SEC Company Response from MoA Funds Corp (CIK 0000795259) — Apr 6, 2020
MoA Funds Corp (CIK 0000795259)
Date: April 6, 2020 · CIK: 0000795259 · Accession: 0001683863-20-002198
AI Filing Summary & Sentiment
File numbers found in text: 811-05084
Letter
Division of Investment Management, Disclosure Review Officer 100 F Street NE Washington DC 20549 Attn: Ms. Elisabeth Bentzinger Re: Post-Effective Amendment No. 58 under the Securities Act of 1933 and No. 59 under the Investment Company Act of 1940 to the Registration Statement on Form N-1A of Mutual of America Investment Corporation (SEC File Nos. 033-06486 and 811-05084)
Dear Ms. Bentzinger,
On behalf of the above-referenced registrant, set forth below are responses to comments relating to the Registration Statement that you provided by telephone to me and Scott Rothstein on March 12, 2020, concerning Post-Effective Amendment No. 58 under the Securities Act of 1933, as amended, and Amendment No. 59 under the Investment Company Act of 1940, as amended, to the Registration Statement on Form N-1A filed with the Securities and Exchange Commission by Mutual of America Investment Corporation on January 31, 2020.
Set forth below are your comments with Mutual of America’s response immediately following each comment. Per our telephone conversation, all changes mentioned herein will appear in the post-effective amendment to the registration statement that will be filed under paragraph (b) of Rule 485 of the Securities Act of 1933 (the “Securities Act”) in April 2020.
General Comments
Comment
You may delete the cross-reference sheet as it is not required.
Response
We deleted the cross-reference sheet.
Summary Prospectus Comments
Comment 1
Catholic Values Index Fund
In the Fees and Expenses of the Fund, you state:
“Other Expenses are estimated, as the Fund will commence operations on or after July 1, 2020.”
Please move this statement to the footnote to the Fee Table per Item 6A of Form N-1A.
The same comment applies to the 2065 Retirement Fund
Response 1
We deleted the sentence from the introductory paragraph and added the following footnote to the Fee Table: “Other Expenses are estimated, as the Fund will commence operations on or after July 1, 2020.”
We made the same changes to the Fee Table for the 2065 Retirement Fund.
Comment 2
The introductory paragraph to the Fee Table for the 2065 Retirement Fund states: “For investments through an insurance company separate account, note that the expenses shown do not include Separate Account expenses which would increase costs if included.”
Please include this wording in the Catholic Values Index Fund disclosure.
Response 2
As we discussed, following the substitution of the Investment Corporation funds with the funds of Mutual of America Variable Insurance Portfolios, Inc. in non-qualified annuity contracts and life insurance policies, the Investment Corporation funds will now be offered both through insurance company separate account annuities used to fund qualified plans and as retail funds, including through a trust-based retirement plan platform. The Catholic Values Index Fund will only be offered as a retail fund and will not be offered through an insurance company separate account. Accordingly, the disclosure is not included for the Catholic Values Index Fund and we removed other references to separate account expenses included in the summary prospectus for the Catholic Values Index Fund.
Comment 3
Principal Investment Strategies
“The Catholic Values Index is designed to provide exposure to U.S. equity stocks included in the S&P 500® Index while maintaining alignment with the moral and social teachings of the Catholic Church.”
Please disclose that the S&P 500® Index is comprised of large capitalization companies.
Response 3
We revised the disclosure as follows:
“The Catholic Values Index is designed to provide exposure to U.S. large capitalization equity stocks included in the S&P 500® Index while maintaining alignment with the moral and social teachings of the Catholic Church.”
Comment 4
“From this starting universe, constituents are screened to exclude companies involved in activities which are perceived to be inconsistent with Catholic values as outlined in the Socially Responsible Investment Guidelines of the United States Conference of Catholic Bishops (“USCCB”).”
Please briefly describe the USCCB investment guidelines in the summary of principal investment strategies and provide more detail in the Item 9 disclosure in the statutory prospectus.
Response 4
The disclosure will be revised as follows: “From this starting universe, constituents are screened to exclude companies involved in activities which are perceived to be inconsistent with Catholic values as outlined in the Socially Responsible Investment Guidelines of the United States Conference of Catholic Bishops (“USCCB”), currently including the protection of human life, promotion of human dignity, reducing arms production, affordable housing/banking, protection of the environment and encouraging corporate responsibility.” We respectfully submit that the forgoing is reasonably sufficient for the purposes of Item 4 disclosure to describe the negative strategy employed by the index and the fund, and that further detail would require addressing issues of faith and doctrine beyond what is necessary in a securities disclosure document.
Comment 5
“The components of the Index are market capitalization weighted, adjusted for free float, which is the value of shares readily available in the market as held by public investors.”
Please clarify that the Index refers to the Catholic Values index.
Response 5
We revised the disclosure as follows:
“The components of the Catholic Values Index are market capitalization weighted, adjusted for free float, which is the value of shares readily available in the market as held by public investors.”
Comment 6
“Under normal circumstances, at least 80% of the Fund’s total assets are invested in securities included in the Catholic Values Index, which at December 31, 2019.”
Include the market capitalization range.
Response 6
We revised the disclosure as follows:
“Under normal circumstances, at least 80% of the Fund’s total assets are invested in securities included in the Catholic Values Index, which at December 31, 2019, included companies with market capitalizations from $2.9 billion up to $1.3 trillion.”
Comment 7
“Under normal circumstances, at least 80% of the Fund’s total assets are invested in securities included in the Catholic Values Index, which at December 31, 2019.”
Disclose in what securities the remaining 20% of the Fund’s total assets are invested.
Response 7
For funds where the name contains the investment strategy, we disclose that at least 80% of the fund’s assets are invested in those securities in order to comply with the SEC’s “names” rule. In fact, under normal circumstances, we expect that substantially all of the Fund’s assets will be invested in securities included in the Catholic Values Index.
Comment 8
“The Fund may concentrate its investments in an industry or group of industries to the extent that the index being tracked is also so concentrated.”
Please state definitively that the fund will concentrate. The word “may” connotes discretion which is not permissible under Section 8. Also, the Fundamental Investment Policy contained in the SAI states “will”, so the revision will be consistent.
Clarify that the index refers to the Catholic Values Index.
Disclose whether the Catholic Values Index currently concentrates its investments in an industry or group of industries, and if so, disclose the industry or group of industries.
Response 8
We revised the disclosure as follows:
“The Fund will concentrate its investments in an industry or group of industries to the extent that the Catholic Values Index being tracked is also so concentrated. Currently, the Fund has a concentration in the stocks of information technology companies.”
Comment 9
Principal Investment Risks
“An investment in the Fund is subject to the following risks which are described in more detail in the Prospectus.”
“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.”
More clearly state that loss of money is a risk of investing.
See Item 4(b)(1)(i):
“Based on the information given in response to Item 9(c), summarize the principal risks of investing in the Fund, including the risks to which the Fund’s portfolio as a whole is subject and the circumstances reasonably likely to affect adversely the Fund’s net asset value, yield, and total return. Unless the Fund is a Money Market Fund, disclose that loss of money is a risk of investing in the Fund.”
The disclosure must be more prominent. This comment applies to the 2065 Retirement Fund, as well as all other funds.
Response 9
We revised the introductory disclosure for all Funds as follows:
“As with any mutual fund, loss of money is a risk of investing in the Fund. Additionally, an investment in the Fund is subject to the following risks which are described in more detail in the Prospectus.”
Comment 10
Please consider disclosing as a Principal Investment Risk the risk of investing in a new fund, for example higher expenses, and the fund may not grow to an economically viable size and may cease operations.
This comment applies to the 2065 Retirement Fund as well.
Response 10
We added the following as a Principal Investment Risk for the Catholic Values Index Fund and the 2065 Retirement Fund:
New Fund risk: The Fund is new and has fewer assets than an older fund and therefore, may have higher expenses than an older fund. While the Adviser has contractually agreed to reimburse the Fund’s direct operating expenses for, at a minimum, its first three years of operation in order to limit expenses, it may take more time for the Fund’s assets to grow large enough to offset high expenses.
Comment 11
Remove the Socially Responsible Investment risk because Catholic values are not socially responsible values, or alternatively explain how the Catholic Values Index Fund is a socially responsible fund with criteria used by the Index.
Response 11
We deleted the Socially Responsible Investment risk.
Comment 12
The Concentration risk refers to the S&P 500® Index. Change this to refer to the Catholic Values Index.
Response 12
We revised the disclosure as follows:
“Concentration risk: The chance that the stocks of a particular industry or group of industries will decline because of adverse developments affecting that industry. Because the Fund concentrates its assets in certain industries to the same extent that the Catholic Values Index does, the Fund bears concentration risk.”
Comment 13
Index risk and Tracking Error risk are very similar so considering deleting one risk in accordance with the plain English principles.
Response 13
We have combined the two risks, as follows: “Index Tracking Error risk: As an index fund, the Fund seeks to track the performance of the Catholic Values Index, although it may not be successful in doing so. The divergence between the performance of the Fund and the index, positive or negative, is called tracking error. Tracking error can be caused by many factors such as operating and transaction costs, as well as weighting of each security in the index, and it may be significant.”
Comment 14
Performance/Annual Return
Please supplementally identify the broad-based securities index that the Catholic Values Index Fund will utilize to show its performance.
Response 14
The Catholic Values Index Fund is an index fund that will track and compare its performance to the S&P 500® Catholic Values Index.
Comment 15
Similarly, please supplementally identify the broad-based securities index that the 2065 Retirement Fund will utilize to show its performance.
Response 15
The 2065 Retirement Fund will have the same comparative indexes as the other Retirement Funds in the series and will compare its performance to the S&P 500® Index and the Bloomberg Barclays U.S. Aggregate Bond Index.
Comment 16
Portfolio Manager
The disclosure states that the portfolio manager will be the portfolio manager of the Fund at its inception.
Provide a date to comply with Item 5(b).
Response 16
We revised the disclosure as follows:
“Jamie A. Zendel, Senior Vice President of the Adviser, will be the portfolio manager of the Fund at its inception in July 2020.”
Comment 17
2065 Retirement Fund
Fees and Expenses of the Fund
The introductory paragraph to the Fee Table for the 2065 Retirement Fund states: “For investments through an insurance company separate account, note that the expenses shown do not include Separate Account expenses which would increase costs if included.”
Also add variable contract expenses.
Response 17
We revised the disclosure as follows:
“For investments through an insurance company separate account, note that the expenses shown do not include Separate Account expenses or variable contract expenses which would increase costs if included.”
We made this change to all Investment Corporation funds, except for the Catholic Values Index Fund that will not be offered through a Separate Account or variable contract.
Comment 18
The footnote to the Fee Table states:
“The Adviser has contractually agreed beginning as of the inception of the Fund to reimburse the Fund’s direct operating expenses (excluding any extraordinary expenses that may arise and charges incurred in trading portfolio securities). This contractual obligation may no
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CORRESP
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filename1.htm
Amy Latkin
Vice President and Associate General Counsel
w: 212.224.1840
April 6, 2020
U.S. Securities and Exchange Commission
Division of Investment Management, Disclosure Review Officer
100 F Street NE
Washington DC 20549
Attn: Ms. Elisabeth Bentzinger
Re: Post-Effective Amendment No. 58 under the Securities Act of 1933 and No. 59 under the Investment Company Act of 1940 to the Registration Statement on Form N-1A of Mutual of America Investment Corporation (SEC File Nos. 033-06486 and 811-05084)
Dear Ms. Bentzinger,
On behalf of the above-referenced registrant, set forth below are responses to comments relating to the Registration Statement that you provided by telephone to me and Scott Rothstein on March 12, 2020, concerning Post-Effective Amendment No. 58 under the Securities Act of 1933, as amended, and Amendment No. 59 under the Investment Company Act of 1940, as amended, to the Registration Statement on Form N-1A filed with the Securities and Exchange Commission by Mutual of America Investment Corporation on January 31, 2020.
Set forth below are your comments with Mutual of America’s response immediately following each comment. Per our telephone conversation, all changes mentioned herein will appear in the post-effective amendment to the registration statement that will be filed under paragraph (b) of Rule 485 of the Securities Act of 1933 (the “Securities Act”) in April 2020.
General Comments
Comment
You may delete the cross-reference sheet as it is not required.
Response
We deleted the cross-reference sheet.
Summary Prospectus Comments
Comment 1
Catholic Values Index Fund
In the Fees and Expenses of the Fund, you state:
“Other Expenses are estimated, as the Fund will commence operations on or after July 1, 2020.”
Please move this statement to the footnote to the Fee Table per Item 6A of Form N-1A.
The same comment applies to the 2065 Retirement Fund
Response 1
We deleted the sentence from the introductory paragraph and added the following footnote to the Fee Table: “Other Expenses are estimated, as the Fund will commence operations on or after July 1, 2020.”
We made the same changes to the Fee Table for the 2065 Retirement Fund.
Comment 2
The introductory paragraph to the Fee Table for the 2065 Retirement Fund states: “For investments through an insurance company separate account, note that the expenses shown do not include Separate Account expenses which would increase costs if included.”
Please include this wording in the Catholic Values Index Fund disclosure.
Response 2
As we discussed, following the substitution of the Investment Corporation funds with the funds of Mutual of America Variable Insurance Portfolios, Inc. in non-qualified annuity contracts and life insurance policies, the Investment Corporation funds will now be offered both through insurance company separate account annuities used to fund qualified plans and as retail funds, including through a trust-based retirement plan platform. The Catholic Values Index Fund will only be offered as a retail fund and will not be offered through an insurance company separate account. Accordingly, the disclosure is not included for the Catholic Values Index Fund and we removed other references to separate account expenses included in the summary prospectus for the Catholic Values Index Fund.
Comment 3
Principal Investment Strategies
“The Catholic Values Index is designed to provide exposure to U.S. equity stocks included in the S&P 500® Index while maintaining alignment with the moral and social teachings of the Catholic Church.”
Please disclose that the S&P 500® Index is comprised of large capitalization companies.
Response 3
We revised the disclosure as follows:
“The Catholic Values Index is designed to provide exposure to U.S. large capitalization equity stocks included in the S&P 500® Index while maintaining alignment with the moral and social teachings of the Catholic Church.”
Comment 4
“From this starting universe, constituents are screened to exclude companies involved in activities which are perceived to be inconsistent with Catholic values as outlined in the Socially Responsible Investment Guidelines of the United States Conference of Catholic Bishops (“USCCB”).”
Please briefly describe the USCCB investment guidelines in the summary of principal investment strategies and provide more detail in the Item 9 disclosure in the statutory prospectus.
Response 4
The disclosure will be revised as follows: “From this starting universe, constituents are screened to exclude companies involved in activities which are perceived to be inconsistent with Catholic values as outlined in the Socially Responsible Investment Guidelines of the United States Conference of Catholic Bishops (“USCCB”), currently including the protection of human life, promotion of human dignity, reducing arms production, affordable housing/banking, protection of the environment and encouraging corporate responsibility.” We respectfully submit that the forgoing is reasonably sufficient for the purposes of Item 4 disclosure to describe the negative strategy employed by the index and the fund, and that further detail would require addressing issues of faith and doctrine beyond what is necessary in a securities disclosure document.
Comment 5
“The components of the Index are market capitalization weighted, adjusted for free float, which is the value of shares readily available in the market as held by public investors.”
Please clarify that the Index refers to the Catholic Values index.
Response 5
We revised the disclosure as follows:
“The components of the Catholic Values Index are market capitalization weighted, adjusted for free float, which is the value of shares readily available in the market as held by public investors.”
Comment 6
“Under normal circumstances, at least 80% of the Fund’s total assets are invested in securities included in the Catholic Values Index, which at December 31, 2019.”
Include the market capitalization range.
Response 6
We revised the disclosure as follows:
“Under normal circumstances, at least 80% of the Fund’s total assets are invested in securities included in the Catholic Values Index, which at December 31, 2019, included companies with market capitalizations from $2.9 billion up to $1.3 trillion.”
Comment 7
“Under normal circumstances, at least 80% of the Fund’s total assets are invested in securities included in the Catholic Values Index, which at December 31, 2019.”
Disclose in what securities the remaining 20% of the Fund’s total assets are invested.
Response 7
For funds where the name contains the investment strategy, we disclose that at least 80% of the fund’s assets are invested in those securities in order to comply with the SEC’s “names” rule. In fact, under normal circumstances, we expect that substantially all of the Fund’s assets will be invested in securities included in the Catholic Values Index.
Comment 8
“The Fund may concentrate its investments in an industry or group of industries to the extent that the index being tracked is also so concentrated.”
Please state definitively that the fund will concentrate. The word “may” connotes discretion which is not permissible under Section 8. Also, the Fundamental Investment Policy contained in the SAI states “will”, so the revision will be consistent.
Clarify that the index refers to the Catholic Values Index.
Disclose whether the Catholic Values Index currently concentrates its investments in an industry or group of industries, and if so, disclose the industry or group of industries.
Response 8
We revised the disclosure as follows:
“The Fund will concentrate its investments in an industry or group of industries to the extent that the Catholic Values Index being tracked is also so concentrated. Currently, the Fund has a concentration in the stocks of information technology companies.”
Comment 9
Principal Investment Risks
“An investment in the Fund is subject to the following risks which are described in more detail in the Prospectus.”
“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.”
More clearly state that loss of money is a risk of investing.
See Item 4(b)(1)(i):
“Based on the information given in response to Item 9(c), summarize the principal risks of investing in the Fund, including the risks to which the Fund’s portfolio as a whole is subject and the circumstances reasonably likely to affect adversely the Fund’s net asset value, yield, and total return. Unless the Fund is a Money Market Fund, disclose that loss of money is a risk of investing in the Fund.”
The disclosure must be more prominent. This comment applies to the 2065 Retirement Fund, as well as all other funds.
Response 9
We revised the introductory disclosure for all Funds as follows:
“As with any mutual fund, loss of money is a risk of investing in the Fund. Additionally, an investment in the Fund is subject to the following risks which are described in more detail in the Prospectus.”
Comment 10
Please consider disclosing as a Principal Investment Risk the risk of investing in a new fund, for example higher expenses, and the fund may not grow to an economically viable size and may cease operations.
This comment applies to the 2065 Retirement Fund as well.
Response 10
We added the following as a Principal Investment Risk for the Catholic Values Index Fund and the 2065 Retirement Fund:
New Fund risk: The Fund is new and has fewer assets than an older fund and therefore, may have higher expenses than an older fund. While the Adviser has contractually agreed to reimburse the Fund’s direct operating expenses for, at a minimum, its first three years of operation in order to limit expenses, it may take more time for the Fund’s assets to grow large enough to offset high expenses.
Comment 11
Remove the Socially Responsible Investment risk because Catholic values are not socially responsible values, or alternatively explain how the Catholic Values Index Fund is a socially responsible fund with criteria used by the Index.
Response 11
We deleted the Socially Responsible Investment risk.
Comment 12
The Concentration risk refers to the S&P 500® Index. Change this to refer to the Catholic Values Index.
Response 12
We revised the disclosure as follows:
“Concentration risk: The chance that the stocks of a particular industry or group of industries will decline because of adverse developments affecting that industry. Because the Fund concentrates its assets in certain industries to the same extent that the Catholic Values Index does, the Fund bears concentration risk.”
Comment 13
Index risk and Tracking Error risk are very similar so considering deleting one risk in accordance with the plain English principles.
Response 13
We have combined the two risks, as follows: “Index Tracking Error risk: As an index fund, the Fund seeks to track the performance of the Catholic Values Index, although it may not be successful in doing so. The divergence between the performance of the Fund and the index, positive or negative, is called tracking error. Tracking error can be caused by many factors such as operating and transaction costs, as well as weighting of each security in the index, and it may be significant.”
Comment 14
Performance/Annual Return
Please supplementally identify the broad-based securities index that the Catholic Values Index Fund will utilize to show its performance.
Response 14
The Catholic Values Index Fund is an index fund that will track and compare its performance to the S&P 500® Catholic Values Index.
Comment 15
Similarly, please supplementally identify the broad-based securities index that the 2065 Retirement Fund will utilize to show its performance.
Response 15
The 2065 Retirement Fund will have the same comparative indexes as the other Retirement Funds in the series and will compare its performance to the S&P 500® Index and the Bloomberg Barclays U.S. Aggregate Bond Index.
Comment 16
Portfolio Manager
The disclosure states that the portfolio manager will be the portfolio manager of the Fund at its inception.
Provide a date to comply with Item 5(b).
Response 16
We revised the disclosure as follows:
“Jamie A. Zendel, Senior Vice President of the Adviser, will be the portfolio manager of the Fund at its inception in July 2020.”
Comment 17
2065 Retirement Fund
Fees and Expenses of the Fund
The introductory paragraph to the Fee Table for the 2065 Retirement Fund states: “For investments through an insurance company separate account, note that the expenses shown do not include Separate Account expenses which would increase costs if included.”
Also add variable contract expenses.
Response 17
We revised the disclosure as follows:
“For investments through an insurance company separate account, note that the expenses shown do not include Separate Account expenses or variable contract expenses which would increase costs if included.”
We made this change to all Investment Corporation funds, except for the Catholic Values Index Fund that will not be offered through a Separate Account or variable contract.
Comment 18
The footnote to the Fee Table states:
“The Adviser has contractually agreed beginning as of the inception of the Fund to reimburse the Fund’s direct operating expenses (excluding any extraordinary expenses that may arise and charges incurred in trading portfolio securities). This contractual obligation may no