Correspondence 0001683863-24-006109 from ADVANCED SERIES TRUST (CIK 0000814679)
ADVANCED SERIES TRUST (CIK 0000814679)
Date: Oct. 28, 2024 · CIK: 0000814679 · Accession: 0001683863-24-006109
AI Filing Summary & Sentiment
File numbers found in text: 333-282309, 333-282329, 811-05186
Letter
VIA EDGAR SUBMISSION Attention: Ms. Jaea Hahn and Mr. Tony Burak AST Cohen & Steers Realty Portfolio File Nos. 333-282309 and 811-05186 AST MFS Global Equity Portfolio File Nos. 333-282309 and 811-05186 AST T. Rowe Price Natural Resources Portfolio File Nos. 333-282309 and 811-05186 AST Emerging Markets Equity Portfolio File Nos. 333-282329 and 811-05186
Dear Ms. Hahn and Mr. Burak:
On behalf of Advanced Series Trust (the “Registrant”), set forth below are responses to telephonic comments received by the undersigned from the staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”) on October 22, 2024 and October 24, 2024. The Staff’s comments relate to the Registrant’s Registration Statements on Form N-14 (the “Registration Statements”), which were filed with the Commission on September 24, 2024 and September 25, 2024, pursuant to Rule 488 under the Securities Act of 1933, as amended (the “1933 Act”). The Registration Statements will be used in connection with special meetings of beneficial shareholders of the AST ClearBridge Dividend Growth Portfolio, AST Cohen & Steers Realty Portfolio, AST MFS Global Equity Portfolio, AST T. Rowe Price Natural Resources Portfolio, and AST Emerging Markets Equity Portfolio (each a “Target Portfolio” and collectively, the Target Portfolios), each a series of the Registrant, scheduled to be held on December 11, 2024.
Capitalized terms used herein that are not otherwise defined shall have the meanings given to them in the Registration Statements. Our summary of the comments and our responses thereto are provided below. The Registrant intends to file definitive versions of the Registration Statements pursuant to Rule 497 under the 1933 Act to reflect the revisions discussed herein in response to the Staff’s comments and make certain other non-material changes, as appropriate.
The Registrant confirms that where a comment is made with respect to disclosure in one location, it will apply to all similar disclosure appearing elsewhere in the Registration Statement and similarly in the other Registration Statements.
General Comments:
1.
Comment: Throughout the prospectus/proxy statement section of the Registration Statement (the “Prospectus/Proxy Statement”), please clarify references to the “Combined Portfolio” to indicate that the ultimate portfolio post-reorganization reflects a new investment strategy and subadvisers and not the current structure and strategy of the Acquiring Portfolio.
Response: The Registrant has revised the defined term “Combined Portfolio” to “Combined Portfolio (as Repositioned)” and made certain additional clarifying edits throughout the Registration Statement.
2.
Comment: Please clarify the shareholder benefits of reorganizing the Target Portfolio into the Acquiring Portfolio set forth in Q4 under “IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE PROPOSAL”. In particular, please explain what is meant by “decreasing economies of scale” as compared to “opportunity to improve overall economies of scale” and explicitly address each Target Portfolio’s historical performance.
Response: The Registrant has revised the disclosure as marked below to clarify the benefits of the proposed Reorganization of the Target Portfolios (similar edits, as applicable, will be made to the other Registration Statements).
Q4. WHY IS THE REORGANIZATION BEING PURSUED?
A. Effective December 31, 2020, Prudential Financial, Inc. ("Prudential") discontinued sales of traditional variable annuity contracts with guaranteed living benefits and restricted additional purchases into certain existing contracts. The closure of these products, coupled with industry trends impacting the platform, has resulted in limited potential sources of long-term scale and the likelihood of related expense increases for the Portfolios. The Manager's goal in making the proposal set forth in the attached Prospectus/Proxy Statement and other recent changes to the Prudential fund platform is to ensure shareholders are protected from decreasing economies of scale due to lower expected asset levels in the long term, and to provide, providing the potential for improved performance through newly repositioned portfolios; all the while and preserving the high-level services shareholders have come to expect.
The With respect to the Portfolios, the Reorganization will consolidate the Target Portfolio and the Acquiring Portfolio, providing an opportunity to improve overall economies of scale in the near term. In addition, shareholders of the Target Portfolio are expected to benefit from reduced total gross and net expenses as shareholders of the Combined Portfolio (as Repositioned) following the Reorganization. The Reorganization also provides shareholders of the Target Portfolio with the potential for improved performance as the Acquiring Portfolio has outperformed, and hypothetically as repositioned would have outperformed each Target Portfolio.
3.
Comment: Please supplementally explain if the Repositioning of the Acquiring Portfolio was approved by the Board of Trustees of the Registrant and if the Repositioning requires shareholder approval.
Response: The Registrant confirms that the Board of Trustees approved matters related to the Repositioning of each Acquiring Portfolio. These matters do not separately require shareholder approval. In particular, the Board relied upon exemptive relief issued to the Registrant to appoint new subadvisers to the Acquiring Portfolio (the Manager-of-Managers Order). Subject to certain conditions, the Manager-of-Managers Order permits the Manager to hire subadvisers that are either indirectly or directly wholly-owned subsidiaries of, or that are not affiliated with, the Manager, and to make changes to certain existing subadvisory agreements with the approval of the Board of Trustees of the Registrant without obtaining shareholder approval.
4.
Comment: Please supplementally explain what will happen to the Target Portfolios in the event the Reorganizations are not approved by shareholders.
Response: In the event the Reorganizations are not approved by shareholders, the Target Portfolios will not be merged into the Acquiring Portfolio and each Target Portfolio will continue to be managed per each Portfolio’s prospectus guidelines. In addition, the Acquiring Portfolio will not be Repositioned.
5.
Comment: The third bullet in the answer to Q5 under “IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE PROPOSAL” states the annualized estimated benefit to shareholders of each Target Portfolio from the Reorganization. Please confirm the amounts listed in each Registration Statement and whether the amount applies to the combined savings for all four Target Portfolios. In addition, please clarify if such savings result from temporary fee reductions through waivers and if so, disclose that expenses may increase upon expiration of such waivers.
Response: The Registrant confirms that the estimated amount of shareholder savings disclosed in Question 5 is accurate for each Reorganization. The amounts reflect savings that primarily result from a permanent contractual reduction in the management fee payable by each Target Portfolio following the Reorganization (the so-called Management Fee Reduction) and not a temporary contractual waiver subject to expiration. The savings reflect the combined savings for all Target Portfolios.
6.
Comment: Please supplementally explain if the Registrant intends to file a post-effective amendment under Rule 485(a) of the Securities Act of 1933.
Response: The Registrant has determined that there are no material changes to the Acquiring Portfolio due to the Repositioning. The Registrant intends to file a prospectus supplement which will outline the Repositioning. In addition, subject to the Manager-of-Managers Order, the Registrant will file and mail an Information Statement pursuant to Section 14(c) of the Securities Exchange Act of 1934 to shareholders of the Acquiring Portfolio.
7.
Comment: Please explain why the Repositioning of the Acquiring Portfolio is conditioned on the Reorganization of each Target Portfolio.
Response: The Repositioning is contingent upon shareholder approval of the Reorganizations because the strategy and subadviser changes contemplated by the Repositioning require the increased scale and elimination of strategies provided by the consolidation of assets and subadvisers of the Portfolios through the Reorganization.
8.
Comment: Please explain the changes resulting from the Repositioning in Q6 under “IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE PROPOSAL.” In addition, consider a cross-reference to the related discussion later in the Prospectus/Proxy Statement.
Response: The Registrant has revised Q6 to describe the Repositioning and has added a cross reference to the discussion regarding the Repositioning that appears later in the Prospectus/Proxy Statement as shown below for the Reorganization of the AST ClearBridge Dividend Growth Portfolio, AST Cohen & Steers Realty Portfolio, AST MFS Global Equity Portfolio, and AST T. Rowe Price Natural Resources Portfolio, into AST Large-Cap Core Portfolio (similar edits, as applicable, will be made to the other Registration Statements).
Q6. WHAT WILL HAPPEN TO THE TARGET PORTFOLIO'S CURRENT INVESTMENTS?
A. As explained further in the attached Prospectus/Proxy Statement, effective on or about the date of the Reorganizations, which is expected to be on or about January 27, 2025, the Acquiring Portfolio will be "repositioned.," The Repositioning which involves hiring ClearBridge Investments, LLC and Dimensional Fund Advisors LP as additional subadvisers to the Acquiring Portfolio to serve alongside J.P. Morgan Investment Management, Inc. and PGIM Quantitative Solutions LLC, and making certain changes to the Acquiring Portfolio’s principal investment strategies (collectively, the “Repositioning”). In addition, effective on such date, the Acquiring Portfolio will be renamed “AST Large-Cap Equity Portfolio,” and the contractual management fee for the Acquiring Portfolio will be reduced on the date of the Repositioning pursuant to the Management Fee Reduction. The Manager will not move forward with the Repositioning or the Management Fee Reduction if the Reorganization is not approved. The Repositioning is contingent upon shareholder approval of each Reorganization because the strategy and subadviser changes contemplated by the Repositioning require the increased scale and rationalization of strategies provided by the consolidation of assets and subadvisers of the Portfolios through the Reorganizations.
The extent to which the securities of the Target Portfolios will be retained in the Combined Portfolio (as Repositioned) by the Acquiring Portfolio will be determined by the consistent w investment objective and strategies subadvisers to the Combined Portfolio (as Repositioned), as repositioned and in effect as of the date of the Reorganization. It is expected that approximately 46.7% of the securities of the Target Portfolios will be retained in connection with the Reorganization and Repositioning. Please see Q8 for additional information on the costs associated with the Reorganization and Repositioning. Please see pages ___ -___ of the attached Prospectus Proxy Statement for a comparison of the principal investment strategies of the Target Portfolios, Acquiring Portfolio, and the Combined Portfolio (as Repositioned). In addition, please see Q8 for additional information on the costs associated with the Reorganization and Repositioning.
9.
Comment: Q6 under “IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE PROPOSAL” states the percentage of the securities of the Target Portfolio that will be retained in connection with the Reorganization. Please supplementally confirm the percentage of Target Portfolio securities that are expected to be retained in connection with the Reorganization and whether such securities will be managed by the same subadvisers in the Combined Portfolio (as Repositioned). In addition, please supplementally confirm if the subadvisers appointed in connection with the Repositioning are appointed to reposition the Acquiring Portfolio only or if they will be retained following the Repositioning and Reorganization.
Response
: The Registrant confirms the accuracy of the percentage of securities that will be retained in connection with each Reorganization. For the subadvisers that are remaining, it is expected that those Target Portfolio securities retained will be managed by the same subadvisers to the Combined Portfolio (as Repositioned) as acquired such securities on behalf of the applicable Target Portfolio. The subadvisers to the Combined Portfolio (as Repositioned) are appointed to manage those Acquiring Portfolio assets allocated by the Manager on an ongoing basis, beyond the period necessary to reposition the Acquiring Portfolio, subject to oversight by the Manager and the Board of the Registrant.
10.
Comment: The Staff notes that Q7 under “IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE PROPOSAL” states that “[t]he Board considered information regarding any potential adverse impact to shareholders as a result of the Reorganization.” Please briefly identify what was considered.
Response: The Registrant confirms that the significant factors, including any adverse factors as applicable, with respect to the Board’s decision to approve the Reorganization are adequately set forth in the Registration Statement.
11.
Comment: Please confirm if the Board unanimously approved the Reorganization. If the Board did not unanimously approve the Reorganization, please explain why the Board did not unanimously approve.
Response: The Registrant has reviewed the disclosure and respectfully submits that the current disclosure is sufficient to meet the applicable requirements of Form N-14. Additionally, the Registrant respectfully submits that there is no requirement in Form N-14 or Form N-1A that requires the requested disclosure.
12.
Comment: Please ensure that all hyperlinks properly link to the referenced filings that are incorporated by reference.
Response: The Registrant confirms the hyperlinks to each document incorporated by reference in the Registration Statements are correct.
1.
Comment: Q8 under “IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE PROPOSAL,” states that the Manager will pay the costs of the Reorganization other than transaction costs. Please confirm the amounts of such transaction costs and clarify the disclosure regarding whether such transaction costs include transaction costs related to the Repositioning.
Response: The Registrant confirms the accuracy of the estimated transaction costs disclosed in the Registration Statement. The Registrant has added the following disclosures to Q8 to clarify the transaction costs borne by shareholders.
These transaction costs relate to aligning the portfolio holdings of the Target Portfolio in anticipation of the Reorganization with the portfolio holdings of the repositioned Acquiring Portfolio. Shareholders of the Target Portfolio[s] will not bear any costs associated with the Repositioning of the Acquiring Portfolio.
2.
Comment: Q16 under “WILL SHAREHOLDERS BE ALLOWED TO TRANSFER OUT OF THE TARGET PORTFOLIOS WITHOUT PENALTY AND WITHOUT BEING REQUIRED TO USE ONE OF THEIR ALLOTTED TRANSFERS?” Please clarify that contract owners will be allowed one free transfer out of each Target Portfolio without penalty.
Response: The Regi
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filename1.htm
SEC Letter
Advanced Series Trust
655 Broad Street
Newark, New Jersey 07102
VIA EDGAR SUBMISSION
October 28, 2024
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Attention: Ms. Jaea Hahn and Mr. Tony Burak
Re:
Registration Statements of Advanced Series Trust on Form N-14:
AST ClearBridge Dividend Growth Portfolio File Nos. 333-282309 and 811-05186
AST Cohen & Steers Realty Portfolio File Nos. 333-282309 and 811-05186
AST MFS Global Equity Portfolio File Nos. 333-282309 and 811-05186
AST T. Rowe Price Natural Resources Portfolio File Nos. 333-282309 and 811-05186
AST Emerging Markets Equity Portfolio File Nos. 333-282329 and 811-05186
Dear Ms. Hahn and Mr. Burak:
On behalf of Advanced Series Trust (the “Registrant”), set forth below are responses to telephonic comments received by the undersigned from the staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”) on October 22, 2024 and October 24, 2024. The Staff’s comments relate to the Registrant’s Registration Statements on Form N-14 (the “Registration Statements”), which were filed with the Commission on September 24, 2024 and September 25, 2024, pursuant to Rule 488 under the Securities Act of 1933, as amended (the “1933 Act”). The Registration Statements will be used in connection with special meetings of beneficial shareholders of the AST ClearBridge Dividend Growth Portfolio, AST Cohen & Steers Realty Portfolio, AST MFS Global Equity Portfolio, AST T. Rowe Price Natural Resources Portfolio, and AST Emerging Markets Equity Portfolio (each a “Target Portfolio” and collectively, the Target Portfolios), each a series of the Registrant, scheduled to be held on December 11, 2024.
Capitalized terms used herein that are not otherwise defined shall have the meanings given to them in the Registration Statements. Our summary of the comments and our responses thereto are provided below. The Registrant intends to file definitive versions of the Registration Statements pursuant to Rule 497 under the 1933 Act to reflect the revisions discussed herein in response to the Staff’s comments and make certain other non-material changes, as appropriate.
The Registrant confirms that where a comment is made with respect to disclosure in one location, it will apply to all similar disclosure appearing elsewhere in the Registration Statement and similarly in the other Registration Statements.
General Comments:
1.
Comment: Throughout the prospectus/proxy statement section of the Registration Statement (the “Prospectus/Proxy Statement”), please clarify references to the “Combined Portfolio” to indicate that the ultimate portfolio post-reorganization reflects a new investment strategy and subadvisers and not the current structure and strategy of the Acquiring Portfolio.
Response: The Registrant has revised the defined term “Combined Portfolio” to “Combined Portfolio (as Repositioned)” and made certain additional clarifying edits throughout the Registration Statement.
2.
Comment: Please clarify the shareholder benefits of reorganizing the Target Portfolio into the Acquiring Portfolio set forth in Q4 under “IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE PROPOSAL”. In particular, please explain what is meant by “decreasing economies of scale” as compared to “opportunity to improve overall economies of scale” and explicitly address each Target Portfolio’s historical performance.
Response: The Registrant has revised the disclosure as marked below to clarify the benefits of the proposed Reorganization of the Target Portfolios (similar edits, as applicable, will be made to the other Registration Statements).
Q4. WHY IS THE REORGANIZATION BEING PURSUED?
A. Effective December 31, 2020, Prudential Financial, Inc. ("Prudential") discontinued sales of traditional variable annuity contracts with guaranteed living benefits and restricted additional purchases into certain existing contracts. The closure of these products, coupled with industry trends impacting the platform, has resulted in limited potential sources of long-term scale and the likelihood of related expense increases for the Portfolios. The Manager's goal in making the proposal set forth in the attached Prospectus/Proxy Statement and other recent changes to the Prudential fund platform is to ensure shareholders are protected from decreasing economies of scale due to lower expected asset levels in the long term, and to provide, providing the potential for improved performance through newly repositioned portfolios; all the while and preserving the high-level services shareholders have come to expect.
The With respect to the Portfolios, the Reorganization will consolidate the Target Portfolio and the Acquiring Portfolio, providing an opportunity to improve overall economies of scale in the near term. In addition, shareholders of the Target Portfolio are expected to benefit from reduced total gross and net expenses as shareholders of the Combined Portfolio (as Repositioned) following the Reorganization. The Reorganization also provides shareholders of the Target Portfolio with the potential for improved performance as the Acquiring Portfolio has outperformed, and hypothetically as repositioned would have outperformed each Target Portfolio.
3.
Comment: Please supplementally explain if the Repositioning of the Acquiring Portfolio was approved by the Board of Trustees of the Registrant and if the Repositioning requires shareholder approval.
Response: The Registrant confirms that the Board of Trustees approved matters related to the Repositioning of each Acquiring Portfolio. These matters do not separately require shareholder approval. In particular, the Board relied upon exemptive relief issued to the Registrant to appoint new subadvisers to the Acquiring Portfolio (the Manager-of-Managers Order). Subject to certain conditions, the Manager-of-Managers Order permits the Manager to hire subadvisers that are either indirectly or directly wholly-owned subsidiaries of, or that are not affiliated with, the Manager, and to make changes to certain existing subadvisory agreements with the approval of the Board of Trustees of the Registrant without obtaining shareholder approval.
4.
Comment: Please supplementally explain what will happen to the Target Portfolios in the event the Reorganizations are not approved by shareholders.
Response: In the event the Reorganizations are not approved by shareholders, the Target Portfolios will not be merged into the Acquiring Portfolio and each Target Portfolio will continue to be managed per each Portfolio’s prospectus guidelines. In addition, the Acquiring Portfolio will not be Repositioned.
5.
Comment: The third bullet in the answer to Q5 under “IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE PROPOSAL” states the annualized estimated benefit to shareholders of each Target Portfolio from the Reorganization. Please confirm the amounts listed in each Registration Statement and whether the amount applies to the combined savings for all four Target Portfolios. In addition, please clarify if such savings result from temporary fee reductions through waivers and if so, disclose that expenses may increase upon expiration of such waivers.
Response: The Registrant confirms that the estimated amount of shareholder savings disclosed in Question 5 is accurate for each Reorganization. The amounts reflect savings that primarily result from a permanent contractual reduction in the management fee payable by each Target Portfolio following the Reorganization (the so-called Management Fee Reduction) and not a temporary contractual waiver subject to expiration. The savings reflect the combined savings for all Target Portfolios.
6.
Comment: Please supplementally explain if the Registrant intends to file a post-effective amendment under Rule 485(a) of the Securities Act of 1933.
Response: The Registrant has determined that there are no material changes to the Acquiring Portfolio due to the Repositioning. The Registrant intends to file a prospectus supplement which will outline the Repositioning. In addition, subject to the Manager-of-Managers Order, the Registrant will file and mail an Information Statement pursuant to Section 14(c) of the Securities Exchange Act of 1934 to shareholders of the Acquiring Portfolio.
7.
Comment: Please explain why the Repositioning of the Acquiring Portfolio is conditioned on the Reorganization of each Target Portfolio.
Response: The Repositioning is contingent upon shareholder approval of the Reorganizations because the strategy and subadviser changes contemplated by the Repositioning require the increased scale and elimination of strategies provided by the consolidation of assets and subadvisers of the Portfolios through the Reorganization.
8.
Comment: Please explain the changes resulting from the Repositioning in Q6 under “IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE PROPOSAL.” In addition, consider a cross-reference to the related discussion later in the Prospectus/Proxy Statement.
Response: The Registrant has revised Q6 to describe the Repositioning and has added a cross reference to the discussion regarding the Repositioning that appears later in the Prospectus/Proxy Statement as shown below for the Reorganization of the AST ClearBridge Dividend Growth Portfolio, AST Cohen & Steers Realty Portfolio, AST MFS Global Equity Portfolio, and AST T. Rowe Price Natural Resources Portfolio, into AST Large-Cap Core Portfolio (similar edits, as applicable, will be made to the other Registration Statements).
Q6. WHAT WILL HAPPEN TO THE TARGET PORTFOLIO'S CURRENT INVESTMENTS?
A. As explained further in the attached Prospectus/Proxy Statement, effective on or about the date of the Reorganizations, which is expected to be on or about January 27, 2025, the Acquiring Portfolio will be "repositioned.," The Repositioning which involves hiring ClearBridge Investments, LLC and Dimensional Fund Advisors LP as additional subadvisers to the Acquiring Portfolio to serve alongside J.P. Morgan Investment Management, Inc. and PGIM Quantitative Solutions LLC, and making certain changes to the Acquiring Portfolio’s principal investment strategies (collectively, the “Repositioning”). In addition, effective on such date, the Acquiring Portfolio will be renamed “AST Large-Cap Equity Portfolio,” and the contractual management fee for the Acquiring Portfolio will be reduced on the date of the Repositioning pursuant to the Management Fee Reduction. The Manager will not move forward with the Repositioning or the Management Fee Reduction if the Reorganization is not approved. The Repositioning is contingent upon shareholder approval of each Reorganization because the strategy and subadviser changes contemplated by the Repositioning require the increased scale and rationalization of strategies provided by the consolidation of assets and subadvisers of the Portfolios through the Reorganizations.
The extent to which the securities of the Target Portfolios will be retained in the Combined Portfolio (as Repositioned) by the Acquiring Portfolio will be determined by the consistent w investment objective and strategies subadvisers to the Combined Portfolio (as Repositioned), as repositioned and in effect as of the date of the Reorganization. It is expected that approximately 46.7% of the securities of the Target Portfolios will be retained in connection with the Reorganization and Repositioning. Please see Q8 for additional information on the costs associated with the Reorganization and Repositioning. Please see pages ___ -___ of the attached Prospectus Proxy Statement for a comparison of the principal investment strategies of the Target Portfolios, Acquiring Portfolio, and the Combined Portfolio (as Repositioned). In addition, please see Q8 for additional information on the costs associated with the Reorganization and Repositioning.
9.
Comment: Q6 under “IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE PROPOSAL” states the percentage of the securities of the Target Portfolio that will be retained in connection with the Reorganization. Please supplementally confirm the percentage of Target Portfolio securities that are expected to be retained in connection with the Reorganization and whether such securities will be managed by the same subadvisers in the Combined Portfolio (as Repositioned). In addition, please supplementally confirm if the subadvisers appointed in connection with the Repositioning are appointed to reposition the Acquiring Portfolio only or if they will be retained following the Repositioning and Reorganization.
Response
: The Registrant confirms the accuracy of the percentage of securities that will be retained in connection with each Reorganization. For the subadvisers that are remaining, it is expected that those Target Portfolio securities retained will be managed by the same subadvisers to the Combined Portfolio (as Repositioned) as acquired such securities on behalf of the applicable Target Portfolio. The subadvisers to the Combined Portfolio (as Repositioned) are appointed to manage those Acquiring Portfolio assets allocated by the Manager on an ongoing basis, beyond the period necessary to reposition the Acquiring Portfolio, subject to oversight by the Manager and the Board of the Registrant.
10.
Comment: The Staff notes that Q7 under “IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE PROPOSAL” states that “[t]he Board considered information regarding any potential adverse impact to shareholders as a result of the Reorganization.” Please briefly identify what was considered.
Response: The Registrant confirms that the significant factors, including any adverse factors as applicable, with respect to the Board’s decision to approve the Reorganization are adequately set forth in the Registration Statement.
11.
Comment: Please confirm if the Board unanimously approved the Reorganization. If the Board did not unanimously approve the Reorganization, please explain why the Board did not unanimously approve.
Response: The Registrant has reviewed the disclosure and respectfully submits that the current disclosure is sufficient to meet the applicable requirements of Form N-14. Additionally, the Registrant respectfully submits that there is no requirement in Form N-14 or Form N-1A that requires the requested disclosure.
12.
Comment: Please ensure that all hyperlinks properly link to the referenced filings that are incorporated by reference.
Response: The Registrant confirms the hyperlinks to each document incorporated by reference in the Registration Statements are correct.
1.
Comment: Q8 under “IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE PROPOSAL,” states that the Manager will pay the costs of the Reorganization other than transaction costs. Please confirm the amounts of such transaction costs and clarify the disclosure regarding whether such transaction costs include transaction costs related to the Repositioning.
Response: The Registrant confirms the accuracy of the estimated transaction costs disclosed in the Registration Statement. The Registrant has added the following disclosures to Q8 to clarify the transaction costs borne by shareholders.
These transaction costs relate to aligning the portfolio holdings of the Target Portfolio in anticipation of the Reorganization with the portfolio holdings of the repositioned Acquiring Portfolio. Shareholders of the Target Portfolio[s] will not bear any costs associated with the Repositioning of the Acquiring Portfolio.
2.
Comment: Q16 under “WILL SHAREHOLDERS BE ALLOWED TO TRANSFER OUT OF THE TARGET PORTFOLIOS WITHOUT PENALTY AND WITHOUT BEING REQUIRED TO USE ONE OF THEIR ALLOTTED TRANSFERS?” Please clarify that contract owners will be allowed one free transfer out of each Target Portfolio without penalty.
Response: The Regi