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AMERICAN GENERAL SERIES PORTFOLIO COMPANY
SUPPLEMENT DATED AUGUST 20, 1999
TO PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION DATED OCTOBER 1, 1998
(AS SUPPLEMENTED FOR PROSPECTUS THROUGH FEBRUARY 22, 1999)
FOR THE PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION OF ALL FUNDS:
This Supplement incorporates certain information provided in a previous
supplement dated July 27, 1999.
Craig R. Rodby and John A. Graf have resigned as Directors and Officers of the
Funds. Effective July 27, 1999, the size of the Board was reset at 12 (nine of
the Directors are independent and three are employees of VALIC or its
affiliates). The following individuals were elected by the Board of Directors to
serve as directors of the Series Company:
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Kent E. Barrett* Executive Vice President and Chief Financial Officer,
2929 Allen Parkway American General Retirement Services (February
Houston, Texas 77019 1999-Present); formerly, Executive Vice President and Chief
Date of Birth: 9/20/56 Financial Officer, American General Life & Accident Company.
Alice T. Kane* Executive Vice President, American General Investment
125 Maiden Lane Management, L.P. (May 1998-Present); formerly, Executive
New York, New York Vice President, New York Life Insurance Company (1994-1998).
Date of Birth: 1/16/48
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* Interested persons of the Series Company as defined in the Investment Company
Act of 1940 specifically because of their capacity as officers, directors or
consultants of the Series Company, VALIC or one of its affiliates.
Effective July 27, 1999, Ms. Kane and Mr. Barrett were elected President and
Executive Vice President of the Series Company, respectively.
FOR THE PROSPECTUS ONLY:
All Funds
Effective May 1, 1999, the Funds' distributor was changed from The Variable
Annuity Marketing Company (VAMCO) to A.G. Distributors, Inc., an affiliate of
VALIC. Effective July 14, 1999, A.G. Distributors, Inc. changed its name to
American General Distributors, Inc. All references to VAMCO in this prospectus
should instead refer to American General Distributors, Inc.
Stock Index Fund, MidCap Index Fund, and Small Cap Index Fund
Effective June 4, 1999, Bankers Trust Corporation, the parent company to Bankers
Trust Company ("Bankers Trust"), the sub-adviser to each Fund, became a
wholly-owned subsidiary of Deutsche Bank AG. Deutsche Bank AG is a major global
banking institution that is engaged in a wide range of financial services,
including investment management, mutual funds, retail and commercial banking,
investment banking and insurance. Bankers Trust has informed the Funds that,
under this new arrangement, the services provided to the Funds will be
maintained at their current level. As a result of the foregoing transaction, on
April 20, 1999, the Board of Directors approved a new investment sub-advisory
agreement with Bankers Trust. The new sub-advisory agreement is identical to the
current agreement with Bankers Trust except for the effective date.
Effective as of July 6, 1999, Kathy Condon has assumed portfolio management
responsibilities for each Fund. Ms. Condon is the Managing Director and Head of
Passive Investments of the sub-adviser. Ms. Condon has been with the sub-adviser
since 1970.
On July 27, 1999, the Board of Directors of the Series Company approved the
termination of Bankers Trust as a sub-adviser to each Fund. VALIC expects to
re-assume direct management of each Fund's investment portfolio on October 1,
1999. Consequently, the section entitled "Portfolio Manager" in each Fund's
"Fact Sheet" is deleted in its entirety.
Growth Fund
On July 27, 1999, the Board of Directors of the Series Company approved the
termination of T. Rowe Price Associates, Inc. as sub-adviser of the Growth Fund
and approved the appointment of Wellington Management Company, LLP ("Wellington
Management"), 75 State Street, Boston, Massachusetts, 02109, as the sub-adviser
of the Fund, effective September 1, 1999. Shareholder approval of the new
investment sub-advisory agreement between VALIC and Wellington Management will
be sought at a shareholder meeting anticipated to be held before year end.
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Wellington Management is an independent partnership owned entirely by 59
partners. As of June 30, 1999, Wellington Management managed $223 billion of
client assets in a broad range of investment styles for institutional investors,
mutual fund sponsors and high net-worth individuals. The firm and its affiliates
have offices in Boston, Atlanta, Radnor, San Francisco, London, Singapore,
Sydney and Tokyo.
The advisory fee paid by the Fund to VALIC will remain the same. VALIC will pay
Wellington Management a monthly fee based on the average daily net asset values
of the Fund at the following annual rates:
0.325% on the first $50 million
0.250% on the next $450 million
0.200% on the next $1 billion
0.180% over $1.5 billion
Effective September 1, 1999, the investment objective of the Fund will be
changed from long-term growth of capital through investment primarily in common
stocks of U.S. growth companies engaged in service-related activities to that of
long-term growth of capital through investment primarily in equity securities.
To achieve the Fund's objective, Wellington Management intends to invest
primarily in large-cap quality companies with long-term growth potential. The
important characteristics of such companies that Wellington Management will
focus on include: a strong management team, a leadership position within an
industry, a globally competitive focus, a strong balance sheet and a high return
on equity.
The investment strategy that Wellington Management will utilize will be a
conservative, long-term approach which will be a blend of top down sector
analysis and bottom up security selection. For the top down sector analysis,
Wellington Management will analyze the macroeconomic and investment environment,
including an evaluation of economic conditions, U.S. fiscal and monetary policy,
demographic trends and investor sentiment. Through top down analysis, Wellington
Management will anticipate trends and changes in markets in the economy as a
whole and will identify industries and sectors that are expected to outperform.
Through bottom up security selection, Wellington Management will use fundamental
analysis to identify specific securities for purchase or sale. Fundamental
analysis of a company involves the assessment of such factors as its management,
business environment, balance sheet, income statement, anticipated earnings,
revenues, dividends and other related measures of value.
Wellington Management believes that its investment strategy is designed to
manage the risks of stock investing, such as market risk and risk associated
with foreign securities. However, the Fund will also be subject to manager risk,
which is the possibility that the strategy to be used by the Fund's management
may fail to produce the intended result.
Effective September 1, 1999, the Fund will be managed by Wellington Management's
Core Equity Team of seven portfolio managers who are supported by 31 global
industry analysts along with specialized fundamental, quantitative and technical
analysts, macro economic analysts and traders. Maya K. Bittar, who is one of the
seven portfolio managers, has the responsibility for implementing this Fund's
investment portfolio. Prior to joining Wellington Management in 1998, Ms. Bittar
was a senior Portfolio Manager of Firstar Investment Research and Management
Company, (1993-1998).
Growth & Income Fund
The section entitled "Portfolio Manager" in the Fund's "Fact Sheet" is replaced
in its entirety with the following:
Investment decisions are made by a team of portfolio managers, assistant
portfolio managers and analysts organized for that purpose. The team meets
regularly to review portfolio holdings and discuss purchase and sale
activity.
Money Market Fund
The first paragraph of the "Investment Strategy" section of the Fund's "Fact
Sheet" is replaced in its entirety with the following:
The Fund invests in short-term money market securities to provide
you with liquidity, protection of your investment and current
income. Such securities must mature, after giving effect to any
demand features, in 13 months or less and the Fund must have a
dollar-weighted average portfolio maturity of 90 days or less.
These practices are designed to minimize any fluctuation in the
value of the Fund's portfolio.
The Fund's "Fact Sheet" should reflect that the Fund may buy taxable municipal
obligations (variable rate demand notes) and Rule 144A securities (liquid).
MidCap Index Fund
The "Fund Investments" chart in the Fund's "Fact Sheet" should reflect that no
more than 10% of the Fund's assets may be invested in illiquid securities.
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Social Awareness Fund
The Fund has made certain changes to its social criteria. The following replaces
the second paragraph of the section entitled "Investment Objective" in the
Fund's "Fact Sheet."
The Fund invests only in companies which meet its social criteria. The Fund
does not invest in companies that are significantly engaged in:
- the production of nuclear energy;
- the manufacture of military weapons or delivery systems;
- the manufacture of alcoholic beverages or tobacco products;
- the operation of gambling casinos; or
- business practices or the production of products that significantly
pollute the environment.
The section entitled "Portfolio Manager" in the Fund's "Fact Sheet" is replaced
in its entirety with the following:
Investment decisions are made by a team of portfolio managers, assistant
portfolio managers and analysts organized for that purpose. The team meets
regularly to review portfolio holdings and discuss purchase and sale
activity.
VA-9017-D
