N-CSR 1 tm232302d18_ncsr.htm N-CSR

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF

REGISTERED MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number: 811-08934

 

Voya Strategic Allocation Portfolios, Inc.

(Exact name of registrant as specified in charter)

 

7337 East Doubletree Ranch Road, Suite 100, Scottsdale, AZ 85258
                 (Address of principal executive offices) (Zip code)

 

The Corporation Trust Incorporated, 300 East Lombard Street, Baltimore, MD 21201

(Name and address of agent for service)

 

Registrant’s telephone number, including area code: 1-800-992-0180

 

Date of fiscal year end: December 31

 

Date of reporting period: December 31, 2022

 

 

 

 

 

Item 1. Reports to Stockholders.

 

(a)       The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1):

 




Annual Report

December 31, 2022

Classes I and S

Strategic Allocation Funds-of-Funds     Voya Strategic Allocation Moderate Portfolio
■ 
Voya Strategic Allocation Conservative Portfolio     Voya Strategic Allocation Growth Portfolio

As permitted by regulations adopted by the U.S. Securities and Exchange Commission, paper copies of each portfolio’s annual and semi-annual shareholder reports, like this annual report, are not sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on a website and you will be notified by mail each time a report is posted and provided with a website link to access the report.

If you already elected to receive shareholder reports electronically, you need not take any action. You may elect to receive shareholder reports and other communications from your insurance carrier electronically by contacting them directly.

You may elect to receive all future reports in paper free of charge. If you received this document in the mail, please follow the instructions provided to elect to continue receiving paper copies of your shareholder reports. You can inform us that you wish to continue receiving paper copies by calling 1-866-345-5954. Your election to receive reports in paper will apply to all the funds in which you invest.

 

This report is submitted for general information to shareholders of the Voya mutual funds. It is not authorized for distribution to prospective shareholders unless accompanied or preceded by a prospectus which includes details regarding the funds’ investment objectives, risks, charges, expenses and other information. This information should be read carefully.


INVESTMENT MANAGEMENT

 

voyainvestments.com


TABLE OF CONTENTS

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PROXY VOTING INFORMATION
A description of the policies and procedures that the Portfolios use to determine how to vote proxies related to portfolio securities is available: (1) without charge, upon request, by calling Shareholder Services toll-free at (800) 992-0180; (2) on the Portfolios’ website at www.voyainvestments.com; and (3) on the U.S. Securities and Exchange Commission’s (“SEC’s”) website at www.sec.gov. Information regarding how the Portfolios voted proxies related to portfolio securities during the most recent 12-month period ended June 30 is available without charge on the Portfolios’ website at www.voyainvestments.com and on the SEC’s website at www.sec.gov.

QUARTERLY PORTFOLIO HOLDINGS
The Portfolios file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form NPORT-P. The Portfolios’ Forms NPORT-P are available on the SEC’s website at www.sec.gov. Each Portfolio’s complete schedule of portfolio holdings is available at: www.voyainvestments.com and without charge upon request from the Portfolio by calling Shareholder Services toll-free at (800) 992-0180.


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BENCHMARK DESCRIPTIONS

Index Description
Bloomberg U.S. Aggregate Bond Index (“Bloomberg U.S. Aggregate Bond”)
An index of publicly issued investment grade U.S. government, mortgage-backed, asset-backed and corporate debt securities.
Russell 3000® Index
An index that measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market.

1


VOYA STRATEGIC ALLOCATION PORTFOLIOS PORTFOLIOS MANAGERS’ REPORT

Voya Strategic Allocation Conservative Portfolio seeks to provide total return (i.e., income and capital growth, both realized and unrealized) consistent with preservation of capital. Voya Strategic Allocation Growth Portfolio seeks to provide capital appreciation. Voya Strategic Allocation Moderate Portfolio seeks to provide total return (i.e., income and capital appreciation, both realized and unrealized). Each Portfolio seeks to achieve its investment objective by investing in a combination of underlying funds which are actively managed funds or passively managed funds (index funds). Each Portfolio uses an asset allocation strategy (“Target Asset Allocation”) designed for investors seeking the risk profile applicable to that Portfolio. These Target Asset Allocations as of December 31, 2022 are set out in the table below. Voya Strategic Allocation Conservative Portfolio, Voya Strategic Allocation Growth Portfolio and Voya Strategic Allocation Moderate Portfolio (each a “Portfolio” and collectively, the “Portfolios”) are managed by Paul Zemsky, CFA and Chief Investment Officer, and Barbara Reinhard, CFA, Portfolio Managers of Voya Investment Management Co. LLC (“Voya IM”) — the Sub-Adviser.

Performance: For the year ended December 31, 2022, Voya Strategic Allocation Conservative Portfolio’s Class I shares provided a total return of -16.46% compared to the Bloomberg U.S. Aggregate Bond Index (“Bloomberg U.S. Aggregate Bond”) and the Voya Strategic Allocation Conservative Composite which returned -13.01% and -14.41%, respectively, for the same period. For the year ended December 31, 2022, Voya Strategic Allocation Moderate Portfolio’s Class I shares provided a total return of -18.16% compared to the Russell 3000® Index and the Voya Strategic Allocation Moderate Composite which returned -19.21% and -15.84%, respectively, for the same period. For the year ended December 31, 2022, Voya Strategic Allocation Growth Portfolio’s Class I shares provided a total return of -19.35% compared to the Russell 3000® Index and the Voya Strategic Allocation Growth Composite which returned -19.21% and -16.74%, respectively, for the same period.

Portfolio Specifics: For the twelve-month reporting period ended December 31, 2022, the Portfolios underperformed their respective strategic allocation benchmarks. Both tactical asset allocation and manager selection detracted. Voya Strategic Allocation Conservative and Voya Strategic Allocation Moderate Portfolios started the year with modest overweights to equities, while Voya Strategic Allocation Growth Portfolio was neutral relative to its strategic asset allocation. Within equities, the Portfolios favored US large and small-cap over US mid-cap and core US fixed income in varying degrees.

In January and February, the Portfolios lowered their allocations to high yield, taking advantage of the relatively stable credit markets as equities experienced sharp volatility. Also in February, the strategy reduced its US large-cap position and added to emerging market and developed international equities. The non-US equity markets offer less tech exposure and less long duration equity exposure which has shown to be more sensitive to rising US real yields.

In March, the Portfolios lowered their international equity exposure in favor of short-term Eurodollar futures, believing that international equities remain vulnerable to the economic fallout from the first major war in the Europe post-World War II. We believe recession risk in the Eurozone is rising quickly as war wages, gasoline prices continue to rise and an inflation problem is forcing the European Central Bank’s (ECB) hand to tighten financial conditions. In addition, slowing Chinese growth is a challenge for emerging markets (“EM”). Any stimulus to occur will likely not be enough to revive a slowing economy and to meeting Beijing’s growth target, in our opinion. We believe strong forward guidance by the US Federal Reserve to increase policy rates and a faster balance sheet roll-off than other central banks are US dollar positives.

As part of its annual review in early April, the Portfolios equity weightings were marginally reduced. US large cap equities were used as the source of the increase to core fixed income positions. Still, the Portfolios held modest overweights to US large cap equities overall. This was a drag over the quarter as both international developed and EM equities performed better after lagging in the first three months of the year. However, overweights to US assets helped within the fixed income segments of the Portfolios, as US aggregate bonds performed better than global bonds and significantly outperformed EM debt, which struggled due to those countries’ generally weaker growth outlook and a substantial strengthening in the dollar. In May, a new position in Japanese equities was initiated, funded by selling US large cap stocks. Japan is acting more defensive than the rest of the world given the Bank of Japan’s (BOJ) use of yield curve control, which, along with relatively cheap valuations, we believe makes their equity markets more attractive in this highly uncertain macro environment. In addition, during times of market stress, the Japanese yen serves as a safe haven for investors. Furthermore, the yen has fallen dramatically since the beginning of 2021 and has not been this cheap relative to the dollar since 2002 from both purchasing power parity and real effective exchange rate perspective. We believe this should help the nation’s export-oriented businesses and could support earnings.

In the third quarter, portfolio managers (PMs) increased US large cap and small cap equities. The large cap increase was funded by a reduction to international developed equites, as the United States continues to be our favorite region given the relatively insulated economic and geopolitical position, strong currency and generally healthier companies. Within the United States, small caps have retraced all their stimulus driven gains and now trade at a discount to large caps. Given the severely oversold conditions, there is potential for an unwind and small caps would disproportionally benefit from the bounce. Within fixed income, PMs lengthened duration across Portfolios by increasing exposure to long-term US government bonds and reducing short-term bonds and cash. We believe declining energy and core goods prices, reduced shelter costs, softening labor market and decreased domestic demand will pull inflation down to the 4—5% range by the middle of next year. The necessary drop in nominal gross domestic product (GDP) or expectation thereof should weigh heavily on long dated yields. As a result, we have extended duration in fixed income Portfolio and maintain our preference for high-quality credit. Finally, toward the end of the quarter, PMs closed the long Japan position, reallocating proceeds to US large cap. The BOJ has held firm in its policy of “unlimited” purchases of 10-year Japanese Government Bonds (JGBs) to keep the yield at or below 0.25%. As Treasury yields climb and the yen weakens, the BOJ seems to have only two options: eliminate or raise the yield cap or intervene in currency markets to support the weakening yen. The BOJ has chosen the latter for now, but we are skeptical of their ability to defend the yen while maintaining yield curve control.

During the final quarter of the year, late in October, PMs lessened the tactical underweight to US large cap equities by selling EM equities. This short-term tactical trade to underweight in EM equity and add to US large caps was due to increased tensions between Beijing and Washington related to Taiwan. However, by December, relations between the two superpowers seemed to improve such that an escalation of hostilities was much less likely. As a result, the brief EM equity underweight was closed by selling international developed equities. International developed equities were used as the source of funds because Europe looked increasingly unappealing after the strong rally in the first two months of the quarter and their still challenged fundamental outlook with the ECB struggling to contain inflation in the face of a gas embargo with Russia that

2


PORTFOLIO MANAGERS’ REPORT VOYA STRATEGIC ALLOCATION PORTFOLIOS

is likely to continue for a multi-year period and local governments having spent their fiscal firepower on helping households meet their increased energy costs. Europe looks to have used a short-term patch to try and fix a long-term problem, which will likely pressure European equities in 2023. Additionally, the emerging and developing international stocks relationship looked to be making an important bottom that favored EM, as China reopens and refocuses on growth. Also, toward the end of the period, after strong returns from stocks in October and November, US large cap equities were decreased and US core bonds were increased, as recession risks accumulated, leading to concerns deteriorating earnings would drive a sell-off into year end. Within fixed income, Portfolios continue to hold long duration postures as a hedge against equity beta in the event of a risk-off flight to safety and given PM’s expectations a weak growth environment will weigh down the back-end of the yield curve.

During the full year period, tactical moves relative to our strategic benchmarks had a negative performance impact across the Portfolios.

Allocation to Underlying Funds were also a hurdle over the year for the Portfolios. Top performing underlying strategies for the year were Voya Large Cap Value Portfolio, Voya U.S. High Dividend Low Volatility Portfolio and Voya Multi-Manager Mid Cap Value Fund. Bottom performers include VY® T. Rowe Price Growth Equity Portfolio, Voya MidCap Opportunities Portfolio and Voya Multi-Manager International Equity Fund.

Current Strategy and Outlook: Inflation dominated the headlines in 2022, and its progression and policy makers’ responses will continue to be the principal global macro drivers in the year ahead. Although it remains unacceptably high, data suggests to use that it has peaked with meaningfully lower core goods and energy prices. Income sensitive components of the price Index baskets, such as shelter and services, are proving sticker given the still strong labor market and high personal income. However, we are beginning to see the effects of declining demand with wage gains cooling, which we expect will continue and contribute to a steady fall in inflation to the low single digits by the end of the year. However, we do not expect a shift in policy from the Fed or ECB. With more tightening in store and explicit declarations that there will be no rate cuts in 2023, a contraction in developed market growth seems likely and should cause top line revenues to fall. Additionally, the prolonged period of rising costs is likely to erode profit margins ahead, including those of US large cap companies, which have thus far been relatively successful in maintaining pricing power. In general, US stocks are not cheap, but they are well of peaks and seem, in our opinion, reasonable. On the other side of this year, however, we believe we will see moderate inflation, more normal interest rates and slow but positive growth, which should be good for equities. Until investors begin to price in that outcome, volatility will likely be high.

We think the bond bear market is over. Following one of the worst years on record, bonds now look attractive. Positive real yields across the interest rate curve offer attractive carry for the first time in years. We expect the hand-off from inflation risk to growth risk should pressure yields lower to the benefit of duration sensitive assets. Additionally, the volatility in rates and the correlation between stocks and bonds should normalize, as fixed income reassumes its place of ballast within multi-asset portfolios.

The US continues to be our favorite region. It is further along in the inflation fight and still more geopolitically insulated as compared to the Eurozone, which still faces an increased probability and expected magnitude of a decline in output. China’s move away from zero covid and the seeming relaxation of tensions with the United States from their boiling point are pluses for EM. While the dollar is less likely to be a challenge to international assets, it should retain its defensive properties in risk-off scenarios, providing motivation for keeping close to home for now.

 

The views expressed in this commentary are informed opinions. They should not be considered promises or advice. The views expressed reflect those of the portfolio managers, only through the end of the period as stated on the cover. The portfolio managers’ views are subject to change at any time based on market and other conditions.

Portfolio holdings and characteristics are subject to change and may not be representative of current holdings and characteristics. Portfolio holdings are subject to change daily. The outlook for this Portfolio may differ from that presented for other Voya mutual funds. This report contains statements that may be “forward-looking” statements. Actual results may differ materially from those projected in the “forward-looking” statements. The Portfolio’s performance returns shown reflect applicable fee waivers and/or expense limits in effect during this period. Absent such fee waivers/expense limitations, if any, performance would have been lower. Performance for the different classes of shares will vary based on differences in fees associated with each class. An index has no cash in its portfolio and imposes no sales charges. An investor cannot invest directly in an index.

3


VOYA STRATEGIC ALLOCATION PORTFOLIOS PORTFOLIOS MANAGERS’ REPORT

 

Annual Target Asset Allocations as of December 31, 2022(1)
(as a percentage of net assets)

Sub Asset Class
  Conservative   Moderate   Growth
US Large Blend
    14.0     32.0     42.0
US Large Growth
    6.0     7.0     5.0
US Large Value
    8.0     7.0     5.0
US Mid Cap Blend
    2.0     5.0     8.0
US Small Cap
    4.0     5.0     7.0
International
    2.0     3.0     8.0
Emerging Markets
    2.0     2.0     3.0
Core Fixed Income
    37.5     28.5     15.5
High Yield
    5.0            
International Bonds
    4.0            
TIPS
    2.0     1.0     1.0
Short Duration
    10.5     6.5     2.5
Long Govt Bonds
    3.0     3.0     3.0
Total Equity
    38.0 %      61.0 %      78.0 % 
Total Fixed Income
    62.0 %      39.0 %      22.0 % 
 
    100.0 %      100.0 %      100.0 % 
 
(1) 
  As these are target allocations, the actual allocations of each Portfolio’s assets may deviate from the percentages shown. Although the Portfolios expect to be fully invested at all times, they may maintain liquidity reserves to meet redemption requests.

Portfolio holdings are subject to change daily.

4


PORTFOLIO MANAGERS’ REPORT VOYA STRATEGIC ALLOCATION
CONSERVATIVE PORTFOLIO

Average Annual Total Returns for the Periods Ended December 31, 2022
  1 Year     5 Year     10 Year  
Class I
    –16.46 %     2.10 %     4.45 %
Class S
    –16.69 %     1.85 %     4.19 %
Bloomberg U.S. Aggregate Bond
    –13.01 %     0.02 %     1.06 %

Based on a $10,000 initial investment, the graph and table above illustrate the total return of Voya Strategic Allocation Conservative Portfolio against the index indicated. The index is unmanaged and has no cash in its portfolio and imposes no sales charges. An investor cannot invest directly in an index.

The Portfolio’s performance is shown without the imposition of any expenses or charges which are, or may be, imposed under your variable annuity contract or variable life insurance policy. Total returns would have been lower if such expenses or charges were included.

The performance graph and table do not reflect the deduction of taxes that a shareholder will pay on Portfolio distributions or the redemption of Portfolio shares.

The performance shown includes, if applicable the effect of fee waivers and/or expense reimbursements by the Investment Adviser and/or other

service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower.

The performance update illustrates performance for a variable investment option available through a variable annuity contract or a variable life insurance policy. The performance shown indicates past performance and is not a projection or prediction of future results. Actual investment returns and principal value will fluctuate so that shares and/or units, at redemption, may be worth more or less than their original cost. Please log on to www.voyainvestments.com or call (800) 992-0180 to get performance through the most recent month end.

Portfolio holdings are subject to change daily.


5


VOYA STRATEGIC ALLOCATION
MODERATE PORTFOLIO
PORTFOLIOS MANAGERS’ REPORT

Average Annual Total Returns for the Periods Ended December 31, 2022
  1 Year     5 Year     10 Year  
Class I
    –18.16     3.31     5.92
Class S
    –18.34     3.05     5.65
Russell 3000® Index
    –19.21     8.79     12.13

Based on a $10,000 initial investment, the graph and table above illustrate the total return of Voya Strategic Allocation Moderate Portfolio against the index indicated. The index is unmanaged and has no cash in its portfolio and imposes no sales charges. An investor cannot invest directly in an index.

The Portfolio’s performance is shown without the imposition of any expenses or charges which are, or may be, imposed under your variable annuity contract or variable life insurance policy. Total returns would have been lower if such expenses or charges were included.

The performance graph and table do not reflect the deduction of taxes that a shareholder will pay on Portfolio distributions or the redemption of Portfolio shares.

The performance shown includes, if applicable, the effect of fee waivers and/or expense reimbursements by the Investment Adviser and/or other

service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower.

The performance update illustrates performance for a variable investment option available through a variable annuity contract or a variable life insurance policy. The performance shown indicates past performance and is not a projection or prediction of future results. Actual investment returns and principal value will fluctuate so that shares and/or units, at redemption, may be worth more or less than their original cost. Please log on to www.voyainvestments.com or call (800) 992-0180 to get performance through the most recent month end.

Portfolio holdings are subject to change daily.


6


PORTFOLIO MANAGER’S REPORT VOYA STRATEGIC ALLOCATION
GROWTH PORTFOLIO

Average Annual Total Returns for the Periods Ended December 31, 2022
  1 Year     5 Year     10 Year  
Class I
    –19.35 %     4.05 %     7.08 %
Class S
    –19.55 %     3.79 %     6.80 %
Russell 3000® Index
    –19.21 %     8.79 %     12.13 %

Based on a $10,000 initial investment, the graph and table above illustrate the total return of Voya Strategic Allocation Growth Portfolio against the index indicated. The index is unmanaged and has no cash in its portfolio and imposes no sales charges. An investor cannot invest directly in an index.

The Portfolio’s performance is shown without the imposition of any expenses or charges which are, or may be, imposed under your variable annuity contract or variable life insurance policy. Total returns would have been lower if such expenses or charges were included.

The performance graph and table do not reflect the deduction of taxes that a shareholder will pay on Portfolio distributions or the redemption of Portfolio shares.

The performance shown includes, if applicable, the effect of fee waivers and/or expense reimbursements by the Investment Adviser and/or other

service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower.

The performance update illustrates performance for a variable investment option available through a variable annuity contract or a variable life insurance policy. The performance shown indicates past performance and is not a projection or prediction of future results. Actual investment returns and principal value will fluctuate so that shares and/or units, at redemption, may be worth more or less than their original cost. Please log on to www.voyainvestments.com or call (800) 992-0180 to get performance through the most recent month end.

Portfolio holdings are subject to change daily.


7


SHAREHOLDER EXPENSE EXAMPLES (UNAUDITED)

As a shareholder of a Portfolio, you incur two types of costs: (1) transaction costs, including redemption fees, and exchange fees; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Portfolio expenses. These Examples are intended to help you understand your ongoing costs (in dollars) of investing in a Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

The Examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2022 through December 31, 2022. The Portfolios’ expenses are shown without the imposition of any charges which are, or may be, imposed under your variable annuity contract, variable life insurance policy, qualified pension, or retirement plan. Expenses would have been higher if such charges were included.

Actual Expenses

The left section of the table shown below, “Actual Portfolio Return,” provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The right section of the table shown below, “Hypothetical (5% return before expenses),” provides information about hypothetical account values and hypothetical expenses based on a Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not a Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in each Portfolio and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees, or exchange fees. Therefore, the hypothetical section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different mutual funds. In addition, if these transactional costs were included, your costs would have been higher.

  Actual Portfolio Return   Hypothetical (5% return before expenses)
  Beginning
Account
Value
July 1,
2022  
  Ending
Account
Value
December 31,
2022  
  Annualized
Expense
Ratio*  
  Expenses Paid
During the
Period Ended
December 31,
2022**  
  Beginning
Account
Value
July 1,
2022
  Ending
Account
Value
December 31,
2022
  Annualized
Expense
Ratio*
  Expenses Paid
During the
Period Ended
December 31,
2022**
Voya Strategic Allocation Conservative Portfolio
Class I
    $ 1,000.00          $ 988.70           0.30 %            $ 1.50              $ 1,000.00           $ 1,023.69           0.30 %           $ 1.53      
Class S
     1,000.00         987.70         0.55         2.76         1,000.00         1,022.43         0.55         2.80  
Voya Strategic Allocation Moderate Portfolio
Class I
    $ 1,000.00        $ 997.40         0.33 %       $ 1.66        $ 1,000.00        $ 1,023.54         0.33 %       $ 1.68  
Class S
     1,000.00         996.50         0.58         2.92         1,000.00         1,022.28         0.58         2.96  
Voya Strategic Allocation Growth Portfolio
Class I
    $ 1,000.00        $ 1,008.40         0.31 %       $ 1.57        $ 1,000.00        $ 1,023.64         0.31 %       $ 1.58  
Class S
     1,000.00         1,006.80         0.56         2.83         1,000.00         1,022.38         0.56         2.85  
 
*
  The annualized expense ratios do not include expenses of the underlying funds.
**
  Expenses are equal to each Portfolio’s respective annualized expense ratios multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half-year.

8



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders of Voya Strategic Allocation Conservative Portfolio, Voya Strategic Allocation Moderate Portfolio and Voya Strategic Allocation Growth Portfolio and the Board of Directors of Voya Strategic Allocation Portfolios, Inc.

Opinion on the Financial Statements

We have audited the accompanying statements of assets and liabilities of Voya Strategic Allocation Conservative Portfolio, Voya Strategic Allocation Moderate Portfolio and Voya Strategic Allocation Growth Portfolio (collectively referred to as the “Portfolios”) (three of the portfolios constituting Voya Strategic Allocation Portfolios, Inc. (the “Company”)), including the portfolios of investments, as of December 31, 2022, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the three years in the period then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Portfolios (three of the portfolios constituting Voya Strategic Allocation Portfolios, Inc.) at December 31, 2022, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended and their financial highlights for each of the three years in the period then ended, in conformity with U.S. generally accepted accounting principles.

The financial highlights for each of the years in the two-year period ended December 31, 2019, were audited by another independent registered public accounting firm whose report, dated February 26, 2020, expressed an unqualified opinion on those financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on each of the Portfolios’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of the Company’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2022, by correspondence with the custodian, brokers and others; when replies were not received from brokers and others, we performed other auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more Voya investment companies since 2019.

Boston, Massachusetts
February 28, 2023

9



STATEMENTS OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2022

  Voya
Strategic
Allocation
Conservative
Portfolio
  Voya
Strategic
Allocation
Moderate
Portfolio
  Voya
Strategic
Allocation
Growth
Portfolio
ASSETS:
                       
Investments in affiliated underlying funds at fair value*
  $ 52,551,137     $ 108,118,816     $ 117,728,066  
Investments in unaffiliated underlying funds at fair value**
    3,930,873       3,361,033       3,589,929  
Cash
    66,433       85,794       112,364  
Cash collateral for futures contracts
          226,193       231,917  
Receivables:
                       
Investments in affiliated underlying funds sold
          199,264        
Fund shares sold
    6,219       131       70,070  
Interest
    628       1,072        
Variation margin on futures contracts
          6,728       7,960  
Prepaid expenses
    311       597       643  
Reimbursement due from Investment Adviser
    2,753             3,832  
Other assets
    6,406       11,599       11,327  
Total assets
    56,564,760       112,011,227       121,756,108  
LIABILITIES:
                       
Payable for investments in affiliated underlying funds purchased
    6,015             40,627  
Payable for fund shares redeemed
    207       199,394       29,443  
Payable for investment management fees
    9,541       18,104       19,674  
Payable for distribution and shareholder service fees
    636       261       469  
Payable for directors fees
    158       307       328  
Payable to directors under the deferred compensation plan (Note 6)
    6,406       11,599       11,327  
Other accrued expenses and liabilities
    24,875       35,524       38,038  
Total liabilities
    47,838       265,189       139,906  
NET ASSETS
  $ 56,516,922     $ 111,746,038     $ 121,616,202  
NET ASSETS WERE COMPRISED OF:
                       
Paid-in capital
  $ 61,996,090     $ 118,275,260     $ 124,793,370  
Total distributable loss
    (5,479,168 )     (6,529,222 )     (3,177,168 )
NET ASSETS
  $ 56,516,922     $ 111,746,038     $ 121,616,202  

 

 

*  Cost of investments in affiliated underlying funds
  $ 57,959,414     $ 119,238,640     $ 127,100,259  
** Cost of investments in unaffiliated underlying funds
  $ 4,566,785     $ 4,207,670     $ 4,493,410  
                         
Class I
                       
Net assets
  $ 53,576,938     $ 110,540,763     $ 119,443,839  
Shares authorized
    100,000,000       100,000,000       100,000,000  
Par value
  $ 0.001     $ 0.001     $ 0.001  
Shares outstanding
    5,086,400       9,544,602       9,955,146  
Net asset value and redemption price per share
  $ 10.53     $ 11.58     $ 12.00  
                         
Class S
                       
Net assets
  $ 2,939,984     $ 1,205,275     $ 2,172,363  
Shares authorized
    100,000,000       100,000,000       100,000,000  
Par value
  $ 0.001     $ 0.001     $ 0.001  
Shares outstanding
    282,285       104,709       183,284  
Net asset value and redemption price per share
  $ 10.41     $ 11.51     $ 11.85  

See Accompanying Notes to Financial Statements

10


STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2022

  Voya
Strategic
Allocation
Conservative
Portfolio
  Voya
Strategic
Allocation
Moderate
Portfolio
  Voya
Strategic
Allocation
Growth
Portfolio
INVESTMENT INCOME:
                       
Dividends from affiliated underlying funds
  $ 1,210,522     $ 1,942,955     $ 1,795,150  
Dividends from unaffiliated underlying funds
    129,012       168,309       178,702  
Interest
    1,023       5,671       3,669  
Total investment income
    1,340,557       2,116,935       1,977,521  
EXPENSES:
                       
Investment management fees
    124,786       237,042       256,240  
Distribution and shareholder service fees:
                       
Class S
    8,142       3,398       5,962  
Transfer agent fees:
                       
Class I
    48,946       94,654       113,299  
Class S
    2,652       1,058       2,100  
Shareholder reporting expense
    7,300       11,680       14,949  
Registration fees
    65       53        
Professional fees
    11,680       29,200       34,630  
Custody and accounting expense
    12,775       15,330       16,425  
Directors fees
    1,585       3,068       3,286  
Miscellaneous expense
    8,735       10,966       8,722  
Interest expense
    162              
Total expenses
    226,828       406,449       455,613  
Waived and reimbursed fees
    (26,371 )           (39,028 )
Net expenses
    200,457       406,449       416,585  
Net investment income
    1,140,100       1,710,486       1,560,936  
REALIZED AND UNREALIZED GAIN (LOSS):
                       
Net realized gain (loss) on:
                       
Sale of affiliated underlying funds
    (3,423,151 )     (7,638,105 )     (8,156,333 )
Sale of unaffiliated underlying funds
    1,225,279       1,228,137       1,814,711  
Capital gain distributions from affiliated underlying funds
    3,380,772       12,512,170       14,133,984  
Futures
          149,897       193,971  
Net realized gain
    1,182,900       6,252,099       7,986,333  
Net change in unrealized appreciation (depreciation) on:
                       
Affiliated underlying funds
    (12,074,179 )     (30,880,725 )     (35,288,001 )
Unaffiliated underlying funds
    (2,320,786 )     (3,055,901 )     (4,275,161 )
Futures
          21,976       30,514  
Net change in unrealized appreciation (depreciation)
    (14,394,965 )     (33,914,650 )     (39,532,648 )
Net realized and unrealized loss
    (13,212,065 )     (27,662,551 )     (31,546,315 )
Decrease in net assets resulting from operations
  $ (12,071,965 )   $ (25,952,065 )   $ (29,985,379 )

See Accompanying Notes to Financial Statements

11


STATEMENTS OF CHANGES IN NET ASSETS

  Voya Strategic Allocation
Conservative Portfolio
  Voya Strategic Allocation
Moderate Portfolio
  Year Ended
December 31,
2022
  Year Ended
December 31,
2021
  Year Ended
December 31,
2022
  Year Ended
December 31,
2021
FROM OPERATIONS:
                               
Net investment income
  $ 1,140,100     $ 1,478,827     $ 1,710,486     $ 2,223,479  
Net realized gain
    1,182,900       5,785,686       6,252,099       13,903,477  
Net change in unrealized appreciation (depreciation)
    (14,394,965 )     (799,073 )     (33,914,650 )     1,786,848  
Increase (decrease) in net assets resulting from operations
    (12,071,965 )     6,465,440       (25,952,065 )     17,913,804  
FROM DISTRIBUTIONS TO SHAREHOLDERS:
                               
Total distributions (excluding return of capital):
                               
Class I
    (7,001,681 )     (1,965,059 )     (15,985,509 )     (7,361,065 )
Class S
    (369,519 )     (98,241 )     (178,171 )     (80,773 )
Total distributions
    (7,371,200 )     (2,063,300 )     (16,163,680 )     (7,441,838 )
FROM CAPITAL SHARE TRANSACTIONS:
                               
Net proceeds from sale of shares
    6,086,984       8,546,135       4,444,559       7,909,864  
Reinvestment of distributions
    7,371,200       2,063,300       16,163,680       7,441,838  
 
    13,458,184       10,609,435       20,608,239       15,351,702  
Cost of shares redeemed
    (12,720,367 )     (10,344,216 )     (11,713,539 )     (13,343,829 )
Net increase in net assets resulting from capital share transactions
    737,817       265,219       8,894,700       2,007,873  
Net increase (decrease) in net assets
    (18,705,348 )     4,667,359       (33,221,045 )     12,479,839  
NET ASSETS:
                               
Beginning of year or period
    75,222,270       70,554,911       144,967,083       132,487,244  
End of year or period
  $ 56,516,922     $ 75,222,270     $ 111,746,038     $ 144,967,083  

See Accompanying Notes to Financial Statements

12


STATEMENTS OF CHANGES IN NET ASSETS

  Voya Strategic Allocation
Growth Portfolio
  Year Ended
December 31,
2022
  Year Ended
December 31,
2021
FROM OPERATIONS:
               
Net investment income
  $ 1,560,936     $ 2,043,930  
Net realized gain
    7,986,333       18,890,159  
Net change in unrealized appreciation (depreciation)
    (39,532,648 )     3,161,747  
Increase (decrease) in net assets resulting from operations
    (29,985,379 )     24,095,836  
FROM DISTRIBUTIONS TO SHAREHOLDERS:
               
Total distributions (excluding return of capital):
               
Class I
    (20,520,510 )     (5,750,466 )
Class S
    (376,391 )     (104,047 )
Total distributions
    (20,896,901 )     (5,854,513 )
FROM CAPITAL SHARE TRANSACTIONS:
               
Net proceeds from sale of shares
    6,061,692       6,920,238  
Reinvestment of distributions
    20,896,901       5,854,513  
 
    26,958,593       12,774,751  
Cost of shares redeemed
    (11,912,836 )     (16,951,362 )
Net increase (decrease) in net assets resulting from capital share transactions
    15,045,757       (4,176,611 )
Net increase (decrease) in net assets
    (35,836,523 )     14,064,712  
NET ASSETS:
               
Beginning of year or period
    157,452,725       143,388,013  
End of year or period
  $ 121,616,202     $ 157,452,725  

See Accompanying Notes to Financial Statements

13


FINANCIAL HIGHLIGHTS

Selected data for a share of beneficial interest outstanding throughout each year or period.

    Income (loss)
from investment
operations
    Less distributions           Ratios to average
net assets
  Supplemental
data
      Net asset
value,
beginning
of year
or period
    Net
investment
income
(loss)
    Net
realized
and
unrealized
gain (loss)
    Total from
investment
operations
    From net
investment
income
    From net
realized
gains
    From
return of
capital
    Total
distributions
    Payment by
affiliate
    Net asset
value,
end of
year or
period
    Total
Return(1)
    Expenses
before
reductions/
additions(2)(3)(4)
    Expenses
net of fee
waivers
and/or
recoupments
if any(2)(3)(4)
    Expenses
net of all
reductions/
additions(2)(3)(4)
    Net
investment
income
(loss)(2)(3)
    Net assets,
end of
year or
period
    Portfolio
turnover
rate
Year or period ended   ($)   ($)   ($)   ($)   ($)   ($)   ($)   ($)   ($)   ($)   (%)   (%)   (%)   (%)   (%)   ($000’s)   (%)
Voya Strategic Allocation Conservative Portfolio
Class I
                                                                                                                                       
12-31-22
    14.26       0.21       (2.51 )     (2.30 )     0.44       0.99             1.43             10.53       (16.46 )      0.34       0.30       0.30       1.81       53,577       74  
12-31-21
    13.45       0.28       0.92       1.20       0.36       0.03             0.39             14.26       9.14       0.36       0.28       0.28       2.01       71,425       44  
12-31-20
    13.02       0.30       0.91       1.21       0.33       0.45             0.78             13.45       10.45       0.40       0.27       0.27       2.44       66,933       71  
12-31-19
    12.34       0.33       1.41       1.74       0.36       0.70             1.06             13.02       14.82       0.30       0.26       0.26       2.53       60,959       74  
12-31-18
    13.51       0.29       (0.80 )     (0.51 )     0.36       0.30             0.66             12.34       (4.03 )      0.31       0.26       0.26       2.26       56,221       60  
Class S
                                                                                                                                       
12-31-22
    14.11       0.18       (2.49 )     (2.31 )     0.40       0.99             1.39             10.41       (16.69 )      0.59       0.55       0.55       1.57       2,940       74  
12-31-21
    13.31       0.24       0.92       1.16       0.33       0.03             0.36             14.11       8.91       0.61       0.53       0.53       1.76       3,797       44  
12-31-20
    12.89       0.30       0.87       1.17       0.30       0.45             0.75             13.31       10.19       0.65       0.52       0.52       2.20       3,622       71  
12-31-19
    12.23       0.30       1.39       1.69       0.33       0.70             1.03             12.89       14.47       0.55       0.51       0.51       2.36       3,572       74  
12-31-18
    13.39       0.26       (0.80 )     (0.54 )     0.32       0.30             0.62             12.23       (4.25 )      0.56       0.51       0.51       2.02       2,670       60  
Voya Strategic Allocation Moderate Portfolio
Class I
                                                                                                                                       
12-31-22
    16.36       0.18       (3.10 )     (2.92 )     0.43       1.43             1.86             11.58       (18.16 )      0.33       0.33       0.33       1.40       110,541       63  
12-31-21
    15.21       0.25       1.77       2.02       0.37       0.50             0.87             16.36       13.84       0.33       0.33       0.33       1.60       143,341       44  
12-31-20
    14.62       0.30       1.31       1.61       0.33       0.69             1.02             15.21       12.73       0.37       0.30       0.30       2.08       131,004       53  
12-31-19
    13.59       0.29       2.18       2.47       0.41       1.03             1.44             14.62       19.26       0.30       0.28       0.28       2.07       126,475       57  
12-31-18
    14.80       0.29       (1.16 )     (0.87 )     0.34                   0.34             13.59       (6.05 )      0.28       0.25       0.25       1.96       117,049       48  
Class S
                                                                                                                                       
12-31-22
    16.26       0.15       (3.08 )     (2.93 )     0.39       1.43             1.82             11.51       (18.34 )      0.58       0.58       0.58       1.13       1,205       63  
12-31-21
    15.12       0.21       1.76       1.97       0.33       0.50             0.83             16.26       13.55       0.58       0.58       0.58       1.34       1,626       44  
12-31-20
    14.52       0.24       1.33       1.57       0.28       0.69             0.97             15.12       12.46       0.62       0.55       0.55       1.74       1,483       53  
12-31-19
    13.50       0.26       2.16       2.42       0.37       1.03             1.40             14.52       18.94       0.55       0.53       0.53       1.81       1,885       57  
12-31-18
    14.71       0.25       (1.16 )     (0.91 )     0.30                   0.30             13.50       (6.31 )      0.53       0.50       0.50       1.69       1,725       48  
                                                                                                                                         
Voya Strategic Allocation Growth Portfolio
Class I
                                                                                                                                       
12-31-22
    17.81       0.16       (3.57 )     (3.41 )     0.48       1.92             2.40             12.00       (19.35 )      0.34       0.31       0.31       1.19       119,444       58  
12-31-21
    15.80       0.23       2.44       2.67       0.33       0.33             0.66             17.81       17.35       0.36       0.32       0.32       1.35       154,678       42  
12-31-20
    15.62       0.26       1.49       1.75       0.32       1.25             1.57             15.80       14.40       0.39       0.29       0.29       1.87       140,657       56  
12-31-19
    14.40       0.28       2.79       3.07       0.43       1.42             1.85             15.62       22.84       0.30       0.26       0.26       1.76       130,989       66  
12-31-18
    16.03       0.28       (1.58 )     (1.30 )     0.33                   0.33             14.40       (8.32 )      0.27       0.23       0.23       1.77       114,461       45  
Class S
                                                                                                                                       
12-31-22
    17.61       0.12       (3.52 )     (3.40 )     0.44       1.92             2.36             11.85       (19.55 )      0.59       0.56       0.56       0.93       2,172       58  
12-31-21
    15.64       0.18       2.41       2.59       0.29       0.33             0.62             17.61       16.98       0.61       0.57       0.57       1.05       2,775       42  
12-31-20
    15.46       0.22       1.48       1.70       0.27       1.25             1.52             15.64       14.16       0.64       0.54       0.54       1.57       2,731       56  
12-31-19
    14.27       0.22       2.77       2.99       0.38       1.42             1.80             15.46       22.49       0.55       0.51       0.51       1.45       2,968       66  
12-31-18
    15.88       0.24       (1.56 )     (1.32 )     0.29                   0.29             14.27       (8.50 )      0.52       0.48       0.48       1.53       2,799       45  

 
(1)
   Total return is calculated assuming reinvestment of all dividends, capital gain distributions and return of capital distributions, if any, at net asset value and does not reflect the effect of insurance contract charges. Total return for periods less than one year is not annualized.
(2)
  Annualized for periods less than one year.
(3)
  Ratios reflect operating expenses of a Portfolio. Expenses before reductions/additions do not reflect amounts reimbursed or recouped by the Investment Adviser and/or Distributor or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by a Portfolio during periods when reimbursements or reductions occur.
 
  Expenses net of fee waivers reflect expenses after reimbursement by the Investment Adviser and/or Distributor or recoupment of previously reimbursed fees by the Investment Adviser, but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions/additions represent the net expenses paid by a Portfolio. Net investment income (loss) is net of all such additions or reductions.
(4)
   Ratios do not include expenses of underlying funds and do not include fees and expenses charged under the variable annuity contract or variable life insurance policy.
  Calculated using average number of shares outstanding throughout the year or period.


See Accompanying Notes to Financial Statements

14


NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2022

NOTE 1 — ORGANIZATION

Voya Strategic Allocation Portfolios, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The Company was incorporated under the laws of Maryland on October 14, 1994. There are three active separate investment series (each a “Portfolio” and collectively the “Portfolios”) that comprise the Company: Voya Strategic Allocation Conservative Portfolio (“Strategic Allocation Conservative”), Voya Strategic Allocation Moderate Portfolio (“Strategic Allocation Moderate”), and Voya Strategic Allocation Growth Portfolio (“Strategic Allocation Growth”), each a diversified series of the Company. Each Portfolio currently seeks to achieve its investment objective by investing primarily in other investment companies (“Underlying Funds”) and each uses asset allocation strategies to determine how to invest in the Underlying Funds. The investment objective of the Portfolios is described in the respective Portfolio’s Prospectus.

The classes of shares included in this report are: Class I and Class S. With the exception of class specific matters, each class has equal voting rights as to voting privileges. For class specific proposals, only the applicable class would have voting privileges. The two classes differ principally in the applicable distribution and service fees, as well as differences in the amount of waiver of fees and reimbursement of expenses, if any. Generally, shareholders of each class also bear certain expenses that pertain to that particular class. All shareholders are allocated the common expenses of a portfolio and earn income and realized gains/losses from a portfolio pro rata based on the daily ending net assets of each class, without distinction between share classes. Expenses that are specific to a portfolio or a class are charged directly to that portfolio or class. Other operating expenses shared by several portfolios are generally allocated among those portfolios based on average net assets. Distributions are determined separately for each class based on income and expenses allocated to each class. Realized gain distributions are allocated to each class pro rata based on the shares outstanding of each class on the date of distribution. Differences in per share dividend rates generally result from differences in separate class expenses, including distribution and shareholder service fees, if any, as well as differences in the amount of waiver of fees and reimbursement of expenses between the separate classes, if any.

Voya Investments, LLC (“Voya Investments” or the “Investment Adviser”), an Arizona limited liability company, serves as the Investment Adviser to the Portfolios. Voya Investment Management Co. LLC (“Voya IM” or the “Sub-

Adviser”), a Delaware limited liability company, serves as the Sub-Adviser to the Portfolios. Voya Investments Distributor, LLC (“VID” or the “Distributor”), a Delaware limited liability company, serves as the principal underwriter to the Portfolios.

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by the Portfolios in the preparation of their financial statements. Each Portfolio is considered an investment company under U.S. generally accepted accounting principles (“GAAP”) and follows the accounting and reporting guidance applicable to investment companies.

A.  Security Valuation. Each Portfolio is open for business every day the New York Stock Exchange (“NYSE”) opens for regular trading (each such day, a “Business Day”). The net asset value (“NAV”) per share for each class of each Portfolio is determined each Business Day as of the close of the regular trading session (“Market Close”), as determined by the Consolidated Tape Association (“CTA”), the central distributor of transaction prices for exchange-traded securities (normally 4:00 p.m. Eastern time unless otherwise designated by the CTA). The NAV per share of each class of each Portfolio is calculated by taking the value of the Portfolio’s assets attributable to that class, subtracting the Portfolio’s liabilities attributable to that class, and dividing by the number of shares of that class that are outstanding. On days when a Portfolio is closed for business, Portfolio shares will not be priced and a Portfolio does not transact purchase and redemption orders. To the extent a Portfolio’s assets are traded in other markets on days when a Portfolio does not price its shares, the value of a Portfolio’s assets will likely change and you will not be able to purchase or redeem shares of a Portfolio.

Portfolio securities for which market quotations are readily available are valued at market value. Investments in open-end registered investment companies that do not trade on an exchange are valued at the end of day NAV per share. The prospectuses of the open-end registered investment companies in which each Portfolio may invest explain the circumstances under which they will use fair value pricing and the effects of using fair value pricing. Foreign securities’ prices are converted into U.S. dollar amounts using the applicable exchange rates as of Market Close.

When a market quotation for a portfolio security is not readily available or is deemed unreliable (for example when trading has been halted or there are unexpected market closures or other material events that would suggest that the market quotation is unreliable) and for purposes of determining the value of other Portfolio assets, the asset is priced at its fair value. The Board has


15


NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2022 (CONTINUED)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (continued)

designated the Investment Adviser, as the valuation designee, to make fair value determinations in good faith. In determining the fair value of each Portfolio’s assets, the Investment Adviser, pursuant to its fair valuation policy, may consider inputs from pricing service providers, broker-dealers, or each Portfolio’s sub-adviser(s). Issuer specific events, transaction price, position size, nature and duration of restrictions on disposition of the security, market trends, bid/ask quotes of brokers and other market data may be reviewed in the course of making a good faith determination of an asset’s fair value. Because trading hours for certain foreign securities end before Market Close, closing market quotations may become unreliable. The prices of foreign securities will generally be adjusted based on inputs from an independent pricing service that are intended to reflect valuation changes through the NYSE close. Because of the inherent uncertainties of fair valuation, the values used to determine each Portfolio’s NAV may materially differ from the value received upon actual sale of those investments. Thus, fair valuation may have an unintended dilutive or accretive effect on the value of shareholders’ investments in each Portfolio.

The Portfolios’ financial instruments are valued at the close of the NYSE and are reported at fair value, which GAAP defines as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Various valuation techniques and inputs are used to determine the fair value of financial instruments. GAAP establishes the following fair value hierarchy that categorizes the inputs used to measure fair value:

Level 1 — quoted prices (unadjusted) in active markets for identical financial instruments that the portfolio can access at the reporting date.

Level 2 — inputs other than Level 1 quoted prices that are observable, either directly or indirectly (including, but not limited to, quoted prices for similar financial instruments in active markets, quoted prices for identical or similar financial instruments in inactive markets, interest rates and yield curves, implied volatilities, and credit spreads).

Level 3 — unobservable inputs (including the portfolio’s own assumptions in determining fair value).

Observable inputs are developed using market data, such as publicly available information about actual events or transactions, and reflect the assumptions that market participants would use to price the financial instrument. Unobservable inputs are those for which market data are not available and are developed using the best information available about the assumptions that market participants

would use to price the financial instrument. GAAP requires valuation techniques to maximize the use of relevant observable inputs and minimize the use of unobservable inputs. When multiple inputs are used to derive fair value, the financial instrument is assigned to the level within the fair value hierarchy based on the lowest-level input that is significant to the fair value of the financial instrument. Input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level but rather the degree of judgment used in determining those values.

A table summarizing each Portfolio’s investments under these levels of classification is included within each Portfolio of Investments.

Each investment asset or liability of a Portfolio is assigned a level at measurement date based on the significance and source of the inputs to its valuation. Quoted prices in active markets for identical securities are classified as “Level 1,” inputs other than quoted prices for an asset or liability that are observable are classified as “Level 2” and significant unobservable inputs, including the Sub-Adviser’s or Pricing Committee’s judgment about the assumptions that a market participant would use in pricing an asset or liability are classified as “Level 3.” The inputs used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. Short-term securities of sufficient credit quality are generally considered to be Level 2 securities under applicable accounting rules. The Portfolios classify each of their investments in the Underlying Funds as Level 1, without consideration as to the classification level of the specific investments held by the Underlying Funds. A table summarizing each Portfolio’s investments under these levels of classification is included within the Portfolio of Investments.

GAAP requires a reconciliation of the beginning to ending balances for reported fair values that presents changes attributable to total realized and unrealized gains or losses, purchases and sales, and transfers in or out of the Level 3 category during the period. A reconciliation of Level 3 investments within the Portfolio of Investments is presented only when a Portfolio has a significant amount of Level 3 investments.

B.  Securities Transactions and Revenue Recognition. Security transactions are accounted for on the trade date. Dividend income received from the Underlying Funds is recognized on the ex-dividend date and is recorded as dividends from underlying funds in the Statements of Operations. Capital gain distributions received from the Underlying Funds are recognized on the ex-dividend date and are recorded on the Statements of Operations as such. Realized gains and losses are reported on the basis of identified cost of securities sold.


16


NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2022 (CONTINUED)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (continued)

C.  Distributions to Shareholders. The Portfolios record distributions to their shareholders on the ex-dividend date. Dividends from net investment income and capital gain distributions, if any, are declared and paid annually by the Portfolios. The Portfolios may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. The characteristics of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from U.S. GAAP for investment companies.

D.  Federal Income Taxes. It is the policy of each Portfolio to comply with the requirements of subchapter M of the Internal Revenue Code and related excise tax provisions applicable to regulated investment companies and to distribute substantially all of its net investment income and any net realized capital gains to its shareholders. Therefore, no federal income tax provision is required. Management has considered the sustainability of the Portfolios’ tax positions taken on federal income tax returns for all open tax years in making this determination. No capital gain distributions shall be made until any capital loss carryforwards have been fully utilized.

The Portfolios may utilize equalization accounting for tax purposes, whereby a portion of redemption payments are treated as distributions of income or gain.

E.  Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

F.  Risk Exposures and the Use of Derivative Instruments. Each Portfolio’s investment strategies permit it to enter into various types of derivatives contracts, including, but not limited to, futures contracts. In doing so, a Portfolio will employ strategies in differing combinations to permit it to increase or decrease the level of risk, or change the level or types of exposure to risk factors. This may allow a Portfolio to pursue its objectives more quickly and efficiently than if it were to make direct purchases or sales of securities capable of affecting a similar response to market or credit factors.

In pursuit of its investment objectives, a Portfolio may seek to increase or decrease its exposure to the following market or credit risk factors:

Equity Risk. Stock prices may be volatile or have reduced liquidity in response to real or perceived impacts of factors including, but not limited to, economic conditions, changes in market interest rates, and political events. Stock markets tend to be cyclical, with periods when stock prices generally rise and periods when stock prices generally decline. Any given stock market segment may remain out of favor with investors for a short or long period of time, and stocks as an asset class may underperform bonds or other asset classes during some periods. Additionally, legislative, regulatory or tax policies or developments in these areas may adversely impact the investment techniques available to a manager, add to costs and impair the ability of a Portfolio to achieve its investment objectives.

Risks of Investing in Derivatives. Each Portfolio’s use of derivatives can result in losses due to unanticipated changes in the market or credit risk factors and the overall market. In instances where a Portfolio is using derivatives to decrease, or hedge, exposures to market or credit risk factors for securities held by a Portfolio, there are also risks that those derivatives may not perform as expected resulting in losses for the combined or hedged positions.

Derivative instruments are subject to a number of risks, including the risk of changes in the market price of the underlying securities, credit risk with respect to the counterparty, risk of loss due to changes in market interest rates and liquidity and volatility risk. The amounts required to purchase certain derivatives may be small relative to the magnitude of exposure assumed by a Portfolio. Therefore, the purchase of certain derivatives may have an economic leveraging effect on a Portfolio and exaggerate any increase or decrease in the NAV. Derivatives may not perform as expected, so a Portfolio may not realize the intended benefits. When used for hedging purposes, the change in value of a derivative may not correlate as expected with the currency, security or other risk being hedged. When used as an alternative or substitute for direct cash investments, the return provided by the derivative may not provide the same return as direct cash investment. In addition, given their complexity, derivatives expose a Portfolio to the risk of improper valuation.

Generally, derivatives are sophisticated financial instruments whose performance is derived, at least in part, from the performance of an underlying asset or assets. Derivatives include, among other things, swap agreements, options, forwards and futures. Investments in derivatives are generally negotiated over-the-counter (“OTC”), with a single counterparty and as a result are subject to credit risks related to the counterparty’s ability or willingness to perform its obligations; any deterioration in the counterparty’s creditworthiness could adversely affect the value of the derivative. In addition, derivatives and their


17


NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2022 (CONTINUED)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (continued)

underlying securities may experience periods of illiquidity which could cause a Portfolio to hold a security it might otherwise sell, or to sell a security it otherwise might hold at inopportune times or at an unanticipated price. A manager might imperfectly judge the direction of the market. For instance, if a derivative is used as a hedge to offset investment risk in another security, the hedge might not correlate to the market’s movements and may have unexpected or undesired results such as a loss or a reduction in gains.

G. Futures Contracts. Each Portfolio may enter into futures contracts involving foreign currency, interest rates, securities and security indices. A futures contract is a commitment to buy or sell a specific amount of a financial instrument at a negotiated price on a stipulated future date. Each Portfolio may buy and sell futures contracts. Futures contracts traded on a commodities or futures exchange will be valued at the final settlement price or official closing price on the principal exchange as reported by such principal exchange at its trading session ending at, or most recently prior to, the time when the Portfolio’s assets are valued.

Upon entering into a futures contract, each Portfolio is required to deposit either cash or securities (initial margin) in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Portfolio each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses and, if any, shown as variation margin receivable or payable on futures contracts on the Statement of Assets and Liabilities.

Open futures contracts are reported on a table following each Portfolio’s Portfolio of Investments. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts, if any, are footnoted in the Portfolio of Investments. Cash collateral held by the broker to cover initial margin requirements on open futures contracts are noted in the Statements of Assets and Liabilities. The net change in unrealized appreciation and depreciation is reported in the Statements of Operations. Realized gains (losses) are reported in the Statements of Operations at the closing or expiration of futures contracts.

Futures contracts are exposed to the market risk factor of the underlying financial instrument. During the year ended December 31, 2022, the Portfolios used futures to enact tactical positions and to provide the Portfolios with greater liquidity. Strategic Allocation Moderate and Strategic Allocation Growth had purchased and sold futures contracts on various equity indices. Strategic Allocation Moderate and Strategic Allocation Growth also purchased

futures contracts on Eurodollars and U.S. Treasury Notes. Futures contracts are purchased to provide immediate market exposure proportionate to the size of the Portfolio’s respective cash flows and residual cash balances in order to decrease potential tracking error if the cash remained uninvested in the market. Additional associated risks of entering into futures contracts include the possibility that there may be an illiquid market where the Portfolios are unable to liquidate the contract or enter into an offsetting position and, if used for hedging purposes, the risk that the price of the contract will correlate imperfectly with the prices of the Portfolios’ securities. With futures, there is minimal counterparty credit risk to the Portfolios since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default.

During the year ended December 31, 2022, Strategic Allocation Moderate and Strategic Allocation Growth had average notional values on futures contracts purchased and sold as disclosed below. Please refer to the tables within the respective Portfolio of Investments for Strategic Allocation Moderate and Strategic Allocation Growth for open futures contracts at December 31, 2022. Strategic Allocation Conservative did not enter into any futures contracts during the year ended December 31, 2022.

    Purchased   Sold
Strategic Allocation Moderate
    $ 4,123,618        $ 4,012,219   
Strategic Allocation Growth
         3,966,167             4,001,953   

H. Indemnifications. In the normal course of business, the Company may enter into contracts that provide certain indemnifications. The Company’s maximum exposure under these arrangements is dependent on future claims that may be made against the Portfolios and, therefore, cannot be estimated; however, based on experience, management considers the risk of loss from such claims remote.

NOTE 3 — INVESTMENTS IN UNDERLYING FUNDS

For the year ended December 31, 2022, the cost of purchases and the proceeds from the sales of the Underlying Funds were as follows:

      Purchases   Sales
Strategic Allocation Conservative
      $ 47,368,996          $ 52,860,531   
Strategic Allocation Moderate
         77,543,702             83,170,391   
Strategic Allocation Growth
         76,754,447             81,048,962   

NOTE 4 — INVESTMENT MANAGEMENT FEES

The Portfolios have entered into an investment management agreement (“Management Agreement”) with the Investment Adviser. The Investment Adviser has overall responsibility for the management of the Portfolios. The Investment Adviser oversees all investment


18


NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2022 (CONTINUED)

NOTE 4 — INVESTMENT MANAGEMENT FEES
(continued)

management and portfolio management services for the Portfolios and assists in managing and supervising all aspects of the general day-to-day business activities and operations of the Portfolios, including custodial, transfer agency, dividend disbursing, accounting, auditing, compliance and related services. The Management Agreement compensates the Investment Adviser with a management fee, computed daily and payable monthly, based on the average daily net assets of each Portfolio, at the following annual rates: 0.18% of each Portfolio’s average daily net assets invested in affiliated Underlying Funds, 0.70% of each Portfolio’s average daily net assets invested in direct investments and 0.40% of each Portfolio’s average daily net assets invested in unaffiliated Underlying Funds and other investments.

The Investment Adviser has entered into a sub-advisory agreement with Voya IM with respect to each Portfolio. Voya IM provides investment advice for the Portfolios and is paid by the Investment Adviser based on the average daily net assets of each respective Portfolio. Subject to such policies as the Board or the Investment Adviser may determine, Voya IM manages the Portfolios’ assets in accordance with the Portfolios’ investment objectives, policies, and limitations.

NOTE 5 — DISTRIBUTION AND SERVICE FEES

Class S shares of the Portfolios have a shareholder services and distribution plan (the “Plan”), whereby the Distributor is compensated by each Portfolio for expenses incurred for shareholder servicing and/or distribution of each Portfolio’s Class S shares. Pursuant to the Plan, the Distributor is entitled to a payment each month to compensate for expenses incurred in the distribution and promotion of each Portfolio’s Class S shares, including expenses incurred in printing prospectuses and reports used for sales purposes, expenses incurred in preparing and printing sales literature and other such distribution related expenses, including any distribution or shareholder servicing fees paid to securities dealers who have executed a distribution agreement with the Distributor. Under the Plan, Class S shares of the Portfolios pay the Distributor a fee calculated at an annual rate of 0.25% of average daily net assets.

NOTE 6 — OTHER TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES

At December 31, 2022, the following direct or indirect, wholly-owned subsidiaries of Voya Financial, Inc. owned more than 5% of the following Portfolios:

Subsidiary     Portfolio     Percentage
ReliaStar Life Insurance Company
   
Strategic Allocation Conservative
    9.47 %  
   
Strategic Allocation Moderate
    12.04   
 
Strategic Allocation Growth
    8.75   
Voya Retirement Insurance and Annuity Company
   
Strategic Allocation Conservative
    84.30   
   
Strategic Allocation Moderate
    84.87   
   
Strategic Allocation Growth
    86.39   

The Portfolios have adopted a deferred compensation plan (the “DC Plan”), which allows eligible independent directors, as described in the DC Plan, to defer the receipt of all or a portion of the directors’ fees that they are entitled to receive from the Portfolios. For purposes of determining the amount owed to the director under the DC Plan, the amounts deferred are invested in shares of the funds selected by the director (the “Notional Funds”). When the Portfolios purchase shares of the Notional Funds, which are all advised by Voya Investments, in amounts equal to the directors’ deferred fees, this results in a Portfolio asset equal to the deferred compensation liability. Such assets, if applicable, are included as a component of “Other assets” on the accompanying Statements of Assets and Liabilities. Deferral of directors’ fees under the DC Plan will not affect net assets of the Portfolios, and will not materially affect the Portfolios’ assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance with the DC Plan.

The Portfolios may pay per account fees to affiliates of Voya Investments for recordkeeping services provided on certain assets. For the year ended December 31, 2022, the per account fees for affiliated recordkeeping services paid by each Portfolio were as follows:

Portfolio   Amount
Strategic Allocation Conservative
      $ 51,387   
Strategic Allocation Moderate
         95,455   
Strategic Allocation Growth
         115,063   

NOTE 7 — EXPENSE LIMITATION AGREEMENTS

The Investment Adviser entered into written expense limitation agreement (“Expense Limitation Agreement”) with each Portfolio whereby the Investment Adviser has agreed to limit expenses, excluding interest, taxes, investment-related costs, leverage expenses and extraordinary expenses to the levels listed below:

Portfolio(1)(2)     Class I   Class S
Strategic Allocation Conservative
         0.71 %            0.96 %  
Strategic Allocation Moderate
         0.75 %            1.00 %  
Strategic Allocation Growth
         0.77 %            1.02 %  


19


NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2022 (CONTINUED)

NOTE 7 — EXPENSE LIMITATION AGREEMENTS (continued)

 
(1) 
These operating expense limits take into account operating expenses incurred at the Underlying Fund level. The amount of fees and expenses of an Underlying Fund borne by each Portfolio will vary based on each Portfolio’s allocation of assets to, and the net expenses of, a particular Underlying Fund.
(2) 
Any fees waived pursuant to the Expense Limitation Agreement shall not be eligible for recoupment.

The Expense Limitation Agreement is contractual through May 1, 2023 and shall renew automatically for one-year terms. Termination or modification of this obligation requires approval by the Board.


NOTE 8 — CAPITAL SHARES

Transactions in capital shares and dollars were as follows:

  Shares
sold
  Shares
issued in
merger
  Reinvestment
of
distributions
  Shares
redeemed
  Net
increase
(decrease)
in shares
outstanding
  Shares
sold
  Proceeds
from shares
issued in
merger
  Reinvestment
of
distributions
  Shares
redeemed
  Net
increase
(decrease)
Year or period ended     #     #     #     #     #     ($)     ($)     ($)     ($)     ($)
Strategic Allocation Conservative
                                                         
Class I
                                                                               
12/31/2022
     521,264                644,129         (1,087,027 )        78,366         6,062,081                7,001,681         (12,461,688 )        602,074   
12/31/2021
     601,134                146,865         (717,231 )        30,768         8,302,592                1,965,059         (9,953,209 )        314,442   
Class S
                                                                               
12/31/2022
     2,205                34,310         (23,321 )        13,194         24,903                369,519         (258,679 )        135,743   
12/31/2021
     17,867                7,409         (28,316 )        (3,040 )        243,543                98,241         (391,007 )        (49,223 )  
Strategic Allocation Moderate
                                                         
Class I
                                                                               
12/31/2022
     341,311                1,345,581         (904,319 )        782,573         4,396,939                15,985,509         (11,539,805 )        8,842,643   
12/31/2021
     496,729                492,379         (840,097 )        149,011         7,864,093                7,361,065         (13,242,848 )        1,982,310   
Class S
                                                                               
12/31/2022
     3,730                15,074         (14,063 )        4,741         47,620                178,171         (173,734 )        52,057   
12/31/2021
     2,928                5,425         (6,454 )        1,899         45,771                80,773         (100,981 )        25,563   
Strategic Allocation Growth
                                                       
Class I
                                                                               
12/31/2022
     437,888                1,680,631         (850,547 )        1,267,972         5,938,823                20,520,510         (11,743,124 )        14,716,209   
12/31/2021
     401,780                357,838         (972,683 )        (213,065 )        6,811,201                5,750,466         (16,452,724 )        (3,891,057 )  
Class S
                                                                               
12/31/2022
     9,409                31,158         (14,838 )        25,729         122,869                376,391         (169,712 )        329,548   
12/31/2021
     6,516                6,536         (30,106 )        (17,054 )        109,037                104,047         (498,638 )        (285,554 )  

NOTE 9 — LINE OF CREDIT

Effective June 13, 2022, the Portfolios, in addition to certain other funds managed by the Investment Adviser, entered into a 364-day unsecured committed revolving line of credit agreement (the “Credit Agreement”) with The Bank of New York Mellon (“BNY”) for an aggregate amount of $400,000,000 through June 12, 2023. The proceeds may be used only to finance temporarily: (1) the purchase or sale of investment securities; or (2) the repurchase or redemption of shares of the Portfolio or certain other funds managed by the Investment Adviser. The funds to which the line of credit is available pay a commitment fee equal to 0.15% per annum on the daily unused portion of the committed line amount payable quarterly in arrears. Prior to June 13, 2022, the predecessor line of credit was for an aggregate amount of $400,000,000 and the funds to which the line of credit was available paid a commitment fee equal

to 0.15% per annum on the daily unused portion of the committed line amount through June 13, 2022.

Borrowings under the Credit Agreement accrue interest at the federal funds rate plus a specified margin. Repayments generally must be made within 60 days after the date of a revolving credit advance.

The following Portfolio utilized the line of credit during the year ended December 31, 2022:

Portfolio   Days
Utilized
    Approximate
Average
Daily Balance
For Days
Utilized
    Approximate
Weighted
Average
Interest Rate
For Days
Utilized
Strategic Allocation Conservative
    2       $ 1,342,000       
2.17%
   


20


NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2022 (CONTINUED)

NOTE 10 — FEDERAL INCOME TAXES

The amount of distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, which may differ from GAAP for investment companies. These book/tax differences may be either temporary or permanent. Permanent differences are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences are not reclassified. Key differences include the treatment of short-term capital gains, futures contracts and wash sale deferrals.

Dividends paid by the Portfolios from net investment income and distributions of net realized short-term capital gains are, for federal income tax purposes, taxable as ordinary income to shareholders.

The tax composition of dividends and distributions to shareholders was as follows:

    Year Ended December 31, 2022   Year Ended December 31, 2021
    Ordinary
Income
  Long-term
Capital Gains
  Ordinary
Income
  Long-term
Capital Gains
Strategic Allocation Conservative
  $ 4,016,276      $ 3,354,924     $
2,056,811
    $
6,489
 
Strategic Allocation Moderate
     5,032,502         11,131,178       
3,980,014
     
3,461,824
 
Strategic Allocation Growth
     6,032,460         14,864,441       
3,623,759
     
2,230,754
 

The tax-basis components of distributable earnings as of December 31, 2022 were:

      Undistributed
Ordinary
Income
  Undistributed
Long-term
Capital Gains
  Unrealized
Appreciation/
(Depreciation)
  Total
Distributable
Earnings/(Loss)
Strategic Allocation Conservative
      $ 1,934,571          $ 1,648,169      $
(9,061,908)
      $
(5,479,168)
   
Strategic Allocation Moderate
         4,664,100             5,257,588       
(16,450,910)
       
(6,529,222)
   
Strategic Allocation Growth
         4,442,463             7,853,520       
(15,473,151)
       
(3,177,168)
   

At December 31, 2022, the Portfolios did not have any capital loss carryforwards for U.S. federal income tax purposes.

The Portfolios’ major tax jurisdictions are U.S. federal and Arizona state.

As of December 31, 2022, no provision for income tax is required in the Portfolios’ financial statements as a result of tax positions taken on federal and state income tax returns for open tax years. The Portfolios’ federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state department of revenue. Generally, the preceding four tax years remain subject to examination by these jurisdictions.

NOTE 11—LONDON INTERBANK OFFERED RATE (“LIBOR”)

In 2017, the UK Financial Conduct Authority announced its intention to cease compelling banks to provide the quotations needed to sustain LIBOR after 2021. On March 5, 2021, ICE Benchmark Administration, the administrator of LIBOR, stated that non-U.S. dollar LIBOR reference rates and the one-week and two-month LIBOR reference rates ceased to be provided or no longer be representative immediately after December 31, 2021 and the remaining more commonly used LIBOR settings will cease to be provided or no longer be representative immediately after June 30, 2023. In addition, global regulators have announced that, with limited exceptions, no new LIBOR-based contracts should be entered into after 2021. Actions by regulators have resulted in the establishment of alternative reference rates to LIBOR in most major currencies (e.g., the Secured Overnight Financing Rate for U.S. Dollar LIBOR and the Sterling Overnight Interbank Average Rate for Sterling LIBOR).

Discontinuance of LIBOR and adoption/implementation of alternative rates pose a number of risks, including among others whether any substitute rate will experience the market participation and liquidity necessary to provide a workable substitute for LIBOR; the effect on parties’ existing contractual arrangements, hedging transactions, and investment strategies generally from a conversion from LIBOR to alternative rates; the effect on a Portfolio’s existing investments (including, for example, fixed-income investments, senior loans, CLOs and CDOs, and derivatives transactions), including the possibility that some of those investments may terminate or their terms may be adjusted to the disadvantage of a Portfolio; and the risk of general market disruption during the period of the conversion. It is difficult to predict at this time the likely impact of the transition away from LIBOR on a Portfolio.

NOTE 12 — MARKET DISRUPTION

A Portfolio is subject to the risk that geopolitical events will disrupt securities markets and adversely affect global economies and markets. Due to the increasing interdependence among global economies and markets,


21


NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2022 (CONTINUED)

NOTE 12 — MARKET DISRUPTION (continued)

conditions in one country, market, or region might adversely impact markets, issuers and/or foreign exchange rates in other countries, including the U.S. Wars, terrorism, global health crises and pandemics, and other geopolitical events that have led, and in the future may continue to lead, to increased market volatility and may have adverse short- or long-term effects on U.S. and global economies and markets generally. For example, the COVID-19 pandemic has resulted, and may continue to result, in significant market volatility, exchange suspensions and closures, declines in global financial markets, higher default rates, supply chain disruptions, and a substantial economic downturn in economies throughout the world. Natural and environmental disasters and systemic market dislocations are also highly disruptive to economies and markets. In addition, military action by Russia in Ukraine has, and may continue to, adversely affect global energy and financial markets and therefore could affect the value of the Portfolio’s investments,

including beyond the Portfolio’s direct exposure to Russian issuers or nearby geographic regions. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict and could be substantial. Those events as well as other changes in foreign (non-U.S.) and domestic economic, social, and political conditions also could adversely affect individual issuers or related groups of issuers, securities markets, interest rates, credit ratings, inflation, investor sentiment, and other factors affecting the Portfolios’ investments. Any of these occurrences could disrupt the operations of a Portfolio and of the Portfolios’ service providers.

NOTE 13 — SUBSEQUENT EVENTS

The Portfolios have evaluated events occurring after the Statements of Assets and Liabilities date through the date that the financial statements were issued (“subsequent events”) to determine whether any subsequent events necessitated adjustment to or disclosure in the financial statements. No such subsequent events were identified.


22


VOYA STRATEGIC ALLOCATION
CONSERVATIVE PORTFOLIO

PORTFOLIO OF INVESTMENTS
as of December 31, 2022

Shares               Value       Percentage
of Net
Assets
                       
EXCHANGE-TRADED FUNDS: 6.9%
     
17,255    
iShares 20+ Year Treasury Bond ETF
  $   1,717,908         3.0   
11,687    
iShares Core S&P Small-Cap ETF
     1,106,058         1.9   
21,373    
Schwab U.S. TIPS ETF
     1,106,907         2.0   
     
Total Exchange-Traded Funds
(Cost $4,566,785)
     3,930,873         6.9   
                       
MUTUAL FUNDS: 93.0%
     
 
Affiliated Investment Companies: 93.0%
318,104    
Voya Global Bond Fund — Class R6
     2,312,617         4.1   
427,846    
Voya High Yield Bond Fund — Class R6
     2,810,948         5.0   
2,021,238    
Voya Intermediate Bond Fund — Class R6
     17,281,587         30.6   
332,513    
Voya Large Cap Value Portfolio — Class R6
     1,732,394         3.1   
48,053    
Voya Large-Cap Growth Fund — Class R6
     1,619,861         2.9   
621,746    
Voya Limited Maturity Bond Portfolio — Class I
     5,856,846         10.3   
134,348    
Voya MidCap Opportunities Portfolio — Class R6
     552,171         1.0   
138,123    
Voya Multi-Manager Emerging Markets Equity Fund — Class I
     1,185,091         2.1   
34,807    
Voya Multi-Manager International Equity Fund — Class I
     307,690         0.5   
Shares               Value       Percentage
of Net
Assets
                       
MUTUAL FUNDS: (continued)
 
 
Affiliated Investment Companies: (continued)
118,852    
Voya Multi-Manager International Factors Fund — Class I
  $ 957,946         1.7   
65,096    
Voya Multi-Manager Mid Cap Value Fund — Class I
     570,240         1.0   
87,067    
Voya Small Company Fund — Class R6
     1,113,588         2.0   
186,399    
Voya U.S. Bond Index Portfolio — Class I
     1,701,821         3.0   
284,000    
Voya U.S. High Dividend Low Volatility Fund — Class R6
     2,891,124         5.1   
495,148    
Voya U.S. Stock Index Portfolio — Class I
     7,813,436         13.8   
243,642    
VY® BrandywineGLOBAL — Bond Portfolio —
Class I
     2,263,432         4.0   
26,849    
VY®T. Rowe Price Growth Equity Portfolio — Class I
     1,580,345         2.8   
                       
     
Total Mutual Funds
(Cost $57,959,414)
     52,551,137         93.0   
     
Total Investments in Securities
(Cost $62,526,199)
  $ 56,482,010         99.9   
     
Assets in Excess of Other Liabilities
     34,912         0.1   
     
Net Assets
  $ 56,516,922         100.0   


Fair Value Measurementsˆ

The following is a summary of the fair valuations according to the inputs used as of December 31, 2022 in valuing the assets and liabilities:

    Quoted Prices
in Active Markets
for Identical
Investments
(Level 1)
  Significant
Other
Observable
Inputs
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
  Fair Value
at
December 31, 2022
Asset Table
                                                                   
Investments, at fair value
                                                                   
Exchange-Traded Funds
      $ 3,930,873          $           $           $ 3,930,873   
Mutual Funds
           52,551,137                                             52,551,137   
Total Investments, at fair value
      $ 56,482,010          $           $           $ 56,482,010   
 
ˆSee Note 2, “Significant Accounting Policies” in the Notes to Financial Statements for additional information.

See Accompanying Notes to Financial Statements

23


VOYA STRATEGIC ALLOCATION
CONSERVATIVE PORTFOLIO

PORTFOLIO OF INVESTMENTS
as of December 31, 2022 (CONTINUED)

Transactions with Affiliates

An investment of at least 5% of the voting securities of an issuer, or a company which is under common control with the issuer, results in that issuer becoming an affiliated person as defined by the 1940 Act.

The following table provides transactions during the year ended December 31, 2022, where the following issuers were considered an affiliate:

Issuer   Beginning
Fair Value
at 12/31/2021
  Purchases
at Cost
  Sales
at Cost
  Change in
Unrealized
Appreciation/
(Depreciation)
  Ending Fair
Value at
12/31/2022
  Investment
Income
  Realized
Gains/(Losses)
  Net
Capital Gain
Distributions
Voya Global Bond
Fund — Class R6
    $ 2,954,609        $ 389,738        $ (579,553 )     $ (452,177 )     $ 2,312,617        $ 16,273        $ (79,433 )     $  
Voya High Yield Bond Fund — Class R6
      9,794,752          624,309          (6,780,527 )       (827,586 )       2,810,948          198,812          (5,703 )       38,482   
Voya Intermediate Bond Fund — Class R6
      17,119,861          9,524,645          (6,767,642 )       (2,595,277 )       17,281,587          496,161          (730,979 )       44  
Voya Large Cap Value Portfolio — Class R6
              3,364,733          (816,895 )       (815,444 )       1,732,394          28,636          (404,013 )       1,088,469   
Voya Large-Cap Growth Fund — Class R6
      1,906,044          1,090,997          (539,168 )       (838,012 )       1,619,861                  (88,453 )       277,269   
Voya Limited Maturity Bond Portfolio — Class I
      3,716,334          6,303,105          (3,942,258 )       (220,335 )       5,856,846          108,143          (122,281 )        
Voya MidCap Opportunities Portfolio — Class R6
      1,065,126          668,378         (749,875 )       (431,458 )       552,171                  (270,755 )       424,277   
Voya Multi-Manager Emerging Markets Equity Fund — Class I
      1,433,411          945,311          (1,073,319 )       (120,312 )       1,185,091          24,878          (330,715 )        
Voya Multi-Manager International Equity Fund — Class I
      1,832,057          326,149          (1,802,471 )       (48,045 )       307,690          3,669          (360,324 )        
Voya Multi-Manager International Factors Fund — Class I
      3,351,626          500,314          (2,703,643 )       (190,351 )       957,946          53,231          (340,132 )        
Voya Multi-Manager Mid Cap Value Fund — Class I
      1,159,655          150,127          (623,941 )       (115,601 )       570,240          8,888          (43,976 )       36,756   
Voya Small Company Fund — Class R6
              1,391,133          (197,992 )       (79,553 )       1,113,588          5,242          (13,887 )        
Voya U.S. Bond Index Portfolio — Class I
      5,210,873          355,831          (3,554,445 )       (310,438 )       1,701,821          60,369          (297,156 )        
Voya U.S. High Dividend Low Volatility Fund — Class R6
      2,669,909          1,662,842          (1,030,246 )       (411,381 )       2,891,124          70,752          (42,727 )       280,534   
Voya U.S. Stock Index Portfolio — Class I
      14,634,416          6,707,578          (10,211,553 )       (3,317,005 )       7,813,436          110,625          240,767          781,949   
VY® BrandywineGLOBAL — Bond Portfolio — Class I
              3,217,308          (607,877 )       (345,999 )       2,263,432          24,843          (54,837 )       124,971   
VY® T. Rowe Price Growth Equity Portfolio —
Class I
      2,951,457          1,276,002          (1,691,909 )       (955,205 )       1,580,345                  (478,547 )       328,021   
 
    $ 69,800,130        $ 38,498,500        $ (43,673,314 )     $ (12,074,179 )     $ 52,551,137        $ 1,210,522        $ (3,423,151 )     $ 3,380,772   

The financial statements for the above mutual fund[s] can be found at www.sec.gov.

At December 31, 2022, the aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments on a tax basis were:

Cost for federal income tax purposes was $65,543,918.
Net unrealized depreciation consisted of:
       
Gross Unrealized Appreciation
  $ 846,034  
Gross Unrealized Depreciation
    (9,907,942
Net Unrealized Depreciation
  $ (9,061,908

See Accompanying Notes to Financial Statements

24


VOYA STRATEGIC ALLOCATION
MODERATE PORTFOLIO

PORTFOLIO OF INVESTMENTS
as of December 31, 2022

 

Shares         Value   Percentage
of Net
Assets
 
                       
EXCHANGE-TRADED FUNDS: 3.0%
22,760  
 
 
iShares 20+ Year Treasury Bond ETF
  $  2,265,985           2.0   
21,144  
 
 
Schwab U.S. TIPS ETF
    1,095,048      1.0   
                       
   
 
 
Total Exchange-Traded Funds
(Cost $4,207,670)
    3,361,033      3.0   
                       
MUTUAL FUNDS: 96.8%
 
 
     
Affiliated Investment Companies: 96.8%
 
3,209,469  
 
 
Voya Intermediate Bond Fund — Class R6
    27,440,957      24.6   
1,515,297  
 
 
Voya Large Cap Value Portfolio — Class R6
    7,894,696      7.1   
79,149  
 
 
Voya Large-Cap Growth Fund — Class R6
    2,668,114      2.4   
769,183  
 
 
Voya Limited Maturity Bond Portfolio — Class I
    7,245,701      6.5   
663,632  
 
 
Voya MidCap Opportunities Portfolio — Class R6
    2,727,527      2.4   
273,129  
 
 
Voya Multi-Manager Emerging Markets Equity Fund — Class I
    2,343,446      2.1   
212,329  
 
 
Voya Multi-Manager International Equity
Fund — Class I
    1,876,988      1.7   
381,212  
 
 
Voya Multi-Manager International Factors
Fund — Class I
    3,072,571      2.7   
Shares         Value   Percentage
of Net
Assets
 
                       
MUTUAL FUNDS: (continued)
 
 
     
Affiliated Investment Companies: (continued)
 
321,660  
 
 
Voya Multi-Manager Mid Cap Value Fund — Class I
  $ 2,817,739      2.5   
32,402  
(1)
 
Voya Small Cap Growth Fund — Class R6
    1,067,001      1.0   
173,024  
 
 
Voya Small Company Fund — Class R6
    2,212,980      2.0   
2,374,480  
 
 
Voya U.S. Stock Index Portfolio — Class I
    37,469,293      33.5   
481,654  
 
 
VY® BrandywineGLOBAL — Bond Portfolio —
Class I
    4,474,564      4.0   
81,672  
 
 
VY® T. Rowe Price Growth Equity Portfolio — Class I
    4,807,239      4.3   
                       
   
 
 
Total Mutual Funds
(Cost $119,238,640)
    108,118,816          96.8   
   
 
 
Total Investments in Securities
(Cost $123,446,310)
  $ 111,479,849      99.8   
   
 
 
Assets in Excess of Other Liabilities
    266,189      0.2   
   
 
 
Net Assets
  $ 111,746,038      100.0   

(1)   Non-income producing security.


 

Fair Value Measurementsˆ

The following is a summary of the fair valuations according to the inputs used as of December 31, 2022 in valuing the assets and liabilities:

  Quoted Prices
in Active Markets
for Identical
Investments
(Level 1)
  Significant
Other
Observable
Inputs
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
  Fair Value
at
December 31, 2022
Asset Table
                                       
Investments, at fair value
                                       
Exchange-Traded Funds
    $ 3,361,033           $               $           $ 3,361,033  
Mutual Funds
      108,118,816                         108,118,816  
Total Investments, at fair value
    $ 111,479,849       $       $       $ 111,479,849  
Other Financial Instruments+
                                       
Futures
      135,851                         135,851  
Total Assets
    $ 111,615,700       $       $       $ 111,615,700  
Liabilities Table
                                       
Other Financial Instruments+
                                       
Futures
    $ (113,875     $       $       $ (113,875
Total Liabilities
    $ (113,875     $       $       $ (113,875

 

 
ˆ
  See Note 2, “Significant Accounting Policies” in the Notes to Financial Statements for additional information.
+
  Other Financial Instruments may include open forward foreign currency contracts, futures, centrally cleared swaps, OTC swaps and written options. Forward foreign currency contracts, futures and centrally cleared swaps are fair valued at the unrealized appreciation (depreciation) on the instrument. OTC swaps and written options are valued at the fair value of the instrument.

See Accompanying Notes to Financial Statements

25


VOYA STRATEGIC ALLOCATION
MODERATE PORTFOLIO

PORTFOLIO OF INVESTMENTS
as of December 31, 2022 (CONTINUED)

Transactions with Affiliates

An investment of at least 5% of the voting securities of an issuer, or a company which is under common control with the issuer, results in that issuer becoming an affiliated person as defined by the 1940 Act.

The following table provides transactions during the year ended December 31, 2022, where the following issuers were considered an affiliate:

Issuer   Beginning
Fair Value
at 12/31/2021
  Purchases
at Cost
  Sales
at Cost
  Change in
Unrealized
Appreciation/
(Depreciation)
  Ending Fair
Value at
12/31/2022
  Investment
Income
  Realized
Gains/(Losses)
  Net
Capital Gain
Distributions
 
Voya High Yield Bond
Fund — Class R6
    $ 11,576,825       $ 62,194       $ (10,951,692 )     $ (687,327 )     $       $ 50,825       $ 361,701       $    
Voya Intermediate Bond
Fund — Class R6
      25,781,112         15,451,721         (9,657,376 )       (4,134,500 )       27,440,957         818,491         (1,087,222 )          
Voya Large Cap Value Portfolio — Class R6
      5,816,856         9,264,981         (3,219,956 )       (3,967,185 )       7,894,696         130,688         (1,364,345 )       4,839,448    
Voya Large-Cap Growth
Fund — Class R6
      3,660,398         1,061,839         (575,532 )       (1,478,591 )       2,668,114                 (100,630 )       457,961    
Voya Limited Maturity Bond Portfolio — Class I
      2,855,360         5,681,579         (1,078,235 )       (213,003 )       7,245,701         81,015         (46,246 )          
Voya MidCap Opportunities Portfolio — Class R6
      3,409,118         2,847,228         (1,733,884 )       (1,794,935 )       2,727,527                 (1,119,809 )       2,022,359    
Voya Multi-Manager Emerging Markets Equity
Fund — Class I
      2,756,425         3,077,630         (3,279,545 )       (211,064 )       2,343,446         49,303         (934,229 )          
Voya Multi-Manager International Equity
Fund — Class I
      7,030,839         590,574         (4,957,935 )       (786,490 )       1,876,988         28,939         (674,727 )          
Voya Multi-Manager International Factors
Fund — Class I
      4,289,062         1,950,526         (2,627,012 )       (540,005 )       3,072,571         126,861         (399,296 )          
Voya Multi-Manager Mid Cap Value Fund — Class I
      3,715,491         406,900         (775,641 )       (529,011 )       2,817,739         44,034         (98,683 )       182,105    
Voya Small Cap Growth
Fund — Class R6
              1,260,063         (120,226 )       (72,836 )       1,067,001                 (4,882 )       27    
Voya Small Company Fund — Class R6
              2,559,899         (178,690 )       (168,229 )       2,212,980         10,449         (12,740 )          
Voya U.S. Bond Index Portfolio — Class I
      5,719,247         51,996         (5,605,356 )       (165,887 )               23,379         (261,548 )          
Voya U.S. Stock Index Portfolio — Class I
      53,435,261         14,192,068         (18,020,211 )       (12,137,825 )       37,469,293         531,608         (1,300,181 )       3,817,981