0000746601 2012-01-01 2012-12-31 0000746601 smfi2:S000039473Member smfi2:C000121593Member 2012-01-01 2012-12-31 0000746601 smfi2:S000039473Member 2012-01-01 2012-12-31 pure iso4217:USD 2012-12-31 485BPOS SIT MUTUAL FUNDS II INC 0000746601 2012-12-17 2012-12-31 2012-12-17 false 0 0.009 0.009 92 288 SUMMARY INFORMATION INVESTMENT OBJECTIVE The Fund seeks high current income and safety of principal. FEES AND EXPENSES OF THE FUND This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. 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) Example This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. It assumes that you invest $10,000 in the Fund for the time periods indicated (with reinvestment of all dividends and distributions), that your investment has a 5% return each year, that the Fund’s operating expenses remain the same, and that you redeem all of your shares at the end of those periods. Although your actual costs and returns may differ, based on these assumptions your costs would be: PORTFOLIO TURNOVER The Fund pays transactions costs, such as 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 in the example, affect the Fund’s performance. The Fund’s inception date was December 31, 2012 therefore there is no turnover rate to report. PRINCIPAL INVESTMENT STRATEGIES PRINCIPAL INVESTMENT RISKS HISTORICAL PERFORMANCE The Fund’s inception was December 31, 2012 and therefore there is no performance information to report at this time. For current performance information, call 1-800-332-5580 or visit www.sitfunds.com. The Fund’s past performance does not necessarily indicate how it will perform in the future. You could lose money by investing in the Fund. The Fund’s inception was December 31, 2012 and therefore there is no performance information to report at this time. www.sitfunds.com 1-800-332-5580 The Fund’s past performance does not necessarily indicate how it will perform in the future. <div style="display:none">~ http://www.sitfunds.com/role/ScheduleShareholderFeesSitQualityIncomeFund column period compact * ~</div> <div style="display:none">~ http://www.sitfunds.com/role/ScheduleAnnualFundOperatingExpensesSitQualityIncomeFund column period compact * ~</div> <div style="display:none">~ http://www.sitfunds.com/role/ScheduleExpenseExampleTransposedSitQualityIncomeFund column period compact * ~</div> The Fund seeks to achieve its objective by investing under normal market conditions at least 80% of its assets in debt securities issued by the U.S. government and its agencies, debt securities issued by corporations, mortgage and other asset-backed securities. The Fund invests at least 50% of its assets in U.S. government debt securities, which are securities issued, guaranteed or insured by the U.S. government, its agencies or instrumentalities. The balance of the Fund’s assets will be invested in investment grade debt securities issued by corporations and municipalities, and mortgage and other asset backed securities. Investment grade debt securities are rated at the time of purchase within the top four rating categories by a Nationally Recognized Statistical Rating Organization or of comparable quality as determined by the Fund’s investment adviser (the “Adviser”). The Fund’s dollar-weighted average portfolio quality is expected to be “A” or better. The U.S. government securities in which the Fund will invest include direct obligations of the U.S. Treasury and securities issued or guaranteed by federal agencies or authorities and U. S. government-sponsored instrumentalities or enterprises. The Fund will invest in pass-through securities. Pass-through securities include mortgage-backed securities such as those issued by Government National Mortgage Association (GNMA), Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (FHLMC). GNMA is an agency of the U.S. government and its securities are backed by the full faith and credit of the U.S. government. FNMA and FHLMC are U.S. government sponsored enterprises and their securities are backed by their credit. The Fund may invest in securities that have not been registered for sale under the Securities Act of 1933 pursuant to Rule 144A (Rule 144A securities) which are determined to be liquid by the Adviser. The Fund may seek to hedge the Fund’s duration by investing in interest rate futures and options, but not in excess of 5% of the Fund’s net assets. In selecting securities for the Fund, the Adviser seeks securities providing relatively high current income. In making purchase and sales decisions for the Fund, the Adviser considers its economic outlook and interest rate forecast, as well as its evaluation of a security’s credit quality, yield, maturity, liquidity and the security’s sector. The Adviser attempts to maintain an average effective duration for the portfolio of approximately 0 to 2 years. The Adviser’s duration target within this range is based on its interest rate forecast. Duration is a measure of total price sensitivity relative to changes in interest rates. Portfolios with shorter durations are typically less sensitive to changes in interest rates. As with all mutual funds investing in bonds, the price and yield of the Fund may change daily due to interest rate changes and other factors. You could lose money by investing in the Fund. The principal risks of investing in the Fund are as follows: <ul type="square"><li style="margin-left: 65px"><blockquote style="margin-left: 20px">Call Risk: Many bonds may be redeemed (“called”) at the option of the issuer before their stated maturity date. In general, an issuer will call its bonds if they can be refinanced by issuing new bonds which bear a lower interest rate. The Fund would then be forced to invest the unanticipated proceeds at lower interest rates, resulting in a decline in the Fund’s income.</blockquote></li></ul><ul type="square"><li style="margin-left: 65px"><blockquote style="margin-left: 20px">Credit Risk: The issuers or guarantors of securities (including U.S. government agencies and instrumentalities issuing securities that are not guaranteed by the full faith and credit of the U.S. government) owned by the Fund may default on the payment of principal or interest, or the other party to a contract may default on its obligations to the Fund, causing the value of the Fund to decrease.</blockquote></li></ul><ul type="square"><li style="margin-left: 65px"><blockquote style="margin-left: 20px">Income Risk: The income you earn from the Fund may decline due to declining interest rates.</blockquote></li></ul><ul type="square"><li style="margin-left: 65px"><blockquote style="margin-left: 20px">Interest Rate Risk: An increase in interest rates may lower the Fund’s value and the overall return on your investment. The magnitude of this decrease is often greater for longer-term fixed income securities than shorter-term securities.</blockquote></li></ul><ul type="square"><li style="margin-left: 65px"><blockquote style="margin-left: 20px">Liquidity Risk: The Fund may not be able to pay redemption proceeds within the time periods described in this Prospectus because of an inability to sell certain debt securities with more limited trading opportunities at a favorable price or time. Recent events have caused the markets for some debt securities to experience lower valuations and reduced liquidity. Consequently, the Fund may have to accept a lower price to sell a security, sell other securities to raise cash, or give up an investment opportunity, any of which could have a negative effect on the Fund’s performance. Infrequent trading may also lead to greater price volatility.</blockquote></li></ul><ul type="square"><li style="margin-left: 65px"><blockquote style="margin-left: 20px">Management Risk: A strategy used by the investment management team may not produce the intended results.</blockquote></li></ul><ul type="square"><li style="margin-left: 65px"><blockquote style="margin-left: 20px">Market Risk: The market value of securities may fall or fail to rise. Market risk may affect a single issuer, sector of the economy, industry, or the market as a whole. The market value of securities may fluctuate, sometimes rapidly and unpredictably.</blockquote></li></ul><ul type="square"><li style="margin-left: 65px"><blockquote style="margin-left: 20px">Mortgage and Asset-Backed Securities Risk: The value of these securities may be adversely affected by factors including changes in interest rates, the market value of the underlying assets, and the creditworthiness of the issuer or entities that provide credit enhancements. These securities are subject to prepayment risk and the impact of prepayments on the value of these securities may be difficult to predict and may result in greater volatility.</blockquote></li></ul><ul type="square"><li style="margin-left: 65px"><blockquote style="margin-left: 20px">Prepayment and Extension Risk: Declining interest rates may compel borrowers to prepay mortgages and debt obligations un- derlying the mortgage-backed securities owned by the Fund. The proceeds received by the Fund from prepayments will likely be reinvested at interest rates lower than the original investment, thus resulting in a reduction of income to the Fund. Likewise, rising interest rates could reduce prepayments and extend the life of securities with lower interest rates, which may increase the sensitivity of the Fund’s value to rising interest rates.</blockquote></li></ul><ul type="square"><li style="margin-left: 65px"><blockquote style="margin-left: 20px">Reinvestment Risk: Income from the Fund’s debt securities portfolio will decline if and when the Fund invests the proceeds from matured, traded or called securities in securities with market interest rates that are below the current earnings rate of the Fund’s portfolio.</blockquote></li></ul><ul type="square"><li style="margin-left: 65px"><blockquote style="margin-left: 20px">Rule 144A Securities Risk: The value and liquidity of these securities may be adversely affected in the event that the number of qualified institutional buyers interested in purchasing 144A securities is limited, the Fund might be unable to dispose of such securities promptly or at reasonable prices, and they may be subject to greater volatility.</blockquote></li></ul><ul type="square"><li style="margin-left: 65px"><blockquote style="margin-left: 20px">U.S. Government Securities Risk: Securities purchased by the Fund issued by Fannie Mae and Freddie Mac are neither issued nor guaranteed by the U.S. Treasury and, therefore, are not backed by the full faith and credit of the United States. There is a risk that the U.S. government will not provide financial support to U.S. government agencies or instrumentalities if it is not obligated to do so by law.</blockquote></li></ul><ul type="square"><li style="margin-left: 65px"><blockquote style="margin-left: 20px">Valuation Risk: The Fund may hold securities for which prices from pricing services may be unavailable or are deemed un- reliable, in which case the Fund’s procedures for valuing investments provide that the Adviser shall use the fair value of such securities for valuing investments. There is a risk that the fair value determined by the Adviser or the price determined by the pricing service may be different than the actual sale prices of such securities.</blockquote></li></ul>