Mutual of America Mid-Term Bond Fund
Mutual of America Investment Corporation
Fund Information for Mutual of America's Group Products (Except Defined Benefit and Pension Investment Contract), SEP and SIMPLE Contracts Separate Account No. 2 - Standard PricingMid-Term Bond Fund
The primary investment objective of the Fund is to produce a high level of current income. The secondary investment objective is the preservation of shareholders' capital.
The Fund invests primarily in publicly traded, investment-grade debt securities.
At least 80% of the Fund's total assets are invested in investment-grade securities issued by U.S. corporations or by the U.S. Government or its agencies, such as bonds, notes, debentures, zero coupon securities and mortgage-backed securities. Bonds are debt instruments that can be issued by the federal government, government agencies and subdivisions, states, cities, corporations and other institutions.
Although the Fund only purchases investment-grade bonds, the Fund may continue to hold certain corporate bonds in the Fund's portfolio that are downgraded to below investment grade, commonly referred to as "high yield" or "junk bonds."
The Adviser evaluates each security to be purchased and selects securities based on duration, seeking to maintain duration for the Fund overall within +/-10% of the duration of its benchmark; credit quality as determined by fundamental financial analysis focused on the issuer's ability to repay debt; and interest income anticipated to be generated.
The Fund's securities holdings will have an average maturity of three to seven years.
General risk: The Fund may not achieve its investment objective. An investment in the Fund could decline in value, and you could lose money by investing in the Fund.
Active Management risk:The portfolio manager’s judgments about the attractiveness, value or potential appreciation of the Fund’s investments may prove to be incorrect. The Fund could underperform in comparison to other funds with a similar benchmark or similar objectives and investment strategies if the Fund’s overall investment selections or strategies fail to produce the intended results.
Market risk: The risk that prices of securities will go down because of the interplay of market forces may affect a single issuer, industry or sector of the economy or may affect the market as a whole.
Mortgage risk: The duration of mortgage-related securities and interest rates tend to move together. As interest rates rise, the duration of mortgage-related securities extends and as interest rates fall, mortgage-related securities are often prepaid at a faster rate. Because of interest rate changes, it is not possible to predict the realized yield or average life of a mortgage-backed security.
Zero Coupon risk: Zero coupon securities and discount notes do not pay interest prior to maturity and therefore may be more difficult to sell during periods of interest rate changes. The market value of debt securities declines as interest rates rise; therefore the Fund may lose value if it sells zero coupon securities prior to their maturity date.
Interest Rate risk: Securities may lose value as the interest rate changes because bonds tend to decrease in value as interest rates rise. In general, the longer the term to maturity, the greater impact interest rate changes will have on the value of a security. The Fund faces a heightened level of interest rate risk under current conditions because interest rates are at near historically low levels.
Corporate Debt risk: During periods of economic uncertainty, the value of corporate debt securities may decline relative to the value of U.S. government debt securities.
Credit risk: Debt obligations are generally subject to the risk that the issuer may be unable to make principal and interest payments when they are due.
Call risk: When interest rates decline, an issuer may have an option to call the securities before maturity, resulting in reduced income.
Non-investment grade debt risk: Non-investment grade debt obligations, known as "junk bonds," have a higher risk of default and tend to be less liquid than higher-rated securities.
Liquidity risk: The prices of debt securities may be subject to significant volatility, particularly as markets become less liquid due to limited dealer inventory of corporate bonds.
Extension risk: Mortgage-related and other asset-backed securities are subject to the risk that the issuer of such a security pays back the principal of such an obligation later than expected. This may occur when interest rates rise, and this may negatively affect Fund returns.
Prepayment risk: Mortgage-related and other asset-backed securities are subject to the risk that the issuer of such a security pays back the principal of such an obligation earlier than expected. This may occur when interest rates decline, and this may negatively affect Fund returns.
|Year to Date||4.69%|
|Prior 3 Months||-0.58%|
|Prior 1 Year||5.55%|
|Prior 3 Years||1.62%|
|Prior 5 Years||1.15%|
|Prior 10 Years||1.76%|
The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and unit values will fluctuate so that units, when redeemed, may be worth more or less than their original cost. Investment Fund total return performance currently may be lower or higher than the figures stated above.
The total return performance data are based on a hypothetical investment of $1,000, which is redeemed at the end of the periods shown. The total return figures reflect the reinvestment of investment income and capital gains and losses, and are net of expenses which include a contract fee, an expense risk fee, administrative charges, a distribution expense charge and Underlying Funds fees and expenses.
The total return figures for periods extending beyond a year are average rates of return and do not reflect the Funds' actual year-to-year results, which varied over the periods shown. Contributions or withdrawals made within a period would experience different rates of return based on the unit values on the dates of such transactions.
Portfolio Turnover Rate(%): 14%**Excludes all short-term securities.
|Sector||% of Portfolio|
|U.S. Govt. Treasuries||64.7%|
|U.S. Govt. Agencies||2.2%|
|Rating||% of Portfolio|
|Company||% of Portfolio|
|Prospect Capital Corp.||0.7%|
|Boston Properties LP||0.5%|
|Dr Pepper Snapple Group Inc||0.5%|
|Mead Johnson Nutrition Co.||0.5%|
|Marriott International, Inc.||0.4%|
|Regions Financial Corp.||0.4%|
|FS Investment Corp.||0.4%|
Andrew L. Heiskell, Executive Vice President of the Adviser, has approximately 51 years of experience in selecting securities for, and managing, fixed-income portfolios. Mr. Heiskell has been employed by the Adviser since 1991. Jacqueline Sabella, Senior Vice President of the Adviser, joined the Adviser in January 2000, and has approximately 22 years of experience in selecting securities and managing fixed income portfolios.