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Touchstone Strategic Trust – ‘497’ on 4/12/21

On:  Monday, 4/12/21, at 3:59pm ET   ·   Effective:  4/12/21   ·   Accession #:  1398344-21-7944   ·   File #:  333-254052

Previous ‘497’:  ‘497’ on 4/9/21   ·   Next:  ‘497’ on 5/26/21   ·   Latest:  ‘497’ on 3/20/24   ·   14 References:   To:  Touchstone Strategic Trust – Previous ‘497’ on 4/9/21 To:  Sunamerica Series, Inc. – ‘497’ on 3/3/21 To:  Touchstone Strategic Trust – ‘N-CSRS’ on 3/3/21 for 12/31/20 To:  SunAmerica Specialty Series – ‘485BPOS’ on 2/26/21 To:  Sunamerica Equity Funds – ‘497’ on 2/2/21 To:  Sunamerica Equity Funds – ‘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 Equity Funds – ‘N-CSR’ on 12/8/20 for 9/30/20 To:  Sunamerica Income Funds – ‘N-CSRS’ on 12/8/20 for 9/30/20 To:  Touchstone Strategic Trust – ‘485BPOS’ on 10/28/20 To:  Touchstone Strategic Trust – ‘N-CSR’ on 9/1/20 for 6/30/20 To:  Sunamerica Income Funds – ‘485BPOS’ on 7/28/20 To:  Sunamerica Income Funds – ‘N-CSR’ on 6/8/20 for 3/31/20 

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

 4/12/21  Touchstone Strategic Trust        497         4/12/21    1:4.5M                                   FilePoint/FA
          → Touchstone Balanced Fund ⇒ Class A (SEBLX) — Class C (SBACX)
          → Touchstone International Equity Fund ⇒ Class A (SWRLX) — Class C (SWFCX) — Class Y (SIIEX)
          → Touchstone Large Cap Focused Fund ⇒ Class A (SENCX) — Class C (SCSCX) — Class Y (SICWX)
          → Touchstone Strategic Income Opportunities Fund ⇒ Class A (TQPAX) — Class C (TQPCX) — Class Y (TQPYX)
          → Touchstone Value Fund ⇒ A (TVLAX) — C (TVLCX) — Y (TVLYX)

Document/Exhibit                   Description                      Pages   Size 

 1: 497         Definitive Material                                 HTML   1.78M 

SUNAMERICA EQUITY FUNDS

SunAmerica Income Funds

SunAmerica Series, Inc.

SunAmerica Specialty Series

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

April 12, 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 4:00 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 EQUITY FUNDS

SunAmerica Income Funds

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 4:00 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 Strategic 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’ and Acquiring Funds’ Class A shares are subject to a sales charge (load). 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/tstproxy2021.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 EQUITY FUNDS

SunAmerica Income Funds

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 STRATEGIC TRUST

303 Broadway, Suite 1100
Cincinnati, Ohio 45202
800.543.0407

April 12, 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 4:00 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 to vote on the following proposals: (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; and (v) the AIG Strategic Value Fund, a series of SunAmerica Series, Inc., into Touchstone Value Fund, a series of Touchstone Strategic Trust.

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 Strategic 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 Balanced Fund, Touchstone International Equity Fund, Touchstone Large Cap Focused Fund, and Touchstone Value Fund (each, an “Operating Fund” and collectively, the “Operating Funds”). Touchstone Strategic Income Opportunities Fund (the “Shell Fund”) is a newly organized series of Touchstone Strategic 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 Strategic 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 12, 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 Strategic 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 Equity Funds, SunAmerica Income Funds, 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, series of SunAmerica Series, Inc. (“Approving Funds”), whose reorganizations are discussed in a separate joint proxy/prospectus, shall have approved their respective reorganization as set forth in the Touchstone Funds Group Trust Proxy Statement (as defined below) and such Approving 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 shall have approved their respective reorganizations, 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 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. Additional information regarding the pro forma 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 Strategic Trust (“Acquiring Funds Board”). The Acquiring Funds into which each of the AIG Active Allocation Fund, AIG Focused Alpha Large-Cap Fund, AIG International Dividend Strategy Fund, and AIG Multi-Asset Allocation Fund will be reorganized currently utilize Fort Washington Investment Advisors, Inc. (“Fort Washington”), an affiliate of Touchstone Advisors, as a sub-advisor. The Acquiring Fund into which each of the AIG Flexible Credit Fund and AIG Strategic Bond Fund will be reorganized is expected to utilize Fort Washington as a sub-advisor. The Acquiring Fund into which AIG Strategic Value Fund will be reorganized currently utilizes Barrow, Hanley, Mewhinney & Strauss, LLC, 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 Strategic 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 Strategic 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 Alpha Large-Cap Fund, AIG Strategic Bond Fund and AIG Flexible Credit Fund, SunAmerica employs a sub-advisor to provide portfolio management services. SunAmerica does not employ a sub-advisor with respect to the AIG Active Allocation Fund, AIG Multi-Asset Allocation Fund, AIG Strategic Value Fund, and AIG International Dividend Strategy 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) of up 5.75% and Acquiring Funds’ Class A shares are subject to a sales charge (load) of 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 Strategic 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 quarterly for the Touchstone Balanced Fund and Touchstone Value Fund and annually for the Touchstone International Equity Fund and Touchstone Large Cap Focused Fund. Net investment income dividends are declared and paid monthly for the Touchstone Strategic Income Opportunities Fund. Net investment income dividends are declared and paid annually for the AIG Focused Alpha Large-Cap Fund, the AIG Multi-Asset Allocation Fund and the AIG Strategic Value Fund, quarterly for the AIG Active Allocation Fund and the AIG International Dividend Strategy Fund, and declared daily and paid monthly for the AIG Strategic Bond Fund and the AIG Flexible Credit 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 consummated. 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 Focused Dividend Strategy Fund and the AIG Select Dividend Growth Fund, series of SunAmerica Series, Inc., into the Touchstone Dividend Equity Fund, a newly created series of Touchstone Funds Group Trust; (ii) the reorganization of the AIG Focused Growth Fund, a series of SunAmerica Specialty Series, into the Touchstone Sands Capital Select Growth Fund, a series of Touchstone Funds Group Trust; (iii) the reorganization of the AIG Senior Floating Rate Fund, a series of SunAmerica Senior Floating Rate Fund, Inc., into the Touchstone Credit Opportunities Fund, a series of Touchstone Funds Group Trust; and (iv) the reorganization of the AIG U.S. Government Securities Fund, a series of SunAmerica Income Funds, into the Touchstone Active Bond Fund, a series of Touchstone Funds Group Trust (the “Touchstone Funds Group Trust Proxy Statement”).

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 Approving Funds, whose reorganizations are discussed in the Touchstone Funds Group Trust Proxy Statement, 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 Approving Funds, whose reorganizations are discussed in the Touchstone Funds Group Trust Proxy Statement, shall have approved their respective reorganization as set forth in the Touchstone Funds Group Trust Proxy Statement and such 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. 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.

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 ACTIVE ALLOCATION FUND INTO TOUCHSTONE BALANCED FUND

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

Shareholders of the AIG Active Allocation Fund will receive shares of the Touchstone Balanced 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 under the following two scenarios (i) assuming that only the Reorganization of the AIG Active Allocation Fund into the Touchstone Balanced Fund takes places and (ii) assuming that both the Reorganization of the AIG Active Allocation Fund into the Touchstone Balanced Fund and the Reorganization of the AIG Multi-Asset Allocation Fund into the Touchstone Balanced Fund (which is also described in this Joint Proxy Statement/Prospectus) take place. The two scenarios are presented because the Reorganizations of the AIG Active Allocation Fund and AIG Multi-Asset Allocation Fund are not contingent on each other, and it is possible that one Reorganization takes place but the other Reorganization does not. However, each 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 Reorganizations, but actual expenses may be greater or less than those shown. Expenses for the Class A, Class B and Class C shares of the AIG Active Allocation 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 and Class C shares of the Touchstone Balanced Fund are based on the operating expenses incurred by each class of shares of the Fund for the twelve months ended December 31, 2020, the Acquiring Fund’s most recent semi-annual period end. The pro forma fees and expenses for the Class A and Class C shares of the Touchstone Balanced Fund reflect the fees and expenses of the Acquiring Fund and assume that the Reorganization(s) had been completed at the beginning of the twelve month period ended December 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 gross and net annual operating expenses for all share classes. At the December 31, 2020 net asset levels, the Target Fund is charged an effective management fee of 0.10%. This is lower than the effective management fee paid by the Acquiring Fund of 0.50% that would be paid by the Acquiring Fund including the Target Fund net assets. The higher effective management fee of the Acquiring Fund reflects the fact that the Acquiring Fund invests directly in securities, and to a limited extent in other investment companies, whereas the Target Fund is a fund of funds that invests in affiliated investment companies and, therefore, bears more acquired fund fees and expenses than the Acquiring Fund (the fees and expenses of the underlying funds in which it invests).

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 144. 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)

Expense Examples. The examples below are intended to help you compare the cost of investing in the Target Fund with the Acquiring Fund and pro forma cost of investing in the Acquiring Fund under the following two scenarios (i) assuming that only the Reorganization of the AIG Active Allocation Fund into the Touchstone Balanced Fund takes place and (ii) assuming that both the Reorganization of the AIG Active Allocation Fund into the Touchstone Balanced Fund and the Reorganization of the AIG Multi-Asset Allocation Fund into the Touchstone Balanced Fund (which is also described in this Joint Proxy Statement/Prospectus) take place. 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 the expense limitation agreement reflected in the Annual Fund Operating Expenses tables above for the Touchstone Balanced Fund will remain in place for one year and the expense limitation agreement that will take effect as of the closing of the Reorganization(s) will remain in place for two years following the closing of the Reorganization(s). The examples regarding Class B shares and Class C shares also assume conversion to Class A shares after eight years from the date of purchase. 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.

Before the Acquiring Fund commenced operations, the assets and liabilities of the Sentinel Balanced Fund (the “Predecessor Fund”) were transferred to the Acquiring Fund in a tax-free reorganization on October 27, 2017. The investment objectives, guidelines, and restrictions of the Predecessor Fund were similar to those of the Acquiring Fund. The performance information included prior to October 27, 2017 is that of the 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 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. Updated performance information for the Acquiring Fund is available on the Acquiring Fund’s website at TouchstoneInvestments.com or by calling 1.800.543.0407. 

AIG Active Allocation Fund-Class A Shares

The AIG Active Allocation Fund’s calendar year-to-date total return for Class A shares as of January 31, 2021 was -0.30%.

Touchstone Balanced Fund-Class A Shares

The Touchstone Balanced Fund’s calendar year-to-date total return for Class A shares as of January 31, 2021 was -1.11%. 

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

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 policies of the AIG Active Allocation Fund and the Touchstone Balanced 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’ share the investment goal of increases in capital; however, the Target Fund also seeks conservation of principal, whereas the Acquiring Fund also seeks current income. Both Funds’ investment strategies include both equity and fixed income allocations. However, unlike the Acquiring Fund which invests directly in equity and fixed income investments, the Target Fund invests in other mutual funds and has exposure to commodity and global strategies. While the Target Fund has no stated policy regarding credit quality as part of its principal investment strategies, the Acquiring Fund’s sub-advisor primarily invests in investment-grade debt securities, but may invest up to 30% of the Fund’s fixed-income sleeve in non-investment-grade debt securities rated as low as B. While the Target Fund has no stated policy regarding derivatives as part of its principal investment strategies, the Acquiring Fund may invest in derivatives. While the Target Fund has no stated policy regarding hedging as part of its principal investment strategies, the Acquiring Fund may invest in mortgage dollar-roll transactions, which may be used to hedge market exposure.

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 the Target Fund and the Acquiring Fund are set forth in Exhibit B to this Joint Proxy Statement/Prospectus. The limitations for the Target Fund and the Acquiring Fund are generally substantially similar, although there are certain differences in the language of the applicable investment limitations attributable primarily because the Target Fund is part of the SunAmerica “family” of funds and the Acquiring Fund is part of the Touchstone “family” of funds.

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

An investment in each Fund is subject to management risk, preferred stock/security risk, and U.S. government securities risk. An investment in the AIG Active Allocation Fund is subject to active trading risk, affiliated fund risk, bond market volatility and interest rate fluctuations risk, disciplined strategy risk, exchange-traded funds risk, focused strategy risk, foreign securities risk, prepayment risk, small- and mid-market capitalization companies risk, and stock market volatility and securities selection risk. The AIG Active Allocation Fund is also subject to the risks of investing in the AIG Commodity Strategy Fund. The AIG Active Allocation Fund, to the extent it invests in the AIG Commodity Strategy Fund, is subject to the following additional risks (these risks increase as the Fund’s allocation to the AIG Commodity Strategy Fund increases): commodity exposure risk, commodity-linked derivatives risk, futures contracts risk, subsidiary risk, derivative instruments risk, risks of leverage, credit risk, counterparty risk, interest rate risk, illiquid investments risk, failure to match index performance risk, financial services risk, and regulatory risk.

An investment in the Touchstone Balanced Fund is subject to equity securities risk including large-cap risk, as well as fixed-income risk including asset-backed securities risk, credit risk, interest rate risk, mortgage-backed securities risk, non-investment-grade debt securities risk and U.S. government securities risk, as well as derivatives risk including leverage risk, futures contracts risk, options risk, swap agreements risk and forward currency exchange contract risk, as well as economic and market events risk, foreign securities risk including depositary receipts risk and emerging markets risk, as well as mortgage dollar roll risk and portfolio turnover 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 Fort Washington will continue to serve as the sub-advisor to the Touchstone Balanced Fund. The portfolio managers of the Touchstone Balanced Fund are Daniel J. Carter, CFA, James Wilhelm, and Austin R. Kummer, CFA. 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 18% of the average value of its portfolio. During the fiscal year ended June 30, 2020, the portfolio turnover rate of the Acquiring Fund was 135% of the average value of its portfolio.

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

It is expected that 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. 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 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 $7,661,008 total (or $0.312 per share) of the combined fund and the spreads and other transaction costs would be expected to total approximately $49,000 in the aggregate (0.008%, or $.002 per share) of the combined fund, based on average transaction costs of the Acquiring Fund.

SUMMARY: REORGANIZATION OF AIG FLEXIBLE CREDIT FUND INTO TOUCHSTONE STRATEGIC INCOME OPPORTUNITIES FUND

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

Shareholders of the AIG Flexible Credit Fund will receive shares of the Touchstone Strategic Income 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 Acquiring Fund under the following two scenarios (i) assuming that only the Reorganization of the AIG Flexible Credit Fund into the Touchstone Strategic Income Opportunities Fund takes places and (ii) assuming that both the Reorganization of the AIG Flexible Credit Fund into the Touchstone Strategic Income Opportunities Fund and the Reorganization of the AIG Strategic Bond Fund into the Touchstone Strategic Income Opportunities Fund (which is also described in this Joint Proxy Statement/Prospectus) take place. The two scenarios are presented because the Reorganizations of the AIG Flexible Credit Fund and AIG Strategic Bond Fund are not contingent on each other, and it is possible that one Reorganization takes place but the other Reorganization does not. However, each Reorganization is subject to the closing of the Transaction between SunAmerica and Touchstone Advisors. The pro forma expense ratios project anticipated expenses of the Touchstone Strategic Income Opportunities 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 Flexible Credit Fund are based on the operating expenses incurred by each class of shares of the Fund for the twelve month period ended September 30, 2020, the Target Fund’s most recent semi-annual period end. Pro forma fees and expenses of Touchstone Strategic Income Opportunities Fund are estimated based on the assets of AIG Flexible Credit Fund as of September 30, 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 gross and net annual operating expenses for all share classes. At the December 31, 2020 net asset levels, the Target Fund is charged an effective contractual management fee rate of 0.74%. This is higher than the estimated effective management fee paid by the Acquiring Fund of 0.51% that would be paid by the Acquiring Fund including the Target Fund net assets. After fee waivers, the effective management fee paid by the Target Fund is 0.34%; however, as noted above, the pro forma gross and net annual operating expenses of the Acquiring Fund after each Reorganization are expected to be lower than the Target Fund’s expenses for all share classes.

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 144. 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. If you purchase Class Y shares through a broker acting solely as an agent on behalf of its customers, that broker may charge you a commission. Such commissions, if any, are not charged by the Fund and are not reflected in the fee table or expense example below. 

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 Funds 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 Flexible Credit 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. The examples regarding Class C shares also assume conversion to Class A shares after eight years from the date of purchase. 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. AIG Strategic Bond Fund will be the accounting and performance survivor of the Reorganization; however, if shareholders of AIG Strategic Bond Fund do not approve the Reorganization, then the AIG Flexible Credit Fund will be the accounting and performance survivor. 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 Strategic Bond Fund’s performance has varied from year to year, by showing how AIG Flexible Credit Fund’s performance has varied from year to year, and by showing how AIG Strategic Bond Fund and AIG Flexible Credit Fund’s average annual returns compare with broad measures of market performance.

Performance of AIG Flexible Credit Fund prior to October 1, 2014, represents the performance of such Target Fund prior to its change in strategies and techniques. Accordingly, this performance information does not reflect the management of the Target Fund in accordance with its current investment strategies and techniques.

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 Strategic Income Opportunities 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 Funds’ performance can be obtained by visiting www.aig.com/funds or can be obtained by phone at 1.800.858.8850, ext. 6003.

AIG Flexible Credit Fund-Class A Shares 

The AIG Flexible Credit Fund’s calendar year-to-date total return for Class A shares as of January 31, 2021 was 0.67%.

Average Annual Total Returns
For the Periods Ended December 31, 2020

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 Strategic Bond Fund-Class A Shares

The AIG Strategic Bond Fund’s calendar year-to-date total return for Class A shares as of January 31, 2021 was -0.36%.

Average Annual Total Returns
For the Periods Ended December 31, 2020

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 Flexible Credit Fund and the Touchstone Strategic Income Opportunities 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 strategies and principal policies, the analytical tools, techniques and investment selection process used by the sub-advisor to the Acquiring Fund may differ from those used by the sub-advisor to the Target Fund. The Target Fund’s investment goal is a high level of total return, whereas the investment goal of the Acquiring Fund is to seek a high level of current income with a focus on capital preservation. Both Funds’ investment strategy includes fixed income allocations. The Target Fund invests, under normal circumstances, at least 80% in credit instruments, derivatives instruments, and exchange-traded funds that are linked to, or provide investment exposure to, credit instruments. Whereas the Acquiring Fund invests at least 80% of its assets in income producing fixed income securities, generally including corporate debt securities, mortgage-related securities, asset-backed securities, government securities and preferred stocks. The Acquiring Fund may also invest in exchange-traded funds. With respect to credit quality, the Target Fund invests in below investment grade high-yield bonds and loans, whereas the Acquiring Fund will primarily invest a minimum of 50% in investment-grade securities, but may also invest in non-investment-grade debt securities. Both Funds may engage in active trading and may invest in non-U.S. investments as outlined below. While the Target Fund has no stated policy regarding hedging, and derivatives and other instruments as part of its principal investment strategies, the Acquiring Fund may invest in mortgage dollar-roll transactions and reverse repurchase agreements, and in derivatives, including forwards, futures contracts, interest rate and credit default swap agreements, and options, which may be used to hedge market exposure.

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. The Target Fund may not pledge its assets.

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

An investment in the AIG Flexible Credit Fund is subject to active trading risk, below investment grade securities risk, bond market volatility risk, call provisions risk, collateral impairment risk, credit risk, exchange-traded funds risk, foreign securities risk, futures risk, illiquid investments risk, interest rate fluctuations risk, general risks relating to the Loans, LIBOR risk, loan settlement risk, mortgage- and asset-backed securities risk, prepayment risk, redemption risk, and securities selection risk. An investment in the Touchstone Strategic Income Opportunities Fund is subject to fixed-income risk, asset-backed securities risk, credit risk, interest rate risk, investment-grade debt securities risk, mortgage-backed securities risk, non-investment grade debt securities risk, prepayment risk, U.S. government securities risk, management risk, derivatives risk, leverage risk, forward foreign currency exchange contract risk, futures contract risk, options risk, swap agreements risk, economic and market events risk, equity securities risk, preferred stock risk, foreign securities risk, emerging markets risk, sovereign debt risk, mortgage dollar roll risk, other investment companies risk, portfolio turnover risk, and repurchase agreement 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 Strategic Income Opportunities Fund. Daniel J. Carter, CFA, Austin R. Kummer, CFA, and Brendan M. White, CFA are expected to serve as the portfolio managers of the Fund. 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 March 31, 2020, the Target Fund’s portfolio turnover rate was 67% of the average value of its portfolio. The Acquiring Fund will not commence operations until the consummation of the Reorganization but its portfolio turnover rate is not expected to exceed 100%.

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

It is expected that approximately 98% 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 98% 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 $4.9 million total (or $0.028 per share) of the combined fund (including the Reorganization of the AIG Strategic Bond Fund) and the spreads and other transaction costs would be expected to total approximately $2.5 million in the aggregate (0.40%, or $0.014 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 FOCUSED ALPHA LARGE-CAP FUND INTO TOUCHSTONE LARGE CAP FOCUSED FUND

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

Shareholders of the AIG Focused Alpha Large-Cap Fund will receive shares of the Touchstone Large Cap Focused 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 Touchstone Large Cap Focused Fund assuming the Reorganization of the AIG Focused Alpha Large-Cap Fund into the Touchstone Large Cap Focused Fund takes place. 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 Alpha Large-Cap 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 Large Cap Focused Fund are based on the operating expenses incurred by each class of shares of the Acquiring Fund for the twelve months ended December 31, 2020, the Acquiring Fund’s most recent semi-annual period end. The pro forma fees and expenses for the Class A, Class C, and Class Y shares of the Touchstone Large Cap Focused Fund reflect the fees and expenses of the Acquiring Fund and assume that the Reorganization had been completed at the beginning of the twelve month period ended December 31, 2020.

As the tables below indicate, the hypothetical pro forma gross and net annual operating expenses of the Acquiring Fund after the Reorganization are expected to be lower than your fund’s gross and net annual operating expenses for all share classes. 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 paid by the Acquiring Fund of 0.56% 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 144. 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)

Any contractual waivers and/or reimbursements made by SunAmerica with respect to the Fund are subject to recoupment from the Fund within two years after the occurrence of the waiver and/or reimbursement, provided that such payments to SunAmerica shall not be made if they would cause the annual fund operating expenses of a class of the Fund to exceed the lesser of (a) the current expense limitation in effect at the time the waiver and/or reimbursement occurred, or (b) the current expense limitation in effect, if any. Additionally, any recoupments from the Target Fund will not be carried over into the combined fund.

Expense Examples. The examples below are intended to help you compare the cost of investing in the Target Fund with the cost of investing in the Acquiring Fund assuming that the Reorganization of the AIG Focused Alpha Large-Cap Fund into the Touchstone Large Cap Focused Fund takes place. 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 the expense limitation agreement reflected in the Annual Fund Operating Expenses tables above for the AIG Focused Alpha Large-Cap Fund will remain in place through the term of the expense limitation agreement and the expense limitation agreement for the Touchstone Large Cap Focused Fund will remain in place for one year in each period and the expense limitation agreement that takes effect upon closing of the Reorganization(s) will be in place for two years following the closing of the Reorganization(s). The examples regarding Class C shares also assume conversion to Class A shares after eight years from the date of purchase. 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 Large-Cap Fund, Inc. (the “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 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 Predecessor Fund. The Predecessor Fund’s operating expenses were lower than those of the Target Fund. If the Fund’s higher operating expenses were applied to the performance for the period prior to January 23, 2012, the performance quoted in the bar chart and table would have been lower. In addition, the Predecessor Fund may have performed differently if it were an open-end fund since closed-end funds are generally not subject to the cash flow fluctuations of an open-end fund.

Before the Acquiring Fund commenced operations, the assets and liabilities of the Sentinel Common Stock Fund (the “Sentinel Predecessor Fund”) were transferred to the Acquiring Fund in a tax-free reorganization on October 27, 2017. The investment objectives, guidelines, and restrictions of the Sentinel Predecessor Fund were similar to those of the Acquiring Fund. The performance information included prior to October 27, 2017 is that of the Sentinel 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 information on the 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. Updated performance information for the Acquiring Fund is available on the Acquiring Fund’s website at TouchstoneInvestments.com or by calling 1.800.543.0407. 

AIG Focused Alpha Large-Cap Fund-Class A Shares

The AIG Focused Alpha Large-Cap Fund’s calendar year-to-date total return for Class A shares as of January 31, 2021 was -1.89%.

Touchstone Large Cap Focused Fund-Class A Shares

The Touchstone Large Cap Focused Fund’s calendar year-to-date total return for Class A shares as of January 31, 2021 was -0.60%.

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

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 Alpha Large-Cap Fund and the Touchstone Large Cap Focused Fund, along with descriptions of certain differences between the Funds’ investment goals and principal investment policies, are set forth in the table below. Although the Funds have similar investment goals, there are certain differences as noted below. Additionally, the analytical tools, techniques and investment selection process used by the sub-advisor to the Acquiring Fund may differ from those used by SunAmerica or any of the Target Fund’s sub-advisors.

While both Funds will under normal market conditions invest at least 80% of their respective assets in large-capitalized companies/stock, the Target Fund’s investment strategy highlights growth, value and “focused” strategies. The Target Fund will hold approximately 40 securities, whereas the Acquiring Fund will hold between 25 and 45 companies. Although both Funds may invest in non-U.S. investments, the Acquiring Fund limits such investments to 35% of its net assets. The Target Fund’s strategy calls for issuer’s market capitalization to be equal to or greater than the median market capitalization of companies in the Russell 1000® Index, at the time of purchase, whereas the Acquiring Fund’s strategy calls for issuer’s market capitalization to be above $5 billion at the time of purchase. While the Target Fund does not have a stated policy on sector or industry focus as part of its principal investment strategies, the Acquiring Fund may invest in any economic sector but may emphasize one or more particular sectors at times. While the Acquiring Fund does not have a stated policy on active trading as part of its principal investment strategies, the Target Fund’s principal investment technique includes active trading of equity securities. 

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 the Target Fund and the Acquiring Fund are set forth in Exhibit B to this Joint Proxy Statement/Prospectus. The limitations for the Target Fund and the 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 Fund is part of the SunAmerica “family” of funds and the Acquiring Fund is part of the Touchstone “family” of funds. The Fund may not pledge 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 Alpha Large-Cap Fund is also subject to active trading risk, emerging markets securities risk, foreign exposure and currency volatility risk, stock market volatility and securities selection risk. An investment in the Touchstone Large Cap Focused Fund is also subject to equity securities risk including large-cap risk, and preferred stock risk, as well as management risk, economic and market events risk, foreign securities risk including depositary receipt risk and emerging markets risk, as well as sector 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 Fort Washington will continue to serve as the sub-advisor to Touchstone Large Cap Focused Fund. The portfolio manager of Touchstone Large Cap Focused Fund is James Wilhelm. For additional information regarding the advisor, sub-advisor and portfolio manager 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 75% of the average value of its portfolio. During the fiscal year ended June 30, 2020, the portfolio turnover rate of the Acquiring Fund was 29% 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 74% 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 74% 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 $94.6 million total (or $1.84 per share) of the combined fund and the spreads and other transaction costs would be expected to total approximately $281,000 in the aggregate (0.011%, or $0.005 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 INTERNATIONAL DIVIDEND STRATEGY FUND INTO TOUCHSTONE INTERNATIONAL EQUITY FUND

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

Shareholders of the AIG International Dividend Strategy Fund will receive shares of the Touchstone International 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 after giving effect to the Reorganization. The pro forma expense ratios project anticipated expenses of the Touchstone 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 International Dividend Strategy Fund are based on the operating expenses incurred by each class of shares of the Fund for the fiscal year ended September 30, 2020. Expenses for the Class A, Class C and Class Y shares of the Touchstone International Equity Fund are based on the operating expenses incurred by each class of shares of the Fund for the twelve month period ended December 31, 2020, the Acquiring Fund’s most recent semi-annual period end. The pro forma fees and expenses for the Class A, Class C, and Class Y shares of the Touchstone International Equity Fund reflect the fees and expenses of the Acquiring Fund and assume that the Reorganization had been completed at the beginning of the twelve month period ended December 31, 2020.

As the tables below indicate, the hypothetical pro forma gross and net annual operating expenses of the Acquiring Fund after the Reorganization are expected to be lower than your fund’s gross and net annual operating expenses for all share classes. 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 paid by the Acquiring Fund of 0.70% 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 144. 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)

Any contractual waivers and/or reimbursements made by SunAmerica pursuant to the Expense Limitation Agreement are subject to recoupment from the Fund within two years after the occurrence of the waiver and/or reimbursement, provided that the recoupment does not cause the expense ratio of the share class to exceed the lesser of (a) the limitation in effect at the time the waivers and/or reimbursements occurred or (b) the current expense limitation of that share class. Additionally, any recoupments from the target Fund will not be carried into the combined fund.

Expense Examples. The examples below are intended to help you compare the cost of investing in the Target Fund with the 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 the expense limitation agreement reflected in the Annual Fund Operating Expenses tables above for the AIG International Dividend Strategy Fund will remain in place through the term of the expense limitation agreement and the expense limitation agreement for the Touchstone International Equity Fund will remain in place for one year in each period and the expense limitation agreement that will take effect as of the Closing to the Reorganization will be in place for two years following the closing of the Reorganization. The examples regarding Class C shares also assume conversion to Class A shares after eight years from the date of purchase. 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.

Effective July 2, 2012, the Target Fund changed its investment strategies and techniques. The performance information provided below for periods prior to July 2, 2012 relates to the Target Fund’s investment strategies that were in effect during such periods. Accordingly, this performance information does not reflect the management of the Target Fund in accordance with its current investment strategy and techniques.

Before the Acquiring Fund commenced operations, the assets and liabilities of the Sentinel International Equity Fund (the “Predecessor Fund”) were transferred to the Acquiring Fund in a tax-free reorganization on October 27, 2017. The investment objectives, guidelines, and restrictions of the Predecessor Fund were similar to those of the Acquiring Fund. The performance information included prior to October 27, 2017 is that of the 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 information on the 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. Updated performance information for the Acquiring Fund is available on the Acquiring Fund’s website at TouchstoneInvestments.com or by calling 1.800.543.0407. 

 AIG International Dividend Strategy Fund-Class A Shares

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

Touchstone International Equity Fund-Class A Shares

The Touchstone International Equity Fund’s calendar year-to-date total return for Class A shares as of January 31, 2021 was -1.05%.

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

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 International Dividend Strategy Fund and the Touchstone International 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 SunAmerica. 

The Target Fund’s investment goal is total return which includes capital appreciation and current income, whereas the Acquiring Fund’s investment goal is growth of capital. Both Fund’s principal investment strategies include 80% of their assets being invested in equity securities. The Target Fund highlights that the equity securities will be dividend yielding, whereas the Acquiring Fund does not specify. Although the Acquiring Fund has no stated policy on the number of securities held as part of its principal investment strategies, the Target Fund explains that its principal investment technique includes buying and holding approximately 50 to 100 securities selected annually. Although the Acquiring Fund has no stated policy on issuer size as part of its principal investment strategies, the Target Fund may invest in companies of any size. The Target Fund more broadly notes that it invests substantially all of the Fund’s assets in non-U.S. securities, whereas the Acquiring Fund will normally invest at least 75% of the Fund’s total assets in securities of non-U.S. issuers and may invest up to 25% in companies organized in the United States that have at least 50% of their assets and/or revenues outside of the United States. 

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 the Target Fund and the Acquiring Fund are set forth in Exhibit B to this Joint Proxy Statement/Prospectus. The limitations for the Target Fund and the 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 International Dividend Strategy Fund is subject to stock market volatility and securities selection risk, international investing risk, small- and mid- capitalization companies risk, disciplined strategy risk and preferred stock risk. An investment in the Touchstone International Equity Fund is subject to equity securities risk, foreign securities risk including depositary receipts risk and emerging markets risk, as well as management risk, and economic and market events 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 Fort Washington will continue to serve as the sub-advisor to Touchstone International Equity Fund. The portfolio manager of Touchstone International Equity Fund is Andrew Boczek. 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 September 30, 2020, the Target Fund’s portfolio turnover rate was 74% of the average value of its portfolio. During the fiscal year ended June 30, 2020, the portfolio turnover rate of the Acquiring Fund was 45% 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 91% 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 91% 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 $3.4 million total (or $0.311 per share) of the combined fund and the spreads and other transaction costs would be expected to total approximately $55,000 in the aggregate (0.032%, or $0.005 per share) of the combined fund, based on average transaction costs of the Acquiring Fund.

SUMMARY: REORGANIZATION OF AIG MULTI-ASSET ALLOCATION FUND INTO TOUCHSTONE BALANCED FUND

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

Shareholders of the AIG Multi-Asset Allocation Fund will receive shares of the Touchstone Balanced 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 under the following two scenarios (i) assuming that only the Reorganization of the AIG Multi-Asset Allocation Fund into the Touchstone Balanced Fund takes places and (ii) assuming that both the Reorganization of the AIG Multi-Asset Allocation Fund into the Touchstone Balanced Fund and the Reorganization of the AIG Active Allocation Fund into the Touchstone Balanced Fund (which is also described in this Joint Proxy Statement/Prospectus) take place. The two scenarios are presented because the Reorganizations of the AIG Multi-Asset Allocation Fund and AIG Active Allocation Fund are not contingent on each other, and it is possible that one Reorganization takes place but the other Reorganization does not. However, each 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 Reorganizations, but actual expenses may be greater or less than those shown. Expenses for the Class A, Class B and Class C shares of the AIG Multi-Asset Allocation Fund are based on the operating expenses incurred by each class of shares of the Target Fund for the fiscal year ended October 31, 2020. Expenses for the Class A and Class C shares of the Touchstone Balanced Fund are based on the operating expenses incurred by each class of shares of the Fund for the twelve month period ended December 31, 2020, the Acquiring Fund’s most recent semi-annual period end. The pro forma fees and expenses for the Class A and Class C shares of the Touchstone Balanced Fund reflect the fees and expenses of the Acquiring Fund and assume that the Reorganization(s) had been completed at the beginning of the twelve month period ended December 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 gross and net annual operating expenses for all share classes. At the December 31, 2020 net asset levels, the Target Fund is charged an effective management fee of 0.10%. This is lower than the effective management fee paid by the Acquiring Fund of 0.49% that would be paid by the Acquiring Fund including the Target Fund net assets. The higher effective management fee of the Acquiring Fund reflects the fact that the Acquiring Fund invests directly in securities, and to a limited extent in other investment companies, whereas the Target Fund is a fund of funds that invests in affiliated investment companies and, therefore, bears more acquired fund fees and expenses than the Acquiring Fund (the fees and expenses of the underlying funds in which it invests).

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 144. 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)

Expense Examples. The examples below are intended to help you compare the cost of investing in the Target Fund with the Acquiring Fund and pro forma cost of investing in the Acquiring Fund under the following two scenarios (i) assuming that only the Reorganization of the AIG Multi-Asset Allocation Fund into the Touchstone Balanced Fund takes place and (ii) assuming that both the Reorganization of the AIG Multi-Asset Allocation Fund into the Touchstone Balanced Fund and the Reorganization of the AIG Active Allocation Fund into the Touchstone Balanced Fund (which is also described in this Joint Proxy Statement/Prospectus) take place. 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 the expense limitation agreement reflected in the Annual Fund Operating Expenses tables above for the Touchstone Balanced Fund will remain in place for one year and the expense limitation agreement that will take effect as of the closing of the Reorganization(s) will remain in place for two years following the closing of the Reorganization(s). The examples regarding Class B shares and Class C shares also assume conversion to Class A shares after eight years from the date of purchase. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: