<Page>
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 811-07797
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SunAmerica Focused Series, Inc.
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(Exact name of registrant as specified in charter)
Harborside Financial Center, 3200 Plaza 5 Jersey City, NJ 07311
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(Address of principal executive offices) (Zip code)
Vincent M. Marra
Senior Vice President & Chief Operating Officer
AIG SunAmerica Asset Management Corp.
Harborside Financial Center,
3200 Plaza 5
Jersey City, NJ 07311
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(Name and address of agent for service)
Registrant's telephone number, including area code: (201) 324-6464
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Date of fiscal year end: October 31
--------------------------
Date of reporting period: April 30, 2005
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Item 1. Reports to Stockholders
SunAmerica Focused Series, Inc. Semiannual Report at April 30, 2005
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[GRAPHIC]
AIG SUNAMERICA
FOCUSED PORTFOLIOS
2005 SEMIANNUAL REPORT
- - FOCUSED ASSET ALLOCATION STRATEGIES
- - FOCUSED PORTFOLIOS
[AIG SUNAMERICA MUTUAL FUNDS LOGO]
<Page>
APRIL 30, 2005 SEMIANNUAL REPORT
SUNAMERICA FOCUSED PORTFOLIOS
SUNAMERICA FOCUSED ASSET ALLOCATION STRATEGIES
FOCUSED EQUITY STRATEGY PORTFOLIO (FESAX)
FOCUSED MULTI-ASSET STRATEGY PORTFOLIO (FASAX)
FOCUSED BALANCED STRATEGY PORTFOLIO (FBAAX)
FOCUSED FIXED INCOME AND EQUITY STRATEGY PORTFOLIO (FFEAX)
FOCUSED FIXED INCOME STRATEGY PORTFOLIO (N/A)
SUNAMERICA FOCUSED LARGE-CAP GROWTH PORTFOLIO (SSFAX)
SUNAMERICA FOCUSED MULTI-CAP GROWTH PORTFOLIO (SSAAX)
SUNAMERICA FOCUSED 2000 GROWTH PORTFOLIO (NSKAX)
SUNAMERICA FOCUSED LARGE-CAP VALUE PORTFOLIO (SSLAX)
SUNAMERICA FOCUSED MULTI-CAP VALUE PORTFOLIO (SFVAX)
SUNAMERICA FOCUSED 2000 VALUE PORTFOLIO (SSSAX)
SUNAMERICA FOCUSED GROWTH AND INCOME PORTFOLIO (FOGAX)
SUNAMERICA FOCUSED INTERNATIONAL EQUITY PORTFOLIO (SFINX)
SUNAMERICA FOCUSED TECHNOLOGY PORTFOLIO (STNAX)
SUNAMERICA FOCUSED DIVIDEND STRATEGY PORTFOLIO (FDSAX)
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TABLE OF CONTENTS
<Table>
A MESSAGE FROM THE PRESIDENT 1
EXPENSE EXAMPLE 3
STATEMENT OF ASSETS AND LIABILITIES 8
STATEMENT OF OPERATIONS 14
STATEMENT OF CHANGES IN NET ASSETS 18
FINANCIAL HIGHLIGHTS 23
PORTFOLIO OF INVESTMENTS 36
NOTES TO FINANCIAL STATEMENTS 70
APPROVAL OF ADVISORY AGREEMENTS 99
DIRECTOR AND OFFICER INFORMATION 103
</Table>
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[AIG SUNAMERICA MUTUAL FUNDS LOGO]
A MESSAGE FROM THE PRESIDENT
DEAR SHAREHOLDERS:
We are pleased to present this semiannual update for the SunAmerica Focused
Portfolios for the period ended April 30, 2005.
Most of the major U.S. equity indices posted modestly positive returns for
the six months ended April 30, 2005. While the re-election of President Bush
produced a strong market rally in the last months of 2004, most of these gains
were retraced during the first months of 2005. Equity returns were restrained by
sharply higher crude oil prices, rising inflationary pressures, job growth
concerns, the relative value of the U.S. dollar versus other major currencies,
and ongoing instability in the Middle East that continued to affect the U.S.
economy. Furthermore, the Federal Reserve Board raised interest rates four times
during the period, bringing the targeted federal funds rate from 1.75% at the
beginning of the reporting period to 2.75% at the end.
There were also wide variances in performance among stock market
capitalizations, investment styles, and equity sectors during the period.
Mid-capitalization stocks performed best. Large-cap stocks followed, outpacing
their small-cap counterparts after a six-year period of small-cap
outperformance. The market favored the value style over the growth style of
investing across all capitalization sectors. Energy stocks in general performed
well in direct response to surging crude oil prices. Information technology
stocks were generally weaker, based little on fundamental data from individual
companies but rather on several macroeconomic and market headwinds that ebbed
investors' appetite for risk.
Despite this somewhat volatile backdrop, the SunAmerica Focused Portfolios'
managers were able to add value for our investors. Seven of the ten regular
SunAmerica Focused Portfolios outperformed their respective benchmark index,
Lipper peer group, and/or Morningstar category average for the six-month period
ended April 30, 2005. Four of the five Focused Asset Allocation Strategies did
the same. We welcomed several new portfolio managers during this period and are
extremely proud that many world-class managers lend their stock-picking talents
and market insights to our SunAmerica Focused Portfolios.
The SunAmerica Focused Large-Cap Growth Portfolio was the first multi-managed
focused mutual fund on Wall Street. Our family of Focused Portfolios now offers
an array of funds designed to help you build a well-constructed portfolio of
carefully selected securities. The SunAmerica Focused Portfolios generally
feature up to three world class managers, each of whom selects his or her ten
favorite stocks for the fund.(1) We believe this focused strategy, which is used
by many institutional investors, offers efficient asset allocation
opportunities(2) and avoids portfolio dilution and overdiversification.
According to Modern Portfolio Theory, investors do
1
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not receive any additional diversification benefits in any single asset class
with portfolios holding more than 20 to 30 stocks.(1), (3)
On the following pages, you will find the financial statements and portfolio
information for each of the SunAmerica Focused Portfolios for the period ended
April 30, 2005.
We thank you for being a part of the SunAmerica Focused Portfolios. We value
your ongoing confidence in us and look forward to serving your investment needs
in the future.
Sincerely,
/s/ Peter A. Harbeck
Peter A. Harbeck
PRESIDENT & CEO
AIG SunAmerica Asset Management Corp.
(1) Because focused mutual funds are less diversified than typical mutual funds,
the performance of each holding in a focused fund has a greater impact upon the
overall portfolio, which increases risk. Due to potential overlap in each
manager's selection, some portfolios may hold less than 30 stocks. The managers
in the Focused 2000 Growth and Focused 2000 Value portfolios each select 20
stocks due to liquidity issues, so each of these portfolios may hold as many as
60 stocks. The Focused Dividend Strategy is a passively-managed, concentrated
value portfolio of 30 high dividend-yielding stocks from the Dow Jones
Industrial Average and the broader market. The Focused Asset Allocation
Strategies are funds-of-funds, allocated and monitored by AIG SunAmerica Asset
Management Corp.
(2) Asset allocation does not guarantee profit, nor does it protect against
loss.
(3) Source: PORTFOLIO SELECTION, 2nd edition, 1991. As cited in A RANDOM WALK
DOWN WALL STREET, Malkiel, Burton. Norton and Company. 1999.
Past performance is no guarantee of future results.
2
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EXPENSE EXAMPLE -- APRIL 30, 2005 -- (UNAUDITED)
DISCLOSURE OF PORTFOLIO EXPENSES IN SHAREHOLDER REPORTS
As a shareholder of a Portfolio in the SunAmerica Focused Series, Inc. (the
"Fund"), you may incur two types of costs: (1) transaction costs, including
sales charges on purchase payments, contingent deferred sales charges,
redemption fees (applicable to Focused International Equity Portfolio only) and
(2) ongoing costs, including management fees; distribution and service fees; and
other Fund expenses. This example is intended to help you understand your
ongoing costs (in dollars) of investing in the Portfolios and to compare these
costs with the ongoing costs of investing in other mutual funds. The example is
based on an investment of $1,000 invested at November 1, 2004 and held until
April 30, 2005.
ACTUAL EXPENSES
The "Actual" section of the table provides information about actual account
values and actual expenses. You may use the information in these columns,
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 column under the heading entitled "Expenses Paid During the Period
ended April 30, 2005" to estimate the expenses you paid on your account during
this period. For shareholder accounts in classes other than Class I, Class X,
and Class Z the "Expenses Paid During the Period ended April 30, 2005" column
does not include small account fees that may be charged if your account balance
is below $500 ($250 for retirement plan accounts). In addition, the "Expenses
Paid During the Period ended April 30, 2005" column does not include
administrative fees that may apply to qualified retirement plan accounts. See
the Portfolios' prospectus and/or the retirement plan document for full
description of these fees. Had these fees been included, the "Expenses Paid
During the Period ended April 30, 2005" column would have been higher and the
"Ending Account Value" would have been lower.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The "Hypothetical" section of the table provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the 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 the Portfolios and other funds. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of other funds. For shareholder accounts in classes other
than Class I, Class X, and Class Z the "Expenses Paid During the Period ended
April 30, 2005" column does not include small account fees that may be charged
if your account balance is below $500 ($250 for retirement plan accounts). In
addition, the "Expenses Paid During the Period ended April 30, 2005" column does
not include administrative fees that may apply to qualified retirement plan
accounts. See the Portfolio's prospectus and/or the retirement plan document for
full description of these fees. Had these fees been included, the "Expenses Paid
During the Period ended April 30, 2005" column would have been higher and the
"Ending Account Value" would have been lower.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, including sales
charges on purchase payments, contingent deferred sales charges, redemption fees
(Focused International Equity Portfolio only); small account fees and
administrative fees, if applicable to your account. Please refer to your
Prospectus and/or qualified retirement plan document for more information.
Therefore, the "Hypothetical" example is useful in comparing ongoing costs only,
and will not help you determine the relative total costs of owning different
funds. In addition, if these transaction costs and other fees were included,
your costs would have been higher.
3
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<Table>
<Caption>
ACTUAL HYPOTHETICAL
-------------------------------------------- --------------------------------------------
ENDING ACCOUNT
ENDING ACCOUNT VALUE USING
VALUE USING EXPENSE PAID A HYPOTHETICAL EXPENSE PAID EXPENSE
BEGINNING ACTUAL DURING THE BEGINNING 5% ASSUMED DURING THE RATIO
ACCOUNT VALUE RETURN AT PERIOD ENDED ACCOUNT VALUE RETURN AT PERIOD ENDED AS OF
AT NOVEMBER 1, APRIL 30, APRIL 30, AT NOVEMBER 1, APRIL 30, APRIL 30, APRIL 30,
PORTFOLIO 2004 2005 2005 2004 2005 2005 2005*
- --------- -------------- -------------- ------------ -------------- -------------- ------------ ----------
Focused Equity Strategy+
Class A# $ 1,000.00 $ 1,034.76 $ 0.91 $ 1,000.00 $ 1,023.90 $ 0.90 0.18%
Class B# $ 1,000.00 $ 1,031.40 $ 4.33 $ 1,000.00 $ 1,020.53 $ 4.31 0.86%
Class C# $ 1,000.00 $ 1,031.41 $ 4.13 $ 1,000.00 $ 1,020.73 $ 4.11 0.82%
Class I# $ 1,000.00 $ 1,034.50 $ 0.76 $ 1,000.00 $ 1,024.05 $ 0.75 0.15%
Focused Multi-Asset
Strategy+
Class A# $ 1,000.00 $ 1,041.71 $ 0.91 $ 1,000.00 $ 1,023.90 $ 0.90 0.18%
Class B# $ 1,000.00 $ 1,037.68 $ 4.29 $ 1,000.00 $ 1,020.58 $ 4.26 0.85%
Class C# $ 1,000.00 $ 1,038.31 $ 4.19 $ 1,000.00 $ 1,020.68 $ 4.16 0.83%
Focused Balanced
Strategy+
Class A# $ 1,000.00 $ 1,026.05 $ 0.80 $ 1,000.00 $ 1,024.00 $ 0.80 0.16%
Class B# $ 1,000.00 $ 1,022.83 $ 4.21 $ 1,000.00 $ 1,020.63 $ 4.21 0.84%
Class C# $ 1,000.00 $ 1,022.80 $ 4.11 $ 1,000.00 $ 1,020.73 $ 4.11 0.82%
Class I# $ 1,000.00 $ 1,025.68 $ 0.75 $ 1,000.00 $ 1,024.05 $ 0.75 0.15%
Focused Fixed Income
and Equity Strategy+
Class A# $ 1,000.00 $ 1,022.06 $ 1.25 $ 1,000.00 $ 1,023.55 $ 1.25 0.25%
Class B# $ 1,000.00 $ 1,018.76 $ 4.50 $ 1,000.00 $ 1,020.33 $ 4.51 0.90%
Class C# $ 1,000.00 $ 1,018.75 $ 4.50 $ 1,000.00 $ 1,020.33 $ 4.51 0.90%
Class I# $ 1,000.00 $ 1,022.56 $ 0.75 $ 1,000.00 $ 1,024.05 $ 0.75 0.15%
Focused Fixed Income
Strategy+
Class A# $ 1,000.00 $ 1,018.23 $ 1.25 $ 1,000.00 $ 1,023.55 $ 1.25 0.25%
Class B# $ 1,000.00 $ 1,014.17 $ 4.49 $ 1,000.00 $ 1,020.33 $ 4.51 0.90%
Class C# $ 1,000.00 $ 1,014.97 $ 4.50 $ 1,000.00 $ 1,020.33 $ 4.51 0.90%
Focused Large-Cap
Growth@
Class A $ 1,000.00 $ 1,034.09 $ 7.67 $ 1,000.00 $ 1,017.26 $ 7.60 1.52%
Class B $ 1,000.00 $ 1,030.28 $ 11.07 $ 1,000.00 $ 1,013.88 $ 10.99 2.20%
Class C $ 1,000.00 $ 1,030.28 $ 11.02 $ 1,000.00 $ 1,013.93 $ 10.94 2.19%
Class Z $ 1,000.00 $ 1,036.38 $ 4.70 $ 1,000.00 $ 1,020.18 $ 4.66 0.93%
Focused Multi-Cap
Growth@
Class A# $ 1,000.00 $ 1,092.88 $ 8.93 $ 1,000.00 $ 1,016.27 $ 8.60 1.72%
Class B# $ 1,000.00 $ 1,089.30 $ 12.28 $ 1,000.00 $ 1,013.04 $ 11.83 2.37%
Class C# $ 1,000.00 $ 1,089.30 $ 12.28 $ 1,000.00 $ 1,013.04 $ 11.83 2.37%
Class X# $ 1,000.00 $ 1,094.13 $ 7.63 $ 1,000.00 $ 1,017.50 $ 7.35 1.47%
Focused 2000 Growth@
Class A# $ 1,000.00 $ 1,034.44 $ 8.68 $ 1,000.00 $ 1,016.27 $ 8.60 1.72%
Class B# $ 1,000.00 $ 1,031.52 $ 11.94 $ 1,000.00 $ 1,013.04 $ 11.83 2.37%
Class C# $ 1,000.00 $ 1,030.93 $ 11.93 $ 1,000.00 $ 1,013.04 $ 11.83 2.37%
Class I# $ 1,000.00 $ 1,035.33 $ 8.18 $ 1,000.00 $ 1,016.76 $ 8.10 1.62%
</Table>
4
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<Table>
<Caption>
ACTUAL HYPOTHETICAL
-------------------------------------------- --------------------------------------------
ENDING ACCOUNT
ENDING ACCOUNT VALUE USING
VALUE USING EXPENSE PAID A HYPOTHETICAL EXPENSE PAID EXPENSE
BEGINNING ACTUAL DURING THE BEGINNING 5% ASSUMED DURING THE RATIO
ACCOUNT VALUE RETURN AT PERIOD ENDED ACCOUNT VALUE RETURN AT PERIOD ENDED AS OF
AT NOVEMBER 1, APRIL 30, APRIL 30, AT NOVEMBER 1, APRIL 30, APRIL 30, APRIL 30,
PORTFOLIO 2004 2005 2005 2004 2005 2005 2005*
- --------- -------------- -------------- ------------ -------------- -------------- ------------ ----------
Focused Large-Cap
Value
Class A# $ 1,000.00 $ 1,036.70 $ 8.38 $ 1,000.00 $ 1,016.56 $ 8.30 1.66%
Class B# $ 1,000.00 $ 1,033.54 $ 11.95 $ 1,000.00 $ 1,013.04 $ 11.83 2.37%
Class C# $ 1,000.00 $ 1,033.49 $ 11.95 $ 1,000.00 $ 1,013.04 $ 11.83 2.37%
Focused Multi-Cap Value
Class A# $ 1,000.00 $ 1,069.77 $ 8.83 $ 1,000.00 $ 1,016.27 $ 8.60 1.72%
Class B# $ 1,000.00 $ 1,066.20 $ 12.14 $ 1,000.00 $ 1,013.04 $ 11.83 2.37%
Class C# $ 1,000.00 $ 1,066.23 $ 12.14 $ 1,000.00 $ 1,013.04 $ 11.83 2.37%
Focused 2000 Value@
Class A# $ 1,000.00 $ 1,025.98 $ 8.49 $ 1,000.00 $ 1,016.41 $ 8.45 1.69%
Class B# $ 1,000.00 $ 1,022.63 $ 11.89 $ 1,000.00 $ 1,013.04 $ 11.83 2.37%
Class C# $ 1,000.00 $ 1,022.60 $ 11.89 $ 1,000.00 $ 1,013.04 $ 11.83 2.37%
Focused Growth and
Income@
Class A# $ 1,000.00 $ 1,052.18 $ 8.75 $ 1,000.00 $ 1,016.27 $ 8.60 1.72%
Class B# $ 1,000.00 $ 1,047.75 $ 12.03 $ 1,000.00 $ 1,013.04 $ 11.83 2.37%
Class C# $ 1,000.00 $ 1,048.51 $ 12.04 $ 1,000.00 $ 1,013.04 $ 11.83 2.37%
Class X# $ 1,000.00 $ 1,054.36 $ 7.18 $ 1,000.00 $ 1,017.80 $ 7.05 1.41%
Focused International
Equity@
Class A# $ 1,000.00 $ 1,053.84 $ 9.93 $ 1,000.00 $ 1,015.12 $ 9.74 1.95%
Class B# $ 1,000.00 $ 1,050.33 $ 13.22 $ 1,000.00 $ 1,011.90 $ 12.97 2.60%
Class C# $ 1,000.00 $ 1,049.77 $ 13.21 $ 1,000.00 $ 1,011.90 $ 12.97 2.60%
Focused Technology@
Class A# $ 1,000.00 $ 942.16 $ 9.49 $ 1,000.00 $ 1,015.03 $ 9.84 1.97%
Class B# $ 1,000.00 $ 938.70 $ 12.59 $ 1,000.00 $ 1,011.80 $ 13.07 2.62%
Class C# $ 1,000.00 $ 938.70 $ 12.59 $ 1,000.00 $ 1,011.80 $ 13.07 2.62%
Focused Dividend
Strategy
Class A# $ 1,000.00 $ 1,035.36 $ 4.79 $ 1,000.00 $ 1,020.08 $ 4.76 0.95%
Class B# $ 1,000.00 $ 1,032.16 $ 8.06 $ 1,000.00 $ 1,016.86 $ 8.00 1.60%
Class C# $ 1,000.00 $ 1,031.34 $ 8.06 $ 1,000.00 $ 1,016.86 $ 8.00 1.60%
</Table>
- ----------
* Expenses are equal to the Portfolio's annualized expense ratio multiplied
by the average account value over the period, multiplied by 181 days
divided by 365 days. These ratios do not reflect transaction costs,
including sales charges on purchase payments, contingent deferred sales
charges, redemption fees (Focused International Equity Portfolio only),
small account fees and administrative fees, if applicable to your account.
Please refer to your prospectus and/or qualified retirement plan document
for more information.
# During the stated period, the investment advisor either waived a portion or
all of the fees and assumed a portion of or all expenses for the Portfolios
or through recoupment provisions, recovered a portion of or all fees and
expenses waived or reimbursed in the previous two fiscal years. As a
result, if these fees and expenses had not been waived, the
"Actual/Hypothetical Ending Account Value" would have been lower and the
"Actual Hypothetical Expenses Paid During the Period" and the "Expense
Ratios" would have been higher. If these fees and expenses had not been
recouped, the "Actual/Hypothetical Ending Account Value" would have been
higher and the "Actual/Hypothetical Expenses Paid During the Period" and
the Expense Ratios" would have been lower.
5
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+ Does not include the expenses of the underlying Funds that the Portfolios
bear indirectly. If these indirect expenses had been included, the
"Actual/Hypothetical Expenses Paid During the Period" and the "Expense
Ratios" would have been higher and the "Actual/Hypothetical Ending Account
Value" would have been lower.
@ Through expense offset arrangements resulting from broker commission
recapture, a portion of the Portfolio's expenses have been reduced. Had the
expense reductions been applied the Expense Example would have been as
follows:
<Table>
<Caption>
ACTUAL HYPOTHETICAL
-------------------------------------------- --------------------------------------------
ENDING ACCOUNT
ENDING ACCOUNT VALUE USING
VALUE USING EXPENSES PAID A HYPOTHETICAL EXPENSE PAID EXPENSE
BEGINNING ACTUAL DURING THE BEGINNING 5% ASSUMED DURING THE RATIO
ACCOUNT VALUE RETURN AT PERIOD ENDED ACCOUNT VALUE RETURN AT PERIOD ENDED AS OF
AT NOVEMBER 1, APRIL 30, APRIL 30, AT NOVEMBER 1, APRIL 30, APRIL 30, APRIL 30,
PORTFOLIO 2004 2005 2005 2004 2005 2005 2005*
- --------- -------------- -------------- ------------ -------------- -------------- ------------ ----------
Focused Large-Cap
Growth
Class A $ 1,000.00 $ 1,034.09 $ 7.31 $ 1,000.00 $ 1,017.60 $ 7.25 1.45%
Class B $ 1,000.00 $ 1,030.28 $ 10.72 $ 1,000.00 $ 1,014.23 $ 10.64 2.13%
Class C $ 1,000.00 $ 1,030.28 $ 10.67 $ 1,000.00 $ 1,014.28 $ 10.59 2.12%
Class Z $ 1,000.00 $ 1,036.38 $ 4.34 $ 1,000.00 $ 1,020.53 $ 4.31 0.86%
Focused Multi-Cap
Growth
Class A# $ 1,000.00 $ 1,092.88 $ 8.93 $ 1,000.00 $ 1,016.27 $ 8.60 1.72%
Class B# $ 1,000.00 $ 1,089.30 $ 12.28 $ 1,000.00 $ 1,013.04 $ 11.83 2.37%
Class C# $ 1,000.00 $ 1,089.30 $ 12.28 $ 1,000.00 $ 1,013.04 $ 11.83 2.37%
Class X# $ 1,000.00 $ 1,094.13 $ 7.63 $ 1,000.00 $ 1,017.50 $ 7.35 1.47%
Focused 2000 Growth
Class A# $ 1,000.00 $ 1,034.44 $ 8.68 $ 1,000.00 $ 1,016.27 $ 8.60 1.72%
Class B# $ 1,000.00 $ 1,031.52 $ 11.94 $ 1,000.00 $ 1,013.04 $ 11.83 2.37%
Class C# $ 1,000.00 $ 1,030.93 $ 11.93 $ 1,000.00 $ 1,013.04 $ 11.83 2.37%
Class I# $ 1,000.00 $ 1,035.33 $ 8.18 $ 1,000.00 $ 1,016.76 $ 8.10 1.62%
Focused 2000 Value
Class A# $ 1,000.00 $ 1,025.98 $ 8.29 $ 1,000.00 $ 1,016.61 $ 8.25 1.65%
Class B# $ 1,000.00 $ 1,022.63 $ 11.68 $ 1,000.00 $ 1,013.24 $ 11.63 2.33%
Class C# $ 1,000.00 $ 1,022.60 $ 11.68 $ 1,000.00 $ 1,013.24 $ 11.63 2.33%
Focused Growth and
Income
Class A# $ 1,000.00 $ 1,052.18 $ 8.60 $ 1,000.00 $ 1,016.41 $ 8.45 1.69%
Class B# $ 1,000.00 $ 1,047.75 $ 11.88 $ 1,000.00 $ 1,013.19 $ 11.68 2.34%
Class C# $ 1,000.00 $ 1,048.51 $ 11.89 $ 1,000.00 $ 1,013.19 $ 11.68 2.34%
Class X# $ 1,000.00 $ 1,054.36 $ 7.18 $ 1,000.00 $ 1,017.80 $ 7.05 1.41%
Focused International
Equity
Class A# $ 1,000.00 $ 1,053.84 $ 9.57 $ 1,000.00 $ 1,015.47 $ 9.39 1.88%
Class B# $ 1,000.00 $ 1,050.33 $ 12.86 $ 1,000.00 $ 1,012.25 $ 12.62 2.53%
Class C# $ 1,000.00 $ 1,049.77 $ 12.86 $ 1,000.00 $ 1,012.25 $ 12.62 2.53%
Focused Technology
Class A# $ 1,000.00 $ 942.16 $ 9.39 $ 1,000.00 $ 1,015.12 $ 9.74 1.95%
Class B# $ 1,000.00 $ 938.70 $ 12.50 $ 1,000.00 $ 1,011.90 $ 12.97 2.60%
Class C# $ 1,000.00 $ 938.70 $ 12.50 $ 1,000.00 $ 1,011.90 $ 12.97 2.60%
</Table>
6
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7
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STATEMENT OF ASSETS AND LIABILITIES -- APRIL 30, 2005 -- (UNAUDITED)
<Table>
<Caption>
FOCUSED FOCUSED FOCUSED FOCUSED FOCUSED
EQUITY MULTI-ASSET BALANCED FIXED INCOME AND FIXED INCOME
STRATEGY STRATEGY STRATEGY EQUITY STRATEGY STRATEGY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------------------------------------------------------------------------------
ASSETS:
Long-term investment securities, at value
(unaffiliated)* $ -- $ -- $ -- $ -- $ --
Long-term investment securities, at value
(affiliated)* 560,431,225 645,587,676 475,002,159 88,847,396 38,606,673
Short-term investment securities, at
value* -- -- -- -- --
Repurchase agreements (cost equals
market value) -- -- -- -- --
--------------- --------------- --------------- ----------------- ---------------
Total investments 560,431,225 645,587,676 475,002,159 88,847,396 38,606,673
--------------- --------------- --------------- ----------------- ---------------
Cash -- -- -- -- --
Foreign cash * -- -- -- -- --
Receivable for--
Fund shares sold 1,076,784 2,379,410 929,267 370,029 91,492
Dividends and interest -- -- -- -- --
Investments sold -- -- -- -- --
Prepaid expenses and other assets 9,204 27,462 7,737 1,479 598
Due from investment advisor for expense
reimbursements/fee waivers -- -- -- -- 2,655
Variation margin on futures contracts -- -- -- -- --
--------------- --------------- --------------- ----------------- ---------------
Total assets 561,517,213 647,994,548 475,939,163 89,218,904 38,701,418
--------------- --------------- --------------- ----------------- ---------------
LIABILITIES:
Payable for--
Fund shares redeemed 2,015,952 648,786 783,241 128,316 463,534
Investments purchased -- -- -- -- --
Investment advisory and
management fees 47,010 53,576 39,463 7,352 2,980
Distribution and service
maintenance fees 209,856 240,765 171,422 26,622 14,135
Transfer agent fees and expenses 5,007 731 1,831 8,754 14,399
Directors' fees and expenses 1,600 1,190 3,719 1,891 1,493
Other accrued expenses 4,375 -- 9,314 29,404 24,880
Line of credit -- -- -- -- --
Dividends payable -- -- -- -- 93,750
Due to investment advisor for expense
recoupment 11,102 -- 12,833 8,088 --
Due to custodian -- -- -- -- --
Due to custodian for foreign cash* -- -- -- -- --
Unrealized depreciation on forward
foreign currency contracts -- -- -- -- --
--------------- --------------- --------------- ----------------- ---------------
Total liabilities 2,294,902 945,048 1,021,823 210,427 615,171
--------------- --------------- --------------- ----------------- ---------------
Net Assets $ 559,222,311 $ 647,049,500 $ 474,917,340 $ 89,008,477 $ 38,086,247
=============== =============== =============== ================= ===============
* Cost
Long-term investment securities
(unaffiliated) $ -- $ -- $ -- $ -- $ --
=============== =============== =============== ================= ===============
Long-term investment securities
(affiliated) $ 542,447,353 $ 601,577,444 $ 461,539,051 $ 87,731,876 $ 38,266,810
=============== =============== =============== ================= ===============
Short-term investment securities $ -- $ -- $ -- $ -- $ --
=============== =============== =============== ================= ===============
Foreign cash $ -- $ -- $ -- $ -- $ --
=============== =============== =============== ================= ===============
</Table>
See Notes to Financial Statements
8
<Page>
<Table>
<Caption>
FOCUSED FOCUSED FOCUSED FOCUSED FOCUSED
EQUITY MULTI-ASSET BALANCED FIXED INCOME AND FIXED INCOME
STRATEGY STRATEGY STRATEGY EQUITY STRATEGY STRATEGY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS:
Common stock, $.0001 par value
(1 billion shares authorized) $ 3,315 $ 3,951 $ 3,077 $ 646 $ 298
Paid-in capital 534,054,210 597,252,828 457,741,444 86,874,065 38,013,322
--------------- --------------- --------------- ----------------- ---------------
534,057,525 597,256,779 457,744,521 86,874,711 38,013,620
Accumulated undistributed net
investment income (loss) 1,224,120 393,418 297,807 177,199 (40,103)
Accumulated undistributed net realized
gain (loss) on investments, futures
contracts, options contracts, foreign
exchange transactions and capital gain
distributions from underlying funds 5,956,794 5,389,071 3,411,904 841,047 (227,133)
Unrealized appreciation (depreciation)
on investments 17,983,872 44,010,232 13,463,108 1,115,520 339,863
Unrealized appreciation (depreciation) on
futures contracts and options contracts -- -- -- -- --
Unrealized foreign exchange gain (loss)
on other assets and liabilities -- -- -- -- --
--------------- --------------- --------------- ----------------- ---------------
Net Assets $ 559,222,311 $ 647,049,500 $ 474,917,340 $ 89,008,477 $ 38,086,247
=============== =============== =============== ================= ===============
CLASS A:
Net assets $ 169,181,347 $ 200,536,845 $ 143,298,331 $ 39,057,824 $ 10,675,260
Shares outstanding 9,959,202 12,196,306 9,279,210 2,834,307 833,620
Net asset value and redemption price per
share (excluding any applicable
contingent deferred sales charge) $ 16.99 $ 16.44 $ 15.44 $ 13.78 $ 12.81
Maximum sales charge (5.75% of
offering price) 1.04 1.00 0.94 0.84 0.78
--------------- --------------- --------------- ----------------- ---------------
Maximum offering price to public $ 18.03 $ 17.44 $ 16.38 $ 14.62 $ 13.59
=============== =============== =============== ================= ===============
CLASS B:
Net assets $ 102,363,060 $ 121,170,067 $ 112,647,134 $ 17,125,484 $ 8,146,212
Shares outstanding 6,085,926 7,413,293 7,306,227 1,243,996 636,682
Net asset value, offering and redemption
price per share (excluding any
applicable contingent deferred sales
charge) $ 16.82 $ 16.34 $ 15.42 $ 13.77 $ 12.79
=============== =============== =============== ================= ===============
CLASS C:
Net assets $ 282,112,272 $ 325,342,588 $ 204,420,902 $ 32,720,755 $ 19,264,775
Shares outstanding 16,775,222 19,903,585 13,242,918 2,376,640 1,505,988
Net asset value, offering and redemption
price per share (excluding any
applicable contingent deferred sales
charge) $ 16.82 $ 16.35 $ 15.44 $ 13.77 $ 12.79
=============== =============== =============== ================= ===============
CLASS I:
Net assets $ 5,565,632 $ -- $ 14,550,973 $ 104,414 $ --
Shares outstanding 327,926 -- 942,788 7,577 --
Net asset value, offering and redemption
price per share $ 16.97 $ -- $ 15.43 $ 13.78 $ --
=============== =============== =============== ================= ===============
CLASS X:
Net assets $ -- $ -- $ -- $ -- $ --
Shares outstanding -- -- -- -- --
Net asset value, offering and redemption
price per share $ -- $ -- $ -- $ -- $ --
=============== =============== =============== ================= ===============
CLASS Z:
Net assets $ -- $ -- $ -- $ -- $ --
Shares outstanding -- -- -- -- --
Net asset value, offering and redemption
price per share $ -- $ -- $ -- $ -- $ --
=============== =============== =============== ================= ===============
</Table>
See Notes to Financial Statements
9
<Page>
<Table>
<Caption>
FOCUSED FOCUSED FOCUSED FOCUSED FOCUSED
LARGE-CAP MULTI-CAP 2000 LARGE-CAP MULTI-CAP
GROWTH GROWTH GROWTH VALUE VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------------------------------------------------------------------------------
ASSETS:
Long-term investment securities, at value
(unaffiliated)* $ 1,548,547,459 $ 322,734,875 $ 327,739,207 $ 498,742,268 $ 553,152,266
Long-term investment securities, at value
(affiliated)* -- -- -- -- --
Short-term investment securities, at value* 7,056,499 20,298,393 -- 6,598,000 --
Repurchase agreements (cost equals
market value) 89,210,000 18,458,000 10,543,000 1,993,000 52,193,000
--------------- --------------- --------------- ----------------- ---------------
Total investments 1,644,813,958 361,491,268 338,282,207 507,333,268 605,345,266
--------------- --------------- --------------- ----------------- ---------------
Cash 49,426 -- 289 2,705 853
Foreign cash* -- -- -- -- --
Receivable for--
Fund shares sold 1,201,403 245,694 605,247 309,029 6,856,410
Dividends and interest 385,132 2,423 1,097 732,611 475,012
Investments sold 1,383,492 5,340,796 -- 9,418,809 16,156,405
Prepaid expenses and other assets 1,003,397 30,879 6,729 9,949 13,262
Due from investment advisor for expense
reimbursements/fee waivers -- -- -- -- --
Variation margin on futures contracts -- -- -- 61,600 293,344
--------------- --------------- --------------- ----------------- ---------------
Total assets 1,648,836,808 367,111,060 338,895,569 517,867,971 629,140,552
--------------- --------------- --------------- ----------------- ---------------
LIABILITIES:
Payable for--
Fund shares redeemed 4,304,457 216,756 444,754 429,056 7,892,894
Investments purchased 60,140,235 1,068,880 -- 8,308,364 13,885,652
Investment advisory and
management fees 1,121,099 304,094 290,651 428,778 508,440
Distribution and service
maintenance fees 878,625 183,405 159,260 212,530 388,225
Transfer agent fees and expenses 322,850 73,368 77,643 107,569 139,950
Directors' fees and expenses 150,019 49,918 5,120 12,782 44,372
Other accrued expenses 486,989 124,483 99,255 136,432 226,270
Line of credit -- -- -- -- --
Dividends payable -- -- -- -- --
Due to investment advisor for
expense recoupment -- 3,279 8,366 1,691 12,997
Due to custodian -- 508,099 -- -- --
Due to custodian for foreign cash* -- -- -- -- 917,414
Unrealized depreciation on forward
foreign currency contracts -- -- -- -- 110,132
--------------- --------------- --------------- ----------------- ---------------
Total liabilities 67,404,274 2,532,282 1,085,049 9,637,202 24,126,346
--------------- --------------- --------------- ----------------- ---------------
Net Assets $ 1,581,432,534 $ 364,578,778 $ 337,810,520 $ 508,230,769 $ 605,014,206
=============== =============== =============== ================= ===============
*Cost
Long-term investment securities
(unaffiliated) $ 1,392,396,690 $ 269,834,588 $ 282,355,595 $ 471,208,584 $ 483,062,350
Long-term investment securities
(affiliated) $ -- $ -- $ -- $ -- $ --
=============== =============== =============== ================= ===============
Short-term investment securities $ 7,057,520 $ 20,298,393 $ -- $ 6,598,000 $ --
=============== =============== =============== ================= ===============
Foreign cash $ -- $ -- $ -- $ -- $ (910,123)
=============== =============== =============== ================= ===============
</Table>
See Notes to Financial Statements
10
<Page>
<Table>
<Caption>
FOCUSED FOCUSED FOCUSED FOCUSED FOCUSED
LARGE-CAP MULTI-CAP 2000 LARGE-CAP MULTI-CAP
GROWTH GROWTH GROWTH VALUE VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS:
Common stock, $.0001 par value
(1 billion shares authorized) $ 9,871 $ 1,903 $ 2,118 $ 3,384 $ 3,047
Paid-in capital 1,947,425,845 404,853,234 292,138,335 469,721,847 515,312,937
--------------- --------------- --------------- ----------------- ---------------
1,947,435,716 404,855,137 292,140,453 469,725,231 515,315,984
Accumulated undistributed net
investment income (loss) 3,250,908 (2,709,745) (3,062,031) 184,759 (1,481,465)
Accumulated undistributed net realized
gain (loss) on investments, futures
contracts, options contracts, foreign
exchange transactions and capital gain
distributions from underlying funds (525,403,838) (90,466,901) 3,348,486 11,066,107 21,225,695
Unrealized appreciation (depreciation)
on investments 156,150,769 52,900,287 45,383,612 27,533,684 70,089,916
Unrealized appreciation (depreciation)
on futures contracts and options
contracts -- -- -- (279,012) (42,837)
Unrealized foreign exchange gain (loss)
on other assets and liabilities (1,021) -- -- -- (93,087)
--------------- --------------- --------------- ----------------- ---------------
Net Assets $ 1,581,432,534 $ 364,578,778 $ 337,810,520 $ 508,230,769 $ 605,014,206
=============== =============== =============== ================= ===============
CLASS A:
Net assets $ 703,928,415 $ 223,422,438 $ 227,680,136 $ 395,721,945 $ 220,258,137
Shares outstanding 42,971,248 11,369,352 14,038,336 26,129,215 10,883,448
Net asset value and redemption price
per share (excluding any applicable
contingent deferred sales charge) $ 16.38 $ 19.65 $ 16.22 $ 15.14 $ 20.24
Maximum sales charge (5.75% of
offering price) 1.00 1.20 0.99 0.92 1.23
--------------- --------------- --------------- ----------------- ---------------
Maximum offering price to public $ 17.38 $ 20.85 $ 17.21 $ 16.06 $ 21.47
=============== =============== =============== ================= ===============
CLASS B:
Net assets $ 374,795,890 $ 90,805,064 $ 36,066,830 $ 38,566,749 $ 180,268,491
Shares outstanding 23,951,146 4,928,861 2,345,732 2,647,027 9,172,009
Net asset value, offering and redemption
price per share (excluding any
applicable contingent deferred sales
charge) $ 15.65 $ 18.42 $ 15.38 $ 14.57 $ 19.65
=============== =============== =============== ================= ===============
CLASS C:
Net assets $ 428,632,718 $ 49,210,746 $ 66,983,616 $ 73,942,075 $ 204,487,578
Shares outstanding 27,380,988 2,671,743 4,369,128 5,067,957 10,410,071
Net asset value, offering and redemption
price per share (excluding any
applicable contingent deferred sales
charge) $ 15.65 $ 18.42 $ 15.33 $ 14.59 $ 19.64
=============== =============== =============== ================= ===============
CLASS I:
Net assets $ -- $ -- $ 7,079,938 $ -- $ --
Shares outstanding -- -- 431,544 -- --
Net asset value, offering and redemption
price per share $ -- $ -- $ 16.41 $ -- $ --
=============== =============== =============== ================= ===============
CLASS X:
Net assets $ -- $ 1,140,530 $ -- $ -- $ --
Shares outstanding -- 57,709 -- -- --
Net asset value, offering and redemption
price per share $ -- $ 19.76 $ -- $ -- $ --
=============== =============== =============== ================= ===============
CLASS Z:
Net assets $ 74,075,511 $ -- $ -- $ -- $ --
Shares outstanding 4,405,509 -- -- -- --
Net asset value, offering and redemption
price per share $ 16.81 $ -- $ -- $ -- $ --
=============== =============== =============== ================= ===============
</Table>
See Notes to Financial Statements
11
<Page>
<Table>
<Caption>
FOCUSED FOCUSED FOCUSED FOCUSED
2000 GROWTH INTERNATIONAL FOCUSED DIVIDEND
VALUE AND INCOME EQUITY TECHNOLOGY STRATEGY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------------------------------------------------------------------------------
ASSETS:
Long-term investment securities, at value
(unaffiliated)* $ 493,592,134 $ 365,387,462 $ 225,867,077 $ 80,699,397 $ 225,732,380
Long-term investment securities, at value
(affiliated)* -- -- -- -- --
Short-term investment securities, at value* 29,697,764 -- 320,974 -- --
Repurchase agreements (cost equals
market value) 29,725,000 14,216,000 6,693,000 3,129,000 1,142,000
--------------- --------------- --------------- ----------------- ---------------
Total investments 553,014,898 379,603,462 232,881,051 83,828,397 226,874,380
--------------- --------------- --------------- ----------------- ---------------
Cash 63,051 1,040 68,621 1,200 593
Foreign cash* -- 1,974 473,992 -- --
Receivable for--
Fund shares sold 924,960 221,139 142,318 156,037 378,246
Dividends and interest 285,353 1,234,462 755,389 2,487 703,823
Investments sold 8,238,027 -- 3,016,909 -- 997,620
Prepaid expenses and other assets 20,128 47,244 4,250 8,784 4,806
Due from investment advisor for expense
reimbursements/fee waivers -- 3,757 20,536 19,221 17,468
Variation margin on futures contracts -- -- -- -- --
--------------- --------------- --------------- ----------------- ---------------
Total assets 562,546,417 381,113,078 237,363,066 84,016,126 228,976,936
--------------- --------------- --------------- ----------------- ---------------
LIABILITIES:
Payable for--
Fund shares redeemed 1,775,141 1,084,164 144,087 212,094 997,260
Investments purchased 10,224,234 11,031,321 3,119,208 161,509 --
Investment advisory and
management fees 468,695 306,301 240,338 88,560 66,519
Distribution and service
maintenance fees 268,882 217,102 91,615 51,269 153,462
Transfer agent fees and expenses 118,417 90,062 48,075 27,281 59,687
Directors' fees and expenses 15,234 25,160 2,729 8,178 11,883
Other accrued expenses 44,324 153,055 149,942 88,025 36,859
Line of credit -- 151,867 -- -- --
Dividends payable -- -- -- -- --
Due to investment advisor for expense
recoupment 4,558 -- -- -- --
Due to custodian -- -- -- -- --
Due to custodian for foreign cash* -- -- -- -- --
Unrealized depreciation on forward
foreign currency contracts -- -- 583,292 -- --
--------------- --------------- --------------- ----------------- ---------------
Total liabilities 12,919,485 13,059,032 4,379,286 636,916 1,325,670
--------------- --------------- --------------- ----------------- ---------------
Net Assets $ 549,626,932 $ 368,054,046 $ 232,983,780 $ 83,379,210 $ 227,651,266
=============== =============== =============== ================= ===============
*Cost
Long-term investment securities
(unaffiliated) $ 472,101,032 $ 334,775,355 $ 204,387,736 $ 77,350,963 $ 216,585,835
=============== =============== =============== ================= ===============
Long-term investment securities
(affiliated) $ -- $ -- $ -- $ -- $ --
=============== =============== =============== ================= ===============
Short-term investment securities $ 29,697,768 $ -- $ 320,974 $ -- $ --
=============== =============== =============== ================= ===============
Foreign cash $ -- $ 1,984 $ 469,400 $ -- $ --
=============== =============== =============== ================= ===============
</Table>
See Notes to Financial Statements
12
<Page>
<Table>
<Caption>
FOCUSED FOCUSED FOCUSED FOCUSED
2000 GROWTH INTERNATIONAL FOCUSED DIVIDEND
VALUE AND INCOME EQUITY TECHNOLOGY STRATEGY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS:
Common stock, $0001 par value
(1 billion shares authorized) $ 2,842 $ 2,377 $ 1,400 $ 1,681 $ 1,810
Paid-in capital 496,776,326 358,967,552 208,945,910 269,761,165 221,232,004
--------------- --------------- --------------- ----------------- ---------------
496,779,168 358,969,929 208,947,310 269,762,846 221,233,814
Accumulated undistributed net
investment income (loss) (1,398,145) (490,842) 363,310 (742,653) 490,426
Accumulated undistributed net realized
gain (loss) on investments, futures
contracts, options contracts, foreign
exchange transactions and capital gain
distributions from underlying funds 32,754,811 (21,032,812) 2,768,897 (188,989,417) (3,219,519)
Unrealized appreciation (depreciation)
on investments 21,491,102 30,612,107 21,479,341 3,348,434 9,146,545
Unrealized appreciation (depreciation)
on futures contracts and options contracts -- -- -- -- --
Unrealized foreign exchange gain (loss)
on other assets and liabilities (4) (4,336) (575,078) -- --
--------------- --------------- --------------- ----------------- ---------------
Net Assets $ 549,626,932 $ 368,054,046 $ 232,983,780 $ 83,379,210 $ 227,651,266
=============== =============== =============== ================= ===============
CLASS A:
Net assets $ 361,305,905 $ 164,336,807 $ 187,624,152 $ 35,690,099 $ 67,245,939
Shares outstanding 18,317,206 10,318,145 11,224,485 7,073,447 5,332,914
Net asset value and redemption price per
share (excluding any applicable
contingent deferred sales charge) $ 19.72 $ 15.93 $ 16.72 $ 5.05 $ 12.61
Maximum sales charge (5.75% of offering
price) 1.20 0.97 1.02 0.31 0.77
--------------- --------------- --------------- ----------------- ---------------
Maximum offering price to public $ 20.92 $ 16.90 $ 17.74 $ 5.36 $ 13.38
=============== =============== =============== ================= ===============
CLASS B:
Net assets $ 70,157,564 $ 78,319,442 $ 12,224,580 $ 22,986,441 $ 58,206,858
Shares outstanding 3,770,475 5,171,407 746,312 4,692,984 4,632,378
Net asset value, offering and redemption
price per share (excluding any applicable
contingent deferred sales charge) $ 18.61 $ 15.14 $ 16.38 $ 4.90 $ 12.57
=============== =============== =============== ================= ===============
CLASS C:
Net assets $ 118,163,463 $ 123,909,815 $ 33,135,048 $ 24,702,670 $ 102,198,469
Shares outstanding 6,337,182 8,189,139 2,026,207 5,041,611 8,134,415
Net asset value, offering and redemption
price per share (excluding any applicable
contingent deferred sales charge) $ 18.65 $ 15.13 $ 16.35 $ 4.90 $ 12.56
=============== =============== =============== ================= ===============
CLASS I:
Net assets $ -- $ -- $ -- $ -- $ --
Shares outstanding -- -- -- -- --
Net asset value, offering and redemption
price per share $ -- $ -- $ -- $ -- $ --
=============== =============== =============== ================= ===============
CLASS X:
Net assets $ -- $ 1,487,982 $ -- $ -- $ --
Shares outstanding -- 92,438 -- -- --
Net asset value, offering and redemption
price per share $ -- $ 16.10 $ -- $ -- $ --
=============== =============== =============== ================= ===============
CLASS Z:
Net assets $ -- $ -- $ -- $ -- $ --
Shares outstanding -- -- -- -- --
Net asset value, offering and redemption
price per share $ -- $ -- $ -- $ -- $ --
=============== =============== =============== ================= ===============
</Table>
See Notes to Financial Statements
13
<Page>
STATEMENT OF OPERATIONS -- FOR THE PERIOD ENDED APRIL 30, 2005 -- (UNAUDITED)
<Table>
<Caption>
FOCUSED
FOCUSED FOCUSED FOCUSED FIXED INCOME
EQUITY MULTI-ASSET BALANCED AND EQUITY
STRATEGY STRATEGY STRATEGY STRATEGY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- -------------- -------------- ---------------
INVESTMENT INCOME:
Dividends (unaffiliated) $ -- $ -- $ -- $ --
Dividends (affiliated) 7,502,264 7,388,079 6,971,793 1,303,087
Interest (unaffiliated) -- -- -- --
-------------- -------------- -------------- ---------------
Total investment income* 7,502,264 7,388,079 6,971,793 1,303,087
============== ============== ============== ===============
Expenses:
Investment advisory and management fees 284,995 307,886 238,410 44,856
Distribution and service maintenance fees
Class A -- -- -- --
Class B 335,548 366,119 369,862 53,761
Class C 932,444 1,024,277 674,897 110,156
Class X -- -- -- --
Class Z -- -- -- --
Service fees Class I -- -- -- --
Transfer agent fees and expenses
Class A 16,164 16,233 12,794 1,060
Class B 14,930 12,755 19,159 703
Class C 20,292 21,323 14,633 1,871
Class I 424 -- 549 --
Class X -- -- -- --
Class Z -- -- -- --
Registration fees
Class A 17,067 12,948 11,986 8,457
Class B 9,825 8,434 8,582 5,871
Class C 22,805 16,718 14,272 6,324
Class I 2,745 -- 922 12,639
Class X -- -- -- --
Class Z -- -- -- --
Custodian fees 6,042 6,535 6,389 6,029
Reports to shareholders 28,292 26,924 18,214 1,592
Audit and tax fees 11,236 11,433 11,165 11,299
Legal fees 5,748 5,353 5,726 1,969
Directors' fees and expenses 11,621 12,031 10,033 1,665
Interest expense -- -- -- --
Other expenses 8,773 13,532 12,483 7,210
-------------- -------------- -------------- ---------------
Total expenses before fee waivers, expense reimbursements,
expense recoupments, custody credits, and fees paid
indirectly 1,728,951 1,862,501 1,430,076 275,462
Net (fees waived and expenses reimbursed)/recouped by
investment adviser (Note 4) 57,598 96,401 20,290 548
Custody credits earned on cash balances (19) (512) (366) (6)
Fees paid indirectly (Note 8) -- -- -- --
-------------- -------------- -------------- ---------------
Net expenses 1,786,530 1,958,390 1,450,000 276,004
-------------- -------------- -------------- ---------------
Net investment income (loss) 5,715,734 5,429,689 5,521,793 1,027,083
-------------- -------------- -------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on investments (unaffiliated) -- -- -- --
Net realized gain (loss) on investments (affiliated) 5,147,756 286,881 2,151,851 657,607
Net realized gain (loss) from capital gain distributions
from underlying funds (affiliated) 6,847,982 5,103,380 4,668,385 312,517
Net realized gain (loss) on futures contracts and options
contracts -- -- -- --
Net realized foreign exchange gain (loss) on other assets and
liabilities -- -- -- --
-------------- -------------- -------------- ---------------
Net realized gain (loss) on investments and foreign currencies 11,995,738 5,390,261 6,820,236 970,124
-------------- -------------- -------------- ---------------
Change in unrealized appreciation (depreciation) on investments
(unaffiliated) -- -- -- --
Change in unrealized appreciation (depreciation) on investments
(affiliated) (1,035,184) 8,719,531 (1,803,137) (241,182)
Change in unrealized appreciation (depreciation) on futures
contracts and options contracts -- -- -- --
Change in unrealized foreign exchange gain (loss) on other
assets and liabilities -- -- -- --
-------------- -------------- -------------- ---------------
Net unrealized gain (loss) on investments and foreign currencies (1,035,184) 8,719,531 (1,803,137) (241,182)
-------------- -------------- -------------- ---------------
Net realized and unrealized gain (loss) on investments and
foreign currencies 10,960,554 14,109,792 5,017,099 728,942
-------------- -------------- -------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS: $ 16,676,288 $ 19,539,481 $ 10,538,892 $ 1,756,025
============== ============== ============== ===============
*Net of foreign withholding taxes on interest and dividends of $ -- $ -- $ -- $ --
============== ============== ============== ===============
</Table>
See Notes to Financial Statements
14
<Page>
<Table>
<Caption>
FOCUSED FOCUSED FOCUSED FOCUSED
FIXED INCOME LARGE-CAP MULTI-CAP 2000
STRATEGY GROWTH GROWTH GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- -------------- -------------- ---------------
INVESTMENT INCOME:
Dividends (unaffiliated) $ -- $ 18,205,626 $ 667,400 $ 260,866
Dividends (affiliated) 637,125 -- -- --
Interest (unaffiliated) -- 456,454 263,743 74,066
-------------- -------------- -------------- ---------------
Total investment income* 637,125 18,662,080 931,143 334,932
============== ============== ============== ===============
Expenses:
Investment advisory and management fees 18,013 7,291,673 1,809,862 1,766,066
Distribution and service maintenance fees
Class A -- 1,297,702 372,432 408,507
Class B 26,026 2,089,025 491,433 194,327
Class C 61,540 2,398,857 249,052 368,108
Class X -- -- -- --
Class Z -- -- -- --
Service fees Class I -- -- -- 9,117
Transfer agent fees and expenses
Class A 704 910,643 284,437 266,657
Class B 716 572,713 145,409 54,549
Class C 877 621,758 67,973 90,386
Class I -- -- -- 8,197
Class X -- -- 248 --
Class Z -- -- -- --
Registration fees
Class A 6,001 13,547 7,471 8,687
Class B 5,270 4,208 5,195 3,785
Class C 7,772 5,267 3,086 4,565
Class I -- -- -- 3,572
Class X -- -- 1,080 --
Class Z -- 1,509 -- --
Custodian fees 6,023 351,121 82,264 82,657
Reports to shareholders 334 165,371 42,653 19,914
Audit and tax fees 11,299 16,505 16,427 16,411
Legal fees 1,271 17,411 4,350 3,819
Directors' fees and expenses 401 44,156 8,462 7,343
Interest expense -- 4,864 -- 72
Other expenses 6,241 51,487 7,554 14,657
-------------- -------------- -------------- ---------------
Total expenses before fee waivers, expense reimbursements,
expense recoupments, custody credits, and fees paid
indirectly 152,488 15,857,817 3,599,388 3,331,396
Net (fees waived and expenses reimbursed)/recouped by
investment adviser (Note 4) (19,892) -- (5,813) 69,731
Custody credits earned on cash balances -- (4,434) (617) (1,557)
Fees paid indirectly (Note 8) -- (589,239) (2,516) (8,078)
-------------- -------------- -------------- ---------------
Net expenses 132,596 15,264,144 3,590,442 3,391,492
-------------- -------------- -------------- ---------------
Net investment income (loss) 504,529 3,397,936 (2,659,299) (3,056,560)
-------------- -------------- -------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on investments (unaffiliated) -- 99,021,539 41,398,651 13,074,788
Net realized gain (loss) on investments (affiliated) 134,067 -- -- --
Net realized gain (loss) from capital gain distributions from
underlying funds (affiliated) 88,230 -- -- --
Net realized gain (loss) on futures contracts and options
contracts -- (12,493) -- --
Net realized foreign exchange gain (loss) on other assets and
liabilities -- 8 -- --
-------------- -------------- -------------- ---------------
Net realized gain (loss) on investments and foreign currencies 222,297 99,009,054 41,398,651 13,074,788
-------------- -------------- -------------- ---------------
Change in unrealized appreciation (depreciation) on investments
(unaffiliated) -- (41,299,490) (8,328,066) (350,554)
Change in unrealized appreciation (depreciation) on investments
(affiliated) (144,172) -- -- --
Change in unrealized appreciation (depreciation) on futures
contracts and options contracts -- -- -- --
Change in unrealized foreign exchange gain (loss) on other
assets and liabilities -- (1,021) -- --
-------------- -------------- -------------- ---------------
Net unrealized gain (loss) on investments and foreign currencies (144,172) (41,300,511) (8,328,066) (350,554)
-------------- -------------- -------------- ---------------
Net realized and unrealized gain (loss) on investments and
foreign currencies 78,125 57,708,543 33,070,585 12,724,234
-------------- -------------- -------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS: $ 582,654 $ 61,106,479 $ 30,411,286 $ 9,667,674
============== ============== ============== ===============
*Net of foreign withholding taxes on interest and dividends of $ -- $ 40,513 $ -- $ --
============== ============== ============== ===============
</Table>
See Notes to Financial Statements
15
<Page>
<Table>
<Caption>
FOCUSED FOCUSED FOCUSED FOCUSED
LARGE-CAP MULTI-CAP 2000 GROWTH
VALUE VALUE VALUE AND INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- -------------- -------------- ---------------
INVESTMENT INCOME:
Dividends (unaffiliated) $ 4,787,283 $ 4,973,828 $ 3,475,020 $ 2,675,417
Dividends (affiliated) -- -- -- --
Interest (unaffiliated) 114,738 283,776 590,617 1,005,802
-------------- -------------- -------------- ---------------
Total investment income* 4,902,021 5,257,604 4,065,637 3,681,219
============== ============== ============== ===============
Expenses:
Investment advisory and management fees 2,577,092 3,139,316 2,886,935 2,049,361
Distribution and service maintenance fees
Class A 691,503 388,018 656,684 291,228
Class B 214,666 945,676 388,371 423,572
Class C 386,703 1,085,018 622,323 675,435
Class X -- -- -- --
Class Z -- -- -- --
Service fees Class I -- -- -- --
Transfer agent fees and expenses
Class A 443,763 268,266 429,684 202,672
Class B 57,897 238,351 100,503 115,008
Class C 94,736 265,949 150,759 167,973
Class I -- -- -- --
Class X -- -- -- 25,235
Class Z -- -- -- --
Registration fees
Class A 12,972 6,812 11,979 7,928
Class B 4,158 5,753 4,244 4,646
Class C 5,850 6,359 5,501 5,837
Class I -- -- -- --
Class X -- -- -- 4,149
Class Z -- -- -- --
Custodian fees 96,276 173,621 102,045 131,121
Reports to shareholders 16,983 57,859 31,278 33,753
Audit and tax fees 16,254 16,318 16,435 16,411
Legal fees 5,383 7,070 5,598 5,155
Directors' fees and expenses 11,053 15,618 11,999 10,386
Interest expense 879 1,404 -- 9,234
Other expenses 17,902 22,415 18,794 17,349
-------------- -------------- -------------- ---------------
Total expenses before fee waivers, expense reimbursements,
expense recoupments, custody credits, and fees paid
indirectly 4,654,070 6,643,823 5,443,132 4,196,453
Net (fees waived and expenses reimbursed)/recouped by
investment adviser (Note 4) 49,015 77,574 125,393 6,373
Custody credits earned on cash balances (257) (1,823) (2,768) (553)
Fees paid indirectly (Note 8) -- -- (118,351) (54,542)
-------------- -------------- -------------- ---------------
Net expenses 4,702,828 6,719,574 5,447,406 4,147,731
-------------- -------------- -------------- ---------------
Net investment income (loss) 199,193 (1,461,970) (1,381,769) (466,512)
-------------- -------------- -------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on investments (unaffiliated) 11,531,376 48,525,564 32,759,985 40,035,259
Net realized gain (loss) on investments (affiliated) -- -- -- --
Net realized gain (loss) from capital gain distributions from
underlying funds (affiliated) -- -- -- --
Net realized gain (loss) on futures contracts and options
contracts 405,462 1,685,495 -- (2,661)
Net realized foreign exchange gain (loss) on other assets and
liabilities -- (1,252,087) -- 191,487
-------------- -------------- -------------- ---------------
Net realized gain (loss) on investments and foreign currencies 11,936,838 48,958,972 32,759,985 40,224,085
-------------- -------------- -------------- ---------------
Change in unrealized appreciation (depreciation) on investments
(unaffiliated) 5,927,392 (5,682,127) (18,321,486) (18,194,055)
Change in unrealized appreciation (depreciation) on investments
(affiliated) -- -- -- --
Change in unrealized appreciation (depreciation) on futures
contracts and options contracts (319,648) (558,287) -- --
Change in unrealized foreign exchange gain (loss) on other
assets and liabilities -- (74,493) (4) (8,281)
-------------- -------------- -------------- ---------------
Net unrealized gain (loss) on investments and foreign currencies 5,607,744 (6,314,907) (18,321,490) (18,202,336)
-------------- -------------- -------------- ---------------
Net realized and unrealized gain (loss) on investments and
foreign currencies 17,544,582 42,644,065 14,438,495 22,021,749
-------------- -------------- -------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS: $ 17,743,775 $ 41,182,095 $ 13,056,726 $ 21,555,237
============== ============== ============== ===============
*Net of foreign withholding taxes on interest and dividends of $ -- $ 86,548 $ 7,638 $ 110,504
============== ============== ============== ===============
</Table>
See Notes to Financial Statements
16
<Page>
<Table>
<Caption>
FOCUSED FOCUSED
INTERNATIONAL FOCUSED DIVIDEND
EQUITY TECHNOLOGY STRATEGY
PORTFOLIO PORTFOLIO PORTFOLIO
--------------- --------------- ---------------
INVESTMENT INCOME:
Dividends (unaffiliated) $ 3,028,595 $ 312,476 $ 3,465,285
Dividends (affiliated) -- -- --
Interest (unaffiliated) 57,982 47,920 17,698
--------------- --------------- ---------------
Total investment income* 3,086,577 360,396 3,482,983
=============== =============== ===============
Expenses:
Investment advisory and management fees 1,419,558 589,454 412,304
Distribution and service maintenance fees
Class A 321,012 69,692 122,704
Class B 58,384 129,284 301,749
Class C 160,085 143,159 525,677
Class X -- -- --
Class Z -- -- --
Service fees Class I -- -- --
Transfer agent fees and expenses
Class A 206,235 59,987 84,022
Class B 16,106 43,084 72,307
Class C 39,362 42,691 121,333
Class I -- -- --
Class X -- -- --
Class Z -- -- --
Registration fees
Class A 9,114 5,013 6,627
Class B 3,872 4,333 6,752
Class C 4,222 4,661 9,770
Class I -- -- --
Class X -- -- --
Class Z -- -- --
Custodian fees 185,106 71,343 34,599
Reports to shareholders 7,167 24,667 15,814
Audit and tax fees 20,578 16,294 14,909
Legal fees 3,676 2,053 3,213
Directors' fees and expenses 4,534 2,413 5,256
Interest expense 1,574 -- --
Other expenses 10,762 8,705 10,357
--------------- --------------- ---------------
Total expenses before fee waivers, expense reimbursements,
expense recoupments, custody credits, and fees paid
indirectly 2,471,347 1,216,833 1,747,393
Net (fees waived and expenses reimbursed)/recouped by
investment adviser (Note 4) (113,988) (110,571) (90,329)
Custody credits earned on cash balances (806) (195) (122)
Fees paid indirectly (Note 8) (76,903) (11,109) --
--------------- --------------- ---------------
Net expenses 2,279,650 1,094,958 1,656,942
--------------- --------------- ---------------
Net investment income (loss) 806,927 (734,562) 1,826,041
--------------- --------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on investments (unaffiliated) 3,241,501 3,498,113 11,082,639
Net realized gain (loss) on investments (affiliated) -- -- --
Net realized gain (loss) from capital gain distributions from
underlying funds (affiliated) -- -- --
Net realized gain (loss) on futures contracts and options
contracts -- -- --
Net realized foreign exchange gain (loss) on other assets and
liabilities 78,543 -- --
--------------- --------------- ---------------
Net realized gain (loss) on investments and foreign currencies 3,320,044 3,498,113 11,082,639
--------------- --------------- ---------------
Change in unrealized appreciation (depreciation) on investments
(unaffiliated) 7,114,985 (8,189,420) (5,235,858)
Change in unrealized appreciation (depreciation) on investments
(affiliated) -- -- --
Change in unrealized appreciation (depreciation) on futures
contracts and options contracts -- -- --
Change in unrealized foreign exchange gain (loss) on other
assets and liabilities (584,325) -- --
--------------- --------------- ---------------
Net unrealized gain (loss) on investments and foreign currencies 6,530,660 (8,189,420) (5,235,858)
--------------- --------------- ---------------
Net realized and unrealized gain (loss) on investments and
foreign currencies 9,850,704 (4,691,307) 5,846,781
--------------- --------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS: $ 10,657,631 $ (5,425,869) $ 7,672,822
=============== =============== ===============
*Net of foreign withholding taxes on interest and dividends of $ 155,837 $ -- $ --
=============== =============== ===============
</Table>
See Notes to Financial Statements
17
<Page>
STATEMENT OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOCUSED EQUITY FOCUSED MULTI-ASSET
STRATEGY PORTFOLIO STRATEGY PORTFOLIO
------------------------------- -------------------------------
FOR THE PERIOD FOR THE PERIOD
ENDED FOR THE YEAR ENDED FOR THE YEAR
APRIL 30, ENDED APRIL 30, ENDED
2005 OCTOBER 31, 2005 OCTOBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
-----------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income (loss) $ 5,715,734 $ (2,505,708) $ 5,429,689 $ 213,723
Net realized gain (loss) on investments and
foreign currencies 11,995,738 2,126,377 5,390,261 574,308
Net unrealized gain (loss) on
investments and foreign currencies (1,035,184) 2,975,057 8,719,531 15,618,063
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations 16,676,288 2,595,726 19,539,481 16,406,094
-------------- -------------- -------------- --------------
DIVIDENDS AND DISTRIBUTIONS PAID TO
SHAREHOLDERS FROM:
Net investment income (Class A) (2,100,912) -- (2,378,109) (280,124)
Net investment income (Class B) (609,379) -- (755,694) --
Net investment income (Class C+) (1,701,328) -- (2,144,819) --
Net investment income (Class I) (75,785) -- -- --
Net investment income (Class X) -- -- -- --
Net investment income (Class Z) -- -- -- --
Net realized gain on investments (Class A) (632,833) (11,582) (80,386) (5,158)
Net realized gain on investments (Class B) (376,700) (7,138) (48,371) (3,400)
Net realized gain on investments (Class C+) (1,051,709) (22,608) (137,286) (9,941)
Net realized gain on investments (Class I) (21,150) -- -- --
Net realized gain on investments (Class X) -- -- -- --
Net realized gain on investments (Class Z) -- -- -- --
-------------- -------------- -------------- --------------
Total dividends and distributions to
shareholders (6,569,796) (41,328) (5,544,665) (298,623)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from capital share transactions
(Note 9) 24,340,019 344,837,872 91,330,435 313,245,923
-------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 34,446,511 347,392,270 105,325,251 329,353,394
NET ASSETS:
Beginning of period 524,775,800 177,383,530 541,724,249 212,370,855
-------------- -------------- -------------- --------------
End of period* $ 559,222,311 $ 524,775,800 $ 647,049,500 $ 541,724,249
============== ============== ============== ==============
*Includes accumulated undistributed
net investment income (loss) $ 1,224,120 $ (4,210) $ 393,418 $ 242,351
============== ============== ============== ==============
<Caption>
FOCUSED BALANCED
STRATEGY PORTFOLIO
-------------------------------
FOR THE PERIOD
ENDED FOR THE YEAR
APRIL 30, ENDED
2005 OCTOBER 31,
(UNAUDITED) 2004
-------------------------------
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income (loss) $ 5,521,793 $ 2,042,428
Net realized gain (loss) on investments and
foreign currencies 6,820,236 5,818,103
Net unrealized gain (loss) on
investments and foreign currencies (1,803,137) 242,663
-------------- --------------
Net increase (decrease) in net assets
resulting from operations 10,538,892 8,103,194
-------------- --------------
DIVIDENDS AND DISTRIBUTIONS PAID TO
SHAREHOLDERS FROM:
Net investment income (Class A) (1,908,464) (1,284,840)
Net investment income (Class B) (1,179,397) (321,864)
Net investment income (Class C+) (2,157,795) (600,182)
Net investment income (Class I) (192,864) (134,692)
Net investment income (Class X) -- --
Net investment income (Class Z) -- --
Net realized gain on investments (Class A) (1,482,685) (2,613)
Net realized gain on investments (Class B) (1,209,896) (2,093)
Net realized gain on investments (Class C+) (2,216,788) (4,626)
Net realized gain on investments (Class I) (142,722) --
Net realized gain on investments (Class X) -- --
Net realized gain on investments (Class Z) -- --
-------------- --------------
Total dividends and distributions to
shareholders (10,490,611) (2,350,910)
-------------- --------------
Net increase (decrease) in net assets
resulting from capital share transactions
(Note 9) 23,533,257 240,391,148
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 23,581,538 246,143,432
NET ASSETS:
Beginning of period 451,335,802 205,192,370
-------------- --------------
End of period* $ 474,917,340 $ 451,335,802
============== ==============
*Includes accumulated undistributed
net investment income (loss) $ 297,807 $ 214,534
============== ==============
</Table>
- ----------
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares
See Notes to Financial Statements
18
<Page>
<Table>
<Caption>
FOCUSED FIXED INCOME FOCUSED FIXED
AND EQUITY STRATEGY INCOME STRATEGY
PORTFOLIO PORTFOLIO
------------------------------- -------------------------------
FOR THE PERIOD FOR THE PERIOD
ENDED FOR THE YEAR ENDED FOR THE YEAR
APRIL 30, ENDED APRIL 30, ENDED
2005 OCTOBER 31, 2005 OCTOBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
-----------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income (loss) $ 1,027,083 $ 1,620,133 $ 504,529 $ 888,109
Net realized gain (loss) on
investments and foreign currencies 970,124 2,036,151 222,297 405,832
Net unrealized gain (loss) on
investments and foreign currencies (241,182) (1,120,971) (144,172) 335,623
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations 1,756,025 2,535,313 582,654 1,629,564
-------------- -------------- -------------- --------------
DIVIDENDS AND DISTRIBUTIONS PAID TO
SHAREHOLDERS FROM:
Net investment income (Class A) (515,858) (890,256) (149,630) (328,924)
Net investment income (Class B) (162,478) (276,292) (105,356) (234,806)
Net investment income (Class C+) (329,710) (574,788) (248,773) (506,771)
Net investment income (Class I) (1,414) (539) -- --
Net investment income (Class X) -- -- -- --
Net investment income (Class Z) -- -- -- --
Net realized gain on investments (Class A) (847,339) (18,478) (159,736) (66,667)
Net realized gain on investments (Class B) (350,708) (8,110) (145,621) (55,320)
Net realized gain on investments (Class C+) (733,777) (16,025) (347,813) (97,016)
Net realized gain on investments (Class I) (2,252) -- -- --
Net realized gain on investments (Class X) -- -- -- --
Net realized gain on investments (Class Z) -- -- -- --
-------------- -------------- -------------- --------------
Total dividends and distributions to
shareholders (2,943,536) (1,784,488) (1,156,929) (1,289,504)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from capital share
transactions (Note 9) 802,211 28,774,372 852,420 12,497,926
-------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (385,300) 29,525,197 278,145 12,837,986
NET ASSETS:
Beginning of period 89,393,777 59,868,580 37,808,102 24,970,116
-------------- -------------- -------------- --------------
End of period* $ 89,008,477 $ 89,393,777 $ 38,086,247 $ 37,808,102
============== ============== ============== ==============
*Includes accumulated undistributed
net investment income (loss) $ 177,199 $ 159,576 $ (40,103) $ (40,873)
============== ============== ============== ==============
<Caption>
FOCUSED
LARGE-CAP GROWTH
PORTFOLIO
--------------------------------
FOR THE PERIOD
ENDED FOR THE YEAR
APRIL 30, ENDED
2005 OCTOBER 31,
(UNAUDITED) 2004
--------------------------------
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income (loss) $ 3,397,936 $ (22,286,763)
Net realized gain (loss) on
investments and foreign currencies 99,009,054 71,126,863
Net unrealized gain (loss) on
investments and foreign currencies (41,300,511) (154,070,146)
--------------- ---------------
Net increase (decrease) in net assets
resulting from operations 61,106,479 (105,230,046)
--------------- ---------------
DIVIDENDS AND DISTRIBUTIONS PAID TO
SHAREHOLDERS FROM:
Net investment income (Class A) -- --
Net investment income (Class B) -- --
Net investment income (Class C+) -- --
Net investment income (Class I) -- --
Net investment income (Class X) -- --
Net investment income (Class Z) -- --
Net realized gain on investments (Class A) -- --
Net realized gain on investments (Class B) -- --
Net realized gain on investments (Class C+) -- --
Net realized gain on investments (Class I) -- --
Net realized gain on investments (Class X) -- --
Net realized gain on investments (Class Z) -- --
--------------- ---------------
Total dividends and distributions to
shareholders -- --
--------------- ---------------
Net increase (decrease) in net assets
resulting from capital share
transactions (Note 9) (189,041,201) 185,392,965
--------------- ---------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (127,934,722) 80,162,919
NET ASSETS:
Beginning of period 1,709,367,256 1,629,204,337
--------------- ---------------
End of period* $ 1,581,432,534 $ 1,709,367,256
=============== ===============
*Includes accumulated undistributed
net investment income (loss) $ 3,250,908 $ (147,028)
=============== ===============
</Table>
- ----------
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares
See Notes to Financial Statements
19
<Page>
<Table>
<Caption>
FOCUSED MULTI-CAP GROWTH FOCUSED 2000 GROWTH
PORTFOLIO PORTFOLIO
------------------------------- -------------------------------
FOR THE PERIOD FOR THE PERIOD
ENDED FOR THE YEAR ENDED FOR THE YEAR
APRIL 30, ENDED APRIL 30, ENDED
2005 OCTOBER 31, 2005 OCTOBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
-----------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income (loss) $ (2,659,299) $ (5,044,713) $ (3,056,560) $ (4,577,276)
Net realized gain (loss) on investments and
foreign currencies 41,398,651 35,145,270 13,074,788 6,289,287
Net unrealized gain (loss) on
investments and foreign currencies (8,328,066) (11,016,806) (350,554) 8,176,454
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations 30,411,286 19,083,751 9,667,674 9,888,465
-------------- -------------- -------------- --------------
DIVIDENDS AND DISTRIBUTIONS PAID TO
SHAREHOLDERS FROM:
Net investment income (Class A) -- -- -- --
Net investment income (Class B) -- -- -- --
Net investment income (Class C+) -- -- -- --
Net investment income (Class I) -- -- -- --
Net investment income (Class X) -- -- -- --
Net investment income (Class Z) -- -- -- --
Net realized gain on investments (Class A) -- -- -- --
Net realized gain on investments (Class B) -- -- -- --
Net realized gain on investments (Class C+) -- -- -- --
Net realized gain on investments (Class I) -- -- -- --
Net realized gain on investments (Class X) -- -- -- --
Net realized gain on investments (Class Z) -- -- -- --
-------------- -------------- -------------- --------------
Total dividends and distributions to
shareholders -- -- -- --
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from capital share transactions
(Note 9) 896,195 9,316,042 15,580,362 124,587,552
-------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 31,307,481 28,399,793 25,248,036 134,476,017
NET ASSETS:
Beginning of period 333,271,297 304,871,504 312,562,484 178,086,467
-------------- -------------- -------------- --------------
End of period* $ 364,578,778 $ 333,271,297 $ 337,810,520 $ 312,562,484
============== ============== ============== ==============
*Includes accumulated undistributed
net investment income (loss) $ (2,709,745) $ (50,446) $ (3,062,031) $ (5,471)
============== ============== ============== ==============
<Caption>
FOCUSED LARGE-CAP VALUE
PORTFOLIO
-------------------------------
FOR THE PERIOD
ENDED FOR THE YEAR
APRIL 30, ENDED
2005 OCTOBER 31,
(UNAUDITED) 2004
-------------------------------
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income (loss) $ 199,193 $ 1,051,308
Net realized gain (loss) on investments and
foreign currencies 11,936,838 11,052,195
Net unrealized gain (loss) on
investments and foreign currencies 5,607,744 (1,109,016)
-------------- --------------
Net increase (decrease) in net assets
resulting from operations 17,743,775 10,994,487
-------------- --------------
DIVIDENDS AND DISTRIBUTIONS PAID TO
SHAREHOLDERS FROM:
Net investment income (Class A) (900,327) (293,906)
Net investment income (Class B) -- --
Net investment income (Class C+) -- --
Net investment income (Class I) -- --
Net investment income (Class X) -- --
Net investment income (Class Z) -- --
Net realized gain on investments (Class A) (2,506,673) --
Net realized gain on investments (Class B) (299,251) --
Net realized gain on investments (Class C+) (523,519) --
Net realized gain on investments (Class I) -- --
Net realized gain on investments (Class X) -- --
Net realized gain on investments (Class Z) -- --
-------------- --------------
Total dividends and distributions to
shareholders (4,229,770) (293,906)
-------------- --------------
Net increase (decrease) in net assets
resulting from capital share transactions
(Note 9) 5,847,102 211,100,902
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 19,361,107 221,801,483
NET ASSETS:
Beginning of period 488,869,662 267,068,179
-------------- --------------
End of period* $ 508,230,769 $ 488,869,662
============== ==============
*Includes accumulated undistributed
net investment income (loss) $ 184,759 $ 885,893
============== ==============
</Table>
- ----------
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares
See Notes to Financial Statements
20
<Page>
<Table>
<Caption>
FOCUSED MULTI-CAP VALUE FOCUSED 2000 VALUE
PORTFOLIO PORTFOLIO
------------------------------- -------------------------------
FOR THE PERIOD FOR THE PERIOD
ENDED FOR THE YEAR ENDED FOR THE YEAR
APRIL 30, ENDED APRIL 30, ENDED
2005 OCTOBER 31, 2005 OCTOBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
-----------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income (loss) $ (1,461,970) $ (902,443) $ (1,381,769) $ (1,885,345)
Net realized gain (loss) on investments and
foreign currencies 48,958,972 27,399,502 32,759,985 63,955,423
Net unrealized gain (loss) on
investments and foreign currencies (6,314,907) 37,675,500 (18,321,490) 6,521,688
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations 41,182,095 64,172,559 13,056,726 68,591,766
-------------- -------------- -------------- --------------
DIVIDENDS AND DISTRIBUTIONS PAID TO
SHAREHOLDERS FROM:
Net investment income (Class A) -- (1,329,223) -- --
Net investment income (Class B) -- (262,410) -- --
Net investment income (Class C+) -- (305,894) -- --
Net investment income (Class I) -- (145,227) -- --
Net investment income (Class X) -- -- -- --
Net investment income (Class Z) -- -- -- --
Net realized gain on investments (Class A) -- -- (37,970,353) --
Net realized gain on investments (Class B) -- -- (8,513,898) --
Net realized gain on investments (Class C+) -- -- (13,371,261) --
Net realized gain on investments (Class I) -- -- -- --
Net realized gain on investments (Class X) -- -- -- --
Net realized gain on investments (Class Z) -- -- -- --
-------------- -------------- -------------- --------------
Total dividends and distributions to
shareholders -- (2,042,754) (59,855,512) --
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from capital share transactions
(Note 9) (37,876,079) (50,074,227) 63,523,939 186,843,328
-------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 3,306,016 12,055,578 16,725,153 255,435,094
NET ASSETS:
Beginning of period 601,708,190 589,652,612 532,901,779 277,466,685
-------------- -------------- -------------- --------------
End of period* $ 605,014,206 $ 601,708,190 $ 549,626,932 $ 532,901,779
============== ============== ============== ==============
*Includes accumulated undistributed
net investment income (loss) $ (1,481,465) $ (19,495) $ (1,398,145) $ (16,376)
============== ============== ============== ==============
<Caption>
FOCUSED GROWTH AND INCOME
PORTFOLIO
-------------------------------
FOR THE PERIOD
ENDED FOR THE YEAR
APRIL 30, ENDED
2005 OCTOBER 31,
(UNAUDITED) 2004
-------------------------------
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income (loss) $ (466,512) $ (2,701,758)
Net realized gain (loss) on investments and
foreign currencies 40,224,085 8,071,100
Net unrealized gain (loss) on
investments and foreign currencies (18,202,336) (3,713,187)
-------------- --------------
Net increase (decrease) in net assets
resulting from operations 21,555,237 1,656,155
-------------- --------------
DIVIDENDS AND DISTRIBUTIONS PAID TO
SHAREHOLDERS FROM:
Net investment income (Class A) -- --
Net investment income (Class B) -- --
Net investment income (Class C+) -- --
Net investment income (Class I) -- --
Net investment income (Class X) -- --
Net investment income (Class Z) -- --
Net realized gain on investments (Class A) -- --
Net realized gain on investments (Class B) -- --
Net realized gain on investments (Class C+) -- --
Net realized gain on investments (Class I) -- --
Net realized gain on investments (Class X) -- --
Net realized gain on investments (Class Z) -- --
-------------- --------------
Total dividends and distributions to
shareholders -- --
-------------- --------------
Net increase (decrease) in net assets
resulting from capital share transactions
(Note 9) (71,434,698) 48,094,697
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (49,879,461) 49,750,852
NET ASSETS:
Beginning of period 417,933,507 368,182,655
-------------- --------------
End of period* $ 368,054,046 $ 417,933,507
============== ==============
*Includes accumulated undistributed
net investment income (loss) $ (490,842) $ (24,330)
============== ==============
</Table>
- ----------
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares
See Notes to Financial Statements
21
<Page>
<Table>
<Caption>
FOCUSED INTERNATIONAL EQUITY FOCUSED TECHNOLOGY
PORTFOLIO PORTFOLIO
------------------------------- -------------------------------
FOR THE PERIOD FOR THE PERIOD
ENDED FOR THE YEAR ENDED FOR THE YEAR
APRIL 30, ENDED APRIL 30, ENDED
2005 OCTOBER 31, 2005 OCTOBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
-----------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income (loss) $ 806,927 $ (415,753) $ (734,562) $ (1,983,892)
Net realized gain (loss) on investments and
foreign currencies 3,320,044 8,895,702 3,498,113 21,386,520
Net unrealized gain (loss) on
investments and foreign currencies 6,530,660 4,861,312 (8,189,420) (12,594,154)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations 10,657,631 13,341,261 (5,425,869) 6,808,474
-------------- -------------- -------------- --------------
DIVIDENDS AND DISTRIBUTIONS PAID TO
SHAREHOLDERS FROM:
Net investment income (Class A) (436,285) -- -- --
Net investment income (Class B) -- -- -- --
Net investment income (Class C+) -- -- -- --
Net investment income (Class I) -- -- -- --
Net investment income (Class X) -- -- -- --
Net investment income (Class Z) -- -- -- --
Net realized gain on investments (Class A) (7,185,784) (426,979) -- --
Net realized gain on investments (Class B) (467,767) (44,930) -- --
Net realized gain on investments (Class C+) (1,272,195) (103,380) -- --
Net realized gain on investments (Class I) -- -- -- --
Net realized gain on investments (Class X) -- -- -- --
Net realized gain on investments (Class Z) -- -- -- --
-------------- -------------- -------------- --------------
Total dividends and distributions to
shareholders (9,362,031) (575,289) -- --
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from capital share transactions
(Note 9) 25,841,496 104,455,254 (3,510,468) (679,463)
-------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 27,137,096 117,221,226 (8,936,337) 6,129,011
NET ASSETS:
Beginning of period 205,846,684 88,625,458 92,315,547 86,186,536
-------------- -------------- -------------- --------------
End of period* $ 232,983,780 $ 205,846,684 $ 83,379,210 $ 92,315,547
============== ============== ============== ==============
*Includes accumulated undistributed
net investment income (loss) $ 363,310 $ (7,332) $ (742,653) $ (8,091)
============== ============== ============== ==============
<Caption>
FOCUSED DIVIDEND STRATEGY
PORTFOLIO #
-------------------------------
FOR THE PERIOD
ENDED FOR THE YEAR
APRIL 30, ENDED
2005 OCTOBER 31,
(UNAUDITED) 2004
-------------------------------
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income (loss) $ 1,826,041 $ 3,013,901
Net realized gain (loss) on investments and
foreign currencies 11,082,639 9,133,762
Net unrealized gain (loss) on
investments and foreign currencies (5,235,858) 6,198,207
-------------- --------------
Net increase (decrease) in net assets
resulting from operations 7,672,822 18,345,870
-------------- --------------
DIVIDENDS AND DISTRIBUTIONS PAID TO
SHAREHOLDERS FROM:
Net investment income (Class A) (641,641) (1,156,426)
Net investment income (Class B) (357,915) (687,625)
Net investment income (Class C+) (625,007) (1,142,126)
Net investment income (Class I) -- --
Net investment income (Class X) -- --
Net investment income (Class Z) -- --
Net realized gain on investments (Class A) -- --
Net realized gain on investments (Class B) -- --
Net realized gain on investments (Class C+) -- --
Net realized gain on investments (Class I) -- --
Net realized gain on investments (Class X) -- --
Net realized gain on investments (Class Z) -- --
-------------- --------------
Total dividends and distributions to
shareholders (1,624,563) (2,986,177)
-------------- --------------
Net increase (decrease) in net assets
resulting from capital share transactions
(Note 9) (7,786,032) 38,045,877
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (1,737,773) 53,405,570
NET ASSETS:
Beginning of period 229,389,039 175,983,469
-------------- --------------
End of period* $ 227,651,266 $ 229,389,039
============== ==============
*Includes accumulated undistributed
net investment income (loss) $ 490,426 $ 288,948
============== ==============
</Table>
- ----------
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares
# See Note 2
See Notes to Financial Statements
22
<Page>
FINANCIAL HIGHLIGHTS
<Table>
<Caption>
NET GAIN
(LOSS)
ON INVEST- DIVIDENDS
NET MENTS TOTAL FROM DISTRI-
NET ASSET INVEST- (BOTH FROM NET BUTION
VALUE MENT REALIZED INVEST- INVEST- FROM TOTAL
PERIOD BEGINNING INCOME AND MENT MENT CAPITAL DISTRI-
ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS
- ------------------------------ ---------- ---------- ------------ ---------- ---------- ---------- ----------
FOCUSED EQUITY STRATEGY PORTFOLIO
CLASS A
11/08/02-10/31/03(5) $ 12.50 $ (0.03) $ 3.49 $ 3.46 $ (0.02) $ -- $ (0.02)
10/31/04 15.94 (0.03) 0.76 0.73 -- (0.00) (0.00)
04/30/05(8) 16.67 0.22 0.37 0.59 (0.21) (0.06) (0.27)
CLASS B
11/08/02-10/31/03(5) $ 12.50 $ (0.11) $ 3.46 $ 3.35 $ (0.01) $ -- $ (0.01)
10/31/04 15.84 (0.13) 0.75 0.62 -- (0.00) (0.00)
04/30/05(8) 16.46 0.15 0.37 0.52 (0.10) (0.06) (0.16)
CLASS C+
11/08/02-10/31/03(5) $ 12.50 $ (0.11) $ 3.45 $ 3.34 $ (0.01) $ -- $ (0.01)
10/31/04 15.83 (0.13) 0.76 0.63 -- (0.00) (0.00)
04/30/05(8) 16.46 0.16 0.36 0.52 (0.10) (0.06) (0.16)
CLASS I
02/23/04-10/31/04(6) $ 17.20 $ (0.03) $ (0.50) $ (0.53) $ -- $ -- $ --
04/30/05(8) 16.67 0.21 0.38 0.59 (0.23) (0.06) (0.29)
FOCUSED MULTI-ASSET STRATEGY PORTFOLIO
CLASS A
11/08/02-10/31/03(5) $ 12.50 $ 0.02 $ 2.58 $ 2.60 $ (0.03) $ -- $ (0.03)
10/31/04 15.07 0.08 0.89 0.97 (0.05) (0.00) (0.05)
04/30/05(8) 15.99 0.18 0.50 0.68 (0.22) (0.01) (0.23)
CLASS B
11/08/02-10/31/03(5) $ 12.50 $ (0.06) $ 2.57 $ 2.51 $ (0.02) $ -- $ (0.02)
10/31/04 14.99 (0.02) 0.89 0.87 -- (0.00) (0.00)
04/30/05(8) 15.86 0.12 0.49 0.61 (0.12) (0.01) (0.13)
CLASS C+
11/08/02-10/31/03(5) $ 12.50 $ (0.06) $ 2.57 $ 2.51 $ (0.02) $ -- $ (0.02)
10/31/04 14.99 (0.02) 0.89 0.87 -- (0.00) (0.00)
04/30/05(8) 15.86 0.13 0.49 0.62 (0.12) (0.01) (0.13)
<Caption>
NET RATIO OF
ASSET NET RATIO OF NET INVESTMENT
VALUE ASSETS EXPENSES INCOME (LOSS)
PERIOD END OF TOTAL END OF TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED PERIOD RETURN(2) PERIOD NET ASSETS(4)(7) ASSETS(4)(7) TURNOVER
- ------------------------------ ---------- ---------- ---------- ---------------- -------------- ----------
FOCUSED EQUITY STRATEGY PORTFOLIO
CLASS A
11/08/02-10/31/03(5) $ 15.94 27.72% $ 50,347 0.25%(3) (0.25)%(3) 7%
10/31/04 16.67 4.60 161,243 0.19 (0.17) 2
04/30/05(8) 16.99 3.48 169,181 0.18(3) 2.49(3) 3
CLASS B
11/08/02-10/31/03(5) $ 15.84 26.81% $ 30,942 0.90%(3) (0.90)%(3) 7%
10/31/04 16.46 3.93 94,156 0.85 (0.83) 2
04/30/05(8) 16.82 3.14 102,363 0.86(3) 1.75(3) 3
CLASS C+
11/08/02-10/31/03(5) $ 15.83 26.73% $ 96,094 0.90%(3) (0.90)%(3) 7%
10/31/04 16.46 4.00 263,636 0.82 (0.79) 2
04/30/05(8) 16.82 3.14 282,112 0.82(3) 1.80(3) 3
CLASS I
02/23/04-10/31/04(6) $ 16.67 (3.08)% $ 5,741 0.15%(3) (0.19)%(3) 2%
04/30/05(8) 16.97 3.45 5,566 0.15(3) 2.34(3) 3
FOCUSED MULTI-ASSET STRATEGY PORTFOLIO
CLASS A
11/08/02-10/31/03(5) $ 15.07 20.82% $ 57,362 0.25%(3) 0.16%(3) 0%
10/31/04 15.99 6.48 161,187 0.20 0.49 0
04/30/05(8) 16.44 4.17 200,537 0.18(3) 2.22(3) 0
CLASS B
11/08/02-10/31/03(5) $ 14.99 20.07% $ 41,762 0.90%(3) (0.50)%(3) 0%
10/31/04 15.86 5.81 98,520 0.84 (0.14) 0
04/30/05(8) 16.34 3.77 121,170 0.85(3) 1.53(3) 0
CLASS C+
11/08/02-10/31/03(5) $ 14.99 20.07% $ 113,247 0.90%(3) (0.48)%(3) 0%
10/31/04 15.86 5.81 282,018 0.82 (0.12) 0
04/30/05(8) 16.35 3.83 325,343 0.83(3) 1.58(3) 0
</Table>
(1) Calculated based upon average shares outstanding.
(2) Total return is not annualized and does not reflect sales load. It does
include expense reimbursements and expense reductions.
(3) Annualized
(4) Net of the following expense reimbursements (recoupments) (based on average
net assets):
<Table>
<Caption>
10/31/03 10/31/04 04/30/05(3)(8)
---------- ---------- --------------
Focused Equity Strategy A 0.36% (0.02)% (0.02)%
Focused Equity Strategy B 0.42 (0.02) (0.04)
Focused Equity Strategy C+ 0.18 0.00 (0.02)
Focused Equity Strategy I -- 0.26 0.08
Focused Multi-Asset Strategy A 0.25 (0.02) (0.02)
Focused Multi-Asset Strategy B 0.27 (0.02) (0.04)
Focused Multi-Asset Strategy C+ 0.12 0.00 (0.03)
</Table>
(5) Commencement of Operations
(6) Inception date of class.
(7) Does not include underlying fund expenses that the Portfolios bear
indirectly.
(8) Unaudited
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
See Notes to Financial Statements
23
<Page>
<Table>
<Caption>
NET GAIN
(LOSS)
ON INVEST- DIVIDENDS
NET MENTS TOTAL FROM DISTRI-
NET ASSET INVEST- (BOTH FROM NET BUTION
VALUE MENT REALIZED INVEST- INVEST- FROM TOTAL
PERIOD BEGINNING INCOME AND MENT MENT CAPITAL DISTRI-
ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS
- ------------------------------ ---------- ---------- ------------ ---------- ---------- ---------- ----------
FOCUSED BALANCED STRATEGY PORTFOLIO
CLASS A
11/08/02-10/31/03(5) $ 12.50 $ 0.05 $ 2.41 $ 2.46 $ (0.06)(6) $ -- $ (0.06)(6)
10/31/04 14.90 0.15 0.56 0.71 (0.20) (0.00) (0.20)
04/30/05(9) 15.41 0.21 0.21 0.42 (0.22) (0.17) (0.39)
CLASS B
11/08/02-10/31/03(5) $ 12.50 $ (0.02) $ 2.39 $ 2.37 $ (0.03)(6) $ -- $ (0.03)(6)
10/31/04 14.84 0.05 0.56 0.61 (0.06) (0.00) (0.06)
04/30/05(9) 15.39 0.16 0.21 0.37 (0.17) (0.17) (0.34)
CLASS C+
11/08/02-10/31/03(5) $ 12.50 $ (0.02) $ 2.40 $ 2.38 $ (0.03)(6) $ -- $ (0.03)(6)
10/31/04 14.85 0.06 0.56 0.62 (0.06) (0.00) (0.06)
04/30/05(9) 15.41 0.17 0.20 0.37 (0.17) (0.17) (0.34)
CLASS I
02/23/04-10/31/04(7) $ 15.72 $ 0.12 $ (0.32) $ (0.20) $ (0.11) $ -- $ (0.11)
04/30/05(9) 15.41 0.21 0.20 0.41 (0.22) (0.17) (0.39)
FOCUSED FIXED INCOME AND EQUITY STRATEGY PORTFOLIO
CLASS A
11/08/02-10/31/03(5) $ 12.50 $ 0.20 $ 1.23 $ 1.43 $ (0.18) $ -- $ (0.18)
10/31/04 13.75 0.33 0.25 0.58 (0.36) (0.01) (0.37)
04/30/05(9) 13.96 0.18 0.13 0.31 (0.18) (0.31) (0.49)
CLASS B
11/08/02-10/31/03(5) $ 12.50 $ 0.12 $ 1.23 $ 1.35 $ (0.11) $ -- $ (0.11)
10/31/04 13.74 0.24 0.24 0.48 (0.26) (0.01) (0.27)
04/30/05(9) 13.95 0.14 0.13 0.27 (0.14) (0.31) (0.45)
CLASS C+
11/08/02-10/31/03(5) $ 12.50 $ 0.13 $ 1.22 $ 1.35 $ (0.11) $ -- $ (0.11)
10/31/04 13.74 0.24 0.24 0.48 (0.26) (0.01) (0.27)
04/30/05(9) 13.95 0.14 0.13 0.27 (0.14) (0.31) (0.45)
CLASS I
07/06/04-10/31/04(7) $ 13.86 $ 0.06 $ 0.11 $ 0.17 $ (0.07) $ -- $ (0.07)
04/30/05(9) 13.96 0.19 0.13 0.32 (0.19) (0.31) (0.50)
<Caption>
NET RATIO OF
ASSET NET RATIO OF NET INVESTMENT
VALUE ASSETS EXPENSES INCOME (LOSS)
PERIOD END OF TOTAL END OF TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED PERIOD RETURN(2) PERIOD NET ASSETS(4)(8) ASSETS(4)(8) TURNOVER
- ------------------------------ ---------- ---------- ---------- ---------------- -------------- ----------
FOCUSED BALANCED STRATEGY PORTFOLIO
CLASS A
11/08/02-10/31/03(5) $ 14.90 19.75% $ 54,459 0.25%(3) 0.43%(3) 2%
10/31/04 15.41 4.78 130,851 0.20 0.99 9
04/30/05(9) 15.44 2.60 143,298 0.16(3) 2.75(3) 2
CLASS B
11/08/02-10/31/03(5) $ 14.84 18.98% $ 48,183 0.90%(3) (0.20)%(3) 2%
10/31/04 15.39 4.09 108,591 0.85 0.33 9
04/30/05(9) 15.42 2.28 112,647 0.84(3) 2.09(3) 2
CLASS C+
11/08/02-10/31/03(5) $ 14.85 19.06% $ 102,550 0.90%(3) 0.19%(3) 2%
10/31/04 15.41 4.16 198,590 0.84 0.38 9
04/30/05(9) 15.44 2.28 204,421 0.82(3) 2.12(3) 2
CLASS I
02/23/04-10/31/04(7) $ 15.41 (1.26)% $ 13,304 0.15%(3) 0.75%(3) 9%
04/30/05(9) 15.43 2.57 14,551 0.15(3) 2.66(3) 2
FOCUSED FIXED INCOME AND EQUITY STRATEGY PORTFOLIO
CLASS A
11/08/02-10/31/03(5) $ 13.75 11.57% $ 26,426 0.25%(3) 1.64%(3) 6%
10/31/04 13.96 4.22 38,251 0.22 2.40 17
04/30/05(9) 13.78 2.21 39,058 0.25(3) 2.65(3) 8
CLASS B
11/08/02-10/31/03(5) $ 13.74 10.88% $ 11,562 0.90%(3) 1.02%(3) 6%
10/31/04 13.95 3.44 16,053 0.90 1.70 17
04/30/05(9) 13.77 1.88 17,125 0.90(3) 2.01(3) 8
CLASS C+
11/08/02-10/31/03(5) $ 13.74 10.88% $ 21,880 0.90%(3) 1.08%(3) 6%
10/31/04 13.95 3.51 34,981 0.88 1.73 17
04/30/05(9) 13.77 1.88 32,721 0.90(3) 2.01(3) 8
CLASS I
07/06/04-10/31/04(7) $ 13.96 1.26% $ 101 0.15%(3) 1.03%(3) 17%
04/30/05(9) 13.78 2.26 104 0.15(3) 2.76(3) 8
</Table>
(1) Calculated based upon average shares outstanding.
(2) Total return is not annualized and does not reflect sales load. It does
include expense reimbursements and expense reductions.
(3) Annualized
(4) Net of the following expense reimbursements (recoupments) (based on average
net assets):
<Table>
<Caption>
10/31/03 10/31/04 04/30/05(3)(9)
---------- ---------- --------------
Focused Balanced Strategy A 0.21% (0.03)% 0.00%
Focused Balanced Strategy B 0.18 (0.02) (0.01)
Focused Balanced Strategy C+ 0.09 0.00 (0.01)
Focused Balanced Strategy I -- 0.11 0.00
Focused Fixed Income and Equity Strategy A 0.53 (0.02) (0.04)
Focused Fixed Income and Equity Strategy B 0.71 (0.02) 0.00
Focused Fixed Income and Equity Strategy C+ 0.52 0.01 (0.04)
Focused Fixed Income and Equity Strategy I -- 13.99 24.38
</Table>
(5) Commencement of Operations
(6) Includes a tax return of capital of less than $.01 per share
(7) Inception date of class.
(8) Does not include underlying fund expenses that the Portfolios bear
indirectly.
(9) Unaudited
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
See Notes to Financial Statements
24
<Page>
<Table>
<Caption>
NET GAIN
(LOSS)
ON INVEST- DIVIDENDS
NET MENTS TOTAL FROM DISTRI-
NET ASSET INVEST- (BOTH FROM NET BUTION
VALUE MENT REALIZED INVEST- INVEST- FROM TOTAL
PERIOD BEGINNING INCOME AND MENT MENT CAPITAL DISTRI-
ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS
- ------------------------------ ---------- ---------- ------------ ---------- ---------- ---------- ----------
FOCUSED FIXED INCOME STRATEGY PORTFOLIO
CLASS A
11/08/02-10/31/03(5) $ 12.50 $ 0.30 $ 0.46 $ 0.76 $ (0.30) $ -- $ (0.30)
10/31/04 12.96 0.42 0.25 0.67 0.50 (0.11) 0.61
04/30/05(7) 13.02 0.21 0.02 0.23 (0.20) (0.24) (0.44)
CLASS B
11/08/02-10/31/03(5) $ 12.50 $ 0.23 $ 0.46 $ 0.69 $ (0.23) $ -- $ (0.23)
10/31/04 12.96 0.33 0.25 0.58 0.42 (0.11) 0.53
04/30/05(7) 13.01 0.17 0.01 0.18 (0.16) (0.24) (0.40)
CLASS C+
11/08/02-10/31/03(5) $ 12.50 $ 0.22 $ 0.47 $ 0.69 $ (0.23) $ -- $ (0.23)
10/31/04 12.96 0.31 0.27 0.58 0.43 (0.11) 0.54
04/30/05(7) 13.00 0.17 0.02 0.19 (0.16) (0.24) (0.40)
<Caption>
NET RATIO OF
ASSET NET RATIO OF NET INVESTMENT
VALUE ASSETS EXPENSES INCOME (LOSS)
PERIOD END OF TOTAL END OF TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED PERIOD RETURN(2) PERIOD NET ASSETS(4)(6) ASSETS(4)(6) TURNOVER
- ------------------------------ ---------- ---------- ---------- ---------------- -------------- ----------
FOCUSED FIXED INCOME STRATEGY PORTFOLIO
CLASS A
11/08/02-10/31/03(5) $ 12.96 6.35% $ 8,400 0.25%(3) 2.52%(3) 66%
10/31/04 13.02 5.29 8,921 0.25 3.27 55
04/30/05(7) 12.81 1.82 10,675 0.25(3) 3.30(3) 16
CLASS B
11/08/02-10/31/03(5) $ 12.96 5.69% $ 6,033 0.90%(3) 1.94%(3) 66%
10/31/04 13.01 4.61 8,157 0.90 2.62 55
04/30/05(7) 12.79 1.42 8,146 0.90(3) 2.64(3) 16
CLASS C+
11/08/02-10/31/03(5) $ 12.96 5.69% $ 10,537 0.90%(3) 1.89%(3) 66%
10/31/04 13.00 4.55 20,730 0.90 2.51 55
04/30/05(7) 12.79 1.50 19,265 0.90(3) 2.63(3) 16
</Table>
(1) Calculated based upon average shares outstanding.
(2) Total return is not annualized and does not reflect sales load. It does
include expense reimbursements and expense reductions.
(3) Annualized
(4) Net of the following expense reimbursements (recoupments) (based on average
net assets):
<Table>
<Caption>
10/31/03 10/31/04 04/30/05(3)(7)
---------- ---------- --------------
Focused Fixed Income Strategy A 0.90% 0.14% 0.14%
Focused Fixed Income Strategy B 1.00 0.14 0.14
Focused Fixed Income Strategy C+ 0.60 0.08 0.08
</Table>
(5) Commencement of Operations
(6) Does not include underlying fund expenses that the Portfolios bear
indirectly.
(7) Unaudited
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
See Notes to Financial Statements
25
<Page>
<Table>
<Caption>
NET GAIN
(LOSS)
ON INVEST- DIVIDENDS
NET MENTS TOTAL FROM DISTRI-
NET ASSET INVEST- (BOTH FROM NET BUTION
VALUE MENT REALIZED INVEST- INVEST- FROM TOTAL
PERIOD BEGINNING INCOME AND MENT MENT CAPITAL DISTRI-
ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS
- ------------------------------ ---------- ---------- ------------ ---------- ---------- ---------- ----------
FOCUSED LARGE-CAP GROWTH PORTFOLIO
CLASS A
10/31/00 $ 19.23 $ (0.19) $ 2.54 $ 2.35 $ -- $ (0.09) $ (0.09)
10/31/01 21.49 (0.11) (6.16) (6.27) -- (0.59) (0.59)
10/31/02 14.63 (0.11) (1.71) (1.82) -- -- --
10/31/03 12.81 (0.12) 3.97 3.85 -- -- --
10/31/04 16.66 (0.15) (0.67) (0.82) -- -- --
04/30/05(5) 15.84 0.05 0.49 0.54 -- -- --
CLASS B
10/31/00 $ 19.05 $ (0.34) $ 2.52 $ 2.18 $ -- $ (0.09) $ (0.09)
10/31/01 21.14 (0.22) (6.04) (6.26) -- (0.59) (0.59)
10/31/02 14.29 (0.20) (1.65) (1.85) -- -- --
10/31/03 12.44 (0.20) 3.83 3.63 -- -- --
10/31/04 16.07 (0.25) (0.63) (0.88) -- -- --
04/30/05(5) 15.19 0.00 0.46 0.46 -- -- --
CLASS C+
10/31/00 $ 19.05 $ (0.35) $ 2.53 $ 2.18 $ -- $ (0.09) $ (0.09)
10/31/01 21.14 (0.22) (6.04) (6.26) -- (0.59) (0.59)
10/31/02 14.29 (0.20) (1.65) (1.85) -- -- --
10/31/03 12.44 (0.20) 3.83 3.63 -- -- --
10/31/04 16.07 (0.25) (0.63) (0.88) -- -- --
04/30/05(5) 15.19 0.00 0.46 0.46 -- -- --
CLASS Z
10/31/00 $ 19.27 $ (0.09) $ 2.53 $ 2.44 $ -- $ (0.09) $ (0.09)
10/31/01 21.62 (0.07) (6.20) (6.27) -- (0.59) (0.59)
10/31/02 14.76 (0.05) (1.74) (1.79) -- -- --
10/31/03 12.97 (0.03) 4.01 3.98 -- -- --
10/31/04 16.95 (0.05) (0.68) (0.73) -- -- --
04/30/05(5) 16.22 0.10 0.49 0.59 -- -- --
<Caption>
NET RATIO OF
ASSET NET RATIO OF NET INVESTMENT
VALUE ASSETS EXPENSES INCOME (LOSS)
PERIOD END OF TOTAL END OF TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED PERIOD RETURN(2) PERIOD NET ASSETS ASSETS TURNOVER
- ------------------------------ ---------- ---------- ---------- ---------------- -------------- ----------
FOCUSED LARGE-CAP GROWTH PORTFOLIO
CLASS A
10/31/00 $ 21.49 12.23% $ 401,754 1.54%(3) (0.81)%(3) 228%
10/31/01 14.63 (29.87) 284,538 1.56 (0.66) 178
10/31/02 12.81 (12.44) 273,034 1.57(4) (0.81)(4) 166
10/31/03 16.66 30.05 514,908 1.58(4) (0.83)(4) 81
10/31/04 15.84 (4.92) 719,460 1.58(4) (0.93)(4) 110
04/30/05(5) 16.38 3.41 703,928 1.52(4)(6) 0.62(4)(6) 82
CLASS B
10/31/00 $ 21.14 11.45% $ 641,205 2.19%(3) (1.46)%(3) 228%
10/31/01 14.29 (30.33) 475,315 2.21 (1.31) 178
10/31/02 12.44 (12.95) 414,904 2.21(4) (1.45)(4) 166
10/31/03 16.07 29.18 502,311 2.22(4) (1.47)(4) 81
10/31/04 15.19 (5.48) 425,461 2.23(4) (1.59)(4) 110
04/30/05(5) 15.65 3.03 374,796 2.20(4)(6) 0.00(4)(6) 82
CLASS C+
10/31/00 $ 21.14 11.45% $ 793,146 2.20%(3) (1.46)%(3) 228%
10/31/01 14.29 (30.33) 544,620 2.21 (1.30) 178
10/31/02 12.44 (12.95) 458,335 2.21(4) (1.45)(4) 166
10/31/03 16.07 29.18 539,786 2.21(4) (1.45)(4) 81
10/31/04 15.19 (5.48) 489,636 2.22(4) (1.59)(4) 110
04/30/05(5) 15.65 3.03 428,633 2.19(4)(6) 0.02(4)(6) 82
CLASS Z
10/31/00 $ 21.62 12.67% $ 12,523 1.12%(3) (0.38)%(3) 228%
10/31/01 14.76 (29.68) 9,321 1.27 (0.38) 178
10/31/02 12.97 (12.13) 8,785 1.21(4) (0.45)(4) 166
10/31/03 16.95 30.69 72,196 0.98(4) (0.22)(4) 81
10/31/04 16.22 (4.31) 74,811 1.00(4) (0.37)(4) 110
04/30/05(5) 16.81 3.64 74,076 0.93(4)(6) 1.21(4)(6) 82
</Table>
(1) Calculated based upon average shares outstanding.
(2) Total return is not annualized and does not reflect sales load. It does
include expense reimbursements and expense reductions.
(3) Net of the following expense reimbursements (recoupments) (based on average
net assets):
<Table>
<Caption>
10/31/00
--------
Focused Large-Cap Growth A 0.05%
Focused Large-Cap Growth B 0.04
Focused Large-Cap Growth C+ 0.04
Focused Large-Cap Growth Z 0.13
</Table>
(4) Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied, the ratio of expenses to average net
assets would have been lower and the ratio of net investment income would
have been higher by:
<Table>
<Caption>
10/31/02 10/31/03 10/31/04 04/30/05(5)(6)
---------- ---------- ---------- --------------
Focused Large-Cap Growth A 0.09% 0.03% 0.05% 0.07%
Focused Large-Cap Growth B 0.09 0.03 0.05 0.07
Focused Large-Cap Growth C+ 0.09 0.03 0.05 0.07
Focused Large-Cap Growth Z 0.09 0.03 0.05 0.07
</Table>
(5) Unaudited
(6) Annualized
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
See Notes to Financial Statements
26
<Page>
<Table>
<Caption>
NET GAIN
(LOSS)
ON INVEST- DIVIDENDS
NET MENTS TOTAL FROM DISTRI-
NET ASSET INVEST- (BOTH FROM NET BUTION
VALUE MENT REALIZED INVEST- INVEST- FROM TOTAL
PERIOD BEGINNING INCOME AND MENT MENT CAPITAL DISTRI-
ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS
- ------------------------------ ---------- ---------- ------------ ---------- ---------- ---------- ----------
FOCUSED MULTI-CAP GROWTH PORTFOLIO
CLASS A
10/31/00 $ 26.13 $ (0.35) $ 8.65 $ 8.30 $ -- $ (3.24) $ (3.24)
10/31/01 31.19 (0.15) (11.07) (11.22) -- (5.04) (5.04)
10/31/02 14.93 (0.16) (1.42) (1.58) -- -- --
10/31/03 13.35 (0.18) 3.69 3.51 -- -- --
10/31/04 16.86 (0.21) 1.33 1.12 -- -- --
04/30/05(7) 17.98 (0.12) 1.79 1.67 -- -- --
CLASS B
10/31/00 $ 25.61 $ (0.56) $ 8.50 $ 7.94 $ -- $ (3.24) $ (3.24)
10/31/01 30.31 (0.27) (10.67) (10.94) -- (5.04) (5.04)
10/31/02 14.33 (0.25) (1.36) (1.61) -- -- --
10/31/03 12.72 (0.26) 3.50 3.24 -- -- --
10/31/04 15.96 (0.32) 1.27 0.95 -- -- --
04/30/05(7) 16.91 (0.17) 1.68 1.51 -- -- --
CLASS C+
10/31/00 $ 25.60 $ (0.56) $ 8.51 $ 7.95 $ -- $ (3.24) $ (3.24)
10/31/01 30.31 (0.27) (10.68) (10.95) -- (5.04) (5.04)
10/31/02 14.32 (0.24) (1.36) (1.60) -- -- --
10/31/03 12.72 (0.26) 3.50 3.24 -- -- --
10/31/04 15.96 (0.31) 1.26 0.95 -- -- --
04/30/05(7) 16.91 (0.17) 1.68 1.51 -- -- --
CLASS X
8/01/02-10/31/02(6) $ 13.55 $ (0.10) $ (0.10) $ (0.20) $ -- $ -- $ --
10/31/03 13.35 (0.15) 3.70 3.55 -- -- --
10/31/04 16.90 (0.17) 1.33 1.16 -- -- --
04/30/05(7) 18.06 (0.09) 1.79 1.70 -- -- --
<Caption>
NET RATIO OF
ASSET NET RATIO OF NET INVESTMENT
VALUE ASSETS EXPENSES INCOME (LOSS)
PERIOD END OF TOTAL END OF TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED PERIOD RETURN(2) PERIOD NET ASSETS(4) ASSETS(4) TURNOVER
- ------------------------------ ---------- ---------- ---------- ---------------- -------------- ----------
FOCUSED MULTI-CAP GROWTH PORTFOLIO
CLASS A
10/31/00 $ 31.19 32.77% $ 162,801 1.78% (1.07)% 134%
10/31/01 14.93 (41.40) 77,975 1.78 (0.77) 176
10/31/02 13.35 (10.58) 85,244 1.76(5) (1.08)(5) 211
10/31/03 16.86 26.29 127,425 1.72(5) (1.30)(5) 100
10/31/04 17.98 6.64 188,725 1.72(5) (1.24)(5) 128
04/30/05(7) 19.65 9.29 223,422 1.72(3)(5) (1.21)(3)(5) 63
CLASS B
10/31/00 $ 30.31 31.95% $ 217,963 2.43% (1.72)% 134%
10/31/01 14.33 (41.73) 114,228 2.43 (1.43) 176
10/31/02 12.72 (11.24) 118,177 2.41(5) (1.74)(5) 211
10/31/03 15.96 25.47 130,904 2.37(5) (1.94)(5) 100
10/31/04 16.91 5.95 96,978 2.37(5) (1.91)(5) 128
04/30/05(7) 18.42 8.93 90,805 2.37(3)(5) (1.85)(3)(5) 63
CLASS C+
10/31/00 $ 30.31 32.01% $ 71,127 2.43% (1.70)% 134%
10/31/01 14.32 (41.77) 34,567 2.43 (1.43) 176
10/31/02 12.72 (11.17) 38,884 2.41(5) (1.74)(5) 211
10/31/03 15.96 25.47 45,985 2.37(5) (1.94)(5) 100
10/31/04 16.91 5.95 46,693 2.37(5) (1.90)(5) 128
04/30/05(7) 18.42 8.93 49,211 2.37(3)(5) (1.85)(3)(5) 63
CLASS X
8/01/02-10/31/02(6) $ 13.35 (1.48)% $ 169 1.47%(3)(5) (0.80)%(3)(5) 211%
10/31/03 16.90 26.59 557 1.47(5) (1.08)(5) 100
10/31/04 18.06 6.86 874 1.47(5) (0.99)(5) 128
04/30/05(7) 19.76 9.41 1,141 1.47(3)(5) (0.96)(3)(5) 63
</Table>
(1) Calculated based upon average shares outstanding.
(2) Total return is not annualized and does not reflect sales load. It does
include expense reimbursements and expense reductions.
(3) Annualized
(4) Net of the following expense reimbursements (recoupments) (based on average
net assets):
<Table>
<Caption>
10/31/00 10/31/01 10/31/02 10/31/03 10/31/04 04/30/05(3)(7)
-------- -------- -------- -------- -------- --------------
Focused Multi-Cap Growth A --% 0.01% 0.05% 0.12% 0.06% (0.01)%
Focused Multi-Cap Growth B -- -- 0.01 0.10 0.07 0.03
Focused Multi-Cap Growth C+ -- 0.02 0.05 0.12 0.07 0.00
Focused Multi-Cap Growth X -- -- 6.36(3) (0.02) 0.69 (0.13)
</Table>
(5) Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied, the ratio of expenses to average net
assets would have been lower and the ratio of net investment income would
have been higher by:
<Table>
<Caption>
10/31/02 10/31/03 10/31/04 04/30/05(3)(7)
-------- -------- -------- --------------
Focused Multi-Cap Growth A 0.03% --% 0.01% 0.00%
Focused Multi-Cap Growth B 0.03 -- 0.01 0.00
Focused Multi-Cap Growth C+ 0.03 -- 0.01 0.00
Focused Multi-Cap Growth X -- -- 0.01 0.00
</Table>
(6) Inception date of class
(7) Unaudited
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
See Notes to Financial Statements
27
<Page>
<Table>
<Caption>
NET GAIN
(LOSS)
ON INVEST- DIVIDENDS
NET MENTS TOTAL FROM DISTRI-
NET ASSET INVEST- (BOTH FROM NET BUTION
VALUE MENT REALIZED INVEST- INVEST- FROM TOTAL
PERIOD BEGINNING INCOME AND MENT MENT CAPITAL DISTRI-
ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS
- ------------------------------ ---------- ---------- ------------ ---------- ---------- ---------- ----------
FOCUSED 2000 GROWTH PORTFOLIO
CLASS A
10/31/00 $ 12.81 $ (0.12) $ 5.66 $ 5.54 $ -- $ (1.08) $ (1.08)
10/31/01 17.27 (0.14) (5.65) (5.79) -- (0.01) (0.01)
10/31/02 11.47 (0.15) (1.11) (1.26) -- -- --
10/31/03 10.21 (0.18) 4.91 4.73 -- -- --
10/31/04 14.94 (0.22) 0.96 0.74 -- -- --
04/30/05(7) 15.68 (0.13) 0.67 0.54 -- -- --
CLASS B
10/31/00 $ 12.57 $ (0.24) $ 5.55 $ 5.31 $ -- $ (1.08) $ (1.08)
10/31/01 16.80 (0.22) (5.46) (5.68) -- (0.01) (0.01)
10/31/02 11.11 (0.23) (1.05) (1.28) -- -- --
10/31/03 9.83 (0.25) 4.72 4.47 -- -- --
10/31/04 14.30 (0.31) 0.92 0.61 -- -- --
04/30/05(7) 14.91 (0.18) 0.65 0.47 -- -- --
CLASS C+
10/31/00 $ 12.57 $ (0.29) $ 5.59 $ 5.30 $ -- $ (1.08) $ (1.08)
10/31/01 16.79 (0.22) (5.45) (5.67) -- (0.01) (0.01)
10/31/02 11.11 (0.20) (1.10) (1.30) -- -- --
10/31/03 9.81 (0.25) 4.70 4.45 -- -- --
10/31/04 14.26 (0.31) 0.92 0.61 -- -- --
04/30/05(7) 14.87 (0.18) 0.64 0.46 -- -- --
CLASS I
7/10/00-10/31/00(6) $ 19.82 $ (0.07) $ (1.42) $ (1.49) $ -- $ (1.00) $ (1.00)
10/31/01 17.33 (0.13) (5.64) (5.77) -- (0.01) (0.01)
10/31/02 11.55 (0.16) (1.09) (1.25) -- -- --
10/31/03 10.30 (0.17) 4.96 4.79 -- -- --
10/31/04 15.09 (0.22) 0.98 0.76 -- -- --
04/30/05(7) 15.85 (0.12) 0.68 0.56 -- -- --
<Caption>
NET RATIO OF
ASSET NET RATIO OF NET INVESTMENT
VALUE ASSETS EXPENSES INCOME (LOSS)
PERIOD END OF TOTAL END OF TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED PERIOD RETURN(2) PERIOD NET ASSETS(4) ASSETS(4) TURNOVER
- ------------------------------ ---------- ---------- ---------- ---------------- -------------- ----------
FOCUSED 2000 GROWTH PORTFOLIO
CLASS A
10/31/00 $ 17.27 43.62% $ 6,795 1.35% (0.66)% 222%
10/31/01 11.47 (33.56) 4,512 1.47 (1.04) 91
10/31/02 10.21 (10.99) 10,856 1.74(5) (1.44)(5) 150
10/31/03 14.94 46.33 89,176 1.72(5) (1.57)(5) 68
10/31/04 15.68 4.95 203,813 1.72(5) (1.51)(5) 101
04/30/05(7) 16.22 3.44 227,680 1.72(3)(5) (1.53)(3)(5) 37
CLASS B
10/31/00 $ 16.80 42.62% $ 14,554 2.00% (1.31)% 222%
10/31/01 11.11 (33.84) 11,158 2.11 (1.69) 91
10/31/02 9.83 (11.52) 14,375 2.40(5) (2.10)(5) 150
10/31/03 14.30 45.47 28,899 2.37(5) (2.21)(5) 68
10/31/04 14.91 4.27 35,101 2.37(5) (2.16)(5) 101
04/30/05(7) 15.38 3.15 36,067 2.37(3)(5) (2.18)(3)(5) 37
CLASS C+
10/31/00 $ 16.79 42.54% $ 3,337 2.21% (1.56)% 222%
10/31/01 11.11 (33.80) 2,119 2.11 (1.67) 91
10/31/02 9.81 (11.70) 22,029 2.39(5) (2.08)(5) 150
10/31/03 14.26 45.36 51,886 2.37(5) (2.22)(5) 68
10/31/04 14.87 4.28 67,004 2.37(5) (2.16)(5) 101
04/30/05(7) 15.33 3.09 66,984 2.37(3)(5) (2.18)(3)(5) 37
CLASS I
7/10/00-10/31/00(6) $ 17.33 (7.34)% $ 14,154 1.11%(3) (0.37)%(3) 222%
10/31/01 11.55 (33.33) 11,581 1.37 (0.94) 91
10/31/02 10.30 (10.82) 4,854 1.64(5) (1.35)(5) 150
10/31/03 15.09 46.50 8,126 1.62(5) (1.46)(5) 68
10/31/04 15.85 5.04 6,645 1.62(5) (1.41)(5) 101
04/30/05(7) 16.41 3.53 7,080 1.62(3)(5) (1.43)(3)(5) 37
</Table>
(1) Calculated based upon average shares outstanding.
(2) Total return is not annualized and does not reflect sales load. It does
include expense reimbursements and expense reductions.
(3) Annualized
(4) Net of the following expense reimbursements (recoupments) (based on average
net assets):
<Table>
<Caption>
10/31/00 10/31/01 10/31/02 10/31/03 10/31/04 04/30/05(3)(7)
-------- -------- -------- -------- -------- --------------
Focused 2000 Growth A 0.75% 1.34% 0.70% 0.18% 0.04% (0.05)%
Focused 2000 Growth B 0.75 1.35 0.72 0.28 0.09 0.01
Focused 2000 Growth C+ 0.96 1.34 0.59 0.17 0.05 (0.03)
Focused 2000 Growth I 0.58(3) 1.34 0.67 0.30 0.05 0.03
</Table>
(5) Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied, the ratio of expenses to average net
assets for would have been lower and the ratio of net investment income
would have been higher by:
<Table>
<Caption>
10/31/02 10/31/03 10/31/04 04/30/05(3)(7)
-------- -------- -------- --------------
Focused 2000 Growth A 0.07% 0.02% 0.02% 0.00%
Focused 2000 Growth B 0.08 0.03 0.02 0.00
Focused 2000 Growth C+ 0.05 0.03 0.02 0.00
Focused 2000 Growth I 0.07 0.03 0.02 0.00
</Table>
(6) Inception date of class.
(7) Unaudited
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
See Notes to Financial Statements
28
<Page>
<Table>
<Caption>
NET GAIN
(LOSS)
ON INVEST- DIVIDENDS
NET MENTS TOTAL FROM DISTRI-
NET ASSET INVEST- (BOTH FROM NET BUTION
VALUE MENT REALIZED INVEST- INVEST- FROM TOTAL
PERIOD BEGINNING INCOME AND MENT MENT CAPITAL DISTRI-
ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS
- ------------------------------ ------------ ---------- ------------ ---------- ---------- ---------- ----------
FOCUSED LARGE-CAP VALUE PORTFOLIO
CLASS A
10/31/00 $ 14.05 $ 0.11 $ 1.86 $ 1.97 $ -- $ (0.32) $ (0.32)
10/31/01 15.70 (0.03) (1.92) (1.95) (0.12) (0.57) (0.69)
10/31/02 13.06 0.04 (1.99) (1.95) -- -- --
10/31/03 11.11 0.04 2.87 2.91 -- -- --
10/31/04 14.02 0.06 0.67 0.73 (0.02) -- (0.02)
04/30/05(7) 14.73 0.02 0.53 0.55 (0.04) (0.10) (0.14)
CLASS B
10/31/00 $ 13.87 $ 0.02 $ 1.81 $ 1.83 $ -- $ (0.32) $ (0.32)
10/31/01 15.38 (0.12) (1.87) (1.99) (0.01) (0.57) (0.58)
10/31/02 12.81 (0.04) (1.94) (1.98) -- -- --
10/31/03 10.83 (0.04) 2.79 2.75 -- -- --
10/31/04 13.58 (0.04) 0.65 0.61 -- -- --
04/30/05(7) 14.19 (0.04) 0.52 0.48 -- (0.10) (0.10)
CLASS C+
10/31/00 $ 13.87 $ 0.02 $ 1.82 $ 1.84 $ -- $ (0.32) $ (0.32)
10/31/01 15.39 (0.13) (1.86) (1.99) (0.01) (0.57) (0.58)
10/31/02 12.82 (0.03) (1.94) (1.97) -- -- --
10/31/03 10.85 (0.04) 2.79 2.75 -- -- --
10/31/04 13.60 (0.04) 0.65 0.61 -- -- --
04/30/05(7) 14.21 (0.03) 0.51 0.48 -- (0.10) (0.10)
<Caption>
NET RATIO OF
ASSET NET RATIO OF NET INVESTMENT
VALUE ASSETS EXPENSES INCOME (LOSS)
PERIOD END OF TOTAL END OF TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED PERIOD RETURN(2) PERIOD NET ASSETS(3) ASSETS(3) TURNOVER
- ------------------------------ ---------- ---------- ------------ ------------- -------------- ----------
FOCUSED LARGE-CAP VALUE PORTFOLIO
CLASS A
10/31/00 $ 15.70 14.36% $ 19,500 1.78%(4) 0.76%(4) 96%
10/31/01 13.06 (12.91) 23,418 1.78 (0.21) 63
10/31/02 11.11 (14.93) 26,269 1.76(5) 0.12(5) 161
10/31/03 14.02 26.19 168,245 1.72(5) 0.30(5) 69
10/31/04 14.73 5.21(6) 368,353 1.72(5) 0.44(5) 47
04/30/05(7) 15.14 3.67 395,722 1.66(5)(8) 0.24(5)(8) 51
CLASS B
10/31/00 $ 15.38 13.52% $ 34,140 2.43%(4) 0.13%(4) 96%
10/31/01 12.81 (13.42) 36,816 2.43 (0.86) 63
10/31/02 10.83 (15.46) 32,261 2.41(5) (0.57)(5) 161
10/31/03 13.58 25.39 41,887 2.37(5) (0.35)(5) 69
10/31/04 14.19 4.49(6) 44,263 2.37(5) (0.24)(5) 47
04/30/05(7) 14.57 3.35 38,567 2.37(5)(8) (0.47)(5)(8) 51
CLASS C+
10/31/00 $ 15.39 13.59% $ 19,717 2.43%(4) 0.12%(4) 96%
10/31/01 12.82 (13.41) 24,958 2.43 (0.86) 63
10/31/02 10.85 (15.37) 33,297 2.40(5) (0.50)(5) 161
10/31/03 13.60 25.35 56,935 2.37(5) (0.35)(5) 69
10/31/04 14.21 4.49(6) 76,253 2.37(5) (0.23)(5) 47
04/30/05(7) 14.59 3.35 73,942 2.37(5)(8) (0.47)(5)(8) 51
</Table>
(1) Calculated based upon average shares outstanding.
(2) Total return is not annualized and does not reflect sales load. It does
include expense reimbursements and expense reductions.
(3) Net of the following expense reimbursements (recoupments) (based on average
net assets):
<Table>
<Caption>
10/31/00 10/31/01 10/31/02 10/31/03 10/31/04 04/30/05(7)(8)
-------- -------- -------- -------- -------- --------------
Focused Large-Cap Value A 0.20% 0.09% 0.16% 0.09% (0.02)% (0.01)%
Focused Large-Cap Value B 0.17 0.04 0.15 0.11 0.01 (0.02)
Focused Large-Cap Value C+ 0.25 0.09 0.15 0.08 0.01 (0.05)
</Table>
(4) The ratio reflects an expense cap which is net of custody credits of
(0.01%) or waiver/reimbursements is applicable.
(5) Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied, the ratio of expenses to average net
assets for would have been lower and the ratio of net investment income
would have been higher by:
<Table>
<Caption>
10/31/02 10/31/03 04/30/05(7)(8)
-------- -------- --------------
Focused Large-Cap Value A 0.22% 0.11% --%
Focused Large-Cap Value B 0.23 0.15 --
Focused Large-Cap Value C+ 0.21 0.14 --
</Table>
(6) Total return for each class was increased by less than 0.01% from gains on
the disposal of investments in violation of investment restrictions (Note
4)
(7) Unaudited
(8) Annualized
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
See Notes to Financial Statements
29
<Page>
<Table>
<Caption>
NET GAIN
(LOSS)
ON INVEST- DIVIDENDS
NET MENTS TOTAL FROM DISTRI-
NET ASSET INVEST- (BOTH FROM NET BUTION
VALUE MENT REALIZED INVEST- INVEST- FROM TOTAL
PERIOD BEGINNING INCOME AND MENT MENT CAPITAL DISTRI-
ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS
- ------------------------------ ------------ ---------- ------------ ---------- ---------- --------- -------
FOCUSED MULTI-CAP VALUE PORTFOLIO
CLASS A
1/01/99-10/31/00(6) $ 12.50 $ 0.03 $ 3.73 $ 3.76 $ -- $ -- $ --
10/31/01 16.26 0.02 1.10 1.12 -- (0.71) (0.71)
10/31/02 16.67 (0.01) (2.73) (2.74) -- (0.50) (0.50)
10/31/03 13.43 0.16 3.51 3.67 -- -- --
10/31/04 17.10 0.05 1.91 1.96 (0.14) -- (0.14)
04/30/05(7) 18.92 -- 1.32 1.32 -- -- --
CLASS B
1/01/99-10/31/00(6) $ 12.50 $ (0.07) $ 3.73 $ 3.66 $ -- $ -- $ --
10/31/01 16.16 (0.09) 1.11 1.02 -- (0.71) (0.71)
10/31/02 16.47 (0.11) (2.69) (2.80) -- (0.50) (0.50)
10/31/03 13.17 0.05 3.45 3.50 -- -- --
10/31/04 16.67 (0.06) 1.84 1.78 (0.02) -- (0.02)
04/30/05(7) 18.43 (0.07) 1.29 1.22 -- -- --
CLASS C+
1/01/99-10/31/00(6) $ 12.50 $ (0.08) $ 3.74 $ 3.66 $ -- $ -- $ --
10/31/01 16.16 (0.09) 1.10 1.01 -- (0.71) (0.71)
10/31/02 16.46 (0.11) (2.69) (2.80) -- (0.50) (0.50)
10/31/03 13.16 0.04 3.46 3.50 -- -- --
10/31/04 16.66 (0.06) 1.84 1.78 (0.02) -- (0.02)
04/30/05(7) 18.42 (0.07) 1.29 1.22 -- -- --
<Caption>
NET RATIO OF
ASSET NET RATIO OF NET INVESTMENT
VALUE ASSETS EXPENSES INCOME (LOSS)
PERIOD END OF TOTAL END OF TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED PERIOD RETURN(2) PERIOD NET ASSETS(4) ASSETS(4) TURNOVER
- ------------------------------ ---------- ---------- ---------- ------------- -------------- ---------
FOCUSED MULTI-CAP VALUE PORTFOLIO
CLASS A
1/01/99-10/31/00(6) $ 16.26 30.08% $ 40,755 1.55%(3)(5) 0.19%(3)(5) 220%
10/31/01 16.67 6.95 136,063 1.56 0.13 245
10/31/02 13.43 (17.09) 128,255 1.62 (0.07) 127
10/31/03 17.10 27.33 162,492 1.72 1.08 184
10/31/04 18.92 11.49 205,956 1.72 0.29 133
04/30/05(7) 20.24 6.98 220,258 1.72(3) (0.05)(3) 94
CLASS B
1/01/99-10/31/00(6) $ 16.16 29.28% $ 33,418 2.20%(3)(5) (0.52)%(3)(5) 220%
10/31/01 16.47 6.35 190,304 2.20 (0.51) 245
10/31/02 13.17 (17.67) 169,875 2.26 (0.72) 127
10/31/03 16.67 26.58 189,432 2.37 0.33 184
10/31/04 18.43 10.71 183,754 2.37 (0.36) 133
04/30/05(7) 19.65 6.62 180,268 2.37(3) (0.70)(3) 94
CLASS C+
1/01/99-10/31/00(6) $ 16.16 29.28% $ 73,484 2.20%(3)(5) (0.53)%(3)(5) 220%
10/31/01 16.46 6.29 213,088 2.20 (0.52) 245
10/31/02 13.16 (17.68) 209,029 2.27 (0.72) 127
10/31/03 16.66 26.60 220,776 2.37 0.31 184
10/31/04 18.42 10.71 211,999 2.37 (0.36) 133
04/30/05(7) 19.64 6.62 204,488 2.37(3) (0.69)(3) 94
</Table>
(1) Calculated based upon average shares outstanding.
(2) Total return is not annualized and does not reflect sales load. It does
include expense reimbursements and expense reductions.
(3) Annualized
(4) Net of the following expense reimbursements (recoupments) (based on average
net assets):
<Table>
<Caption>
10/31/00 10/31/01 10/31/02 10/31/03 10/31/04 04/30/05(3)(7)
-------- -------- -------- -------- -------- --------------
Focused Multi-Cap Value A 0.50% 0.19% 0.11% 0.03% 0.04% (0.03)%
Focused Multi-Cap Value B 0.59 0.20 0.11 0.02 0.04 (0.02)
Focused Multi-Cap Value C+ 0.59 0.18 0.11 0.01 0.03 (0.03)
</Table>
(5) The ratio reflects an expense cap which is net of custody credits of
(0.01%) or waiver/reimbursements is applicable.
(6) Commencement of operations
(7) Unaudited
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
See Notes to Financial Statements
30
<Page>
<Table>
<Caption>
NET GAIN
(LOSS)
ON INVEST- DIVIDENDS
NET MENTS TOTAL FROM DISTRI-
NET ASSET INVEST- (BOTH FROM NET BUTION
VALUE MENT REALIZED INVEST- INVEST- FROM TOTAL
PERIOD BEGINNING INCOME AND MENT MENT CAPITAL DISTRI-
ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS
- ------------------------------ ---------- ---------- ------------ ---------- ---------- ---------- ----------
FOCUSED 2000 VALUE PORTFOLIO
CLASS A
10/31/00 $ 11.70 $ 0.07 $ 2.15 $ 2.22 $ -- $ -- $ --
10/31/01 13.92 (0.03) 1.66 1.63 -- -- --
10/31/02 15.55 (0.06) (1.16) (1.22) -- (1.12) (1.12)
10/31/03 13.21 (0.03) 5.15 5.12 -- (0.63)(5) (0.63)
10/31/04 17.70 (0.04) 3.67 3.63 -- -- --
04/30/05(6) 21.33 (0.03) 0.70 0.67 -- (2.28) (2.28)
CLASS B
10/31/00 $ 11.54 $ (0.02) $ 2.13 $ 2.11 $ -- $ -- $ --
10/31/01 13.65 (0.13) 1.63 1.50 -- -- --
10/31/02 15.15 (0.16) (1.12) (1.28) -- (1.12) (1.12)
10/31/03 12.75 (0.12) 4.96 4.84 -- (0.63)(5) (0.63)
10/31/04 16.96 (0.15) 3.50 3.35 -- -- --
04/30/05(6) 20.31 (0.10) 0.68 0.58 -- (2.28) (2.28)
CLASS C+
10/31/00 $ 11.55 $ (0.02) $ 2.13 $ 2.11 $ -- $ -- $ --
10/31/01 13.66 (0.13) 1.63 1.50 -- -- --
10/31/02 15.16 (0.14) (1.14) (1.28) -- (1.12) (1.12)
10/31/03 12.76 (0.12) 4.98 4.86 -- (0.63)(5) (0.63)
10/31/04 16.99 (0.15) 3.51 3.36 -- -- --
04/30/05(6) 20.35 (0.09) 0.67 0.58 -- (2.28) (2.28)
<Caption>
NET RATIO OF
ASSET NET RATIO OF NET INVESTMENT
VALUE ASSETS EXPENSES INCOME (LOSS)
PERIOD END OF TOTAL END OF TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED PERIOD RETURN(2) PERIOD NET ASSETS(3) ASSETS(3) TURNOVER
- ------------------------------ ---------- ---------- ---------- ------------- -------------- ---------
FOCUSED 2000 VALUE PORTFOLIO
CLASS A
10/31/00 $ 13.92 18.97% $ 17,188 1.78% 0.52% 67%
10/31/01 15.55 11.71 29,772 1.78 (0.19) 66
10/31/02 13.21 (9.13) 43,322 1.75(4) (0.49)(4) 123
10/31/03 17.70 40.24 140,181 1.72(4) (0.20)(4) 101
10/31/04 21.33 20.51 342,316 1.72(4) (0.25)(4) 75
04/30/05(6) 19.72 2.60 361,306 1.69(4)(7) (0.28)(4)(7) 34
CLASS B
10/31/00 $ 13.65 18.28% $ 22,593 2.43% (0.12)% 67%
10/31/01 15.15 10.99 37,205 2.43 (0.83) 66
10/31/02 12.75 (9.80) 44,538 2.40(4) (1.15)(4) 123
10/31/03 16.96 39.46 60,293 2.37(4) (0.84)(4) 101
10/31/04 20.31 19.75 75,814 2.37(4) (0.81)(4) 75
04/30/05(6) 18.61 2.26 70,158 2.37(4)(7) (0.96)(4)(7) 34
CLASS C+
10/31/00 $ 13.66 18.27% $ 12,195 2.43% (0.16)% 67%
10/31/01 15.16 10.98 25,676 2.43 (0.84) 66
10/31/02 12.76 (9.79) 50,881 2.40(4) (1.09)(4) 123
10/31/03 16.99 39.59 76,993 2.37(4) (0.84)(4) 101
10/31/04 20.35 19.78 114,772 2.37(4) (0.83)(4) 75
04/30/05(6) 18.65 2.26 118,163 2.37(4)(7) (0.96)(4)(7) 34
</Table>
(1) Calculated based upon average shares outstanding.
(2) Total return is not annualized and does not reflect sales load. It does
include expense reimbursements and expense reductions.
(3) Net of the following expense reimbursements (recoupments) (based on average
net assets):
<Table>
<Caption>
10/31/00 10/31/01 10/31/02 10/31/03 10/31/04 04/30/05(6)(7)
---------- ---------- ---------- ---------- ---------- ---------------
Focused 2000 Value A 0.25% 0.11% 0.08% 0.09% 0.00% (0.04)%
Focused 2000 Value B 0.25 0.07 0.07 0.09 0.03 (0.04)
Focused 2000 Value C+ 0.31 0.15 0.09 0.07 0.01 (0.06)
</Table>
(4) Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied, the ratio of expenses to average net
assets would have been lower and the ratio of net investment income would
have been higher by:
<Table>
<Caption>
10/31/02 10/31/03 10/31/04 04/30/05(6)(7)
---------- ---------- ---------- -------------
Focused 2000 Value A 0.08% 0.03% 0.04% 0.04%
Focused 2000 Value B 0.08 0.03 0.04 0.04
Focused 2000 Value C+ 0.08 0.03 0.04 0.04
</Table>
(5) Includes a tax return of capital of less than $0.01 per share.
(6) Unaudited
(7) Annualized
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
See Notes to Financial Statements
31
<Page>
<Table>
<Caption>
NET GAIN
(LOSS)
ON INVEST- DIVIDENDS
NET MENTS TOTAL FROM DISTRI-
NET ASSET INVEST- (BOTH FROM NET BUTION
VALUE MENT REALIZED INVEST- INVEST- FROM TOTAL
PERIOD BEGINNING INCOME AND MENT MENT CAPITAL DISTRI-
ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS
- ------------------------------ ---------- ---------- ------------ ---------- ---------- ---------- ----------
FOCUSED GROWTH AND INCOME PORTFOLIO
CLASS A
10/31/00 $ 17.12 $ (0.13) $ 3.51 $ 3.38 $ -- $ (0.98) $ (0.98)
10/31/01 19.52 (0.05) (6.18) (6.23) -- (0.44) (0.44)
10/31/02 12.85 (0.07) (0.74) (0.81) -- -- --
10/31/03 12.04 (0.08) 2.97 2.89 -- -- --
10/31/04 14.93 (0.04) 0.25 0.21 -- -- --
04/30/05(7) 15.14 0.01 0.78 0.79 -- -- --
CLASS B
10/31/00 $ 16.90 $ (0.26) $ 3.46 $ 3.20 $ -- $ (0.98) $ (0.98)
10/31/01 19.12 (0.15) (6.03) (6.18) -- (0.44) (0.44)
10/31/02 12.50 (0.16) (0.70) (0.86) -- -- --
10/31/03 11.64 (0.16) 2.85 2.69 -- -- --
10/31/04 14.33 (0.14) 0.26 0.12 -- -- --
04/30/05(7) 14.45 (0.04) 0.73 0.69 -- -- --
CLASS C+
10/31/00 $ 16.89 $ (0.26) $ 3.46 $ 3.20 $ -- $ (0.98) $ (0.98)
10/31/01 19.11 (0.15) (6.03) (6.18) -- (0.44) (0.44)
10/31/02 12.49 (0.15) (0.71) (0.86) -- -- --
10/31/03 11.63 (0.15) 2.84 2.69 -- -- --
10/31/04 14.32 (0.14) 0.25 0.11 -- -- --
04/30/05(7) 14.43 (0.04) 0.74 0.70 -- -- --
CLASS X
3/19/02-10/31/02(6) $ 14.55 $ (0.03) $ (2.46) $ (2.49) $ -- $ -- $ --
10/31/03 12.06 (0.03) 2.96 2.93 -- -- --
10/31/04 14.99 0.02 0.26 0.28 -- -- --
04/30/05(7) 15.27 0.00 0.83 0.83 -- -- --
<Caption>
NET RATIO OF
ASSET NET RATIO OF NET INVESTMENT
VALUE ASSETS EXPENSES INCOME (LOSS)
PERIOD END OF TOTAL END OF TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED PERIOD RETURN(2) PERIOD NET ASSETS(4) ASSETS(4) TURNOVER
- ------------------------------ ---------- ---------- ---------- ------------- -------------- ----------
FOCUSED GROWTH AND INCOME PORTFOLIO
CLASS A
10/31/00 $ 19.52 19.88% $ 62,164 1.45% (0.62)% 121%
10/31/01 12.85 (32.51) 39,280 1.45 (0.33) 203
10/31/02 12.04 (6.30) 59,186 1.57(5) (0.61)(5) 170
10/31/03 14.93 24.00 119,353 1.72(5) (0.58)(5) 103
10/31/04 15.14 1.41 159,097 1.72(5) (0.34)(5) 62
04/30/05(7) 15.93 5.22 164,337 1.72(3)(5) 0.11(3)(5) 96
CLASS B
10/31/00 $ 19.12 19.03% $ 83,480 2.10% (1.27)% 121%
10/31/01 12.50 (32.94) 59,653 2.10 (0.99) 203
10/31/02 11.64 (6.88) 65,825 2.21(5) (1.27)(5) 170
10/31/03 14.33 23.11 88,038 2.37(5) (1.24)(5) 103
10/31/04 14.45 0.84 85,871 2.37(5) (1.01)(5) 62
04/30/05(7) 15.14 4.78 78,319 2.37(3)(5) (0.56)(3)(5) 96
CLASS C+
10/31/00 $ 19.11 19.04% $ 69,826 2.10% (1.26)% 121%
10/31/01 12.49 (32.96) 50,468 2.10 (0.98) 203
10/31/02 11.63 (6.89) 85,094 2.23(5) (1.27)(5) 170
10/31/03 14.32 23.13 137,348 2.37(5) (1.24)(5) 103
10/31/04 14.43 0.77 136,360 2.37(5) (1.01)(5) 62
04/30/05(7) 15.13 4.85 123,910 2.37(3)(5) (0.56)(3)(5) 96
CLASS X
3/19/02-10/31/02(6) $ 12.06 (17.11)% $ 7,782 1.44%(3)(5) (0.29)%(3)(5) 170%
10/31/03 14.99 24.30 23,443 1.40(5) (0.23)(5) 103
10/31/04 15.27 1.87 36,605 1.33(5) 0.06(5) 62
04/30/05(7) 16.10 5.44 1,488 1.41(3)(5) 0.00(3)(5) 96
</Table>
(1) Calculated based upon average shares outstanding.
(2) Total return is not annualized and does not reflect sales load. It does
include expense reimbursements and expense reductions.
(3) Annualized
(4) Net of the following expense reimbursements (recoupments) (based on average
net assets):
<Table>
<Caption>
10/31/00 10/31/01 10/31/02 10/31/03 10/31/04 04/30/04(3)(7)
---------- --------- ---------- ---------- ---------- ---------------
Focused Growth and Income A 0.34% 0.30% 0.23% 0.04% 0.04% (0.01)%
Focused Growth and Income B 0.32 0.30 0.22 0.04 0.05 0.02
Focused Growth and Income C+ 0.35 0.30 0.20 0.03 0.03 0.00
Focused Growth and Income X -- -- 0.18(3) (0.02) 0.03 (0.05)
</Table>
(5) Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied, the ratio of expenses to average net
assets would have been lower and the ratio of net investment income would
have been higher by:
<Table>
<Caption>
10/31/02 10/31/03 10/31/04 04/30/05(3)(7)
---------- --------- ---------- --------------
Focused Growth and Income A 0.04% 0.03% 0.04% 0.03%
Focused Growth and Income B 0.05 0.04 0.05 0.03
Focused Growth and Income C+ 0.04 0.03 0.05 0.03
Focused Growth and Income X 0.01 0.03 0.04 0.00
</Table>
(6) Inception date of class
(7) Unaudited
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
See Notes to Financial Statements
32
<Page>
<Table>
<Caption>
NET GAIN
(LOSS)
ON INVEST- DIVIDENDS
NET MENTS TOTAL FROM DISTRI-
NET ASSET INVEST- (BOTH FROM NET BUTION
VALUE MENT REALIZED INVEST- INVEST- FROM TOTAL
PERIOD BEGINNING INCOME AND MENT MENT CAPITAL DISTRI-
ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS
- ------------------------------ ------------ ---------- ------------ ---------- ---------- --------- ----------
FOCUSED INTERNATIONAL EQUITY PORTFOLIO
CLASS A
11/01/01-10/31/02(7) $ 12.50 $ (0.02) $ (0.47) $ (0.49) $ -- $ -- $ --
10/31/03 12.01 0.01 2.80 2.81 -- -- --
10/31/04 14.82 (0.02) 1.84 1.82 -- (0.08) (0.08)
04/30/05(8) 16.56 0.06 0.84 0.90 (0.04) (0.70) (0.74)
CLASS B
11/01/01-10/31/02(7) $ 12.50 $ (0.10) $ (0.46) $ (0.56) $ -- $ -- $ --
10/31/03 11.94 (0.05) 2.75 2.70 -- -- --
10/31/04 14.64 (0.13) 1.82 1.69 -- (0.08) (0.08)
04/30/05(8) 16.25 0.01 0.82 0.83 -- (0.70) (0.70)
CLASS C+
11/01/01-10/31/02(7) $ 12.50 $ (0.11) $ (0.46) $ (0.57) $ -- $ -- $ --
10/31/03 11.93 (0.05) 2.75 2.70 -- -- --
10/31/04 14.63 (0.13) 1.81 1.68 -- (0.08) (0.08)
04/30/05(8) 16.23 0.01 0.81 0.82 -- (0.70) (0.70)
<Caption>
NET RATIO OF
ASSET NET RATIO OF NET INVESTMENT
VALUE ASSETS EXPENSES INCOME (LOSS)
PERIOD END OF TOTAL END OF TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED PERIOD RETURN(2) PERIOD NET ASSETS(4)(6) ASSETS(4)(6) TURNOVER
- ------------------------------ ---------- ---------- ---------- ---------------- -------------- ---------
FOCUSED INTERNATIONAL EQUITY PORTFOLIO
CLASS A
11/01/01-10/31/02(7) $ 12.01 (3.92)% $ 17,225 1.95%(3)(5) (0.13)%(3)(5) 117%
10/31/03 14.82 23.40 63,803 1.95 0.10 103
10/31/04 16.56 12.31 165,924 1.95 (0.12) 166
04/30/05(8) 16.72 5.38 187,624 1.95(3) 0.77(3) 54
CLASS B
11/01/01-10/31/02(7) $ 11.94 (4.48)% $ 5,097 2.60%(3)(5) (0.79)%(3)(5) 117%
10/31/03 14.64 22.61 7,682 2.60 (0.41) 103
10/31/04 16.25 11.57 10,735 2.60 (0.85) 166
04/30/05(8) 16.38 5.03 12,225 2.60(3) 0.13(3) 54
CLASS C+
11/01/01-10/31/02(7) $ 11.93 (4.56)% $ 10,350 2.60%(3)(5) (0.91)%(3)(5) 117%
10/31/03 14.63 22.63 17,141 2.60 (0.40) 103
10/31/04 16.23 11.51 29,188 2.60 (0.83) 166
04/30/05(8) 16.35 4.98 33,135 2.60(3) 0.13(3) 54
</Table>
(1) Calculated based upon average shares outstanding.
(2) Total return is not annualized and does not reflect sales load. It does
include expense reimbursements and expense reductions.
(3) Annualized
(4) Net of the following expense reimbursements (recoupments) (based on average
net assets):
<Table>
<Caption>
10/31/02(3) 10/31/03 10/31/04 04/30/05(3)(8)
----------- -------- -------- --------------
Focused International Equity A 0.62% 0.50% 0.21% 0.09%
Focused International Equity B 1.19 0.69 0.36 0.20
Focused International Equity C+ 0.83 0.57 0.26 0.13
</Table>
(5) The ratio reflects an expense cap which is net of custody credits of
(0.01%) or waiver/reimbursements is applicable.
(6) Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied, the ratio of expenses to average net
assets would have been lower and the ratio of net investment income would
have been higher by:
<Table>
<Caption>
10/31/02 10/31/03 10/31/04 04/30/05(3)(8)
-------- -------- -------- --------------
Focused International Equity A 0.01% 0.01% 0.02% 0.07%
Focused International Equity B 0.01 0.01 0.02 0.07
Focused International Equity C+ 0.01 0.01 0.02 0.07
</Table>
(7) Commencement of operations
(8) Unaudited
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
See Notes to Financial Statements
33
<Page>
<Table>
<Caption>
NET GAIN
(LOSS)
ON INVEST- DIVIDENDS
NET MENTS TOTAL FROM DISTRI-
NET ASSET INVEST- (BOTH FROM NET BUTION
VALUE MENT REALIZED INVEST- INVEST- FROM TOTAL
PERIOD BEGINNING INCOME AND MENT MENT CAPITAL DISTRI-
ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS
- ------------------------------ ------------ ---------- ------------ ---------- ---------- -------- ---------
FOCUSED TECHNOLOGY PORTFOLIO
CLASS A
5/22/00-10/31/00(7) $ 12.50 $ (0.11) $ 3.13 $ 3.02 $ -- $ -- $ --
10/31/01 15.52 (0.08) (11.49) (11.57) -- -- --
10/31/02 3.95 (0.07) (1.09) (1.16) -- -- --
10/31/03 2.79 (0.07) 2.19 2.12 -- -- --
10/31/04 4.91 (0.09) 0.54 0.45 -- -- --
04/30/05(8) 5.36 (0.03) (0.28) (0.31) -- -- --
CLASS B
5/22/00-10/31/00(7) $ 12.50 $ (0.17) $ 3.14 $ 2.97 $ -- $ -- $ --
10/31/01 15.47 (0.13) (11.41) (11.54) -- -- --
10/31/02 3.93 (0.09) (1.09) (1.18) -- -- --
10/31/03 2.75 (0.09) 2.15 2.06 -- -- --
10/31/04 4.81 (0.12) 0.53 0.41 -- -- --
04/30/05(8) 5.22 (0.05) (0.27) (0.32) -- -- --
CLASS C+
5/22/00-10/31/00(7) $ 12.50 $ (0.17) $ 3.14 $ 2.97 $ -- $ -- $ --
10/31/01 15.47 (0.13) (11.42) (11.55) -- -- --
10/31/02 3.92 (0.09) (1.08) (1.17) -- -- --
10/31/03 2.75 (0.09) 2.15 2.06 -- -- --
10/31/04 4.81 (0.12) 0.53 0.41 -- -- --
04/30/05(8) 5.22 (0.05) (0.27) (0.32) -- -- --
<Caption>
NET RATIO OF
ASSET NET RATIO OF NET INVESTMENT
VALUE ASSETS EXPENSES INCOME (LOSS)
PERIOD END OF TOTAL END OF TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED PERIOD RETURN(2) PERIOD NET ASSETS(4) ASSETS(4) TURNOVER
- ------------------------------ ---------- ---------- ---------- ---------------- -------------- ---------
FOCUSED TECHNOLOGY PORTFOLIO
CLASS A
5/22/00-10/31/00(7) $ 15.52 24.16% $ 89,371 1.97%(3)(5) (1.30)%(3)(5) 176%
10/31/01 3.95 (74.55) 28,327 1.97 (1.12) 449
10/31/02 2.79 (29.37) 18,034 1.97(6) (1.77)(6) 262
10/31/03 4.91 75.99 34,846 1.97(6) (1.83)(6) 157
10/31/04 5.36 9.16 37,852 1.97(6) (1.86)(6) 159
04/30/05(8) 5.05 (5.78) 35,690 1.97(3)(6) (1.21)(3)(6) 42
CLASS B
5/22/00-10/31/00(7) $ 15.47 23.76% $ 70,073 2.62%(3)(5) (1.97)%(3)(5) 176%
10/31/01 3.93 (74.60) 20,658 2.62 (1.77) 449
10/31/02 2.75 (30.03) 13,368 2.62(6) (2.42)(6) 262
10/31/03 4.81 74.91 22,851 2.62(6) (2.48)(6) 157
10/31/04 5.22 8.52 25,969 2.62(6) (2.50)(6) 159
04/30/05(8) 4.90 (6.13) 22,986 2.62(3)(6) (1.85)(3)(6) 42
CLASS C+
5/22/00-10/31/00(7) $ 15.47 23.76% $ 86,105 2.62%(3)(5) (1.97)%(3)(5) 176%
10/31/01 3.92 (74.66) 26,869 2.62 (1.77) 449
10/31/02 2.75 (29.85) 17,137 2.62(6) (2.42)(6) 262
10/31/03 4.81 74.91 28,490 2.62(6) (2.48)(6) 157
10/31/04 5.22 8.52 28,495 2.62(6) (2.51)(6) 159
04/30/05(8) 4.90 (6.13) 24,703 2.62(3)(6) (1.85)(3)(6) 42
</Table>
(1) Calculated based upon average shares outstanding.
(2) Total return is not annualized and does not reflect sales load. It does
include expense reimbursements and expense reductions.
(3) Annualized
(4) Net of the following expense reimbursements (based on average net assets):
<Table>
<Caption>
10/31/00 10/31/01 10/31/02 10/31/03 10/31/04 04/30/05(3)(8)
-------- -------- -------- -------- -------- --------------
Focused Technology A 0.30% 0.18% 0.39% 0.48% 0.38% 0.22%
Focused Technology B 0.31 0.16 0.43 0.52 0.43 0.26
Focused Technology C+ 0.31 0.13 0.40 0.47 0.39 0.23
</Table>
(5) The ratio reflects an expense cap which is net of custody credits of 0.02%
or waiver/reimbursements is applicable.
(6) Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied, the ratio of expenses to average net
assets would have been lower and the ratio of net investment income would
have been higher by:
<Table>
<Caption>
10/31/02 10/31/03 10/31/04 04/30/05(3)(8)
-------- -------- -------- --------------
Focused Technology A --% 0.08% 0.07% 0.02%
Focused Technology B -- 0.08 0.07 0.02
Focused Technology C+ -- 0.08 0.07 0.02
</Table>
(7) Commencement of operations
(8) Unaudited
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
See Notes to Financial Statements
34
<Page>
<Table>
<Caption>
NET GAIN
(LOSS)
ON INVEST- DIVIDENDS
NET MENTS TOTAL FROM DISTRI-
NET ASSET INVEST- (BOTH FROM NET BUTION
VALUE MENT REALIZED INVEST- INVEST- FROM TOTAL
PERIOD BEGINNING INCOME AND MENT MENT CAPITAL DISTRI-
ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS
- ------------------------------ ------------ ---------- ------------ ---------- ---------- ---------- ----------
FOCUSED DIVIDEND STRATEGY PORTFOLIO
CLASS A
9/30/00 $ 11.87 $ 0.23 $ (1.85) $ (1.62) $ (0.23) $ (0.35) $ (0.58)
9/30/01 9.67 0.23 0.73 0.96 (0.22) -- (0.22)
9/30/02 10.41 0.22 (0.72) (0.50) (0.20) -- (0.20)
9/30/03 9.71 0.24 1.17 1.41 (0.37) -- (0.37)
10/01/03-10/31/03* 10.75 0.04 0.52 0.56 -- -- --
10/31/04 11.31 0.23 0.98 1.21 (0.23) -- (0.23)
04/30/05(5) 12.29 0.13 0.31 0.44 (0.12) -- (0.12)
CLASS B
9/30/00 $ 11.81 $ 0.16 $ (1.84) $ (1.68) $ (0.16) $ (0.35) $ (0.51)
9/30/01 9.62 0.16 0.73 0.89 (0.16) -- (0.16)
9/30/02 10.35 0.15 (0.74) (0.59) (0.13) -- (0.13)
9/30/03 9.63 0.18 1.17 1.35 (0.26) -- (0.26)
10/01/03-10/31/03* 10.72 0.03 0.52 0.55 -- -- --
10/31/04 11.27 0.15 0.98 1.13 (0.15) -- (0.15)
04/30/05(5) 12.25 0.09 0.31 0.40 (0.08) -- (0.08)
CLASS C+
9/30/00 $ 11.81 $ 0.16 $ (1.84) $ (1.68) $ (0.16) $ (0.35) $ (0.51)
9/30/01 9.62 0.15 0.74 0.89 (0.16) -- (0.16)
9/30/02 10.35 0.15 (0.74) (0.59) (0.13) -- (0.13)
9/30/03 9.63 0.18 1.16 1.34 (0.26) -- (0.26)
10/01/03-10/31/03* 10.71 0.03 0.53 0.56 -- -- --
10/31/04 11.27 0.15 0.98 1.13 (0.15) -- (0.15)
04/30/05(5) 12.25 0.09 0.30 0.39 (0.08) -- (0.08)
<Caption>
NET RATIO OF
ASSET NET RATIO OF NET INVESTMENT
VALUE ASSETS EXPENSES INCOME (LOSS)
PERIOD END OF TOTAL END OF TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED PERIOD RETURN(2) PERIOD NET ASSETS(3) ASSETS(3) TURNOVER
- ------------------------------ ---------- ---------- ---------- ---------------- -------------- ----------
FOCUSED DIVIDEND STRATEGY PORTFOLIO
CLASS A
9/30/00 $ 9.67 (14.09)% $ 8,732 0.95% 2.20% 57%
9/30/01 10.41 10.04 7,983 0.95 2.10 59
9/30/02 9.71 (5.07) 9,372 0.95 1.96 37
9/30/03 10.75 14.69 45,639 0.95 2.41 20
10/01/03-10/31/03* 11.31 5.21 50,263 0.95(4) 2.24(4) 0
10/31/04 12.29 10.71 68,541 0.95 1.86 43
04/30/05(5) 12.61 3.54 67,246 0.95(4) 2.01(4) 28
CLASS B
9/30/00 $ 9.62 (14.62)% $ 21,221 1.60% 1.56% 57%
9/30/01 10.35 9.30 21,674 1.60 1.45 59
9/30/02 9.63 (5.86) 20,670 1.60 1.31 37
9/30/03 10.72 14.07 47,369 1.60 1.79 20
10/01/03-10/31/03* 11.27 5.13 53,628 1.60(4) 1.59(4) 0
10/31/04 12.25 10.01 59,128 1.60 1.21 43
04/30/05(5) 12.57 3.22 58,207 1.60(4) 1.35(4) 28
CLASS C+
9/30/00 $ 9.62 (14.62)% $ 24,110 1.60% 1.50% 57%
9/30/01 10.35 9.30 21,793 1.60 1.45 59
9/30/02 9.63 (5.86) 19,568 1.60 1.30 37
9/30/03 10.71 13.96 69,059 1.60 1.77 20
10/01/03-10/31/03* 11.27 5.23 79,071 1.60(4) 1.59(4) 0
10/31/04 12.25 10.01 101,720 1.60 1.21 43
04/30/05(5) 12.56 3.13 102,198 1.60(4) 1.36(4) 28
</Table>
* The Portfolio changed its fiscal year end from September 30 to October 31.
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load. Total
return does not include expense reimbursements.
(3) Net of the following expense reimbursements (based on average net assets):
<Table>
<Caption>
9/30/00 9/30/01 9/30/02 9/30/03 10/31/04 04/30/05(4)(5)
------- ------- ------- ------- -------- --------------
Focused Dividend Strategy Class A 0.34% 0.36% 0.29% 0.16% 0.13% 0.08%
Focused Dividend Strategy Class B 0.30 0.25 0.24 0.16 0.15 0.08
Focused Dividend Strategy Class C+ 0.27 0.27 0.23 0.14 0.13 0.07
</Table>
(4) Annualized
(5) Unaudited
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
See Notes to Financial Statements
35
<Page>
FOCUSED EQUITY STRATEGY PORTFOLIO
PORTFOLIO PROFILE -- APRIL 30, 2005 -- (UNAUDITED)
INDUSTRY ALLOCATION*
<Table>
Domestic Equity Portfolios 89.8%
International Equity Portfolios 10.4
-----
100.2%
=====
</Table>
* Calculated as a percentage of net assets.
36
<Page>
FOCUSED EQUITY STRATEGY PORTFOLIO@
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 -- (UNAUDITED)
<Table>
<Caption>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 3)
- ----------------------------------------------------------------------------------------
AFFILIATED INVESTMENT COMPANIES#--100.2%
DOMESTIC EQUITY PORTFOLIOS--89.8%
SunAmerica Focused Series, Inc.
Focused 2000 Growth Portfolio,
Class A+ 4,175,021 $ 67,718,839
SunAmerica Focused Series, Inc.
Focused 2000 Value Portfolio,
Class A+ 5,138,832 101,337,771
SunAmerica Focused Series, Inc.
Focused Large-Cap Growth
Portfolio, Class A+ 10,206,539 167,183,106
SunAmerica Focused Series, Inc.
Focused Large-Cap Value
Portfolio, Class A 10,955,035 165,968,775
---------------
TOTAL DOMESTIC EQUITY PORTFOLIOS
(cost $488,325,632) 502,208,491
---------------
INTERNATIONAL EQUITY PORTFOLIOS--10.4%
SunAmerica Focused Series, Inc.
Focused International Equity
Portfolio, Class A
(cost $54,121,721) 3,482,221 58,222,734
---------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $542,447,353)(1) 100.2% 560,431,225
Liabilities in excess of other assets (0.2) (1,208,914)
---------- ---------------
NET ASSETS 100.0% $ 559,222,311
========== ===============
</Table>
- ----------
+ Non-income producing securities
# See Note 6
@ The Focused Equity Strategy Portfolio invests in various AIG SunAmerica Mutual
Funds some of which are not presented in this report. Additional information
on the underlying funds is available at our website, www.sunamericafunds.com.
(1) See Note 7 for cost of investments on a tax basis
See Notes to Financial Statements
37
<Page>
FOCUSED MULTI-ASSET STRATEGY PORTFOLIO
PORTFOLIO PROFILE -- APRIL 30, 2005 -- (UNAUDITED)
INDUSTRY ALLOCATION*
<Table>
Domestic Equity Portfolios 70.5%
Fixed Income Funds 18.9
International Equity Portfolios 10.4
----
99.8%
====
</Table>
* Calculated as a percentage of net assets.
38
<Page>
FOCUSED MULTI-ASSET STRATEGY PORTFOLIO@
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 -- (UNAUDITED)
<Table>
<Caption>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 3)
- ----------------------------------------------------------------------------------------
AFFILIATED INVESTMENT COMPANIES#--99.8%
DOMESTIC EQUITY PORTFOLIOS--70.5%
SunAmerica Focused Series, Inc.
Focused 2000 Growth Portfolio,
Class A+ 4,024,828 $ 65,282,711
SunAmerica Focused Series, Inc.
Focused 2000 Value Portfolio,
Class A+ 3,514,305 69,302,094
SunAmerica Focused Series, Inc.
Focused Growth and Income
Portfolio, Class A+ 3,923,777 62,505,765
SunAmerica Focused Series, Inc.
Focused Large-Cap Growth
Portfolio, Class A+ 3,624,335 59,366,600
SunAmerica Focused Series, Inc.
Focused Large-Cap Value
Portfolio, Class A 4,152,020 62,903,096
SunAmerica Focused Series, Inc.
Focused Multi-Cap Growth
Portfolio, Class A+ 3,516,207 69,093,472
SunAmerica Focused Series, Inc.
Focused Multi-Cap Value
Portfolio, Class A+ 3,339,915 67,599,873
---------------
TOTAL DOMESTIC EQUITY PORTFOLIOS
(cost $417,223,800) 456,053,611
---------------
FIXED INCOME FUNDS--18.9%
SunAmerica Income Funds
SunAmerica Core Bond Fund,
Class A 6,011,767 61,320,028
SunAmerica Income Funds
SunAmerica GNMA Fund,
Class A 5,406,595 61,040,462
---------------
TOTAL FIXED INCOME FUNDS
(cost $123,064,157) 122,360,490
---------------
INTERNATIONAL EQUITY PORTFOLIOS--10.4%
SunAmerica Focused Series, Inc.
Focused International Equity
Portfolio, Class A
(cost $61,289,487) 4,017,558 67,173,575
---------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $601,577,444)(1) 99.8% 645,587,676
Other assets less liabilities 0.2 1,461,824
--------- ---------------
NET ASSETS 100.0% $ 647,049,500
========= ===============
</Table>
- ----------
+ Non-income producing securities
# See Note 6
@ The Focused Multi-Asset Strategy Portfolio invests in various AIG SunAmerica
Mutual Funds, some of which are not presented in this report. Additional
information on the underlying funds is available at our website,
www.sunamericafunds.com.
(1) See Note 7 for cost of investments on a tax basis
See Notes to Financial Statements
39
<Page>
FOCUSED BALANCED STRATEGY PORTFOLIO
PORTFOLIO PROFILE -- APRIL 30, 2005 -- (UNAUDITED)
INDUSTRY ALLOCATION*
<Table>
Domestic Equity Portfolios 59.1%
Fixed Income Funds 34.6
International Equity Portfolios 6.3
-----
100.0%
=====
</Table>
* Calculated as a percentage of net assets.
40
<Page>
FOCUSED BALANCED STRATEGY PORTFOLIO@
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 -- (UNAUDITED)
<Table>
<Caption>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 3)
- ----------------------------------------------------------------------------------------
AFFILIATED INVESTMENT COMPANIES#--100.0%
DOMESTIC EQUITY PORTFOLIOS--59.1%
SunAmerica Focused Series, Inc.
Focused 2000 Growth Portfolio,
Class A+ 2,423,606 $ 39,310,895
SunAmerica Focused Series, Inc.
Focused 2000 Value Portfolio,
Class A+ 2,798,585 55,188,101
SunAmerica Focused Series, Inc.
Focused Large-Cap Growth
Portfolio, Class A+ 5,900,863 96,656,140
SunAmerica Focused Series, Inc.
Focused Large-Cap Value
Portfolio, Class A 5,908,503 89,513,827
---------------
TOTAL DOMESTIC EQUITY PORTFOLIOS
(cost $268,609,798) 280,668,963
---------------
FIXED INCOME FUNDS--34.6%
SunAmerica Income Funds
SunAmerica Core Bond Fund,
Class A 8,085,811 82,475,270
SunAmerica Income Funds
SunAmerica GNMA Fund,
Class A 7,238,974 81,728,016
---------------
TOTAL FIXED INCOME FUNDS
(cost $165,419,728) 164,203,286
---------------
INTERNATIONAL EQUITY PORTFOLIOS--6.3%
SunAmerica Focused Series, Inc.
Focused International Equity
Portfolio, Class A
(cost $27,509,525) 1,802,028 30,129,910
---------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $461,539,051)(1) 100.0% 475,002,159
Liabilities in excess of other assets 0.0 (84,819)
--------- ---------------
NET ASSETS 100.0% $ 474,917,340
========= ===============
</Table>
- ----------
+ Non-income producing securities
# See Note 6
@ The Focused Balanced Strategy Portfolio invests in various AIG SunAmerica
Mutual Funds, some of which are not presented in this report. Additional
information on the underlying funds is available at our website,
www.sunamericafunds.com.
(1) See Note 7 for cost of investments on a tax basis
See Notes to Financial Statements
41
<Page>
FOCUSED FIXED INCOME AND EQUITY STRATEGY PORTFOLIO
PORTFOLIO PROFILE -- APRIL 30, 2005 -- (UNAUDITED)
INDUSTRY ALLOCATION*
<Table>
Fixed Income Funds 67.4%
Domestic Equity Portfolios 28.2
International Equity Portfolios 4.2
----
99.8%
====
</Table>
* Calculated as a percentage of net assets.
42
<Page>
FOCUSED FIXED INCOME AND EQUITY STRATEGY PORTFOLIO@
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 -- (UNAUDITED)
<Table>
<Caption>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 3)
- ----------------------------------------------------------------------------------------
AFFILIATED INVESTMENT COMPANIES#--99.8%
DOMESTIC EQUITY PORTFOLIOS--28.2%
SunAmerica Focused Series, Inc.
Focused Large-Cap Growth
Portfolio, Class A+ 788,562 $ 12,916,638
SunAmerica Focused Series, Inc.
Focused Large-Cap Value
Portfolio, Class A 805,537 12,203,892
---------------
TOTAL DOMESTIC EQUITY PORTFOLIOS
(cost $24,325,047) 25,120,530
---------------
FIXED INCOME FUNDS--67.4%
SunAmerica Income Funds
SunAmerica Core Bond Fund,
Class A 1,420,864 14,492,808
SunAmerica Income Funds
SunAmerica GNMA Fund,
Class A 2,154,900 24,328,822
SunAmerica Income Funds
SunAmerica High Yield
Bond Fund, Class A 1,551,341 6,717,307
SunAmerica Income Funds
SunAmerica U.S. Government
Securities Fund, Class A 1,523,633 14,489,746
---------------
TOTAL FIXED INCOME FUNDS
(cost $60,056,942) 60,028,683
---------------
INTERNATIONAL EQUITY PORTFOLIOS--4.2%
SunAmerica Focused Series, Inc.
Focused International Equity
Portfolio, Class A
(cost $3,349,887) 221,183 3,698,183
---------------
TOTAL LONG-TERM INVESTMENTS SECURITIES
(cost $87,731,876)(1) 99.8% 88,847,396
Other assets less liabilities 0.2 161,081
--------- ---------------
NET ASSETS 100.0% $ 89,008,477
========= ===============
</Table>
- ----------
+ Non-income producing securities
# See Note 6
@ The Focused Fixed Income and Equity Strategy Portfolio invests in various AIG
SunAmerica Mutual Funds, some of which are not presented in this report.
Additional information on the underlying funds is available at our website,
www.sunamericafunds.com.
(1) See Note 7 for cost of investments on a tax basis
See Notes to Financial Statements
43
<Page>
FOCUSED FIXED INCOME STRATEGY PORTFOLIO
PORTFOLIO PROFILE -- APRIL 30, 2005 -- (UNAUDITED)
INDUSTRY ALLOCATION*
<Table>
Fixed Income Funds 91.5%
Domestic Equity Portfolios 9.9
-----
101.4%
=====
</Table>
* Calculated as a percentage of net assets.
44
<Page>
FOCUSED FIXED INCOME STRATEGY PORTFOLIO@
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 -- (UNAUDITED)
<Table>
<Caption>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 3)
- ----------------------------------------------------------------------------------------
AFFILIATED INVESTMENT COMPANIES#--101.4%
DOMESTIC EQUITY PORTFOLIOS--9.9%
SunAmerica Focused Series, Inc.
Focused Growth and Income
Portfolio, Class A+
(cost $3,630,901) 235,598 $ 3,753,081
---------------
FIXED INCOME FUNDS--91.5%
SunAmerica Income Funds
SunAmerica Core Bond Fund,
Class A 756,228 7,713,528
SunAmerica Income Funds
SunAmerica GNMA Fund,
Class A 1,357,820 15,329,793
SunAmerica Income Funds
SunAmerica High Yield
Bond Fund, Class A 950,641 4,116,277
SunAmerica Income Funds
SunAmerica U.S. Government
Securities Fund, Class A 809,042 7,693,994
---------------
TOTAL FIXED INCOME FUNDS
(cost $34,635,909) 34,853,592
---------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $38,266,810)(1) 101.4% 38,606,673
Liabilities in excess of other assets (1.4) (520,426)
--------- ---------------
NET ASSETS 100.0% $ 38,086,247
========= ===============
</Table>
- ----------
+ Non-income producing securities
# See Note 6
@ The Focused Fixed Income Strategy Portfolio invests in various AIG SunAmerica
Mutual Funds, some of which are not presented in this report. Additional
information on the underlying funds is available at our website,
www.sunamericafunds.com.
(1) See Note 7 for cost of investments on a tax basis
See Notes to Financial Statements
45
<Page>
FOCUSED LARGE-CAP GROWTH PORTFOLIO
PORTFOLIO PROFILE -- APRIL 30, 2005 -- (UNAUDITED)
INDUSTRY ALLOCATION*
<Table>
Pharmaceuticals 10.2%
Internet Content 7.9
Health Services 7.4
Housing & Household Durables 7.0
Transportation 6.5
Medical Products 6.2
Insurance 5.7
Repurchase Agreements 5.6
Conglomerate 4.7
Telecommunications 4.4
Retail 3.4
Business Services 3.2
Food, Beverage & Tobacco 3.2
Computer Software 3.0
Aerospace & Military Technology 2.8
Broadcasting & Media 2.8
Energy Services 2.8
Household & Personal Products 2.7
Leisure & Tourism 2.7
Machinery 2.7
Automotive 2.4
Chemicals 2.2
Education 2.0
Restaurants 2.0
U.S. Government Agencies 0.5
-----
104.0%
=====
</Table>
* Calculated as a percentage of net assets.
46
<Page>
FOCUSED LARGE-CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 -- (UNAUDITED)
<Table>
<Caption>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 3)
- ------------------------------------------------------------------------------------------
COMMON STOCK--97.9%
AEROSPACE & MILITARY TECHNOLOGY--2.8%
General Dynamics Corp. 426,300 $ 44,782,815
-----------------
AUTOMOTIVE--2.4%
Harley-Davidson, Inc. 800,000 37,616,000
-----------------
BROADCASTING & MEDIA--2.8%
News Corp., Class A 2,855,800 43,636,624
-----------------
BUSINESS SERVICES--3.2%
Accenture, Ltd., Class A+ 2,300,000 49,910,000
-----------------
CHEMICALS--2.2%
Lyondell Chemical Co. 1,383,500 34,712,015
-----------------
CONGLOMERATE--4.7%
General Electric Co. 2,043,574 73,977,379
-----------------
COMPUTER SOFTWARE--3.0%
Microsoft Corp. 1,893,000 47,892,900
-----------------
EDUCATION--2.0%
Apollo Group, Inc., Class A+ 443,500 31,985,220
-----------------
ENERGY SERVICES--2.8%
Transocean, Inc.+ 943,400 43,745,458
-----------------
FOOD, BEVERAGE & TOBACCO--3.2%
Coca-Cola Co. 1,179,000 51,215,760
-----------------
HEALTH SERVICES--7.4%
UnitedHealth Group, Inc. 1,236,407 116,852,826
-----------------
HOUSEHOLD & PERSONAL PRODUCTS--2.7%
Procter & Gamble Co. 777,188 42,084,730
-----------------
HOUSING & HOUSEHOLD DURABLES--7.0%
Lennar Corp., Class A 1,521,336 78,303,164
Pulte Homes, Inc. 461,800 32,995,610
-----------------
111,298,774
-----------------
INSURANCE--5.7%
AFLAC, Inc. 1,183,700 48,117,405
Wellpoint, Inc.+ 330,300 42,195,825
-----------------
90,313,230
-----------------
INTERNET CONTENT--7.9%
eBay, Inc.+ 2,589,500 82,164,835
Yahoo!, Inc.+ 1,239,300 42,768,243
-----------------
124,933,078
-----------------
LEISURE & TOURISM--2.7%
Hilton Hotels Corp. 1,974,300 43,098,969
-----------------
MACHINERY--2.7%
Caterpillar, Inc. 485,700 42,765,885
-----------------
MEDICAL PRODUCTS--6.2%
Medtronic, Inc. 1,092,100 57,553,670
Zimmer Holdings, Inc.+ 506,665 41,252,664
-----------------
98,806,334
-----------------
PHARMACEUTICALS--10.2%
Genentech, Inc.+ 1,522,450 108,002,603
Pfizer, Inc. 1,962,153 53,311,697
-----------------
161,314,300
-----------------
RESTAURANTS--2.0%
Starbucks Corp.+ 622,481 30,825,259
-----------------
RETAIL--3.4%
Wal-Mart Stores, Inc. 1,137,400 53,617,036
-----------------
TELECOMMUNICATIONS--4.4%
QUALCOMM, Inc. 2,012,324 70,209,984
-----------------
<Caption>
SHARES/
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
- ------------------------------------------------------------------------------------------
TRANSPORTATION--6.5%
FedEx Corp. 725,051 $ 61,593,083
United Parcel Service, Inc.,
Class B 580,000 41,359,800
-----------------
102,952,883
-----------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $1,392,396,690) 1,548,547,459
-----------------
SHORT-TERM INVESTMENT SECURITIES--0.5%
U.S. GOVERNMENT AGENCIES--0.5%
Federal Home Loan Mtg.
Disc. Notes
3.00% due 07/26/05 $ 2,500,000 2,482,705
Federal National Mtg. Assoc
Disc. Notes
2.98% due 07/11/05 4,600,000 4,573,794
-----------------
TOTAL SHORT-TERM INVESTMENT SECURITIES
(cost $7,057,520) 7,056,499
-----------------
REPURCHASE AGREEMENTS--5.6%
Agreement with State Street
Bank & Trust Co., bearing
interest at 1.25%, dated
04/29/05, to be
repurchased 05/02/05 in
the amount of $89,219,293
and collateralized by
$90,435,000 of United
States Treasury Notes,
bearing interest at 3.75%,
due 03/31/07 and having
an approximate value of
$91,000,219
(cost $89,210,000) 89,210,000 89,210,000
-----------------
TOTAL INVESTMENTS
(cost $1,488,664,210)(1) 104.0% 1,644,813,958
Liabilities in excess of
other assets (4.0) (63,381,424)
----------------- -----------------
NET ASSETS 100.0% $ 1,581,432,534
================= =================
</Table>
- ----------
+ Non-income producing securities
(1) See Note 7 for cost of investments on a tax basis
See Notes to Financial Statements
47
<Page>
FOCUSED MULTI-CAP GROWTH PORTFOLIO
PORTFOLIO PROFILE -- APRIL 30, 2005 -- (UNAUDITED)
INDUSTRY ALLOCATION*
<Table>
Internet Content 12.8%
Health Services 9.8
Broadcasting & Media 9.0
Electronics 8.0
Pharmaceuticals 5.7
U.S. Government Agencies 5.6
Automotive 5.1
Repurchase Agreements 5.1
Computers & Business Equipment 5.0
Medical Products 5.0
Internet Software 3.9
Energy Sources 3.7
Leisure & Tourism 3.7
Entertainment Products 3.2
Computer Software 2.8
Manufacturing 2.8
Conglomerate 2.5
Banks 2.3
Retail 1.8
Energy Services 1.4
Business Services 0.0
----
99.2%
====
</Table>
* Calculated as a percentage of net assets.
48
<Page>
FOCUSED MULTI-CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 -- (UNAUDITED)
<Table>
<Caption>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 3)
- ------------------------------------------------------------------------------------------
COMMON STOCK--88.5%
AUTOMOTIVE--5.1%
Advanced Auto Parts, Inc.+ 350,000 $ 18,672,500
-----------------
BANKS--2.3%
Bank of America Corp. 190,000 8,557,600
-----------------
BROADCASTING & MEDIA--9.0%
Echostar Communications Corp.,
Class A 285,000 8,250,750
News Corp., Class A 673,200 10,286,496
XM Satellite Radio Holdings,
Inc., Class A+ 509,415 14,131,172
-----------------
32,668,418
-----------------
BUSINESS SERVICES--0.0%
FutureLink Corp.+(3)(4) 1,785 0
-----------------
COMPUTERS & BUSINESS EQUIPMENT--5.0%
Apple Computer, Inc.+ 504,420 18,189,385
-----------------
CONGLOMERATE--2.5%
Dover Corp. 250,000 9,090,000
-----------------
COMPUTER SOFTWARE--2.8%
Oracle Corp.+ 875,000 10,115,000
-----------------
ELECTRONICS--8.0%
Activision, Inc.+ 601,200 8,693,352
FormFactor, Inc.+ 111,500 2,546,660
Lam Research Corp.+ 350,000 8,977,500
Tessera Technologies, Inc.+ 338,339 8,986,284
-----------------
29,203,796
-----------------
ENERGY SERVICES--1.4%
Transocean, Inc.+ 113,000 5,239,810
-----------------
ENERGY SOURCES--3.7%
Forest Oil Corp.+ 348,800 13,439,265
-----------------
ENTERTAINMENT PRODUCTS--3.2%
Lions Gate Entertainment Corp.+ 1,212,100 11,708,886
-----------------
HEALTH SERVICES--9.8%
AMERIGROUP Corp.+ 463,600 16,281,632
UnitedHealth Group, Inc. 204,680 19,344,307
-----------------
35,625,939
-----------------
INTERNET CONTENT--12.8%
aQuantive, Inc.+ 1,101,200 12,223,320
eBay, Inc.+ 339,600 10,775,508
Google, Inc., Class A+ 85,370 18,781,400
Yahoo!, Inc.+ 145,400 5,017,754
-----------------
46,797,982
-----------------
INTERNET SOFTWARE--3.9%
Macromedia, Inc.+ 358,900 14,216,029
-----------------
LEISURE & TOURISM--3.7%
Starwood Hotels & Resorts
Worldwide, Inc. 246,300 13,383,942
-----------------
MANUFACTURING--2.8%
Roper Industries, Inc. 150,000 10,150,500
-----------------
MEDICAL PRODUCTS--5.0%
Johnson & Johnson 150,000 10,294,500
Zimmer Holdings, Inc.+ 100,000 8,142,000
-----------------
18,436,500
-----------------
<Caption>
SHARES/
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
- ------------------------------------------------------------------------------------------
PHARMACEUTICALS--5.7%
Celgene Corp.+ 408,240 $ 15,476,378
Medicines Co.+ 250,000 5,337,500
-----------------
20,813,878
-----------------
RETAIL--1.8%
Abercrombie & Fitch Co.,
Class A 119,100 6,425,445
-----------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $269,834,588) 322,734,875
-----------------
SHORT-TERM INVESTMENT SECURITIES--5.6%
U.S. GOVERNMENT AGENCIES--5.6%
Federal National Mtg. Assoc.
Disc. Notes
2.84% due 05/02/05
(cost $20,298,393) $ 20,300,000 20,298,393
-----------------
REPURCHASE AGREEMENTS--5.1%
State Street Bank & Trust Co.
Joint Repurchase Agreement(2) 996,000 996,000
UBS Securities, LLC
Joint Repurchase Agreement(2) 13,000,000 13,000,000
Agreement with State Street
Bank & Trust Co., bearing
interest at 1.25%, dated
04/29/05, to be repurchased
05/02/05 in the amount of
$4,462,465 and collateralized
by $4,525,000 of United
States Treasury Notes,
bearing interest at 3.75%,
due 03/31/07 and having
an approximate value of
$4,553,281 4,462,000 4,462,000
-----------------
TOTAL REPURCHASE AGREEMENTS
(cost $18,458,000) 18,458,000
-----------------
TOTAL INVESTMENTS
(cost $308,590,981)(1) 99.2% 361,491,268
Other assets less liabilities 0.8 3,087,510
----------------- -----------------
NET ASSETS 100.0% $ 364,578,778
================= =================
</Table>
- ----------
+ Non-income producing securities
(1) See Note 7 for cost of investments on a tax basis
(2) See Note 3 for details of Joint Repurchase Agreement
(3) Security obtained prior to Portfolio merger and change in investment
technique
(4) Illiquid security
See Notes to Financial Statements
49
<Page>
FOCUSED 2000 GROWTH PORTFOLIO
PORTFOLIO PROFILE -- APRIL 30, 2005 -- (UNAUDITED)
INDUSTRY ALLOCATION*
<Table>
Health Services 12.0%
Retail 8.7
Financial Services 8.6
Medical Products 7.6
Business Services 6.1
Electronics 5.6
Pharmaceuticals 5.6
Insurance 4.9
Leisure & Tourism 4.5
Energy Services 3.9
Repurchase Agreements 3.1
Communication Equipment 2.9
Energy Sources 2.8
Housing & Household Durables 2.7
Internet Content 2.6
Transportation 2.6
Restaurants 2.5
Household & Personal Products 1.8
Automotive 1.6
Computer Software 1.6
Food, Beverage & Tobacco 1.5
Internet Software 1.4
Computers & Business Equipment 1.3
Education 1.2
Manufacturing 1.2
Banks 1.0
Machinery 0.8
-----
100.1%
=====
</Table>
* Calculated as a percentage of net assets.
50
<Page>
FOCUSED 2000 GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 -- (UNAUDITED)
<Table>
<Caption>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 3)
- ------------------------------------------------------------------------------------------
COMMON STOCK--97.0%
AUTOMOTIVE--1.6%
CarMax, Inc.+ 200,000 $ 5,456,000
-----------------
BANKS--1.0%
Signature Bank+ 140,300 3,455,589
-----------------
BUSINESS SERVICES--6.1%
Central European
Distribution Corp.+ 137,761 5,113,688
ChoicePoint, Inc.+ 160,000 6,315,200
Digital River, Inc.+ 172,160 4,579,456
Hewitt Associates, Inc., Class A+ 175,000 4,656,750
-----------------
20,665,094
-----------------
COMMUNICATION EQUIPMENT--2.9%
Foundry Networks, Inc.+ 556,600 4,675,440
Ixia+ 320,000 5,123,200
-----------------
9,798,640
-----------------
COMPUTERS & BUSINESS EQUIPMENT--1.3%
M-Systems Flash Disk
Pioneers, Ltd.+ 227,898 4,318,667
-----------------
COMPUTER SOFTWARE--1.6%
Hyperion Solutions Corp.+ 130,300 5,299,301
-----------------
EDUCATION--1.2%
Universal Technical
Institute, Inc.+ 120,000 4,189,200
-----------------
ELECTRONICS--5.6%
Emulex Corp.+ 311,200 4,832,936
FormFactor, Inc.+ 233,400 5,330,856
Sigmatel, Inc.+ 169,672 4,443,710
Sonic Solutions+ 280,723 4,123,821
-----------------
18,731,323
-----------------
ENERGY SERVICES--3.9%
Grey Wolf, Inc.+ 1,104,300 6,625,800
Veritas DGC, Inc.+ 251,839 6,447,078
-----------------
13,072,878
-----------------
ENERGY SOURCES--2.8%
Comstock Resources, Inc.+ 124,500 3,149,850
Encore Acquisition Co.+ 170,000 6,242,400
-----------------
9,392,250
-----------------
FINANCIAL SERVICES--8.6%
Affiliated Managers
Group, Inc.+ 83,900 5,246,267
Chicago Mercantile Exchange 35,000 6,843,200
Euronet Worldwide, Inc.+ 222,655 6,581,682
First Marblehead Corp.+ 175,000 6,742,750
Jefferies Group, Inc. 100,000 3,620,000
-----------------
29,033,899
-----------------
FOOD, BEVERAGE & TOBACCO--1.5%
United Natural Foods, Inc.+ 194,500 5,212,600
-----------------
HEALTH SERVICES--12.0%
AMERIGROUP Corp.+ 300,000 10,536,000
Centene Corp.+ 234,800 6,539,180
LCA Vision, Inc. 199,278 7,809,705
Manor Care, Inc. 200,000 6,670,000
SFBC International, Inc.+ 111,678 3,484,353
United Surgical Partners
International, Inc.+ 123,400 5,460,450
-----------------
40,499,688
-----------------
HOUSEHOLD & PERSONAL PRODUCTS--1.8%
Jarden Corp.+ 135,900 $ 6,070,653
-----------------
HOUSING & HOUSEHOLD DURABLES--2.7%
Toll Brothers, Inc.+ 120,000 9,096,000
-----------------
INSURANCE--4.9%
Arch Capital Group, Ltd.+ 250,000 9,997,500
Axis Capital Holdings, Ltd. 250,000 6,650,000
-----------------
16,647,500
-----------------
INTERNET CONTENT--2.6%
aQuantive, Inc.+ 531,988 5,905,067
Audible, Inc.+ 231,831 2,972,073
-----------------
8,877,140
-----------------
INTERNET SOFTWARE--1.4%
Websense, Inc.+ 87,500 4,641,875
-----------------
LEISURE & TOURISM--4.5%
Kerzner International, Ltd.+ 120,000 6,610,800
Wynn Resorts, Ltd.+ 160,000 8,470,400
-----------------
15,081,200
-----------------
MACHINERY--0.8%
TurboChef Technologies, Inc.+ 264,564 2,754,111
-----------------
MANUFACTURING--1.2%
Ceradyne, Inc.+ 199,250 3,957,105
-----------------
MEDICAL PRODUCTS--7.6%
Advanced Medical Optics, Inc.+ 149,700 5,535,906
American Medical Systems
Holdings, Inc.+ 355,900 6,214,014
Edwards Lifesciences Corp.+ 200,000 8,808,000
Intuitive Surgical, Inc.+ 121,240 5,206,046
-----------------
25,763,966
-----------------
PHARMACEUTICALS--5.6%
Bone Care International, Inc.+ 120,000 3,097,200
Connetics Corp.+ 262,100 5,695,433
Kos Pharmaceuticals, Inc.+ 100,000 4,817,000
United Therapeutics Corp.+ 109,812 5,269,878
-----------------
18,879,511
-----------------
RESTAURANTS--2.5%
Cheesecake Factory, Inc.+ 90,000 2,762,100
RARE Hospitality
International, Inc.+ 208,600 5,803,252
-----------------
8,565,352
-----------------
RETAIL--8.7%
Aeropostale, Inc.+ 207,000 5,781,510
Build-A-Bear Workshop, Inc.+ 160,000 4,289,600
Cabela's Inc., Class A+ 170,000 3,388,100
Hot Topic, Inc.+ 331,800 6,632,682
Select Comfort Corp.+ 170,000 3,760,400
Urban Outfitters, Inc.+ 124,956 5,535,551
-----------------
29,387,843
-----------------
TRANSPORTATION--2.6%
C.H. Robinson Worldwide, Inc. 80,000 4,128,000
Overnite Corp. 158,900 4,763,822
-----------------
8,891,822
-----------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $282,355,595) 327,739,207
-----------------
</Table>
51
<Page>
<Table>
<Caption>
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
- ------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--3.1%
Agreement with State Street
Bank & Trust Co., bearing
interest at 1.25%, dated
04/29/05, to be repurchased
05/02/05 in the amount of
$6,164,642 and collateralized
by $4,500,000 of United States
Treasury Bonds, bearing
interest at 8.13%, due
08/15/19 and having an
approximate value of
$6,296,795 $ 6,164,000 $ 6,164,000
Agreement with UBS
Securities, LLC, bearing interest
at 2.75%, dated 04/29/05, to
be repurchased 05/02/05 in
the amount of $4,380,004 and
collateralized by $4,455,000 of
Federal Home Loan Bank
Bonds, bearing interest at
3.63%, due 01/15/08 and
having an approximate value
of $4,468,352 4,379,000 4,379,000
-----------------
TOTAL REPURCHASE AGREEMENTS
(cost $10,543,000) 10,543,000
-----------------
TOTAL INVESTMENTS
(cost $292,898,595)(1) 100.1% 338,282,207
Liabilities in excess of other assets (0.1) (471,687)
----------------- -----------------
NET ASSETS 100.0% $ 337,810,520
================= =================
</Table>
- ----------
+ Non-income producing securities
(1) See note 7 for cost of investments on a tax basis
See Notes to Financial Statements
52
<Page>
FOCUSED LARGE CAP VALUE PORTFOLIO
PORTFOLIO PROFILE -- APRIL 30, 2005 -- (UNAUDITED)
INDUSTRY ALLOCATION*
<Table>
Energy Sources 12.8%
Food, Beverage & Tobacco 12.8
Pharmaceuticals 11.7
Banks 11.2
Financial Services 9.0
Electronics 7.5
Broadcasting & Media 4.2
Telecommunications 4.1
Insurance 3.5
Retail 3.5
Business Services 3.1
Machinery 3.1
Computers & Business Equipment 2.9
Computer Software 2.9
Health Services 2.9
Metals & Mining 2.9
Time Deposits 1.3
Repurchase Agreements 0.4
----
99.8%
====
</Table>
* Calculated as a percentage of net assets.
53
<Page>
FOCUSED LARGE CAP VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 -- (UNAUDITED)
<Table>
<Caption>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 3)
- ------------------------------------------------------------------------------------------
COMMON STOCK--98.1%
BANKS--11.2%
Bank of America Corp. 625,600 $ 28,177,024
Washington Mutual, Inc. 312,500 12,912,500
Wells Fargo & Co. 266,500 15,974,010
-----------------
57,063,534
-----------------
BROADCASTING & MEDIA--4.2%
Comcast Corp., Class A+ 663,300 21,298,563
-----------------
BUSINESS SERVICES--3.1%
Monsanto Co. 270,000 15,827,400
-----------------
COMPUTERS & BUSINESS EQUIPMENT--2.9%
Xerox Corp.+ 1,110,000 14,707,500
-----------------
COMPUTER SOFTWARE--2.9%
Oracle Corp.+ 1,290,000 14,912,400
-----------------
ELECTRONICS--7.5%
Lam Research Corp.+ 647,900 16,618,635
Rockwell Automation, Inc. 290,000 13,406,700
Teradyne, Inc.+ 752,300 8,290,346
-----------------
38,315,681
-----------------
ENERGY SOURCES--12.8%
Burlington Resources, Inc. 320,000 15,555,200
ConocoPhillips 319,600 33,510,060
Valero Energy Corp. 230,000 15,761,900
-----------------
64,827,160
-----------------
FINANCIAL SERVICES--9.0%
Citigroup, Inc. 189,800 8,913,008
Fannie Mae@ 294,800 15,904,460
Freddie Mac 343,200 21,113,664
-----------------
45,931,132
-----------------
FOOD, BEVERAGE & TOBACCO--12.8%
Altria Group, Inc. 455,100 29,576,949
Archer-Daniels-Midland Co. 700,000 12,593,000
PepsiCo, Inc. 235,000 13,075,400
UST, Inc. 211,000 9,663,800
-----------------
64,909,149
-----------------
HEALTH SERVICES--2.9%
Quest Diagnostics, Inc. 138,020 14,602,516
-----------------
INSURANCE--3.5%
Aetna, Inc. 240,000 17,608,800
-----------------
MACHINERY--3.1%
Caterpillar, Inc. 181,000 15,937,050
-----------------
METALS & MINING--2.9%
Nucor Corp. 290,000 14,819,000
-----------------
<Caption>
SHARES/
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
- ------------------------------------------------------------------------------------------
PHARMACEUTICALS--11.7%
Medco Health Solutions, Inc.+ 393,100 $ 20,036,307
Pfizer, Inc. 1,459,500 39,654,615
-----------------
59,690,922
-----------------
RETAIL--3.5%
J.C. Penny Co., Inc. -
Holding Co. 370,000 17,541,700
-----------------
TELECOMMUNICATIONS--4.1%
AT&T Corp. 549,700 10,515,761
SBC Communications, Inc. 430,000 10,234,000
-----------------
20,749,761
-----------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $471,208,584) 498,742,268
-----------------
SHORT-TERM INVESTMENT SECURITIES--1.3%
TIME DEPOSITS--1.3%
Euro Time Deposit with State
Street Bank & Trust Co.
2.25% due 05/02/05
(cost $6,598,000) $ 6,598,000 6,598,000
-----------------
REPURCHASE AGREEMENTS--0.4%
UBS Warburg, LLC Joint
Repurchase Agreement(2) 1,865,000 1,865,000
Agreement with State Street
Bank & Trust Co., bearing
interest at 1.25%, dated
04/29/05, to be repurchased
05/02/05 in the amount of
$128,013 and collateralized
by $115,000 of United States
Treasury Bonds, bearing
interest at 5.50%, due 08/15/28
and having an approximate
value of $131,064 128,000 128,000
-----------------
TOTAL REPURCHASE AGREEMENTS
(cost $1,993,000) 1,993,000
-----------------
TOTAL INVESTMENTS
(cost $479,799,584)(1) 99.8% 507,333,268
Other assets less liabilities 0.2 897,501
----------------- -----------------
NET ASSETS 100.0% $ 508,230,769
================= =================
</Table>
- ----------
+ Non-income producing securities
(1) See Note 7 for cost of investments on a tax basis
(2) See Note 3 for details of Joint Repurchase Agreement
@ The security or a portion thereof represents collateral for the following open
futures contracts:
OPEN FUTURE CONTRACTS
<Table>
<Caption>
UNREALIZED
NUMBER VALUE AS OF APPRECIATION
OF CONTRACTS DESCRIPTION EXPIRATION DATE VALUE AT TRADE DATE APRIL 30, 2005 (DEPRECIATION)
- ----------------------------------------------------------------------------------------------------------------
16 Long S&P 500 Index June 2005 $ 4,913,012 $ 4,634,000 $ (279,012)
==========
</Table>
See Notes to Financial Statements
54
<Page>
FOCUSED MULTI-CAP VALUE PORTFOLIO
PORTFOLIO PROFILE APRIL 30, 2005 -- (UNAUDITED)
INDUSTRY ALLOCATION*
<Table>
Repurchase Agreements 8.6%
Banks 8.5
Energy Sources 7.5
Conglomerate 6.5
Automotive 6.1
Financial Services 6.0
Real Estate Companies 5.3
Aerospace & Military Technology 3.7
Food, Beverage & Tobacco 3.7
Energy Services 3.6
Chemicals 3.5
Retail 3.5
Pharmaceuticals 3.3
Transportation 3.3
Apparel & Textiles 3.2
Real Estate Investment Trusts 3.2
Broadcasting & Media 3.1
Business Services 3.1
Electronics 3.0
Insurance 3.0
Metals & Mining 3.0
Telecommunications 2.8
Machinery 2.5
Computer Software 0.0
-----
100.0%
=====
</Table>
* Calculated as a percentage of net assets.
55
<Page>
FOCUSED MULTI-CAP VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 -- (UNAUDITED)
<Table>
<Caption>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 3)
- ------------------------------------------------------------------------------------------
COMMON STOCK--91.4%
AEROSPACE & MILITARY TECHNOLOGY--3.7%
Northrop Grumman Corp.@ 408,000 $ 22,374,720
-----------------
APPAREL & TEXTILES--3.2%
V. F. Corp. 343,000 19,410,370
-----------------
AUTOMOTIVE -- 6.1%
AutoZone, Inc.+ 256,700 21,306,100
Toyota Motor Corp.(2) 435,000 15,763,584
-----------------
37,069,684
-----------------
BANKS--8.5%
Golden West Financial Corp. 205,100 12,783,883
North Fork Bancorp., Inc. 626,450 17,634,568
SunTrust Banks, Inc. 290,700 21,171,681
-----------------
51,590,132
-----------------
BROADCASTING & MEDIA--3.1%
Clear Channel
Communications, Inc. 242,000 7,729,480
Liberty Media International, Inc.+ 267,860 11,108,154
-----------------
18,837,634
-----------------
BUSINESS SERVICES--3.1%
Republic Services, Inc. 546,366 18,904,264
-----------------
CHEMICALS--3.5%
du Pont (E.I.) de Nemours & Co. 446,600 21,039,326
-----------------
CONGLOMERATE--6.5%
Hutchison Whampoa, Ltd.+(2) 4,392,000 39,390,776
-----------------
COMPUTER SOFTWARE--0.0%
Computer Associates
International, Inc. 321 8,635
-----------------
ELECTRONICS--3.0%
AVX Corp. 1,683,700 18,335,493
-----------------
ENERGY SERVICES--3.6%
Unocal Corp. 402,600 21,961,830
-----------------
ENERGY SOURCES--7.5%
Devon Energy Corp. 370,500 16,735,485
Encana Corp. 446,100 28,487,946
-----------------
45,223,431
-----------------
FINANCIAL SERVICES--6.0%
CIT Group, Inc. 437,400 17,618,472
Freddie Mac 219,900 13,528,248
Instinet Group, Inc.+ 1,000,000 5,250,000
-----------------
36,396,720
-----------------
FOOD, BEVERAGE & TOBACCO--3.7%
Kraft Foods, Inc., Class A@ 684,709 22,191,419
-----------------
INSURANCE--3.0%
Assurant, Inc. 537,700 17,792,493
-----------------
MACHINERY--2.5%
Alamo Group, Inc. 797,209 15,266,552
-----------------
METALS & MINING--3.0%
POSCO Sponsored ADR 397,600 18,102,728
-----------------
PHARMACEUTICALS--3.3%
Sankyo Co., Ltd.(2) 949,800 19,696,565
-----------------
REAL ESTATE COMPANIES--5.3%
Forest City Enterprises, Inc.,
Class A 508,850 32,133,878
-----------------
<Caption>
SHARES/
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
- ------------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS--3.2%
Catellus Development Corp. 708,466 $ 19,624,508
-----------------
RETAIL--3.5%
Wal-Mart Stores, Inc. 446,400 21,043,296
-----------------
TELECOMMUNICATIONS--2.8%
ALLTEL Corp. 292,500 16,660,800
-----------------
TRANSPORTATION--3.3%
United Parcel Service, Inc.,
Class B 281,826 20,097,012
-----------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $483,062,350) 553,152,266
-----------------
REPURCHASE AGREEMENTS--8.6%
Agreement with State Street
Bank & Trust Co., bearing
interest at 1.65%, dated
04/29/05, to be repurchased
05/02/05 in the amount of
$26,651,664 and collateralized
by $22,330,000 of United
States Treasury Bonds,
bearing interest at 6.25%,
due 08/15/23 and having
an approximate value of
$27,182,108 $ 26,648,000 26,648,000
Agreement with State Street
Bank & Trust Co., bearing
interest at 1.65%, dated
04/29/05, to be repurchased
05/02/05 in the amount of
$19,411,669 and collateralized
by $19,805,000 of United
States Treasury Notes,
bearing interest at 2.00%,
due 08/31/05 and having
an approximate value of
$19,801,495 19,409,000 19,409,000
Agreement with State Street
Bank & Trust Co., bearing
interest at 1.65%, dated
04/29/05, to be repurchased
05/02/05 in the amount of
$6,136,844 and collateralized
by $6,315,000 of United
States Treasury Notes,
bearing interest at 3.50%,
due 02/15/10 and having
an approximate value of
$6,259,744 6,136,000 6,136,000
-----------------
TOTAL REPURCHASE AGREEMENTS
(cost $52,193,000) 52,193,000
-----------------
TOTAL INVESTMENTS
(cost $535,255,350)(1) 100.0% 605,345,266
Liabilities in excess of other assets (0.0) (331,060)
----------------- -----------------
NET ASSETS 100.0% $ 605,014,206
================= =================
</Table>
56
<Page>
- ----------
+ Non-income producing securities
(1) See Note 7 for cost of investments on a tax basis.
(2) Security was valued using fair value procedures at April 30, 2005. See Note
3 regarding fair value pricing procedures for foreign equity securities.
ADR--American Depository Receipt
@ The security or a portion therof represents collateral for the following open
futures contracts:
OPEN FUTURE CONTRACTS
<Table>
<Caption>
UNREALIZED
NUMBER VALUE AS OF APPRECIATION
OF CONTRACTS DESCRIPTION EXPIRATION DATE VALUE AT TRADE DATE APRIL 30, 2005 (DEPRECIATION)
- -------------------------------------------------------------------------------------------------------------------
74 Long S&P 500 Index June 2005 $ 21,304,887 $ 21,262,050 $ (42,837)
=========
</Table>
OPEN FORWARD FOREIGN CURRENCY CONTRACTS
<Table>
<Caption>
GROSS
CONTRACT IN EXCHANGE DELIVERY UNREALIZED
TO DELIVER FOR DATE DEPRECIATION
- -------------------------------------------------------------------------------
USD 11,158,652 JPY 1,178,415,000 05/31/2005 $ (110,132)
===========
</Table>
- ----------
JPY--Japanese Yen
USD--United States Dollar
See Notes to Financial Statements
57
<Page>
FOCUSED 2000 VALUE PORTFOLIO
PORTFOLIO PROFILE -- APRIL 30, 2005 -- (UNAUDITED)
INDUSTRY ALLOCATION*
<Table>
Business Services 9.5%
Insurance 8.2
Retail 6.3
Energy Services 6.0
Repurchase Agreements 5.4
U.S. Government Agencies 5.4
Transportation 4.9
Financial Services 4.2
Chemicals 4.1
Real Estate Companies 3.9
Real Estate Investment Trusts 3.5
Forest Products 3.2
Food, Beverage & Tobacco 3.0
Health Services 3.0
Internet Software 2.9
Telecommunications 2.9
Automotive 2.6
Banks 2.5
Housing & Household Durables 2.2
Electronics 1.9
Energy Sources 1.9
Broadcasting & Media 1.6
Exchange Traded Funds 1.6
Household & Personal Products 1.6
Apparel & Textile 1.5
Conglomerate 1.5
Machinery 1.5
Pharmaceuticals 1.4
Communication Equipment 1.0
Computers & Business Equipment 0.8
Leisure & Tourism 0.6
-----
100.6%
=====
</Table>
* Calculated as a percentage of net assets.
58
<Page>
FOCUSED 2000 VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 -- (UNAUDITED)
<Table>
<Caption>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 3)
- ------------------------------------------------------------------------------------------
COMMON STOCK--88.2%
APPAREL & TEXTILES--1.5%
Jones Apparel Group, Inc. 268,900 $ 8,188,005
-----------------
AUTOMOTIVE--2.6%
Cooper Tire & Rubber Co. 360,000 6,282,000
Delphi Corp. 1,140,100 3,762,330
Superior Industries
International, Inc. 200,000 4,066,000
-----------------
14,110,330
-----------------
BANKS--2.5%
Brookline Bancorp, Inc. 450,000 6,750,000
Washington Federal, Inc. 319,000 7,110,510
-----------------
13,860,510
-----------------
BROADCASTING & MEDIA--1.6%
R.H. Donnelley Corp.+ 158,100 9,003,795
-----------------
BUSINESS SERVICES--9.5%
BearingPoint, Inc.+ 1,411,300 8,735,947
Bowne & Co., Inc. 296,935 3,866,094
Clark, Inc. 442,400 6,127,240
Dycom Industries, Inc.+ 414,600 9,643,596
Jacobs Engineering Group, Inc.+ 175,000 8,524,250
Valassis Communications, Inc.+ 278,100 9,803,025
W. W. Grainger, Inc. 97,900 5,412,891
-----------------
52,113,043
-----------------
CHEMICALS--4.1%
Lubrizol Corp. 372,100 14,426,317
UAP Holding Corp.+ 575,660 8,283,747
-----------------
22,710,064
-----------------
COMMUNICATION EQUIPMENT--1.0%
Avocent Corp.+ 221,200 5,560,968
-----------------
COMPUTERS & BUSINESS EQUIPMENT--0.8%
Silicon Storage Technology, Inc.+ 1,700,000 4,454,000
-----------------
CONGLOMERATE--1.5%
Federal Signal Corp. 570,465 8,003,624
-----------------
ELECTRONICS--1.9%
Arrow Electronics, Inc.+ 432,600 10,529,484
-----------------
ENERGY SERVICES--6.0%
Alliant Energy Corp. 437,400 11,521,116
ENSCO International, Inc. 297,400 9,695,240
Patterson-UTI Energy, Inc. 500,000 11,985,000
-----------------
33,201,356
-----------------
ENERGY SOURCES--1.9%
Cimarex Energy Co.+ 300,000 10,650,000
-----------------
FINANCIAL SERVICES--4.2%
A.G. Edwards, Inc. 200,400 7,957,884
Apollo Investment Corp. 558,500 8,857,810
CIT Group, Inc. 151,000 6,082,280
-----------------
22,897,974
-----------------
FOOD, BEVERAGE & TOBACCO--3.0%
Performance Food Group Co.+ 317,400 8,534,886
Smithfield Foods, Inc.+ 261,100 7,900,886
-----------------
16,435,772
-----------------
FOREST PRODUCTS--3.2%
Glatfelter 460,000 $ 5,487,800
Rayonier, Inc. 190,000 9,549,400
Sealed Air Corp.+ 49,300 2,388,092
-----------------
17,425,292
-----------------
HEALTH SERVICES--3.0%
Apria Healthcare Group, Inc.+ 241,800 7,278,180
Tenet Healthcare Corp.+ 772,100 9,242,037
-----------------
16,520,217
-----------------
HOUSEHOLD & PERSONAL PRODUCTS--1.6%
Nu Skin Enterprises, Inc.,
Class A 407,050 8,955,100
-----------------
HOUSING & HOUSEHOLD DURABLES--2.2%
Beazer Homes USA, Inc. 268,800 12,257,280
-----------------
INSURANCE--8.2%
Allmerica Financial Corp.+ 220,200 7,392,114
Assured Guaranty, Ltd. 556,205 10,601,267
Old Republic International Corp. 350,000 8,260,000
Radian Group, Inc. 154,700 6,873,321
UnumProvident Corp. 704,500 11,779,240
-----------------
44,905,942
-----------------
INTERNET SOFTWARE--2.9%
Verity, Inc.+ 640,000 5,248,000
GTECH Holdings Corp. 432,500 10,583,275
-----------------
15,831,275
-----------------
LEISURE & TOURISM--0.6%
AirTran Holdings, Inc.+ 391,900 3,252,770
-----------------
MACHINERY--1.5%
Global Power Equipment
Group, Inc.+ 900,000 8,154,000
-----------------
PHARMACEUTICALS--1.4%
Perrigo Co. 430,000 7,877,600
-----------------
REAL ESTATE COMPANIES--3.9%
MI Developments, Inc., Class A 282,900 8,339,892
St. Joe Co. 187,700 13,062,043
-----------------
21,401,935
-----------------
REAL ESTATE INVESTMENT TRUSTS--3.5%
American Financial Realty Trust 701,900 10,760,127
Home Properties, Inc. 200,000 8,370,000
-----------------
19,130,127
-----------------
RETAIL--6.3%
Big Lots, Inc.+ 605,000 6,158,900
BJ's Wholesale Club, Inc.+ 343,500 9,154,275
Finish Line, Inc., Class A 532,700 9,599,254
OfficeMax, Inc. 303,100 9,844,688
-----------------
34,757,117
-----------------
TELECOMMUNICATIONS--2.9%
IDT Corp., Class B+ 450,000 6,327,000
Scientific-Atlanta, Inc. 304,900 9,323,842
-----------------
15,650,842
-----------------
</Table>
59
<Page>
<Table>
<Caption>
SHARES/
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
- ------------------------------------------------------------------------------------------
COMMON STOCK (continued)
TRANSPORTATION--4.9%
CSX Corp. 421,400 $ 16,910,782
Laidlaw International, Inc.+ 450,000 10,075,500
-----------------
26,986,282
-----------------
TOTAL COMMON STOCK
(cost $462,575,002) 484,824,704
-----------------
EXCHANGE TRADED FUNDS--1.6%
FINANCIAL SERVICES--1.6%
iShares Russell 2000 Value
Index Fund
(cost $9,526,030) 50,200 8,767,430
-----------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $472,101,032) 493,592,134
-----------------
SHORT-TERM INVESTMENT SECURITIES--5.4%
U.S. GOVERNMENT AGENCIES--5.4%
Federal Home Loan Bank
Consolidated Disc. Notes
2.65% due 05/02/05 $ 21,398,425 21,398,421
Federal National Mtg. Assoc.
Disc. Notes
2.65% due 05/02/05 8,299,343 8,299,343
-----------------
TOTAL SHORT-TERM INVESTMENT SECURITIES
(cost $29,697,768) 29,697,764
-----------------
<Caption>
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
- ------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--5.4%
State Street Bank & Trust Co.
Joint Repurchase Agreement(2) $ 8,540,000 $ 8,540,000
UBS Warburg, LLC Joint
Repurchase Agreement(2) 15,000,000 15,000,000
Agreement with State Street
Bank & Trust Co., bearing
interest at 2.60%, dated
04/29/05, to be repurchased
05/02/05 in the amount of
$6,186,340 and collateralized
by $6,270,000 of United States
Treasury Notes, bearing interest
at 3.75%, due 03/31/07 and
having an approximate value of
$6,309,188 6,185,000 6,185,000
-----------------
TOTAL REPURCHASE AGREEMENTS
(cost $29,725,000) 29,725,000
-----------------
TOTAL INVESTMENTS
(cost $531,523,800)(1) 100.6% 553,014,898
Liabilities in excess of other assets (0.6) (3,387,966)
----------------- -----------------
NET ASSETS 100.0% $ 549,626,932
================= =================
</Table>
- ----------
+ Non-income producing securities
(1) See note 7 for cost of investments on a tax basis
(2) See note 3 for details of Joint Repurchase Agreement
See Notes to Financial Statements
60
<Page>
FOCUSED GROWTH AND INCOME PORTFOLIO
PORTFOLIO PROFILE -- APRIL 30, 2005 -- (UNAUDITED)
INDUSTRY ALLOCATION*
<Table>
Pharmaceuticals 18.9%
Health Services 9.3
Household & Personal Products 8.6
Conglomerate 7.2
Financial Services 6.4
Banks 6.1
Energy Sources 5.8
Housing & Household Durables 4.5
Telecommunications 4.4
Communication Equipment 4.1
Medical Products 4.1
Repurchase Agreements 3.8
Restaurants 3.7
Food, Beverage & Tobacco 3.3
Leisure & Tourism 3.2
Aerospace & Military Technology 2.8
Broadcasting & Media 2.7
Computer & Business Equiptment 2.5
Transportation 1.7
-----
103.1%
=====
</Table>
* Calculated as a percentage of net assets
61
<Page>
FOCUSED GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 -- (UNAUDITED)
<Table>
<Caption>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 3)
- ------------------------------------------------------------------------------------------
COMMON STOCK--96.4%
AEROSPACE & MILITARY TECHNOLOGY--2.8%
United Technologies Corp. 100,000 $ 10,172,000
-----------------
BANKS--6.1%
Bank of America Corp. 250,000 11,260,000
Lloyds TSB Group, PLC(2) 1,288,600 11,066,265
-----------------
22,326,265
-----------------
BROADCASTING & MEDIA--2.7%
Time Warner, Inc.+ 600,000 10,086,000
-----------------
COMMUNICATION EQUIPMENT--4.1%
QUALCOMM, Inc. 432,129 15,076,981
-----------------
COMPUTERS & BUSINESS EQUIPMENT--2.5%
International Business
Machines Corp. 120,000 9,165,600
-----------------
CONGLOMERATE--7.2%
General Electric Co. 734,693 26,595,886
-----------------
ENERGY SOURCES--5.8%
ChevronTexaco Corp. 180,000 9,360,000
Petroleo Brasileiro SA ADR 283,000 11,866,190
-----------------
21,226,190
-----------------
FINANCIAL SERVICES--6.4%
Citigroup, Inc. 504,700 23,700,712
-----------------
FOOD, BEVERAGE & TOBACCO--3.3%
Diageo, PLC Sponsored ADR 200,000 11,950,000
-----------------
HEALTH SERVICES--9.3%
Cardinal Health, Inc. 205,800 11,436,306
UnitedHealth Group, Inc. 242,240 22,894,102
-----------------
34,330,408
-----------------
HOUSEHOLD & PERSONAL PRODUCTS--8.6%
Colgate-Palmolive Co. 242,200 12,059,138
Kimberly-Clark Corp. 170,000 10,616,500
Procter & Gamble Co. 166,840 9,034,386
-----------------
31,710,024
-----------------
HOUSING & HOUSEHOLD DURABLES--4.5%
Lennar Corp., Class A 323,984 16,675,456
-----------------
LEISURE & TOURISM--3.2%
Southwest Airlines Co. 778,000 11,576,640
-----------------
MEDICAL PRODUCTS--4.1%
Zimmer Holdings, Inc.+ 185,173 15,076,786
-----------------
PHARMACEUTICALS--18.9%
Genentech, Inc.+ 325,174 23,067,844
Pfizer, Inc. 1,262,006 34,288,704
Sanofi-Aventis(2) 138,300 12,246,541
-----------------
69,603,089
-----------------
RESTAURANTS--3.7%
Starbucks Corp.+ 275,000 13,618,000
-----------------
TELECOMMUNICATIONS--1.5%
NII Holdings, Inc.+ 110,000 5,507,700
-----------------
TRANSPORTATION--1.7%
FedEx Corp. 74,875 6,360,631
-----------------
TOTAL COMMON STOCK
(cost $320,443,524) 354,758,368
-----------------
<Caption>
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
- ------------------------------------------------------------------------------------------
CONVERTIBLE BONDS--2.9%
TELECOMMUNICATIONS--2.9%
Level 3 Communications, Inc.
6.00% due 03/15/10
(cost $14,331,831) $ 23,425,000 $ 10,629,094
-----------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $334,775,355) 365,387,462
-----------------
REPURCHASE AGREEMENTS--3.8%
Agreement with State Street
Bank & Trust Co., bearing
interest at 1.25%, dated
04/29/05, to be repurchased
05/02/05 in the amount of
$13,571,414 and collateralized
by $12,145,000 of United States
Treasury Bonds, bearing
interest at 5.50%, due 08/15/28
and having an approximate
value of $13,841,474 13,570,000 13,570,000
Agreement with State Street
Bank & Trust Co., bearing
interest at 1.25%, dated
04/29/05, to be repurchased
05/02/05 in the amount of
$646,067 and collateralized
by $655,000 of United States
Treasury Notes, bearing
interest at 3.75%, due 03/31/07
and having an approximate
value of $659,094 646,000 646,000
-----------------
TOTAL REPURCHASE AGREEMENTS
(cost $14,216,000) 14,216,000
-----------------
TOTAL INVESTMENTS
(cost $348,971,355)(1) 103.1% 379,603,462
Liabilities in excess of other assets (3.1) (11,549,416)
----------------- -----------------
NET ASSETS 100.0% $ 368,054,046
================= =================
</Table>
- ----------
+ Non-income producing securities
(1) See Note 7 for cost of investments on a tax basis.
(2) Security was valued using fair value procedures at April 30, 2005.
See Note 3 regarding fair value pricing procedures for foreign equity
securities.
ADR--American Depository Receipt
See Notes to Financial Statements
62
<Page>
FOCUSED INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO PROFILE -- APRIL 30, 2005 -- (UNAUDITED)
INDUSTRY ALLOCATION*
<Table>
Pharmaceuticals 17.8%
Business Services 12.3
Banks 11.8
Leisure & Tourism 8.8
Food, Beverage & Tobacco 7.5
Metals & Mining 6.3
Broadcasting & Media 5.9
Machinery 5.6
Automotive 4.4
Real Estate Companies 3.2
Financial Services 3.2
Retail 3.0
Electronics 2.9
Repurchase Agreements 2.9
Telecommunications 2.8
Energy Sources 1.5
-----
99.9%
=====
</Table>
COUNTRY ALLOCATION*
<Table>
United Kingdom 20.6%
Japan 14.1
France 9.6
Switzerland 9.3
Germany 6.9
Mexico 6.1
Ireland 4.0
Australia 3.5
Sweden 3.3
Hong Kong 3.2
Singapore 3.2
Finland 3.1
Luxembourg 3.1
United States 3.0
South Korea 2.9
Thailand 2.5
South Africa 1.5
-----
99.9%
=====
</Table>
* Calculated as a percentage of net assets.
63
<Page>
FOCUSED INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO PROFILE -- APRIL 30, 2005 -- (UNAUDITED)
<Table>
<Caption>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 3)
- ------------------------------------------------------------------------------------------
COMMON STOCK--96.9%
AUSTRALIA--3.5%
Australia & New Zealand Banking
Group, Ltd.(2) 482,800 $ 8,166,158
-----------------
FINLAND--3.1%
Metso OYJ(2) 402,500 7,288,929
-----------------
FRANCE--9.6%
Suez SA 271,100 7,405,833
Vinci SA(2) 57,625 8,657,863
Vivendi Universal SA(2) 208,900 6,206,281
-----------------
22,269,977
-----------------
GERMANY--6.9%
Bayerische Motoren Werke
(BMW)(2) 243,800 10,327,967
Pfeiffer Vacuum
Technology AG(2) 122,400 5,832,660
-----------------
16,160,627
-----------------
HONG KONG--3.2%
Shangri-La Asia, Ltd.(2) 4,856,000 7,416,863
-----------------
IRELAND--4.0%
Bank of Ireland(2) 618,500 9,365,508
-----------------
JAPAN--14.1%
Mitsui Mining & Smelting Co.,
Ltd. 1,766,000 7,557,985
Takeda Pharmaceutical Co.,
Ltd.(2) 231,200 11,229,589
Takefuji Corp.+ 114,510 7,190,097
YAMADA-DENKI Co., Ltd.(2) 144,100 6,901,006
-----------------
32,878,677
-----------------
LUXEMBOURG--3.1%
Tenaris SA ADR 128,200 7,326,630
-----------------
MEXICO--6.1%
America Movil SA de CV ADR 131,739 6,540,841
Grupo Televisa SA de CV
Sponsored ADR+ 134,800 7,573,064
-----------------
14,113,905
-----------------
SINGAPORE--3.2%
Capitaland, Ltd.(2) 4,791,000 7,475,610
-----------------
SOUTH AFRICA--1.5%
Sasol, Ltd.(2) 149,311 3,495,439
-----------------
SOUTH KOREA--2.9%
Samsung Electronics Co., Ltd.
GDR* 29,900 6,742,450
-----------------
SWEDEN--3.3%
Swedish Match AB 648,200 7,649,280
-----------------
SWITZERLAND--9.3%
Roche Holding AG(2) 152,380 18,434,870
UBS AG(2) 40,748 3,267,078
-----------------
21,701,948
-----------------
THAILAND--2.5%
Siam Cement, PCL 969,300 5,857,296
-----------------
UNITED KINGDOM--20.6%
Diageo, PLC(2) 653,800 9,679,116
Enodis, PLC+(2) 3,601,300 6,612,014
Enterprise Inns, PLC(2) 581,158 8,092,803
<Caption>
SHARES/
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
- ------------------------------------------------------------------------------------------
GlaxoSmithKline, PLC(2) 470,100 $ 11,832,613
InterContinental Hotels Group,
PLC(2) 425,195 5,052,281
Royal Bank of Scotland Group,
PLC 221,700 6,688,953
-----------------
47,957,780
-----------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $204,387,736) 225,867,077
-----------------
SHORT-TERM INVESTMENT SECURITIES--0.1%
Verizon Network Funding Corp.
2.92% due 05/02/05
(cost $320,974) $ 321,000 320,974
-----------------
REPURCHASE AGREEMENTS--2.9%
Agreement with State Street
Bank & Trust Co., bearing
interest at 1.25%, dated
04/29/05, to be repurchased
05/02/05 in the amount of
$4,571,476 and collateralized
by $4,095,000 of United States
Treasury Bonds, bearing
interest at 5.50%, due 08/15/28
and having an approximate
value of $4,667,010 4,571,000 4,571,000
Agreement with State Street
Bank & Trust Co., bearing
interest at 1.25%, dated
04/29/05, to be repurchased
05/02/05 in the amount of
$2,122,221 and collateralized
by $1,755,000 of United States
Treasury Bonds, bearing
interest at 6.13%, due 08/15/29
and having an approximate
value of $2,168,536 2,122,000 2,122,000
-----------------
TOTAL REPURCHASE AGREEMENTS
(cost $6,693,000) 6,693,000
-----------------
TOTAL INVESTMENTS
(cost $211,401,710)(1) 99.9% 232,881,051
Other assets less liabilities 0.1 102,729
----------------- -----------------
NET ASSETS 100.0% $ 232,983,780
================= =================
</Table>
- ----------
+ Non-income producing securities
* Securities exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be sold in transactions exempt from registration,
normally to qualified institutional buyers. The Portfolio has no rights to
demand registration of these securities. At April 30, 2005, the aggregate
value of these securities was $6,742,450 representing 2.9% of net assets.
Unless otherwise indicated, these securities are not considered to be illiquid
(1) See Note 7 for cost of investments on a tax basis.
(2) Security was valued using fair value procedures at April 30, 2005. See Note
3 regarding fair value pricing procedures for foreign equity securities.
ADR--American Depository Receipt
GDR--Global Depository Receipt
64
<Page>
OPEN FORWARD FOREIGN CURRENCY CONTRACTS
<Table>
<Caption>
GROSS
CONTRACT IN EXCHANGE DELIVERY UNREALIZED
TO DELIVER FOR DATE APPRECIATION
- ------------------------------------------------------------------------
USD 2,668,120 GBP 1,400,000 12/07/2005 $ 19,563
USD 2,101,110 GBP 1,100,000 12/09/2005 20,194
-------------
39,757
-------------
</Table>
<Table>
<Caption>
GROSS
CONTRACT IN EXCHANGE DELIVERY UNREALIZED
TO DELIVER FOR DATE (DEPRECIATION)
- -------------------------------------------------------------------------
USD 5,406,000 GBP 3,000,000 07/12/2005 $ (296,248)
USD 5,252,770 GBP 2,900,000 07/14/2005 (258,959)
USD 2,581,250 GBP 1,400,000 11/28/2005 (67,842)
--------------
(623,049)
--------------
Net Unrealized Appreciation (Depreciation) $ (583,292)
==============
</Table>
- ----------
GBP--Pound Sterling
USD--United States Dollar
See Notes to Financial Statements
65
<Page>
FOCUSED TECHNOLOGY PORTFOLIO
PORTFOLIO PROFILE -- APRIL 30, 2005 -- (UNAUDITED)
INDUSTRY ALLOCATION*
<Table>
Internet Content 23.3%
Computer Software 19.2
Electronics 13.0
Telecommunications 13.0
Computers & Business Equipment 9.2
Internet Software 6.2
Financial Services 4.5
Broadcasting & Media 4.3
Business Services 4.1
Repurchase Agreements 3.7
-----
100.5%
=====
</Table>
* Calculated as a percentage of net assets.
66
<Page>
FOCUSED TECHNOLOGY PORTFOLIO
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 -- (UNAUDITED)
<Table>
<Caption>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 3)
- --------------------------------------------------------------------------------------------
COMMON STOCK--96.8%
BROADCASTING & MEDIA--4.3%
Getty Images, Inc.+ 50,000 $ 3,577,500
-----------------
BUSINESS SERVICES--4.1%
Monster Worldwide, Inc.+ 150,069 3,453,088
-----------------
COMPUTERS & BUSINESS EQUIPMENT--9.2%
Dell, Inc.+ 178,700 6,224,121
Hewlett-Packard Co. 72,540 1,484,894
-----------------
7,709,015
-----------------
COMPUTER SOFTWARE--19.2%
EMC Corp.+ 213,600 2,802,432
Microsoft Corp. 97,500 2,466,750
NCR Corp.+ 107,200 3,537,600
Oracle Corp.+ 202,000 2,335,120
Red Hat, Inc.+ 451,610 4,854,807
-----------------
15,996,709
-----------------
ELECTRONICS--13.0%
Analog Devices, Inc. 42,500 1,449,675
Flextronics International, Ltd.+ 290,400 3,237,960
Intel Corp. 68,300 1,606,416
Marvell Technology Group, Ltd.+ 70,120 2,347,618
Texas Instruments, Inc. 88,200 2,201,472
-----------------
10,843,141
-----------------
FINANCIAL SERVICES--4.5%
E*TRADE Financial Corp.+ 337,800 3,752,958
-----------------
INTERNET CONTENT--23.3%
Google, Inc., Class A+ 40,430 8,894,600
HomeStore, Inc.+ 961,800 1,885,128
InfoSpace, Inc.+ 39,200 1,214,808
Yahoo!, Inc.+ 214,310 7,395,838
-----------------
19,390,374
-----------------
INTERNET SOFTWARE--6.2%
Symantec Corp.+ 94,000 1,765,320
VeriSign, Inc.+ 127,600 3,376,296
-----------------
5,141,616
-----------------
TELECOMMUNICATIONS--13.0%
Amdocs, Ltd.+ 112,500 3,004,875
American Tower Corp., Class A+ 166,000 2,860,180
Comverse Technology, Inc.+ 102,100 2,326,859
Motorola, Inc. 172,300 2,643,082
-----------------
10,834,996
-----------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $77,350,963) 80,699,397
-----------------
<Caption>
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
- --------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--3.7%
State Street Bank & Trust Co.
Joint Repurchase Agreement(1) $ 202,000 $ 202,000
Agreement with State Street
Bank & Trust Co., bearing
interest at 1.65%, dated
04/29/05, to be repurchased
05/02/05 in the amount of
$1,806,248 and collateralized
by $1,865,000 of United States
Treasury Notes, bearing
interest at 2.50%, due 09/30/06
and having an approximate
value of $1,842,467 1,806,000 1,806,000
Agreement with State Street
Bank & Trust Co., bearing
interest at 1.65%, dated
04/29/05, to be repurchased
05/02/05 in the amount of
$1,121,154 and collateralized
by $1,140,000 of United States
Treasury Notes, bearing
interest at 3.75%, due 03/31/07
and having an approximate
value of $1,147,125 1,121,000 1,121,000
-----------------
TOTAL REPURCHASE AGREEMENTS
(cost $3,129,000) 3,129,000
-----------------
TOTAL INVESTMENTS
(cost $80,479,963)(2) 100.5% 83,828,397
Liabilities in excess of other assets (0.5) (449,187)
----------------- -----------------
NET ASSETS 100.0% $ 83,379,210
================= =================
</Table>
- ----------
+ Non-income producing securities
(1) See Note 3 for details of Joint Repurchase Agreement
(2) See Note 7 for cost of investments on a tax basis
See Notes to Financial Statements
67
<Page>
FOCUSED DIVIDEND STRATEGY PORTFOLIO
PORTFOLIO PROFILE -- APRIL 30, 2005 -- (UNAUDITED)
INDUSTRY ALLOCATION*
<Table>
Food Beverage & Tobacco 27.5%
Pharmaceuticals 14.3
Business Services 12.7
Household & Personal Products 10.6
Chemicals 10.1
Financial Services 6.5
Telecommunications 6.2
Automotive 5.3
Electronics 3.1
Retail Stores 2.9
Repurchase Agreements 0.5
----
99.7%
====
</Table>
* Calculated as a percentage of net assets.
68
<Page>
FOCUSED DIVIDEND STRATEGY PORTFOLIO
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 -- (UNAUDITED)
<Table>
<Caption>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 3)
- --------------------------------------------------------------------------------------------
COMMON STOCK--99.2%
AUTOMOTIVE--5.3%
General Motors Corp. 195,806 $ 5,224,104
Johnson Controls, Inc. 123,223 6,761,246
-----------------
11,985,350
-----------------
BUSINESS SERVICES--12.7%
Avery Dennison Corp. 129,535 6,781,157
Bemis Co., Inc. 268,358 7,395,947
Genuine Parts Co. 178,517 7,658,379
Paychex, Inc. 233,261 7,137,787
-----------------
28,973,270
-----------------
CHEMICALS--10.1%
du Pont (E.I.) de Nemours & Co. 160,683 7,569,776
Rohm and Haas Co. 177,192 7,736,203
Sherwin-Williams Co. 175,253 7,811,026
-----------------
23,117,005
-----------------
ELECTRONICS--3.1%
Emerson Electric Co. 111,994 7,018,664
-----------------
FINANCIAL SERVICES--6.5%
Citigroup, Inc. 163,761 7,690,216
J.P. Morgan Chase & Co. 201,267 7,142,966
-----------------
14,833,182
-----------------
FOOD, BEVERAGE & TOBACCO--27.5%
Altria Group, Inc. 128,668 8,362,133
Anheuser-Busch Cos., Inc. 154,620 7,247,040
Brown-Forman Corp., Class B 161,012 8,936,166
Coca-Cola Co. 188,850 8,203,644
ConAgra Foods, Inc. 267,536 7,156,588
McCormick & Co., Inc. 204,087 7,059,369
PepsiCo, Inc. 150,536 8,375,823
Sysco Corp. 207,588 7,182,545
-----------------
62,523,308
-----------------
HOUSEHOLD & PERSONAL PRODUCTS--10.6%
Avon Products, Inc. 202,459 8,114,557
Clorox Co. 132,952 8,415,861
Colgate-Palmolive Co. 153,443 7,639,927
-----------------
24,170,345
-----------------
PHARMACEUTICALS--14.3%
Abbott Laboratories 167,634 8,240,888
Bristol-Myers Squibb Co. 306,650 7,972,900
Merck & Co., Inc. 244,119 8,275,634
Pfizer, Inc. 291,212 7,912,230
-----------------
32,401,652
-----------------
RETAIL STORES--2.9%
Albertson's, Inc. 330,348 6,537,587
-----------------
TELECOMMUNICATIONS--6.2%
SBC Communications, Inc. 305,340 7,267,092
Verizon Communications, Inc. 192,875 6,904,925
-----------------
14,172,017
-----------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $216,585,835) 225,732,380
-----------------
<Caption>
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
- --------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--0.5%
State Street Bank & Trust Co.
Joint Repurchase Agreement(2)
(cost $1,142,000) $ 1,142,000 $ 1,142,000
-----------------
TOTAL INVESTMENTS
(cost $217,727,835)(1) 99.7% 226,874,380
Other assets less liabilities 0.3 776,886
----------------- -----------------
NET ASSETS 100.0% $ 227,651,266
================= =================
</Table>
- ----------
(1) See Note 7 for cost of investments on a tax basis
(2) See Note 3 for details of Joint Repurchase Agreement
See Notes to Financial Statements
69
<Page>
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 -- (UNAUDITED)
NOTE 1. ORGANIZATION
SunAmerica Focused Series, Inc., formerly SunAmerica Style Select, Inc.
(the "Fund"), is an open-end management investment company organized as a
Maryland corporation on July 3, 1996. The Fund is managed by AIG SunAmerica
Asset Management Corp. (the "Adviser" or "SAAMCo"), an indirect wholly-owned
subsidiary of American International Group, Inc. ("AIG"). The Fund issues
separate series of shares (each, a "Portfolio"). The assets of each Portfolio
are normally allocated among at least three investment advisers (each, an
"Adviser"), each of which will be independently responsible for advising its
respective portion of the Portfolio's assets.
Effective February 23, 2004, the Focused Dividend Strategy Portfolio was added
to the Fund. The investment objective for each of the Portfolios is as follows:
FOCUSED EQUITY STRATEGY PORTFOLIO seeks growth of capital through allocation of
assets among a combination of funds within SunAmerica Focused Series, Inc. and
SunAmerica Income Funds, investing in equity and fixed income securities. Under
normal market conditions this Portfolio invests 80% - 100% in domestic equity
mutual funds, up to 20% in foreign equity mutual funds and up to 5% in bond
funds.
FOCUSED MULTI-ASSET STRATEGY PORTFOLIO seeks growth of capital through
allocation of assets among a combination of funds within SunAmerica Focused
Series, Inc. and SunAmerica Income Funds, investing in equity and fixed income
securities. Under normal market conditions this Portfolio invests 70% in
domestic equity mutual funds, 10% in foreign equity mutual funds and 20% in bond
funds.
FOCUSED BALANCED STRATEGY PORTFOLIO seeks growth of capital and conservation of
principal through allocation of assets among a combination of funds within
SunAmerica Focused Series, Inc. and SunAmerica Income Funds, investing in equity
and fixed income securities. Under normal market conditions this Portfolio
invests 35% - 75% in domestic equity mutual funds, up to 15% in foreign equity
mutual funds and 25% - 50% in bond funds.
FOCUSED FIXED INCOME AND EQUITY STRATEGY PORTFOLIO seeks current income with
growth of capital as a secondary objective through allocation of assets among a
combination of funds within SunAmerica Focused Series, Inc. and SunAmerica
Income Funds, investing in equity and fixed income securities. Under normal
market conditions this Portfolio invests 15% - 50% in domestic equity mutual
funds, up to 10% in foreign equity mutual funds and 50% - 80% in bond funds.
FOCUSED FIXED INCOME STRATEGY PORTFOLIO seeks current income through allocation
of assets among a combination of funds within SunAmerica Focused Series, Inc.
and SunAmerica Income Funds, investing in equity and fixed income securities.
Under normal market conditions this Portfolio invests up to 20% in domestic
equity mutual funds, up to 5% in foreign equity mutual funds and 80% - 100% in
bond funds.
FOCUSED LARGE-CAP GROWTH PORTFOLIO seeks long-term growth of capital through
active trading of equity securities selected on the basis of growth criteria. At
least 80% of the Portfolio's net assets plus any borrowing for investment
purposes will be invested in large-cap companies.
FOCUSED MULTI-CAP GROWTH PORTFOLIO seeks long-term growth of capital through
active trading of equity securities selected on the basis of growth criteria,
without regard to market capitalization.
FOCUSED 2000 GROWTH PORTFOLIO seeks long-term growth of capital through active
trading of equity securities selected on the basis of growth criteria, issued by
companies with characteristics similar to those contained in the Russell 2000
Growth Index.
FOCUSED LARGE-CAP VALUE PORTFOLIO seeks long-term growth of capital through
active trading of equity securities selected on the basis of value criteria. At
least 80% of the Portfolio's net assets plus any borrowing for investment
purposes will be invested in large-cap companies.
70
<Page>
FOCUSED MULTI-CAP VALUE PORTFOLIO seeks long-term growth of capital through
active trading of equity securities selected on the basis of value criteria,
without regard to market capitalization.
FOCUSED 2000 VALUE PORTFOLIO seeks long-term growth of capital through active
trading of equity securities selected on the basis of value criteria, issued by
companies with characteristics similar to those contained in the Russell 2000
Value Index.
FOCUSED GROWTH AND INCOME PORTFOLIO seeks long-term growth of capital and
current income through active trading of equity securities selected to achieve a
blend of growth companies, value companies and companies that the Advisers
believe have elements of growth and value, issued by large-cap companies,
including those that offer the potential for a reasonable level of current
income. Each Adviser may emphasize either a growth orientation or a value
orientation at any particular time.
FOCUSED INTERNATIONAL EQUITY PORTFOLIO seeks long-term growth of capital through
active trading of equity securities and other securities with equity
characteristics of non-U.S. issuers located in countries throughout the world
and selected without regard to market capitalization at the time of purchase. At
least 80% of the Portfolio's net assets plus any borrowing for investment
purposes will be invested in equity securities.
FOCUSED TECHNOLOGY PORTFOLIO seeks long-term growth of capital through active
trading of equity securities of companies that demonstrate the potential for
long-term growth of capital and that the Advisers believe will benefit
significantly from technological advances or improvements, without regard to
market capitalization. At least 80% of the Portfolio's net assets plus any
borrowing for investment purposes will be invested in such securities.
FOCUSED DIVIDEND STRATEGY PORTFOLIO seeks total return (including capital
appreciation and current income) by employing a "buy and hold" strategy with
thirty high dividend yielding equity securities selected annually from the Dow
Jones Industrial Average and the broader market.
THE ASSET ALLOCATION STRATEGY PORTFOLIOS: FOCUSED EQUITY STRATEGY, FOCUSED
MULTI-ASSET STRATEGY, FOCUSED BALANCED STRATEGY, FOCUSED FIXED INCOME AND EQUITY
STRATEGY, AND FOCUSED FIXED INCOME STRATEGY ("STRATEGY PORTFOLIOS") invest in
various AIG SunAmerica Mutual Funds, some of which are not presented in this
report. Additional information on the underlying funds is available at our
website, www.sunamericafunds.com.
CLASSES OF SHARES: Each Portfolio offers multiple classes of shares. The classes
within each Portfolio are presented in the Statement of Assets and Liabilities.
The cost structure for each class is as follows:
Class A shares-- Offered at net asset value per share plus an initial sales
charge. Any purchases of Class A shares in excess of
$1,000,000 will be subject to a contingent deferred sales
charge on redemptions made within two years of purchase. With
respect to Class A shares of the Focused International Equity
Portfolio, a redemption fee of 2% will be assessed on the
proceeds of any redemption of shares that were purchased
within ninety (90) days prior to the date of such redemption.
An exchange fee of 2% will be assessed on the amount of any
exchange of Class A shares of the Focused International Equity
Portfolio that were purchased within ninety (90) days prior to
the date of such exchange.
Class B shares-- Offered at net asset value per share without an initial sales
charge, although a declining contingent deferred sales charge
may be imposed on redemptions made within six years of
purchase. Class B shares will convert automatically to Class A
shares approximately eight years after purchase and at such
time will be subject to the lower distribution fee applicable
to Class A shares.
Class C shares-- Offered at net asset value per share without an initial sales
charge and may be subject to a contingent deferred sales
charge on redemptions made within 12 months of purchase.
Effective February 23, 2004, Class II shares were redesignated
as Class C shares.
Class I shares-- Offered at net asset value per share exclusively for sale to
certain institutions.
Class X shares-- Offered at net asset value per share exclusively to certain
group plans.
Class Z shares-- Offered at net asset value per share exclusively for sale to
SAAMCo affiliated companies' retirement plans.
71
<Page>
As of February 23, 2004, Class I shares of the Multi-Cap Value Fund are no
longer being offered for sale.
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions. Class A, Class B and Class C shares each make
distribution and account maintenance and service fee payments under the
distribution plans pursuant to Rule 12b-1 under the Investment Company Act of
1940 (the "Act"), except that Class B and Class C shares are subject to higher
distribution fee rates. There are no distribution payments applicable to Class I
and no distribution or service fee payments applicable to Class X and Class Z.
Only Class B shares and Class C shares of the Strategy Portfolios make
distribution fee payments.
INDEMNIFICATION: Under the Fund's organizational documents, its officers and
directors are indemnified against certain liability arising out of the
performance of their duties to the Fund. In addition, in the normal course of
business the Fund enters into contracts that contain a variety of
representations and warranties, which provide general indemnification. The
Fund's maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Fund that have not yet
occurred. However, the Fund expects the risk of loss to be remote.
NOTE 2. FUND MERGERS
Pursuant to a plan of reorganization approved by the shareholders of the
SunAmerica Strategic Investment Series, Inc. SunAmerica Aggressive Growth
LifeStage Fund, SunAmerica Moderate Growth LifeStage Fund, SunAmerica
Conservative Growth LifeStage Fund and SunAmerica Equity Funds Focused Dividend
Strategy Portfolio (referred to herein as the "Prior Focused Dividend Strategy
Portfolio") on January 30, 2004, all the assets and liabilities of the
determined SunAmerica Strategic Investment Series, Inc. and SunAmerica Equity
Funds were transferred in a taxfree exchange to a determined SunAmerica Focused
Series, Inc. Portfolio. Except for the Focused Dividend Strategy Portfolio, the
SunAmerica Focused Portfolios are the surviving entities in conjunction with the
reorganizations. The Focused Dividend Strategy Portfolio adopted the prior
financial and performance record of the prior Focused Dividend Strategy
Portfolio. The details of the reorganizations, which were consummated on
February 23, 2004, are set forth below.
The Focused Equity Strategy Portfolio acquired all of the assets and liabilities
of the SunAmerica Aggressive Growth LifeStage Fund. Class A, Class B, Class C
and Class I shares of the SunAmerica Aggressive Growth LifeStage Fund were
exchanged tax free for Class A, Class B, Class C and Class I shares of Focused
Equity Strategy Portfolio, respectively. The Focused Balanced Strategy Portfolio
acquired all of the assets and liabilities of the SunAmerica Moderate Growth
LifeStage Fund and the SunAmerica Conservative Growth LifeStage Fund. Class A,
Class B, Class C and Class I shares of the SunAmerica Moderate Growth LifeStage
Fund and SunAmerica Conservative Growth Lifestage Fund were exchanged tax free
for Class A, Class B, Class C and Class I shares of Focused Balanced Strategy
Portfolio, respectively.
Net assets and unrealized appreciation (depreciation) as of the merger date were
as follows:
<Table>
Net assets of Focused Equity Strategy Portfolio prior to merger $ 354,084,991
Net assets of SunAmerica Aggressive Growth LifeStage Fund prior to merger $ 26,230,199
--------------
Aggregate net assets of Focused Equity Strategy Portfolio following acquisition $ 380,315,190
--------------
Unrealized appreciation (depreciation) in SunAmerica Aggressive Growth LifeStage Fund --
Net assets of Focused Balanced Strategy Portfolio prior to merger $ 307,179,095
Net assets of SunAmerica Moderate Growth LifeStage Fund prior to merger $ 40,081,061
Net assets of SunAmerica Conservative Growth LifeStage Fund prior to merger $ 24,946,412
--------------
Aggregate net assets of Focused Balanced Strategy Portfolio following acquisition $ 372,206,568
--------------
Unrealized appreciation (depreciation)in SunAmerica Moderate Growth LifeStage Fund --
Unrealized appreciation (depreciation)in SunAmerica Conservative Growth LifeStage Fund $ 188,747
</Table>
Effective February 23, 2004, the SunAmerica Equity Funds Focused Dividend
Strategy Portfolio was reorganized into SunAmerica Focused Series, Inc. Focused
Dividend Strategy Portfolio, a newly created Portfolio in the SunAmerica Focused
Series, Inc. The Focused Dividend Strategy Portfolio changed its fiscal year end
from September 30 to October 31.
72
<Page>
NOTE 3. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from these estimates. The following is a
summary of the significant accounting policies followed by the Portfolios in the
preparation of their financial statements:
SECURITY VALUATIONS: Stocks are generally valued based upon closing sales prices
reported on recognized securities exchanges or, for listed securities having no
sales reported and for unlisted securities, upon last reported bid price.
Securities listed on the NASDAQ Stock Market are valued using the NASDAQ
Official Closing Price ("NOCP"). Generally, the NOCP will be the last sale price
unless the reported trade for the securities is outside the range of the bid/ask
price. In such cases, the NOCP will be normalized to the nearer of the bid or
ask price. Nonconvertible bonds, debentures, other long-term debt securities,
and short-term securities with original or remaining maturities in excess of 60
days are valued at prices obtained for the day of valuation from a bond pricing
service of a major dealer in bonds when such prices are available; however, in
circumstances where the investment adviser deems it appropriate to do so, an
over-the-counter or exchange quotation at the mean of representative bid or
asked prices may be used. The investments of the Strategy Portfolios and other
mutual funds held are valued at the closing net asset value per share of each
underlying Fund. Securities traded primarily on securities exchanges outside the
United States are valued at the last sale price on such exchanges on the day of
valuation, or if there is no sale on the day of valuation, at the last-reported
bid price. If a security's price is available from more than one exchange, a
portfolio uses the exchange that is the primary market for the security.
However, depending on the foreign market, closing prices may be up to 15 hours
old when they are used to price the Fund's shares, and the Fund may determine
that certain closing prices are unreliable. This determination will be based on
review of a number of factors, including developments in foreign markets, the
performance of U.S. securities markets, and the performance of instruments
trading in U.S. markets that represent foreign securities and baskets of foreign
securities. If the Portfolio determines that closing prices do not reflect the
fair value of the securities, the Portfolio will adjust the previous closing
prices in accordance with pricing procedures approved by the Board of Directors
to reflect what it believes to be the fair value of the securities as of the
close of regular trading on the New York Stock Exchange. A Portfolio may also
fair value securities in other situations, for example, when a particular
foreign market is closed but the Portfolio is open. For foreign equity
securities, the Portfolio uses an outside pricing service to provide it with
closing market prices and information used for adjusting those prices. Futures
contracts and options traded on national securities exchanges are valued as of
the close of the exchange on which they are traded. Short-term securities with
60 days or less to maturity are amortized to maturity based on their cost to the
Portfolio if acquired within 60 days of maturity or, if already held by the
Portfolio on the 60th day, are amortized to maturity based on the value
determined on the 61st day. Securities for which quotations are not readily
available, or if a development/event occurs that may significantly impact the
value of the securities, then these securities may be fair valued as determined
pursuant to procedures adopted in good faith under the direction of the Fund's
Directors.
REPURCHASE AGREEMENTS: The Portfolios, along with other affiliated registered
investment companies, pursuant to exemptive relief granted by the Securities and
Exchange Commission, may transfer uninvested cash balances onto a single joint
account, the daily aggregate balance of which is invested in one or more
repurchase agreements collateralized by U.S. Treasury or federal agency
obligations. For repurchase agreements and joint repurchase agreements, the
Portfolios' custodian takes possession of the collateral pledged for investments
in repurchase agreements. The underlying collateral is valued daily on a mark to
market basis to ensure that the value, including accrued interest, is at least
102% of the repurchase price. In the event of default of the obligation to
repurchase, a Portfolio has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. If the seller defaults and the value
of the collateral declines or if bankruptcy proceedings are commenced with
respect to the seller of the security, realization of the collateral by the
Portfolio may be delayed or limited.
73
<Page>
As of April 30, 2005, the following Portfolios held an undivided interest in a
joint repurchase agreement with State Street Bank & Trust Co.:
<Table>
<Caption>
PERCENTAGE PRINCIPAL
INTEREST AMOUNT
------------- -------------
Focused Multi-Cap Growth Portfolio 0.92% $ 996,000
Focused 2000 Value Portfolio 7.87 8,540,000
Focused Technology Portfolio 0.19 202,000
Focused Dividend Strategy Portfolio 1.05 1,142,000
</Table>
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
State Street Bank & Trust Co., dated April 29, 2005, bearing interest at a rate
of 2.70% per annum, with a principal amount of $108,537,000, a repurchase price
of $108,561,421 and a maturity date of May 2, 2005. The repurchase agreement is
collateralized by the following:
<Table>
<Caption>
INTEREST RATE/ MATURITY PRINCIPAL MARKET
TYPE OF COLLATERAL DISCOUNT YIELD DATE AMOUNT VALUE
- ----------------------------------------------- -------------- -------- ------------- -------------
U.S. Treasury Note 4.38% 08/15/12 $ 99,995,000 $ 103,244,838
U.S. Treasury Note 6.50 08/15/05 7,290,000 7,463,138
</Table>
In addition, at April 30, 2005, the following Portfolio held an undivided
interest in a joint repurchase aggreement with UBS Warburg, LLC:
<Table>
<Caption>
PERCENTAGE PRINCIPAL
INTEREST AMOUNT
------------- -------------
Focused Large-Cap Value Portfolio 1.20% $ 1,865,000
</Table>
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
UBS Warburg, LLC, dated April 29, 2005, bearing interest at a rate of 2.84% per
annum, with a principal amount of $155,850,000, a repurchase price of
$155,886,885 and a maturity date of May 2, 2005. The repurchase agreement is
collateralized by the following:
<Table>
<Caption>
INTEREST RATE/ MATURITY PRINCIPAL MARKET
TYPE OF COLLATERAL DISCOUNT YIELD DATE AMOUNT VALUE
- ----------------------------------------------- -------------- -------- ------------- -------------
U.S. Treasury Note 2.00% 08/31/05 $ 3,407,000 $ 3,418,943
U.S. Treasury Note 5.63 05/15/08 50,000,000 55,266,920
U.S. Treasury Note 5.75 11/15/05 46,072,000 49,127,889
U.S. Treasury Bond 7.88 02/15/21 38,546,000 54,229,736
</Table>
In addition, at April 30, 2005, the following Portfolio held an undivided
interest in a joint repurchase aggreement with UBS Warburg, LLC:
<Table>
<Caption>
PERCENTAGE PRINCIPAL
INTEREST AMOUNT
------------- -------------
Focused Multi-Cap Growth Portfolio 3.71% $ 13,000,000
Focused 2000 Value Portfolio 4.29 15,000,000
</Table>
74
<Page>
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
UBS Warburg, LLC, dated April 29, 2005, bearing interest at a rate of 2.83% per
annum, with a principal amount of $350,000,000, a repurchase price of
$350,082,542 and a maturity date of May 2, 2005. The repurchase agreement is
collateralized by the following:
<Table>
<Caption>
INTEREST RATE/ MATURITY PRINCIPAL MARKET
TYPE OF COLLATERAL DISCOUNT YIELD DATE AMOUNT VALUE
- ----------------------------------------------- -------------- -------- ------------- -------------
U.S. Treasury Bond 3.63% 04/15/28 $ 70,166,000 $ 111,563,940
U.S. Treasury Bond 3.88 04/15/29 150,000,000 245,437,500
</Table>
SECURITIES TRANSACTIONS, INVESTMENT INCOME, EXPENSES, DIVIDENDS AND
DISTRIBUTIONS TO SHAREHOLDERS: Security transactions are recorded on a trade
date basis. Realized gains and losses on sales of investments are calculated on
the identified cost basis. Interest income is accrued daily except when
collection is not expected. Dividend income is recorded on the ex-dividend date
except for certain dividends from foreign securities, which are recorded as soon
as the Portfolio is informed after ex-dividend date. The Strategy Portfolios
invest in a combination of AIG SunAmerica Mutual Funds including Funds investing
in fixed income securities. Distributions from income from underlying funds, if
any, are recorded to income on ex-dividend date. Distributions from net realized
capital gains from underlying funds, if any, are recorded to realized gains on
ex-dividend date. For financial statement purposes, the Fund amortizes all
premiums and accretes all discounts on fixed income securities. Portfolios
investing in foreign securities may be subject to taxes imposed by countries in
which they invest. Such taxes are generally based on either income or capital
gains earned or repatriated.
Net investment income, other than class specific expenses, and realized and
unrealized gains and losses, are allocated daily to each class of shares based
upon the relative net asset value of outstanding shares (or the value of the
dividend-eligible shares, as appropriate) of each class of shares at the
beginning of the day (after adjusting for the current capital shares activity of
the respective class).
Expenses common to all Portfolios, not directly related to individual
Portfolios, are allocated among the Portfolios based upon their relative net
asset value or other appropriate methods. In all respects, expenses are charged
to each Portfolio as incurred on a specific identification basis. Interest
earned on cash balances held at the custodian are shown as custody credits in
the Statement of Operations. For the Strategy Portfolios, the expenses included
in the accompanying financial statements reflect the expenses of the Strategy
Portfolios and do not include indirect expenses borne by each Strategy Portfolio
in connection with its investment in the underlying Funds.
Dividends from net investment income, if any, are normally paid quarterly for
the Focused Balanced Strategy Portfolio, Focused Fixed Income and Equity
Strategy Portfolio, Focused Growth and Income Portfolio and Focused Dividend
Strategy Portfolio. Dividends from net investment income, if any, for the
Focused Fixed Income Strategy Portfolio will normally be declared daily and paid
quarterly. All other Portfolios pay annually. Capital gain distributions, if
any, are paid annually. Each of the Strategy Portfolios reserve the right to
declare and pay dividends less frequently than disclosed above, provided that
the net realized capital gains and net investment income, if any, are paid at
least annually. The Portfolios record dividends and distributions to their
shareholders on the ex-dividend date. The amount of dividends and distributions
from net investment income and net realized capital gains are determined and
presented in accordance with federal income tax regulations, which may differ
from U.S. generally accepted accounting principles. These "book/tax" differences
are either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts at fiscal year end based on their federal tax-basis treatment;
temporary differences do not require reclassification. Net investment income
(loss), net realized gain (loss), and net assets are not affected by these
reclassifications.
The Portfolios intend to comply with the requirements of the Internal Revenue
Code, as amended, applicable to regulated investment companies and distribute
all of their taxable income, including any net realized gain on investments, to
its shareholders. Therefore, no federal tax provisions are required. Each
Portfolio is considered a separate entity for tax purposes.
75
<Page>
FOREIGN CURRENCY TRANSLATION: The books and records of the Fund are maintained
in U.S. dollars. Assets and liabilities denominated in foreign currencies and
commitments under forward foreign currency contracts are translated into U.S.
dollars based on the exchange rate of such currencies against U.S. dollars on
the date of the valuation.
The Fund does not isolate that portion of the results of operations arising as a
result of changes in the foreign exchange rates from the changes in the market
prices of securities held at the end of the period. Similarly, the Fund does not
isolate the effect of changes in foreign exchange rates from the changes in the
market prices of Portfolio securities sold during the year.
Realized foreign exchange gains and losses on other assets and liabilities and
change in unrealized foreign exchange gains and losses on other assets and
liabilities located in the Statement of Operations include foreign exchange
gains and losses from currency gains or losses between the trade and settlement
dates of securities transactions, the difference between the amounts of
interest, dividends and foreign withholding taxes recorded on a Portfolio's
books and the U.S. dollar equivalent amounts actually received or paid and
changes in the unrealized foreign exchange gains and losses relating to other
assets and liabilities arising as a result of changes in the exchange rate.
FORWARD FOREIGN CURRENCY CONTRACTS: Certain Portfolios may enter into forward
foreign currency contracts ("forward contracts") to attempt to protect
securities and related receivables and payables against changes in future
foreign exchange rates or to enhance return. A forward contract is an agreement
between two parties to buy or sell currency at a set price on a future date. The
market value of the contract will fluctuate with changes in currency exchange
rates. The contract is marked to market daily using the forward rate and the
change in market value is recorded by the Portfolio as an unrealized gain or
loss. On settlement date, the Portfolio records realized foreign exchange gains
or losses when the contract is closed equal to the difference between the value
of the contract at the time it was opened and the value at the time it was
closed. Risks may arise upon entering into these contracts from the potential
inability of counter-parties to meet the terms of their contracts and from
unanticipated movements in the value of a foreign currency relative to the U.S.
dollar. Forward contracts involve elements of risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The Fund bears the risk of
an unfavorable change in the foreign exchange rate underlying the forward
contract.
FUTURES CONTRACTS: A futures contract is an agreement between two parties to buy
and sell a financial instrument at a set price on a future date. Upon entering
into such a contract the Portfolios are required to pledge to the broker an
amount of cash or U.S. government securities equal to the minimum "initial
margin" requirements of the exchange on which the futures contract is traded.
The Portfolios' activities in futures contracts are used primarily for hedging
purposes and from time to time for income enhancement and are conducted through
regulated exchanges that do not result in counter-party credit risks. A
Portfolio's participation in the futures markets involves certain risks,
including imperfect correlation between movements in the price of futures
contracts and movements in the price of the securities hedged or used for cover.
Pursuant to a contract the Portfolios agree to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in value of the contract. Such
receipts or payments are known as "variation margin" and are recorded by the
Portfolios as unrealized appreciation or depreciation. Futures contracts involve
elements of risk in excess of the amount reflected in the Statement of Assets
and Liabilities. When a contract is closed, the Portfolios record a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
OPTIONS: An option is a contract conveying a right to buy or sell a financial
instrument at a specified price during a stipulated period. The premium paid by
a Portfolio for the purchase of a call or a put option is included in the
Portfolio's Statement of Assets and Liabilities as an investment and
subsequently marked to market to reflect the current market value of the option.
When a Portfolio writes a call or a put option, an amount equal to the premium
received by the Portfolio is included in the Portfolio's Statement of Assets and
Liabilities as a liability and is subsequently marked to market to reflect the
current market value of the option written. If an option which the Portfolio has
written either expires on its stipulated expiration date, or if the Portfolio
enters into a closing purchase transaction the Portfolio realizes a gain (or
loss if the cost of a closing purchase transaction exceeds the premium received
76
<Page>
when the option was written) without regard to any unrealized gain or loss on
the underlying security, and the liability related to such option is
extinguished. If a call option which the Portfolio has written is exercised, the
Portfolio realizes a capital gain or loss from the sale of the underlying
security and the proceeds from such sale are increased by the premium originally
received. If a put option which the Portfolio has written is exercised, the
amount of the premium originally received reduces the cost basis of the security
which the Portfolio purchased upon exercise of the option.
For the period ended April 30, 2005, transactions in written options were as
follows:
<Table>
<Caption>
FOCUSED LARGE-CAP GROWTH FOCUSED GROWTH AND INCOME
PORTFOLIO PORTFOLIO
------------------------------ -----------------------------
CONTRACTS AMOUNT CONTRACTS AMOUNT
------------- ------------- ------------- -------------
Written option contracts as of 10/31/04 -- $ -- -- $ --
Options written during the period (108) (18,071) (23) (3,848)
Written options closed during the period 108 30,564 23 6,509
Net realized gain (loss) on written options closed -- (12,493) -- (2,661)
------------- ------------- ------------- -------------
Written option contracts as of 04/30/05 -- $ -- -- $ --
============= ============= ============= =============
</Table>
NOTE 4. INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT, DISTRIBUTION AGREEMENT AND
SERVICE AGREEMENT
The Fund, on behalf of each Portfolio, has entered into an Investment Advisory
and Management Agreement (the "Agreement") with SAAMCo. Under the Agreement,
SAAMCo provides continuous supervision of the respective Portfolios and
administers their corporate affairs, subject to general review by the Board of
Directors. In connection therewith, SAAMCo furnishes the Fund with office
facilities, maintains certain of the Fund's books and records, and pays for the
salaries and expenses of all personnel, including officers of the Fund who are
employees of SAAMCo and its affiliates. The annual rate of the investment
advisory and management fee payable by each Portfolio to SAAMCo as full
compensation for services and facilities furnished to the Fund is as follows:
1.00% of the average daily net assets of the Focused Multi-Cap Growth, Focused
2000 Growth, Focused Large-Cap Value, Focused Multi-Cap Value, Focused 2000
Value, Focused Growth and Income Portfolios; 0.85% of the average daily net
assets of the Focused Large-Cap Growth Portfolio; 1.25% of the average daily net
assets of the Focused International Equity Portfolio and the Focused Technology
Portfolio; 0.35% of the daily net assets of the Focused Dividend Strategy
Portfolio; and 0.10% for the Strategy Portfolios.
Except for the Strategy Portfolios and the Focused Dividend Strategy Portfolio
which are advised by SAAMCo, the organizations described below act as Investment
Advisers to the Fund, pursuant to Subadvisory Agreements with SAAMCo. Under the
Subadvisory Agreements, the SubAdvisers manage the investment and reinvestment
of the assets of the respective Portfolios for which they are responsible. Each
of the following SubAdvisers are independent of SAAMCo (with the exception of
the Focused Multi-Cap Growth, Focused 2000 Value, Focused Growth and Income and
Focused Technology for which SAAMCo acts as an Adviser) and discharges its
responsibilities subject to the policies of the Board of Directors and the
oversight and supervision of SAAMCo, which pays the SubAdvisers' fees. Effective
January 18, 2005, Fund Asset Management, L.P. (doing business as Mercury
Advisers) replaced Harris Associates L.P. as one of the Advisers for the Focused
Large-Cap Value Portfolio and PEA Capital, LLC replaced Harris Associates L.P.
as one of the Advisers for the Focused Growth and Income Portfolio. Effective
March 7, 2005, SAAMCo replaced Hotchkis and Wiley Capital Management, Inc. as
one of the Advisers for the Focused 2000 Value Portfolio. Effective March 21,
2005, SAAMCo replaced PEA Capital, LLC as one of the Advisers for the Focused
Growth and Income Portfolio.
77
<Page>
Focused Large-Cap Growth Portfolio
Fred Alger Management, Inc.
Marsico Capital Management, LLC
American Century Investment Management, Inc.
Focused Multi-Cap Growth Portfolio
Credit Suisse Asset Management, LLC
Janus Capital Management LLC
AIG SunAmerica Asset Management Corp.
Focused 2000 Growth Portfolio
BAMCO, Inc.
Deutsche Asset Management, Inc.
Oberweis Asset Management, Inc.
Focused Large-Cap Value Portfolio
Dreman Value Management, LLC
Fund Asset Management, L.P. (doing
business as Mercury Advisors)
Wellington Management Company LLP*
Focused Multi-Cap Value Portfolio
American Century Investment Management, Inc.
Third Avenue Management, LLC
JP Morgan Fleming Asset Management, Inc.
Focused 2000 Value Portfolio
Janus Capital Management LLC (subcontracted
to Perkins, Wolf, McDonnell & Company)
AIG SunAmerica Asset Management Corp.
Boston Partners Asset Management L.P.
Focused Growth and Income Portfolio
Thornburg Investment Management, Inc.
Marsico Capital Management, LLC
AIG SunAmerica Asset Management Corp.
Focused International Equity Portfolio
Massachusetts Financial Services Company
Harris Associates L.P.
Marsico Capital Management, LLC
FocusedTechnology Portfolio
Dresdner RCM Global Investors LLC
AIG SunAmerica Asset Management Corp.
BAMCO, Inc.
* Effective June 20, 2005, AIG SunAmerica Asset Management Corp. will replace
Wellington Management Company LLP as one of the Advisers for Focused Large-Cap
Value Portfolio.
Each Adviser is paid monthly by SAAMCo a fee equal to a percentage of the
average daily net assets of the Portfolio allocated to the Adviser. For the
period ended April 30, 2005, SAAMCo paid the Advisers for each Portfolio the
following, expressed as an annual percentage of the average daily net assets of
each Portfolio:
<Table>
<Caption>
PORTFOLIO
- ---------
Focused Large-Cap Growth 0.39%
Focused Multi-Cap Growth 0.38%
Focused 2000 Growth 0.57%
Focused Large-Cap Value 0.45%
Focused Multi-Cap Value 0.46%
Focused 2000 Value 0.42%
Focused Growth and Income 0.42%
Focused International Equity 0.52%
Focused Technology 0.45%
</Table>
SAAMCo contractually agreed to waive fees or reimburse expenses, if necessary,
at or below the following percentages of each Portfolio's average net assets:
<Table>
<Caption>
PORTFOLIO CLASS A CLASS B CLASS C CLASS I CLASS X
- --------- --------- --------- --------- --------- ---------
Focused Multi-Cap Growth 1.72% 2.37% 2.37% -- 1.47%
Focused 2000 Growth 1.72% 2.37% 2.37% 1.62% --
Focused Large-Cap Value 1.72% 2.37% 2.37% -- --
Focused Multi-Cap Value 1.72% 2.37% 2.37% -- --
Focused 2000 Value 1.72% 2.37% 2.37% -- --
Focused Growth and Income 1.72% 2.37% 2.37% -- 1.47%
Focused International Equity 1.95% 2.60% 2.60% -- --
Focused Technology 1.97% 2.62% 2.62% -- --
Focused Dividend Strategy 0.95% 1.60% 1.60% -- --
</Table>
78
<Page>
SAAMCo voluntarily agreed to waive fees or reimburse expenses, if necessary, for
the Strategy Portfolios, at or below the following percentages of each
Portfolio's average net assets:
<Table>
<Caption>
PORTFOLIO CLASS A CLASS B CLASS C CLASS I
- --------- --------- --------- --------- ---------
Focused Equity Strategy 0.25% 0.90% 0.90% 0.15%
Focused Multi Asset Strategy 0.25% 0.90% 0.90% --
Focused Balanced Strategy 0.25% 0.90% 0.90% 0.15%
Focused Fixed Income & Equity 0.25% 0.90% 0.90% 0.15%
Focused Fixed Income Strategy 0.25% 0.90% 0.90% --
</Table>
Any waivers or reimbursements made by SAAMCo are subject to recoupment from the
Portfolios within the following two years of making such waivers or
reimbursements, provided that the Portfolios are able to effect such payment to
SAAMCo and remain in compliance with the foregoing expense limitations.
For the period ended April 30, 2005, SunAmerica has agreed to reimburse expenses
as follows:
<Table>
<Caption>
PORTFOLIO AMOUNT
- --------- ------------
Focused Equity Strategy Class I $ 2,408
Focused Balanced Strategy Class I 254
Focused Fixed Income and Equity Strategy Class B 864
Focused Fixed Income and Equity Strategy Class I 12,645
Focused Fixed Income Strategy Class A 6,338
Focused Fixed Income Strategy Class B 5,661
Focused Fixed Income Strategy Class C 7,893
Focused Multi-Cap Growth Class A 543
Focused Multi-Cap Growth Class B 12,614
Focused Multi-Cap Growth Class C 1,658
Focused Multi-Cap Growth Class X 875
Focused 2000 Growth Class B 2,556
Focused 2000 Growth Class I 1,237
Focused Growth and Income Class A $ 1,107
Focused Growth and Income Class B 9,088
Focused Growth and Income Class C 877
Focused Growth and Income Class X 2,321
Focused International Equity Class A 82,149
Focused International Equity Class B 11,502
Focused International Equity Class C 20,337
Focused Technology Class A 44,226
Focused Technology Class B 33,940
Focused Technology Class C 32,405
Focused Dividend Strategy Class A 28,008
Focused Dividend Strategy Class B 25,147
Focused Dividend Strategy Class C 37,174
</Table>
For the period ended April 30, 2005, the amounts repaid to the Advisor are as
follows:
<Table>
<Caption>
PORTFOLIO AMOUNT
- --------- ------------
Focused Equity Strategy Class A $ 18,052
Focused Equity Strategy Class B 19,840
Focused Equity Strategy Class C 22,114
Focused Multi-Asset Strategy Class A 20,034
Focused Multi-Asset Strategy Class B 23,228
Focused Multi-Asset Strategy Class C 53,139
Focused Balanced Strategy Class B 6,277
Focused Balanced Strategy Class C 13,802
Focused Balanced Strategy Class I 465
Focused Fixed Income and Equity Strategy Class A 6,866
Focused Fixed Income and Equity Strategy Class B 1,209
Focused Fixed Income and Equity Strategy Class C 5,982
Focused Multi-Cap Growth Class A 7,749
Focused Multi-Cap Growth Class C 567
Focused Multi-Cap Growth Class X $ 1,561
Focused 2000 Growth Class A 61,769
Focused 2000 Growth Class B 359
Focused 2000 Growth Class C 11,396
Focused Large-Cap Value Class A 27,497
Focused Large-Cap Value Class B 3,690
Focused Large-Cap Value Class C 17,828
Focused Multi-Cap Value Class A 31,803
Focused Multi-Cap Value Class B 17,701
Focused Multi-Cap Value Class C 28,070
Focused 2000 Value Class A 76,601
Focused 2000 Value Class B 14,320
Focused 2000 Value Class C 34,472
Focused Growth and Income Class A 7,624
Focused Growth and Income Class C 3,373
Focused Growth and Income Class X 8,769
</Table>
79
<Page>
At April 30, 2005, expenses previously waived or reimbursed by SunAmerica that
are subject to recoupment are as follows:
<Table>
<Caption>
OTHER
EXPENSES
PORTFOLIO REIMBURSED
- --------- ------------
Focused Equity Strategy Portfolio $ 33,513
Focused Balanced Strategy Portfolio --
Focused Fixed Income and Equity Strategy Portfolio 33,481
Focused Fixed Income Strategy Portfolio 66,369
Focused Multi-Cap Growth Portfolio --
Focused 2000 Growth Portfolio 6,396
Focused Large-Cap Value Portfolio $ 979
Focused Multi-Cap Value Portfolio 69,362
Focused 2000 Value Portfolio --
Focused Growth and Income Portfolio 19,328
Focused International Equity Portfolio 178,337
Focused Technology Portfolio 141,629
Focused Dividend Strategy Portfolio --
<Caption>
CLASS
SPECIFIC
EXPENSES
PORTFOLIO REIMBURSED
- --------- ------------
Focused Equity Strategy Portfolio Class A $ --
Focused Equity Strategy Portfolio Class B --
Focused Equity Strategy Portfolio Class C --
Focused Equity Strategy Portfolio Class I 16,728
Focused Balanced Strategy Portfolio Class A --
Focused Balanced Strategy Portfolio Class B --
Focused Balanced Strategy Portfolio Class C --
Focused Balanced Strategy Portfolio Class I 14,023
Focused Fixed Income and Equity Strategy Portfolio Class A 8,896
Focused Fixed Income and Equity Strategy Portfolio Class B 17,360
Focused Fixed Income and Equity Strategy Portfolio Class C 651
Focused Fixed Income and Equity Strategy Portfolio Class I 17,404
Focused Fixed Income Strategy Portfolio Class A 35,257
Focused Fixed Income Strategy Portfolio Class B 26,374
Focused Fixed Income Strategy Portfolio Class C 25,665
Focused Multi-Cap Growth Class A 177,577
Focused Multi-Cap Growth Class B 167,389
Focused Multi-Cap Growth Class C $ 67,692
Focused Multi-Cap Growth Class X 8,258
Focused 2000 Growth Class A 79,268
Focused 2000 Growth Class B 58,351
Focused 2000 Growth Class C 61,392
Focused 2000 Growth Class I 13,608
Focused Large Cap Value Class A --
Focused Large Cap Value Class B 31,245
Focused Large Cap Value Class C 25,587
Focused Multi-Cap Value Class A 73,423
Focused Multi-Cap Value Class B 95,631
Focused Multi-Cap Value Class C 67,438
Focused 2000 Value Class A --
Focused 2000 Value Class B 49,452
Focused 2000 Value Class C 32,375
Focused Growth and Income Class A 77,789
Focused Growth and Income Class B 73,174
Focused Growth and Income Class C 82,192
Focused Growth and Income Class X 2,321
Focused International Equity Class A 294,815
Focused International Equity Class B 53,186
Focused International Equity Class C 87,314
Focused Technology Class A 188,083
Focused Technology Class B 149,326
Focused Technology Class C 150,919
Focused Dividend Strategy Portfolio Class A 138,131
Focused Dividend Strategy Portfolio Class B 165,468
Focused Dividend Strategy Portfolio Class C 228,959
</Table>
80
<Page>
The Fund, on behalf of each Portfolio, has entered into a Distribution Agreement
with AIG SunAmerica Capital Services, Inc. ("SACS" or the "Distributor"), an
affiliate of SAAMCo. Each Portfolio has adopted a Distribution Plan (the "Plan")
in accordance with the provisions of Rule 12b-1 under the Act. Rule 12b-1 under
the Act permits an investment company directly or indirectly to pay expenses
associated with the distribution of its shares ("distribution expenses") in
accordance with a plan adopted by the investment company's Board of Directors.
Pursuant to such rule, the Board of Directors and the shareholders of each class
of shares of each Portfolio have adopted Distribution Plans hereinafter referred
to as the "Class A Plan", "Class B Plan", and "Class C Plan". In adopting the
Distribution Plans, the Board of Directors determined that there was a
reasonable likelihood that each such Plan would benefit the Fund and the
shareholders of the respective class.
The sales charge and distribution fees of a particular class will not be used to
subsidize the sale of shares of any other class. Under the Class A Plan, Class B
Plan, and Class C Plan, the Distributor receives payments from each Portfolio,
except for the Strategy Portfolios, at an annual rate of up to 0.10%, 0.75% and
0.75%, respectively, of average daily net assets of such Portfolio's Class to
compensate the Distributor and certain securities firms for providing sales and
promotional activities for distributing that class of shares. For the Strategy
Portfolios, the Distributor receives payments at an annual rate of up to 0.65%
of average daily net assets for both Class B and Class C. The distribution costs
for which the Distributor may be reimbursed out of such distribution fees
include fees paid to broker-dealers that have sold Fund shares, commissions and
other expenses such as those incurred for sales literature, prospectus printing
and distribution and compensation to wholesalers. It is possible that in any
given year the amount paid to the distributor under each Class' Plan may exceed
the Distributor's distribution costs as described above. Except for the Strategy
Portfolios, the Distribution Plans provide that each class of shares of each
Portfolio may also pay the Distributor an account maintenance and service fee up
to an annual rate of 0.25% of the aggregate average daily net assets of such
class of shares for payments to broker-dealers for providing continuing account
maintenance. Accordingly, for the period ended April 30, 2005, SACS received
fees, as reflected in the Statement of Operations, based upon the aforementioned
rates.
Except for the Strategy Portfolios, SACS is paid a fee of 0.25% of average daily
net assets of Class I shares as compensation for providing additional
shareholder services to Class I shareholders.
SACS receives sales charges on each Portfolio's Class A shares, portions of
which are reallowed to affiliated broker-dealers and non-affiliated
broker-dealers. SACS also receives the proceeds of contingent deferred sales
charges paid by investors in connection with certain redemptions of each
Portfolio's Class A, Class B and Class C shares. SACS has advised the Portfolios
that for the period ended April 30, 2005, the proceeds received from sales (and
paid out to affiliated and non-affiliated broker-dealers) and redemptions are as
follows:
<Table>
<Caption>
CLASS A CLASS B
--------------------------------------------------------------- -------------
CONTINGENT CONTINGENT
AFFILIATED NON-AFFILIATED DEFERRED DEFERRED
PORTFOLIO SALES CHARGES BROKER-DEALERS BROKER-DEALERS SALES CHARGES SALES CHARGES
- --------- ------------- -------------- -------------- ------------- -------------
Focused Equity Strategy $ 920,450 $ 228,011 $ 559,883 $ 14 $ 143,213
Focused Multi-Asset Strategy 1,495,753 406,731 872,759 159 111,482
Focused Balanced Strategy 700,003 248,499 345,628 -- 114,210
Focused Fixed Income and Equity Strategy 141,386 66,094 52,952 -- 26,497
Focused Fixed Income Strategy 39,066 12,512 20,500 -- 10,901
Focused Large-Cap Growth 423,983 178,645 186,373 15,343 787,311
Focused Multi-Cap Growth 204,098 101,450 74,613 -- 80,611
Focused 2000 Growth 214,173 65,837 118,275 -- 33,951
Focused Large-Cap Value 78,102 28,957 38,318 -- 49,582
Focused Multi-Cap Value 206,644 83,753 93,988 -- 339,263
Focused 2000 Value 341,133 106,548 184,947 -- 58,213
Focused Growth & Income 138,700 52,951 65,108 -- 138,721
Focused International Equity 94,531 38,349 42,108 -- 17,213
Focused Technology 101,333 32,462 54,314 -- 40,500
Focused Dividend Strategy 246,993 21,377 194,477 544 92,845
</Table>
81
<Page>
<Table>
<Caption>
CLASS C
---------------------------------------------------------------
CONTINGENT
SALES AFFILIATED NON-AFFILIATED DEFERRED
PORTFOLIO CHARGES BROKER-DEALERS BROKER-DEALERS SALES CHARGES
- --------- ------------- -------------- -------------- -------------
Focused Equity Strategy $ -- $ -- $ -- $ 120,837
Focused Multi-Asset Strategy -- -- -- 98,006
Focused Balanced Strategy -- -- -- 81,557
Focused Fixed Income and Equity Strategy -- -- -- 21,749
Focused Fixed Income Strategy -- -- -- 4,756
Focused Large-Cap Growth -- -- -- 91,111
Focused Multi-Cap Growth -- -- -- 8,450
Focused 2000 Growth -- -- -- 16,295
Focused Large-Cap Value -- -- -- 14,835
Focused Multi-Cap Value -- -- -- 14,572
Focused 2000 Value -- -- -- 16,956
Focused Growth & Income -- -- -- 34,102
Focused International Equity -- -- -- 7,080
Focused Technology -- -- -- 4,126
Focused Dividend Strategy -- -- -- 26,140
</Table>
The Fund, on behalf of each Portfolio, except for the Strategy Portfolios, has
entered into a Service Agreement with AIG SunAmerica Fund Services, Inc.
("SAFS"), an indirect wholly-owned subsidiary of SAAMCo. Under the Service
Agreement, SAFS performs certain shareholder account functions by assisting the
Portfolios' transfer agent in connection with the services that it offers to the
shareholders of the Portfolios. The Service Agreement, which permits the
Portfolios to compensate SAFS for services rendered based upon an annual rate of
0.22% of average daily net assets, is approved annually by the Board of
Directors. For the period ended April 30, 2005, the Portfolios incurred the
following expenses, which are included in transfer agent fees and expenses in
the Statement of Operations, to compensate SAFS pursuant to the terms of the
Service Agreement.
<Table>
<Caption>
PAYABLE AT
EXPENSE APRIL 30, 2005
----------------------------------------------------- -----------------------------------------------------
PORTFOLIO CLASS A CLASS B CLASS C CLASS I CLASS X CLASS A CLASS B CLASS C CLASS I CLASS X
- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Focused Large-Cap
Growth $ 815,699 $ 459,586 $ 527,749 $ -- $ -- $ 128,338 $ 69,133 $ 79,246 $ -- $ --
Focused Multi-Cap
Growth 234,101 108,115 54,792 -- 248 40,526 17,080 9,085 -- 210
Focused 2000 Growth 256,776 42,752 80,984 8,197 -- 42,933 6,900 12,778 1,333 --
Focused Large-Cap
Value 434,659 47,227 85,075 -- -- 73,192 7,308 13,831 -- --
Focused Multi-Cap
Value 243,897 208,048 238,704 -- -- 40,688 33,253 37,916 -- --
Focused 2000 Value 412,773 85,441 136,911 -- -- 67,629 13,345 22,139 -- --
Focused Growth and
Income 183,058 93,186 148,596 -- 25,235 29,776 14,422 22,919 -- 270
Focused International
Equity 201,779 12,844 35,219 -- -- 34,068 2,186 6,045 -- --
Focused Technology 43,806 28,442 31,495 -- -- 6,627 4,297 4,662 -- --
Focused Dividend
Strategy 77,128 66,385 115,649 -- -- 12,385 10,666 18,761 -- --
</Table>
82
<Page>
At April 30, 2005, the following affiliates owned outstanding shares of the
following Portfolios:
<Table>
<Caption>
PORTFOLIO HOLDER PERCENTAGE
- --------- ------ ----------
Focused Large-Cap Growth Class A Focused Equity Strategy Portfolio 24%
Focused Multi-Asset Strategy Portfolio 8
Focused Balanced Strategy Portfolio 14
Focused Multi-Cap Growth Class A Focused Multi-Asset Strategy Portfolio 31
Focused Multi-Cap Growth Class X SAAMCo 13
Focused 2000 Growth Class A Focused Equity Strategy Portfolio 30
Focused Multi-Asset Strategy Portfolio 29
Focused Balanced Strategy Portfolio 17
Focused Large-Cap Value Class A Focused Equity Strategy Portfolio 42
Focused Balanced Strategy Portfolio 23
Focused Multi-Asset Strategy Portfolio 16
Focused Multi-Cap Value Class A Focused Multi-Asset Strategy Portfolio 30
Focused 2000 Value Class A Focused Equity Strategy Portfolio 28
Focused Multi-Asset Strategy Portfolio 19
Focused Balanced Strategy Portfolio 15
Focused Growth and Income Class A Focused Multi-Asset Strategy Portfolio 38
Focused International Equity Class A Focused Equity Strategy Portfolio 31
Focused Multi-Asset Strategy Portfolio 36
Focused Balanced Strategy Portfolio 16
Focused Technology Class A AIG SunAmerica, Inc. 7
</Table>
The Strategy Portfolios do not invest in underlying AIG SunAmerica Funds for the
purpose of exercising management or control; however, investments by the
Strategy Portfolios within the set limits may represent a significant portion of
an underlying AIG SunAmerica Fund's net assets. At April 30, 2005 each Strategy
Portfolio held less than 48% of the outstanding shares of any underlying AIG
SunAmerica Fund. In addition, the Strategy Portfolios, in the aggregate, held
less than 85% of the outstanding shares of any underlying AIG SunAmerica Funds.
83
<Page>
NOTE 5. PURCHASE AND SALES OF INVESTMENT SECURITIES
The cost of purchases and proceeds from sales and maturities of long-term
investments during the period ended April 30, 2005 were as follows:
<Table>
<Caption>
FOCUSED FIXED
FOCUSED FOCUSED MULTI- FOCUSED INCOME AND FOCUSED FIXED
EQUITY STRATEGY ASSET BALANCED EQUITY STRATEGY INCOME STRATEGY
PORTFOLIO STRATEGY PORTFOLIO STRATEGY PORTFOLIO PORTFOLIO PORTFOLIO
-------------------- ------------------ ------------------ ---------------- ------------------
Purchases (excluding U.S.
government securities) $ 33,005,578 $ 85,123,595 $ 23,243,536 $ 7,116,312 $ 5,921,930
Sales (excluding U.S.
government securities) 16,019,988 1,232,888 10,845,480 9,694,550 5,897,399
Purchase of U.S.
government securities -- -- -- -- --
Sales of U.S. government
securities -- -- -- -- --
<Caption>
FOCUSED FOCUSED FOCUSED
FOCUSED LARGE-CAP MULTI-CAP FOCUSED 2000 LARGE-CAP MULTI-CAP
GROWTH PORTFOLIO GROWTH PORTFOLIO GROWTH PORTFOLIO VALUE PORTFOLIO VALUE PORTFOLIO
-------------------- ------------------ ------------------ ---------------- ------------------
Purchases (excluding U.S.
government securities) $ 1,364,921,755 $ 211,152,372 $ 134,191,627 $ 256,758,613 $ 551,211,156
Sales (excluding U.S.
government securities) 1,535,942,548 238,290,333 126,767,635 255,214,588 604,908,111
Purchase of U.S.
government securities -- -- -- -- --
Sales of U.S.
government securities -- -- -- -- --
<Caption>
FOCUSED GROWTH FOCUSED
FOCUSED 2000 AND INCOME INTERNATIONAL FOCUSED TECHNOLOGY
VALUE PORTFOLIO PORTFOLIO EQUITY PORTFOLIO PORTFOLIO
------------------ ------------------ ---------------- ------------------
Purchases (excluding U.S. government securities) $ 187,472,621 $ 388,085,305 $ 132,430,106 $ 37,634,125
Sales (excluding U.S. government securities) 179,304,646 437,027,841 118,003,149 40,261,479
Purchase of U.S. government securities -- -- -- --
Sales of U.S. government securities -- -- -- --
<Caption>
FOCUSED DIVIDEND
STRATEGY PORTFOLIO
------------------
Purchases (excluding U.S. government securities) $ 64,436,650
Sales (excluding U.S. government securities) 71,563,166
Purchase of U.S. government securities --
Sales of U.S. government securities --
</Table>
84
<Page>
NOTE 6. TRANSACTIONS WITH AFFILIATES
As disclosed in the Portfolio of Investments, certain Portfolios owned shares of
various AIG SunAmerica Mutual Funds and securities issued by AIG or an affiliate
thereof. For the period ended April 30, 2005, transactions in these securities
were as follows:
<Table>
<Caption>
CAPITAL GAIN
DISTRIBUTION MARKET VALUE AT
PORTFOLIO SECURITY INCOME RECEIVED OCTOBER 31, 2004
- -------------------- ------------------------------ ------------ ------------ ----------------
Focused Equity
Strategy Various AIG SunAmerica Funds* $ 7,502,264 $ 6,847,982 $ 524,982,817
Focused Multi-Asset
Strategy Various AIG SunAmerica Funds* 7,388,079 5,103,380 540,199,099
Focused Balanced
Strategy Various AIG SunAmerica Funds* 6,971,793 4,668,385 450,615,211
Focused Fixed
Income and
Equity Strategy Various AIG SunAmerica Funds* 1,303,087 312,517 89,393,606
Focused Fixed
Income Strategy Various AIG SunAmerica Funds* 637,125 88,230 37,866,894
<Caption>
CHANGE IN
COST OF COST OF REALIZED UNREALIZED MARKET VALUE AT
PORTFOLIO SECURITY PURCHASES SALES GAIN (LOSS) GAIN (LOSS) APRIL 30, 2005
- -------------------- ------------------------------ ------------ ------------ ---------------- ------------- ----------------
Focused Equity
Strategy Various AIG SunAmerica Funds* $ 47,355,824 $ 16,019,988 $ 5,147,756 $ (1,035,184) $ 560,431,225
Focused Multi-Asset
Strategy Various AIG SunAmerica Funds* 97,615,053 1,232,888 286,881 8,719,531 645,587,676
Focused Balanced
Strategy Various AIG SunAmerica Funds* 34,883,714 10,845,480 2,151,851 (1,803,137) 475,002,159
Focused Fixed Income
and Equity Strategy Various AIG SunAmerica Funds* 8,731,915 9,694,550 657,607 (241,182) 88,847,396
Focused Fixed Income
Strategy Various AIG SunAmerica Funds* 6,647,283 5,897,399 134,067 (144,172) 38,606,673
</Table>
* See Portfolio of Investments for details.
The following Portfolios incurred brokerage commissions with affiliated brokers:
<Table>
<Caption>
FOCUSED FOCUSED FOCUSED FOCUSED FOCUSED FOCUSED
LARGE-CAP MULTI-CAP 2000 LARGE- MULTI-CAP GROWTH FOCUSED
GROWTH GROWTH GROWTH CAP VALUE VALUE AND INCOME TECHNOLOGY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- --------- ---------- ----------
Banc of America Securities, LLC $ -- $ -- $ -- $ -- $ -- $ 8,500 $ --
Baron Capital Partners, LLC -- -- 1,912 -- -- -- 2,015
Credit Suisse First Boston Corp. -- 3,168 -- -- -- -- --
Deutsche Bank Securities, Inc. -- -- 4,070 -- -- -- --
Fred Alger Company, Inc. 954,975 -- -- -- -- -- --
JP Morgan Securities, Inc. 59,324 -- -- -- -- -- --
M.J. Whitman, Inc. -- -- -- -- 59,383 -- --
Merrill Lynch, Pierce, Fenner & Smith, Inc. -- -- -- 14,114 -- -- --
</Table>
85
<Page>
NOTE 7. FEDERAL INCOME TAXES
The following details the tax basis distributions as well as the components of
distributable earnings. The tax basis components of distributable earnings
differ from the amounts reflected in the Statement of Assets and Liabilities by
temporary book/tax differences primarily from wash sales, retirement pension
expense, derivative transactions, and Fund mergers.
<Table>
<Caption>
DISTRIBUTABLE EARNINGS TAX DISTRIBUTIONS
------------------------------------------------- ------------------------
FOR THE YEAR ENDED OCTOBER 31, 2004
----------------------------------------------------------------------------
LONG-TERM GAINS/ UNREALIZED LONG-TERM
ORDINARY CAPITAL LOSS APPRECIATION ORDINARY CAPITAL
PORTFOLIO INCOME CARRYOVER (DEPRECIATION)* INCOME GAINS
- --------- ------------ ---------------- --------------- ------------ ---------
Focused Equity Strategy $ -- $ 2,082,354 $ 18,954,700 $ 27,100 $ 14,228
Focused Multi-Asset Strategy 246,175 265,359 35,290,195 280,124 18,499
Focused Balanced Strategy 219,851 5,050,439 15,088,860 2,341,578 9,332
Focused Fixed Income and Equity Strategy 1,235,334 859,160 1,227,723 1,784,488 --
Focused Fixed Income Strategy 638,904 58,330 26,537 1,289,504 --
Focused Large-Cap Growth -- (601,397,283) 174,434,650 -- --
Focused Multi-Cap Growth -- (131,571,154) 60,933,955 -- --
Focused 2000 Growth -- (9,513,594) 45,521,458 -- --
Focused Large-Cap Value 900,154 3,329,305 20,776,335 293,906 --
Focused Multi-Cap Value -- (24,440,429) 72,999,617 2,042,754 --
Focused 2000 Value 31,938,828 27,916,172 39,807,926 -- --
Focused Growth and Income -- (60,739,353) 48,292,563 -- --
Focused International Equity 4,930,471 3,514,455 14,299,243 -- 575,289
Focused Technology -- (192,417,949) 11,468,273 -- --
Focused Dividend Strategy 301,929 (11,269,375) 11,349,620 2,986,177 --
</Table>
* Unrealized appreciation (depreciation) includes amounts for derivatives and
other assets and liabilities denominated in foreign currency.
As of October 31, 2004, for Federal income tax purposes, the Portfolios
indicated below have capital loss carryforwards, which expire in the year
indicated, which are available to offset future capital gains, if any:
<Table>
<Caption>
CAPITAL LOSS CARRYFORWARD
-----------------------------------------------------------------
PORTFOLIO 2008 2009 2010 2011
- --------- -------------- -------------- -------------- --------------
Focused Equity Strategy* $ -- $ 5,162,582 $ 811,968 $ --
Focused Multi-Asset Strategy -- -- -- --
Focused Balanced Strategy* -- 2,121,281 1,108,014 --
Focused Fixed Income and Equity Strategy -- -- -- --
Focused Fixed Income Strategy -- -- -- --
Focused Large-Cap Growth* 695,156 357,048,757 243,653,370 --
Focused Multi-Cap Growth* 7,756,481 68,868,584 39,994,082 14,952,007
Focused 2000 Growth -- -- 9,513,594 --
Focused Large-Cap Value -- -- -- --
Focused Multi-Cap Value -- -- -- 24,440,429
Focused 2000 Value -- -- -- --
Focused Growth and Income -- 45,960,204 12,118,153 2,660,996
Focused International Equity -- -- -- --
Focused Technology -- 164,509,052 27,908,897 --
Focused Dividend Strategy 8,970,790 2,298,585 -- --
</Table>
* Certain Capital loss carryforward amounts may be subject to limitations
on their use pursuant to applicable U.S. Federal Income Tax Law.
86
<Page>
The Portfolio's indicated below, utilized capital loss carryforwards, which
offset net taxable gains realized in the year ended October 31, 2004
<Table>
<Caption>
CAPITAL LOSS
CARRYFORWARD
PORTFOLIO UTILIZED
- --------- ------------
Focused Equity Strategy $ 43,544
Focused Multi-Asset Strategy --
Focused Balanced Strategy 346,776
Focused Fixed Income and Equity Strategy --
Focused Fixed Income Strategy --
Focused Large-Cap Growth 87,022,110
Focused Multi-Cap Growth 35,087,497
Focused 2000 Growth 6,501,998
Focused Large-Cap Value 7,476,931
Focused Multi-Cap Value 28,180,090
Focused 2000 Value 2,224,570
Focused Growth and Income 8,600,943
Focused International Equity --
Focused Technology 20,471,667
Focused Dividend Strategy 7,221,562
</Table>
87
<Page>
As of April 30, 2005, the amounts of aggregate unrealized gain (loss) and the
cost of investment securities for federal tax purposes, including short-term
securities and repurchase agreements, were as follows:
<Table>
<Caption>
FOCUSED FOCUSED MULTI- FOCUSED FOCUSED FIXED FOCUSED
EQUITY STRATEGY ASSET STRATEGY BALANCED STRATEGY INCOME AND EQUITY FIXED INCOME
PORTFOLIO PORTFOLIO PORTFOLIO STRATEGY PORTFOLIO STRATEGY PORTFOLIO
----------------- ----------------- ----------------- ------------------ ------------------
Cost $ 542,511,709 $ 601,577,950 $ 461,716,436 $ 87,860,855 $ 38,724,308
================= ================= ================= ================== ==================
Appreciation 19,705,920 44,713,899 14,742,003 1,414,714 393,476
Depreciation (1,786,404) (704,173) (1,456,280) (428,173) (511,111)
----------------- ----------------- ----------------- ------------------ ------------------
Net unrealized appreciation
(depreciation) $ 17,919,516 $ 44,009,726 $ 13,285,723 $ 986,541 $ (117,635)
================= ================= ================= ================== ==================
<Caption>
FOCUSED MULTI- FOCUSED LARGE- FOCUSED MULTI-
FOCUSED LARGE-CAP CAP GROWTH FOCUSED 2000 CAP VALUE CAP VALUE
GROWTH PORTFOLIO PORTFOLIO GROWTH PORTFOLIO PORTFOLIO PORTFOLIO
----------------- ----------------- ----------------- ------------------ ------------------
Cost $ 1,511,679,819 $ 308,885,379 $ 293,111,303 $ 480,629,541 $ 538,032,748
================= ================= ================= ================== ==================
Appreciation 233,022,602 64,101,274 59,535,875 56,185,256 86,793,884
Depreciation (99,888,463) (11,495,385) (14,364,971) (29,481,529) (19,481,366)
----------------- ----------------- ----------------- ------------------ ------------------
Net unrealized appreciation
(depreciation) $ 133,134,139 $ 52,605,889 $ 45,170,904 $ 26,703,727 $ 67,312,518
================= ================= ================= ================== ==================
<Caption>
FOCUSED GROWTH FOCUSED FOCUSED
FOCUSED 2000 AND INCOME INTERNATIONAL TECHNOLOGY FOCUSED DIVIDEND
VALUE PORTFOLIO PORTFOLIO EQUITY PORTFOLIO PORTFOLIO STRATEGY PORTFOLIO
----------------- ----------------- ----------------- ------------------ ------------------
Cost $ 531,528,462 $ 349,508,899 $ 211,472,037 $ 80,549,544 $ 220,760,618
================= ================= ================= ================== ==================
Appreciation 57,496,757 48,176,199 26,573,973 10,026,211 21,411,238
Depreciation (36,010,321) (18,081,636) (5,164,959) (6,747,358) (15,297,476)
----------------- ----------------- ----------------- ------------------ ------------------
Net unrealized appreciation
(depreciation) $ 21,486,436 $ 30,094,563 $ 21,409,014 $ 3,278,853 $ 6,113,762
================= ================= ================= ================== ==================
</Table>
NOTE 8. EXPENSE REDUCTIONS
Through expense offset arrangements resulting from broker commission recapture,
a portion of the Portfolio's expenses have been reduced. For the period ended
April 30, 2005, the amount of expense reductions received by each Portfolio,
were as follows:
<Table>
<Caption>
TOTAL EXPENSE
PORTFOLIO REDUCTIONS
- -------- -------------
Focused Large-Cap Growth $ 589,239
Focused Multi-Cap Growth 2,516
Focused 2000 Growth 8,078
Focused 2000 Value 118,351
Focused Growth and Income 54,542
Focused International Equity 76,903
Focused Technology 11,109
</Table>
88
<Page>
NOTE 9 CAPITAL SHARE TRANSACTIONS
Transactions in shares of each class of each series were as follows:
<Table>
<Caption>
FOCUSED EQUITY STRATEGY
-----------------------------------------------------------------------
CLASS A SHARES
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 1,726,225* $ 30,360,298* 8,055,056** $ 135,480,588**
Shares issued by merger -- -- 239,692 4,122,703
Reinvested dividends 126,913 2,298,395 599 10,113
Shares redeemed (1,566,296) (27,680,779) (1,781,728) (29,523,684)
-------------- -------------- -------------- --------------
Net increase (decrease) 286,842 $ 4,977,914 6,513,619 $ 110,089,720
============== ============== ============== ==============
<Caption>
FOCUSED EQUITY STRATEGY
-----------------------------------------------------------------------
CLASS B
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 849,032 $ 14,821,033 3,586,811 $ 60,230,701
Shares issued by merger -- -- 767,778 13,100,103
Reinvested dividends 48,265 867,315 379 6,361
Shares redeemed (531,071)* (9,240,896)* (588,743)** (9,708,916)**
-------------- -------------- -------------- --------------
Net increase (decrease) 366,226 $ 6,447,452 3,766,225 $ 63,628,249
============== ============== ============== ==============
<Caption>
CLASS C (1)
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 2,505,514 $ 43,654,479 11,913,013 $ 198,102,021
Shares issued by merger -- -- 48,156 821,051
Reinvested dividends 110,093 1,977,266 1,058 17,716
Shares redeemed (1,858,886) (32,442,160) (2,013,934) (33,124,066)
-------------- -------------- -------------- --------------
Net increase (decrease) 756,721 $ 13,189,585 9,948,293 $ 165,816,722
============== ============== ============== ==============
<Caption>
CLASS I CLASS I
--------------------------------- ---------------------------------
FOR THE PERIOD
FOR THE SIX MONTHS ENDED FEBRUARY 23, 2004+
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 91,759 $ 1,627,759 71,796 $ 483,700
Shares issued by merger -- -- 475,950 8,186,342
Reinvested dividends 5,366 96,935 -- --
Shares redeemed (113,598) (1,999,626) (203,347) (3,366,861)
-------------- -------------- -------------- --------------
Net increase (decrease) (16,473) $ (274,932) 344,399 $ 5,303,181
============== ============== ============== ==============
<Caption>
FOCUSED MULTI-ASSET STRATEGY
-----------------------------------------------------------------------
CLASS A SHARES
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 2,951,437# $ 49,685,033# 7,536,141## $ 118,786,803##
Reinvested dividends 127,398 2,184,872 16,322 256,249
Shares redeemed (960,026) (16,175,259) (1,280,209) (20,136,213)
-------------- -------------- -------------- --------------
Net increase (decrease) 2,118,809 $ 35,694,646 6,272,254 $ 98,906,839
============== ============== ============== ==============
<Caption>
FOCUSED MULTI-ASSET STRATEGY
-----------------------------------------------------------------------
CLASS B
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 1,557,805 $ 26,082,670 3,982,486 $ 62,507,816
Reinvested dividends 39,227 670,383 181 2,841
Shares redeemed (396,066)# (6,620,701)# (556,290)## (8,687,600)##
-------------- -------------- -------------- --------------
Net increase (decrease) 1,200,966 $ 20,132,352 3,426,377 $ 53,823,057
============== ============== ============== ==============
<Caption>
CLASS C (1)
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 3,866,652 $ 64,624,581 11,819,197 $ 185,328,506
Reinvested dividends 103,582 1,770,208 575 8,998
Shares redeemed (1,850,099) (30,891,352) (1,591,465) (24,821,477)
-------------- -------------- -------------- --------------
Net increase (decrease) 2,120,135 $ 35,503,437 10,228,307 $ 160,516,027
============== ============== ============== ==============
</Table>
+ Commencement of Operations
* Includes automatic conversion of 62,412 shares of Class B shares in the
amount of $1,080,216 to 61,777 shares of Class A shares in the amount of
$1,080,216
** Includes automatic conversion of 36,266 shares of Class B shares in the
amount of $599,106 to 35,919 shares of Class A shares in the amount of
$599,106
# Includes automatic conversion of 35,035 shares of Class B shares in the
amount of $586,315 to 34,809 shares of Class A shares in the amount of
$586,315
## Includes automatic conversion of 69,434 shares of Class B shares in the
amount of $1,083,653 to 69,068 shares of Class A shares in the amount of
$1,083,653
(1) Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
@ Unaudited
89
<Page>
<Table>
<Caption>
FOCUSED BALANCED STRATEGY
-----------------------------------------------------------------------
CLASS A SHARES
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 1,568,303* $ 24,919,948* 5,568,331** $ 85,757,438**
Shares issued by merger -- -- 845,475 13,290,867
Reinvested dividends 169,530 2,725,800 66,529 1,028,976
Shares redeemed (949,428) (15,024,389) (1,644,387) (25,260,279)
-------------- -------------- -------------- --------------
Net increase (decrease) 788,405 $ 12,621,359 4,835,948 $ 74,817,002
============== ============== ============== ==============
<Caption>
FOCUSED BALANCED STRATEGY
-----------------------------------------------------------------------
CLASS B
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 683,936 $ 10,840,772 3,196,412 $ 49,982,599
Shares issued by merger -- -- 1,510,040 23,691,809
Reinvested dividends 119,773 1,926,171 16,532 255,018
Shares redeemed (553,978)* (8,772,198)* (913,278)** (13,992,884)**
-------------- -------------- -------------- --------------
Net increase (decrease) 249,731 $ 3,994,745 3,809,706 $ 59,936,542
============== ============== ============== ==============
<Caption>
CLASS C (1)
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 1,884,165 $ 29,885,760 8,704,328 $ 134,284,420
Shares issued by merger -- -- 255,038 4,006,646
Reinvested dividends 187,045 3,011,835 28,520 440,357
Shares redeemed (1,719,176) (27,251,930) (3,001,467) (45,999,071)
-------------- -------------- -------------- --------------
Net increase (decrease) 352,034 $ 5,645,665 5,986,419 $ 92,732,352
============== ============== ============== ==============
<Caption>
CLASS I CLASS I
--------------------------------- ---------------------------------
FOR THE PERIOD
FOR THE SIX MONTHS ENDED FEBRUARY 23, 2004+
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 275,358 $ 4,376,122 204,180 $ 2,395,455
Shares issued by merger -- -- 1,529,144 24,038,151
Reinvested dividends 20,936 335,586 7,658 118,764
Shares redeemed (216,962) (3,440,220) (877,526) (13,647,118)
-------------- -------------- -------------- --------------
Net increase (decrease) 79,332 $ 1,271,488 863,456 $ 12,905,252
============== ============== ============== ==============
<Caption>
FOCUSED FIXED INCOME AND EQUITY STRATEGY
-----------------------------------------------------------------------
CLASS A SHARES
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 401,191# $ 5,633,533# 1,615,562## $ 22,689,955##
Reinvested dividends 49,992 700,268 31,421 439,428
Shares redeemed (356,117) (4,985,273) (829,743) (11,595,607)
-------------- -------------- -------------- --------------
Net increase (decrease) 95,066 $ 1,348,528 817,240 $ 11,533,776
============== ============== ============== ==============
<Caption>
FOCUSED FIXED INCOME AND EQUITY STRATEGY
-----------------------------------------------------------------------
CLASS B
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 181,182 $ 2,527,884 533,969 $ 7,483,063
Reinvested dividends 26,233 367,639 13,668 191,072
Shares redeemed (114,684)# (1,604,919)# (238,089)## (3,335,905)##
-------------- -------------- -------------- --------------
Net increase (decrease) 92,731 $ 1,290,604 309,548 $ 4,338,230
============== ============== ============== ==============
<Caption>
CLASS C (1)
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 393,357 $ 5,504,115 1,535,526 $ 21,467,974
Reinvested dividends 50,885 713,362 29,428 411,417
Shares redeemed (574,969) (8,058,923) (650,495) (9,077,564)
-------------- -------------- -------------- --------------
Net increase (decrease) (130,727) $ (1,841,446) 914,459 $ 12,801,827
============== ============== ============== ==============
<Caption>
CLASS I CLASS I
--------------------------------- ---------------------------------
FOR THE PERIOD
FOR THE SIX MONTHS ENDED JULY 7, 2004+ THROUGH
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 61 $ 859 7,215 $ 100,000
Reinvested dividends 262 3,666 39 539
Shares redeemed -- -- -- --
-------------- -------------- -------------- --------------
Net increase (decrease) 323 $ 4,525 7,254 $ 100,539
============== ============== ============== ==============
</Table>
+ Commencement of Operations
* Includes automatic conversion of 42,048 shares of Class B shares in the
amount of $663,712 to 41,965 shares of Class A shares in the amount of
$663,712
** Includes automatic conversion of 56,467 shares of Class B shares in the
amount of $867,541 to 56,359 shares of Class A shares in the amount of
$867,541
# Includes automatic conversion of 9,166 shares of Class B shares in the
amount of $126,669 to 9,156 shares of Class A shares in the amount of
$126,669
## Includes automatic conversion of 6,463 shares of Class B shares in the
amount of $91,074 to 6,450 shares of Class A shares in the amount of
$91,074
(1) Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
@ Unaudited
90
<Page>
<Table>
<Caption>
FOCUSED FIXED INCOME STRATEGY
-----------------------------------------------------------------------
CLASS A SHARES
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 266,164* $ 3,427,503* 541,378** $ 7,004,960**
Reinvested dividends 18,765 242,100 21,478 277,898
Shares redeemed (136,528) (1,768,279) (525,673) (6,792,226)
-------------- -------------- -------------- --------------
Net increase (decrease) 148,401 $ 1,901,324 37,183 $ 490,632
============== ============== ============== ==============
<Caption>
FOCUSED FIXED INCOME STRATEGY
-----------------------------------------------------------------------
CLASS B
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 69,776 $ 898,078 323,421 $ 4,167,683
Reinvested dividends 11,889 153,352 12,709 164,195
Shares redeemed (72,148)* (932,113)* (174,469)** (2,249,695)**
-------------- -------------- -------------- --------------
Net increase (decrease) 9,517 $ 119,317 161,661 $ 2,082,183
============== ============== ============== ==============
<Caption>
CLASS C (1)
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 287,318 $ 3,697,044 1,906,382 $ 24,546,297
Reinvested dividends 32,867 423,794 30,850 398,252
Shares redeemed (408,292) (5,289,059) (1,156,181) (15,019,438)
-------------- -------------- -------------- --------------
Net increase (decrease) (88,107) $ (1,168,221) 781,051 $ 9,925,111
============== ============== ============== ==============
<Caption>
FOCUSED LARGE-CAP GROWTH PORTFOLIO
-----------------------------------------------------------------------
CLASS A SHARES
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 3,700,211# $ 62,439,611# 22,615,574## $ 385,182,154##
Reinvested dividends -- -- -- --
Shares redeemed (6,136,628) (103,863,640) (8,122,284) (135,045,333)
-------------- -------------- -------------- --------------
Net increase (decrease) (2,436,417) $ (41,424,029) 14,493,290 $ 250,136,821
============== ============== ============== ==============
<Caption>
FOCUSED LARGE-CAP GROWTH PORTFOLIO
-----------------------------------------------------------------------
CLASS B
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 536,789 $ 8,662,928 2,743,291 $ 45,080,945
Reinvested dividends -- -- -- --
Shares redeemed (4,601,494)# (74,328,695)# (5,988,433)## (96,178,476)##
-------------- -------------- -------------- --------------
Net increase (decrease) (4,064,705) $ (65,665,767) (3,245,142) $ (51,097,531)
============== ============== ============== ==============
<Caption>
CLASS C (1)
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 1,175,594 $ 19,077,353 6,107,255 $ 99,910,105
Reinvested dividends -- -- -- --
Shares redeemed (6,026,708) (97,455,355) (7,461,059) (119,843,363)
-------------- -------------- -------------- --------------
Net increase (decrease) (4,851,114) $ (78,378,002) (1,353,804) $ (19,933,258)
============== ============== ============== ==============
<Caption>
CLASS Z
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 330,619 $ 5,749,562 781,570 $ 13,487,898
Reinvested dividends -- -- -- --
Shares redeemed (538,478) (9,322,965) (427,958) (7,200,965)
-------------- -------------- -------------- --------------
Net increase (decrease) (207,859) $ (3,573,403) 353,612 $ 6,286,933
============== ============== ============== ==============
</Table>
* Includes automatic conversion of 3,819 shares of Class B shares in the
amount of $48,913 to 3,816 shares of Class A shares in the amount of
$48,913
** Includes automatic conversion of 5,509 shares of Class B shares in the
amount of $70,817 to 5,505 shares of Class A shares in the amount of
$70,817
# Includes automatic conversion of 372,898 shares of Class B shares in the
amount of $6,006,937 to 372,789 shares of Class A shares in the amount of
$6,006,937
## Includes automatic conversion of 356,494 shares of Class B shares in the
amount of $5,674,472 to 343,146 shares of Class A shares in the amount of
$5,674,472
(1) Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
@ Unaudited
91
<Page>
<Table>
<Caption>
FOCUSED MULTI-CAP GROWTH PORTFOLIO
-----------------------------------------------------------------------
CLASS A SHARES
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 1,772,420* $ 35,122,121* 4,672,374** $ 80,828,781**
Reinvested dividends -- -- -- --
Shares redeemed (900,287) (17,837,011) (1,731,397) (29,860,200)
-------------- -------------- -------------- --------------
Net increase (decrease) 872,133 $ 17,285,110 2,940,977 $ 50,968,581
============== ============== ============== ==============
<Caption>
FOCUSED MULTI-CAP GROWTH PORTFOLIO
-----------------------------------------------------------------------
CLASS B
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 358,119 $ 6,670,122 655,950 $ 10,720,980
Reinvested dividends -- -- -- --
Shares redeemed (1,164,591)* (21,592,540)* (3,120,551)** (50,796,969)**
-------------- -------------- -------------- --------------
Net increase (decrease) (806,472) $ (14,922,418) (2,464,601) $ (40,075,989)
============== ============== ============== ==============
<Caption>
CLASS C (1)
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 306,956 $ 5,710,977 606,632 $ 9,944,192
Reinvested dividends -- -- -- --
Shares redeemed (397,041) (7,362,736) (725,792) (11,791,753)
-------------- -------------- -------------- --------------
Net increase (decrease) (90,085) $ (1,651,759) (119,160) $ (1,847,561)
============== ============== ============== ==============
<Caption>
CLASS X
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 9,603 $ 191,396 16,310 $ 285,909
Reinvested dividends -- -- -- --
Shares redeemed (310) (6,134) (861) (14,898)
-------------- -------------- -------------- --------------
Net increase (decrease) 9,293 $ 185,262 15,449 $ 271,011
============== ============== ============== ==============
<Caption>
FOCUSED 2000 GROWTH PORTFOLIO
-----------------------------------------------------------------------
CLASS A SHARES
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 1,708,859# $ 29,474,442# 8,002,285## $ 123,188,573##
Reinvested dividends -- -- -- --
Shares redeemed (669,676) (11,639,635) (971,993) (14,740,766)
-------------- -------------- -------------- --------------
Net increase (decrease) 1,039,183 $ 17,834,807 7,030,292 $ 108,447,807
============== ============== ============== ==============
<Caption>
FOCUSED 2000 GROWTH PORTFOLIO
-----------------------------------------------------------------------
CLASS B
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 259,784 $ 4,246,903 816,491 $ 11,975,617
Reinvested dividends -- -- 4 50
Shares redeemed (268,142)# (4,412,151)# (483,156)## (7,048,160)##
-------------- -------------- -------------- --------------
Net increase (decrease) (8,358) $ (165,248) 333,339 $ 4,927,507
============== ============== ============== ==============
<Caption>
CLASS C (1)
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 521,657 $ 8,490,119 1,938,176 $ 28,402,764
Reinvested dividends -- -- -- --
Shares redeemed (658,937) (10,799,130) (1,070,496) (15,393,434)
-------------- -------------- -------------- --------------
Net increase (decrease) (137,280) $ (2,309,011) 867,680 $ 13,009,330
============== ============== ============== ==============
<Caption>
CLASS I
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 57,781 $ 1,012,083 142,565 $ 2,201,678
Reinvested dividends -- -- -- --
Shares redeemed (45,418) (792,269) (261,951) (3,998,770)
-------------- -------------- -------------- --------------
Net increase (decrease) 12,363 $ 219,814 (119,386) $ (1,797,092)
============== ============== ============== ==============
</Table>
* Includes automatic conversion of 634,295 shares of Class B shares in the
amount of $11,752,393 to 595,465 shares of Class A shares in the amount of
$11,752,393
** Includes automatic conversion of 1,608,803 shares of Class B shares in the
amount of $26,217,559 to 1,517,569 shares of Class A shares in the amount
of $26,217,559
# Includes automatic conversion of 19,429 shares of Class B shares in the
amount of $315,163 to 18,438 shares of Class A shares in the amount of
$315,163
## Includes automatic conversion of 21,405 shares of Class B shares in the
amount of $317,527 to 20,429 shares of Class A shares in the amount of
$317,527
(1) Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
@ Unaudited
92
<Page>
<Table>
<Caption>
FOCUSED LARGE-CAP VALUE PORTFOLIO
-----------------------------------------------------------------------
CLASS A SHARES
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 2,232,595* $ 34,463,947* 15,206,464** $ 225,992,445**
Reinvested dividends 216,051 3,355,273 19,611 284,555
Shares redeemed (1,322,898) (20,558,356) (2,222,479) (32,722,987)
-------------- -------------- -------------- --------------
Net increase (decrease) 1,125,748 $ 17,260,864 13,003,596 $ 193,554,013
============== ============== ============== ==============
<Caption>
FOCUSED LARGE-CAP VALUE PORTFOLIO
-----------------------------------------------------------------------
CLASS B
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 193,477 $ 2,882,685 754,095 $ 10,828,250
Reinvested dividends 17,885 267,896 -- --
Shares redeemed (682,868)* (10,170,527)* (719,472)** (10,271,690)**
-------------- -------------- -------------- --------------
Net increase (decrease) (471,506) $ (7,019,946) 34,623 $ 556,560
============== ============== ============== ==============
<Caption>
CLASS C (1)
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 382,384 $ 5,733,775 2,075,064 $ 29,797,894
Reinvested dividends 31,151 467,318 -- --
Shares redeemed (710,320) (10,594,909) (896,879) (12,807,565)
-------------- -------------- -------------- --------------
Net increase (decrease) (296,785) $ (4,393,816) 1,178,185 $ 16,990,329
============== ============== ============== ==============
<Caption>
FOCUSED MULTI-CAP VALUE PORTFOLIO
-----------------------------------------------------------------------
CLASS A SHARES
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 1,613,032# $ 33,119,140# 3,429,914## $ 63,206,686##
Reinvested dividends -- -- 68,556 1,207,281
Shares redeemed (1,616,868) (33,030,505) (2,110,913) (38,931,593)
-------------- -------------- -------------- --------------
Net increase (decrease) (3,836) $ 88,635 1,387,557 $ 25,482,374
============== ============== ============== ==============
<Caption>
FOCUSED MULTI-CAP VALUE PORTFOLIO
-----------------------------------------------------------------------
CLASS B
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 905,038 $ 18,010,233 886,486 $ 15,988,957
Reinvested dividends -- -- 12,892 222,518
Shares redeemed (1,703,221)# (34,013,193)# (2,295,161)## (41,294,111)##
-------------- -------------- -------------- --------------
Net increase (decrease) (798,183) $ (16,002,960) (1,395,783) $ (25,082,636)
============== ============== ============== ==============
<Caption>
CLASS C (1)
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 410,550 $ 8,203,346 1,318,585 $ 23,730,021
Reinvested dividends -- -- 15,585 268,895
Shares redeemed (1,509,602) (30,165,100) (3,078,363) (55,278,964)
-------------- -------------- -------------- --------------
Net increase (decrease) (1,099,052) $ (21,961,754) (1,744,193) $ (31,280,048)
============== ============== ============== ==============
<Caption>
CLASS I
---------------------------------
FOR THE YEAR ENDED
OCTOBER 31, 2004
---------------------------------
SHARES AMOUNT
-------------- --------------
Shares sold 65,871 $ 1,231,063
Reinvested dividends 8,233 145,227
Shares redeemed (1,063,459) (20,570,207)
-------------- --------------
Net increase (decrease) (989,355) $ (19,193,917)
============== ==============
</Table>
* Includes automatic conversion of 236,309 shares of Class B shares in the
amount of $3,526,090 to 227,641 shares of Class A shares in the amount of
$3,526,090
** Includes automatic conversion of 73,501 shares of Class B shares in the
amount of $1,041,515 to 70,974 shares of Class A shares in the amount of
$1,041,515
# Includes automatic conversion of 66,153 shares of Class B shares in the
amount of $1,318,710 to 64,361 shares of Class A shares in the amount of
$1,318,710
## Includes automatic conversion of 124,527 shares of Class B shares in the
amount of $2,251,359 to 121,732 shares of Class A shares in the amount of
$2,251,359
(1) Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
@ Unaudited
93
<Page>
<Table>
<Caption>
FOCUSED 2000 VALUE PORTFOLIO
-----------------------------------------------------------------------
CLASS A SHARES
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 2,709,753* $ 57,337,622* 10,041,656** $ 200,898,576**
Reinvested dividends 1,736,866 36,161,543 -- --
Shares redeemed (2,174,497) (44,931,226) (1,915,452) (38,794,542)
-------------- -------------- -------------- --------------
Net increase (decrease) 2,272,122 $ 48,567,939 8,126,204 $ 162,104,034
============== ============== ============== ==============
<Caption>
FOCUSED 2000 VALUE PORTFOLIO
-----------------------------------------------------------------------
CLASS B
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 424,045 $ 8,529,587 974,045 $ 18,699,301
Reinvested dividends 385,879 7,597,968 -- --
Shares redeemed (772,637)* (15,300,162)* (796,549)** (15,272,636)**
-------------- -------------- -------------- --------------
Net increase (decrease) 37,287 $ 827,393 177,496 $ 3,426,665
============== ============== ============== ==============
<Caption>
CLASS C (1)
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 971,778 $ 19,616,201 2,208,755 $ 42,503,729
Reinvested dividends 588,690 11,614,851 -- --
Shares redeemed (864,157) (17,102,445) (1,098,869) (21,191,100)
-------------- -------------- -------------- --------------
Net increase (decrease) 696,311 $ 14,128,607 1,109,886 $ 21,312,629
============== ============== ============== ==============
<Caption>
FOCUSED GROWTH AND INCOME PORTFOLIO
-----------------------------------------------------------------------
CLASS A SHARES
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 1,222,488# $ 19,648,331# 4,754,445## $ 73,517,220##
Reinvested dividends -- -- -- --
Shares redeemed (1,411,051) (22,678,183) (2,243,362) (34,393,117)
-------------- -------------- -------------- --------------
Net increase (decrease) (188,563) $ (3,029,852) 2,511,083 $ 39,124,103
============== ============== ============== ==============
<Caption>
FOCUSED GROWTH AND INCOME PORTFOLIO
-----------------------------------------------------------------------
CLASS B
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 212,190 $ 3,247,336 1,236,311 $ 18,476,403
Reinvested dividends -- -- -- --
Shares redeemed (985,390)# (15,101,355)# (1,435,315)## (21,037,483)##
-------------- -------------- -------------- --------------
Net increase (decrease) (773,200) $ (11,854,019) (199,004) $ (2,561,080)
============== ============== ============== ==============
<Caption>
CLASS C (1)
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 346,547 $ 5,313,042 2,514,166 $ 37,196,286
Reinvested dividends -- -- -- --
Shares redeemed (1,605,604) (24,551,399) (2,658,038) (38,625,193)
-------------- -------------- -------------- --------------
Net increase (decrease) (1,259,057) $ (19,238,357) (143,872) $ (1,428,907)
============== ============== ============== ==============
<Caption>
CLASS X
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 231,108 $ 3,763,360 1,026,677 $ 15,929,182
Reinvested dividends -- -- -- --
Shares redeemed (2,536,067) (41,075,830) (192,802) (2,968,601)
-------------- -------------- -------------- --------------
Net increase (decrease) (2,304,959) $ (37,312,470) 833,875 $ 12,960,581
============== ============== ============== ==============
</Table>
* Includes automatic conversion of 275,243 shares of Class B shares in the
amount of $5,478,032 to 260,319 shares of Class A shares in the amount of
$5,478,032
** Includes automatic conversion of 92,519 shares of Class B shares in the
amount of $1,799,177 to 88,269 shares of Class A shares in the amount of
$1,799,177
# Includes automatic conversion of 175,747 shares of Class B shares in the
amount of $2,699,586 to 167,371 shares of Class A shares in the amount of
$2,699,586
## Includes automatic conversion of 121,214 shares of Class B shares in the
amount of $1,755,452 to 115,872 shares of Class A shares in the amount of
$1,755,452
(1) Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
@ Unaudited
94
<Page>
<Table>
<Caption>
FOCUSED INTERNATIONAL EQUITY PORTFOLIO
-----------------------------------------------------------------------
CLASS A SHARES
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 1,120,545* $ 19,230,220* 6,175,757** $ 99,858,965**
Reinvested dividends 444,320 7,513,444 27,068 422,536
Shares redeemed (358,921) (6,141,108) (488,520) (7,916,869)
-------------- -------------- -------------- --------------
Net increase (decrease) 1,205,944 $ 20,602,556 5,714,305 $ 92,364,632
============== ============== ============== ==============
<Caption>
FOCUSED INTERNATIONAL EQUITY PORTFOLIO
-----------------------------------------------------------------------
CLASS B
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 163,355 $ 2,731,383 263,378 $ 4,194,222
Reinvested dividends 25,028 415,709 2,586 39,817
Shares redeemed (102,511)* (1,719,767)* (130,281)** (2,064,944)**
-------------- -------------- -------------- --------------
Net increase (decrease) 85,872 $ 1,427,325 135,683 $ 2,169,095
============== ============== ============== ==============
<Caption>
CLASS C (1)
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 342,715 $ 5,745,770 843,408 $ 13,395,727
Reinvested dividends 68,686 1,138,817 6,049 93,094
Shares redeemed (183,472) (3,072,972) (223,055) (3,567,294)
-------------- -------------- -------------- --------------
Net increase (decrease) 227,929 $ 3,811,615 626,402 $ 9,921,527
============== ============== ============== ==============
<Caption>
FOCUSED TECHNOLOGY PORTFOLIO
-----------------------------------------------------------------------
CLASS A SHARES
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 1,564,307# $ 8,621,826# 3,928,724## $ 20,148,304##
Reinvested dividends -- -- -- --
Shares redeemed (1,547,325) (8,536,403) (3,971,660) (19,846,524)
-------------- -------------- -------------- --------------
Net increase (decrease) 16,982 $ 85,423 (42,936) $ 301,780
============== ============== ============== ==============
<Caption>
FOCUSED TECHNOLOGY PORTFOLIO
-----------------------------------------------------------------------
CLASS B
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 334,629 $ 1,805,950 1,381,952 $ 6,925,078
Reinvested dividends -- -- -- --
Shares redeemed (613,085)# (3,265,527)# (1,160,936)## (5,762,800)##
-------------- -------------- -------------- --------------
Net increase (decrease) (278,456) $ (1,459,577) 221,016 $ 1,162,278
============== ============== ============== ==============
<Caption>
CLASS C (1)
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 577,868 $ 3,119,987 1,518,671 $ 7,607,540
Reinvested dividends -- -- -- --
Shares redeemed (990,108) (5,256,301) (1,987,665) (9,751,061)
-------------- -------------- -------------- --------------
Net increase (decrease) (412,240) $ (2,136,314) (468,994) $ (2,143,521)
============== ============== ============== ==============
</Table>
* Includes automatic conversion of 16,212 shares of Class B shares in the
amount of $271,250 to 15,906 shares of Class A shares in the amount of
$271,250
** Includes automatic conversion of 30,637 shares of Class B shares in the
amount of $487,920 to 30,146 shares of Class A shares in the amount of
$487,920
# Includes automatic conversion of 30,566 shares of Class B shares in the
amount of $159,583 to 29,686 shares of Class A shares in the amount of
$159,583
## Includes automatic conversion of 66,401 shares of Class B shares in the
amount of $336,538 to 64,854 shares of Class A shares in the amount of
$336,538
(1) Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
@ Unaudited
95
<Page>
<Table>
<Caption>
FOCUSED DIVIDEND STRATEGY PORTFOLIO
-----------------------------------------------------------------------
CLASS A SHARES
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 770,599* $ 9,901,908* 3,237,330** $ 39,693,426**
Reinvested dividends 30,195 390,115 56,321 690,992
Shares redeemed (1,044,987) (13,403,597) (2,124,502) (25,969,781)
-------------- -------------- -------------- --------------
Net increase (decrease) (244,193) $ (3,111,574) 1,169,149 $ 14,414,637
============== ============== ============== ==============
<Caption>
FOCUSED DIVIDEND STRATEGY PORTFOLIO
-----------------------------------------------------------------------
CLASS B
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 335,453 $ 4,287,495 1,102,392 $ 13,480,063
Reinvested dividends 18,660 240,333 37,089 452,614
Shares redeemed (549,152)* (7,020,619)* (830,413)** (10,129,378)**
-------------- -------------- -------------- --------------
Net increase (decrease) (195,039) $ (2,492,791) 309,068 $ 3,803,299
============== ============== ============== ==============
<Caption>
CLASS C (1)
-----------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 2005@ OCTOBER 31, 2004
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Shares sold 713,187 $ 9,115,884 2,921,309 $ 35,630,528
Reinvested dividends 29,607 381,296 58,468 714,093
Shares redeemed (914,022) (11,678,847) (1,350,575) (16,516,680)
-------------- -------------- -------------- --------------
Net increase (decrease) (171,228) $ (2,181,667) 1,629,202 $ 19,827,941
============== ============== ============== ==============
</Table>
* Includes automatic conversion of 31,758 shares of Class B shares in the
amount of $404,989 to 31,640 shares of Class A shares in the amount of
$404,989
** Includes automatic conversion of 26,332 shares of Class B shares in the
amount of $322,101 to 26,233 shares of Class A shares in the amount of
$322,101
(1) Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
@ Unaudited
NOTE 10. DIRECTORS' RETIREMENT PLAN
The Directors of the SunAmerica Focused Series, Inc. have adopted the AIG
SunAmerica Disinterested Trustees' and Directors' Retirement Plan (the
"Retirement Plan") effective January 1, 1993 for the unaffiliated Directors. The
Retirement Plan provides generally that if an unaffiliated Director who has at
least 10 years of consecutive service as a Disinterested Director of any of the
AIG SunAmerica mutual funds (an "Eligible Director"), retires after reaching age
60 but before age 70, or who has at least 5 years of consecutive service after
reaching age 65 but before 70, or dies while a Director, such person will be
eligible to receive a retirement or death benefit from each AIG SunAmerica
mutual fund with respect to which he or she is an Eligible Director. As of each
birthday, prior to the 70th birthday, but in no event for a period greater than
10 years, each Eligible Director will be credited with an amount equal to 50% of
his or her regular fees (excluding committee fees) for services as a
Disinterested Director of each AIG SunAmerica mutual fund for the calendar year
in which such birthday occurs. In addition, an amount equal to 8.50% of any
amounts credited under the preceding clause during prior years, is added to each
Eligible Director's account until such Eligible Director reaches his or her 70th
birthday. An Eligible Director may receive any benefits payable under the
Retirement Plan, at his or her election, either in one lump sum or in up to
fifteen annual installments. Any undistributed amounts shall continue to accrue
interest at 8.50%.
96
<Page>
The following amounts for the Retirement Plan Liabilities are included in the
Directors' fees and expense line on the Statement of Assets and Liabilities and
the Amounts for the Retirement Plan Expenses are included in the Directors' fees
and expenses line on the Statement of Operations.
<Table>
<Caption>
RETIREMENT PLAN RETIREMENT PLAN RETIREMENT PLAN
LIABILITY EXPENSE PAYMENTS
--------------- --------------- ---------------
PORTFOLIO AS OF APRIL 30, 2005
- ---------------------------------------- ---------------------------------------------------
Focused Equity Strategy $ 6,725 $ 2,583 $ 68
Focused Multi-Asset Strategy 6,490 2,731 65
Focused Balanced Strategy 7,471 2,237 83
Focused Fixed Income and Equity Strategy 1,394 470 16
Focused Fixed Income Strategy 533 185 6
Focused Large-Cap Growth 153,584 10,374 3,818
Focused Multi-Cap Growth 50,849 1,998 1,595
Focused 2000 Growth 7,070 1,701 102
Focused Large-Cap Value 16,438 2,538 361
Focused Multi-Cap Value 45,743 3,652 969
Focused 2000 Value 18,788 2,813 401
Focused Growth and Income 26,197 2,466 599
Focused International Equity 4,275 1,041 65
Focused Technology 8,447 569 213
Focused Dividend Strategy 13,889 1,283 375
</Table>
NOTE 11. LINES OF CREDIT
The AIG SunAmerica Family of Mutual Funds has established a $75 million
committed and $50 million uncommitted lines of credit with State Street Bank &
Trust Co., the Portfolios' custodian. Interest is currently payable at the
Federal Funds rate plus 50 basis points on the committed line and State Street's
discretionary bid rate on the uncommitted line of credit. There is also a
commitment fee of 10 basis points per annum on the daily unused portion of the
$75 million committed line of credit which, is included in the other expenses
line on the Statement of Operations. Borrowings under the line of credit will
commence when the respective Portfolio's cash shortfall exceeds $100,000. During
the period ending April 30, 2005, the following Portfolios had borrowings:
<Table>
<Caption>
DAYS INTEREST AVERAGE DEBT WEIGHTED AVERAGE
OUTSTANDING CHARGES UTILIZED INTEREST
----------- -------- ------------ ----------------
Focused Large-Cap Growth Portfolio 51 $ 4,864 $ 1,246,757 2.81%
Focused 2000 Growth Portfolio 2 72 449,066 2.10
Focused Large-Cap Value Portfolio 27 879 424,130 2.94
Focused Multi-Cap Value Portfolio 15 1,404 1,069,873 3.09
Focused Growth and Income Portfolio 74 9,234 1,474,911 2.90
Focused International Equity Portfolio 16 1,574 1,149,202 3.17
</Table>
At April 30, 2005, the Focused Growth and Income Portfolio had $151,867 in
borrowings outstanding at an interest rate of 3.50%.
NOTE 12. INTERFUND LENDING AGREEMENT
Pursuant to exemptive relief granted by the Securities and Exchange Commission,
the Portfolios are permitted to participate in an interfund lending program
among investment companies advised by SAAMCo or an affiliate. The interfund
lending program allows the participating Portfolios to borrow money from and
loan money to each other for the temporary or emergency purposes. An interfund
loan will be made under this facility only if the participating Portfolios
receive a more favorable interest rate than would otherwise be available from a
typical bank for a comparable transaction. For the period ended April 30, 2005,
none of the Portfolios participated in the program.
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NOTE 13. INVESTMENT CONCENTRATION
All Portfolios, except Focused Dividend Strategy Portfolio, may invest
internationally, including in "emerging market" countries. These securities may
be denominated in currencies other than U.S. dollars. While investing
internationally may reduce portfolio risk by increasing the diversification of
portfolio investment, the value of the investment may be affected by fluctuating
currency values, changing local and regional economic, political and social
conditions, and greater market volatility. In addition, foreign securities may
not be as liquid as domestic securities. These risks are primarily risks of the
Focused International Equity Portfolio. At April 30, 2005, the Focused
International Equity Portfolio had approximately 20.6% of its net assets
invested in equity securities of companies domiciled in the United Kingdom.
NOTE 14. SUBSEQUENT EVENTS
At a regular meeting of the Board of Directors held on November 30, 2004, the
Board approved the establishment of two new portfolios: Focused Mid-Cap Growth
Portfolio and Focused Mid-Cap Value Portfolio. These portfolios are scheduled to
commence operations on or about August 2, 2005.
NOTE 15. OTHER INFORMATION
On May 26, 2005, the New York Attorney General and the New York Superintendent
of Insurance filed a civil complaint against American International Group, Inc.
("AIG") as well as its former Chairman and Chief Executive Officer and former
Vice Chairman and Chief Financial Officer, in the Supreme Court of the State of
New York. The complaint asserts claims under New York's Martin Act and Insurance
Law, among others, and makes allegations concerning certain transactions entered
into by AIG and certain of its subsidiaries, but in no case involving any
subsidiary engaged in providing management or administrative services to the
Portfolios. The complaint seeks disgorgement, injunctive relief, punitive
damages and costs, among other things.
AIG is the indirect parent company and an affiliated person of the AIG
SunAmerica Asset Management Corp. ("Adviser") and AIG SunAmerica Capital
Services, Inc. (the "Distributor"). Neither the Adviser, the Distributor or
their respective officers and directors nor the Portfolios have been named in
the complaint, and the complaint does not seek any penalties against them.
In the Adviser's view, the matters alleged in the lawsuit are not material in
relation to the financial position of the Adviser or the Distributor, or to
their ability to provide their respective services to the Portfolios. Due to a
provision in the law governing the operation of mutual funds, however, if the
lawsuit results in an injunction being entered against AIG, then the Adviser and
the Distributor will need to obtain permission from the Securities and Exchange
Commission to continue to service the Portfolios. While the Securities and
Exchange Commission has granted this type of relief to others in the past in
similar circumstances, there is no assurance that this permission would be
granted.
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APPROVAL OF ADVISORY AGREEMENTS -- APRIL 30, 2005 -- (UNAUDITED)
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
During the last fiscal half-year, the Board of Directors (the "Board"),
including the Directors that are not interested persons of SunAmerica Focused
Series, Inc. (the "Portfolios") (the "Disinterested Directors"), approved new
Subadvisory Agreements between Merrill Lynch Investment Management, d/b/a
Mercury Advisors ("Mercury Advisors"), PEA Capital LLC ("PEA Capital"), and
Henderson Global Investors (North America) Inc. ("Henderson") (collectively the
"Subadvisers") and SAAMCo, with respect to certain of the Portfolios.
Specifically, at a meeting of the Board of Directors held on January 12, 2005,
the Board, including the Disinterested Directors, approved new Subadvisory
Agreements between Mercury Advisors and SAAMCo with respect to the Focused
Large-Cap Value Portfolio, and between PEA Capital and SAAMCo with respect to
the Focused Growth and Income Portfolio. The Board next approved a new
Subadvisory Agreement at a meeting held on April 13, 2005, between Henderson and
SAAMCo with respect to the Focused International Equity Portfolio.
In accordance with Section 15(c) of the Investment Company Act of 1940, as
amended (the "1940 Act"), the Board received materials for its consideration of
the following: (1) the nature and quality of the services reasonably anticipated
to be provided and the results reasonably anticipated to be achieved by the
Subadvisers; (2) the amount and structure of the Subadvisers' fees and
comparative fee information for the Portfolios and representative peer groups,
(3) the terms of the Subadvisory Agreements; (4) economies of scale; (5) each
Subadviser's compliance history and program; (6) the Portfolios' investment
performance as compared to the Subadvisers' historical investment performance;
and (7) the management personnel and operations of the Subadvisers. Experienced
counsel that is independent of SAAMCo provided guidance to the Board. These
factors, as considered by the Board, are described in more detail below.
NATURE, EXTENT AND QUALITY OF SERVICES
The Board, including the Disinterested Directors, considered the nature, quality
and extent of services to be provided by each Subadviser. The Board noted that
the Subadvisers are responsible for providing investment management services,
including investment research, advice and supervision, and determining which
securities shall be purchased or sold by each Portfolio. The Board reviewed each
Subadviser's history, structure and size, and investment experience. The Board
was informed that in SAAMCo's opinion, each of the Subadvisers has the size,
visibility and resources to attract and retain highly qualified investment
professionals. Given that the Portfolios are multi-managed funds, the Board also
considered how the proposed Subadviser's style would fit with and complement the
other Subadvisers to the Portfolio. With respect to administrative services, the
Board considered that each Subadviser provides general assistance in marketing
and has developed internal procedures for monitoring compliance with the
investment objectives, policies and restrictions of the Portfolios as set forth
in the prospectus.
The Board concluded that it was satisfied with the nature, quality and extent of
the services to be provided by the Subadvisers and that there was a reasonable
basis on which to conclude that the Subadvisers would be capable of providing
the high quality of investment management services expected by the Board.
THE AMOUNT AND STRUCTURE OF THE SUBADVISERS' FEES
The Board, including the Disinterested Directors, received information regarding
the reasonableness of the subadvisory fees. The Board compared the subadvisory
fee with those of other advisers and considered the indirect costs and benefits
of providing such subadvisory services.
To assist in analyzing the reasonableness of the fees, the Board received
reports prepared independently by Lipper, Inc. ("Lipper"). The reports compared
the subadvisory fees paid out by SAAMCo for each of the Portfolios to fees paid
by Funds within their peer groups. For all three Portfolios, the subadvisory fee
to be paid by SAAMCo was
99
<Page>
slightly higher than the median subadvisory fee charged in the Portfolios peer
group. In a memo prepared by SAAMCo and presented to the Board, SAAMCo stated
that the advisory fee rates for each Subadviser were negotiated based on the
consideration of a variety of factors, including: the value of the services
provided; the competitive environment in which the portfolio is marketed; the
investment characteristics of the portfolio relative to other similar funds in
its category as tracked by Lipper; and fees charged to comparable portfolios.
The Board, including the Disinterested Directors, considered that each Portfolio
pays a fee to SAAMCo pursuant to the Investment Advisory and Management
Agreement, and that, in turn, SAAMCo rather than the Portfolios, pays a fee to
each Subadviser. Therefore, the Board considered the amount retained by SAAMCo
and the fee paid to the Subadviser with respect to the different services
provided by the Subadvisers.
On the basis of the information considered, the Board was satisfied with
SAAMCo's recommendation that the subadvisory fee rates were fair in light of the
usual and customary charges made for services of the same nature and quality.
TERMS OF THE SUBADVISORY AGREEMENT
The Board, including the Disinterested Directors, received a draft of the
proposed SubAdvisory Agreements. The Board considered that the Subadvisory
Agreements will continue in effect for a period of two years from the date of
their execution, unless terminated sooner. The Board further considered that
they may be renewed from year to year, so long as their continuance is
specifically approved at least annually in accordance with the requirement of
the 1940 Act and that the Subadvisory Agreements provide that they will
terminate in the event of an assignment (as defined in the 1940 Act) or upon
termination of the Advisory Agreement. The Board further considered, that under
the terms of the Subadvisory Agreements, no Subadviser is liable to the
Portfolios, or their shareholders, for any act or omission by it or for any
losses sustained by the Portfolios or their shareholders, except in the case of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties; and SAAMCo may terminate any Subadvisory Agreement with a
Subadviser without shareholder approval.
The Board also considered that SAAMCo has received an exemptive order from the
SEC that permits SAAMCo, subject to certain conditions, to enter into agreements
relating to the Portfolios with Subadvisers to which it is not "affiliated" as
defined under the 1940 Act ("Unaffiliated Advisers") with approval by the Board
of Directors, but without obtaining shareholder approval. The Board also
considered that subject to Board approval, the exemptive order also permits
SAAMCo, to employ new Unaffiliated Advisers or continue the employment of
existing Portfolios, change the terms of particular agreements with Unaffiliated
Advisers or continue the employment of existing Unaffiliated Advisers after
events that would otherwise cause an automatic termination of a subadvisory
agreement. Additionally, the Board considered that shareholders will be notified
of any Subadviser changes.
The Board also considered that each Subadvisory Agreement provides that the
Subadviser will pay all of its own expenses in connection with the performance
of its duties as well as the cost of maintaining the staff and personnel as
necessary for it to perform its obligations.
ECONOMIES OF SCALE
The Board considered information about the potential of shareholders to
experience economies of scale as the Portfolios grow in size. The Board
considered that because SAAMCo, and not the Portfolio, is responsible for paying
any fees to Subadvisors, that any breakpoints in the Subadvisory Agreements
would not directly benefit the Portfolios' shareholders. The Board also
considered that they had previously approved net expense ratios in the
Investment Advisory and Management Agreement between SAAMCo and the Portfolios.
Under this agreement, SAAMCo will waive and reimburse the Portfolios should the
Total Annual Fund Operating Expenses be higher than the net expense ratio. This
would keep shareholders expenses below a certain level and would provide
shareholders with a similar benefit as breakpoints in realizing economies of
scale.
100
<Page>
COMPLIANCE
The Board considered each Subadviser's Code of Ethics, as well as their
compliance and regulatory history, including information concerning their
involvement in any regulatory actions or investigations. In addition, the Board
considered each Subadviser's compliance staff, which would be responsible for
providing compliance functions for the Subadviser.
INVESTMENT PERFORMANCE
The Board, including the Disinterested Directors, received information regarding
the investment performance of the Portfolios. The Board specifically considered
each Subadvisers historical performance in regards to any similarly managed
accounts as compared to the Portfolios, Lipper peer groups and the appropriate
indices. The Board considered information provided by Lipper, and information
prepared by SAAMCo, based on information provided by Morningstar, an independent
provider of investment company data. Generally, performance information provided
were annualized returns for the period since inception, its one-, two-, three-,
four-, and five-year periods.
For the Focused Large-Cap Value Portfolio the Board considered that the
Portfolio had under performed its benchmark for the one-, two- and three-year
periods. The Board also reviewed performance comparisons between the Focused
Large-Cap Value Portfolio and the Merrill Large-Cap Value Fund, which is managed
by Mercury. The Board considered that the Fund managed by Mercury had a similar
investment strategy and had outperformed the Focused Large-Cap Value Portfolio
for the one-, two- and three-year periods ending on November 30, 2004. The Board
further considered that the Focused Large-Cap Value Portfolio ranked in the
fourth or fifth quintile of its relative peer group, while the Merrill Large-Cap
Value ranked in the first quintile of the same peer group for each of the
relevant periods.
With respect to the Focused Growth and Income Portfolio, the Board considered
that the Portfolio had under performed its benchmark for the past one-year
period. The Board also reviewed performance comparisons between the Focused
Growth and Income Portfolio and the PEA Capital Value Fund, which is managed by
PEA. The Board considered that the PEA Capital Value Fund had a similar
investment strategy to the Focused Growth and Income Portfolio, and had
outperformed the Focused Growth and Income Portfolio for the past one-, two-,
three-, four-, and five-year periods ending on November 30, 2004. The Board
further considered that the Focused Growth and Income Portfolio ranked in the
fourth quintile of its relative peer group for the past one year, while the PEA
Capital Value Fund consistently ranked in the first quintile for each of the
past five years.
At a meeting held on April 13, 2005, the Board received performance information
for the Focused International Equity Portfolio. The Board considered that one of
the Portfolio's current subadviser's performance has significantly lagged its
peer group. The current Subadviser's portion of the International Equity
Portfolio as compared to the Morningstar Foreign Large-Cap Growth category has
performed in the fourth quartile for the last four calendar years. The Board
considered the Portfolio's performance as compared to a fund managed by
Henderson with a similar investment strategy. The Board further considered that
the fund managed by Henderson had outperformed the Focused International
Portfolio over the past fiscal quarter, one-, two-, and three-year periods, and
outperformed its relative indices as determined by both Lipper and Morningstar
over the same periods.
The Board noted that the Portfolios under performance were being addressed by
SAAMCo's proposal to change Subadvisers. The Board considered that the
historical performance generated by the proposed Subadvisers was satisfactory
and that SAAMCo was addressing concerns where a Portfolio was under performing.
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<Page>
MANAGEMENT PERSONNEL AND OPERATIONS OF THE SUBADVISERS
For each of the proposed Subadvisers, the Board, including the Disinterested
Directors, met with key personnel of the Subadviser. At these meetings the Board
was provided with a list of key management, investment, and compliance personnel
of each Subadviser as well as information on the organizational structure,
investment process and discipline of the Subadviser and the proposed portfolio
manager(s) or team. The Board's considerations of the proposed SubAdvisers
included comparisons to other investment managers.
At the Board meeting held on January 12, 2005, the Board met with
representatives from PEA Capital. The Board was informed that PEA Capital was a
subsidiary of Allianz Global Invests and had approximately $14.4 billion in
assets under management as of December 31, 2004. The Board was then provided
with a list of key personnel who would be responsible for security analysis and
investment decisions. In response to the Board's inquiry, PEA Capital's
representatives discussed the challenges of managing a "focused" portfolio,
discussed their investment philosophy and sell discipline, and noted their
experience and performance in managing a portfolio with a similar strategy to
the Focused Growth and Income Portfolio.
At this same meeting, the Board also met with representatives from Mercury
Advisors. The Board noted that Mercury Advisors is a division of Merrill Lynch
Investment Management, which has approximately $496 billion in client assets
under management as of December 31, 2004. The Board met with Mercury Advisors'
Senior Portfolio Manager who explained the firm's investment philosophy and
stated that the firm seeks to identify well-managed companies with good earnings
growth rates selling at a reasonable valuation. The Board was then provided with
a list of the investment team and overview of the individuals who would be
responsible for security analysis and investment decisions. The Board noted
Mercury Advisors' experience and performance in managing a portfolio with a
similar strategy to the Focused Large Cap Value Portfolio.
At the Board meeting held on April 13, 2005, the Board met with representatives
from Henderson via teleconference. The Board was introduced to the key
investment personnel who would be responsible for security analysis and
investment decisions. The Board was provided with information regarding
Henderson's corporate structure and investment philosophy. The Board noted that
Henderson is a subsidiary of HHG PLC., and has approximately $133 billion in
assets under management as of December 31, 2004. The Board considered
Henderson's experience and performance in managing international equity accounts
with investment strategies similar to the Focused International Equity
Portfolio.
CONCLUSION
In reaching its decision to approve the new Subadvisory Agreements, the Board
did not identify any single factor as being of principal significance, but based
its recommendation on each of the factors considered. Based upon the materials
reviewed and the considerations described above, the Board, including the
Disinterested Directors, concluded that the terms of the Subadvisory Agreements
are reasonable, fair and in the best interest of the Portfolios and its
shareholders, and that the subadvisory fee rates are fare and reasonable in
light of the usual and customary charges made for services of the same nature
and quality. Please refer to Footnote 4 for additional information.
102
<Page>
SunAmerica Focused Portfolios
DIRECTOR AND OFFICER INFORMATION -- APRIL 30, 2005 -- (UNAUDITED)
The following table contains basic information regarding the Directors and
Officers that oversee operations of the Portfolios and other investment
companies within the Fund complex.
<Table>
<Caption>
NUMBER OF
TERM OF PORTFOLIOS IN
POSITION OFFICE AND FUND OTHER
NAME, HELD WITH LENGTH OF COMPLEX DIRECTORSHIPS
ADDRESS AND SUNAMERICA TIME PRINCIPAL OCCUPATIONS OVERSEEN BY HELD BY
DATE OF BIRTH* COMPLEX SERVED(4) DURING PAST 5 YEARS DIRECTOR(1) DIRECTOR(2)
- ---------------------- ---------- ---------- --------------------- ------------- ------------------------
DIRECTORS
Jeffrey S. Burum Trustee 2004- Founder and CEO of 36 None
DOB: February 27, 1963 present National Housing
Development Corp.
(January 2000 to
present); Founder,
Owner and Partner of
Colonies Crossroads,
Inc. (January 2000 to
present); Owner and
Managing Member of
Diversified Pacific
Development Group,
LLC (June 1990 to
present).
Dr. Judith L. Craven Trustee 2001- Retired. 76 Director, A.G. Belo
DOB: October 6, 1945 present Corporation (1992 to
present); Director,
Sysco Corporation (1996
to present); Director,
Luby's, Inc. (1998 to
present); Director,
University of Texas
Board of Regents (2001
to present).
William F. Devin Trustee 2001- Retired. 76 Member of the Board of
DOB: December 30, 1938 present Governors, Boston Stock
Exchange (1985 to
present).
Samuel M. Eisenstat Chairman 1986- Attorney, solo 46 Director, North European
DOB: March 7, 1940 of the present practitioner. Oil Royalty Trust.
Board
Stephen J. Gutman Trustee 1986- Associate, Corcoran 46 None
DOB: May 10, 1943 present Group (Real Estate)
(October 2003-
present); Partner and
Member of Managing
Directors, Beau
Brummel-Soho LLC
(Licensing of
menswear specialty
retailing and other
activities) (June
1988 to present)
Peter A. Harbeck(3) Trustee 1995- President, CEO and 85 None
DOB: January 23, 1954 present Director, SAAMCo.
(August 1995 to
present); Director,
AIG SunAmerica
Capital Services,
Inc. ("SACS") (August
1993 to present)
President and CEO,
AIG AdvisorGroup,
Inc. (June 2004 to
present)
William J. Shea(5) Trustee 2004- President and CEO, 46 Chairman of the Board,
DOB: February 9, 1948 present Conseco, Inc. Royal and SunAlliance,
(Financial Services) U.S.A., Inc. (March 2005
(2001-2004); Chairman to present); Director,
of the Board of Boston Private Holdings
Centennial (October 2004 to
Technologies, Inc. present)
(1998 to 2001); Vice
Chairman, Bank Boston
Corp. (1993-1998)
</Table>
103
<Page>
<Table>
<Caption>
NUMBER OF
TERM OF PORTFOLIOS IN
POSITION OFFICE AND FUND OTHER
NAME, HELD WITH LENGTH OF COMPLEX DIRECTORSHIPS
ADDRESS AND SUNAMERICA TIME PRINCIPAL OCCUPATIONS OVERSEEN BY HELD BY
DATE OF BIRTH* COMPLEX SERVED(4) DURING PAST 5 YEARS DIRECTOR(1) DIRECTOR(2)
- ---------------------- ---------- ---------- --------------------- ------------- ------------------------
OFFICERS
Vincent M. Marra President 2004- Senior Vice President N/A N/A
DOB: May 28, 1950 present and Chief Operating
Officer, SAAMCo
(February 2003 to
Present); Chief
Administrative
Officer, Chief
Operating Officer and
Chief Financial
Officer, Carret &
Co., LLC (June 2002
to February 2003);
President and Chief
Operating Officer,
Bowne Digital
Solutions (1999 to
May 2002)
Donna M. Handel Trustee 2002- Assistant Treasurer N/A N/A
DOB: June 25, 1966 present (1993 to 2002);
Senior Vice
President, SAAMCo
(December 2004 to
Present); Vice
President, SAAMCo
(1997 to December
2004)
</Table>
- ----------
* The business address for each Director is the Harborside Financial Center,
3200 Plaza 5, Jersey City, NJ 07311-4992.
(1) The "Fund Complex" consists of all registered investment company portfolios
for which SAAMCo serves as investment adviser or business manager. The
"Fund Complex" includes the SunAmerica Money Market Funds (2 funds),
SunAmerica Equity Funds (9 funds), SunAmerica Income Funds (6 funds),
SunAmerica Focused Series, Inc. (15 portfolios), Anchor Series Trust (9
portfolios), SunAmerica Senior Floating Rate Fund, Inc. (1 fund),
SunAmerica Series Trust (32 portfolios), VALIC Company I (24 portfolios),
VALIC Company II (15 funds), Seasons Series Trust (24 portfolios) and AIG
Series Trust (4 portfolios).
(2) Directorships of companies required to report to the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (i.e. "public
companies") or other investment companies registered under the Investment
Company Act of 1940.
(3) Interested Director, as defined within the Investment Company Act of 1940,
because he or she is an officer and a director of the advisor and a
director of the principal underwriter of, the Trust.
(4) Directors serve until their successors are duly elected and qualified,
subject to the Director's retirement plan as discussed in Note 10 of the
financial statements.
(5) Effective November 30, 2004, William J. Shea began serving as a Director.
Additional information concerning the Directors and Officers is contained in the
Statement of Additional Information and is available without charge by calling
(800) 858-8850.
104
<Page>
HARBORSIDE FINANCIAL CENTER
3200 PLAZA 5
JERSEY CITY, NJ 07311-4992
<Table>
DIRECTORS/TRUSTEES INVESTMENT ADVISER DISCLOSURE OF QUARTERLY PORTFOLIO
SAMUEL M. EISENSTAT AIG SUNAMERICA ASSET MANAGEMENT CORP. HOLDINGS
PETER A. HARBECK HARBORSIDE FINANCIAL CENTER The Fund is required to file its complete
DR. JUDITH L. CRAVEN 3200 PLAZA 5 schedule of portfolio holdings with the
WILLIAM F. DEVIN JERSEY CITY, NJ 07311-4992 U.S. Securities and Exchange Commission
STEPHEN J. GUTMAN for its first and third fiscal quarters on
JEFFREY S. BURUM DISTRIBUTOR Form N-Q for fiscal quarters ending after
WILLIAM J. SHEA AIG SUNAMERICA CAPITAL SERVICES, INC. July 9, 2004. Once filed, the Fund's Form
HARBORSIDE FINANCIAL CENTER N-Q will be available without charge on
OFFICERS 3200 PLAZA 5 the U.S. Securities and Exchange
VINCENT M. MARRA, PRESIDENT JERSEY CITY, NJ 07311-4992 Commission's website at www.sec.gov. You
DONNA M. HANDEL, TREASURER can also obtain copies of Form N-Q by (i)
BRIAN P. CLIFFORD, VICE PRESIDENT SHAREHOLDER SERVICING AGENT visiting the U.S. Securities and Exchange
FRANCIS GANNON, VICE PRESIDENT AIG SUNAMERICA FUND SERVICES, INC. Commission's Public Reference Room in
J. STEVEN NEAMTZ, VICE PRESIDENT HARBORSIDE FINANCIAL CENTER Washington, DC (information on the
TIMOTHY PETTEE, VICE PRESIDENT 3200 PLAZA 5 operation of the Public Reference Room may
CYNTHIA GIBBONS, VICE PRESIDENT AND CHIEF JERSEY CITY, NJ 07311-4992 be obtained by calling 1-800-SEC-0330);
COMPLIANCE OFFICER (ii) sending your request and a
THOMAS LYNCH, SECRETARY CUSTODIAN AND TRANSFER AGENT duplicating fee to the U.S. Securities and
GREGORY R. KINGSTON, VICE PRESIDENT AND STATE STREET BANK AND TRUST COMPANY Exchange Commission's Public Reference
ASSISTANT TREASURER P.O. BOX 419572 Room, Washington, DC 20549-0102 or (iii)
NORI L. GABERT, VICE PRESIDENT AND KANSAS CITY, MO 64141-6572 sending your request electronically to
ASSISTANT SECRETARY publicinfo.sec.gov.
COREY ISSING, ASSISTANT SECRETARY VOTING PROXIES ON SUNAMERICA
FOCUSED PORTFOLIO SECURITIES
A description of the policies and This report is submitted solely for the
procedures that the Trust uses to general information of shareholders of the
determine how to vote proxies Fund. Distribution of this report to
relating to securities held in the persons other than shareholders of the
Fund's portfolio which is available Fund is authorized only in connection with
in the Trust's Statement of a currently effective prospectus, setting
Additional Information, may be forth details of the Fund, which must
obtained without charge upon request, precede or accompany this report.
by calling (800) 858-8850. This
information is also available from The accompanying report has not been
the EDGAR database on the U.S. audited by independent accountants and
Securities and Exchange Commission's accordingly no opinion has been expressed
website at http://www.sec.gov. thereon.
PROXY VOTING RECORD ON
SUNAMERICA FOCUSED PORTFOLIOS
Information regarding how SunAmerica
Focused Portfolios voted proxies
relating to securities held in the
SunAmerica Focused Portfolios during
the twelve month period ended June
30, 2004 is available without charge,
upon request, by calling
(800)858-8850 or on the U.S.
Securities and Exchange Commission's
website at http://www.sec.gov.
</Table>
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(This page intentionally left blank.)
<Page>
THE AIG SUNAMERICA FOCUSED PORTFOLIOS
[GRAPHIC]
[AIG SUNAMERICA MUTUAL FUNDS LOGO]
<Page>
[AIG SUNAMERICA MUTUAL FUNDS LOGO]
DISTRIBUTED BY:
AIG SUNAMERICA CAPITAL SERVICES, INC.
Investors should carefully consider the investment objectives, risks, charges
and expenses of any mutual fund distributed by AIG SunAmerica Capital Services,
Inc. before investing. This and other important information is contained in the
prospectus, which can be obtained from your financial adviser or from the AIG
SunAmerica Sales Desk at 800-858-8850, ext.6003. Read the prospectus carefully
before you invest.
www.sunamericafunds.com
FOSAN-4/05
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Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. Controls and Procedures.
(a) An evaluation was performed within 90 days of the filing of this
report, under the supervision and with the participation of the
registrant's management, including the President and Treasurer, of the
effectiveness of the design and operation of the registrant's
disclosure controls and procedures. Based on that evaluation, the
registrant's management, including the President and Treasurer,
concluded that the registrant's disclosure controls and procedures are
effective.
(b) There was no change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act
of 1940 (17 CFR 270.30a-3(d))) that occurred during the second fiscal
quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal contro1 over financial reporting. However,
internal controls with respect to monitoring proof of claim filings
have been enhanced.
Item 12. Exhibits.
(a) (1) Not applicable.
(2) Certification pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit
99.CERT.
(3) Not applicable.
(b) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 attached hereto as Exhibit 99.906.CERT.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SunAmerica Focused Series, Inc.
By: /s/ Vincent M. Marra
--------------------
Vincent M. Marra
President
Date: July 8, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Vincent M. Marra
--------------------
Vincent M. Marra
President
Date: July 8, 2005
By: /s/ Donna M. Handel
-------------------
Donna M. Handel
Treasurer
Date: July 8, 2005