CORRESP 1 filename1.htm

 

Sit Mutual Funds

3300 IDS Center, 80 South Eighth Street

Minneapolis, MN 55402

612-332-5580

 

 

 

July 12, 2011 VIA EDGAR

 

Ms. Laura Hatch

Division of Investment Management

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

 

RE:     Series ID   Class ID   File Number  
  Sit Mid Cap Growth Fund, Inc   S000011802   C000032269   811-03342  
  Sit Large Cap Growth Fund, Inc   S000011803   C000032270   811-03343  
  Sit U.S. Government Securities Fund, Inc   S000011654   C000032004   811-04995  
  Sit Mutual Funds, Inc              
     Sit International Growth Fund   S000003461   C000009595   811-06373  
     Sit Balanced Fund   S000003462   C000009596   811-06373  
     Sit Developing Markets Growth Fund   S000003463   C000009597   811-06373  
     Sit Small Cap Growth Fund   S000003464   C000009598   811-06373  
     Sit Dividend Growth Fund - Class I   S000003466   C000009600   811-06373  
     Sit Dividend Growth Fund - Class S   S000003466   C000033658   811-06373  
     Sit Global Dividend Growth Fund - Class I   S000023468   C000069003   811-06373  
     Sit Global Dividend Growth Fund - Class S   S000023468   C000071096   811-06373  
  Sit Mutual Funds II, Inc              
     Sit Tax-Free Income Fund   S000003467   C000009601   811-04033  
     Sit MN Tax-Free Income Fund   S000003468   C000009602   811-04033  
     Sit High Income Municipal Bond Fund - Class I   S000015046   C000040905   811-04033  

(the “Registrants”)

 

Dear Ms. Hatch:

 

This is correspondence in connection with your review of the Registrants’ financial statements and other filings. This correspondence responds to your comments provided to me via the telephone on June 28, 2011 and notes the changes that will be made in subsequent filings in response to such comments.

 

I address each of your comments below in the order discussed.

 

1.      Rule 17g-1(g)(1)(B)(iii) requires that the fidelity bond information filed with the SEC (filing type 40-17G) include “a statement showing the amount of the single insured bond which the investment company would have provided and maintained had it not been named as an insured under a joint insured bond…”

 

The form 40-17G filed on November 10, 2011 did not include the information required in item (iii). Ms. Hatch clarified that the information include the cost of a single bond for each fund as provided by the underwriter. Future filings will include this information.

 

2.      Sit U.S. Government Securities Fund. Prospectus dated August 1, 2010, Fees and Expenses of the Fund. The expense example was calculated based on the expenses after the waiver in years 3, 5 and 10. It was noted that (as of August 1, 2010) the fee waiver could be terminated after December 31, 2011.

 

 

  

 

Effective November 1, 2010, the Sit U.S. Government Securities Fund management fee was contractually changed to 0.8% which is equal to the fee after the fee waiver prior to November 1, 2010. The prospectus dated August 1, 2011 will reflect the management fee of 0.8%.

 

3.      Tax-Free Income Fund. Prospectus dated August 1, 2010. As of March 31, 2011 the closed-end funds held by the Fund totaled 6.9% of the Fund’s assets. Closed-end funds are not discussed in the prospectus. Ms. Hatch suggested adding a discussion regarding the Fund’s investments in closed-end funds.

 

The prospectus dated August 1, 2011 will include a reference regarding the Fund’s investment in closed-end funds.

 

4.      Sit U. S. Government Securities Fund. Financial statements dated March 31, 2011, Notes to Financial Statements, note 3, Investment Security Transactions. Section 30(e)(6) of the Investment Company Act of 1940 provides that the semi-annual reports include “a statement of the aggregate dollar amounts of purchases and sales of investment securities, other than Government securities, made during the period covered by the report.”

 

The amounts reported in the Fund’s financial statements in note 3 Investment Security Transactions as of March 31, 2011 included government securities, however the amounts reported should have excluded government securities. The Investment Security Transactions note in the Fund’s future financial statements will exclude the purchases and sales of government securities, and an additional note to the financial statements will include the aggregate dollar amounts of purchases and sales of government securities.

 

5.      Sit International Growth Fund and Sit Developing Markets Growth Fund Annual Report as of June 30, 2010, Notes to Financial Statements 4, and Financial Highlights, notes 5 and 4 respectively. Each Fund received proceeds from market timing settlements. The Notes to Financial Statements should include the impact on the Funds’ total return during the period, if material. In addition, the Notes to Financial Statements should include the impact on performance from the receipt of litigation settlements, if any.

 

Future financial statements will refer to market timing settlements and litigation settlements paid to the Funds in the Financial Highlights section, and will include the impact of settlement proceeds on total return in the Notes to Financial Statements.

 

I believe this letter is responsive to all of your comments. Please call me with any questions.

 

 

Sincerely,

 

/s/ Paul E. Rasmussen

 

Paul E. Rasmussen

Vice President

 

 

 

 

2