TRANSAMERICA SERIES TRUST
Transamerica PIMCO Total Return VP
Supplement to the Currently Effective Prospectus, Summary Prospectus and Statement of Additional Information
The Board of Trustees has approved the termination of Pacific Investment Management Company LLC as sub-adviser to Transamerica PIMCO Total Return VP (the “portfolio”). The Board has also approved a new investment sub- advisory agreement with Aegon USA Investment Management, LLC (“AUIM”), an affiliate of Transamerica Asset Management, Inc. (“TAM”), the portfolio’s investment manager, subject to approval by the portfolio’s investors.
Because AUIM is an affiliate of TAM, the new investment sub-advisory agreement between TAM and AUIM with respect to the portfolio must be approved by investors. A proxy statement describing the proposed sub-advisory agreement is expected to be mailed to portfolio investors in August 2022. If approved by portfolio investors, it is anticipated that the change in sub-adviser would occur on or about November 1, 2022. At that time, among other things, the portfolio is expected to be renamed and certain changes would be made to the portfolio’s investment objective, principal investment strategies, principal risks, management fee schedule and sub-advisory fee schedule.
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Investors Should Retain this Supplement for Future Reference
June 28, 2022
Transamerica Aegon Core Bond VP (formerly, Transamerica JPMorgan Core Bond VP) Supplement to the Currently Effective Prospectus and Summary Prospectus
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Effective November 1, 2022, following investor approval, Transamerica Asset Management, Inc. (“TAM”) is replacing J.P. Morgan Investment Management, Inc. (“JPMorgan”) with Aegon USA Investment Management, LLC as sub-adviser to the above-named portfolio.
In connection with the change in sub-adviser: (i) the portfolio is renamed Transamerica Aegon Core Bond VP; (ii) the portfolio’s investment objective, principal investment strategies (including its 80% investment policy) and principal investment risks have changed; and (iii) the portfolio’s management fee and sub-advisory fee schedules have changed. TAM continues to serve as the portfolio’s investment manager.
Effective November 1, 2022, the following information supplements and supersedes any contrary information contained in the Prospectus and Summary Prospectus, as applicable, concerning the portfolio.
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The portfolio’s management fee schedule is as follows.
TAM will receive compensation from the portfolio, calculated daily and paid monthly, at the annual rates (expressed as a percentage of the portfolio’s average daily net assets) indicated below:
First $1 billion......................................................................................................... 0.42%
Over $1 billion up to $2 billion............................................................................ 0.38%
Over $2 billion up to $3.5 billion......................................................................... 0.365%
Over $3.5 billion up to $5 billion......................................................................... 0.36%
In excess of $5 billion............................................................................................ 0.355%
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The portfolio’s investment objective is as follows:
Seeks to achieve maximize total return.
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The “Annual Fund Operating Expenses” table included in the “Fees and Expenses” section of the Prospectus and Summary Prospectus is deleted in its entirety and replaced with the following:
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Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) |
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|
Class |
Initial |
Service |
|
Management fees1 |
0.42% |
0.42% |
|
Distribution and service (12b-1) fees |
None |
0.25% |
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Other expenses |
0.07% |
0.07% |
|
Total annual fund operating expenses |
0.49% |
0.74% |
1 Management fees have been restated to reflect a reduction in management fees effective November 1, 2022.
The “Example” table included in the Prospectus and Summary Prospectus is deleted in its entirety and replaced with the following:
Example: This Example is intended to help you compare the cost of investing in the portfolio with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the portfolio for the time periods indicated and then redeem all shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the portfolio’s operating expenses remain the same. The Example does not reflect charges that are, or may be, imposed under your variable life insurance
policy or variable annuity contract. If such charges were reflected, costs would be higher. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
|
|
1 year |
3 years |
5 years |
10 years |
|
Initial Class |
$50 |
$157 |
$274 |
$616 |
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Service Class |
$76 |
$237 |
$411 |
$918 |
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The portfolio’s principal investment strategies are as follows:
The portfolio’s sub-adviser, Aegon USA Investment Management, LLC (the “sub-adviser”), seeks to achieve the fund’s objective by investing, under normal circumstances, primarily in investment grade debt securities, which may include: investment grade corporate securities, U.S. government obligations, mortgage-backed securities guaranteed by U.S. government agencies and instrumentalities, and private residential mortgage-backed securities. Under normal circumstances, the portfolio invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in fixed-income securities. The portfolio’s weighted average duration will typically range from 3 to 10 years. Duration is a measure used to determine the sensitivity of a security’s price to changes in interest rates. The longer a security’s duration, the more sensitive it will be to changes in interest rates. The portfolio may also invest in U.S. Treasury and agency securities, municipal bonds, asset-backed securities (including collateralized loan obligations (“CLOs”), collateralized bond obligations (“CBOs”) and collateralized debt obligations (“CDOs”)), commercial mortgage-backed securities (“CMBS”), high quality short-term debt obligations and repurchase agreements. The portfolio’s investments may include debt securities of foreign issuers, including emerging market debt securities. The portfolio may invest in securities that are denominated in U.S. dollars and in foreign currencies.
The portfolio may invest up to 10% of its net assets in emerging market debt securities and up to 10% of its net assets in high-yield debt securities (commonly referred to as “junk bonds”), but may invest no more than 15% of its net assets in emerging market debt securities and high-yield debt securities combined. Investment grade debt securities carry a rating of at least BBB from Standard & Poor’s or Fitch or Baa from Moody’s or are of comparable quality as determined by the sub-adviser.
The sub-adviser uses a combination of a global “top-down” analysis of the macroeconomic and interest rate environment and proprietary “bottom-up” research of corporate, government and agency debt, and other debt instruments. In the sub-adviser’s “top- down” approach, the sub-adviser analyzes various fundamental, technical, sentiment and valuation factors that affect the movements of markets and securities prices worldwide. In its proprietary “bottom-up” research, the sub-adviser considers various fundamental and other factors, such as creditworthiness, capital structure, covenants, cash flows and, as applicable, collateral. The sub-adviser uses this combined “top-down” and “bottom-up” approach to determine sector, security, yield curve, and duration positions for the portfolio. The sub-adviser’s research analysts also integrate environmental, social and governance (“ESG”) matters within their analytical process for public corporate, sovereign and structured issuers alongside traditional credit metrics as a risk management tool and as a method to identify financially material ESG factors and arrive at an independent, comprehensive view of the investment. Consideration of ESG matters is subjective and not determinative in the sub-adviser’s investment process. The sub- adviser may conclude that other attributes of an investment outweigh ESG considerations when making investment decisions. The sub‐adviser’s research analysts do not take ESG factors into consideration with respect to every investment in the portfolio.
The portfolio may, but is not required to, engage in certain investment strategies involving derivatives, such as options, futures, forward currency contracts and swaps, including, but not limited to, interest rate, total return and credit default swaps. These investment strategies may be employed as a hedging technique, as a means of altering investment characteristics of the portfolio (such as shortening or lengthening duration), in an attempt to enhance returns or for other purposes.
The portfolio may purchase securities on a when-issued, delayed delivery or forward commitment basis.
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The following principal risks will be added to the “Principal Risks” section for the portfolio included in the Prospectus and Summary Prospectus: Inflation, Focused Investing, Currency Hedging, Dollar Rolls, Emerging Markets, Hedging, High-Yield Debt Securities, Inflation-Protected Securities, Loans, Municipal Securities, Repurchase Agreements, Sovereign Debt, To Be Announced (TBA) Transactions, and Yield.
The portfolio’s principal risks are as follows:
Market – The market prices of the portfolio’s securities or other assets may go up or down, sometimes rapidly or unpredictably, due to general market conditions, overall economic trends or events, inflation, changes in interest rates, governmental actions or interventions, actions taken by the U.S. Federal Reserve or foreign central banks, market disruptions caused by tariffs, trade disputes
or other factors, political developments, investor sentiment, the global and domestic effects of a pandemic, and other factors that may or may not be related to the issuer of the security or other asset. If the market prices of the portfolio’s securities and assets fall, the value of your investment will go down.
Economies and financial markets throughout the world are increasingly interconnected. Economic, financial or political events, trading and tariff arrangements, public health events (such as the spread of infectious disease), wars, terrorism, cybersecurity events, technology and data interruptions, natural disasters, and other circumstances in one or more countries or regions could be highly disruptive to, and have profound impacts on, global economies or markets. As a result, whether or not the portfolio invests in securities of issuers located in or with significant exposure to the countries directly affected, the value and liquidity of the portfolio’s investments may go down.
The pandemic of the novel coronavirus respiratory disease designated COVID-19 has resulted in extreme volatility in the financial markets, a domestic and global economic downturn, severe losses, particularly to some sectors of the economy and individual issuers, and reduced liquidity of many instruments. There also have been significant disruptions to business operations, including business closures; strained healthcare systems; disruptions to supply chains and employee availability; large fluctuations in consumer demand; and widespread uncertainty regarding the duration and long-term effects of the pandemic. The domestic and global economic downturn may be prolonged. The pandemic may result in domestic and foreign political and social instability, damage to diplomatic and international trade relations, and continued volatility and/or decreased liquidity in the securities markets. Developing or emerging market countries may be more impacted by the pandemic.
The U.S. government and the Federal Reserve, as well as certain foreign governments and central banks, have taken extraordinary actions to support local and global economies and the financial markets in response to the COVID-19 pandemic, including by pushing interest rates to very low levels. This and other government intervention into the economy and financial markets to address the pandemic may not work as intended, particularly if the efforts are perceived by investors as being unlikely to achieve the desired results. Government actions to mitigate the economic impact of the pandemic have resulted in large expansion of government deficits and debt, the long-term consequences of which are not known. Rates of inflation have recently risen, which could adversely affect economies and markets.
The COVID-19 pandemic could continue to adversely affect the value and liquidity of the portfolio’s investments, impair the portfolio’s ability to satisfy redemption requests, and negatively impact the portfolio’s performance. In addition, the pandemic, and measures taken to mitigate its effects, could result in disruptions to the services provided to the portfolio by its service providers.
Fixed-Income Securities – Risks of fixed-income securities include credit risk, interest rate risk, counterparty risk, prepayment risk, extension risk, valuation risk, and liquidity risk. The value of fixed-income securities may go up or down, sometimes rapidly and unpredictably, due to general market conditions, such as real or perceived adverse economic or political conditions, tariffs and trade disruptions, inflation, changes in interest rates, lack of liquidity in the bond markets or adverse investor sentiment. In addition, the value of a fixed-income security may decline if the issuer or other obligor of the security fails to pay principal and/or interest, otherwise defaults or has its credit rating downgraded or is perceived to be less creditworthy, or the credit quality or value of any underlying assets declines. If the value of fixed-income securities owned by the portfolio falls, the value of your investment will go down. The portfolio may lose its entire investment in the fixed-income securities of an issuer.
Interest Rate – Interest rates in the U.S. and certain foreign markets have been low relative to historic levels. The portfolio faces a risk that interest rates may rise. The value of fixed-income securities generally goes down when interest rates rise. A rise in rates tends to have a greater impact on the prices of longer term or duration securities. Changes in interest rates also may affect the liquidity of the portfolio’s investments. A general rise in interest rates may cause investors to sell fixed-income securities on a large scale, which could adversely affect the price and liquidity of fixed-income securities generally and could also result in increased redemptions from the portfolio. Increased redemptions could cause the portfolio to sell securities at inopportune times or depressed prices and result in further losses.
Credit – If an issuer or other obligor (such as a party providing insurance or other credit enhancement) of a security held by the portfolio or a counterparty to a financial contract with the portfolio is unable or unwilling to meet its financial obligations, or is downgraded or perceived to be less creditworthy (whether by market participants or otherwise), or if the value of any underlying assets declines, the value of your investment will typically decline. A decline may be significant, particularly in certain market environments. In addition, the portfolio may incur costs and may be hindered or delayed in enforcing its rights against an issuer, obligor or counterparty.
Mortgage-Related and Asset-Backed Securities – The value of mortgage-related and asset-backed securities will be influenced by factors affecting the housing market and the assets underlying such securities. As a result, during periods of declining asset values, difficult or frozen credit markets, swings in interest rates, or deteriorating economic conditions, mortgage-related and asset- backed securities may decline in value, face valuation difficulties, become more volatile and/or become illiquid, which could negatively impact the portfolio. Mortgage-backed securities represent direct or indirect participations in, or are collateralized by and payable from, mortgage loans secured by real property. Asset-backed securities represent participations in, or are secured by and payable from, assets such as installment sales or loan contracts, leases, credit card receivables and other categories of
receivables. The value of mortgage-backed and asset-backed securities may be affected by changes in credit quality or value of the mortgage loans or other assets that support the securities. Mortgage-backed and asset-backed securities are subject to prepayment or call and extension risks. Some of these securities may receive little or no collateral protection from the underlying assets.
Inflation – The value of assets or income from investment may be worth less in the future as inflation decreases the value of money. As inflation increases, the real value of the portfolio’s assets can decline as can the value of the portfolio’s distributions.
Liquidity – The portfolio may make investments that are illiquid or that become illiquid after purchase. Illiquid investments can be difficult to value, may trade at a discount from comparable, more liquid investments, and may be subject to wide fluctuations in value. If the portfolio is forced to sell an illiquid investment to meet redemption requests or other cash needs, the portfolio may be forced to sell at a substantial loss or may not be able to sell at all. Liquidity of particular investments, or even entire asset classes, including U.S. Treasury securities, can deteriorate rapidly, particularly during times of market turmoil, and those investments may be difficult or impossible for the portfolio to sell. This may prevent the portfolio from limiting losses.
Counterparty – The portfolio could lose money if the counterparties to derivatives, repurchase agreements and other financial contracts entered into for the portfolio do not fulfill their contractual obligations. In addition, the portfolio may incur costs and may be hindered or delayed in enforcing its rights against a counterparty.
Extension – When interest rates rise, repayments of fixed-income securities, including asset- and mortgage-backed securities, may occur more slowly than anticipated, causing their market prices to decline.
Prepayment or Call – Many issuers have a right to prepay their fixed-income securities. If this happens, the portfolio will not benefit from the rise in the market price of the securities that normally accompanies a decline in interest rates and may be forced to reinvest the prepayment proceeds in securities with lower yields.
Focused Investing – To the extent the portfolio invests in a limited number of countries, regions, sectors, industries or market segments, in a limited number of issuers, or in issuers in related businesses or that are subject to related operating risks, the portfolio will be more susceptible to negative events affecting those countries, regions, sectors, industries, segments or issuers, and the value of its shares may be more volatile than if it invested more widely.
Management – The value of your investment may go down if the Investment Manager’s or sub-adviser’s judgments and decisions are incorrect or otherwise do not produce the desired results, or if the investment strategy does not work as intended. You may also suffer losses if there are imperfections, errors or limitations in the quantitative, analytic or other tools, resources, information and data used, investment techniques applied, or the analyses employed or relied on, by the Investment Manager or sub-adviser, if such tools, resources, information or data are used incorrectly or otherwise do not work as intended, or if the Investment Manager’s or sub-adviser’s investment style is out of favor or otherwise fails to produce the desired results. Any of these things could cause the portfolio to lose value or its results to lag relevant benchmarks or other funds with similar objectives.
Active Trading – The portfolio may purchase and sell securities without regard to the length of time held. Active trading may be more pronounced during periods of market volatility and may have a negative impact on performance.
Currency – The value of a portfolio’s investments in securities denominated in foreign currencies increases or decreases as the rates of exchange between those currencies and the U.S. dollar change. U.S. dollar-denominated securities of foreign issuers may also be affected by currency risk. Currency exchange rates can be volatile and may fluctuate significantly over short periods of time. Currency conversion costs and currency fluctuations could reduce or eliminate investment gains or add to investment losses. A portfolio may be unable or may choose not to hedge its foreign currency exposure.
Currency Hedging – The portfolio may hedge its currency risk using currency futures, forwards or options. However, hedging strategies and/or these instruments may not always work as intended, and a portfolio may be worse off than if it had not used a hedging strategy or instrument. Certain countries may also impose restrictions on the exchange or export of currency or adverse currency exchange rates and may be characterized by a lack of available currency hedging instruments.
Derivatives – The use of derivatives involves a variety of risks, which may be different from, or greater than, the risks associated with investing in traditional securities, such as stocks and bonds. Risks of derivatives include leverage risk, liquidity risk, valuation risk, market risk, counterparty risk, credit risk, operational risk and legal risk. Use of derivatives can increase portfolio losses, increase costs, reduce opportunities for gains, increase fund volatility, and not produce the result intended. Certain derivatives have the potential for unlimited loss, regardless of the size of the initial investment. Even a small investment in derivatives can have a disproportionate impact on the portfolio. Derivatives may be difficult or impossible to sell, unwind or value, and the counterparty (including, if applicable, the portfolio’s clearing broker, the derivatives exchange or the clearinghouse) may default on its obligations to the portfolio. In certain cases, the portfolio may incur costs and may be hindered or delayed in enforcing its rights against or closing out derivatives instruments with a counterparty, which may result in additional losses. Derivatives are also generally subject to the risks applicable to the assets, rates, indices or other indicators underlying the derivative, including market risk, credit risk, liquidity risk, management and valuation risk. Also, suitable derivative transactions may not be available in all circumstances or at reasonable prices. The value of a derivative may fluctuate more or less than, or otherwise not correlate well
with, the underlying assets, rates, indices or other indicators to which it relates. The portfolio may segregate cash or other liquid or other assets to cover the funding of its obligations under derivatives contracts or make margin payments when it takes positions in derivatives involving obligations to third parties. New Rule 18f-4 under the 1940 Act provides a comprehensive regulatory framework for the use of derivatives by funds and imposes new requirements and restrictions on a portfolio’s investments in derivatives. Rule 18f-4 could have an adverse impact on the portfolio’s performance and its ability to implement its investment strategies as it has historically and may increase costs related to the portfolio’s use of derivatives. It is not currently clear what impact, if any, the new rule will have on the availability, liquidity or performance of derivatives. The new rule may not be effective to limit the risk of loss from derivatives.
Dollar Rolls – The use of dollar rolls is a speculative technique involving leverage, and can have an economic effect similar to borrowing money. Dollar roll transactions involve the risk that the market value of the securities the portfolio is required to purchase may decline below the agreed upon repurchase price of those securities. If the broker/dealer to whom the portfolio sells securities becomes insolvent, the portfolio’s ability to purchase or repurchase securities may be restricted.
Emerging Markets – Investments in securities of issuers located or doing business in emerging markets are subject to heightened foreign investments risks and may experience rapid and extreme changes in value. Emerging market countries tend to have less developed and less stable economic, political and legal systems and regulatory and accounting standards, may have policies that restrict investment by foreigners or that prevent foreign investors such as the portfolio from withdrawing their money at will, and are more likely to experience nationalization, expropriation and confiscatory taxation. In addition, emerging market securities may have low trading volumes and may be or become illiquid.
Foreign Investments – Investing in securities of foreign issuers or issuers with significant exposure to foreign markets involves additional risks. Foreign markets can be less liquid, less regulated, less transparent and more volatile than U.S. markets. The value of the portfolio’s foreign investments may decline, sometimes rapidly or unpredictably, because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable or unsuccessful government actions, reduction of government or central bank support, tariffs and trade disruptions, sanctions, political or financial instability, social unrest or other adverse economic or political developments. Foreign investments may also be subject to different accounting practices and different regulatory, legal, auditing, financial reporting and recordkeeping standards and practices, and may be more difficult to value than investments in U.S. issuers.
Hedging – The portfolio may buy and sell futures contracts, put and call options, forward contracts and other instruments as a hedge. The portfolio’s hedging strategies may not work as intended, and the portfolio may be in a less favorable position than if it had not used a hedging instrument.
High-Yield Debt Securities – High-yield debt securities, commonly referred to as “junk” bonds, are securities that are rated below “investment grade” or are of comparable quality. Changes in interest rates, the market’s perception of the issuers, the creditworthiness of the issuers and negative perceptions of the junk bond market generally may significantly affect the value of these bonds. Junk bonds are considered speculative, tend to be volatile, typically have a higher risk of default, tend to be less liquid and more difficult to value than higher grade securities, and may result in losses for the portfolio.
Inflation-Protected Securities – Inflation-protected debt securities may react differently from other types of debt securities and tend to react to changes in “real” interest rates, which represent nominal (stated) interest rates reduced by the expected impact of inflation. In general, the price of an inflation-protected debt security can fall when real interest rates rise, and can rise when real interest rates fall. Interest payments on inflation-protected debt securities can be unpredictable and will vary as the principal and/or interest is adjusted for inflation.
Large Shareholder – A significant portion of the portfolio’s shares may be owned by other portfolios sponsored by Transamerica. Transactions by these portfolios may be disruptive to the management of the portfolio. For example, the portfolio may experience large redemptions and could be required to sell securities at a time when it may not otherwise desire to do so. Such transactions may increase the portfolio’s brokerage and/or other transaction costs. These transactions may also accelerate the realization of taxable income to shareholders if such sales of investments resulted in gains. In addition, sizeable redemptions could cause the portfolio’s total expenses to increase.
Leveraging – To the extent that the portfolio borrows or uses derivatives or other investments, such as ETFs, that have embedded leverage, your investment may be subject to heightened volatility, risk of loss and costs. Other risks also will be compounded because leverage generally magnifies the effect of a change in the value of an asset and creates a risk of loss of value on a larger pool of assets than the portfolio would otherwise have. Use of leverage may result in the loss of a substantial amount, and possibly all, of the portfolio’s assets. The portfolio also may have to sell assets at inopportune times to satisfy its obligations or meet segregation, coverage or margin requirements.
LIBOR – Many financial instruments, financings or other transactions to which the portfolio may be a party use or may use a floating rate based on the London Interbank Offered Rate (“LIBOR”). The UK Financial Conduct Authority and LIBOR’s administrator announced that the use of LIBOR will be phased out; most LIBOR rates are no longer published as of the end of 2021
and a majority of U.S. dollar LIBOR rates will no longer be published after June 30, 2023. It is possible that a subset of LIBOR rates may be published after these dates on a “synthetic” basis, but any such publications would be considered non-representative of the underlying market. There remains uncertainty regarding the nature of any replacement rate and the impact of the transition from LIBOR on the portfolio, issuers of instruments in which the portfolio invests, and financial markets generally. As such, the potential effect of a transition away from LIBOR on the portfolio or the portfolio’s investments cannot yet be determined.
Loans – Loans are subject to the credit risk of nonpayment of principal or interest. Economic downturns or increases in interest rates may cause an increase in defaults, interest rate risk and liquidity risk. Loans may or may not be collateralized at the time of acquisition, and any collateral may be relatively illiquid or lose all or substantially all of its value subsequent to investment. The portfolio’s investments in loans are also subject to prepayment or call risk.
Municipal Securities – The municipal bond market can be susceptible to unusual volatility, particularly for lower-rated and unrated securities. Liquidity can be reduced unpredictably in response to overall economic conditions or credit tightening. Municipal issuers may be adversely affected by rising health care costs, increasing unfunded pension liabilities, and by the phasing out of federal programs providing financial support. The value of municipal securities can also be adversely affected by changes in the financial condition of one or more individual municipal issuers or insurers of municipal issuers, regulatory and political developments, tax law changes or other legislative actions, and by uncertainties and public perceptions concerning these and other factors. To the extent the portfolio invests significantly in a single state or in securities the payments on which are dependent upon a single project or source of revenues, or that relate to a sector or industry, the portfolio will be more susceptible to associated risks and developments. Municipal issuers may be more susceptible to downgrades or defaults during recessions or similar periods of economic stress. A number of municipal issuers have defaulted on obligations, commenced insolvency proceedings, or suffered credit downgrading. Financial difficulties of municipal issuers may continue or worsen.
Investment in municipal securities of issuers in Guam, Puerto Rico, the U.S. Virgin Islands, or other U.S. territories, may have more risks than tax-exempt securities issued by other issuers due to the political, social and/or economic conditions in the particular territory.
Privately Placed and Other Restricted Securities – Restricted securities, which include private placements of private and public companies, are subject to legal or contractual restrictions on their resale. Restricted securities may be difficult to sell at the time and price a portfolio prefers. Restricted securities may be difficult to value properly and may involve greater risks than securities that are not subject to restrictions on resale, both of which may result in substantial losses. An insufficient number of eligible buyers interested in purchasing restricted securities held by a portfolio could adversely affect the marketability of such securities and a portfolio might be unable to dispose of such securities promptly or at reasonable prices, adversely affecting a portfolio’s overall liquidity and performance. Restricted securities may not be listed on an exchange and may have no active trading market. A portfolio may incur additional expense when disposing of restricted securities. Restricted securities may involve a high degree of business and financial risk and may result in substantial losses to the portfolio.
Repurchase Agreements – In a repurchase agreement, the portfolio purchases securities from a broker-dealer or a bank, called the counterparty, upon the agreement of the counterparty to repurchase the securities from the portfolio at a later date, and at a specified price. The securities purchased serve as the portfolio’s collateral for the obligation of the counterparty to repurchase the securities. If the counterparty does not repurchase the securities, the portfolio is entitled to sell the securities, but the portfolio may not be able to sell them for the price at which they were purchased, thus causing a loss. If the counterparty becomes insolvent, there is some risk that the portfolio will not have a right to the securities, or the immediate right to sell the securities.
Sovereign Debt – Sovereign debt instruments are subject to the risk that the governmental entity may delay or fail to pay interest or repay principal on its sovereign debt. If a governmental entity defaults, it may ask for more time in which to pay or for further loans, or the debt may be restructured. There may be no established legal process for collecting sovereign debt that a government does not pay, nor are there bankruptcy proceedings through which all or part of the sovereign debt that a governmental entity has not repaid may be collected.
Sustainability and Environmental, Social and Governance (“ESG”) Considerations – Applying sustainability and/or ESG factors as part of the portfolio’s security selection process may impact the sub-adviser’s investment decisions. Sustainability and ESG factors are not uniformly defined and applying such factors involves subjective assessments. Sustainability and ESG ratings and assessments of issuers can vary across investment advisers (including sub-advisers) and third party data providers and may change over time. Sustainability and ESG factors can be difficult to apply consistently across issuers, regions, countries, industries or sectors. The application of these factors could negatively impact the portfolio’s performance. Sustainability and ESG information from issuers and from third party data providers may be incomplete, inaccurate or unavailable, which could lead to an incorrect assessment of a company’s sustainability or ESG characteristics.
To Be Announced (TBA)Transactions –Although the securities that are delivered in TBA transactions must meet certain standards, there is a risk that the actual securities received by the portfolio may be less favorable than what was anticipated when entering into the transaction. TBA transactions also involve the risk that a counterparty will fail to deliver the security, exposing the portfolio to further losses.
U.S. Government and Agency Obligations – Government agency obligations have different levels of credit support and, therefore, different degrees of credit risk. Securities issued by agencies and instrumentalities of the U.S. government that are supported by the full faith and credit of the U.S. government generally present a lesser degree of credit risk than securities issued by agencies and instrumentalities sponsored by the U.S. government that are supported only by the issuer’s right to borrow from the U.S. Treasury and securities issued by agencies and instrumentalities sponsored by the U.S. government that are supported only by the credit of the issuing agencies. A security backed by the “full faith and credit” of the U.S. government is guaranteed only as to its stated interest rate and face value at maturity, not its current market price.
Valuation – The sales price the portfolio could receive for any particular portfolio investment may differ from the portfolio's valuation of the investment, particularly for securities that trade in thin or volatile markets, that are priced based upon valuations provided by third party pricing services that use matrix or evaluated pricing systems, or that are valued using a fair value methodology. These differences may increase significantly and affect portfolio investments more broadly during periods of market volatility. Investors who purchase or redeem portfolio shares on days when the portfolio is holding fair-valued securities may receive fewer or more shares or lower or higher redemption proceeds than they would have received if the portfolio had not fair- valued securities or had used a different valuation methodology. The portfolio’s ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third party service providers.
Yield – The amount of income received by the portfolio will go up or down depending on day-to-day variations in short-term interest rates, and the portfolio’s expenses could absorb all or a significant portion of the portfolio’s income. If interest rates increase, the portfolio’s yield may not increase proportionately.
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The following replaces the corresponding information in the Prospectus and Summary Prospectus for the portfolio under the section entitled “Management”:
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Management: |
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Investment Manager: Transamerica Asset Management, Inc. Sub-Adviser: Aegon USA Investment Management, LLC |
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Portfolio Managers: |
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Bradley D. Doyle, CFA |
Portfolio Manager |
since November 2022 |
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Tyler A. Knight, CFA |
Portfolio Manager |
since November 2022 |
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Sivakumar N. Rajan |
Portfolio Manager |
since November 2022 |
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Brian W. Westhoff, CFA |
Portfolio Manager |
since November 2022 |
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The following information is added alphabetically to the sub-section titled “Recent Management Fee Changes” under the heading “Shareholder Information - Investment Manager” in the Prospectus:
Transamerica Aegon Core Bond VP (formerly, Transamerica JPMorgan Core Bond VP): Effective November 1, 2022, the management fee of the portfolio is 0.42% of the first $1 billion; 0.38% over $1 billion up to $2 billion; 0.365% over $2 billion up to $3.5 billion; 0.36% over $3.5 billion up to $5 billion; and 0.355% in excess of $5 billion in average daily net assets. Prior to November 1, 2022, the management fee was 0.45% of the first $750 million; 0.39% over $750 million up to $1 billion; 0.375% over $1 billion up to $1.5 billion; 0.37% over $1.5 billion up to $3 billion; and 0.365% in excess of $3 billion in average daily net assets.
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Investors Should Retain this Supplement for Future Reference
November 1, 2022
Transamerica Managed Risk – Balanced ETF VP Transamerica Managed Risk – Conservative ETF VP Transamerica Managed Risk – Growth ETF VP
Supplement to the Currently Effective Prospectus, Summary Prospectuses and Statement of Additional Information
* * *
Effective on or about November 1, 2022, Transamerica Asset Management, Inc. (“TAM”) will replace Milliman Financial Risk Management LLC (“Milliman”) as sub-adviser to Transamerica Managed Risk – Balanced ETF VP, Transamerica Managed Risk – Conservative ETF VP and Transamerica Managed Risk – Growth ETF VP (each, a “portfolio” and together, the “portfolios”) with Goldman Sachs Asset Management, L.P. (“GSAM”) as sub-adviser. An information statement will be made available to investors which will provide certain information about the new sub-adviser and the terms of the new sub-advisory agreement.
As discussed further below, in connection with the change in sub-adviser: (i) each portfolio will be renamed; (ii) each portfolio’s principal investment strategies will change; and (iii) each portfolio’s management fee and sub-advisory fee schedules will be lowered.
TAM will continue to serve as each portfolio’s investment manager.
Effective on or about November 1, 2022, the following information will supplement and supersede any contrary information contained in the Prospectus, Summary Prospectuses and Statement of Information, as applicable, concerning the portfolios.
* * *
Each portfolio will lower its management fee schedule as described below.
TAM will receive compensation from each portfolio, calculated daily and paid monthly, at the annual rates (expressed as a percentage of the portfolio’s average daily net assets) indicated below:
First $50 million...................................................................................................... 0.34%
Over $50 million up to $250 million................................................................... 0.32%
Over $250 million up to $5 billion....................................................................... 0.30%
Over $5 billion up to $7 billion............................................................................ 0.29%
Over $7 billion up to $9 billion............................................................................ 0.2875%
In excess of $9 billion............................................................................................ 0.28%
* * *
The following information will be added alphabetically to the sub-section titled “Recent Management Fee Changes” under the heading “Shareholder Information - Investment Manager” in the Prospectus:
Transamerica Managed Risk – Balanced ETF VP Transamerica Managed Risk – Conservative ETF VP Transamerica Managed Risk – Growth ETF VP
Effective November 1, 2022, the management fee of each portfolio is 0.34% of the first $50 million; 0.32% over $50 million up to $250 million; 0.30% over $250 million up to $5 billion; 0.29% over $5 billion up to $7 billion; 0.2875% over $7 billion up to $9 billion; and 0.28% in excess of $9 billion in average daily net assets. Prior to November 1, 2022, the management fee was 0.34% of the first $50 million; 0.32% over $50 million up to $250 million; and 0.30% in excess of $250 million in average daily net assets.
* * *
Transamerica Managed Risk – Balanced ETF VP will be renamed Transamerica Goldman Sachs Managed Risk – Balanced ETF VP and the following information will supplement and supersede any contrary information contained in the Prospectus and Summary Prospectus concerning the portfolio:
The portfolio’s principal investment strategies will be as follows:
The portfolio is a fund of funds. The portfolio’s sub-adviser, Goldman Sachs Asset Management, L.P. (the “sub-adviser”), seeks to achieve the portfolio’s objective by investing its assets primarily in a combination of underlying third-party exchange traded funds (“ETFs”).
In seeking to achieve its investment objective, the portfolio follows these investment strategies:
• Under normal circumstances, the portfolio will invest at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in ETFs. The portfolio expects to allocate substantially all of its assets among underlying ETFs that track the performance of a benchmark index in seeking to achieve targeted exposure to domestic equities, international equities and domestic bonds. The portfolio’s goal is to achieve a mix over time of approximately 50% of net assets in ETFs that invest primarily in equities (“equity ETFs”) and 50% of net assets in ETFs that invest primarily in fixed income securities (“fixed income ETFs”). The sub-adviser may adjust these percentage allocations as market conditions change based on the sub-adviser’s risk management calculations.
• The portfolio employs a managed risk strategy in an effort to manage return volatility. The sub-adviser uses a proprietary model incorporating realized and forecasted short-term volatility to adjust the portfolio’s weightings if this short-term volatility measure is above a certain threshold. The strategy also aims to reduce the impact of sustained market declines by reducing equity exposure. In implementing this strategy, based on the level of volatility in equity and fixed income markets, changes in volatility of the portfolio, and drawdowns experienced by the portfolio, the sub-adviser is permitted to increase exposure to equity ETFs to approximately 70% of net assets or decrease exposure to equity ETFs to approximately 25% of net assets and is permitted to increase exposure to fixed income ETFs to approximately 75% of net assets or decrease exposure to fixed income ETFs to approximately 30% of net assets. This means at any time the portfolio’s asset mix may be significantly different than its stated asset mix goal.
• The sub-adviser decides how much of the portfolio’s assets to allocate to each underlying ETF based on what it considers to be prudent diversification principles and other factors, such as historical performance and volatility in the equity and fixed income markets.
• The sub-adviser may periodically adjust the portfolio’s allocations to favor investments in those underlying ETFs that are expected to provide the most favorable outlook for achieving the portfolio’s investment objective.
Each underlying ETF has its own investment objective, principal investment strategies and investment risks. The portfolio’s ability to achieve its investment objective depends partly (or in part) on the performance of the underlying ETFs.
It is not possible to predict the extent to which the portfolio will be invested in a particular underlying ETF at any time. The portfolio may also invest in institutional mutual funds. The portfolio may be a significant shareholder in certain underlying ETFs.
The sub-adviser may change the portfolio’s asset allocations and underlying ETFs at any time without investor approval and without notice to investors.
* * *
Transamerica Managed Risk – Conservative ETF VP will be renamed Transamerica Goldman Sachs Managed Risk – Conservative ETF VP and the following information will supplement and supersede any contrary information contained in the Prospectus and Summary Prospectus concerning the portfolio:
The portfolio’s principal investment strategies will be as follows:
The portfolio is a fund of funds. The portfolio’s sub-adviser, Goldman Sachs Asset Management, L.P. (the “sub-adviser”), seeks to achieve the portfolio’s objective by investing its assets primarily in a combination of underlying third-party exchange traded funds (“ETFs”).
In seeking to achieve its investment objective, the portfolio follows these investment strategies:
• Under normal circumstances, the portfolio will invest at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in ETFs. The portfolio expects to allocate substantially all of its assets among underlying ETFs that track the performance of a benchmark index in seeking to achieve targeted exposure to domestic equities, international equities and domestic bonds. The portfolio’s goal is to achieve a mix over time of approximately 35% of its net assets in ETFs that invest primarily in equities (“equity ETFs”) and 65% of its net assets in ETFs that invest primarily in fixed income securities (“fixed income ETFs”). The sub-adviser may adjust these percentage allocations as market conditions change based on the sub-adviser’s risk management calculations.
• The portfolio employs a managed risk strategy in an effort to manage return volatility. The sub-adviser uses a proprietary model incorporating realized and forecasted short-term volatility to adjust the portfolio’s weightings if this short-term volatility measure is above a certain threshold. In implementing this strategy, based on the level of volatility in equity and fixed income markets, changes in volatility of the portfolio, and drawdowns experienced by the portfolio, the sub-adviser is permitted to increase exposure to equity ETFs to approximately 50% of net assets or decrease exposure to equity ETFs to approximately 15% of nets assets and is permitted to increase exposure to fixed income ETFs to approximately 85% of net assets or decrease exposure to fixed income ETFs to approximately 50% of net assets. This means at any time the portfolio’s asset mix may be significantly different than its stated asset mix goal.
• The sub-adviser decides how much of the portfolio’s assets to allocate to each underlying ETF based on what it considers to be prudent diversification principles and other factors, such as historical performance and volatility in the equity and fixed income markets.
• The sub-adviser may periodically adjust the portfolio’s allocations to favor investments in those underlying ETFs that are expected to provide the most favorable outlook for achieving the portfolio’s investment objective.
Each underlying ETF has its own investment objective, principal investment strategies and investment risks. The portfolio’s ability to achieve its investment objective depends partly (or in part) on the performance of the underlying ETFs.
It is not possible to predict the extent to which the portfolio will be invested in a particular underlying ETF at any time. The portfolio may also invest in institutional mutual funds. The portfolio may be a significant shareholder in certain underlying ETFs.
The sub-adviser may change the portfolio’s asset allocations and underlying ETFs at any time without investor approval and without notice to investors.
* * *
Transamerica Managed Risk – Growth ETF VP will be renamed Transamerica Goldman Sachs Managed Risk – Growth ETF VP and the following information will supplement and supersede any contrary information contained in the Prospectus and Summary Prospectus concerning the portfolio:
The portfolio’s principal investment strategies will be as follows:
The portfolio is a fund of funds. The portfolio’s sub-adviser, Goldman Sachs Asset Management, L.P. (the “sub-adviser”), seeks to achieve the portfolio’s objective by investing its assets primarily in a combination of underlying third-party exchange traded funds (“ETFs”).
In seeking to achieve its investment objective, the portfolio follows these investment strategies:
• Under normal circumstances, the portfolio will invest at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in ETFs. The portfolio expects to allocate substantially all of its assets among underlying ETFs that track the performance of a benchmark index in seeking to achieve targeted exposure to domestic equities, international equities and domestic bonds. The portfolio’s goal is to achieve a mix over time of approximately 75% of net assets in ETFs that invest primarily in equities (“equity ETFs”) and 25% of net assets in ETFs that invest primarily in fixed income securities (“fixed income ETFs”). The sub-adviser may adjust these percentage allocations as market conditions change based on the sub-adviser’s risk management calculations.
• The portfolio employs a managed risk strategy in an effort to manage return volatility. The sub-adviser uses a proprietary model incorporating realized and forecasted short-term volatility to adjust the portfolio’s weightings if this short-term volatility measure is above a certain threshold. The strategy also aims to reduce the impact of sustained market declines by reducing equity exposure. In implementing this strategy, based on the level of volatility in equity and fixed income markets, changes in volatility of the portfolio, and drawdowns experienced by the portfolio, the sub-adviser is permitted to increase exposure to equity ETFs to approximately 100% of net assets or decrease exposure to equity ETFs to approximately 35% of net assets, and is permitted to increase exposure to fixed income ETFs to approximately 65% of net assets or decrease exposure to fixed income ETFs to approximately 0% of net assets. This means at any time the portfolio’s asset mix may be significantly different than its stated asset mix goal.
• The sub-adviser decides how much of the portfolio’s assets to allocate to each underlying ETF based on what it considers to be prudent diversification principles and other factors, such as historical performance and volatility in the equity and fixed income markets.
• The sub-adviser may periodically adjust the portfolio’s allocations to favor investments in those underlying ETFs that are expected to provide the most favorable outlook for achieving the portfolio’s investment objective.
Each underlying ETF has its own investment objective, principal investment strategies and investment risks. The portfolio’s ability to achieve its investment objective depends partly (or in part) on the performance of the underlying ETFs.
It is not possible to predict the extent to which the portfolio will be invested in a particular underlying ETF at any time. The portfolio may also invest in institutional mutual funds. The portfolio may be a significant shareholder in certain underlying ETFs.
The sub-adviser may change the portfolio’s asset allocations and underlying ETFs at any time without investor approval and without notice to investors.
* * *
The portfolios’ sub-adviser will be as follows:
Goldman Sachs Asset Management, L.P., an affiliate of Goldman Sachs & Co. LLC, has been a registered investment adviser since 1990. As of December 31, 2021, Goldman Sachs Asset Management, L.P. had approximately $2.21 trillion in total assets under supervision. Goldman Sachs Asset Management, L.P.’s principal business address is 200 West Street, New York, NY 10282.
* * *
Each portfolio’s portfolio managers will be as follows:
|
Name |
Sub-Adviser |
Positions Over Past Five Years |
|
Neill Nuttall |
Goldman Sachs Asset Management, L.P. |
Portfolio Manager of the portfolio since 2022; Managing Director and Chief Investment Officer of the Multi-Asset Solutions Group; employed with Goldman Sachs Asset Management, L.P. since 2014 |
|
Alexandra Wilson-Elizondo |
Goldman Sachs Asset Management, L.P. |
Portfolio Manager of the portfolio since 2022; Head of multi-asset funds and model portfolio management within the Multi-Asset Solutions Group; employed with Goldman Sachs Asset Management, L.P. since 2021; prior to 2021, employed by MacKay Shields since 2015 |
|
Wael Younan |
Goldman Sachs Asset Management, L.P. |
Portfolio Manager of the portfolio since 2022; Managing Director of the Multi-Asset Solutions Group; employed with Goldman Sachs Asset Management, L.P. since 2010 |
|
Siwen Wu |
Goldman Sachs Asset Management, L.P. |
Portfolio Manager of the portfolio since 2022; Vice President of the Multi-Asset Solutions Group; employed with Goldman Sachs Asset Management, L.P. since 2014 |
* * *
The following information revises the corresponding information appearing in the table contained in the “Investment Manager Compensation” sub-section of the Statement of Additional Information under the heading “Investment Management and Other Services – The Investment Manager” for each of the portfolios:
|
Portfolio Name |
Percentage of Average Daily Net Assets |
|
Transamerica Goldman Sachs Managed Risk – Balanced ETF VP Transamerica Goldman Sachs Managed Risk – Conservative ETF VP Transamerica Goldman Sachs Managed Risk – Growth ETF VP |
First $50 million......................................................... 0.34% Over $50 million up to $250 million....................... 0.32% Over $250 million up to $5 billion........................... 0.30% Over $5 billion up to $7 billion................................ 0.29% Over $7 billion up to $9 billion............................. 0.2875% In excess of $9 billion................................................. 0.28% |
* * *
The following information revises the corresponding information appearing in the table contained in the “Sub-Advisory Fees” sub- section of the Statement of Additional Information under the heading “Investment Management and Other Services – Sub-Advisers” for each of the portfolios:
|
Portfolio |
Sub-Adviser |
Sub-Advisory Fees |
|
Transamerica Goldman Sachs Managed Risk – Balanced ETF VP Transamerica Goldman Sachs Managed Risk – Conservative ETF VP Transamerica Goldman Sachs Managed Risk – Growth ETF VP |
Goldman Sachs Asset Management, L.P.(8) |
First $1 billion.......................................................................... 0.07% Over $1 billion up to $3 billion........................................................................ 0.055% Over $3 billion up to $5 billion........................................................................ 0.050% Over $5 billion up to $7 billion........................................................................ 0.045% Over $7 billion up to $9 billion...................................................................... 0.0425% In excess of $9 billion........................................................................ 0.035% |
(8) The average daily net assets for the purpose of calculating sub-advisory fees will be determined on the basis of the combined assets of Transamerica Goldman Sachs 70/30 Allocation VP, Transamerica Asset Allocation – Conservative Portfolio, Transamerica Asset Allocation – Growth Portfolio, Transamerica Asset Allocation – Moderate Growth Portfolio, Transamerica Asset Allocation – Moderate Portfolio, Transamerica Goldman Sachs Managed Risk – Balanced ETF VP, Transamerica Goldman Sachs Managed Risk – Conservative ETF VP and Transamerica Goldman Sachs Managed Risk – Growth ETF VP.
* * *
Investors Should Retain this Supplement for Future Reference
June 28, 2022
Important Notice Regarding Change in Investment Policy
Transamerica JPMorgan Core Bond VP
Supplement to the Currently Effective Prospectus and Summary Prospectus
* * *
Pending investor approval, Transamerica Asset Management, Inc. (“TAM”) will replace J.P. Morgan Investment Management, Inc (“JPMorgan”) with Aegon USA Investment Management, LLC (“AUIM”) as sub-adviser to Transamerica JPMorgan Core Bond VP (the “portfolio”). Because AUIM is an affiliate of TAM, under the terms of TAM’s manager of managers exemptive relief, the new investment sub-advisory agreement between TAM and AUIM with respect to the portfolio must be approved by investors. A proxy statement proposing the sub-advisory agreement with AUIM is expected to be mailed to portfolio investors in August 2022. If approved by portfolio investors, it is anticipated that the change in sub-adviser would occur on or about November 1, 2022.
If the new sub-advisory agreement is approved, the portfolio will be renamed “Transamerica Aegon Core Bond VP”. In addition, and discussed further below, in connection with the change in sub-adviser: (i) the portfolio’s investment objective, principal investment strategies (including its 80% investment policy) and principal investment risks will change; and (ii) the portfolio’s management fee and sub-advisory fee schedules will change. These changes do not require approval by investors.
The portfolio’s current 80% investment policy is to invest, under normal circumstances, at least 80% of the portfolio’s net assets (plus the amount of borrowings, if any, for investment purposes) in bonds, including (without limitation):
• U.S. government securities, including Treasury obligations and government sponsored enterprises such as Fannie Mae, Ginnie Mae, Freddie Mac and securities issued by other government agencies and instrumentalities
• Medium- to high-quality corporate bonds
• Mortgage-backed securities, including U.S. agency and non-agency pass through and collateralized mortgage obligations (“CMOs”)
• Asset-backed securities
• Commercial mortgage-backed securities (“CMBS”)
As reflected below, under the revised 80% policy, the portfolio would, under normal circumstances, invest at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in fixed-income securities.
TAM will continue to serve as the portfolio’s investment manager.
In connection with and contingent upon the proposed change in sub-adviser, if approved by portfolio investors, effective on or about November 1, 2022, the following information will supplement and supersede any contrary information contained in the Prospectus and Summary Prospectus, as applicable, concerning the portfolio.
* * *
The portfolio will change its management fee schedule as described below.
TAM will receive compensation from the portfolio, calculated daily and paid monthly, at the annual rates (expressed as a percentage of the portfolio’s average daily net assets) indicated below:
First $1 billion......................................................................................................... 0.42%
Over $1 billion up to $2 billion............................................................................ 0.38%
Over $2 billion up to $3.5 billion......................................................................... 0.365%
Over $3.5 billion up to $5 billion......................................................................... 0.36%
In excess of $5 billion............................................................................................ 0.355%
* * *
The “Annual Fund Operating Expenses” table included in the “Fees and Expenses” section of the Prospectus and Summary Prospectus is deleted in its entirety and replaced with the following:
|
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) |
||
|
Class |
Initial |
Service |
|
Management fees1 |
0.42% |
0.42% |
|
Distribution and service (12b-1) fees |
None |
0.25% |
|
Other expenses |
0.07% |
0.07% |
|
Total annual fund operating expenses |
0.49% |
0.74% |
1 Management fees have been restated to reflect a reduction in management fees effective November 1, 2022.
The “Example” table included in the Prospectus and Summary Prospectus is deleted in its entirety and replaced with the following:
Example: This Example is intended to help you compare the cost of investing in the portfolio with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the portfolio for the time periods indicated and then redeem all shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the portfolio’s operating expenses remain the same. The Example does not reflect charges that are, or may be, imposed under your variable life insurance policy or variable annuity contract. If such charges were reflected, costs would be higher. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
|
|
1 year |
3 years |
5 years |
10 years |
|
Initial Class |
$50 |
$157 |
$274 |
$616 |
|
Service Class |
$76 |
$237 |
$411 |
$918 |
* * *
The following information will be added alphabetically to the sub-section titled “Recent Management Fee Changes” under the heading “Shareholder Information - Investment Manager” in the Prospectus:
Transamerica Aegon Core Bond VP (formerly, Transamerica JPMorgan Core Bond VP): Effective November 1, 2022, the management fee of the portfolio is 0.42% of the first $1 billion; 0.38% over $1 billion up to $2 billion; 0.365% over $2 billion up to $3.5 billion; 0.36% over $3.5 billion up to $5 billion; and 0.355% in excess of $5 billion in average daily net assets. Prior to November 1, 2022, the management fee was 0.45% of the first $750 million; 0.39% over $750 million up to $1 billion; 0.375% over $1 billion up to $1.5 billion; 0.37% over $1.5 billion up to $3 billion; and 0.365% in excess of $3 billion in average daily net assets.
* * *
INVESTMENT OBJECTIVE:
The portfolio’s investment objective will be as follows:
Seeks to achieve maximize total return.
The portfolio’s principal investment strategies will be as follows:
The portfolio’s sub-adviser, Aegon USA Investment Management, LLC (the “sub-adviser”), seeks to achieve the fund’s objective by investing, under normal circumstances, primarily in investment grade debt securities, which may include: investment grade corporate securities, U.S. government obligations, mortgage-backed securities guaranteed by U.S. government agencies and instrumentalities, and private residential mortgage-backed securities. Under normal circumstances, the portfolio invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in fixed-income securities. The portfolio’s weighted average duration will typically range from 3 to 10 years. Duration is a measure used to determine the sensitivity of a security’s price to changes in interest rates. The longer a security’s duration, the more sensitive it will be to changes in interest rates. The portfolio may also invest in U.S. Treasury and agency securities, municipal bonds, asset-backed securities (including collateralized loan obligations (“CLOs”), collateralized bond obligations (“CBOs”) and collateralized debt obligations (“CDOs”)), commercial mortgage-backed securities (“CMBS”), high quality short-term debt obligations and repurchase agreements. The portfolio’s investments may include debt securities of foreign issuers, including emerging market debt securities. The portfolio may invest in securities that are denominated in U.S. dollars and in foreign currencies.
The portfolio may invest up to 10% of its net assets in emerging market debt securities and up to 10% of its net assets in high-yield debt securities (commonly referred to as “junk bonds”), but may invest no more than 15% of its net assets in emerging market debt securities and high-yield debt securities combined. Investment grade debt securities carry a rating of at least BBB from Standard & Poor’s or Fitch or Baa from Moody’s or are of comparable quality as determined by the sub-adviser.
The sub-adviser uses a combination of a global “top-down” analysis of the macroeconomic and interest rate environment and proprietary “bottom-up” research of corporate, government and agency debt, and other debt instruments. In the sub-adviser’s “top- down” approach, the sub-adviser analyzes various fundamental, technical, sentiment and valuation factors that affect the movements of markets and securities prices worldwide. In its proprietary “bottom-up” research, the sub-adviser considers various fundamental and other factors, such as creditworthiness, capital structure, covenants, cash flows and, as applicable, collateral. The sub- adviser’s research analysts also integrate environmental, social and governance (“ESG”) matters within their analytical process for credit, sovereign and structured issuers alongside traditional credit metrics as a risk management tool and as a method to identify financially material ESG factors and arrive at an independent, comprehensive view of the investment. Consideration of ESG matters is subjective and not determinative in the sub-adviser’s investment process. The sub-adviser may conclude that other attributes of an investment outweigh ESG considerations when making investment decisions. The sub-adviser uses this combined “top-down” and “bottom-up” approach to determine sector, security, yield curve, and duration positions for the portfolio.
The portfolio may, but is not required to, engage in certain investment strategies involving derivatives, such as options, futures, forward currency contracts and swaps, including, but not limited to, interest rate, total return and credit default swaps. These investment strategies may be employed as a hedging technique, as a means of altering investment characteristics of the portfolio (such as shortening or lengthening duration), in an attempt to enhance returns or for other purposes.
The portfolio may purchase securities on a when-issued, delayed delivery or forward commitment basis.
PRINCIPAL RISKS:
The following principal risks will be added to the “Principal Risks” section included in the Prospectus and Summary Prospectus. The first two risks will be added as key risks. Inflation is added after Mortgage-Related and Asset-Backed Securities. Focused Investing is added after Prepayment or Call. The remaining new risks will be added in alphabetical order after certain key risks.
Inflation – The value of assets or income from investment may be worth less in the future as inflation decreases the value of money. As inflation increases, the real value of the portfolio’s assets can decline as can the value of the portfolio’s distributions.
Focused Investing – To the extent the portfolio invests in a limited number of countries, regions, sectors, industries or market segments, in a limited number of issuers, or in issuers in related businesses or that are subject to related operating risks, the portfolio will be more susceptible to negative events affecting those countries, regions, sectors, industries, segments or issuers, and the value of its shares may be more volatile than if it invested more widely.
Currency Hedging – The portfolio may hedge its currency risk using currency futures, forwards or options. However, hedging strategies and/or these instruments may not always work as intended, and a portfolio may be worse off than if it had not used a hedging strategy or instrument. Certain countries may also impose restrictions on the exchange or export of currency or adverse currency exchange rates and may be characterized by a lack of available currency hedging instruments.
Dollar Rolls – The use of dollar rolls is a speculative technique involving leverage, and can have an economic effect similar to borrowing money. Dollar roll transactions involve the risk that the market value of the securities the portfolio is required to purchase may decline below the agreed upon repurchase price of those securities. If the broker/dealer to whom the portfolio sells securities becomes insolvent, the portfolio’s ability to purchase or repurchase securities may be restricted.
Emerging Markets – Investments in securities of issuers located or doing business in emerging markets are subject to heightened foreign investments risks and may experience rapid and extreme changes in value. Emerging market countries tend to have less developed and less stable economic, political and legal systems and regulatory and accounting standards, may have policies that restrict investment by foreigners or that prevent foreign investors such as the portfolio from withdrawing their money at will, and are more likely to experience nationalization, expropriation and confiscatory taxation. In addition, emerging market securities may have low trading volumes and may be or become illiquid.
Hedging – The portfolio may buy and sell futures contracts, put and call options, forward contracts and other instruments as a hedge. The portfolio’s hedging strategies may not work as intended, and the portfolio may be in a less favorable position than if it had not used a hedging instrument.
High-Yield Debt Securities – High-yield debt securities, commonly referred to as “junk” bonds, are securities that are rated below “investment grade” or are of comparable quality. Changes in interest rates, the market’s perception of the issuers, the creditworthiness of the issuers and negative perceptions of the junk bond market generally may significantly affect the value of these bonds. Junk bonds are considered speculative, tend to be volatile, typically have a higher risk of default, tend to be less liquid and more difficult to value than higher grade securities, and may result in losses for the portfolio.
Inflation-Protected Securities – Inflation-protected debt securities may react differently from other types of debt securities and tend to react to changes in “real” interest rates, which represent nominal (stated) interest rates reduced by the expected impact of inflation. In general, the price of an inflation-protected debt security can fall when real interest rates rise, and can rise when real interest rates fall. Interest payments on inflation-protected debt securities can be unpredictable and will vary as the principal and/or interest is adjusted for inflation.
Loans – Loans are subject to the credit risk of nonpayment of principal or interest. Economic downturns or increases in interest rates may cause an increase in defaults, interest rate risk and liquidity risk. Loans may or may not be collateralized at the time of acquisition, and any collateral may be relatively illiquid or lose all or substantially all of its value subsequent to investment. The portfolio’s investments in loans are also subject to prepayment or call risk.
Municipal Securities – The municipal bond market can be susceptible to unusual volatility, particularly for lower-rated and unrated securities. Liquidity can be reduced unpredictably in response to overall economic conditions or credit tightening. Municipal issuers may be adversely affected by rising health care costs, increasing unfunded pension liabilities, and by the phasing out of federal programs providing financial support. The value of municipal securities can also be adversely affected by changes in the financial condition of one or more individual municipal issuers or insurers of municipal issuers, regulatory and political developments, tax law changes or other legislative actions, and by uncertainties and public perceptions concerning these and other factors. To the extent the portfolio invests significantly in a single state or in securities the payments on which are dependent upon a single project or source of revenues, or that relate to a sector or industry, the portfolio will be more susceptible to associated risks and developments. Municipal issuers may be more susceptible to downgrades or defaults during recessions or similar periods of economic stress. A number of municipal issuers have defaulted on obligations, commenced insolvency proceedings, or suffered credit downgrading. Financial difficulties of municipal issuers may continue or worsen.
Investment in municipal securities of issuers in Guam, Puerto Rico, the U.S. Virgin Islands, or other U.S. territories, may have more risks than tax-exempt securities issued by other issuers due to the political, social and/or economic conditions in the particular territory.
Repurchase Agreements – In a repurchase agreement, the portfolio purchases securities from a broker-dealer or a bank, called the counterparty, upon the agreement of the counterparty to repurchase the securities from the portfolio at a later date, and at a specified price. The securities purchased serve as the portfolio’s collateral for the obligation of the counterparty to repurchase the securities. If the counterparty does not repurchase the securities, the portfolio is entitled to sell the securities, but the portfolio may not be able to sell them for the price at which they were purchased, thus causing a loss. If the counterparty becomes insolvent, there is some risk that the portfolio will not have a right to the securities, or the immediate right to sell the securities.
Sovereign Debt – Sovereign debt instruments are subject to the risk that the governmental entity may delay or fail to pay interest or repay principal on its sovereign debt. If a governmental entity defaults, it may ask for more time in which to pay or for further loans, or the debt may be restructured. There may be no established legal process for collecting sovereign debt that a government does not pay, nor are there bankruptcy proceedings through which all or part of the sovereign debt that a governmental entity has not repaid may be collected.
To Be Announced (TBA)Transactions –Although the securities that are delivered in TBA transactions must meet certain standards, there is a risk that the actual securities received by the portfolio may be less favorable than what was anticipated when entering into the transaction. TBA transactions also involve the risk that a counterparty will fail to deliver the security, exposing the portfolio to further losses.
Yield – The amount of income received by the portfolio will go up or down depending on day-to-day variations in short-term interest rates, and the portfolio’s expenses could absorb all or a significant portion of the portfolio’s income. If interest rates increase, the portfolio’s yield may not increase proportionately.
* * *
The portfolio’s sub-adviser will be as follows:
Aegon USA Investment Management, LLC, a wholly-owned and indirect subsidiary of Aegon N.V., has been a registered investment adviser since December 2001. As of December 31, 2021, Aegon USA Investment Management, LLC had approximately
$135.9 billion in total assets under management.
* * *
The portfolio managers will be as follows:
|
Name |
Sub-Adviser |
Positions Over Past Five Years |
|
Bradley D. Doyle, CFA |
Aegon USA Investment Management, LLC |
Portfolio Manager of the portfolio since 2022. Portfolio Manager with Aegon USA Investment Management, LLC since 2004; Head of Investment Grade Credit since 2017. |
|
Tyler A. Knight, CFA |
Aegon USA Investment Management, LLC |
Portfolio Manager of the portfolio since 2022. Portfolio Manager with Aegon USA Investment Management, LLC since 2008; Head of Structured Finance since 2018. |
|
Sivakumar N. Rajan |
Aegon USA Investment Management, LLC |
Portfolio Manager of the Portfolio since 2022. Portfolio Manager with Aegon USA Investment Management, LLC since 2015. |
|
Brian W. Westhoff, CFA |
Aegon USA Investment Management, LLC |
Portfolio Manager of the portfolio since 2022. Portfolio Manager with Aegon USA Investment Management, LLC since 2011; Head of Multi-Sector Portfolio Management and Emerging Market Debt Strategies. |
* * *
Investors Should Retain this Supplement for Future Reference
August 4, 2022
TRANSAMERICA SERIES TRUST
Transamerica JPMorgan Core Bond VP
Supplement to the Currently Effective Prospectus, Summary Prospectus and Statement of Additional Information
The Board of Trustees has approved the termination of J.P. Morgan Investment Management Inc. as sub-adviser to Transamerica JPMorgan Core Bond VP (the “portfolio”). The Board has also approved a new investment sub-advisory agreement with Aegon USA Investment Management, LLC (“AUIM”), an affiliate of Transamerica Asset Management, Inc. (“TAM”), the portfolio’s investment manager, subject to approval by the portfolio’s investors.
Because AUIM is an affiliate of TAM, the new investment sub-advisory agreement between TAM and AUIM with respect to the portfolio must be approved by investors. A proxy statement describing the proposed sub-advisory agreement is expected to be mailed to portfolio investors in August 2022. If approved by portfolio investors, it is anticipated that the change in sub-adviser would occur on or about November 1, 2022. At that time, among other things, the portfolio is expected to be renamed and certain changes would be made to the portfolio’s investment objective, principal investment strategies, principal risks, management fee schedule and sub-advisory fee schedule.
* * *
Investors Should Retain this Supplement for Future Reference
June 28, 2022
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Transamerica Series Trust:
In planning and performing our audits of the financial statements of Transamerica 60/40 Allocation VP, Transamerica BlackRock Government Money Market, Transamerica Aegon High Yield Bond VP, Transamerica Aegon U.S. Government Securities VP, Transamerica American Funds Managed Risk VP, Transamerica JPMorgan Asset Allocation – Conservative VP, Transamerica JPMorgan Asset Allocation – Growth VP, Transamerica JPMorgan Asset Allocation – Moderate Growth VP, Transamerica JPMorgan Asset Allocation – Moderate VP, Transamerica Aegon Sustainable Equity Income VP, Transamerica BlackRock iShares Edge 100 VP, Transamerica Morgan Stanley Global Allocation Managed Risk – Balanced VP, Transamerica BlackRock iShares Edge 50 VP, Transamerica iShares Edge 75 VP, Transamerica BlackRock Tactical Allocation VP, Transamerica BlackRock Global Real Estate Securities VP, Transamerica JPMorgan International Moderate Growth VP, Transamerica JPMorgan Mid Cap Value VP, Transamerica Madison Diversified Income VP, Transamerica BlackRock iShares Active Asset Allocation – Conservative VP, Transamerica BlackRock iShares Active Asset Allocation – Moderate Growth VP, Transamerica BlackRock iShares Active Asset Allocation – Moderate VP, Transamerica Small/Mid Cap Value VP, Transamerica T. Rowe Price Small Cap VP, Transamerica BlackRock iShares Edge 40 VP, Transamerica Morgan Stanley Global Allocation VP, Transamerica Janus Balanced VP, Transamerica Aegon Core Bond VP, Transamerica JPMorgan Enhanced Index VP, Transamerica JPMorgan Tactical Allocation VP, Transamerica BlackRock iShares Dynamic Allocation – Balanced VP, Transamerica BlackRock iShares Dynamic Allocation – Moderate Growth VP, Transamerica Market Participation Strategy VP, Transamerica International Focus VP, Transamerica Morgan Stanley Capital Growth VP, Transamerica Janus Mid-Cap Growth VP, Transamerica Multi-Managed Balanced VP, Transamerica PIMCO Tactical – Balanced VP, Transamerica PIMCO Tactical – Conservative VP, Transamerica PIMCO Tactical – Growth VP, Transamerica Aegon Bond VP, Transamerica PineBridge Inflation Opportunities VP, Transamerica ProFund UltraBear VP, Transamerica TS&W International Equity VP, Transamerica Rothchild & Co Large Cap Value VP, Transamerica MSCI EAFE Index VP, Transamerica S&P 500 Index VP, Transamerica Goldman Sachs 70/30 Allocation VP, Transamerica Goldman Sachs Managed Risk – Balanced ETF VP, Transamerica Goldman Sachs Managed Risk – Conservative ETF VP, Transamerica Goldman Sachs Managed Risk – Growth ETF VP and Transamerica WMC US Growth VP (the “Funds”) (fifty-three of the Funds comprising Transamerica Series Trust (the “Trust”)) as of and for the period/year ended December 31, 2022, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), we considered the Trust’s internal control over financial reporting, including controls over safeguarding securities, as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements and to comply with the requirements of Form N-CEN, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion.
The management of the Trust is responsible for establishing and maintaining effective internal control over financial reporting. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of controls. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of a company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.
Our consideration of the Trust’s internal control over financial reporting was for the limited purpose described in the first paragraph and would not necessarily disclose all deficiencies in internal control that might be material weaknesses under standards established by the PCAOB. However, we noted no deficiencies in the Trust’s internal control over financial reporting and its operation, including controls over safeguarding securities that we consider to be a material weakness as defined above as of December 31, 2022.
This report is intended solely for the information and use of management and the Board of Trustees of the Transamerica Funds and the Securities and Exchange Commission and is not intended to be and should not be used by anyone other than these specified parties.
/s/ Ernst & Young LLP
Boston, Massachusetts
February 27, 2023
TRANSAMERICA SERIES TRUST
Transamerica Goldman Sachs 70/30 Allocation VP Transamerica Janus Balanced VP
Transamerica JPMorgan Mid Cap Value VP Transamerica Small/Mid Cap Value VP Transamerica T. Rowe Price Small Cap VP
Supplement to the Currently Effective Prospectus, Summary Prospectuses and Statement of Additional Information
* * *
Transamerica Goldman Sachs 70/30 Allocation VP
Effective as of November 1, 2022, the following information will supplement and supersede any contrary information contained in the Prospectus, Summary Prospectus and Statement of Information concerning the portfolio.
The portfolio will change its management fee schedule as described below.
Transamerica Asset Management, Inc. (“TAM”), the portfolio’s investment manager, will receive compensation from the portfolio, calculated daily and paid monthly, at the annual rates (expressed as a percentage of the portfolio’s average daily net assets) indicated below:
First $1 billion......................................................................................................... 0.104%
Over $1 billion up to $3 billion............................................................................ 0.0975%
Over $3 billion up to $5 billion............................................................................ 0.0925%
Over $5 billion up to $7 billion............................................................................ 0.085%
Over $7 billion up to $9 billion............................................................................ 0.080%
In excess of $9 billion............................................................................................ 0.0725%
* * *
Transamerica Janus Balanced VP
Effective as of August 1, 2022, the following information will supplement and supersede any contrary information contained in the Prospectus, Summary Prospectus and Statement of Information concerning the portfolio.
The portfolio will change its management fee schedule as described immediately below. The portfolio will also change its sub-advisory fee schedule as described below.
TAM will receive compensation from the portfolio, calculated daily and paid monthly, at the annual rates (expressed as a percentage of the portfolio’s average daily net assets) indicated below:
First $250 million................................................................................................... 0.735%
Over $250 million up to $500 million................................................................. 0.705%
Over $500 million up to $1 billion....................................................................... 0.65%
In excess of $1 billion............................................................................................ 0.63%
The “Annual Fund Operating Expenses” table included in the “Fees and Expenses” section of the Prospectus and Summary Prospectus is deleted in its entirety and replaced with the following:
|
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) |
||
|
Class |
Initial |
Service |
|
Management fees1 |
0.68% |
0.68% |
|
Distribution and service (12b-1) fees |
None |
0.25% |
|
Other expenses |
0.03% |
0.03% |
|
Total annual fund operating expenses |
0.71% |
0.96% |
1 Management fees have been restated to reflect a reduction in management fees effective August 1, 2022.
The “Example” table included in the Prospectus and Summary Prospectus is deleted in its entirety and replaced with the following:
Example: This Example is intended to help you compare the cost of investing in the portfolio with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the portfolio for the time periods indicated and then redeem all shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the portfolio’s operating expenses remain the same. The Example does not reflect charges that are, or may be, imposed under your variable life insurance policy or variable annuity contract. If such charges were reflected, costs would be higher. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
|
|
1 year |
3 years |
5 years |
10 years |
|
Initial Class |
$73 |
$227 |
$395 |
$883 |
|
Service Class |
$98 |
$306 |
$531 |
$1,178 |
* * *
Transamerica JPMorgan Mid Cap Value VP
Effective as of August 1, 2022, the following information will supplement and supersede any contrary information contained in the Prospectus, Summary Prospectus and Statement of Information concerning the portfolio.
The portfolio will change its management fee schedule as described below.
TAM will receive compensation from the portfolio, calculated daily and paid monthly, at the annual rates (expressed as a percentage of the portfolio’s average daily net assets) indicated below:
First $100 million................................................................................................... 0.88%
Over $100 million up to $550 million................................................................. 0.83%
Over $550 million up to $750 million................................................................. 0.79%
Over $750 million up to $1 billion....................................................................... 0.77%
In excess of $1 billion............................................................................................ 0.76%
* * *
Transamerica Small/Mid Cap Value VP
Effective as of August 1, 2022, the following information will supplement and supersede any contrary information contained in the Prospectus, Summary Prospectus and Statement of Information concerning the portfolio.
The portfolio will change its management fee schedule as described below.
TAM will receive compensation from the portfolio, calculated daily and paid monthly, at the annual rates (expressed as a percentage of the portfolio’s average daily net assets) indicated below:
First $100 million................................................................................................... 0.79%
Over $100 million up to $350 million................................................................. 0.78%
Over $350 million up to $500 million................................................................. 0.77%
Over $500 million up to $750 million................................................................. 0.75%
Over $750 million up to $1 billion....................................................................... 0.745%
Over $1 billion up to $1.5 billion......................................................................... 0.69%
Over $1.5 billion up to $2 billion......................................................................... 0.68%
In excess of $2 billion............................................................................................ 0.67%
The “Annual Fund Operating Expenses” table included in the “Fees and Expenses” section of the Prospectus and Summary Prospectus is deleted in its entirety and replaced with the following:
|
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) |
||
|
Class |
Initial |
Service |
|
Management fees1 |
0.77% |
0.77% |
|
Distribution and service (12b-1) fees |
None |
0.25% |
|
Other expenses |
0.04% |
0.04% |
|
Total annual fund operating expenses |
0.81% |
1.06% |
1 Management fees have been restated to reflect a reduction in management fees effective August 1, 2022.
The “Example” table included in the Prospectus and Summary Prospectus is deleted in its entirety and replaced with the following:
Example: This Example is intended to help you compare the cost of investing in the portfolio with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the portfolio for the time periods indicated and then redeem all shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the portfolio’s operating expenses remain the same. The Example does not reflect charges that are, or may be, imposed under your variable life insurance policy or variable annuity contract. If such charges were reflected, costs would be higher. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
|
|
1 year |
3 years |
5 years |
10 years |
|
Initial Class |
$83 |
$259 |
$450 |
$1,002 |
|
Service Class |
$108 |
$337 |
$585 |
$1,294 |
* * *
Transamerica T. Rowe Price Small Cap VP
Effective as of August 1, 2022, the following information will supplement and supersede any contrary information contained in the Prospectus, Summary Prospectus and Statement of Information concerning the portfolio.
The portfolio will change its management fee schedule as described below.
TAM will receive compensation from the portfolio, calculated daily and paid monthly, at the annual rates (expressed as a percentage of the portfolio’s average daily net assets) indicated below:
First $1 billion......................................................................................................... 0.78%
Over $1 billion up to $1.5 billion......................................................................... 0.77%
In excess of $1.5 billion......................................................................................... 0.76%
* * *
The following information will be added alphabetically to the sub-section titled “Recent Management Fee Changes” under the heading “Shareholder Information - Investment Manager” in the Prospectus:
Transamerica Goldman Sachs 70/30 Allocation VP: Effective November 1, 2022, the management fee is 0.104% of the first
$1 billion; 0.0975% over $1 billion up to $3 billion; 0.0925% over $3 billion up to $5 billion; 0.085% over $5 billion up to $7 billion; 0.080% over $7 billion up to $9 billion; and 0.0725% in excess of $9 billion in average daily net assets. Prior to November 1, 2022, the management fee was 0.104% of the first $1 billion; 0.0975% over $1 billion up to $3 billion; 0.0925% over $3 billion up to $5 billion; 0.085% over $5 billion up to $7 billion; and 0.080% over $7 billion in average daily net assets.
Transamerica Janus Balanced VP: Effective August 1, 2022, the management fee is 0.735% of the first $250 million; 0.705% over $250 billion up to $500 million; 0.65% over $500 million up to $1 billion; and 0.63% in excess of $1 billion in average daily net assets. Prior to August 1, 2022, the management fee was 0.76% of the first $250 million; 0.73% over $250 million up to $500 million; 0.705% over $500 million up to $1 billion; 0.68% over $1 billion up to $1.25 billion; and 0.63% in excess of $1.25 billion in average daily net assets.
Transamerica JPMorgan Mid Cap Value VP: Effective August 1, 2022, the management fee is 0.88% of the first $100 million; 0.83% over $100 million up to $550 million; 0.79% over $550 million up to $750 million; 0.77% over $750 million up to $1 billion; and 0.76% in excess of $1 billion in average daily net assets. Prior to August 1, 2022, the management fee was 0.88% of the first $100 million; 0.83% over $100 million up to $750 million; 0.81% over $750 million up to $1.5 billion; and 0.80% in excess of $1.5 billion in average daily net assets.
Transamerica Small/Mid Cap Value VP: Effective August 1, 2022, the management fee is 0.79% of the first $100 million; 0.78% over $100 million up to $350 million; 0.77% over $350 million up to $500 million; 0.75% over $500 million up to $750 million; 0.745% over $750 million up to $1 billion; 0.69% over $1 billion up to $1.5 billion; 0.68% over $1.5 billion up to $2 billion; and 0.67% in excess of $2 billion in average daily net assets. Prior to August 1, 2022, the management fee was 0.79% of the first $350 million; 0.78% over $350 million up to $500 million; 0.765% over $500 million up to $750 million; 0.755% over $750 million up to $1 billion; 0.735% over $1 billion up to $1.5 billion; 0.73% over $1.5 billion up to $2 billion; and 0.725% in excess of $2 billion in average daily net assets.
Transamerica T. Rowe Price Small Cap VP: Effective August 1, 2022, the management fee is 0.78% of the first $1 billion; 0.77% over $1 billion up to $1.5 billion; and 0.76% in excess of $1.5 billion in average daily net assets. Prior to August 1, 2022, the management fee was 0.78% of the portfolio’s average daily net assets.
* * *
Effective as of November 1, 2022, the following information will revise the corresponding information appearing in the table contained in the “Investment Manager Compensation” sub-section of the Statement of Additional Information under the heading “Investment Management and Other Services – The Investment Manager”:
|
Portfolio Name |
Percentage of Average Daily Net Assets |
|
Transamerica Goldman Sachs 70/30 Allocation VP |
0.104% of the first $1 billion 0.0975% over $1 billion up to $3 billion 0.0925% over $3 billion up to $5 billion 0.085% over $5 billion up to $7 billion 0.080% over $7 billion up to $9 billion 0.0725% in excess of $9 billion |
* * *
Effective as of August 1, 2022, the following information will revise the corresponding information appearing in the table contained in the “Investment Manager Compensation” sub-section of the Statement of Additional Information under the heading “Investment Management and Other Services – The Investment Manager”:
|
Portfolio Name |
Percentage of Average Daily Net Assets |
|
Transamerica Janus Balanced VP |
0.735% of the first $250 million 0.705% over $250 million up to $500 million 0.65% over $500 million up to $1 billion 0.63% in excess of $1 billion |
|
Transamerica JPMorgan Mid Cap Value VP |
0.88% of the first $100 million 0.83% over $100 million up to $550 million 0.79% over $550 million up to $750 million 0.77% over $750 million up to $1 billion 0.76% in excess of $1 billion |
|
Transamerica Small/Mid Cap Value VP |
0.79% of the first $100 million 0.78% over $100 million up to $350 million 0.77% over $350 million up to $500 million 0.75% over $500 million up to $750 million 0.745% over $750 million up to $1 billion 0.69% over $1 billion up to $1.5 billion 0.68% over $1.5 billion up to $2 billion 0.67% in excess of $2 billion |
|
Transamerica T. Rowe Price Small Cap VP |
0.78% of the first $1 billion 0.77% over $1 billion up to $1.5 billion 0.76% in excess of $1.5 billion |
* * *
Effective as of November 1, 2022, the following information will revise the corresponding information appearing in the table contained in the “Sub-Advisory Fees” sub-section of the Statement of Additional Information under the heading “Investment Management and Other Services – Sub-Advisers”:
|
Portfolio |
Sub-Adviser |
Sub-Advisory Fees |
|
Transamerica Goldman Sachs 70/30 Allocation VP |
Goldman Sachs Asset Management, L.P.(8) |
0.070% of the first $1 billion 0.055% over $1 billion up to $3 billion 0.050% over $3 billion up to $5 billion 0.045% over $5 billion up to $7 billion 0.0425% over $7 billion up to $9 billion 0.0350% in excess of $9 billion |
(8) The average daily net assets for the purposed of calculating sub-advisory fees will be determined on the basis of the combined assets of Transamerica Goldman Sachs 70/30 Allocation VP, Transamerica Asset Allocation – Conservative Portfolio, Transamerica Asset Allocation – Growth Portfolio, Transamerica Asset Allocation – Moderate Growth Portfolio, Transamerica Asset Allocation – Moderate Portfolio, Transamerica Goldman Sachs Managed Risk – Balanced ETF VP, Transamerica Goldman Sachs Managed Risk – Conservative ETF VP and Transamerica Goldman Sachs Managed Risk – Growth ETF VP.
* * *
Effective as of August 1, 2022, the following information will revise the corresponding information appearing in the table contained in the “Sub-Advisory Fees” sub-section of the Statement of Additional Information under the heading “Investment Management and Other Services – Sub-Advisers”:
|
Portfolio |
Sub-Adviser |
Sub-Advisory Fees |
|
Transamerica Janus Balanced VP |
Janus Henderson Investors US LLC |
0.30% of the first $500 million 0.27% over $500 million up to $1 billion 0.25% in excess of $1 billion |
* * *
Investors Should Retain this Supplement for Future Reference
June 28, 2022
TRANSAMERICA SERIES TRUST
Supplement to the Currently Effective Prospectus
* * *
Transamerica Aegon High Yield Bond VP Transamerica Multi-Managed Balanced VP
* * *
Transamerica Aegon High Yield Bond VP
Effective immediately, the third paragraph under “Principal Investment Strategies” in the Prospectus and Summary Prospectus relating to the portfolio is deleted entirely and replaced as follows:
The sub-adviser uses a combination of a global “top-down” analysis of the macroeconomic and interest rate environment and proprietary “bottom-up” research of corporate and sovereign debt, stressed and distressed securities, and other debt instruments. In the sub-adviser’s “top-down” approach, the sub-adviser analyzes various fundamental, technical, sentiment, and valuation factors that the sub-adviser believes affect the movement of markets and securities prices worldwide. This “top-down” analysis assists the sub-adviser in analyzing portfolio risk and allocating assets among sectors, industries, and credit quality categories. In its proprietary “bottom-up” research, the sub-adviser considers various fundamental and other factors, such as creditworthiness and capital structure. The sub-adviser uses this combined “top-down” and “bottom-up” approach to determine asset class, sector, security, yield curve and duration positions for the portfolio. The sub-adviser’s research analysts also integrate environmental, social and governance (“ESG”) matters within their analytical process for credit issuers alongside traditional credit metrics as a risk management tool and as a method to identify financially material ESG factors and arrive at an independent, comprehensive view of the investment. Consideration of ESG matters is subjective and not determinative in the sub-adviser’s investment process. The sub-adviser may conclude that other attributes of an investment outweigh ESG considerations when making investment decisions. The sub‐adviser’s research analysts do not take ESG factors into consideration with respect to every investment in the portfolio.
Effective immediately, the third paragraph in the section entitled “More on Each Portfolio’s Strategies and Investments – Transamerica Aegon High Yield Bond VP” in the Prospectus relating to the portfolio is deleted entirely and replaced as follows:
The sub-adviser uses a combination of a global “top-down” analysis of the macroeconomic and interest rate environment and proprietary “bottom-up” research of corporate and sovereign debt, stressed and distressed securities, and other debt instruments. In the sub-adviser’s “top-down” approach, the sub-adviser analyzes various fundamental, technical, sentiment, and valuation factors that the sub-adviser believes affect the movement of markets and securities prices worldwide. This “top-down” analysis assists the sub-adviser in analyzing portfolio risk and allocating assets among sectors, industries, and credit quality categories. In its proprietary “bottom-up” research, the sub-adviser considers various fundamental and other factors, such as creditworthiness and capital structure. The sub-adviser uses this combined “top-down” and “bottom-up” approach to determine asset class, sector, security, yield curve and duration positions for the portfolio. The sub-adviser’s research analysts also integrate environmental, social and governance (“ESG”) matters within their analytical process for credit issuers alongside traditional credit metrics as a risk management tool and as a method to identify financially material ESG factors and arrive at an independent, comprehensive view of the investment. ESG factors considered can vary across issuers and industries and may include, but are not limited to, greenhouse gas emissions, biodiversity impacts, product and employee safety, labor management, and corporate governance. Consideration of ESG matters is subjective and not determinative in the sub-adviser’s investment process. The sub-adviser may conclude that other attributes of an investment outweigh ESG considerations when making investment decisions. The sub‐adviser’s research analysts do not take ESG factors into consideration with respect to every investment in the portfolio.
* * *
Transamerica Multi-Managed Balanced VP
Effective immediately, the eighth paragraph under “Principal Investment Strategies” in the Prospectus and Summary Prospectus relating to the portfolio is deleted entirely and replaced as follows:
In managing the portfolio’s fixed-income component, the fixed-income sub-adviser uses a combination of a global “top-down” analysis of the macroeconomic and interest rate environment and proprietary “bottom-up” research of corporate and government debt, and other debt instruments. In the fixed-income sub-adviser’s “top-down” approach, the fixed-income sub- adviser analyzes various fundamental, technical, sentiment and valuation factors that affect the movement of markets and securities prices worldwide. In its proprietary “bottom-up” research, the fixed-income sub-adviser considers various fundamental and other factors, such as creditworthiness, capital structure, covenants, cash flows and, as applicable, collateral. The fixed-income sub-adviser uses this combined “top-down” and “bottom-up” approach to determine sector, security, yield curve positioning, and duration positions for the fixed-income component of the portfolio. The fixed-income sub-adviser’s research analysts also integrate ESG matters within their analytical process for public corporate, sovereign and structured issuers alongside traditional credit metrics as a risk management tool and as a method to identify financially material ESG
factors and arrive at an independent, comprehensive view of the investment. Consideration of ESG matters is subjective and not determinative in the fixed-income sub-adviser’s investment process. The fixed-income sub-adviser may conclude that other attributes of an investment outweigh ESG considerations when making investment decisions. The fixed-income sub-adviser’s research analysts do not take ESG factors into consideration with respect to every investment in the portfolio.
Effective immediately, the seventh paragraph in the section entitled “More on Each Portfolio’s Strategies and Investments – Transamerica Multi-Managed Balanced VP” in the Prospectus relating to the portfolio is deleted entirely and replaced as follows:
In managing the portfolio’s fixed-income component, the fixed-income sub-adviser uses a combination of a global “top-down” analysis of the macroeconomic and interest rate environment and proprietary “bottom-up” research of corporate and government debt, and other debt instruments. In the fixed-income sub-adviser’s “top-down” approach, the fixed-income sub- adviser analyzes various fundamental, technical, sentiment and valuation factors that affect the movement of markets and securities prices worldwide. In its proprietary “bottom-up” research, the fixed-income sub-adviser considers various fundamental and other factors, such as creditworthiness, capital structure, covenants, cash flows and, as applicable, collateral. The fixed-income sub-adviser uses this combined “top-down” and “bottom-up” approach to determine sector, security, yield curve positioning, and duration positions for the fixed-income component of the portfolio. The fixed-income sub-adviser’s research analysts also integrate ESG matters within their analytical process for public corporate , sovereign and structured issuers alongside traditional credit metrics as a risk management tool and as a method to identify financially material ESG factors and arrive at an independent, comprehensive view of the investment. ESG factors considered can vary across issuers and industries and may include, but are not limited to, greenhouse gas emissions, biodiversity impacts, product and employee safety, labor management, and corporate governance. For structured issuers, ESG considerations may also include, but are not limited to, affordability and energy efficiency of collateral, underwriting standards and policies, alignment of interest and control provisions. Consideration of ESG matters is subjective and not determinative in the fixed-income sub-adviser’s investment process. The fixed-income sub-adviser may conclude that other attributes of an investment outweigh ESG considerations when making investment decisions. The fixed-income sub‐adviser’s research analysts do not take ESG factors into consideration with respect to every investment in the portfolio.
* * *
Investors Should Retain this Supplement for Future Reference
September 26, 2022