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HOUSTON, Sep 21, 2005 -- AIG VALIC, a member of American International Group, Inc. (AIG), recently introduced a new series of target maturity-style mutual funds into the group retirement market that guarantee both principal and market gains achieved during the life of the investment for shareholders who remain invested to maturity. The offerings are called High Watermark Funds.

The High Watermark Funds, with maturity dates from five to 15 years, are designed for investors seeking the growth potential of equity markets and to assist investors in achieving their long-term savings goals with some protection from equity-market volatility. Like competing target maturity investments, the High Watermark Funds combine equity exposure with fixed income investments in various combinations depending upon the maturity date of the fund. What sets the new funds apart is the principal protection they offer, not just for an investor's initial investment, but also for the "high watermark" gain achieved during the life of the fund. Investors who hold shares to maturity, and reinvest all dividends and distributions, receive the highest net asset value attained during the life of the fund adjusted for extraordinary expenses.

"Target maturity funds are an increasingly popular investment choice in qualified group retirement plans," said Bruce R. Abrams, President and CEO of AIG VALIC and the VALIC Retirement Services, Co. "They make an excellent core holding for plan participants seeking a single, managed solution for their retirement savings. The High Watermark Funds, with their unique risk mitigation and principal protection features, take the concept to a whole new competitive level."

The High Watermark Funds are managed using a proprietary investment approach that dynamically allocates assets in varying proportions to S&P 500 index futures, non-callable U.S. government securities, and high-grade money market instruments, capturing exposure to equities' long-term growth potential while also maintaining value protection. They differ from typical target maturity funds in several important ways, such as:

-- A typical target maturity fund offers no loss protection for principal or net gains during the life of the fund. At the maturity date of a High Watermark Fund, an investor is entitled to the highest value his account has attained during the life of the fund.

-- The High Watermark Funds' investing strategy is fully executed and managed within the fund itself; many competing target maturity funds employ a "fund of funds" investment approach that relies on the investing efficacy of multiple funds.

-- The High Watermark Funds use S&P 500 index futures to achieve broad-based equity exposure and avoid both security selection and sector risk.

-- The High Watermark Funds use primarily non-callable U.S. government securities to generate the potential for current income and to avoid the possibility of credit risk.

AIG SunAmerica Asset Management Corp. (AIG SunAmerica), fund manager for the three new institutional class High Watermark Funds that AIG VALIC will distribute, introduced retail class versions of the funds a year ago. For the 12-month period ending June 30, 2005, the retail Class A 2010, 2015 and 2020 High Watermark Funds delivered total returns of 4.37%, 10.09% and 12.31%, respectively (1.62%, 3.78%, and 5.87%, respectively, including the maximum sales charge). Since inception, the retail Class A 2010, 2015 and 2020 High Watermark Funds delivered total returns of 4.51%, 10.25% and 12.32%, respectively (-1.41%, 4.01%, and 5.97%, respectively, including the maximum sales charge). The performance data quoted represents past performance and is no guarantee of future results. The maximum sales charges are: Class A: 5.75%, Class C: 1.00% Contingent Deferred Sales Charge (CDSC). The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be higher or lower than the original cost. Current performance may be higher or lower due to market volatility than that shown. Performance as of the most recent month end is available at www.sunamericafunds.com.

Trajectory Asset Management LLC (Trajectory), a firm specializing in quantitative investment strategies, developed the proprietary methodology used to manage the High Watermark Funds and is the Funds' adviser.

AIG VALIC is the nation's leading provider of retirement services to primary and secondary education, the second largest provider to healthcare groups and the third-largest provider to higher education groups. AIG VALIC serves 25,000 client groups and more than two million participant accounts in more than 40,000 locations throughout the United States. AIG VALIC is a marketing unit that includes VALIC Retirement Services Company, VALIC Financial Advisors, Inc., and The Variable Annuity Life Insurance Company (VALIC), which are member companies of American International Group, Inc. (AIG).

American International Group, Inc. (AIG), world leaders in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed in the U.S. on the New York Stock Exchange and ArcaEx, as well as the stock exchanges in London, Paris, Switzerland and Tokyo.

AIG SunAmerica is the mutual fund and asset management business of AIG Retirement Services, Inc. and is a member company of AIG. As of May 31, 2005, AIG SunAmerica managed and/or administered nearly $42 billion of assets including approximately $10 billion in 38 retail mutual funds.

The S&P 500 Index is an unmanaged, broad-based, market-cap weighted index of 500 stocks. The index assumes reinvestment of dividends and cannot be purchased directly by investors.

The High Watermark Funds' guarantee is backed by a master agreement between AIG Series Trust, on behalf of the Funds, and Prudential Global Funding Inc. (PGF). PGF's obligations are guaranteed by its parent, Prudential Financial, Inc. (Prudential Financial). The master agreement is solely the obligation of PGF and Prudential Financial. The master agreement is an obligation that runs solely to the Funds, not to the Funds' shareholders. PGF's obligations under the master agreement are dependent on the financial condition of PGF and Prudential Financial. The guaranteed payout will be reduced by any redemptions of Fund shares or distributions taken in cash, sales charges and extraordinary fund expenses. Distributions from the Funds are taxable whether or not an investor reinvests them in additional shares of the Funds. The guaranteed payout under the master agreement does not apply to shares redeemed during the investment period, and shareholders can lose money on shares redeemed early. Neither the Funds nor AIG SunAmerica is obligated to replace PGF or Prudential Financial should they be unable to make repayments necessary to support the guaranteed payout. The master agreement increases the Funds' expenses and could lower the Funds' performance. If the master agreement with PGF is terminated, the fee payable under a new agreement may be higher.

Shareholders will receive the High Watermark Fund's then-current net asset value rather than the guaranteed payout when they redeem shares if the Adviser fails to satisfy certain obligations under the master agreement or the Fund's Board of Trustees determines to liquidate the Fund prior to its maturity date.

The Fund's risk profile is largely a factor of the principal securities in which it invests and investment techniques that it uses. As a result the Fund may be subject to the following risks: (1) opportunity costs; (2) interim redemptions; (3) early Fund termination; (4) interest rate fluctuations; and (5) futures exposure. For more information about these and other risks, see the Fund's prospectus.

Asset allocation does not guarantee a profit, nor does it protect against loss. Nothing contained herein shall be deemed to be investment advice or a comparison among investments. Investment objectives, costs and expenses, liquidity, safety, guarantees or insurance, fluctuation of principal or return and tax features among investments may vary.

The High Watermark Funds' daily net asset values are not guaranteed and shares are not insured by the FDIC, the Federal Reserve Board or any other agency. Investors should carefully consider the Funds' investment objectives, strategies, risks, charges and expenses before investing. The Funds' prospectus, which contains this and other information about the Funds, should be read carefully before investing. For a copy of a prospectus, please call (800) 858-8850, ext. 6003.

AIG Retirement Services, Inc.
Casey Boggs
Director, Public Relations

John Packs
Senior Investment Officer