused Dividend Strategy Fund and the AIG Select Dividend Growth Fund shall have approved their respective Reorganization and such Target Funds shall have a minimum amount of assets at closing as agreed between SunAmerica and Touchstone Advisors, and (2) shareholders of the Target Funds and the other AIG funds proposed to reorganize into Touchstone funds representing a minimum amount of assets under management at the closing of the Transaction, as agreed between SunAmerica and Touchstone Advisors.

Shareholders of record of each Target Fund as of the close of business on March 31, 2021 are entitled to notice of and are eligible to vote at the Special Meeting. Subject to the satisfaction or waiver of all closing conditions, the Reorganizations are expected to be completed on July 16, 2021, or as soon as practicable thereafter.

Q.       What is the recommendation of the Target Funds Boards?

A.       After considering the proposed Reorganizations, each Target Funds Board determined, at a meeting held on February 8, 2021, that each Reorganization was in the best interests of the applicable Target Fund and its shareholders. In approving the Reorganizations, the Target Funds Board considered, among other factors, that the Reorganizations offer shareholders of the Target Funds an opportunity to be part of a larger mutual fund complex offering a diversified fund line-up with free exchangeability among funds and sponsored by a reputable and respected investment adviser with a proven track record of successful acquisitions, and that the Reorganizations present an excellent opportunity for the shareholders of each Target Fund to become investors in a fund that has a larger asset size than the Target Fund, total annual fund operating expenses that are generally no higher than the total annual fund operating expenses of the Target Fund (after applicable expense waivers), and a strong historical investment performance record. In addition, each Reorganization will provide Target Fund shareholders with an opportunity to continue their investment in a Touchstone Fund with an investment goal and principal investment strategies similar to those of their Target Fund through a tax-free reorganization of the Target Fund into the corresponding Acquiring Fund.

Each Target Funds Board recommends that shareholders of the respective Target Funds approve the Reorganization of their Fund.

See “Information About the Reorganizations – Target Funds Board Approval of the Reorganizations” for additional information regarding each Target Funds Board’s considerations.

Q.       How do the fees and expenses of the Funds compare?

A.       Touchstone Advisors has contractually agreed to waive fees and reimburse expenses in order to maintain the total annual operating expense ratio (excluding dividend and interest expenses relating to short sales; interest; taxes; brokerage commissions and other transaction costs; portfolio transaction and investment related expenses, including expenses associated with the Fund's liquidity providers; other expenditures which are capitalized in accordance with U.S. generally accepted accounting principles; the cost of “Acquired Fund Fees and Expenses,” if any; and other extraordinary expenses not incurred in the ordinary course of business) for each class of shares of each Acquiring Fund offered hereby to an amount no greater than the total annual operating expense ratio of the corresponding class of shares of the corresponding Target Fund for the Target Fund’s most recent fiscal year end (after giving effect to any fees waived and expenses reimbursed for the Target Fund). These contractual expense limitations will remain in place for a period of at least two years from the closing date of the Reorganizations. The expense ratios for each class of the Touchstone Credit Opportunities Fund are expected to be higher than the expense ratios of the corresponding Target Fund because dividend and interest expenses related to short sales are excluded from the expense limitation arrangement. Additional information regarding the pro forma gross and net fees and expenses for the Funds involved in each Reorganization can be found under the Summary section for your Target Fund’s Reorganization. Additional information regarding the terms of the expense limitation agreements can be found under “The Funds’ Management - Expense Limitation Agreement.”

Q.       How do the Target Funds’ and Acquiring Funds’ investment goals and principal investment strategies compare?

A.       Although each Target Fund and the corresponding Acquiring Fund have similar investment goals and principal investment strategies, there are some differences. In addition, the analytical tools, techniques and investment selection process used by the sub-advisors of the Acquiring Funds to select investments may be different from those used by SunAmerica and the sub-advisors of the Target Funds. The section of this Joint Proxy Statement/Prospectus entitled “Summary” for your Target Fund’s Reorganization describes in detail the differences between the investment goals and principal investment strategies of each Target Fund and the corresponding Acquiring Fund.

Q.       Who will manage the Acquiring Funds after the Reorganizations?

A.       Touchstone Advisors currently serves as investment advisor to the Acquiring Funds. With respect to each Acquiring Fund, Touchstone Advisors employs a sub-advisor to provide portfolio management services. The sub-advisors are overseen by Touchstone Advisors and by the Board of Trustees of Touchstone Funds Group Trust (“Acquiring Funds Board”).

The Acquiring Fund into which the AIG U.S. Government Securities Fund will be reorganized currently utilizes Fort Washington Investment Advisors, Inc. (“Fort Washington”), an affiliate of Touchstone Advisors, as a sub-advisor. The Acquiring Fund into which the AIG Senior Floating Rate Fund will be reorganized currently utilizes Ares Capital Management II LLC, as a sub-advisor. The Acquiring Fund into which the AIG Focused Growth Fund will be reorganized currently utilizes Sands Capital Management, LLC, as a sub-advisor. The Acquiring Fund into which each of the AIG Focused Dividend Strategy Fund and AIG Select Dividend Growth Fund will be reorganized is expected to utilize Fort Washington as a sub-advisor. The portfolio management teams of each Acquiring Fund will differ from the current portfolio managers of the corresponding Target Fund. The SEC has granted an exemptive order that permits Touchstone Funds Group Trust or Touchstone Advisors, under certain conditions, to select or change unaffiliated sub-advisors, enter into new sub-advisory agreements, or amend existing sub-advisory agreements without first obtaining shareholder approval. The Acquiring Funds must still obtain shareholder approval of any sub-advisory agreement with a sub-advisor affiliated with Touchstone Funds Group Trust or Touchstone Advisors other than by reason of serving as a sub-advisor to one or more Acquiring Funds. Shareholders of an Acquiring Fund will be notified of any material changes in its sub-advisory arrangements; please see the sections of the Joint Proxy Statement/Prospectus entitled “Summary” for your Target Fund’s Reorganization and “The Funds’ Management.”

The Target Funds are currently managed by SunAmerica. With respect to the AIG Focused Growth Fund and AIG Senior Floating Rate Fund, SunAmerica employs a sub-advisor to provide portfolio management services. SunAmerica does not employ a sub-advisor with respect to the AIG U.S. Government Securities Fund, AIG Focused Dividend Strategy Fund, and AIG Select Dividend Growth Fund.

Q.       What will happen to my existing shares?

A.       At the closing, your Target Fund will transfer all of its assets to the corresponding Acquiring Fund in exchange for (i) the Acquiring Fund’s assumption of the liabilities (other than certain excluded liabilities) of the Target Fund, as described in the respective Plan, and (ii) newly issued shares of the Acquiring Fund having a value equal to the aggregate net assets of the Target Fund. Immediately after the Reorganization of your Target Fund, you will own shares of the corresponding Acquiring Fund with an aggregate net asset value equal to the aggregate net asset value of the shares of the Target Fund that you held immediately prior to the closing of the Reorganization (although the number of shares and the net asset value per share may be different).

Q.       How similar are the Target Funds’ and Acquiring Funds’ share classes?

A.        The share classes of the Target Funds are similar to the corresponding share class of the Acquiring Funds. The Target Funds’ Class A shares are subject to a sales charge (load) up to 5.75% and Acquiring Funds’ Class A shares are subject to a sales charge (load) up to 5.00%. The Target Funds’ and Acquiring Funds’ Class C shares and the Target Funds’ Class B shares are subject to a contingent deferred sales charge (load). The Target Funds’ and Acquiring Funds’ Class A and C shares and the Target Funds’ Class B shares are also subject to distribution and/or service (12b-1) fees. The Target Funds’ Class W shares and the Acquiring Funds’ Class Y shares are not subject to any sales charge (load) or 12b-1 fees. Share class selection was primarily based on shareholder eligibility requirements of each share class of both the Target Funds and the Acquiring Funds and on the presence of a distribution plan for each share class. In addition, similarities in shareholder services and expenses were considered.

Q.       Will I have to pay federal income taxes as a result of my Target Fund’s Reorganization?

A.       Each Reorganization is intended to qualify as a tax-free reorganization for federal income tax purposes. Accordingly, shareholders are not expected to recognize any gain or loss for federal income tax purposes as a direct result of the exchange of their Target Fund shares for shares of the corresponding Acquiring Fund in their Target Fund’s Reorganization. While it is unlikely a Fund holds stock in a foreign corporation classified as a passive foreign investment company (“PFIC”), in the case of a Reorganization involving the combination of two existing Funds (an “Existing Fund Reorganization”), if a Fund does hold stock in a PFIC, the Reorganization of the Fund may result in it having to pay a “deferred tax amount” that cannot be reduced or eliminated by distributing an equivalent amount to shareholders. Because any deferred tax amounts would be payable at the Fund level, the shareholders would effectively bear that cost. Each Reorganization involving the newly created series of Touchstone Funds Group Trust is referred to as a “New Fund Reorganization”.

Shareholders of a Fund involved in an Existing Fund Reorganization may receive a higher level of taxable distributions as a result of the Reorganization. Prior to the closing of an Existing Fund Reorganization, the Target Fund may distribute all of its net investment income and net capital gains, if any. All or a portion of such distribution may be taxable to the shareholders of such Target Fund and will generally be taxed as ordinary income or capital gains for federal income tax purposes, unless the shareholders are tax-advantaged accounts such as an individual retirement account or 401(k) plan (in which case the owners of such accounts may be taxed upon withdrawal of their investment from such accounts). The tax character of such distributions will be the same regardless of whether they are paid in cash or reinvested in additional shares.

In addition, a significant portion of the portfolio securities of each Target Fund are expected to be sold following the Reorganization. To the extent that portfolio investments received by an Acquiring Fund from a Target Fund in a Reorganization are sold after the Reorganization, the combined Fund will incur transaction costs related to the purchase and sale of securities and may recognize gains or losses, which may result in taxable distributions to shareholders holding shares of the combined Fund (including former Target Fund shareholders who hold shares of the Acquiring Fund following the Reorganization). The section of this Joint Proxy Statement/Prospectus entitled “Information About the Reorganizations –Material Federal Income Tax Consequences” provides additional information regarding the federal income tax consequences of the Reorganizations.

Q.       Will I have to pay any sales charge (load), commission, or other similar fee in connection with the Reorganization?

A.       No, you will not pay any sales charge (load), commission, or other similar fee in connection with the receipt of Acquiring Fund shares in the Reorganization of your Target Fund. In addition, any applicable investment minimums will not apply with regard to your receipt of Acquiring Fund shares in a Reorganization. If you hold Target Fund shares that are subject to contingent deferred sales charges (Class A shares, Class B shares or Class C shares), the Acquiring Funds will look to the date of purchase of your Target Fund shares for purposes of assessing such contingent deferred sales charges.

Q.       What if I redeem my shares before the Reorganization of my Target Fund takes place?

A.       If you choose to redeem your Target Fund shares before the Reorganization takes place, then the redemption will be treated as a normal sale of shares and, generally, will be a taxable transaction.

Q.       How do the distribution policies of the Funds compare?

A.       Like the Target Funds, each Acquiring Fund intends to distribute to its shareholders substantially all of its net investment income and capital gains. Net investment income dividends are declared and paid annually for the Touchstone Sands Capital Select Growth Fund, quarterly for the Touchstone Credit Opportunities Fund and Touchstone Dividend Equity Fund and monthly for the Touchstone Active Bond Fund. Net investment income dividends are declared daily and paid monthly for the AIG Senior Floating Rate Fund and AIG U.S. Government Securities Fund, declared and paid quarterly for the AIG Select Dividend Growth Fund and the AIG Focused Dividend Strategy Fund, and declared and paid annually for the AIG Focused Growth Fund.

Each Fund makes distributions of capital gains, if any, at least annually. After the Reorganizations, any income and capital gains will be reinvested in the class of shares of the Acquiring Fund you receive in your Target Fund’s Reorganization or, if you have so elected, distributed in cash. For more information, see the section entitled “Distributions and Taxes – Distribution Policy.”

Q.       How do I purchase, exchange and redeem shares after the Reorganizations?

A.       Shares of the Target Funds may currently be purchased and redeemed in accordance with the policies of the Target Funds, and you may exchange shares of the Target Funds for shares of other series within the SunAmerica family of funds, subject to applicable policies and procedures. In connection with the Reorganizations, you will become a shareholder of a Fund that is part of the Touchstone family of funds. You will be able to purchase and redeem shares of your Fund in accordance with the policies of the Acquiring Funds. You may also exchange shares of your Acquiring Fund for shares of other Funds in the Touchstone family of funds, including the other Acquiring Funds, subject to applicable policies and procedures of the Touchstone family of funds. For more information, see the section entitled “Distributions and Taxes –Distribution Policy.” The Target Funds’ policies and procedures applicable to purchases, exchanges, and redemptions are generally comparable to those of the Acquiring Funds; however, following the Reorganizations, purchases, exchanges, and redemptions of Acquiring Fund shares may be subject to fees, charges, expenses and limitations that differ from those applicable to the Target Funds. See “Investing with Touchstone.”

Q.       Who will pay the costs of the Reorganizations?

A.       Touchstone Advisors and SunAmerica (or their respective affiliates) will pay the costs of the Reorganizations (other than transaction costs related to the purchase or sale of portfolio securities), including the costs relating to the Special Meeting and this Joint Proxy Statement/Prospectus, whether or not the Reorganizations are completed. The costs of the Reorganizations (other than transaction costs related to the purchase or sale of portfolio securities) are estimated to be approximately $5.25 million in the aggregate. It is not anticipated that the Target Funds will be repositioned prior to the Reorganizations (with the exception of certain limited securities and derivative positions), though the Target Funds may sell certain securities that may be less liquid or for other reasons would be advantageous to sell prior to the Reorganizations. Because any repositioning generally will occur following the Reorganizations, shareholders of the combined Fund (including Target Fund shareholders who receive shares in a Reorganization) will bear such costs. Additional information regarding expected portfolio repositioning and related transaction costs in connection with purchases and sales of securities for each Reorganization is included in the “Summary” for your Target Fund.

Q.       What is the required vote to approve each Reorganization?

A.       In addition to applicable Board approval, the required shareholder approvals for each Target Fund are set forth below.

Q.       Why did I receive two proxy statements?

A.       This is not a duplicate proxy statement. You are being asked to vote separately for each fund in which you own shares. The proposals included here were not included in any other proxy statement. There is a separate proxy statement that pertains to: (i) the reorganization of each of the AIG Active Allocation Fund and the AIG Multi-Asset Allocation Fund, series of SunAmerica Series, Inc., into the Touchstone Balanced Fund, a series of Touchstone Strategic Trust; (ii) the reorganization of each of the AIG Flexible Credit Fund and the AIG Strategic Bond Fund, series of SunAmerica Income Funds, into the Touchstone Strategic Income Opportunities Fund, a newly created series of Touchstone Strategic Trust; (iii) the reorganization of the AIG Focused Alpha Large-Cap Fund, a series of SunAmerica Specialty Series, into the Touchstone Large Cap Focused Fund, a series of Touchstone Strategic Trust; (iv) the reorganization of the AIG International Dividend Strategy Fund, a series of SunAmerica Equity Funds, into the Touchstone International Equity Fund, a series of Touchstone Strategic Trust; (v) and the AIG Strategic Value Fund, a series of SunAmerica Series, Inc., into Touchstone Value Fund, a series of Touchstone Strategic Trust.

Q.       What will happen if shareholders of one or more Target Funds do not approve the Reorganization or the Transaction is not completed?

A.       If the shareholders of a Target Fund do not approve the Reorganization, or other closing conditions are not satisfied or waived, the Reorganization of that Target Fund will not be completed and such Target Funds Board will consider other possible courses of action for that Target Fund, including continuing to operate the Target Fund as a stand-alone fund, reorganizing the Target Fund into another mutual fund or liquidating the Target Fund. The consummation of the Reorganization as to a Target Fund and its corresponding Acquiring Fund is not contingent upon the consummation of the Reorganization of any other Target Fund and its corresponding Acquiring Fund; provided, however, that, as noted below, no Reorganization will be consummated if shareholders of the AIG Focused Dividend Strategy Fund and the AIG Select Dividend Growth Fund do not approve the Reorganization of their respective Target Fund.

The completion of the Transaction is subject to the satisfaction or waiver of certain conditions including that (1) shareholders of the AIG Focused Dividend Strategy Fund and the AIG Select Dividend Growth Fund shall have approved their respective Reorganization and such Target Funds shall have a minimum amount of assets at closing as agreed between SunAmerica and Touchstone Advisors, and (2) shareholders of the Target Funds and the other AIG funds proposed to reorganize into Touchstone funds representing a minimum amount of assets under management at closing as agreed between SunAmerica and Touchstone Advisors shall have approved their respective reorganizations.

While the consummation of the Reorganization as to a Target Fund and its corresponding Acquiring Fund is not contingent upon the consummation of the Reorganization of any other Target Fund and its corresponding Acquiring Fund, if the above closing conditions, or any other closing conditions with respect to the Transaction are not satisfied, then Touchstone Advisors is not obligated to close the Transaction, and absent a waiver from Touchstone Advisors, none of the Reorganizations would be consummated. In that event, each respective Target Funds Board will consider other possible courses of action for the Target Funds. Touchstone Advisors and SunAmerica will pay the costs of the Reorganizations whether or not the Reorganizations are consummated.

Q.       What will happen to my account options, such as my automatic investment plan?

A.       Your current election with respect to automatic investment plans and systematic withdrawal plans and distributions will be automatically enacted on your new account at Touchstone Funds. Your current bank instructions on file with the Target Fund(s) also will be enacted on your Touchstone Funds account.

Q.       For Class A shares, will my net asset value (“NAV”) purchase privileges (eligibility for sales load waivers) be converted or do I need to re-enroll?

A.       For the majority of shareholders with NAV privileges, those elections will carry over and no action will be required to maintain that election. There are some isolated circumstances which may result in changes to NAV privileges. If this affects your account, you will receive a separate communication alerting you to this change.

Q.       When will the Reorganizations occur?

A.       Subject to the satisfaction or waiver of all closing conditions, the Reorganizations are expected to be completed on July 16, 2021, or as soon as practicable thereafter.

Q.       Whom should I contact for more information?

A.       You can contact our proxy solicitor, AST Fund Solutions, LLC, at 866-340-7108.

SUMMARY: REORGANIZATION OF AIG FOCUSED DIVIDEND STRATEGY FUND INTO TOUCHSTONE DIVIDEND EQUITY FUND

What class of shares of the Acquiring Fund will I receive in the Reorganization?

Shareholders of the AIG Focused Dividend Strategy Fund will receive shares of the Touchstone Dividend Equity Fund, as follows:

How do the fees and expenses of the Target Fund and the Acquiring Fund compare?

The tables below describe the fees and expenses that you pay if you buy, hold and sell shares of your Target Fund and the pro forma fees and expenses that you may pay if you buy, hold and sell shares of the corresponding Touchstone Fund assuming that both the Reorganization of the AIG Focused Dividend Strategy Fund into the Touchstone Dividend Equity Fund and the Reorganization of the AIG Select Dividend Growth Fund into the Touchstone Dividend Equity Fund (which is also described in this Joint Proxy Statement/Prospectus) take place. The completion of the Transaction is subject to the satisfaction or waiver of certain conditions including that shareholders of both the AIG Focused Dividend Strategy Fund and the AIG Select Dividend Growth Fund shall have approved their respective Reorganization. The pro forma expense ratios project anticipated expenses of the Touchstone Dividend Equity Fund following the Reorganization, but actual expenses may be greater or less than those shown. Expenses for the Class A, Class B, Class C and Class W shares of the AIG Focused Dividend Strategy Fund are based on the operating expenses incurred by each class of shares of the Fund as of the fiscal year ended October 31, 2020. Touchstone Dividend Equity Fund is newly formed and will commence operations upon the closing of the Reorganization. Pro forma fees and expense of Touchstone Dividend Equity Fund are estimated based on the assets of AIG Focused Dividend Strategy Fund as of October 31, 2020.

As the tables below indicate, the hypothetical pro forma gross and net annual operating expenses of the Acquiring Fund after each Reorganization are expected to be lower than your Fund’s net annual operating expenses for all share classes, except that gross expenses of Class C shares are expected to be higher. At the December 31, 2020 net asset levels, the Target Fund is charged an effective management fee of 0.49%. This is lower than the effective management fee of 0.51% that would be paid by the Acquiring Fund including the Target Fund net assets. However, the net expenses of the Acquiring Fund are expected to be lower than the net expenses of the Target Fund after the application of fee waivers currently in place. To the extent such fee waivers expire or are otherwise not renewed, the Acquiring Fund fees may be higher.

The Target Fund’s policies and procedures applicable to purchases, exchanges and redemptions are generally comparable to those of the Acquiring Fund’s; however, following the Reorganization, purchases, exchanges and redemptions of the Acquiring Fund shares may be subject to fees, charges, expenses and limitations that differ from those applicable to the Target Fund. See generally “Investing with Touchstone” on page 103. No sales charge will be imposed on the Class A shares of the Acquiring Fund received in connection with the Reorganization. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the Touchstone Fund complex. In addition, you may qualify for sales charge discounts for Class A shares of Touchstone equity funds and Touchstone fixed income funds if you and your family invest, or agree to invest in the future, at least $25,000 or $50,000, respectively, in the Touchstone Funds. For the Target Fund, more information about these and other discounts is available from your financial professional and in the sections entitled “Shareholder Account Information – Sales Charge Reductions and Waivers” and “Financial Intermediary – Specific Sales Charge Waiver Policies” in the Target Fund’s Prospectus. For the Acquiring Fund, more information about these and other discounts is available from your financial professional and in the section entitled “Choosing a Class of Shares” in the Acquiring Fund’s prospectus and in “Appendix A – Intermediary-Specific Sales Charge Waivers and Discounts” to the Acquiring Fund’s prospectus.

SHAREHOLDER FEES

(fees paid directly from your investment)

ANNUAL FUND OPERATING EXPENSES

(expenses that you pay each year as a percentage of the value of your investment)

ANNUAL FUND OPERATING EXPENSES

(expenses that you pay each year as a percentage of the value of your investment)

ANNUAL FUND OPERATING EXPENSES

(expenses that you pay each year as a percentage of the value of your investment)

ANNUAL FUND OPERATING EXPENSES

(expenses that you pay each year as a percentage of the value of your investment)

Expense Examples. The examples below are intended to help you compare the cost of investing in the Target Fund with the pro forma cost of investing in the Acquiring Fund. The examples assume that you invest $10,000 in each Fund and then either (i) sell all of your shares at the end of each period indicated below or (ii) keep all of your shares at the end of each period indicated below. The examples also assume that your investment has a 5% annual return and that operating expenses (before fee waivers and expense reimbursements) remain the same. These examples also assume that the expense limitation agreement reflected in the Annual Fund Operating Expenses tables above for the Acquiring Fund will be in place for two years following the closing of the Reorganization. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

How do the performance records of the Target Fund and the Acquiring Fund compare?

The Acquiring Fund has no performance history. The Target Fund will be the accounting and performance survivor of the Reorganization. The bar charts and the performance tables below provide some indication of the risks of an investment in the Acquiring Fund by showing how the Target Fund’s performance has varied from year to year and by showing how the Target Fund’s average annual returns compare with a broad measure of market performance.

Each Target Fund’s past performance, before and after taxes, does not necessarily represent how the Acquiring Fund will perform in the future. The Acquiring Fund will be managed by a different advisor and sub-advisor and pursuant to different strategies than either Target Fund, accordingly, the past performance of the Target Funds does not necessarily reflect how the Acquiring Fund will perform in the future. Performance information for the Acquiring Fund is not available because it has not commenced operations as of the date of the Joint Proxy Statement/Prospectus. For a discussion of the historical performance of all accounts managed by the Fund’s sub-advisor, Fort Washington, with investment objectives, policies, strategies, and risks substantially similar to those of the Fund, see Exhibit D (“Prior Performance For Similar Accounts Managed by Fort Washington for the Touchstone Dividend Equity Fund”) to this Joint Proxy Statement/Prospectus. 

The bar chart does not reflect any sales charges, which would reduce your return. The performance table reflects any applicable sales charges. Past performance of each Target Fund, before and after taxes, does not necessarily represent how the Acquiring Fund will perform in the future. Updated information on the Target Fund’s performance can be obtained by visiting www.aig.com/funds or can be obtained by phone at 1.800.858.8850, ext. 6003.

AIG Focused Dividend Strategy Fund-Class A Shares

The AIG Focused Dividend Strategy Fund’s calendar year-to-date total return for Class A shares as of January 31, 2021 was -0.25%.

Average Annual Total Returns
For the periods ended December 31, 2020

The table below shows how the Target Fund’s performance compares with the returns of an index that measures broad market performance.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. The return after taxes on distributions and sale of Fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period. If you hold your Fund shares through a tax-advantaged arrangement, such as an individual retirement account or a 401(k) plan, the after-tax returns do not apply to your situation.

How do the investment goals and principal investment strategies of the Funds compare?

The investment goals and principal investment strategies of the AIG Focused Dividend Strategy Fund and the Touchstone Dividend Equity Fund, along with descriptions of certain differences between the Funds’ investment goals and principal investment strategies, are set forth in the table below. Although the Funds have similar investment goals and principal investment strategies, the analytical tools, techniques and investment selection process used by the sub-advisor to the Acquiring Fund may differ from those used by the Target Fund. Both Funds share the investment goal of seeking capital appreciation and current income. Both Fund’s investment strategies include investing at least 80% of each Fund’s assets in equity securities, with the Target Fund investing in dividend yielding equity securities and the Acquiring Fund investing in equities securities of U.S. large-cap companies that have historically paid dividends. Both Funds have stated policies with respect to the number of securities each holds, the Target Fund holds up to 30 high dividend yielding equity securities selected annually, whereas the Acquiring Fund generally holds between 65 to 90 companies, with residual cash and equivalents expected to represent less than 10% of the Fund’s net assets. Both Funds also have stated policies with respect to selecting securities, the Target Fund will select the ten highest yielding stocks within the Dow Jones Industrial Average and the next twenty stocks will be selected from the Russell 1000® Index. With respect to the Acquiring Fund, the sub-advisor seeks out companies that have historically paid consistent, growing dividends, have sustainable competitive advantages that should result in excess profits to support future dividend payments and trade at reasonable valuations compared to their intrinsic value. The Target Fund employs a “buy and hold” strategy, while the Acquiring Fund does not have a similar stated policy as part of its principal investment strategies. 

Comparison of Investment Limitations

Each Fund has fundamental investment limitations which cannot be changed without shareholder approval, and non-fundamental investment limitations which may be changed with Board approval but without shareholder approval. Descriptions of the fundamental limitations of each Target Fund and each Acquiring Fund are set forth in Exhibit B to this Joint Proxy Statement/Prospectus. The limitations for each Target Fund and each corresponding Acquiring Fund are generally substantially similar, although there are certain differences in the language of the applicable investment limitations attributable primarily to the fact that the Target Funds are part of the SunAmerica “family” of funds and the Acquiring Funds are part of the Touchstone “family” of funds.

How do the principal risks of investing in the Funds compare?

An investment in the AIG Focused Dividend Strategy Fund is subject to disciplined strategy risk, focused strategy risk, and stock market volatility and securities selection risk. An investment in the Touchstone Dividend Equity Fund is subject to dividend risk, equity securities risk, large-cap risk, management risk, economic and market events risk and value investing risk. For more information on the Funds’ principal risks, see “Comparison of Principal Risks.”

Who will be the Advisor, Sub-Advisor and Portfolio Managers of my Fund after the Reorganization?

After the Reorganization, Touchstone Advisors will serve as the investment advisor, and Fort Washington will serve as the sub-advisor to Touchstone Dividend Equity Fund. The portfolio managers of Touchstone Dividend Equity Fund are Austin R. Kummer, CFA, Brendan M. White, CFA, and James E. Wilhelm, Jr. For additional information regarding the advisor, sub-advisor and portfolio managers listed above, please see the sections entitled “The Funds’ Management – Investment Advisor” and “The Funds’ Management – Sub-Advisors and Portfolio Managers.”

What are the portfolio turnover rates of the Funds?

A Fund pays transaction costs, such as brokerage commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect a Fund’s performance. During the fiscal year ended October 31, 2020, the Target Fund’s portfolio turnover rate was 68% of the average value of its portfolio. The Acquiring Fund will not commence operations until the consummation of the Reorganization but is expected to have a similar portfolio turnover rate.

Will there be any repositioning of the portfolio in connection with the Reorganization?

It is expected that approximately 75% of the portfolio investments of the Target Fund may be sold by the Acquiring Fund following the Reorganization. The timing of any repositioning and its resulting impact on capital gains distributions in 2021 and beyond is uncertain. The amounts per share of any capital gains distributions resulting from the repositioning will depend on a number of factors, including the proportion of portfolio holdings that are actually sold, the timing of portfolio sales, the performance of the stock market in general, the availability of offsetting capital losses and the scale of purchase and redemption activity in the Funds’ shares. The timing of portfolio sales will also be subject to market conditions existing after the closing of the Reorganization. Accordingly, the per share amounts of any capital gains distributions resulting from the repositioning cannot be estimated at this time. Touchstone Advisors publishes estimates of capital gains distributions for the Touchstone Funds on its website (https://www.touchstoneinvestments.com/resources.htm), generally in October of each year. The Acquiring Fund will also bear brokerage costs in connection with the repositioning. For illustration purposes only, if the Reorganization had been completed as of November 30, 2020 and the Acquiring Fund had sold 75% of the investments held in the Target Fund’s portfolio as of November 30, 2020, the resulting realized capital gains estimate would be expected to be $205 million total (or $0.0639 per share) of the combined fund (including the Reorganization of the AIG Select Dividend Growth Fund) and the spreads and other transaction costs would be expected to total approximately $2 million in the aggregate (0.04%, or $0.006 per share) of the combined fund (including the Reorganization of the AIG Select Dividend Equity Fund, based on average transaction costs of the Acquiring Fund. The brokerage costs to be borne by the Acquiring Fund will be borne by both Acquiring Fund shareholders and continuing Target Fund shareholders (as shareholders of the Acquiring Fund following the Reorganization).

SUMMARY: REORGANIZATION OF AIG FOCUSED GROWTH FUND INTO TOUCHSTONE SANDS CAPITAL SELECT GROWTH FUND

What class of shares of the Acquiring Fund will I receive in the Reorganization?

Shareholders of the AIG Focused Growth Fund will receive shares of the Touchstone Sands Capital Select Growth Fund, as follows:

How do the fees and expenses of the Target Fund and the Acquiring Fund compare?

The tables below describe the fees and expenses that you pay if you buy, hold and sell shares of your Target Fund and the pro forma fees and expenses that you may pay if you buy, hold and sell shares of the corresponding Acquiring Fund assuming that the Reorganization of the AIG Focused Growth Fund into the Touchstone Sands Capital Select Growth Fund takes place. However, the Reorganization is subject to the closing of the Transaction between SunAmerica and Touchstone Advisors. The pro forma expense ratios project anticipated expenses of the Acquiring Fund following the Reorganization, but actual expenses may be greater or less than those shown. Expenses for the Class A, Class C, and Class W shares of the AIG Focused Growth Fund are based on the operating expenses incurred by each class of shares of the Fund for the fiscal year ended October 31, 2020. Expenses for the Class A, Class C, and Class Y shares of the Touchstone Sands Capital Growth Select Growth Fund are based on the operating expenses incurred by each class of shares of the Acquiring Fund for the fiscal year ended September 30, 2020. The pro forma fees and expenses for the Class A, Class C, and Class Y shares of the Touchstone Sands Capital Select Growth Fund reflect the fees and expenses of the Acquiring Fund and assume that the Reorganization had been completed at the beginning of the fiscal year ended September 30, 2020.

The Target Fund’s policies and procedures applicable to purchases, exchanges and redemptions are generally comparable to those of the Acquiring Fund’s; however, following the Reorganization, purchases, exchanges and redemptions of the Acquiring Fund shares may be subject to fees, charges, expenses and limitations that differ from those applicable to the Target Fund. See generally “Investing with Touchstone” on page 103. No sales charge will be imposed on the Class A shares of the Acquiring Fund received in connection with the Reorganization. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the Touchstone Fund complex. In addition, you may qualify for sales charge discounts for Class A shares of Touchstone equity funds and Touchstone fixed income funds if you and your family invest, or agree to invest in the future, at least $25,000 or $50,000, respectively, in the Touchstone Funds. For the Target Fund, more information about these and other discounts is available from your financial professional and in the sections entitled “Shareholder Account Information – Sales Charge Reductions and Waivers” and “Financial Intermediary – Specific Sales Charge Waiver Policies” in the Target Fund’s Prospectus. For the Acquiring Fund, more information about these and other discounts is available from your financial professional and in the section entitled “Choosing a Class of Shares” in the Acquiring Fund’s prospectus and in “Appendix A – Intermediary-Specific Sales Charge Waivers and Discounts” to the Acquiring Fund’s prospectus.

On December 11, 2020, the Touchstone Sands Capital Institutional Growth Fund, a series of Touchstone Institutional Funds Trust, was reorganized into the Acquiring Fund, which resulted in increased assets for the Acquiring Fund (the “Touchstone Sands Reorganization”). As the tables below indicate, including footnote 9 thereto, the hypothetical pro forma gross and net annual operating expenses of the Acquiring Fund after the Reorganization are expected to be lower than your Target Fund’s net annual operating expenses for Classes W shares, the same as your Target Fund’s net annual operating expenses for Class C shares, and lower than your Target Fund’s net annual operating expenses for Class A shares after taking into account the Acquiring Fund’s increased assets following the Touchstone Sands Reorganization. At the December 31, 2020 net asset levels, the Target Fund is charged an effective management fee of 1.00%. This is higher than the effective management fee of 0.59% that would be paid by the Acquiring Fund including the Target Fund net assets.

SHAREHOLDER FEES

(fees paid directly from your investment)

ANNUAL FUND OPERATING EXPENSES

(expenses that you pay each year as a percentage of the value of your investment)

ANNUAL FUND OPERATING EXPENSES

(expenses that you pay each year as a percentage of the value of your investment)

ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year as a percentage of the value of your investment)

Expense Examples. The examples below are intended to help you compare the cost of investing in the Target Fund with the pro forma cost of investing in the Acquiring Fund.The examples assume that you invest $10,000 in each Fund and then either (i) sell all of your shares at the end of each period indicated below or (ii) keep all of your shares at the end of each period indicated below. The examples also assume that your investment has a 5% annual return and that operating expenses (before fee waivers and expense reimbursements) remain the same. The examples also assume that any fee waiver agreement and/or expense limitation agreement for the AIG Focused Growth Fund will remain in place through the term of the applicable fee waiver agreement and/or expense limitation agreement, the expense limitation agreements for the Touchstone Sands Capital Select Growth Fund will remain in place for one year in each period and the expense limitation agreement that takes effect upon closing of the Reorganization will be in place for two years following the closing of the Reorganization. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

How do the performance records of the Target Fund and the Acquiring Fund compare?

The bar charts and the performance tables below provide some indication of the risks of an investment in each of the Target Fund and the Acquiring Fund by showing how each Fund’s performance has varied from year to year and by showing how each Fund’s average annual returns compare with a broad measure of market performance. The Acquiring Fund will be the accounting survivor of the Reorganization for performance purposes.

The Target Fund acquired the assets and assumed the liabilities of the SunAmerica Focused Alpha Growth Fund, Inc. (the “Focused Growth Predecessor Fund”), a closed-end investment company also advised by SunAmerica, in a reorganization that occurred on January 23, 2012. Prior to January 23, 2012, the Target Fund had no operating history and it therefore carried forward the performance and accounting history of the Focused Growth Predecessor Fund, which had a fiscal year end of December 31. Accordingly, the Target Fund’s performance information in the bar chart and table for periods prior to January 23, 2012 is based on that of the Focused Growth Predecessor Fund. The Focused Growth Predecessor Fund’s operating expenses were lower than those of the Target Fund. If the Target Fund’s higher operating expenses were applied to the performance for the period prior to the Focused Growth Predecessor Fund Reorganization, the performance quoted in the bar chart and table would have been lower.

The bar chart does not reflect any sales charges, which would reduce your return.  The performance table reflects any applicable sales charges. Past performance of the Target Fund and the Acquiring Fund, before and after taxes, does not necessarily represent how either Fund will perform in the future. Updated performance information for the Target Fund is available on the Target Fund’s website at www.aig.com/funds or can be obtained by phone at 800-858-8850, ext. 6003. Updated performance information for the Acquiring Fund is available on the Acquiring Fund’s website at TouchstoneInvestments.com or by calling 800.543.0407.

AIG Focused Growth Fund-Class A Shares

The AIG Focused Growth Fund’s calendar year-to-date total return for Class A shares as of January 31, 2021 was -0.56%.

Touchstone Sands Capital Select Growth Fund-Class A Shares

The Touchstone Sands Capital Select Growth Fund’s calendar year-to-date total return for Class A shares as of January 31, 2021 was -1.36%.

Average Annual Total Returns
For the periods ended December 31, 2020

The table below shows how the Target Fund and Acquiring Fund's performance compares with the returns of an index that measures broad market performance.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. The return after taxes on distributions and sale of Fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period. If you hold your Fund shares through a tax-advantaged arrangement, such as an individual retirement account or a 401(k) plan, the after-tax returns do not apply to your situation.

How do the investment goals and principal investment strategies of the Funds compare?

The investment goals and principal investment strategies of the AIG Focused Growth Fund and the Touchstone Sands Capital Select Growth Fund, along with descriptions of certain differences between the Funds’ investment goals and principal investment strategies, are set forth in the table below. As described further below, the Target Fund’s investment objective is growth of capital, while the Acquiring Fund’s investment objective is long-term capital appreciation. The primary difference between the Funds’ investment strategies is that the Target Fund generally holds securities of more companies than the Acquiring Fund and that the Target Fund typically invests 35% of its portfolio in companies with small- and mid-market capitalization while the Acquiring Fund emphasizes investments in large capitalization companies. Additionally, the Target Fund identifies specific percentages of its portfolio that will be invested in large, mid and small cap companies. The Target Fund may invest in foreign securities. The Acquiring Fund does not have a stated policy regarding foreign securities as part of its principal investment strategies. Although the Acquiring Fund generally invests in companies with a larger market capitalization as part of its principal investment strategies, the ranges of issuer sizes are comparable. The Target Fund describes active trading as a principal investment technique. The Acquiring Fund has no stated policy regarding active trading.

Comparison of Investment Limitations

Each Fund has fundamental investment limitations which cannot be changed without shareholder approval, and non-fundamental investment limitations which may be changed with Board approval but without shareholder approval. Descriptions of the fundamental limitations of each Target and Acquiring Fund are set forth in Exhibit B to this Joint Proxy Statement/Prospectus. The limitations for each Target Fund and each corresponding Acquiring Fund are generally substantially similar, although there are certain differences in the language of the applicable investment limitations attributable primarily to the fact that the SunAmerica Funds are part of the SunAmerica “family” of funds and the Touchstone Funds are part of the Touchstone “family” of funds or based on the specific Fund’s investment strategies. Additionally the Target Fund may not pledge its assets, except as permitted under the Investment Company Act of 1940, as amended (the “1940 Act”), and as interpreted or modified by regulatory authority having jurisdiction, from time to time, whereas the Acquiring Fund does not have a stated policy with respect to pledging its assets.

How do the principal risks of investing in the Funds compare?

An investment in each Fund is subject to non-diversified risk. An investment in the AIG Focused Growth Fund is also subject to active trading risk, emerging markets securities risk, foreign exposure and currency volatility risk, small- and mid- market capitalization companies risk and stock market volatility and securities selection risk. An investment in the Touchstone Sands Capital Select Growth Fund is also subject to equity securities risk including large-cap risk, growth-investing risk, health crises impact risk, management risk, economic and market events risk, and sector focus risk. For more information on the Funds’ principal risks, see “Comparison of Principal Risks.”

Who will be the Advisor, Sub-Advisor and Portfolio Managers of my Fund after the Reorganization?

After the Reorganization, Touchstone Advisors will continue to serve as the investment advisor and Sands Capital Management, LLC (“Sands Capital”) will continue to serve as the sub-advisor to the Touchstone Sands Capital Select Growth Fund. The portfolio managers of Touchstone Sands Capital Select Growth Fund are Frank M. Sands, A. Michael Sramek, Wesley A. Johnston, and Thomas H. Trentman. For additional information regarding the advisor, sub-advisor and portfolio managers listed above, please see the sections entitled “The Funds’ Management-Investment Advisor” and “The Funds’ Management –Sub-Advisors and Portfolio Managers.”

What are the portfolio turnover rates of the Funds?

 A Fund pays transaction costs, such as brokerage commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect a Fund’s performance. During the fiscal year ended October 31, 2020, the Target Fund’s portfolio turnover rate was 53% of the average value of its portfolio. During the fiscal year ended September 30, 2020, the portfolio turnover rate of the Acquiring Fund was 41% of the average value of its portfolio.

Will there be any repositioning of the portfolio in connection with the Reorganization?

It is expected that approximately 71% of the portfolio investments of the Target Fund may be sold by the Acquiring Fund following the Reorganization. The timing of any repositioning and its resulting impact on capital gains distributions in 2021 and beyond is uncertain. In addition, additional securities may be sold over time in the ordinary course of business. The amounts per share of any capital gains distributions resulting from the repositioning will depend on a number of factors, including the proportion of portfolio holdings that are actually sold, the timing of portfolio sales, the performance of the stock market in general, the availability of offsetting capital losses and the scale of purchase and redemption activity in the Funds’ shares. The timing of portfolio sales will also be subject to market conditions existing after the closing of the Reorganization. Accordingly, the per share amounts of any capital gains distributions resulting from the repositioning cannot be estimated at this time. Touchstone Advisors publishes estimates of capital gains distributions for the Touchstone Funds on its website (https://www.touchstoneinvestments.com/resources.htm), generally in October of each year. The Acquiring Fund will also bear brokerage costs in connection with the repositioning. For illustration purposes only, if the Reorganization had been completed as of November 30, 2020 and the Acquiring Fund had sold 71% of the investments held in the Target Fund’s portfolio as of November 30, 2020, the resulting realized capital gains estimate would be expected to be $203 million total (or $0.737 per share) of the combined fund and the spreads and other transaction costs would be expected to total approximately $271,000 in the aggregate (0.005%, or $0.001 per share) of the combined fund, based on average transaction costs of the Acquiring Fund. The brokerage costs to be borne by the Acquiring Fund will be borne by both Acquiring Fund shareholders and continuing Target Fund shareholders (as shareholders of the Acquiring Fund following the Reorganization).

SUMMARY: REORGANIZATION OF AIG SELECT DIVIDEND GROWTH FUND INTO TOUCHSTONE DIVIDEND EQUITY FUND

What class of shares of the Acquiring Fund will I receive in the Reorganization?

Shareholders of the AIG Select Dividend Growth Fund will receive shares of the Touchstone Dividend Equity Fund, as follows:

How do the fees and expenses of the Target Fund and the Acquiring Fund compare?

The tables below describe the fees and expenses that you pay if you buy, hold and sell shares of your Target Fund and the pro forma fees and expenses that you may pay if you buy, hold and sell shares of the corresponding Touchstone Fund assuming that both the Reorganization of the AIG Select Dividend Growth Fund into the Touchstone Dividend Equity Fund and the Reorganization of the AIG Focused Dividend Strategy Fund into the Touchstone Dividend Equity Fund (which is also described in this Joint Proxy Statement/Prospectus) take place. The completion of the Transaction is subject to the satisfaction or waiver of certain conditions including that shareholders of both the AIG Focused Dividend Strategy Fund and the AIG Select Dividend Growth Fund shall have approved their respective Reorganization. The pro forma expense ratios project anticipated expenses of the Touchstone Dividend Equity Fund following the Reorganizations, but actual expenses may be greater or less than those shown. Expenses for the Class A, Class C and Class W shares of the AIG Select Dividend Growth Fund are based on the operating expenses incurred by each class of shares of the Fund as of the fiscal year ended October 31, 2020. Touchstone Dividend Equity Fund is newly formed and will commence operations upon the closing of the Reorganizations. Pro forma fees and expense of Touchstone Dividend Equity Fund are estimated based on the assets of AIG Select Dividend Growth Fund as of October 31, 2020.

As the tables below indicate, the hypothetical pro forma gross and net annual operating expenses of the Acquiring Fund after each Reorganization are expected to be lower than your Fund’s net annual operating expenses for all share classes. At the December 31, 2020 asset levels, the Target Fund is charged an effective management fee of 0.75%. This is higher than the effective management fee of 0.55% that would be paid by the Acquiring Fund including the Target Fund net assets.

The Target Fund’s policies and procedures applicable to purchases, exchanges and redemptions are generally comparable to those of the Acquiring Fund’s; however, following the Reorganization, purchases, exchanges and redemptions of the Acquiring Fund shares may be subject to fees, charges, expenses and limitations that differ from those applicable to the Target Fund. See generally “Investing with Touchstone” on page 103. No sales charge will be imposed on the Class A shares of the Acquiring Fund received in connection with the Reorganization. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the Touchstone Fund complex. In addition, you may qualify for sales charge discounts for Class A shares of Touchstone equity funds and Touchstone fixed income funds if you and your family invest, or agree to invest in the future, at least $25,000 or $50,000, respectively, in the Touchstone Funds. For the Target Fund, more information about these and other discounts is available from your financial professional and in the sections entitled “Shareholder Account Information - Sales Charge Reductions and Waivers” and “Financial Intermediary – Specific Sales Charge Waiver Policies” in the Target Fund’s Prospectus. For the Acquiring Fund, more information about these and other discounts is available from your financial professional and in the section entitled “Choosing a Class of Shares” in the Acquiring Fund’s prospectus and in “Appendix A – Intermediary-Specific Sales Charge Waivers and Discounts” to the Fund’s prospectus.

SHAREHOLDER FEES

(fees paid directly from your investment)

ANNUAL FUND OPERATING EXPENSES

(expenses that you pay each year as a percentage of the value of your investment)

ANNUAL FUND OPERATING EXPENSES

(expenses that you pay each year as a percentage of the value of your investment)

ANNUAL FUND OPERATING EXPENSES

(expenses that you pay each year as a percentage of the value of your investment)

Expense Examples. The examples below are intended to help you compare the cost of investing in the Target Fund with the pro forma cost of investing in the Acquiring Fund. The examples assume that you invest $10,000 in each Fund and then either (i) sell all of your shares at the end of each period indicated below or (ii) keep all of your shares at the end of each period indicated below. The examples also assume that your investment has a 5% annual return and that operating expenses (before fee waivers and expense reimbursements) remain the same. These examples also assume that the expense limitation agreement reflected in the Annual Fund Operating Expenses tables above for the AIG Select Dividend Growth Fund will remain in place through the term of the expense limitation agreement and the expense limitation agreement for the Acquiring Fund will be in place for two years following the closing of the Reorganization. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

How do the performance records of the Target Fund and the Acquiring Fund compare?

The Acquiring Fund has no performance history. The AIG Focused Dividend Strategy Fund will be the accounting and performance survivor of the Reorganization, and the Acquiring Fund will adopt its performance history. The bar charts and the performance tables below provide some indication of what the risks of an investment in the Acquiring Fund will be by showing how AIG Focused Dividend Strategy Fund’s performance has varied from year to year, by showing how AIG Select Dividend Growth Fund's performance has varied from year to year, and by showing how AIG Select Dividend Fund’s and AIG Focused Dividend Strategy Fund’s average annual returns compare with broad measures of market performance.

The Acquiring Fund will be managed by a different advisor and sub-advisor and pursuant to different strategies than the Target Fund, accordingly, the past performance of the Target Fund does not necessarily reflect how the Acquiring Fund will perform in the future. Performance information for the Acquiring Fund is not available because it has not commenced operations as of the date of the Joint Proxy Statement/Prospectus. For a discussion of the historical performance of all accounts managed by the Fund’s sub-advisor, Fort Washington, with investment objectives, policies, strategies, and risks substantially similar to those of the Fund, see Exhibit D (“Prior Performance For Similar Accounts Managed by Fort Washington for the Touchstone Dividend Equity Fund”) to this Joint Proxy Statement/Prospectus.

The bar chart does not reflect any sales charges, which would reduce your return. The performance table reflects any applicable sales charges. Past performance of the Target Fund, before and after taxes, does not necessarily represent how the Target Fund will perform in the future. Updated information on the Target Fund’s performance can be obtained by visiting www.aig.com/funds or can be obtained by phone at 1.800.858.8850, ext. 6003.

AIG Select Dividend Growth Fund - Class A Shares

The AIG Select Dividend Growth Fund’s calendar year-to-date total return for Class A shares as of January 31, 2021 was -0.24%.

Average Annual Total Returns
For the periods ended December 31, 2020

The table below shows how the Target Fund's performance compares with the returns of an index that measures broad market performance.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. The return after taxes on distributions and sale of Fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period. If you hold your Fund shares through a tax-advantaged arrangement, such as an individual retirement account or a 401(k) plan, the after-tax returns do not apply to your situation.

AIG Focused Dividend Strategy Fund-Class A Shares

The AIG Focused Dividend Strategy Fund’s calendar year-to-date total return for Class A shares as of January 31, 2021 was -0.25%.

Average Annual Total Returns
For the periods ended December 31, 2020

The table below shows how the Target Fund’s performance compares with the returns of an index that measures broad market performance.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. The return after taxes on distributions and sale of Fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period. If you hold your Fund shares through a tax-advantaged arrangement, such as an individual retirement account or a 401(k) plan, the after-tax returns do not apply to your situation.

How do the investment goals and principal investment strategies of the Funds compare?

The investment goals and principal investment strategies of the AIG Select Dividend Growth Fund and the Touchstone Dividend Equity Fund, along with descriptions of certain differences between the Funds’ investment goals and principal investment strategies, are set forth in the table below. Although the Funds have similar investment goals and principal strategies, the analytical tools, techniques and investment selection process used by the sub-advisor to the Acquiring Fund may differ from those used by the Target Fund. Both Funds’ include the investment goal of increases in capital, as well as current income. Both Fund’s investment strategies include investing at least 80% of each Fund’s assets in equity securities, with the Target Fund investing in dividend paying equity securities and the Acquiring Fund investing in equities securities of U.S. large-cap companies that have historically paid dividends. Both Funds have stated policies with respect to the number of securities each holds as part of their principal investment strategies; the Target Fund holds up to 40 dividend paying equity securities selected annually, whereas the Acquiring Fund generally holds between 65 to 90 companies, with residual cash and equivalents expected to represent less than 10% of the Fund’s net assets. Both Funds also have stated policies with respect to selecting securities as part of their principal investment strategies. The Target Fund employs a blended approach of selecting stocks for the Fund based on both value and growth criteria. With respect to the Acquiring Fund, the sub-advisor seeks out companies that have historically paid consistent, growing dividends, have sustainable competitive advantages that should result in excess profits to support future dividend payments and trade at reasonable valuations compared to their intrinsic value. While the Acquiring Fund does not have a similar stated policy as part of its principal investment strategies, the Target Fund employs a “buy and hold” strategy.

Comparison of Investment Limitations

Each Fund has fundamental investment limitations which cannot be changed without shareholder approval, and non-fundamental investment limitations which may be changed with Board approval but without shareholder approval. Descriptions of the fundamental limitations of each Target Fund and each Acquiring Fund are set forth in Exhibit B to this Joint Proxy Statement/Prospectus. The limitations for each Target Fund and each corresponding Acquiring Fund are generally substantially similar, although there are certain differences in the language of the applicable investment limitations attributable primarily to the fact that the Target Funds are part of the SunAmerica “family” of funds and the Acquiring Funds are part of the Touchstone “family” of funds. Additionally the Target Fund may not pledge its assets, except as permitted under the 1940 Act, and as interpreted or modified by regulatory authority having jurisdiction, from time to time, whereas the Acquiring Fund does not have a stated policy with respect to pledging its assets.

How do the principal risks of investing in the Funds compare?

An investment in the AIG Select Dividend Growth Fund is subject to disciplined strategy risk, focused strategy risk and stock market volatility and securities selection risk. An investment in the Touchstone Dividend Equity Fund is subject to dividend risk, equity securities risk, large-cap risk, management risk, economic and market events risk and value investing risk. For more information on the Funds’ principal risks, see “Comparison of Principal Risks.”

Who will be the Advisor, Sub-Advisor and Portfolio Managers of my Fund after the Reorganization?

After the Reorganization, Touchstone Advisors will serve as the investment advisor and Fort Washington will serve as the sub-advisor to Touchstone Dividend Equity Fund. The portfolio managers of Touchstone Dividend Equity Fund are Austin R. Kummer, CFA, Brendan M. White, CFA, and James E. Wilhelm, Jr. For additional information regarding the advisor, sub-advisor and portfolio managers listed above, please see the sections entitled “The Funds’ Management – Investment Advisor” and “The Funds’ Management – Sub-Advisors and Portfolio Managers.”

What are the portfolio turnover rates of the Funds?

A Fund pays transaction costs, such as brokerage commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect a Fund’s performance. During the fiscal year ended October 31, 2020, the Target Fund’s portfolio turnover rate was 47% of the average value of its portfolio. The Acquiring Fund will not commence operations until the consummation of the Reorganization but is expected to have a similar portfolio turnover rate.

Will there be any repositioning of the portfolio in connection with the Reorganization?

It is expected that approximately 77% of the portfolio investments of the Target Fund may be sold by the Acquiring Fund following the Reorganization. The timing of any repositioning and its resulting impact on capital gains distributions in 2021 and beyond is uncertain. The amounts per share of any capital gains distributions resulting from the repositioning will depend on a number of factors, including the proportion of portfolio holdings that are actually sold, the timing of portfolio sales, the performance of the stock market in general, the availability of offsetting capital losses and the scale of purchase and redemption activity in the Funds’ shares. The timing of portfolio sales will also be subject to market conditions existing after the closing of the Reorganization. Accordingly, the per share amounts of any capital gains distributions resulting from the repositioning cannot be estimated at this time. Touchstone Advisors publishes estimates of capital gains distributions for the Touchstone Funds on its website (https://www.touchstoneinvestments.com/resources.htm), generally in October of each year. The Acquiring Fund will also bear brokerage costs in connection with the repositioning. For illustration purposes only, if the Reorganization had been completed as of November 30, 2020, and the Acquiring Fund had sold 77% of the investments held in the Target Fund’s portfolio as of November 30, 2020, the resulting realized capital gains estimate would be expected to be $205 million total (or $0.0639 per share) of the combined fund (including the Reorganization of the AIG Focused Dividend Strategy Fund) and the spreads and other transaction costs would be expected to total approximately $2 million in the aggregate (0.04%, or $0.006 per share) of the combined fund, based on average transaction costs of the Acquiring Fund. The brokerage costs to be borne by the Acquiring Fund will be borne by both Acquiring Fund shareholders and continuing Target Fund shareholders (as shareholders of the Acquiring Fund following the Reorganization).

SUMMARY: REORGANIZATION OF AIG SENIOR FLOATING RATE FUND INTO TOUCHSTONE CREDIT OPPORTUNITIES FUND

What class of shares of the Acquiring Fund will I receive in the Reorganization?

Shareholders of the AIG Senior Floating Rate Fund will receive shares of the Touchstone Credit Opportunities Fund, as follows:

How do the fees and expenses of the Target Fund and the Acquiring Fund compare?

The tables below describe the fees and expenses that you pay if you buy, hold and sell shares of your Target Fund and the pro forma fees and expenses that you may pay if you buy, hold and sell shares of the corresponding Acquiring Fund assuming that the Reorganization of the AIG Senior Floating Rate Fund into the Touchstone Credit Opportunities Fund takes place. However, the Reorganization is subject to the closing of the Transaction between SunAmerica and Touchstone Advisors. The pro forma expense ratios project anticipated expenses of the Acquiring Fund following the Reorganization, but actual expenses may be greater or less than those shown. Expenses for the Class A, Class C, and Class W shares of the AIG Senior Floating Rate Fund are based on the operating expenses incurred by each class of shares of the Fund for the fiscal year ended December 31, 2020. Expenses for the Class A, Class C and Class Y shares of the Touchstone Credit Opportunities Fund are based on the operating expenses incurred by each class of shares of the Fund for the fiscal year ended September 30, 2020. The pro forma fees and expenses for the Class A, Class C, and Class Y shares of the Touchstone Credit Opportunities Fund reflect the fees and expenses of the Acquiring Fund and assume that the Reorganization had been completed at the beginning of the fiscal year ended September 30, 2020.

The Target Fund’s policies and procedures applicable to purchases, exchanges and redemptions are generally comparable to those of the Acquiring Fund’s; however, following the Reorganization, purchases, exchanges and redemptions of the Acquiring Fund shares may be subject to fees, charges, expenses and limitations that differ from those applicable to the Target Fund. See generally “Investing with Touchstone” on page 103. No sales charge will be imposed on the Class A shares of the Acquiring Fund received in connection with the Reorganization. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the Touchstone Fund complex. In addition, you may qualify for sales charge discounts for Class A shares of Touchstone equity funds and Touchstone fixed income funds if you and your family invest, or agree to invest in the future, at least $25,000 or $50,000, respectively, in the Touchstone Funds. For the Target Fund, more information about these and other discounts is available from your financial professional and in the sections entitled “Shareholder Account Information – Sales Charge Reductions and Waivers” and “Financial Intermediary – Specific Sales Charge Waiver Policies” in the Target Fund’s Prospectus. For the Acquiring Fund, more information about these and other discounts is available from your financial professional and in the section entitled “Choosing a Class of Shares” in the Acquiring Fund’s prospectus and in “Appendix A – Intermediary-Specific Sales Charge Waivers and Discounts” to the Acquiring Fund’s prospectus.

As the tables below indicate, though the gross expenses of Class A and Class W shares are expected to be lower than your Target Fund's gross expenses, the hypothetical pro forma net annual operating expenses of the Acquiring Fund after each Reorganization are expected to be higher than your Target Fund’s expenses for all share classes due to the dividend and interest expenses related to short sales that are excluded from the expense limitation arrangement. Please note, however, that the Acquiring Fund’s historical investment performance, which reflects the Acquiring Fund’s investment strategy, including the use of short selling as a component of that strategy, was better than the Target Fund’s historical performance for the 1- and 5- year periods ended December 31, 2020. In addition, at the December 31, 2020 asset levels, the Target Fund is charged an effective management fee of 0.85%. This is higher than the effective management fee of 0.60% that would be paid by the Acquiring Fund including the Target Fund net assets.

SHAREHOLDER FEES

(fees paid directly from your investment)

ANNUAL FUND OPERATING EXPENSES

(expenses that you pay each year as a percentage of the value of your investment)

ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year as a percentage of the value of your investment)

ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year as a percentage of the value of your investment)

Expense Examples. The examples below are intended to help you compare the cost of investing in the Target Fund with the pro forma cost of investing in the Acquiring Fund. The examples assume that you invest $10,000 in each Fund and then either (i) sell all of your shares at the end of each period indicated below or (ii) keep all of your shares at the end of each period indicated below. The examples also assume that your investment has a 5% annual return and that operating expenses (before fee waivers and expense reimbursements) remain the same. The examples also assume that any fee waiver agreement and/or expense limitation agreement for the AIG Senior Floating Rate Fund will remain in place through the term of the applicable fee waiver agreement and/or expense limitation agreement, the expense limitation agreements for the Touchstone Credit Opportunities Fund will remain in place for one year and the expense limitation agreement that will take effect as of the closing of the Reorganization will remain in place for two years following the closing of the Reorganization(s). Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

How do the performance records of the Target Fund and the Acquiring Fund compare?

The bar charts and the performance tables below provide some indication of the risks of an investment in each of the Target Fund and the Acquiring Fund by showing how each Fund’s performance has varied from year to year and by showing how each Fund’s average annual returns compare with a broad measure of market performance. The Acquiring Fund will be the accounting survivor of the Reorganization for performance purposes.

On September 6, 2019, another series of the Acquiring Funds Trust (the “Credit Opportunities Predecessor Fund”), was reorganized into the Acquiring Fund. As a result of the reorganization, the performance and accounting history of the Credit Opportunities Predecessor Fund was assumed by the Acquiring Fund. Financial and performance information prior to September 6, 2019 is that of the Credit Opportunities Predecessor Fund.

The bar chart does not reflect any sales charges, which would reduce your return. The performance table reflects any applicable sales charges. Past performance of the Target Fund and the Acquiring Fund, before and after taxes, does not necessarily represent how either Fund will perform in the future. Updated performance information for the Target Fund is available on the Target Fund’s website at www.aig.com/funds or can be obtained by phone at 800-858-8850, ext. 6003. Updated performance information for the Acquiring Fund is available on the Acquiring Fund’s website at TouchstoneInvestments.com or by calling 800.543.0407.

AIG Senior Floating Rate Fund-Class A Shares

The AIG Senior Floating Rate Fund’s calendar year-to-date total return for Class A shares as of January 31, 2021 was 0.90%.

Touchstone Credit Opportunities Fund-Class A Shares

The Touchstone Credit Opportunities Fund’s calendar year-to-date total return for Class A shares as of January 31, 2021 was 1.02%

Average Annual Total Returns
For the periods ended December 31, 2020

The table below shows how the Target Fund and Acquiring Fund's performance compares with the returns of an index or indexes that measures broad market performance.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. The return after taxes on distributions and sale of Fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period. If you hold your Fund shares through a tax-advantaged arrangement, such as an individual retirement account or a 401(k) plan, the after-tax returns do not apply to your situation.

How do the investment goals and principal investment strategies of the Funds compare?

The investment goals and principal investment strategies of the AIG Senior Floating Rate Fund and the Touchstone Credit Opportunities Fund, along with descriptions of certain differences between the Funds’ investment goals and principal investment strategies, are set forth in the table below. As described further below, the Target Fund’s investment objective is to provide a high level of current income consistent with the preservation of capital, while the Acquiring Fund’s investment objective is absolute total return primarily from income and capital appreciation. The primary difference between the Funds’ investment strategies is that the Target Fund generally invests in senior secured floating rate loans and other institutionally traded secured floating rate debt obligations, whereas the Acquiring Fund invests, under normal circumstances, at least 80% of its assets in U.S. and non-U.S. debt instruments, which may include loans. The credit quality of the loans in which the Target Fund invests will be rated below investment grade or will be unrated loans of comparable quality, whereas the Acquiring Fund may invest in debt instruments of any credit quality or rating. Both Funds allow for investing in non-U.S. investments. However, whereas the Target Fund identifies specific percentages of its portfolio that will be invested in non-U.S. investments, the Acquiring Fund does not. Both Funds also allow for certain methods of hedging. Additionally, the Target Fund is a diversified fund, whereas the Acquiring Fund is a non-diversified fund.

Comparison of Investment Limitations

Each Fund has fundamental investment limitations which cannot be changed without shareholder approval, and non-fundamental investment limitations which may be changed with Board approval but without shareholder approval. Descriptions of the fundamental limitations of each Target and Acquiring Fund are set forth in Exhibit B to this Joint Proxy Statement/Prospectus. The limitations for each Target Fund and each corresponding Acquiring Fund are generally substantially similar, although there are certain differences in the language of the applicable investment limitations attributable primarily to the fact that the SunAmerica Funds are part of the SunAmerica “family” of funds and the Touchstone Funds are part of the Touchstone “family” of funds or based on the specific Fund’s investment strategies. Additionally the Target Fund is diversified whereas the Acquiring Fund is non-diversified.

How do the principal risks of investing in the Funds compare?

An investment in each Fund is subject to foreign securities risk. An investment in the AIG Senior Floating Rate Fund is also subject to collateral impairment risk, credit quality risk, economic and general market volatility risk, general risks related to the loans, interest rate fluctuations risk, LIBOR risk, loan settlement risk, prepayment risk, redemption risk and securities selection risk. An investment in the Touchstone Credit Opportunities Fund is also subject to collateralized loan obligations risk, convertible securities risk, counterparty risk, derivatives risk including futures contracts risk, economic and market events risk, options risk and swap agreement risk, equity securities risk including preferred stock risk, fixed-income risk including corporate loan risk, credit risk, distressed securities risk, interest rate risk and non-investment-grade debt securities risk, foreign securities risk, health crises impact risk, leverage risk, liquidity risk, management risk, non-diversification risk, pay-in-kind risk, Rule 144 securities risk, and short sales risk. For more information on the Funds’ principal risks, see “Comparison of Principal Risks.”

 Who will be the Advisor, Sub-Advisor and Portfolio Managers of my Fund after the Reorganization?

After the Reorganization, Touchstone will continue to serve as the investment advisor and Ares Capital Management II LLC will continue to serve as the sub-advisor to Touchstone Credit Opportunities Fund. The portfolio managers of Touchstone Credit Opportunities Fund are Seth Brufsky, Jason Duko, Chris Mathewson, and Kapil Singh. For additional information regarding the advisor, sub-advisor and portfolio managers listed above, please see the sections entitled “The Funds’ Management – Investment Advisor” and “The Funds’ Management – Sub-Advisors and Portfolio Managers.”

What are the portfolio turnover rates of the Funds?

A Fund pays transaction costs, such as brokerage commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect a Fund’s performance. During the fiscal year ended December 31, 2020, the Target Fund’s portfolio turnover rate was 51% of the average value of its portfolio. During the fiscal year ended September 30, 2020, the Acquiring Fund’s portfolio turnover rate was 115% of the average value of its portfolio.

Will there be any repositioning of the portfolio in connection with the Reorganization?

It is expected that approximately 60% of the portfolio investments of the Target Fund may be sold by the Acquiring Fund following the Reorganization. The timing of any repositioning and its resulting impact on capital gains distributions in 2021 and beyond is uncertain. In addition, additional securities may be sold over time in the ordinary course of business. The amounts per share of any capital gains distributions resulting from the repositioning will depend on a number of factors, including the proportion of portfolio holdings that are actually sold, the timing of portfolio sales, the performance of the bond market in general, the availability of offsetting capital losses and the scale of purchase and redemption activity in the Funds’ shares. The timing of portfolio sales will also be subject to market conditions existing after the closing of the Reorganization. Accordingly, the per share amounts of any capital gains distributions resulting from the repositioning cannot be estimated at this time. Touchstone Advisors publishes estimates of capital gains distributions for the Touchstone Funds on its website (https://www.touchstoneinvestments.com/resources.htm), generally in October of each year. The Acquiring Fund will also bear brokerage costs in connection with the repositioning. For illustration purposes only, if the Reorganization had been completed as of November 30, 2020 and the Acquiring Fund had sold 60% of the investments held in the Target Fund’s portfolio as of November 30, 2020, the resulting realized capital loss estimate would be expected to be $(2.9 million) total (or $0.122 per share) of the combined fund and the spreads and other transaction costs would be expected to total approximately $465,000 in the aggregate (0.19%, or $0.019 per share) of the combined fund, based on average transaction costs of the Acquiring Fund. The brokerage costs to be borne by the Acquiring Fund will be borne by both Acquiring Fund shareholders and continuing Target Fund shareholders (as shareholders of the Acquiring Fund following the Reorganization).

In addition, on November 19, 2020, the Board of Trustees of Touchstone Strategic Trust approved the reorganization of the Touchstone Dynamic Diversified Income Fund into the Acquiring Fund, subject to the approval of the Touchstone Dynamic Diversified Income Fund’s shareholders (the “Dynamic Fund Reorganization”). The Trust filed a prospectus/proxy statement on Form N-14 with respect to the Dynamic Fund Reorganization with the SEC on March 17, 2021. The Dynamic Fund Reorganization is expected to be completed on or about June 4, 2021, prior to the closing of the Reorganization discussed in this Prospectus/Proxy Statement. Touchstone Advisors does not expect the Dynamic Fund Reorganization to affect the completion of the Reorganization discussed in this Prospectus/Proxy Statement.

SUMMARY: REORGANIZATION OF AIG U.S. GOVERNMENT SECURITIES FUND INTO TOUCHSTONE ACTIVE BOND FUND

What class of shares of the Acquiring Fund will I receive in the Reorganization?

Shareholders of the AIG U.S. Government Securities Fund will receive shares of the Touchstone Active Bond Fund, as follows:

How do the fees and expenses of the Target Fund and the Acquiring Fund compare?

The tables below describe the fees and expenses that you pay if you buy, hold and sell shares of your Target Fund and the pro forma fees and expenses that you may pay if you buy, hold and sell shares of the corresponding Acquiring Fund assuming that the Reorganization of the AIG U.S. Government Securities Fund into the Touchstone Active Bond Fund takes place. However, the Reorganization is subject to the closing of the Transaction between SunAmerica and Touchstone Advisors. The pro forma expense ratios project anticipated expenses of the Acquiring Fund following the Reorganization, but actual expenses may be greater or less than those shown. Expenses for the Class A and Class C shares of the AIG U.S. Government Securities Fund are based on the operating expenses incurred by each class of shares of the Fund for the twelve months ended September 30, 2020, the Target Fund’s most recent semi-annual period end. Expenses for the Class A and Class C shares of the Touchstone Active Bond Fund are based on the operating expenses incurred by each class of shares of the Acquiring Fund for the fiscal year ended September 30, 2020. The pro forma fees and expenses for the Class A and Class C shares of the Touchstone Active Bond Fund reflect the fees and expenses of the Acquiring Fund and assume that the Reorganization had been completed at the beginning of the fiscal year ended September 30, 2020.

The Target Fund’s policies and procedures applicable to purchases, exchanges and redemptions are generally comparable to those of the Acquiring Fund’s; however, following the Reorganization, purchases, exchanges and redemptions of the Acquiring Fund shares may be subject to fees, charges, expenses and limitations that differ from those applicable to the Target Fund. See generally “Investing with Touchstone” on page 103. No sales charge will be imposed on the Class A shares of the Acquiring Fund received in connection with the Reorganization. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the Touchstone Fund complex. In addition, you may qualify for sales charge discounts for Class A shares of Touchstone equity funds and Touchstone fixed income funds if you and your family invest, or agree to invest in the future, at least $25,000 or $50,000, respectively, in the Touchstone Funds. For the Target Fund, more information about these and other discounts is available from your financial professional and in the sections entitled “Shareholder Account Information – Sales Charge Reductions and Waivers” and “Financial Intermediary – Specific Sales Charge Waiver Policies” in the Target Fund’s Prospectus. For the Acquiring Fund, more information about these and other discounts is available from your financial professional and in the section entitled “Choosing a Class of Shares” in the Acquiring Fund’s prospectus and in “Appendix A – Intermediary-Specific Sales Charge Waivers and Discounts” to the Acquiring Fund’s prospectus.

As the tables below indicate, the hypothetical pro forma gross and net annual operating expenses of the Acquiring Fund after each Reorganization are expected to be lower for Class A than your Target Fund’s expenses and the same for Class C. At the December 31, 2020 net asset levels, the Target Fund is charged an effective management fee of 0.65%. This is higher than the effective management fee of 0.38% that would be paid by the Acquiring Fund including the Target Fund net assets.

SHAREHOLDER FEES
(fees paid directly from your investment)

ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year as a percentage of the value of your investment)

ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year as a percentage of the value of your investment)

Expense Examples. The examples below are intended to help you compare the cost of investing in the Target Fund with the pro forma cost of investing in the Acquiring Fund. The examples assume that you invest $10,000 in each Fund and then sell all of your shares at the end of each period indicated below or (ii) keep all of your shares at the end of each period indicated below. The examples also assume that your investment has a 5% annual return and that operating expenses (before fee waivers and expense reimbursements) remain the same. The examples also assume that any expense limitation agreement for the AIG U.S. Government Securities Fund will remain in place through the term of the expense limitation agreement, the expense limitation agreements for the Touchstone Active Bond Fund will remain in place for one year in each period and the expense limitation agreement that takes effect as of the closing of the Reorganization will be in place for two years following the closing of the Reorganization. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

How do the performance records of the Target Fund and the Acquiring Fund compare?

The bar charts and the performance tables below provide some indication of the risks of an investment in each of the Target Fund and the Acquiring Fund by showing how each Fund’s performance has varied from year to year and by showing how each Fund’s average annual returns compare with a broad measure of market performance. The Acquiring Fund will be the accounting survivor of the Reorganization for performance purposes.

On January 27, 2017, the Touchstone Active Bond Fund, previously a series of Touchstone Investment Trust (the “Active Bond Predecessor Fund”), was reorganized into the Acquiring Fund. As a result of that reorganization, the performance and accounting history of the Active Bond Predecessor Fund was assumed by the Acquiring Fund. Financial and performance information prior to January 27, 2017 is that of the Active Bond Predecessor Fund.

The bar chart does not reflect any sales charges, which would reduce your return. The performance table reflects any applicable sales charges. Past performance of the Target Fund and the Acquiring Fund, before and after taxes, does not necessarily represent how either Fund will perform in the future. Updated performance information for the Target Fund is available on the Target Fund’s website at www.aig.com/funds or can be obtained by phone at 800-858-8850, ext. 6003. Updated performance information for the Acquiring Fund is available on the Acquiring Fund’s website at TouchstoneInvestments.com or by calling 800.543.0407.

AIG U.S. Government Securities Fund-Class A Shares

The AIG U.S. Government Securities Fund’s calendar year-to-date total return for Class A shares as of January 31, 2021 was -0.91%.

Touchstone Active Bond Fund-Class A Shares

The Touchstone Active Bond Fund’s calendar year-to-date total return for Class A shares as of January 31, 2021 was -0.62%.

Average Annual Total Returns
For the periods ended December 31, 2020

The table below shows how the Target Fund and Acquiring Fund's performance compares with the returns of an index that measures broad market performance.

How do the investment goals and principal investment strategies of the Funds compare?

The investment goals and principal investment strategies of the AIG U.S. Government Securities Fund and the Touchstone Active Bond Fund, along with descriptions of certain differences between the Funds’ investment goals and principal investment strategies, are set forth in the table below. As described further below, the Target Fund’s investment objective is high current income consistent with relative safety of capital, while the Acquiring Fund’s investment objective is to provide as high a level of current income as is consistent with the preservation of capital. Additionally, the Acquiring Fund has a secondary goal of capital appreciation. The primary difference between the funds’ investment strategies is that the Target Fund generally invests at least 80% of its assets in U.S. Government securities, whereas the Acquiring Fund, under normal circumstances, invests at least 80% of its assets in bonds, which may include U.S. Government securities. Overall, the Target Fund does not have a stated policy on hedging and derivatives and other instruments as part of its principal investment strategies, while the Acquiring Fund may invest up to 30% of the Acquiring Fund’s total assets in non-investment grade debt securities and may invest in each of non-U.S. investments, hedging, and derivatives and other instruments, as described in more detail below. Additionally, both Funds may engage in active trading.

Comparison of Investment Limitations

Each Fund has fundamental investment limitations which cannot be changed without shareholder approval, and non-fundamental investment limitations which may be changed with Board approval but without shareholder approval. Descriptions of the fundamental limitations of each Target and Acquiring Fund are set forth in Exhibit B to this Joint Proxy Statement/Prospectus. The limitations for each Target Fund and each corresponding Acquiring Fund are generally substantially similar, although there are certain differences in the language of the applicable investment limitations attributable primarily to the fact that the SunAmerica Funds are part of the SunAmerica “family” of funds and the Touchstone Funds are part of the Touchstone “family” of funds or based on the specific Fund’s investment strategies. Additionally the Target Fund may not pledge its assets, whereas the Acquiring Fund does not have a stated policy with respect to pledging its assets.

How do the principal risks of investing in the Funds compare?

An investment in the AIG U.S. Government Securities Fund is subject to active trading risk, bond market volatility risk, interest rate fluctuations risk, prepayment risk, redemption risk, securities selection risk, and U.S. government securities risk. An investment in the Touchstone Active Bond Fund is subject to economic and market events risk, derivatives risk including forward foreign currency exchange contract risk, futures contracts risk, options risk, and swap agreement risk, fixed income risk including asset-backed securities risk, credit risk, interest rate risk, investment-grade debt securities risk, mortgage-backed securities risk, and non-investment-grade debt securities risk, foreign securities risk including emerging markets risk and sovereign debt risk, health crises impact risk, leverage risk, management risk, mortgage dollar roll risk, portfolio turnover risk and U.S. government agencies securities risk. For more information on the Funds’ principal risks, see “Comparison of Principal Risks.”

Who will be the Advisor, Sub-Advisor and Portfolio Managers of my Fund after the Reorganization?

After the Reorganization, Touchstone will continue to serve as the investment advisor and Fort Washington will serve as the sub-advisor to Touchstone Active Bond Fund. The portfolio manager of Touchstone Active Bond Fund is Daniel J. Carter, CFA. For additional information regarding the advisor and portfolio managers listed above, please see the section entitled “The Funds’ Management– Investment Advisor.”

What are the portfolio turnover rates of the Funds?

A Fund pays transaction costs, such as brokerage commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect a Fund’s performance. During the fiscal year ended March 30, 2020, the Target Fund’s portfolio turnover rate was 40% of the average value of its portfolio. During the fiscal year ended September 30, 2020, the portfolio turnover rate of the Acquiring Fund was 261% of the average value of its portfolio.

Will there be any repositioning of the portfolio in connection with the Reorganization?

It is expected that approximately 100% of the portfolio investments of the Target Fund may be sold by the Acquiring Fund following the Reorganization. The timing of any repositioning and its resulting impact on capital gains distributions in 2021 and beyond is uncertain. In addition, additional securities may be sold over time in the ordinary course of business. The amounts per share of any capital gains distributions resulting from the repositioning will depend on a number of factors, including the proportion of portfolio holdings that are actually sold, the timing of portfolio sales, the performance of the bond market in general, the availability of offsetting capital losses and the scale of purchase and redemption activity in the Funds’ shares. The timing of portfolio sales will also be subject to market conditions existing after the closing of the Reorganization. Accordingly, the per share amounts of any capital gains distributions resulting from the repositioning cannot be estimated at this time. Touchstone Advisors publishes estimates of capital gains distributions for the Touchstone Funds on its website (https://www.touchstoneinvestments.com/resources.htm), generally in October of each year. The Acquiring Fund will also bear brokerage costs in connection with the repositioning. For illustration purposes only, if the Reorganization had been completed as of November 30, 2020 and the Acquiring Fund had sold 100% of the investments held in the Target Fund’s portfolio as of November 30, 2020, the resulting realized capital gains estimate would be expected to be $11 million total (or $0.249 per share) of the combined fund and the spreads and other transaction costs would be expected to total approximately $86,000 in the aggregate (0.015%, or $0.002 per share) of the combined fund, based on average transaction costs of the Acquiring Fund. The brokerage costs to be borne by the Acquiring Fund will be borne by both Acquiring Fund shareholders and continuing Target Fund shareholders (as shareholders of the Acquiring Fund following the Reorganization).

COMPARISON OF PRINCIPAL RISKS

Each Target Fund and corresponding Acquiring Fund have similar, but not identical principal risks. The principal risks applicable to each Fund are summarized below. The Target Funds and Touchstone Funds are separate fund complexes with different historical disclosure practices. Accordingly, certain differences between the Target Funds and Acquiring Funds are attributable primarily to differing historical practices. The table below is not intended to provide shareholders with any indication of the Funds’ relative risk/return profiles. Shareholders should instead refer to the narrative descriptions of the Funds’ principal risks that follow the table below.