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 811-04801
---------------------------------------------
SunAmerica Equity Funds
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Harborside Financial Center, 3200 Plaza 5 Jersey City, NJ 07311
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Robert M. Zakem, Esq.
Senior Vice President & General Counsel
AIG SunAmerica Asset Management Corp.
Harborside Financial Center,
3200 Plaza 5
Jersey City, NJ 07311
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (201) 324-6363
-----------------------------
Date of fiscal year end: September 30, 2003
--------------------------
Date of reporting period: September 30, 2003
-------------------------
Item 1. Reports to Shareholders
SunAmerica Equity Funds, Annual Report at September 30, 2003.
[GRAPHIC]
SunAmerica
THE RETIREMENT SPECIALIST
Equity Funds
2003 ANNUAL REPORT
[LOGO]
AIG Sun America
Mutual Funds
September 30, 2003 ANNUAL REPORT
SUNAMERICA EQUITY FUNDS
SunAmerica Blue Chip Growth Fund (SVLAX)
SunAmerica Growth Opportunities Fund (SGWAX)
SunAmerica New Century Fund (SEGAX)
SunAmerica Growth and Income Fund (SEIAX)
SunAmerica Balanced Assets Fund (SBAAX)
Focused Dividend Strategy Portfolio (FDSAX)
SunAmerica International Equity Fund (SIEAX)
Table of Contents
STATEMENT OF ASSETS AND LIABILITIES......................................... 1
STATEMENT OF OPERATIONS..................................................... 3
STATEMENT OF CHANGES IN NET ASSETS.......................................... 5
FINANCIAL HIGHLIGHTS........................................................ 8
PORTFOLIO OF INVESTMENTS.................................................... 15
NOTES TO FINANCIAL STATEMENTS............................................... 30
REPORT OF INDEPENDENT ACCOUNTANTS........................................... 51
TRUSTEE INFORMATION......................................................... 52
SHAREHOLDER TAX INFORMATION................................................. 54
SunAmerica Equity Funds
STATEMENT OF ASSETS AND LIABILITIES -- September 30, 2003
Focused
Blue Chip Growth New Growth and Balanced Dividend International
Growth Opportunities Century Income Assets Strategy Equity
Fund Fund Fund Fund Fund Portfolio Fund
------------ ------------- ------------- ------------ ------------- ------------ -------------
ASSETS:
Investments securities, at
market value*.............. $120,386,389 $ 108,320,547 $ 110,340,020 $197,726,203 $ 249,444,140 $160,251,136 $ 86,908,299
Short-term securities*...... -- -- -- -- -- -- 174,667
Repurchase agreements (cost
equals market)............. 1,941,000 21,662,000 -- 1,146,000 2,479,000 1,873,000 1,382,000
Cash........................ 780 751 -- 790 504 678 441
Foreign Cash*............... -- -- -- -- -- -- 318,823
Receivable for investments
sold....................... -- 6,342,730 1,755,785 1,580,908 1,317,423 -- 2,120,100
Interest and dividends
receivable................. 69,191 43,933 15,439 148,592 664,532 281,019 331,888
Receivable for shares of
beneficial interest sold... 44,813 185,854 14,479 53,128 166,356 1,494,690 67,617
Prepaid expenses............ 1,681 1,724 1,480 3,193 3,956 1,137 1,282
Receivable from investment
advisor.................... 9,522 1,801 5,280 6,255 1,808 39,295 12,075
Other assets................ -- -- -- 1,179 2,424 -- --
------------ ------------- ------------- ------------ ------------- ------------ ------------
Total assets............... 122,453,376 136,559,340 112,132,483 200,666,248 254,080,143 163,940,955 91,317,192
------------ ------------- ------------- ------------ ------------- ------------ ------------
LIABILITIES:
Payable for investments
purchased.................. -- -- 2,586,327 -- -- 1,202,048 2,062,420
Payable for daily variation
margin..................... -- -- -- -- -- -- 23,941
Payable for shares of
beneficial interest
redeemed................... 146,444 196,796 116,724 471,959 317,790 404,841 103,327
Accrued expenses............ 175,015 206,086 200,938 246,486 312,336 110,881 202,479
Investment advisory and
management fees payable.... 77,963 86,159 70,299 127,884 159,005 47,192 74,812
Distribution and service
maintenance fees payable... 55,565 69,304 42,892 123,620 113,758 109,929 46,028
Line of credit payable...... -- -- 594,631 -- -- -- --
------------ ------------- ------------- ------------ ------------- ------------ ------------
Total liabilities.......... 454,987 558,345 3,611,811 969,949 902,889 1,874,891 2,513,007
------------ ------------- ------------- ------------ ------------- ------------ ------------
Net assets............... $121,998,389 $ 136,000,995 $ 108,520,672 $199,696,299 $ 253,177,254 $162,066,064 $ 88,804,185
============ ============= ============= ============ ============= ============ ============
NET ASSETS WERE COMPOSED OF:
Shares of beneficial
interest, $.01 par value... $ 95,891 $ 103,386 $ 82,332 $ 201,995 $ 203,492 $ 151,125 $ 103,724
Paid-in capital............. 212,748,656 362,870,847 235,359,082 289,923,964 355,352,038 185,387,548 153,232,206
------------ ------------- ------------- ------------ ------------- ------------ ------------
212,844,547 362,974,233 235,441,414 290,125,959 355,555,530 185,538,673 153,335,930
Accumulated undistributed
net investment income
(loss)..................... (30,664) (24,692) (53,640) (36,226) (12,414) 5,373 (94,044)
Accumulated undistributed
net realized gain (loss)
on investments, futures
and options contracts and
foreign exchange
transactions............... (96,834,305) (238,223,153) (146,477,100) (95,693,760) (109,293,394) (23,435,920) (71,669,613)
Net unrealized appreciation
(depreciation) on
investments................ 6,018,811 11,274,607 19,609,998 5,300,326 6,927,532 (42,062) 7,302,645
Net unrealized appreciation
(depreciation) on futures
and options contracts...... -- -- -- -- -- -- (92,887)
Unrealized foreign exchange
gain (loss) on other
assets and liabilities..... -- -- -- -- -- -- 22,154
------------ ------------- ------------- ------------ ------------- ------------ ------------
Net assets............... $121,998,389 $ 136,000,995 $ 108,520,672 $199,696,299 $ 253,177,254 $162,066,064 $ 88,804,185
============ ============= ============= ============ ============= ============ ============
*Identified cost
Investment securities...... $114,367,578 $ 97,045,940 $ 90,730,022 $192,425,877 $ 242,516,608 $160,293,198 $ 79,605,670
============ ============= ============= ============ ============= ============ ============
Short-term securities...... -- -- -- -- -- -- 174,651
============ ============= ============= ============ ============= ============ ============
Foreign cash............... -- -- -- -- -- -- 318,062
============ ============= ============= ============ ============= ============ ============
See Notes to Financial Statements
1
SunAmerica Equity Funds
STATEMENT OF ASSETS AND LIABILITIES -- September 30, 2003 -- (continued)
Focused
Blue Chip Growth New Growth and Balanced Dividend International
Growth Opportunities Century Income Assets Strategy Equity
Fund Fund Fund Fund Fund Portfolio Fund
----------- ------------- ----------- ----------- ------------ ----------- -------------
Class A (unlimited shares
authorized):
Net assets......................... $64,672,240 $62,660,058 $85,684,975 $70,826,116 $175,323,846 $45,638,595 $28,719,984
Shares of beneficial interest
issued and outstanding............ 4,929,998 4,559,169 6,376,521 6,953,204 14,078,602 4,246,478 3,289,051
Net asset value and redemption
price per share................... $ 13.12 $ 13.74 $ 13.44 $ 10.19 $ 12.45 $ 10.75 $ 8.73
Maximum sales charge (5.75% of
offering price)................... 0.80 0.84 0.82 0.62 0.76 0.66 0.53
----------- ----------- ----------- ----------- ------------ ----------- -----------
Maximum offering price to public... $ 13.92 $ 14.58 $ 14.26 $ 10.81 $ 13.21 $ 11.41 $ 9.26
=========== =========== =========== =========== ============ =========== ===========
Class B (unlimited shares
authorized):
Net assets......................... $30,263,097 $38,870,039 $16,078,009 $66,378,343 $ 47,495,943 $47,368,504 $24,798,973
Shares of beneficial interest
issued and outstanding............ 2,542,719 3,125,253 1,336,587 6,852,583 3,828,093 4,420,634 2,972,736
Net asset value, offering and
redemption price per share
(excluding any applicable
contingent deferred sales charge). $ 11.90 $ 12.44 $ 12.03 $ 9.69 $ 12.41 $ 10.72 $ 8.34
=========== =========== =========== =========== ============ =========== ===========
Class II (unlimited shares
authorized):
Net assets......................... $ 7,285,502 $19,808,070 $ 2,182,689 $49,592,541 $ 25,783,799 $69,058,965 $14,786,686
Shares of beneficial interest
issued and outstanding............ 613,804 1,593,975 181,537 5,129,967 2,075,510 6,445,434 1,774,236
Net asset value and redemption
price per share (excluding any
applicable contingent deferred
sales charge)..................... $ 11.87 $ 12.43 $ 12.02 $ 9.67 $ 12.42 $ 10.71 $ 8.33
Maximum sales charge (1.00% of
offering price)................... 0.12 0.13 0.12 0.10 0.13 0.11 0.08
----------- ----------- ----------- ----------- ------------ ----------- -----------
Maximum offering price to public... $ 11.99 $ 12.56 $ 12.14 $ 9.77 $ 12.55 $ 10.82 $ 8.42
=========== =========== =========== =========== ============ =========== ===========
Class I (unlimited shares
authorized):
Net assets......................... $19,777,550 $ 4,404,427 $ 4,574,999 $12,899,299 $ 4,573,666 $ -- $20,498,542
Shares of beneficial interest
issued and outstanding............ 1,502,615 319,187 338,569 1,263,783 367,037 -- 2,336,393
Net asset value, offering and
redemption price per share........ $ 13.16 $ 13.80 $ 13.51 $ 10.21 $ 12.46 $ -- $ 8.77
=========== =========== =========== =========== ============ =========== ===========
Class X (unlimited shares
authorized):
Net assets......................... $ -- $10,258,401 $ -- $ -- $ -- $ -- $ --
Shares of beneficial interest
issued and outstanding............ -- 741,037 -- -- -- -- --
Net asset value, offering and
redemption price per share........ $ -- $ 13.84 $ -- $ -- $ -- $ -- $ --
=========== =========== =========== =========== ============ =========== ===========
See Notes to Financial Statements
2
SunAmerica Equity Funds
STATEMENT OF OPERATIONS -- For the period ended September 30, 2003
Blue Chip Growth New
Growth Opportunities Century
Fund Fund Fund
------------ ------------- ------------
INVESTMENT INCOME:
Income:
Interest........................................... $ 64,695 $ 241,254 $ 61,916
Dividends*......................................... 1,174,961 380,113 461,141
------------ ----------- ------------
Total investment income.......................... 1,239,656 621,367 523,057
------------ ----------- ------------
Expenses:
Investment advisory and management fees............ 892,334 910,348 784,871
Distribution and service maintenance
fees -- Class A.................................. 219,876 197,823 274,063
Distribution and service maintenance
fees -- Class B.................................. 307,871 361,400 197,944
Distribution and service maintenance
fees -- Class II................................. 74,292 187,892 21,912
Service fees -- Class I............................ 44,850 9,232 9,835
Transfer agent fees and expenses -- Class A........ 184,115 181,909 234,533
Transfer agent fees and expenses -- Class B........ 123,155 142,068 65,754
Transfer agent fees and expenses -- Class II....... 30,282 71,251 8,691
Transfer agent fees and expenses -- Class I........ 64,697 7,969 12,040
Transfer agent fees and expenses -- Class Z+....... -- -- 14,902
Transfer agent fees and expenses -- Class X........ -- 14,242 --
Custodian fees and expenses........................ 59,726 65,287 58,681
Registration fees -- Class A....................... 6,206 2 10,158
Registration fees -- Class B....................... 8,817 3,078 8,139
Registration fees -- Class II...................... 10,725 -- 10,733
Registration fees -- Class I....................... 28,484 15,076 14,351
Registration fees -- Class Z+...................... -- -- 5,354
Registration fees -- Class X....................... -- 2,239 --
Printing expense................................... 49,307 98,909 48,768
Trustees' fees and expenses........................ 11,240 11,710 9,292
Legal expenses..................................... 9,451 9,123 7,069
Audit and tax fees................................. 26,418 53,173 25,887
Insurance expense.................................. 1,528 1,576 1,535
Interest expense................................... 1,226 183 7,284
Amortization of organizational expenses............ -- -- --
Miscellaneous expenses............................. 9,809 8,169 7,963
------------ ----------- ------------
Total expenses................................... 2,164,409 2,352,659 1,839,759
Less: expenses reimbursed by investment advisor.. (59,487) (20,798) (54,679)
Less: custody credits earned on cash balances.... (183) (233) (130)
------------ ----------- ------------
Net expenses..................................... 2,104,739 2,331,628 1,784,950
------------ ----------- ------------
Net investment income (loss)........................ (865,083) (1,710,261) (1,261,893)
------------ ----------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on investments............. (14,883,864) 3,180,317 (14,089,380)
Net realized gain (loss) on futures and options
contracts.......................................... -- -- 116,181
Net realized foreign exchange gain (loss) on
other assets and liabilities....................... -- 23 --
Net change in unrealized appreciation
(depreciation) on investments...................... 34,594,963 35,797,632 33,831,669
Net change in unrealized appreciation
(depreciation) on futures and options contracts.... -- -- (37,628)
Net change in unrealized foreign exchange gain
(loss) on other assets and liabilities............. -- -- --
------------ ----------- ------------
Net realized and unrealized gain (loss) on
investments, foreign currency, futures and
options contracts and other assets and
liabilities........................................ 19,711,099 38,977,972 19,820,842
------------ ----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS.................................... $ 18,846,016 $37,267,711 $ 18,558,949
============ =========== ============
- --------
*Net of foreign withholding taxes on dividends of... $ 1,535 $ 20 $ 4,155
============ =========== ============
+SeeNote 1
See Notes to Financial Statements
3
SunAmerica Equity Funds
STATEMENT OF OPERATIONS -- For the period ended September 30, 2003 --
(continued)
Focused
Growth and Balanced Dividend International
Income Assets Strategy Equity
Fund Fund Portfolio Fund
------------ ------------ ----------- -------------
INVESTMENT INCOME:
Income:
Interest..................................... $ 76,773 $ 3,991,423 $ 13,754 $ 28,858
Dividends*................................... 3,219,694 2,264,063 3,385,375 1,952,634
------------ ------------ ----------- -----------
Total investment income.................... 3,296,467 6,255,486 3,399,129 1,981,492
------------ ------------ ----------- -----------
Expenses:
Investment advisory and management fees...... 1,584,763 1,987,802 352,539 899,419
Distribution and service maintenance
fees -- Class A............................ 245,248 623,426 89,551 114,572
Distribution and service maintenance
fees -- Class B............................ 752,590 542,524 341,411 244,442
Distribution and service maintenance
fees -- Class II........................... 543,291 281,749 409,985 147,474
Service fees -- Class I...................... 28,811 11,206 -- 45,038
Transfer agent fees and expenses -- Class A.. 201,340 510,458 66,781 106,665
Transfer agent fees and expenses -- Class B.. 219,649 159,437 89,508 82,485
Transfer agent fees and expenses -- Class II. 151,889 76,087 103,553 56,848
Transfer agent fees and expenses -- Class I.. 41,339 9,216 -- 46,268
Transfer agent fees and expenses -- Class Z+. 15,854 -- -- --
Transfer agent fees and expenses -- Class X.. -- -- -- --
Custodian fees and expenses.................. 66,322 76,856 55,942 177,814
Registration fees -- Class A................. 227 1,442 11,054 23,188
Registration fees -- Class B................. 1,300 4,688 13,045 2,741
Registration fees -- Class II................ 8,838 6,264 12,420 16,871
Registration fees -- Class I................. 25,187 9,400 -- 22,479
Registration fees -- Class Z+................ 3,791 -- -- --
Registration fees -- Class X................. -- -- -- --
Printing expense............................. 78,779 114,089 562 60,734
Trustees' fees and expenses.................. 20,150 24,506 6,637 8,266
Legal expenses............................... 10,638 7,535 5,959 11,355
Audit and tax fees........................... 35,824 27,142 26,309 28,556
Insurance expense............................ 2,673 3,637 975 1,103
Interest expense............................. 11,391 14,407 329 1,853
Amortization of organizational expenses...... -- -- 2,068 --
Miscellaneous expenses....................... 14,163 12,414 6,443 8,522
------------ ------------ ----------- -----------
Total expenses............................. 4,064,057 4,504,285 1,595,071 2,106,693
Less: expenses reimbursed by investment
advisor................................... (62,373) (8,578) (150,241) (160,654)
Less: custody credits earned on cash
balances.................................. (187) (653) (68) (412)
------------ ------------ ----------- -----------
Net expenses............................... 4,001,497 4,495,054 1,444,762 1,945,627
------------ ------------ ----------- -----------
Net investment income (loss).................. (705,030) 1,760,432 1,954,367 35,865
------------ ------------ ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on investments....... (35,762,966) (28,335,937) (1,146,576) (4,807,957)
Net realized gain (loss) on futures and
options contracts............................ -- -- -- (429,413)
Net realized foreign exchange gain (loss) on
other assets and liabilities................. -- 382 -- (62,455)
Net change in unrealized appreciation
(depreciation) on investments................ 64,603,752 42,771,990 10,231,551 26,498,054
Net change in unrealized appreciation
(depreciation) on futures and options
contracts.................................... -- -- -- 59,687
Net change in unrealized foreign exchange
gain (loss) on other assets and liabilities.. -- (61) -- 16,646
------------ ------------ ----------- -----------
Net realized and unrealized gain (loss) on
investments, foreign currency, futures and
options contracts and other assets and
liabilities.................................. 28,840,786 14,436,374 9,084,975 21,274,562
------------ ------------ ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS.................... $ 28,135,756 $ 16,196,806 $11,039,342 $21,310,427
============ ============ =========== ===========
- --------
*Net of foreign withholding taxes on
dividends of................................. $ 3,023 $ 2,126 -- $ 382,441
============ ============ =========== ===========
+SeeNote 1
See Notes to Financial Statements
4
SunAmerica Equity Funds
STATEMENT OF CHANGES IN NET ASSETS
Blue Chip Growth Fund Growth Opportunities Fund New Century Fund
-------------------------- -------------------------- --------------------------
For the year For the year For the year For the year For the year For the year
ended ended ended ended ended ended
September 30, September 30, September 30, September 30, September 30, September 30,
2003 2002 2003 2002 2003 2002
------------- ------------- ------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss).............. $ (865,083) $ (1,120,747) $ (1,710,261) $ (2,748,061) $ (1,261,893) $ (1,593,066)
Net realized gain (loss) on investments... (14,883,864) (39,022,124) 3,180,317 (81,795,320) (14,089,380) (37,341,136)
Net realized gain (loss) on futures and
options contracts........................ -- -- -- -- 116,181 33,958
Net realized foreign exchange gain (loss)
on other assets and liabilities.......... -- -- 23 (1,685) -- --
Net change in unrealized appreciation
(depreciation) on investments............ 34,594,963 (365,222) 35,797,632 17,563,137 33,831,669 19,516,469
Net change in unrealized appreciation
(depreciation) on futures and options
contracts................................ -- -- -- -- (37,628) 37,628
Net change in unrealized foreign exchange
gain (loss) on other assets and
liabilities.............................. -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations.................. 18,846,016 (40,508,093) 37,267,711 (66,981,929) 18,558,949 (19,346,147)
------------ ------------ ------------ ------------ ------------ ------------
Dividends and distributions to shareholders
from:
Net investment income (Class A)........... -- -- -- -- -- --
Net investment income (Class B)........... -- -- -- -- -- --
Net investment income (Class II).......... -- -- -- -- -- --
Net investment income (Class I)........... -- -- -- -- -- --
Net investment income (Class Z*).......... -- -- -- -- -- --
Net investment income (Class X)........... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and distributions to
shareholders............................... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from capital share transactions
(Note 7)................................... (11,161,768) 31,522,952 (7,535,129) (3,181,313) (15,057,929) (22,851,713)
------------ ------------ ------------ ------------ ------------ ------------
Total increase (decrease) in net assets..... 7,684,248 (8,985,141) 29,732,582 (70,163,242) 3,501,020 (42,197,860)
NET ASSETS:
Beginning of period......................... 114,314,141 123,299,282 106,268,413 176,431,655 105,019,652 147,217,512
------------ ------------ ------------ ------------ ------------ ------------
End of period+.............................. $121,998,389 $114,314,141 $136,000,995 $106,268,413 $108,520,672 $105,019,652
============ ============ ============ ============ ============ ============
+Includes accumulated undistributed net
investment income (loss)................... $ (30,664) $ (26,460) $ (24,692) $ (21,936) $ (53,640) $ (49,899)
============ ============ ============ ============ ============ ============
*SeeNote 1
See Notes to Financial Statements
5
SunAmerica Equity Funds
STATEMENT OF CHANGES IN NET ASSETS -- (continued)
Focused Dividend
Growth and Income Fund Balanced Assets Fund Strategy Portfolio
-------------------------- -------------------------- --------------------------
For the year For the year For the year For the year For the year For the year
ended ended ended ended ended ended
September 30, September 30, September 30, September 30, September 30, September 30,
2003 2002 2003 2002 2003 2002
------------- ------------- ------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss)...... $ (705,030) $ (1,347,407) $ 1,760,432 $ 4,132,280 $ 1,954,367 $ 837,228
Net realized gain (loss) on
investments..................... (35,762,966) (27,209,639) (28,335,937) (45,215,395) (1,146,576) 852,543
Net realized gain (loss) on
futures and options contracts... -- -- -- -- -- --
Net realized foreign exchange
gain (loss) on other assets and
liabilities..................... -- -- 382 -- -- --
Net change in unrealized
appreciation (depreciation) on
investments..................... 64,603,752 (49,065,970) 42,771,990 6,725,223 10,231,551 (5,204,963)
Net change in unrealized
appreciation (depreciation) on
futures and options contracts... -- -- -- -- -- --
Net change in unrealized foreign
exchange gain (loss) on other
assets and liabilities.......... -- -- (61) 61 -- --
------------ ------------ ------------ ------------ ------------ -----------
Net increase (decrease) in net
assets resulting from operations.. 28,135,756 (77,623,016) 16,196,806 (34,357,831) 11,039,342 (3,515,192)
------------ ------------ ------------ ------------ ------------ -----------
Dividends and distributions to
shareholders from:
Net investment income (Class A)... -- -- (1,750,489) (3,174,586) (801,768) (159,210)
Net investment income (Class B)... -- -- (190,530) (736,268) (800,184) (279,654)
Net investment income (Class II).. -- -- (97,381) (339,322) (926,034) (281,153)
Net investment income (Class I)... -- -- (50,394) (75,703) -- --
Net investment income (Class Z*).. -- -- -- -- -- --
Net investment income (Class X)... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ -----------
Total dividends and distributions
to shareholders................... -- -- (2,088,794) (4,325,879) (2,527,986) (720,017)
------------ ------------ ------------ ------------ ------------ -----------
Net increase (decrease) in net
assets resulting from capital
share transactions (Note 7)....... (51,963,968) 97,748,034 (45,385,301) (26,393,716) 103,943,412 2,397,249
------------ ------------ ------------ ------------ ------------ -----------
Total increase (decrease) in net
assets............................ (23,828,212) 20,125,018 (31,277,289) (65,077,426) 112,454,768 (1,837,960)
NET ASSETS:
Beginning of period................ 223,524,511 203,399,493 284,454,543 349,531,969 49,611,296 51,449,256
------------ ------------ ------------ ------------ ------------ -----------
End of period+..................... $199,696,299 $223,524,511 $253,177,254 $284,454,543 $162,066,064 $49,611,296
============ ============ ============ ============ ============ ===========
+Includes accumulated
undistributed net investment
income (loss)..................... $ (36,226) $ (27,988) $ (12,414) $ (86,761) $ 5,373 $ 578,151
============ ============ ============ ============ ============ ===========
*SeeNote 1
See Notes to Financial Statements
6
SunAmerica Equity Funds
STATEMENT OF CHANGES IN NET ASSETS -- (continued)
International Equity Fund
-----------------------------------------
For the year For the eleven For the year
ended months ended ended
September 30, September 30, October 31,
2003 2002 2001
------------- -------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss)..................... $ 35,865 $ (373,850) $ (794,939)
Net realized gain (loss) on investments.......... (4,807,957) (14,220,332) (24,076,533)
Net realized gain (loss) on futures and options
contracts...................................... (429,413) (476,249) (1,945,215)
Net realized foreign exchange gain (loss) on
other assets and liabilities................... (62,455) (162,770) (222,800)
Net change in unrealized appreciation
(depreciation) on investments.................. 26,498,054 (7,495,028) (4,259,325)
Net change in unrealized appreciation
(depreciation) on futures and options contracts 59,687 (152,574) --
Net change in unrealized foreign exchange gain
(loss) on other assets and liabilities......... 16,646 (19,524) 28,406
------------ ------------ ------------
Net increase (decrease) in net assets resulting
from operations.................................. 21,310,427 (22,900,327) (31,270,406)
------------ ------------ ------------
Dividends and distributions to shareholders from:
Net investment income (Class A).................. -- -- (2,717,876)
Net investment income (Class B).................. -- -- (3,778,769)
Net investment income (Class II)................. -- -- (1,557,334)
Net investment income (Class I).................. -- -- --
Net investment income (Class Z*)................. -- -- (26,021)
Net investment income (Class X).................. -- -- --
------------ ------------ ------------
Total dividends and distributions to shareholders. -- -- (8,080,000)
------------ ------------ ------------
Net increase (decrease) in net assets resulting
from capital share transactions (Note 7)......... (19,779,286) 46,069,437 (15,232,332)
------------ ------------ ------------
Total increase (decrease) in net assets........... 1,531,141 23,169,110 (54,582,738)
NET ASSETS:
Beginning of period............................... 87,273,044 64,103,934 118,686,672
------------ ------------ ------------
End of period+....................................
$ 88,804,185 $ 87,273,044 $ 64,103,934
============ ============ ============
+Includes accumulated undistributed net
investment income (loss)......................... $ (94,044) $ (13,517) $ (38,006)
============ ============ ============
*SeeNote 1
See Notes to Financial Statements.
7
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS
BLUE CHIP GROWTH FUND
---------------------
Net
gain (loss)
on invest- Total Dividends Distri-
Net Asset Net ments (both from from net butions Net Asset Net Assets
Value, invest- realized invest- invest- from Total Value, end of
Period beginning ment and ment ment capital distri- end of Total period
Ended of period income(1) unrealized) operations income gains butions period Return(2) (000's)
- ------------ --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
Class A
-------
9/30/99..... $18.61 $(0.05) $ 6.53 $ 6.48 $ -- $(1.47) $(1.47) $23.62 36.29% $103,841
9/30/00..... 23.62 (0.14) 8.00 7.86 -- (2.46) (2.46) 29.02 34.66 152,788
9/30/01..... 29.02 (0.03) (11.13) (11.16) -- (3.51) (3.51) 14.35 (42.23) 82,523
9/30/02..... 14.35 (0.07) (3.13) (3.20) -- -- -- 11.15 (22.30) 59,812
9/30/03..... 11.15 (0.06) 2.03 1.97 -- -- -- 13.12 17.67 64,672
Class B
-------
9/30/99..... $17.84 $(0.19) $ 6.25 $ 6.06 $ -- $(1.47) $(1.47) $22.43 35.45% $ 49,015
9/30/00..... 22.43 (0.31) 7.58 7.27 -- (2.46) (2.46) 27.24 33.80 67,586
9/30/01..... 27.24 (0.16) (10.35) (10.51) -- (3.51) (3.51) 13.22 (42.66) 34,649
9/30/02..... 13.22 (0.16) (2.86) (3.02) -- -- -- 10.20 (22.84) 31,203
9/30/03..... 10.20 (0.14) 1.84 1.70 -- -- -- 11.90 16.67 30,263
Class II
--------
2/02/99-
9/30/99(3). $21.79 $(0.13) $ 0.77 $ 0.64 $ -- $ -- $ -- $22.43 2.94% $ 785
9/30/00..... 22.43 (0.31) 7.53 7.22 -- (2.46) (2.46) 27.19 33.57 8,939
9/30/01..... 27.19 (0.15) (10.32) (10.47) -- (3.51) (3.51) 13.21 (42.58) 6,127
9/30/02..... 13.21 (0.16) (2.87) (3.03) -- -- -- 10.18 (22.94) 7,687
9/30/03..... 10.18 (0.16) 1.85 1.69 -- -- -- 11.87 16.60 7,286
Class I
-------
11/16/01-
9/30/02(3)# $16.30 $(0.04) $ (5.10) $ (5.14) $ -- $ -- $ -- $11.16 (31.53)% $ 15,612
9/30/03..... 11.16 (0.04) 2.04 2.00 -- -- -- 13.16 17.92 19,778
Ratio of net
Ratio of investment
expenses income
Period to average to average Portfolio
Ended net assets net assets turnover
- ------------ ---------- ------------ ---------
9/30/99..... 1.49% (0.22)% 71%
9/30/00..... 1.43 (0.49) 75
9/30/01..... 1.45 (0.15) 136
9/30/02..... 1.47(6) (0.47)(6) 107
9/30/03..... 1.54 (0.50) 114
9/30/99..... 2.15% (0.89)% 71%
9/30/00..... 2.09 (1.16) 75
9/30/01..... 2.19 (0.89) 136
9/30/02..... 2.18(6) (1.18)(6) 107
9/30/03..... 2.32 (1.28) 114
2/02/99-
9/30/99(3). 2.17%(4)(5) (0.95)%(4)(5) 71%
9/30/00..... 2.17(5) (1.17)(5) 75
9/30/01..... 2.11(5) (0.81)(5) 136
9/30/02..... 2.23(5)(6) (1.25)(5)(6) 107
9/30/03..... 2.44(5) (1.40)(5) 114
11/16/01-
9/30/02(3)# 1.33%(4)(5)(6) (0.32)%(4)(5)(6) 107%
9/30/03..... 1.33(5) (0.29)(5) 114
- --------
# See Note 2
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load. Total
return does include expense reimbursements and expense reductions.
(3) Commencement of sale of respective class of shares
(4) Annualized
(5) Net of the following expense reimbursements (based on average net assets):
9/30/99(4) 9/30/00 9/30/01 9/30/02(6) 9/30/03
---------- ------- ------- ---------- -------
Blue Chip Growth Class II............... 8.74% 0.17% 0.03% -- % -- %
Blue Chip Growth Class I................ -- -- -- 0.08(4) 0.33
(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 by 0.01%.
See Notes to Financial Statements
8
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
GROWTH OPPORTUNITIES FUND
-------------------------
Net
gain (loss)
on invest- Total Dividends Distri-
Net Asset Net ments (both from from net butions Net Asset Net Assets
Value, invest- realized invest- invest- from Total Value, end of
Period beginning ment and ment ment capital distri- end of Total period
Ended of period income(1) unrealized) operations income gains butions period Return(2) (000's)
- ------------ --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
Class A
-------
9/30/99..... $16.22 $(0.19) $ 8.26 $ 8.07 $ -- $(1.17) $(1.17) $23.12 $ 52.42 $ 57,880
9/30/00..... 23.12 (0.17) 21.77 21.60 -- (3.93) (3.93) 40.79 102.04 206,531
9/30/01..... 40.79 (0.14) (22.33) (22.47) -- (2.90) (2.90) 15.42 (58.23) 89,935
9/30/02..... 15.42 (0.17) (5.26) (5.43) -- -- -- 9.99 (35.21) 50,018
9/30/03..... 9.99 (0.13) 3.88 3.75 -- -- -- 13.74 37.54 62,660
Class B
-------
9/30/99..... $15.52 $(0.32) $ 7.85 $ 7.53 $ -- $(1.17) $(1.17) $21.88 $ 51.24 $ 16,529
9/30/00..... 21.88 (0.37) 20.42 20.05 -- (3.93) (3.93) 38.00 100.58 108,083
9/30/01..... 38.00 (0.28) (20.66) (20.94) -- (2.90) (2.90) 14.16 (58.50) 54,902
9/30/02..... 14.16 (0.26) (4.79) (5.05) -- -- -- 9.11 (35.66) 33,221
9/30/03..... 9.11 (0.20) 3.53 3.33 -- -- -- 12.44 36.55 38,870
Class II
--------
2/02/99-
9/30/99(3). $19.86 $(0.21) $ 2.23 $ 2.02 $ -- $ -- $ -- $21.88 10.17% $ 1,089
9/30/00..... 21.88 (0.33) 20.35 20.02 -- (3.93) (3.93) 37.97 100.44 65,322
9/30/01..... 37.97 (0.28) (20.64) (20.92) -- (2.90) (2.90) 14.15 (58.50) 31,594
9/30/02..... 14.15 (0.26) (4.79) (5.05) -- -- -- 9.10 (35.69) 17,484
9/30/03..... 9.10 (0.20) 3.53 3.33 -- -- -- 12.43 36.59 19,808
Class I
-------
11/16/01-
9/30/02(3)# $18.09 $(0.14) $ (7.95) $ (8.09) $ -- $ -- $ -- $10.00 (44.72)% $ 3,054
9/30/03..... 10.00 (0.10) 3.90 3.80 -- -- -- 13.80 38.00 4,404
Class X
-------
3/19/02-
9/30/02(3). $18.19 $(0.08) $ (8.10) $ (8.18) $ -- $ -- $ -- $10.01 (44.97)% $ 2,492
9/30/03..... 10.01 (0.07) 3.90 3.83 -- -- -- 13.84 38.26 10,258
Ratio of net
Ratio of investment
expenses income
Period to average to average Portfolio
Ended net assets net assets turnover
- ------------ ---------- ------------ ---------
9/30/99..... 1.57% (0.93)% 220%
9/30/00..... 1.43 (0.49) 139
9/30/01..... 1.49 (0.57) 207
9/30/02..... 1.49(6) (1.11)(6) 344
9/30/03..... 1.63 (1.11) 204
9/30/99..... 2.32% (1.67)% 220%
9/30/00..... 2.10 (1.11) 139
9/30/01..... 2.17 (1.25) 207
9/30/02..... 2.18(6) (1.80)(6) 344
9/30/03..... 2.36 (1.85) 204
2/02/99-
9/30/99(3). 2.35%(4)(5) (1.74)%(4)(5) 220%
9/30/00..... 2.09(5) (0.99)(5) 139
9/30/01..... 2.16(5) (1.24)(5) 207
9/30/02..... 2.21(5)(6) (1.82)(5)(6) 344
9/30/03..... 2.33(5) (1.82)(5) 204
11/16/01-
9/30/02(3)# 1.33%(4)(5)(6) (0.95)%(4)(5)(6) 344%
9/30/03..... 1.33(5) (0.82)(5) 204
3/19/02-
9/30/02(3). 1.20%(4)(5)(6) (0.83)%(4)(5)(6) 344%
9/30/03..... 1.17(5) (0.64)(5) 204
- --------
# See Note 2
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load. Total
return does include expense reimbursements and expense reductions.
(3) Commencement of sale of respective class of shares
(4) Annualized
(5) Net of the following expense reimbursements (based on average net assets):
9/30/99(4) 9/30/00 9/30/01 9/30/02(6) 9/30/03
---------- ------- ------- ---------- -------
Growth Opportunities Class II........... 9.94% 0.01% -- % -- % -- %
Growth Opportunities Class I............ -- -- -- 0.18(4) 0.50
Growth Opportunities Class X............ -- -- -- 0.38(4) 0.04
(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 remained the same.
See Notes to Financial Statements
9
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
NEW CENTURY FUND
----------------
Net
gain (loss)
on invest- Total Dividends Distri-
Net Asset Net ments (both from from net butions Net Asset Net Assets Ratio of
Value, invest- realized invest- invest- from Total Value, end of expenses
Period beginning ment and ment ment capital distri- end of Total period to average
Ended of period income(1) unrealized) operations income gains butions period Return(2) (000's) net assets
- ----------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ---------- ----------
Class A
-------
9/30/99.... $19.10 $(0.21) $ 9.89 $ 9.68 $ -- $(1.40) $(1.40) $27.38 53.00% $148,376 1.48%
9/30/00.... 27.38 (0.31) 19.04 18.73 -- (4.97) (4.97) 41.14 72.74 253,359 1.42
9/30/01.... 41.14 (0.05) (19.00) (19.05) -- (8.88) (8.88) 13.21 (54.88) 101,691 1.46
9/30/02.... 13.21 (0.13) (1.86) (1.99) -- -- -- 11.22 (15.06) 74,710 1.50
9/30/03.... 11.22 (0.13) 2.35 2.22 -- -- -- 13.44 19.79 85,685 1.57
Class B
-------
9/30/99.... $18.34 $(0.35) $ 9.48 $ 9.13 $ -- $(1.40) $(1.40) $26.07 52.15% $ 77,331 2.12%
9/30/00.... 26.07 (0.53) 18.04 17.51 -- (4.97) (4.97) 38.61 71.59 122,004 2.07
9/30/01.... 38.61 (0.17) (17.57) (17.74) -- (8.88) (8.88) 11.99 (55.15) 39,577 2.11
9/30/02.... 11.99 (0.20) (1.68) (1.88) -- -- -- 10.11 (15.68) 23,271 2.18
9/30/03.... 10.11 (0.20) 2.12 1.92 -- -- -- 12.03 18.99 16,078 2.28
Class II
--------
9/30/99.... $18.34 $(0.40) $ 9.51 $ 9.11 $ -- $(1.40) $(1.40) $26.05 52.04% $ 2,599 2.15%(5)
9/30/00.... 26.05 (0.54) 18.01 17.47 -- (4.97) (4.97) 38.55 71.48 10,848 2.14(5)
9/30/01.... 38.55 (0.17) (17.54) (17.71) -- (8.88) (8.88) 11.96 (55.16) 4,508 2.13(5)
9/30/02.... 11.96 (0.20) (1.67) (1.87) -- -- -- 10.09 (15.64) 2,447 2.14(5)
9/30/03.... 10.09 (0.18) 2.11 1.93 -- -- -- 12.02 19.13 2,183 2.14(5)
Class I
-------
11/21/01-
9/30/02(3) $14.67 $(0.10) $ (3.32) $ (3.42) $ -- $ -- $ -- $11.25 (23.31)% $ 3,378 1.32%(4)(5)
9/30/03.... 11.25 (0.10) 2.36 2.26 -- -- -- 13.51 20.09 4,575 1.32(5)
Ratio of net
investment
income
Period to average Portfolio
Ended net assets turnover
- ----------- ------------ ---------
9/30/99.... (0.82)% 177%
9/30/00.... (0.80) 227
9/30/01.... (0.23) 282
9/30/02.... (0.92) 199
9/30/03.... (1.08) 123
9/30/99.... (1.46)% 177%
9/30/00.... (1.46) 227
9/30/01.... (0.88) 282
9/30/02.... (1.60) 199
9/30/03.... (1.77) 123
9/30/99.... (1.60)%(5) 177%
9/30/00.... (1.47)(5) 227
9/30/01.... (0.90)(5) 282
9/30/02.... (1.56)(5) 199
9/30/03.... (1.63)(5) 123
11/21/01-
9/30/02(3) (0.81)%(4)(5) 199%
9/30/03.... (0.83)(5) 123
- --------
(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) Commencement of sale of respective class of shares
(4) Annualized
(5) Net of the following expense reimbursements (based on average net assets):
9/30/99 9/30/00 9/30/01 9/30/02 9/30/03
------- ------- ------- ------- -------
New Century Class II.......... 2.48% 0.05% 0.06% 0.27% 0.66%
New Century Class I........... -- -- -- 0.32(4) 0.51
See Notes to Financial Statements
10
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
GROWTH AND INCOME FUND
----------------------
Net
gain (loss)
on invest- Total Dividends Distri-
Net Asset Net ments (both from from net butions Net Asset Net Assets
Value, invest- realized invest- invest- from Total Value, end of
Period beginning ment and ment ment capital distri- end of Total period
Ended of period income(1) unrealized) operations income gains butions period Return(2) (000's)
- ------------ --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
Class A
-------
9/30/99..... $12.80 $(0.02) $ 3.92 $ 3.90 $-- $(0.47) $(0.47) $16.23 30.99% $ 86,524
9/30/00..... 16.23 (0.08) 4.51 4.43 -- (0.66) (0.66) 20.00 27.64 127,168
9/30/01..... 20.00 (0.03) (7.43) (7.46) -- (1.43) (1.43) 11.11 (39.45) 75,795
9/30/02..... 11.11 -- (2.24) (2.24) -- -- -- 8.87 (20.16) 71,482
9/30/03..... 8.87 0.01 1.31 1.32 -- -- -- 10.19 14.88 70,826
Class B
-------
9/30/99..... $12.62 $(0.12) $ 3.87 $ 3.75 $-- $(0.47) $(0.47) $15.90 30.23% $ 121,709
9/30/00..... 15.90 (0.20) 4.40 4.20 -- (0.66) (0.66) 19.44 26.74 176,395
9/30/01..... 19.44 (0.12) (7.19) (7.31) -- (1.43) (1.43) 10.70 (39.85) 99,012
9/30/02..... 10.70 (0.07) (2.14) (2.21) -- -- -- 8.49 (20.65) 81,686
9/30/03..... 8.49 (0.06) 1.26 1.20 -- -- -- 9.69 14.13 66,378
Class II
--------
9/30/99..... $12.61 $(0.12) $ 3.87 $ 3.75 $-- $(0.47) $(0.47) $15.89 30.25% $ 11,135
9/30/00..... 15.89 (0.20) 4.39 4.19 -- (0.66) (0.66) 19.42 26.78 39,986
9/30/01..... 19.42 (0.13) (7.18) (7.31) -- (1.43) (1.43) 10.68 (39.89) 28,283
9/30/02..... 10.68 (0.07) (2.13) (2.20) -- -- -- 8.48 (20.60) 60,174
9/30/03..... 8.48 (0.06) 1.25 1.19 -- -- -- 9.67 14.03 49,593
Class I
-------
11/16/01-
9/30/02(3)# $12.29 $ 0.02 $(3.43) $(3.41) $-- $ -- $ -- $ 8.88 (27.75)% $ 9,877
9/30/03..... 8.88 0.02 1.31 1.33 -- -- -- 10.21 14.98 12,899
Ratio of net
Ratio of investment
expenses income
Period to average to average Portfolio
Ended net assets net assets turnover
- ------------ ---------- ------------ ---------
9/30/99..... 1.48% (0.13)% 63%
9/30/00..... 1.44 (0.43) 61
9/30/01..... 1.45 (0.21) 126
9/30/02..... 1.50(6) (0.01)(6) 118
9/30/03..... 1.50 0.06 123
9/30/99..... 2.11% (0.76)% 63%
9/30/00..... 2.07 (1.07) 61
9/30/01..... 2.09 (0.85) 126
9/30/02..... 2.13(6) (0.66)(6) 118
9/30/03..... 2.16 (0.59) 123
9/30/99..... 2.15%(5) (0.80)%(5) 63%
9/30/00..... 2.10(5) (1.10)(5) 61
9/30/01..... 2.13(5) (0.88)(5) 126
9/30/02..... 2.17(5)(6) (0.68)(5)(6) 118
9/30/03..... 2.16(5) (0.60)(5) 123
11/16/01-
9/30/02(3)# 1.32%(4)(5)(6) 0.21%(4)(5)(6) 118%
9/30/03..... 1.32(5) 0.23(5) 123
- --------
# See Note 2
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load. Total
return does include expense reimbursements and expense reductions.
(3) Commencement of sale of respective class of shares
(4) Annualized
(5) Net of the following expense reimbursements (based on average net assets):
9/30/99 9/30/00 9/30/01 9/30/02(6) 9/30/03
------- ------- ------- ---------- -------
Growth and Income Class II.............. 0.44% 0.01% -- % -- % -- %
Growth and Income Class I............... -- -- -- 0.12(4) 0.37
(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 by 0.02%.
See Notes to Financial Statements
11
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
BALANCED ASSETS FUND
--------------------
Net
gain (loss)
on invest- Total Dividends Distri-
Net Asset Net ments (both from from net butions Net Asset Net Assets
Value, invest- realized invest- invest- from Total Value, end of
Period beginning ment and ment ment capital distri- end of Total period
Ended of period income(1) unrealized) operations income gains butions period Return(2) (000's)
- --------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
Class A
-------
9/30/99........ $18.03 $0.25 $ 3.57 $ 3.82 $(0.26) $(1.47) $(1.73) $20.12 22.11% $256,467
9/30/00........ 20.12 0.21 2.83 3.04 (0.22) (1.98) (2.20) 20.96 15.69 319,598
9/30/01........ 20.96 0.22 (5.73) (5.51) (0.21) (2.00) (2.21) 13.24 (28.35) 229,609
9/30/02(7)..... 13.24 0.19 (1.45) (1.26) (0.19) -- (0.19) 11.79 (9.65) 183,652
9/30/03........ 11.79 0.10 0.68 0.78 (0.12) -- (0.12) 12.45 6.65 175,324
Class B
-------
9/30/99........ $18.01 $0.13 $ 3.57 $ 3.70 $(0.15) $(1.47) $(1.62) $20.09 21.38% $177,577
9/30/00........ 20.09 0.08 2.82 2.90 (0.09) (1.98) (2.07) 20.92 14.98 174,936
9/30/01........ 20.92 0.11 (5.70) (5.59) (0.13) (2.00) (2.13) 13.20 (28.80) 95,473
9/30/02(7)..... 13.20 0.10 (1.45) (1.35) (0.11) -- (0.11) 11.74 (10.29) 64,452
9/30/03........ 11.74 0.03 0.68 0.71 (0.04) -- (0.04) 12.41 6.07 47,496
Class II
--------
2/02/99-
9/30/99(3)... $20.00 $0.08 $ 0.11 $ 0.19 $(0.08) $ -- $(0.08) $20.11 0.95% $ 8,851
9/30/00........ 20.11 0.08 2.82 2.90 (0.09) (1.98) (2.07) 20.94 14.95 29,506
9/30/01........ 20.94 0.12 (5.72) (5.60) (0.13) (2.00) (2.13) 13.21 (28.83) 24,450
9/30/02(7)..... 13.21 0.09 (1.43) (1.34) (0.11) -- (0.11) 11.76 (10.21) 31,894
9/30/03........ 11.76 0.03 0.67 0.70 (0.04) -- (0.04) 12.42 5.97 25,784
Class I
-------
11/16/01-
9/30/02(3)(7)# $14.29 $0.19 $(2.48) $(2.29) $(0.21) $ -- $(0.21) $11.79 (16.18) $ 4,457
9/30/03........ 11.79 0.12 0.69 0.81 (0.14) -- (0.14) 12.46 6.89 4,574
Ratio of net
Ratio of investment
expenses income
Period to average to average Portfolio
Ended net assets net assets turnover
- --------------- ---------- ------------ ---------
9/30/99........ 1.45% 1.26% 123%
9/30/00........ 1.44 1.01 259
9/30/01........ 1.44 1.32 362
9/30/02(7)..... 1.47(6) 1.39(6) 485
9/30/03........ 1.49 0.86 409
9/30/99........ 2.06% 0.64% 123%
9/30/00........ 2.06 0.40 259
9/30/01........ 2.08 0.68 362
9/30/02(7)..... 2.12(6) 0.73(6) 485
9/30/03........ 2.16 0.22 409
2/02/99-
9/30/99(3)... 2.05%(4)(5) 0.71%(4)(5) 123%
9/30/00........ 2.05(5) 0.38(5) 259
9/30/01........ 2.05(5) 0.71(5) 362
9/30/02(7)..... 2.13(5)(6) 0.72(5)(6) 485
9/30/03........ 2.15(5) 0.22(5) 409
11/16/01-
9/30/02(3)(7)# 1.33%(4)(5)(6) 1.52%(4)(5)(6) 485%
9/30/03........ 1.33(5) 1.02(5) 409
- --------
# See Note 2
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load. Total
return does include expense reimbursements and expense reductions.
(3) Commencement of sale of respective class of shares
(4) Annualized
(5) Net of the following expense reimbursements (based on average net assets):
9/30/99(4) 9/30/00 9/30/01 9/30/02(6) 9/30/03
---------- ------- ------- ---------- -------
Balanced Assets Class II................ 1.41% 0.07% 0.06% -- % -- %
Balanced Assets Class I................. -- -- -- 0.19(4) 0.19
(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 remained the same.
(7) As disclosed in the Notes to the Financial Statements, the Fund has adopted
the provisions of the AICPA Audit and Accounting Guide of Investment
Companies and began accreting discount and amortizing premium on debt
securities. The per share affect of this change for the period ended
September 30, 2002 on investment income and realized and unrealized gain
and losses was approximately $0.01 per share for all classes of shares. The
effect of this change was to decrease the ratio of net investment income to
average net assets by 0.05% for all classes of shares. Per share data and
ratios for periods prior to September 30, 2002 have not been restated to
reflect this change in accounting policy.
See Notes to Financial Statements
12
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
FOCUSED DIVIDEND STRATEGY PORTFOLIO
-----------------------------------
Net
gain (loss)
on invest- Total Dividends Distri- Net
Net Asset Net ments (both from from net butions Net Asset Assets Ratio of
Value, invest- realized invest- invest- from Total Value, end of expenses
Period beginning ment and ment ment capital distri- end of Total period to average
Ended of period income(1) unrealized) operations income gains butions period Return(2) (000's) net assets(3)
- --------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ------- -------------
Class A
-------
9/30/99... $11.06 $0.21 $ 0.73 $ 0.94 $(0.13) $ -- $(0.13) $11.87 8.47% $26,403 0.95%
9/30/00... 11.87 0.23 (1.85) (1.62) (0.23) (0.35) (0.58) 9.67 (14.09) 8,732 0.95
9/30/01... 9.67 0.23 0.73 0.96 (0.22) -- (0.22) 10.41 10.04 7,983 0.95
9/30/02... 10.41 0.22 (0.72) (0.50) (0.20) -- (0.20) 9.71 (5.07) 9,372 0.95
9/30/03... 9.71 0.24 1.17 1.41 (0.37) -- (0.37) 10.75 14.69 45,639 0.95
Class B
-------
9/30/99... $11.03 $0.14 $ 0.72 $ 0.86 $(0.08) $ -- $(0.08) $11.81 7.82% $55,526 1.60%
9/30/00... 11.81 0.16 (1.84) (1.68) (0.16) (0.35) (0.51) 9.62 (14.62) 21,221 1.60
9/30/01... 9.62 0.16 0.73 0.89 (0.16) -- (0.16) 10.35 9.30 21,674 1.60
9/30/02... 10.35 0.15 (0.74) (0.59) (0.13) -- (0.13) 9.63 (5.86) 20,670 1.60
9/30/03... 9.63 0.18 1.17 1.35 (0.26) -- (0.26) 10.72 14.07 47,369 1.60
Class II
--------
9/30/99... $11.03 $0.14 $ 0.72 $ 0.86 $(0.08) $ -- $(0.08) $11.81 7.82% $94,065 1.60%
9/30/00... 11.81 0.16 (1.84) (1.68) (0.16) (0.35) (0.51) 9.62 (14.62) 24,110 1.60
9/30/01... 9.62 0.15 0.74 0.89 (0.16) -- (0.16) 10.35 9.30 21,793 1.60
9/30/02... 10.35 0.15 (0.74) (0.59) (0.13) -- (0.13) 9.63 (5.86) 19,568 1.60
9/30/03... 9.63 0.18 1.16 1.34 (0.26) -- (0.26) 10.71 13.96 69,059 1.60
Ratio of net
investment
income
Period to average Portfolio
Ended net assets(3) turnover
- --------- ------------- ---------
9/30/99... 1.69% 35%
9/30/00... 2.20 57
9/30/01... 2.10 59
9/30/02... 1.96 37
9/30/03... 2.41 20
9/30/99... 1.08% 35%
9/30/00... 1.56 57
9/30/01... 1.45 59
9/30/02... 1.31 37
9/30/03... 1.79 20
9/30/99... 1.11% 35%
9/30/00... 1.50 57
9/30/01... 1.45 59
9/30/02... 1.30 37
9/30/03... 1.77 20
- --------
(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):
9/30/99 9/30/00 9/30/01 9/30/02 9/30/03
------- ------- ------- ------- -------
Focused Dividend Strategy Class A....... 0.23% 0.34% 0.36% 0.29% 0.16%
Focused Dividend Strategy Class B....... 0.22 0.30 0.25 0.24 0.16
Focused Dividend Strategy Class II...... 0.19 0.27 0.27 0.23 0.14
See Notes to Financial Statements
13
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
INTERNATIONAL EQUITY FUND
-------------------------
Net
gain (loss)
Net on invest- Total Dividends Distri- Net
Net Asset invest- ments (both from from net butions Net Asset Assets
Value, ment realized invest- invest- from Total Value, end of
Period beginning income and ment ment capital distri- end of Total period
Ended of period Loss(1) unrealized) operations income gains butions period Return(2) (000's)
- ----------------- --------- ------- ----------- ---------- --------- ------- ------- --------- --------- -------
Class A
-------
10/31/98......... $12.46 $(0.01) $(0.01) $(0.02) $-- $(0.22) $(0.22) $12.22 (0.09)% $28,418
10/31/99......... 12.22 (0.03) 2.12 2.09 -- (0.05) (0.05) 14.26 17.15 29,324
10/31/00......... 14.26 (0.11) 0.29 0.18 -- -- -- 14.44 1.26 49,085
10/31/01......... 14.44 (0.05) (4.40) (4.45) -- (1.11) (1.11) 8.88 (33.17) 24,408
11/01/01-
9/30/02(6)(9)... 8.88 -- (1.88) (1.88) -- -- -- 7.00 (21.17) 30,896
9/30/03.......... 7.00 0.03 1.70 1.73 -- -- -- 8.73 24.71 28,720
Class B
-------
10/31/98......... $12.38 $(0.09) $ -- $(0.09) $-- $(0.22) $(0.22) $12.07 (0.67)% $47,817
10/31/99......... 12.07 (0.12) 2.08 1.96 -- (0.05) (0.05) 13.98 16.29 47,342
10/31/00......... 13.98 (0.22) 0.31 0.09 -- -- -- 14.07 0.64 48,901
10/31/01......... 14.07 (0.13) (4.26) (4.39) -- (1.11) (1.11) 8.57 (33.64) 26,747
11/01/01-
9/30/02(6)(9)... 8.57 (0.06) (1.78) (1.84) -- `-- -- 6.73 (21.47) 25,509
9/30/03.......... 6.73 (0.03) 1.64 1.61 -- -- -- 8.34 23.92 24,799
Class II
--------
10/31/98......... $12.38 $(0.09) $ -- $(0.09) $-- $(0.22) $(0.22) $12.07 (0.67)% $ 7,982
10/31/99......... 12.07 (0.13) 2.10 1.97 -- (0.05) (0.05) 13.99 16.37 11,709
10/31/00......... 13.99 (0.21) 0.30 0.09 -- -- -- 14.08 0.64 20,367
10/31/01......... 14.08 (0.12) (4.28) (4.40) -- (1.11) (1.11) 8.57 (33.69) 12,949
11/01/01-
9/30/02(6)(9)... 8.57 (0.06) (1.79) (1.85) -- -- -- 6.72 (21.59) 15,067
9/30/03.......... 6.72 (0.03) 1.64 1.61 -- -- -- 8.33 23.96 14,787
Class I
-------
11/16/01-
9/30/02(6)(7)(9) $ 9.09 $ 0.01 $(2.08) $(2.07) $-- $ -- $ -- $ 7.02 (22.77)% $15,802
9/30/03.......... 7.02 0.03 1.72 1.75 -- -- -- 8.77 24.93 20,499
Ratio of net
Ratio of investment
expenses income
Period to average to average Portfolio
Ended net assets(4) net assets(4) turnover
- ----------------- ------------- ------------- ---------
10/31/98......... 2.03% (0.11)% 114%
10/31/99......... 2.03 (0.23) 102
10/31/00......... 2.03(5) (0.72)(5) 89
10/31/01......... 2.03 (0.42) 272
11/01/01-
9/30/02(6)(9)... 1.93(3)(5)(8) (0.06)(3)(5)(8) 230
9/30/03.......... 1.90 0.35 209
10/31/98......... 2.68% (0.74)% 114%
10/31/99......... 2.68 (0.92) 102
10/31/00......... 2.68(5) (1.37)(5) 89
10/31/01......... 2.68 (1.14) 272
11/01/01-
9/30/02(6)(9)... 2.56(3)(5)(8) (0.72)(3)(5)(8) 230
9/30/03.......... 2.55 (0.41) 209
10/31/98......... 2.68% (0.71)% 114%
10/31/99......... 2.68 (0.95) 102
10/31/00......... 2.68(5) (1.30)(5) 89
10/31/01......... 2.68 (1.13) 272
11/01/01-
9/30/02(6)(9)... 2.55(3)(5)(8) (0.72)(3)(5)(8) 230
9/30/03.......... 2.55 (0.38) 209
11/16/01-
9/30/02(6)(7)(9) 1.80%(3)(5)(8) 0.16%(3)(5)(8) 230%
9/30/03.......... 1.80 0.43 209
- --------
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load. Total
return does include expense reimbursements and expense reductions.
(3) Annualized
(4) Net of the following expense reimbursements (based on average net assets):
10/31/98 10/31/99 10/31/00 10/31/01 9/30/02(8) 9/30/03
-------- -------- -------- -------- ---------- -------
International Equity Class A............ 0.45% 0.25% 0.04% 0.03% 0.08% 0.18%
International Equity Class B............ 0.48 0.24 0.04 0.06 0.14 0.13
International Equity Class II........... 0.55 0.33 0.10 0.14 0.13 0.28
International Equity Class I............ -- -- -- -- 0.11 0.16
(5) The ratio reflects an expense cap which is net of custody credits of
(0.01)% or waiver/reimbursements if applicable
(6) See Note 2
(7) Commencement of sale of respective class of shares
(8) Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied, the ratio of expenses to average net
assets would have remained the same.
(9) The Fund changed its fiscal year end from October 31 to September 30.
See Notes to Financial Statements
14
SunAmerica Blue Chip Growth Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2003
Value
Security Description Shares (Note 3)
-----------------------------------------------------------
COMMON STOCK -- 98.7%
Aerospace & Military Technology -- 1.0%
United Technologies Corp.............. 16,000 $ 1,236,480
-----------
Banks -- 1.8%
Bank of America Corp.................. 28,950 2,259,258
-----------
Broadcasting & Media -- 4.1%
Clear Channel Communications, Inc..... 35,000 1,340,500
Time Warner, Inc.+.................... 60,000 906,600
Viacom, Inc., Class B................. 42,900 1,643,070
Walt Disney Co........................ 57,000 1,149,690
-----------
5,039,860
-----------
Business Services -- 2.0%
Furniture Brands International, Inc.+. 50,000 1,205,000
Paychex, Inc.......................... 35,000 1,187,550
-----------
2,392,550
-----------
Computer Software -- 6.7%
Adobe Systems, Inc.................... 25,000 981,500
Microsoft Corp........................ 190,000 5,280,100
VERITAS Software Corp.+............... 60,000 1,884,000
-----------
8,145,600
-----------
Computers & Business Equipment -- 8.3%
Dell, Inc.+........................... 60,000 2,003,400
EMC Corp.+............................ 120,000 1,515,600
Hewlett-Packard Co.................... 50,000 968,000
Intel Corp............................ 130,204 3,581,912
International Business Machines Corp.. 23,000 2,031,590
-----------
10,100,502
-----------
Conglomerate -- 3.4%
General Electric Co................... 120,000 3,577,200
Tyco International, Ltd............... 30,000 612,900
-----------
4,190,100
-----------
Electronics -- 4.3%
Applied Materials, Inc.+.............. 130,000 2,358,200
Maxim Integrated Products, Inc........ 30,000 1,185,000
QLogic Corp.+......................... 35,000 1,645,350
-----------
5,188,550
-----------
Energy Services -- 1.5%
Baker Hughes, Inc..................... 20,000 591,800
BJ Services Co.+...................... 36,000 1,230,120
-----------
1,821,920
-----------
Energy Sources -- 1.6%
Exxon Mobil Corp...................... 54,000 1,976,400
-----------
Financial Services -- 11.8%
American Express Co................... 49,600 2,234,976
Capital One Financial Corp............ 40,000 2,281,600
Value
Security Description Shares (Note 3)
--------------------------------------------------------------
Financial Services -- (continued)
Citigroup, Inc........................... 91,232 $ 4,151,968
Goldman Sachs Group, Inc................. 15,000 1,258,500
Merrill Lynch & Co., Inc................. 34,250 1,833,403
Morgan Stanley Dean Witter & Co.......... 30,000 1,513,800
SLM Corp................................. 30,000 1,168,800
-----------
14,443,047
-----------
Food, Beverage & Tobacco -- 2.1%
Coca-Cola Co............................. 32,800 1,409,088
PepsiCo, Inc............................. 25,275 1,158,353
-----------
2,567,441
-----------
Household Products -- 1.9%
Estee Lauder Cos., Inc., Class A......... 20,000 682,000
Procter & Gamble Co...................... 17,500 1,624,350
-----------
2,306,350
-----------
Insurance -- 2.4%
Berkshire Hathaway, Inc.+................ 1,150 2,870,400
-----------
Internet Content -- 0.7%
Yahoo!, Inc.+............................ 25,000 884,500
-----------
Internet Software -- 1.8%
BEA Systems, Inc.+....................... 180,000 2,169,000
-----------
Leisure & Tourism -- 4.1%
Carnival Corp............................ 50,000 1,644,500
Mandalay Resort Group.................... 35,000 1,386,350
Southwest Airlines Co.................... 110,000 1,947,000
-----------
4,977,850
-----------
Machinery -- 2.1%
Cooper Industries, Ltd., Class A......... 25,000 1,200,750
Deere & Co............................... 25,000 1,332,750
-----------
2,533,500
-----------
Medical Products -- 3.8%
Chiron Corp.+............................ 25,000 1,292,250
Genzyme Corp.+........................... 25,000 1,156,250
Johnson & Johnson........................ 45,000 2,228,400
-----------
4,676,900
-----------
Metals & Mining -- 1.1%
Alcoa, Inc............................... 50,000 1,308,000
-----------
Pharmaceuticals -- 9.0%
Amgen, Inc.+............................. 46,611 3,009,672
Bristol-Myers Squibb Co.................. 50,000 1,283,000
Merck & Co., Inc......................... 29,100 1,473,042
Pfizer, Inc.............................. 135,045 4,102,667
Teva Pharmaceutical Industries, Ltd. ADR. 20,000 1,143,000
-----------
11,011,381
-----------
15
SunAmerica Blue Chip Growth Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2003 -- (continued)
Value
Security Description Shares (Note 3)
-----------------------------------------------------------
COMMON STOCKS (continued)
Restaurants -- 1.0%
Applebees International, Inc......... 40,000 $ 1,259,200
------------
Retail Stores -- 10.9%
Amazon.com, Inc.+.................... 50,000 2,418,000
Coach, Inc.+......................... 30,000 1,638,000
Home Depot, Inc...................... 35,000 1,114,750
Masco Corp........................... 50,000 1,224,000
Target Corp.......................... 35,000 1,317,050
Tiffany & Co......................... 40,000 1,493,200
Wal-Mart Stores, Inc................. 72,400 4,043,540
------------
13,248,540
------------
Telecommunications -- 8.9%
AT&T Wireless Services, Inc.+........ 150,000 1,227,000
Cisco Systems, Inc.+................. 210,000 4,103,400
EchoStar Communications Corp.,
Class A+............................ 45,000 1,722,150
Nextel Communications, Inc.,
Class A+............................ 130,000 2,559,700
Vodafone Group, PLC ADR.............. 60,000 1,215,000
------------
10,827,250
------------
Transportation -- 2.4%
FedEx Corp........................... 27,000 1,739,610
United Parcel Service, Inc., Class B. 19,000 1,212,200
------------
2,951,810
------------
Total Investment Securities -- 98.7%
(cost $114,367,578)................. 120,386,389
------------
Principal
Amount Value
Security Description (in thousands) (Note 3)
------------------------------------------------------------------
REPURCHASE AGREEMENT -- 1.6%
Joint Repurchase Agreement with
State Street Bank & Trust Co.
(Note 3)
(cost $1,941,000)................. $1,941 $ 1,941,000
------------
TOTAL INVESTMENTS --
(cost $116,308,578)............... 100.3% 122,327,389
Liabilities in excess of other assets (0.3) (329,000)
------ ------------
NET ASSETS -- 100.0% $121,998,389
====== ============
- --------
+ Non-income producing security
ADR -- AmericanDepository Receipt
See Notes to Financial Statements
16
SunAmerica Growth Opportunities Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2003
Value
Security Description Shares (Note 3)
-----------------------------------------------------------
COMMON STOCK -- 79.7%
Aerospace & Military Technology -- 0.8%
Empresa Brasileira de Aeronautica ADR. 50,000 $ 1,055,000
-----------
Broadcasting & Media -- 0.8%
Westwood One, Inc.+................... 35,000 1,056,650
-----------
Business Services -- 1.9%
Corrections Corp. of America+......... 28 691
CSG Systems International, Inc.+...... 50,000 738,500
Fastenal Co........................... 30,000 1,134,000
Herman Miller, Inc.................... 30,000 683,100
-----------
2,556,291
-----------
Communication Equipment -- 3.1%
Advanced Fibre Communications, Inc.+.. 100,000 2,097,000
Intersil Corp., Class A+.............. 50,000 1,190,000
LSI Logic Corp.+...................... 100,000 899,000
-----------
4,186,000
-----------
Computer Software -- 3.4%
DST Systems, Inc.+.................... 60,000 2,256,000
Fiserv, Inc.+......................... 30,000 1,086,900
FutureLink Corp.+..................... 11,714 2
Manhattan Associates, Inc.+........... 50,000 1,294,500
-----------
4,637,402
-----------
Computers & Business Equipment -- 0.7%
Network Appliance, Inc.+................ 45,000 923,850
-----------
Education -- 1.7%
Apollo Group, Inc., Class A+.......... 17,000 1,122,510
Corinthian Colleges, Inc.+............ 20,000 1,143,200
-----------
2,265,710
-----------
Electronics -- 8.5%
American Power Conversion Corp........ 25,000 428,500
AMETEK, Inc........................... 30,000 1,285,800
AMIS Holdings, Inc.+.................. 7,000 129,220
Analog Devices, Inc.+................. 25,000 950,500
Cymer, Inc.+.......................... 30,000 1,236,000
Cypress Semiconductor Corp.+.......... 200,000 3,536,000
Lam Research Corp.+................... 46,600 1,032,190
MEMC Electronic Materials, Inc.+...... 100,000 1,091,000
Sigmatel, Inc.+....................... 3,000 61,830
Teradyne, Inc.+....................... 100,000 1,860,000
-----------
11,611,040
-----------
Energy Services -- 5.8%
BJ Services Co.+...................... 35,000 1,195,950
ENSCO International, Inc.............. 9,800 262,836
Value
Security Description Shares (Note 3)
------------------------------------------------------------------
Energy Services -- (continued)
GlobalSantaFe Corp............................ 50,000 $1,197,500
Key Energy Services, Inc.+.................... 85,700 827,005
Nabors Industries, Ltd.+...................... 49,200 1,833,192
Pride International, Inc.+.................... 154,700 2,622,165
----------
7,938,648
----------
Energy Sources -- 0.8%
Cross Timbers Royalty Trust................... 369 7,749
XTO Energy, Inc............................... 50,000 1,049,500
----------
1,057,249
----------
Financial Services -- 3.0%
Capital One Financial Corp.................... 40,000 2,281,600
Golden West Financial Corp.................... 20,000 1,790,200
----------
4,071,800
----------
Food, Beverage & Tobacco -- 1.0%
Campbell Soup Co.............................. 50,000 1,325,000
----------
Health Services -- 1.6%
Caremark Rx, Inc.+............................ 30,000 678,000
Centene Corp.+................................ 30,000 911,700
United Surgical Partners International, Inc.+ 20,000 566,000
----------
2,155,700
----------
Insurance -- 6.6%
Anthem, Inc.+................................. 20,000 1,426,600
First Health Group Corp.+..................... 40,000 1,046,000
Montpelier Re Holdings, Ltd.+................. 25,000 753,750
Platinum Underwriters Holdings, Ltd........... 45,000 1,264,500
SAFECO Corp................................... 60,000 2,115,600
Scottish Annuity & Life Holdings, Ltd......... 7,000 169,050
St. Paul Cos., Inc............................ 60,000 2,221,800
----------
8,997,300
----------
Internet Software -- 2.7%
BEA Systems, Inc.+............................ 100,000 1,205,000
Symantec Corp.+............................... 40,000 2,520,800
----------
3,725,800
----------
Leisure & Tourism -- 5.6%
GTECH Holdings Corp........................... 30,000 1,285,500
International Game Technology................. 40,000 1,126,000
JetBlue Airways Corp.+........................ 45,000 2,743,650
Mandalay Resort Group......................... 40,000 1,584,400
Royal Caribbean Cruises, Ltd.................. 30,000 843,300
----------
7,582,850
----------
17
SunAmerica Growth Opportunities Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2003 -- (continued)
Value
Security Description Shares (Note 3)
--------------------------------------
COMMON STOCKS (continued)
Machinery -- 4.9%
Cooper Industries, Ltd., Class A..... 20,000 $ 960,600
Graco, Inc........................... 30,000 1,126,500
Ingersoll-Rand Co., Ltd., Class A.... 25,000 1,336,000
Parker-Hannifin Corp................. 30,000 1,341,000
Terex Corp.+......................... 30,000 555,900
Toro Co.............................. 30,000 1,350,000
-----------
6,670,000
-----------
Medical Products -- 1.7%
ID Biomedical Corp.+................. 80,000 1,399,200
INAMED Corp.+........................ 11,800 866,710
-----------
2,265,910
-----------
Metals & Mining -- 0.4%
Worthington Industries, Inc.......... 50,000 628,000
-----------
Pharmaceuticals -- 13.5%
Biovail Corp.+....................... 60,000 2,229,000
Cephalon, Inc.+...................... 72,000 3,306,240
Integra Lifesciences Holdings Corp.+. 152,900 4,325,541
Medicines Co.+....................... 50,000 1,300,000
MGI Pharma, Inc.+.................... 20,000 785,200
Pharmaceutical Resources, Inc.+...... 50,000 3,411,000
Sepracor, Inc.+...................... 50,000 1,377,000
Watson Pharmaceuticals, Inc.+........ 40,000 1,667,600
-----------
18,401,581
-----------
Restaurants -- 1.7%
Applebees International, Inc......... 40,000 1,259,200
Landry's Restaurants, Inc............ 50,000 1,030,000
-----------
2,289,200
-----------
Retail Stores -- 4.2%
Coach, Inc.+......................... 30,000 1,638,000
Foot Locker, Inc..................... 100,000 1,620,000
HON INDUSTRIES, Inc.................. 30,000 1,108,800
Williams Sonoma, Inc.+............... 50,000 1,349,000
-----------
5,715,800
-----------
Shares/
Principal
Amount Value
Security Description (in thousands) (Note 3)
-------------------------------------------------------------
Telecommunications -- 4.5%
Avaya, Inc.+.................... 50,000 $ 545,000
Comcast Corp., Class A,
Special+....................... 40,000 1,181,600
EchoStar Communications Corp.,
Class A+....................... 113,950 4,360,866
------------
6,087,466
------------
Transportation -- 0.8%
C.H. Robinson Worldwide, Inc.... 30,000 1,116,300
------------
Total Investment Securities -- 79.7%
(cost $97,045,940)............. 108,320,547
------------
REPURCHASE AGREEMENT -- 15.9%
Joint Repurchase Agreement with
State Street Bank & Trust Co.
(Note 3)....................... 662 662,000
Joint Repurchase Agreement with
UBS Warburg, LLC (Note 3)...... 21,000 21,000,000
------------
Total Repurchase Agreement
(cost $21,662,000)............. 21,662,000
------------
TOTAL INVESTMENTS --
(cost $118,707,940)............ 95.6% 129,982,547
Other assets less liabilities..... 4.4 6,018,448
------- ------------
NET ASSETS -- 100.0% $136,000,995
======= ============
- --------
ADR -- AmericanDepository Receipt
+ Non-income producing security
See Notes to Financial Statements
18
SunAmerica New Century Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2003
Value
Security Description Shares (Note 3)
-------------------------------------------------------
COMMON STOCK -- 101.7%
Banks -- 3.6%
Hibernia Corp., Class A............ 85,000 $1,722,100
Wachovia Corp...................... 53,100 2,187,189
----------
3,909,289
----------
Broadcasting & Media -- 4.4%
Fox Entertainment Group, Inc.,
Class A+.......................... 26,900 752,931
Lin TV Corp.+...................... 33,250 706,895
Monster Worldwide, Inc.+........... 52,000 1,309,360
Radio One, Inc.+................... 36,100 518,396
Westwood One, Inc.+................ 49,300 1,488,367
----------
4,775,949
----------
Business Services -- 4.8%
Kroll, Inc.+....................... 50,000 930,000
Paychex, Inc....................... 52,600 1,784,718
Stericycle, Inc.+.................. 30,600 1,443,402
Waste Connections, Inc.+........... 31,200 1,094,808
----------
5,252,928
----------
Communication Equipment -- 5.2%
Foundry Networks, Inc.+............ 75,600 1,626,156
Intersil Corp., Class A+........... 58,000 1,380,400
Marvell Technology Group, Ltd.+.... 70,500 2,661,375
----------
5,667,931
----------
Computer Software -- 8.2%
CACI International, Inc., Class A+. 38,900 1,666,865
Citrix Systems, Inc.+.............. 66,700 1,472,736
Cognos, Inc.+...................... 46,800 1,451,736
Netscreen Technologies, Inc.+...... 61,200 1,360,476
PeopleSoft, Inc.+.................. 47,300 860,387
VERITAS Software Corp.+............ 66,700 2,094,380
----------
8,906,580
----------
Computers & Business Equipment -- 2.5%
EMC Corp.+......................... 212,000 2,677,560
----------
Education -- 2.4%
Apollo Group, Inc., Class A+....... 29,750 1,964,392
Career Education Corp.+............ 13,800 625,140
----------
2,589,532
----------
Electronics -- 8.4%
AMIS Holdings, Inc.+............... 4,500 83,070
ATMI, Inc.+........................ 61,300 1,549,051
Business Objects SA ADR+........... 65,900 1,644,205
KLA-Tencor Corp.+.................. 41,600 2,138,240
Novellus Systems, Inc.+............ 48,300 1,630,125
Value
Security Description Shares (Note 3)
---------------------------------------------------------
Electronics (continued)
Rockwell Automation, Inc............. 78,000 $2,047,500
----------
9,092,191
----------
Energy Services -- 3.0%
BJ Services Co.+..................... 23,800 813,246
Patterson-UTI Energy, Inc.+.......... 19,400 525,158
Pride International, Inc.+........... 43,700 740,715
Smith International, Inc.+........... 34,400 1,237,712
----------
3,316,831
----------
Energy Sources -- 1.5%
Apache Corp.......................... 13,740 952,732
Burlington Resources, Inc............ 13,400 645,880
----------
1,598,612
----------
Entertainment Products -- 2.1%
Digital Theater Systems, Inc.+....... 25,000 712,025
Leapfrog Enterprises, Inc.+.......... 41,800 1,588,400
----------
2,300,425
----------
Financial Services -- 8.2%
Charles Schwab & Co., Inc............ 149,200 1,776,972
Goldman Sachs Group, Inc............. 19,300 1,619,270
Lehman Brothers Holdings, Inc........ 23,800 1,644,104
Morgan Stanley Dean Witter & Co...... 22,100 1,115,166
SLM Corp............................. 70,500 2,746,680
----------
8,902,192
----------
Health Services -- 3.4%
Centene Corp.+....................... 47,200 1,434,408
Select Medical Corp.+................ 43,600 1,255,680
Weight Watchers International, Inc.+. 23,500 977,600
----------
3,667,688
----------
Household Products -- 1.2%
Yankee Candle, Inc.+................. 50,200 1,279,096
----------
Internet Content -- 3.3%
Yahoo!, Inc.+........................ 101,300 3,583,994
----------
Internet Software -- 2.0%
BEA Systems, Inc.+................... 181,200 2,183,460
----------
Leisure & Tourism -- 2.1%
JetBlue Airways Corp.+............... 36,750 2,240,648
----------
Machinery -- 1.2%
Cummins, Inc......................... 29,900 1,328,457
----------
Medical Products -- 6.7%
Boston Scientific Corp.+............. 17,200 1,097,360
19
SunAmerica New Century Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2003 -- (continued)
Value
Security Description Shares (Note 3)
------------------------------------------------------------
COMMON STOCK (continued)
Medical Products (continued)
Cytyc Corp.+............................. 70,400 $1,058,816
MedImmune, Inc.+......................... 90,300 2,980,803
Millennium Pharmaceuticals, Inc.+........ 28,400 437,076
Neurocrine Biosciences, Inc.+............ 34,900 1,728,248
----------
7,302,303
----------
Pharmaceuticals -- 7.5%
Amgen, Inc.+............................. 31,600 2,040,412
Gilead Sciences, Inc.+................... 30,900 1,728,237
Mylan Labs, Inc.......................... 28,300 1,093,795
Teva Pharmaceutical Industries, Ltd. ADR. 57,200 3,268,980
----------
8,131,424
----------
Restaurants -- 1.8%
Applebees International, Inc............. 20,300 639,044
Ruby Tuesday, Inc........................ 53,400 1,287,474
----------
1,926,518
----------
Retail Stores -- 8.2%
99 Cents Only Stores+.................... 45,900 1,484,406
Amazon.com, Inc.+........................ 61,000 2,949,960
Chico's FAS, Inc.+....................... 37,000 1,133,680
Coach, Inc.+............................. 27,800 1,517,880
Gymboree Corp.+.......................... 37,500 528,375
Williams Sonoma, Inc.+................... 47,200 1,273,456
----------
8,887,757
----------
Value
Security Description Shares (Note 3)
------------------------------------------------------------
Telecommunications -- 7.0%
EchoStar Communications Corp.,
Class A+.......................... 69,100 $ 2,644,457
Nextel Communications, Inc.,
Class A+.......................... 141,800 2,792,042
Sonus Networks, Inc.+.............. 305,000 2,113,650
------------
7,550,149
------------
Transportation -- 3.0%
Heartland Express, Inc............. 53,313 1,280,578
J.B. Transport Services, Inc.+..... 76,400 1,987,928
------------
3,268,506
------------
Total Investment Securities -- 101.7%
(cost $90,730,022)................ 110,340,020
------------
TOTAL INVESTMENTS --
(cost $90,730,022)................ 101.7% 110,340,020
Liabilities in excess of other assets (1.7) (1,819,348)
------- ------------
NET ASSETS -- 100.0% $108,520,672
======= ============
- --------
+ Non-income producing security
ADR -- AmericanDepository Receipt
See Notes to Financial Statements
20
SunAmerica Growth and Income Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2003
Value
Security Description Shares (Note 3)
-----------------------------------------------------------
COMMON STOCK -- 99.0%
Aerospace & Military Technology -- 2.7%
Boeing Co............................. 33,800 $ 1,160,354
Honeywell International, Inc.......... 78,900 2,079,015
United Technologies Corp.............. 27,300 2,109,744
-----------
5,349,113
-----------
Automotive -- 1.1%
Ford Motor Co......................... 195,200 2,102,304
-----------
Banks -- 4.0%
Bank of America Corp.................. 72,000 5,618,880
Mellon Financial Corp................. 79,500 2,396,130
-----------
8,015,010
-----------
Broadcasting & Media -- 3.5%
Clear Channel Communications, Inc..... 45,100 1,727,330
Time Warner, Inc.+.................... 85,600 1,293,416
Viacom, Inc., Class B................. 54,100 2,072,030
Walt Disney Co........................ 92,700 1,869,759
-----------
6,962,535
-----------
Business Services -- 1.0%
Paychex, Inc.......................... 58,600 1,988,298
-----------
Computer Software -- 6.3%
Computer Associates International,
Inc.................................. 90,100 2,352,511
Microsoft Corp........................ 270,200 7,508,858
VERITAS Software Corp.+............... 87,800 2,756,920
-----------
12,618,289
-----------
Computers & Business Equipment -- 7.7%
Dell, Inc.+........................... 94,500 3,155,355
EMC Corp.+............................ 180,100 2,274,663
Hewlett-Packard Co.................... 112,500 2,178,000
Intel Corp............................ 171,100 4,706,961
International Business Machines Corp.. 34,400 3,038,552
-----------
15,353,531
-----------
Conglomerate -- 3.9%
General Electric Co................... 186,000 5,544,660
Tyco International, Ltd............... 108,000 2,206,440
-----------
7,751,100
-----------
Electronics -- 2.1%
Applied Materials, Inc.+.............. 180,100 3,267,014
Maxim Integrated Products, Inc........ 24,400 963,800
-----------
4,230,814
-----------
Value
Security Description Shares (Note 3)
--------------------------------------------------------
Energy Services -- 1.5%
Baker Hughes, Inc.................. 31,500 $ 932,085
BJ Services Co.+................... 63,000 2,152,710
-----------
3,084,795
-----------
Energy Sources -- 2.7%
Exxon Mobil Corp................... 145,200 5,314,320
-----------
Financial Services -- 13.5%
American Express Co................ 40,600 1,829,436
Capital One Financial Corp......... 54,000 3,080,160
CIT Group, Inc..................... 74,400 2,139,744
Citigroup, Inc..................... 148,500 6,758,235
Goldman Sachs Group, Inc........... 24,400 2,047,160
J.P. Morgan Chase & Co............. 72,000 2,471,760
Merrill Lynch & Co., Inc........... 49,500 2,649,735
Morgan Stanley Dean Witter & Co.... 56,900 2,871,174
SLM Corp........................... 34,500 1,344,120
Wells Fargo & Co................... 34,500 1,776,750
-----------
26,968,274
-----------
Food, Beverage & Tobacco -- 3.2%
Altria Group, Inc.................. 45,000 1,971,000
Coca-Cola Co....................... 60,400 2,594,784
PepsiCo, Inc....................... 40,600 1,860,698
-----------
6,426,482
-----------
Forest Products -- 1.1%
MeadWestvaco Corp.................. 87,800 2,238,900
-----------
Household Products -- 2.0%
Estee Lauder Cos., Inc., Class A... 45,100 1,537,910
Procter & Gamble Co................ 26,900 2,496,858
-----------
4,034,768
-----------
Insurance -- 2.7%
Berkshire Hathaway, Inc.+.......... 1,500 3,744,000
Travelers Property Casualty Corp.,
Class A........................... 108,000 1,715,040
-----------
5,459,040
-----------
Internet Content -- 0.6%
Yahoo!, Inc.+...................... 36,000 1,273,680
-----------
Leisure & Tourism -- 4.0%
Carnival Corp...................... 81,000 2,664,090
Hilton Hotels Corp................. 146,400 2,374,608
Southwest Airlines Co.............. 170,200 3,012,540
-----------
8,051,238
-----------
21
SunAmerica Growth and Income Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2003 -- (continued)
Value
Security Description Shares (Note 3)
-----------------------------------------------------------
COMMON STOCK (continued)
Machinery -- 2.4%
Deere & Co............................ 53,700 $ 2,862,747
Ingersoll-Rand Co., Ltd., Class A..... 34,200 1,827,648
-----------
4,690,395
-----------
Medical Products -- 3.7%
Chiron Corp.+......................... 43,900 2,269,191
Genzyme Corp.+........................ 43,900 2,030,375
Johnson & Johnson..................... 63,400 3,139,568
-----------
7,439,134
-----------
Metals & Mining -- 2.0%
Alcoa, Inc............................ 81,000 2,118,960
Freeport-McMoRan Copper & Gold, Inc.,
Class B.............................. 58,600 1,939,660
-----------
4,058,620
-----------
Pharmaceuticals -- 7.6%
Amgen, Inc.+.......................... 45,000 2,905,650
Bristol-Myers Squibb Co............... 90,100 2,311,966
Merck & Co., Inc...................... 45,000 2,277,900
Pfizer, Inc........................... 184,550 5,606,629
Teva Pharmaceutical Industries, Ltd.
ADR.................................. 36,000 2,057,400
-----------
15,159,545
-----------
Restaurants -- 1.4%
Applebees International, Inc.......... 90,100 2,836,348
-----------
Retail Stores -- 8.2%
Coach, Inc.+.......................... 49,500 2,702,700
Home Depot, Inc....................... 58,500 1,863,225
Masco Corp............................ 97,600 2,389,248
Target Corp........................... 48,800 1,836,344
Tiffany & Co.......................... 63,000 2,351,790
Wal-Mart Stores, Inc.................. 91,800 5,127,030
-----------
16,270,337
-----------
Shares/
Principal
Amount Value
Security Description (in thousands) (Note 3)
---------------------------------------------------------------------
Telecommunications -- 7.2%
AT&T Wireless Services, Inc.+........... 360,100 $ 2,945,618
Cisco Systems, Inc.+.................... 180,100 3,519,154
EchoStar Communications Corp.,
Class A+............................... 58,600 2,242,622
Nextel Communications, Inc.,
Class A+............................... 199,600 3,930,124
Vodafone Group, PLC ADR................. 81,000 1,640,250
------------
14,277,768
------------
Transportation -- 2.0%
FedEx Corp.............................. 31,500 2,029,545
United Parcel Service, Inc., Class B.... 29,700 1,894,860
------------
3,924,405
------------
Utilities -- 0.9%
Southern Co............................. 63,000 1,847,160
------------
Total Investment Securities -- 99.0%
(cost $192,425,877).................... 197,726,203
REPURCHASE AGREEMENT -- 0.6%
Joint Repurchase Agreement with
State Street Bank & Trust Co. (Note 3)
(cost $1,146,000)...................... 1,146 1,146,000
------------
TOTAL INVESTMENTS --
(cost $193,571,877).................... 99.6% $198,872,203
Other assets less liabilities............. 0.4 824,096
------- ------------
NET ASSETS -- 100.0% $199,696,299
======= ============
- --------
ADR -- AmericanDepositary Receipt
+ Non-income producing security
See Notes to Financial Statements
22
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2003
Value
Security Description Shares (Note 3)
-------------------------------------------------------------
COMMON STOCK -- 62.2%
Aerospace & Military Technology -- 1.6%
Boeing Co............................... 22,200 $ 762,126
Honeywell International, Inc............ 62,100 1,636,335
United Technologies Corp................ 22,100 1,707,888
-----------
4,106,349
-----------
Automotive -- 0.7%
Ford Motor Co........................... 163,100 1,756,587
-----------
Banks -- 2.3%
Bank of America Corp.................... 50,900 3,972,236
Mellon Financial Corp................... 63,900 1,925,946
-----------
5,898,182
-----------
Broadcasting & Media -- 2.0%
Clear Channel Communications, Inc....... 34,100 1,306,030
Time Warner, Inc.+...................... 69,900 1,056,189
Viacom, Inc., Class B................... 34,000 1,302,200
Walt Disney Co.......................... 67,400 1,359,458
-----------
5,023,877
-----------
Business Services -- 0.7%
Paychex, Inc............................ 50,000 1,696,500
-----------
Computer Software -- 4.0%
Computer Associates International, Inc.. 68,200 1,780,702
Microsoft Corp.......................... 217,900 6,055,441
VERITAS Software Corp.+................. 69,700 2,188,580
-----------
10,024,723
-----------
Computers & Business Equipment -- 4.7%
Dell, Inc.+............................. 68,200 2,277,198
EMC Corp.+.............................. 144,900 1,830,087
Hewlett-Packard Co...................... 72,400 1,401,664
Intel Corp.............................. 139,300 3,832,143
International Business Machines Corp.... 29,500 2,605,735
-----------
11,946,827
-----------
Conglomerate -- 2.3%
General Electric Co..................... 146,800 4,376,108
Tyco International, Ltd................. 76,800 1,569,024
-----------
5,945,132
-----------
Electronics -- 1.2%
Applied Materials, Inc.+................ 127,300 2,309,222
Maxim Integrated Products, Inc.......... 19,300 762,350
-----------
3,071,572
-----------
Value
Security Description Shares (Note 3)
--------------------------------------------------------
Energy Services -- 0.9%
Baker Hughes, Inc.................. 21,400 $ 633,226
BJ Services Co.+................... 51,700 1,766,589
-----------
2,399,815
-----------
Energy Sources -- 1.7%
Exxon Mobil Corp................... 115,000 4,209,000
-----------
Financial Services -- 8.7%
American Express Co................ 49,700 2,239,482
Capital One Financial Corp......... 51,000 2,909,040
CIT Group, Inc..................... 67,400 1,938,424
Citigroup, Inc..................... 97,100 4,419,021
Goldman Sachs Group, Inc........... 20,000 1,678,000
J.P. Morgan Chase & Co............. 59,700 2,049,501
Merrill Lynch & Co., Inc........... 41,800 2,237,554
Morgan Stanley Dean Witter & Co.... 40,200 2,028,492
SLM Corp........................... 31,500 1,227,240
Wells Fargo & Co................... 25,400 1,308,100
-----------
22,034,854
-----------
Food, Beverage & Tobacco -- 2.0%
Altria Group, Inc.................. 36,400 1,594,320
Coca-Cola Co....................... 47,200 2,027,712
PepsiCo, Inc....................... 30,000 1,374,900
-----------
4,996,932
-----------
Forest Products -- 0.6%
MeadWestvaco Corp.................. 60,000 1,530,000
-----------
Household Products -- 1.2%
Estee Lauder Cos., Inc., Class A... 34,100 1,162,810
Procter & Gamble Co................ 21,300 1,977,066
-----------
3,139,876
-----------
Insurance -- 1.8%
Berkshire Hathaway, Inc.+.......... 1,200 2,995,200
Travelers Property Casualty Corp.,
Class A........................... 93,700 1,487,956
-----------
4,483,156
-----------
Internet Content -- 0.4%
Yahoo!, Inc.+...................... 29,800 1,054,324
-----------
Leisure & Tourism -- 2.5%
Carnival Corp...................... 59,700 1,963,533
Hilton Hotels Corp................. 120,000 1,946,400
Southwest Airlines Co.............. 140,600 2,488,620
-----------
6,398,553
-----------
23
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2003 -- (continued)
Value
Security Description Shares (Note 3)
-----------------------------------------------------------
COMMON STOCK (continued)
Machinery -- 1.6%
Deere & Co............................ 47,000 $ 2,505,570
Ingersoll-Rand Co., Ltd., Class A..... 28,900 1,544,416
-----------
4,049,986
-----------
Medical Products -- 2.3%
Chiron Corp.+......................... 33,700 1,741,953
Genzyme Corp.+........................ 33,700 1,558,625
Johnson & Johnson..................... 53,000 2,624,560
-----------
5,925,138
-----------
Metals & Mining -- 1.6%
Alcoa, Inc............................ 85,200 2,228,832
Freeport-McMoRan Copper & Gold, Inc.,
Class B.............................. 51,900 1,717,890
-----------
3,946,722
-----------
Pharmaceuticals -- 4.8%
Amgen, Inc.+.......................... 25,800 1,665,906
Bristol-Myers Squibb Co............... 93,700 2,404,342
Merck & Co., Inc...................... 36,500 1,847,630
Pfizer, Inc........................... 150,360 4,567,937
Teva Pharmaceutical Industries, Ltd.
ADR.................................. 27,100 1,548,765
-----------
12,034,580
-----------
Restaurants -- 1.0%
Applebees International, Inc.......... 81,500 2,565,620
-----------
Retail Stores -- 5.2%
Coach, Inc.+.......................... 37,300 2,036,580
Home Depot, Inc....................... 46,900 1,493,765
Masco Corp............................ 75,000 1,836,000
Target Corp........................... 40,000 1,505,200
Tiffany & Co.......................... 51,100 1,907,563
Wal-Mart Stores, Inc.................. 79,000 4,412,150
-----------
13,191,258
-----------
Telecommunications -- 4.4%
AT&T Wireless Services, Inc.+......... 278,100 2,274,858
Cisco Systems, Inc.+.................. 121,200 2,368,248
EchoStar Communications Corp.,
Class A+............................. 48,200 1,844,614
Nextel Communications, Inc., Class A+. 163,000 3,209,470
Vodafone Group, PLC ADR............... 68,200 1,381,050
-----------
11,078,240
-----------
Shares/
Principal
Amount Value
Security Description (in thousands) (Note 3)
-----------------------------------------------------------------
Transportation -- 1.4%
FedEx Corp.......................... 28,000 $ 1,804,040
United Parcel Service, Inc.,
Class B............................ 25,300 1,614,140
------------
3,418,180
------------
Utilities -- 0.6%
Southern Co......................... 51,100 1,498,252
------------
Total Common Stock
(cost $151,483,758)................ 157,424,235
------------
CORPORATE BONDS -- 12.4%
Banks -- 2.4%
Bank of New York Co., Inc.
2.20% due 5/12/06.................. 2,000 2,011,938
Bank One Corp.
2.63% due 6/30/08.................. 2,000 1,938,552
KfW Kreditanstalt fuer Wiederaufbau
2.38% due 9/25/06.................. 2,000 2,011,966
------------
5,962,456
------------
Financial Services -- 7.5%
BP Capital, PLC
2.63% due 3/15/07.................. 1,000 1,005,983
Citigroup, Inc.
3.50% due 2/01/08.................. 2,000 2,029,032
CS First Boston Mtg. Securities
Corp. 6.48% due 5/17/40............ 5,000 5,622,111
General Electric Capital Corp.
3.50% due 5/01/08.................. 2,000 2,024,396
Goldman Sachs Group, Inc.
4.13% due 1/15/08.................. 2,000 2,068,952
Inter-American Development Bank
3.38% due 3/17/08.................. 5,000 5,115,615
Private Export Funding Corp.
4.97% due 8/15/13.................. 1,000 1,050,108
------------
18,916,197
------------
Retail Stores -- 1.3%
Target Corp.
4.00% due 6/15/13.................. 3,000 2,867,040
Wal-Mart Stores, Inc.
4.55% due 5/01/13.................. 500 504,976
------------
3,372,016
------------
24
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2003 -- (continued)
Principal
Amount Value
Security Description (in thousands) (Note 3)
------------------------------------------------------------
CORPORATE BONDS (continued)
Telecommunications -- 0.2%
ESAT Telecom Group, PLC
11.88% due 12/01/08........... 500 $ 537,009
-----------
Utilities -- 1.0%
GTE Corp.
6.60% due 9/22/05............. 1,500 1,622,442
Penn Power Co.
8.50% due 7/15/22............. 1,000 1,045,414
-----------
2,667,856
-----------
Total Corporate Bonds
(cost $30,736,671)............ 31,455,534
-----------
U.S. GOVERNMENT OBLIGATIONS -- 7.7%
U.S Treasury Bonds -- 1.0%
11.25% due 2/15/15............. 1,530 2,513,802
-----------
U.S. Treasury Notes -- 6.7%
1.50% due 7/31/05.............. 3,000 3,006,915
2.00% due 8/31/05 - 5/15/06.... 5,000 5,046,171
2.63% due 5/15/08.............. 4,000 3,989,532
3.00% due 2/15/08.............. 5,000 5,086,330
-----------
17,128,948
-----------
Total U.S. Government Obligations
(cost $19,468,173)............ 19,642,750
-----------
U.S. GOVERNMENT AGENCIES -- 16.2%
Federal Home Loan Bank -- 1.8%
3.88% due 6/14/13.............. 2,500 2,394,205
4.50% due 11/15/12............. 2,000 2,018,338
-----------
4,412,543
-----------
Federal Home Loan Mortgage
Corporation -- 0.8%
6.00% due 5/01/14.............. 300 313,181
6.65% due 3/10/04.............. 500 512,163
6.88% due 1/15/05.............. 1,000 1,070,626
-----------
1,895,970
-----------
Federal National Mortgage
Association -- 5.6%
1.64% due 9/26/08(1)........... 1,250 1,249,223
4.75% due 2/21/13.............. 1,000 1,006,624
5.00% due 7/01/18 - 7/01/33.... 5,972 6,075,754
Principal
Amount Value
Security Description (in thousands) (Note 3)
----------------------------------------------------------------
Federal National Mortgage
Association (continued)
5.50% due 7/01/17 - 3/01/33....... 3,872 $ 3,989,033
6.00% due 5/15/08 - 11/01/32...... 1,400 1,483,131
6.50% due 9/01/10................. 441 466,696
------------
14,270,461
------------
Government National Mortgage
Association -- 6.5%
5.00% due 6/15/33 - 8/15/33....... 14,406 14,445,229
5.50% due 5/15/33................. 1,973 2,024,079
------------
16,469,308
------------
Resolution Funding Strip -- 0.3%
zero coupon due 4/15/09........... 1,000 832,692
------------
Federal Farm Credit Bank -- 1.2%
2.13% due 8/15/05................. 1,000 1,010,283
2.50% due 3/15/06................. 2,000 2,030,364
------------
3,040,647
------------
Total U.S. Government Agencies
(cost $40,828,006)............... 40,921,621
------------
Total Investment Securities -- 98.5%
(cost $242,516,608).............. 249,444,140
------------
REPURCHASE AGREEMENT -- 1.0%
Joint Repurchase Agreement with
State Street Bank and Trust Co.
(Note 3)......................... 479 479,000
Joint Repurchase Agreement with
UBS Warburg, LLC (Note 3)........ 2,000 2,000,000
------------
Total Repurchase Agreement
(cost $2,479,000)................ 2,479,000
------------
TOTAL INVESTMENTS --
(cost $244,995,608).............. 99.5% 251,923,140
Other assets less liabilities....... 0.5 1,254,114
------ ------------
NET ASSETS -- 100.0% $253,177,254
====== ============
- --------
ADR -- AmericanDepository Receipt
+ Non-income producing security
(1) Security is a "floating rate" bond where the coupon rate fluctuates. The
rate steps up or down for each rate downgrade or upgrade. The rate
reflected is as of September 30, 2003.
See Notes to Financial Statements
25
Focused Dividend Strategy Portfolio
PORTFOLIO OF INVESTMENTS -- September 30, 2003
Value
Security Description Shares (Note 3)
---------------------------------------------------
COMMON STOCK -- 98.9%
Aerospace & Military Technology -- 3.7%
Honeywell International, Inc.. 227,543 $ 5,995,758
-----------
Automotive -- 3.5%
General Motors Corp........... 139,798 5,721,932
-----------
Broadcasting & Media -- 3.1%
Interpublic Group Cos., Inc... 353,491 4,991,293
-----------
Business Services -- 12.6%
Avery Dennison Corp........... 84,713 4,279,701
Bemis Co., Inc................ 103,777 4,597,321
Genuine Parts Co.............. 168,039 5,373,887
Pitney Bowes, Inc............. 158,452 6,071,881
-----------
20,322,790
-----------
Chemicals -- 9.8%
E.I. du Pont de Nemours & Co.. 122,244 4,890,983
Rohm and Haas Co.............. 161,240 5,393,478
Vulcan Materials Co........... 140,363 5,601,887
-----------
15,886,348
-----------
Computer Software -- 3.4%
Electronic Data Systems Corp.. 274,190 5,538,638
-----------
Conglomerate -- 3.9%
General Electric Co........... 212,043 6,321,002
-----------
Electronics -- 3.3%
Emerson Electric Co........... 102,430 5,392,939
-----------
Entertainment Products -- 1.9%
Eastman Kodak Co.............. 145,450 3,045,723
-----------
Financial Services -- 4.6%
J.P. Morgan Chase & Co........ 216,062 7,417,408
-----------
Food, Beverage & Tobacco -- 13.3%
Altria Group, Inc............. 127,304 5,575,915
Brown-Forman Corp., Class B... 78,549 6,214,797
ConAgra Foods, Inc............ 204,459 4,342,709
UST, Inc...................... 154,268 5,427,148
-----------
21,560,569
-----------
Household Products -- 3.5%
Clorox Co..................... 125,065 5,736,732
-----------
Machinery -- 4.8%
Caterpillar, Inc.............. 113,195 7,792,344
-----------
Shares/
Principal
Amount Value
Security Description (in thousands) (Note 3)
------------------------------------------------------------------
Pharmaceuticals -- 9.7%
Abbott Laboratories................ 138,399 $ 5,888,877
Bristol-Myers Squibb Co............ 222,896 5,719,511
Schering-Plough Corp............... 264,986 4,038,387
------------
15,646,775
------------
Retail Stores -- 9.7%
Albertson's, Inc................... 229,563 4,722,111
May Department Stores Co........... 225,242 5,547,711
Sherwin-Williams Co................ 183,908 5,408,734
------------
15,678,556
------------
Telecommunications -- 5.5%
Alltel Corp........................ 101,502 4,703,603
SBC Communications, Inc............ 191,008 4,249,928
------------
8,953,531
------------
Utilities -- 2.6%
AT&T Corp.......................... 197,160 4,248,798
------------
Total Investment Securities -- 98.9%
(cost $160,293,198).............................. 160,251,136
------------
REPURCHASE AGREEMENT -- 1.1%
Joint Repurchase Agreement with
State Street Bank & Trust Co.
(Note 3) (cost $1,873,000)........ 1,873 1,873,000
------------
TOTAL INVESTMENTS --
(cost $162,166,198)............... 100.0% 162,124,136
Liabilities in excess of other assets 0.0 (58,072)
------- ------------
NET ASSETS -- 100.0% $162,066,064
======= ============
See Notes to Financial Statements
26
SunAmerica International Equity Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2003
Value
Security Description Shares (Note 3)
------------------------------------------------------------
COMMON STOCK -- 97.9%
Australia -- 1.7%
Australia & New Zealand Banking
Group, Ltd. (Finance)............... 121,400 $1,482,353
----------
Belgium -- 1.1%
Solvay SA (Materials)................ 14,400 1,027,706
----------
Brazil -- 1.5%
Companhia de Saneamento Basico do
Estado de Sao Paulo (Utilities)..... 16,450,000 707,858
Companhia Siderurgica Nacional SA
(Materials)......................... 18,100,000 638,278
----------
1,346,136
----------
China -- 2.5%
Aluminium Corp. of China, Ltd.
(Materials)......................... 2,554,000 857,446
China Petroleum and Chemical Corp.
(Energy)............................ 4,862,000 1,349,788
----------
2,207,234
----------
Finland -- 0.9%
Fortum Oyj (Energy).................. 89,900 778,303
----------
France -- 4.6%
BNP Paribas SA (Finance)............. 37,000 1,815,032
Total SA (Energy)@................... 15,200 2,295,350
----------
4,110,382
----------
Germany -- 5.6%
Continental AG (Consumer
Discretionary)...................... 28,650 834,574
Deutsche Boerse AG (Finance)......... 10,400 530,772
E.ON AG (Utilities).................. 18,300 893,440
SAP AG (Information Technology)...... 10,300 1,258,723
Siemens AG (Industrial &
Commercial)......................... 24,400 1,453,955
----------
4,971,464
----------
Greece -- 1.8%
Alpha Bank A.E. (Finance)............ 76,200 1,573,327
----------
Hong Kong -- 0.3%
Peregrine Investments Holdings, Ltd.
(Finance)+(1)....................... 91,000 0
Weiqiao Textile Co., Ltd. (Consumer
Discretionary)+..................... 194,000 239,231
----------
239,231
----------
India -- 1.0%
State Bank of India GDR (Finance).... 34,228 861,861
----------
Value
Security Description Shares (Note 3)
--------------------------------------------------------------
Indonesia -- 1.2%
PT Telekomunikasi Indonesia ADR
(Information Technology)................ 76,300 $ 1,039,969
-----------
Ireland -- 2.3%
Anglo Irish Bank Corp., PLC (Finance).... 193,100 2,085,751
-----------
Israel -- 1.9%
Teva Pharmaceutical Industries, Ltd. ADR
(Health Care)........................... 29,100 1,663,065
-----------
Italy -- 1.8%
Parmalat Finanziaria SpA (Consumer
Staples)................................ 62,336 195,748
Riunione Adriatica di Sicurta SpA
(Finance)............................... 90,600 1,382,929
-----------
1,578,677
-----------
Japan -- 20.3%
Fanuc, Ltd. (Information Technology)..... 34,100 2,072,046
Ibiden Co., Ltd. (Information
Technology)............................. 103,300 1,558,563
NEC Electronics Corp. (Information
Technology)+............................ 24,500 1,677,826
Nippon Yusen Kabushiki Kaisha
(Industrial & Commercial)............... 545,000 2,157,205
Nissan Motor Co., Ltd. (Consumer
Discretionary).......................... 141,700 1,532,545
Nomura Holdings, Inc. (Finance).......... 76,000 1,227,842
NTT DoCoMo, Inc. (Information
Technology)............................. 821 2,011,695
Osaka Gas Co., Ltd. (Utilities).......... 370,000 1,012,880
Sanyo Electric Co., Ltd. (Information
Technology)............................. 517,000 2,167,024
Sawai Pharmaceutical Co., Ltd. (Health
Care)................................... 26,800 844,303
Sumitomo Mitsui Financial Group, Inc.
(Finance)............................... 267 1,078,401
Uni-Charm Corp. (Consumer Staples)....... 14,200 672,943
-----------
18,013,273
-----------
Korea -- 1.3%
Samsung Electronics (Information
Technology)............................. 3,300 1,124,723
-----------
Netherlands -- 4.4%
ABN Amro Holdings NV (Finance)........... 67,400 1,244,771
ING Groep NV (Finance)................... 45,500 833,951
Koninklijke (Royal) KPN NV (Information
Technology)+............................ 241,900 1,812,371
-----------
3,891,093
-----------
27
SunAmerica International Equity Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2003 -- (continued)
Value
Security Description Shares (Note 3)
---------------------------------------------------------------
COMMON STOCK (continued)
Norway -- 2.9%
Statoil ASA (Energy)..................... 133,400 $1,195,967
Telenor ASA (Information Technology)..... 304,700 1,356,142
----------
2,552,109
----------
Singapore -- 2.5%
Neptune Orient Lines, Ltd. (Industrial &
Commercial)+............................ 960,000 1,082,550
Venture Corp., Ltd. (Industrial &
Commercial)............................. 96,000 1,110,308
----------
2,192,858
----------
South Africa -- 1.5%
African Bank Investments, Ltd.
(Finance)............................... 474,100 494,295
Impala Platinum Holdings, Ltd.
(Materials)............................. 10,600 885,645
----------
1,379,940
----------
Spain -- 6.1%
Fomento de Construcciones y Contratas
SA (Industrial & Commercial)............ 50,659 1,564,828
Iberdrola SA (Utilities)................. 40,300 678,537
Repsol YPF SA (Energy)@.................. 193,200 3,176,395
----------
5,419,760
----------
Sweden -- 1.1%
Telefonaktiebolaget LM Ericsson
(Information Technology)+............... 668,400 974,797
----------
Switzerland -- 8.5%
Adecco SA (Industrial & Commercial)...... 27,500 1,359,581
Credit Suisse Group (Finance)............ 27,300 873,939
Nestle SA (Consumer Staples)............. 9,470 2,184,888
Novartis AG (Health Care)................ 32,800 1,269,950
Zurich Financial Services AG
(Finance)+.............................. 15,200 1,900,288
----------
7,588,646
----------
Thailand -- 0.7%
Asian Property Development Public Co.,
Ltd. NVDR (Industrial &
Commercial)+............................ 4,299,700 671,325
----------
Shares/
Principal
Amount Value
Security Description (in thousands) (Note 3)
-------------------------------------------------------------------
United Kingdom -- 16.6%
AstraZeneca, PLC (Health Care)......... 24,900 $ 1,052,135
Barclays, PLC (Finance)................ 286,600 2,199,782
British Sky Broadcasting Group, PLC
(Information & Entertainment)+........ 145,500 1,486,214
Cadbury Schweppes, PLC
(Consumer Staples).................... 108,900 669,771
Carlton Communications, PLC
(Information & Entertainment)......... 277,900 746,032
Enterprise Inns, PLC (Consumer
Staples).............................. 73,100 1,133,086
FKI, PLC (Industrial & Commercial)..... 116,119 197,844
GlaxoSmithKline, PLC (Health Care)..... 97,200 2,018,019
Gus, PLC (Consumer Discretionary)...... 131,100 1,429,562
Tesco, PLC (Consumer
Discretionary)........................ 530,600 2,125,596
Vodafone Group, PLC ADR (Information
Technology)........................... 83,500 1,690,875
-----------
14,748,916
-----------
United States -- 3.8%
IRSA Inversiones y Representaciones SA
GDR (Industrial & Commercial)+........ 81,800 752,560
News Corp., Ltd. ADR (Information &
Entertainment)........................ 55,300 1,813,840
Sibneft ADR (Energy)................... 28,000 819,000
-----------
3,385,400
-----------
Total Investment Securities -- 97.9%
(cost $79,605,670).................... 86,908,299
-----------
SHORT-TERM INVESTMENTS -- 1.7%
U.S. Government Obligations -- 0.2%
United States Treasury Bills
0.92% due 12/18/03@
(cost $174,651)....................... 175 174,667
-----------
28
SunAmerica International Equity Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2003 -- (continued)
Principal
Amount Value
Security Description (in thousands) (Note 3)
-----------------------------------------------------------------
REPURCHASE AGREEMENT -- 1.5%
Agreement with State Street Bank &
Trust Co., bearing interest at 0.35%
dated 9/30/03, to be repurchased
10/01/03 in the amount of
$1,382,013 and collateralized by
$970,000 of United States Treasury
Notes bearing interest at 8.75%,
due 5/15/17 and having an
approximate value of $1,413,096@
(cost $1,382,000).................... 1,382 $1,382,000
----------
TOTAL SHORT TERM INVESTMENTS
(cost $1,556,651).................... 1,556,667
----------
Value
Security Description (Note 3)
---------------------------------------------------
TOTAL INVESTMENTS --
(cost $81,162,321)........... 99.6% $88,464,966
Other assets less liabilities -- 0.4 339,219
----- -----------
NET ASSETS -- 100.0% $88,804,185
===== ===========
- --------
ADR -- AmericanDepository Receipt
GDR -- GlobalDepository Receipt
NVDR-- Non Voting Depository Receipt
+ Non-income producing security
@ The security or a portion thereof represents collateral for open futures
contracts
(1) Fair valued security -- see Note 3.
Open Futures Contracts
- ----------------------
Number of Expiration Value at Value as of Unrealized
Contracts Description Date Trade Date September 30, 2003 Depreciation
- --------- ----------------------- ------------- ---------- ------------------ ------------
54 Long Dow Jones Euro STOXX 50 December 2003 $1,600,257 $1,507,370 $(92,887)
See Notes to Financial Statements
29
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003
Note 1. Organization
SunAmerica Equity Funds is registered under the Investment Company Act 1940,
as amended, (the "1940 Act") as an open-end diversified management
investment company and is organized as a Massachusetts business trust (the
"Trust" or "Equity Funds") on June 16, 1986. It currently consists of seven
different investment funds (each, a "Fund" and collectively, the "Funds").
Each Fund is a separate series of the Trust with a distinct investment
objective and/or strategy. Each Fund is advised and/or managed by AIG
SunAmerica Asset Management Corp. (the "Adviser" or "SAAMCo"), an indirect
wholly-owned subsidiary of American International Group, Inc. An investor
may invest in one or more of the following Funds: SunAmerica Blue Chip
Growth Fund ("Blue Chip Growth Fund"), SunAmerica Growth Opportunities Fund
("Growth Opportunities Fund"), SunAmerica New Century Fund ("New Century
Fund"), SunAmerica Growth and Income Fund ("Growth and Income Fund"),
SunAmerica Balanced Assets Fund ("Balanced Assets Fund"), Focused Dividend
Strategy Portfolio ("Focused Dividend Strategy") (formerly "Dogs" of Wall
Street Fund) and SunAmerica International Equity Fund ("International Equity
Fund"). The Funds are considered to be separate entities for financial and
tax reporting purposes. The investment objective for each of the Funds is as
follows:
Blue Chip Growth Fund seeks capital appreciation, by primarily investing in
equity securities of Blue Chip companies that demonstrate the potential
for capital appreciation, issued by large-cap companies. At least 80% of
the Fund's net assets plus any borrowing for investment purposes will be
invested in such securities.
Growth Opportunities Fund seeks capital appreciation, by primarily investing
in equity securities that demonstrate the potential for capital
appreciation, issued generally by mid-cap companies.
New Century Fund seeks capital appreciation, by investing in equity
securities that demonstrate the potential for capital appreciation,
without regard to market capitalization.
Growth and Income Fund seeks capital appreciation and current income, by
investing in equity securities issued by companies of any size, that pay
dividends, demonstrate the potential for capital appreciation and/or are
believed to be undervalued in the market.
Balanced Assets Fund seeks capital appreciation and conservation of
principal, through active trading partly in equity securities that
demonstrate the potential for capital appreciation issued by companies
with market capitalization of over $1.5 billion, and partly in
high-quality bonds.
Focused Dividend Strategy Portfolio (formerly "Dogs" of Wall Street Fund)
seeks high 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.
International Equity Fund seeks capital appreciation, by investing a
majority of its total assets in foreign equity securities and other
securities with equity characteristics of non-U.S. issuers located in at
least three countries other than the U.S. and selected without regard to
market capitalization. At least 80% of the Fund's net assets plus any
borrowing for investment purposes will be invested in such securities.
Each Fund offers multiple classes of shares. The classes within each Fund
are presented in the Statement of Assets and Liabilities. The cost structure
for each class is as follows:
Class A shares are offered at net asset value per share plus an initial
sales charge. Additionally, any purchases of Class A shares in excess of
$1,000,000 will be purchased at net asset value but will be subject to a
contingent deferred sales charge on redemptions made within two years of
purchase.
30
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
Class B shares are offered without an initial sales charge, although a
declining contingent sales charge may be imposed on redemptions made
within six years of purchase. Class B shares of each Fund convert
automatically to Class A shares on the first business day of the month
following the eighth anniversary of the issuance of such Class B shares
and at such time will be subject to the lower distribution fee applicable
to Class A shares.
Class II shares are offered at net asset value per share plus an initial
sales charge and may be subject to a contingent deferred sales charge on
redemptions made within 18 months of purchase.
Class I, Class X and Class Z shares are offered at net asset value per
share. These classes are offered exclusively to participants in certain
employee benefit plans and other programs. As of August 1, 2003, Class Z
shares of the New Century Fund and the Growth and Income 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 II 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 II shares are subject to
higher distribution fee rates. There are no distribution payments applicable
to Class I, Class Z and Class X.
Indemnifications: Under the Trust's organizational documents, its officers
and trustees are indemnified against certain liability arising out of the
performance of their duties to the Trust. In addition, in the normal course
of business the Trust enters into contracts that contain a variety of
representations and warranties which provide general indemnifications. The
Trust's maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Trust that have not yet
occurred. However, the Trust expects the risk of loss to be remote.
Note 2. Fund Mergers
Pursuant to a plan of reorganization approved by shareholders of the North
American Funds ("NA Funds") on November 7, 2001, all the assets and
liabilities of the determined NA Funds were transferred in a tax-free
exchange to a determined SunAmerica Mutual Fund ("SA Funds"). The details of
the reorganization transactions, which were consummated on November 16,
2001, are set forth below.
The Balanced Assets Fund, the Blue Chip Growth Fund, the Growth
Opportunities Fund, and Growth and Income Fund, acquired all of the assets
and liabilities of the North American Balanced Fund ("NA Balanced Fund"),
the North American Large Cap Growth Fund ("NA Large Cap Growth Fund"), the
North American Mid Cap Growth Fund ("NA Mid Cap Growth Fund") and the North
American Growth & Income Fund ("NA Growth & Income Fund"), respectively. In
conjunction with the reorganizations, the SA Funds are the surviving
entities.
The SunAmerica Style Select Series, Inc. International Equity Portfolio,
("SA International Equity Portfolio") was reorganized into the SunAmerica
International Equity Fund ("International Equity Fund"), a newly created
portfolio of the SunAmerica Equity Funds. The International Equity Fund
acquired all of the assets and liabilities of the North American Global
Equity Fund ("NA Global Equity Fund"), the North American International
Equity
31
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
Fund ("NA International Equity Fund") and the North American International
Small Cap Fund ("NA International Small Cap Fund"). In conjunction with the
reorganization, the SA International Equity Portfolio is the surviving
entity. However, based on accounting principles generally accepted in the
United States of America, from a financial reporting standpoint, the
SunAmerica Style Select Series, Inc. International Equity Portfolio is the
surviving entity in this reorganization.
All shares of the NA Funds Class A, Class B, Class C and Class I were
exchanged, tax free, for shares of the surviving SA Funds Class A, Class B,
Class II and Class I shares, respectively.
Net assets and unrealized appreciation (depreciation) as of the merger date
were as follows:
Net assets of SA Balanced Assets Fund prior to merger............................. $371,042,518
Net assets of NA Balanced Fund prior to merger................................... $ 45,882,834
------------
Aggregate net assets of SA Balanced Assets Fund following the acquisition........ $416,925,352
------------
Unrealized depreciation in NA Balanced Fund...................................... $ (1,150,770)
Net assets of SA Blue Chip Growth Fund prior to merger........................... $140,372,588
Net assets of NA Large Cap Growth Fund prior to merger........................... $ 49,623,653
------------
Aggregate net assets of SA Blue Chip Growth Fund following the acquisition....... $189,996,241
------------
Unrealized depreciation in NA Large Cap Growth Fund.............................. $ (664,756)
Net assets of SA Growth Opportunities Fund prior to merger....................... $209,788,850
Net assets of NA Mid Cap Growth Fund prior to merger............................. $ 36,916,105
------------
Aggregate net assets of SA Growth Opportunities Fund following the acquisition... $246,704,955
------------
Unrealized depreciation in NA Mid Cap Growth Fund................................ $(12,626,899)
Net assets of SA Growth and Income Fund prior to merger.......................... $220,505,849
Net assets of NA Growth & Income Fund prior to merger............................ $211,587,665
------------
Aggregate net assets of SA Growth and Income Fund following the acquisition...... $432,093,514
------------
Unrealized appreciation in NA Growth & Income Fund............................... $ 32,484,119
Net assets of SA International Equity Portfolio prior to merger.................. $ 70,062,710
Net assets of NA Global Equity Fund prior to merger.............................. $ 16,132,268
Net assets of NA International Equity Fund prior to merger....................... $ 39,407,291
Net assets of NA International Small Cap Fund prior to merger.................... $ 12,430,366
------------
Aggregate net assets of International Equity Fund following the acquisition...... $138,032,635
------------
Unrealized depreciation in NA Global Equity Fund................................. $ (648,941)
Unrealized depreciation in NA International Equity Fund.......................... $ (9,929,038)
Unrealized appreciation in NA International Small Cap Fund....................... $ 690,813
32
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
Note 3. Significant Accounting Policies
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America 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 Funds in the preparation of their financial statements:
Security Valuations: Securities that are actively traded in the
over-the-counter market, including listed securities for which the primary
market is believed by the Adviser to be over-the-counter, are valued at the
quoted bid price provided by principal market makers. Securities listed on
the New York Stock Exchange ("NYSE") or other national securities exchanges
are valued on the basis of the last sale price on the exchange on which they
are primarily traded. If there is no sale on that day, then securities are
valued at the closing bid price on the NYSE or other primary exchange for
that day. However, if the last sale price on the NYSE is different than the
last sale price on any other exchange, the NYSE price is used. Securities
listed on the NASDAQ exchange 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. For listed securities having no sales reported and for unlisted
securities, such securities will be valued based upon the last reported bid
price. Securities that are traded on foreign exchanges are ordinarily valued
at the last quoted sales price available before the time when the assets are
valued. If a security's price is available from more than one foreign
exchange, a Fund uses the exchange that is the primary market for the
security. Futures contracts and options traded on national securities
exchanges are valued as of the close of the exchange on which they are
traded. The Funds may make use of a pricing service in the determination of
their net asset values. Securities for which market 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 Trust's Trustees. Short-term investments which mature in
less than 60 days are valued at amortized cost, if their original maturity
was 60 days or less, or by amortizing their value on the 61st day prior to
maturity, if their original term to maturity exceeded 60 days.
Repurchase Agreements: Pursuant to exemptive relief granted by the
Securities and Exchange Commission, the Funds are permitted to participate
in joint repurchase agreement transactions with other affiliated investment
companies. The Funds, along with other affiliated registered investment
companies, transfer uninvested cash balances into 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.
The Funds' 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.
33
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
In the event of default of the obligation to repurchase, a Fund 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 Fund may be
delayed or limited.
As of September 30, 2003, Blue Chip Growth Fund, Growth Opportunities Fund,
Growth and Income Fund, Balanced Assets Fund and Focused Dividend Strategy
Portfolio had a 1.8%, 0.6%, 1.1%, 0.4%, and 1.7% undivided interest,
respectively, which represented $1,941,000, $662,000, $1,146,000, $479,000
and $1,873,000 respectively, in principal amount in a joint repurchase
agreement with State Street Bank & Trust Co. As of such date, the repurchase
agreement in the joint account and the collateral therefore were as follows:
State Street Bank & Trust Co. Repurchase Agreement 0.85% dated 9/30/03, in
the principal amount of $108,359,000, repurchase price $108,361,558 due
10/01/03, collateralized by the following:
Type of Collateral Interest Rate Maturity Date Principal Amount Market Value
- ------------------ ------------- ------------- ---------------- ------------
U.S. Treasury Notes 3.25% 12/31/2003 $80,400,000 $81,606,000
U.S. Treasury Notes 7.25% 8/15/2004 19,200,000 20,400,000
U.S. Treasury Bonds 8.13% 8/15/2019 6,125,000 8,529,063
As of September 30, 2003, Growth Opportunities Fund and Balanced Assets Fund
had a 7.00% and 0.7% undivided interest, respectively, which represented
$21,000,000 and 2,000,000, respectively, in principal amount in a joint
repurchase agreement with UBS Warburg, LLC. As of such date, the repurchase
agreement in the joint account and the collateral therefore were as follows:
UBS Warburg, LLC. Repurchase Agreement, 0.96% dated 9/30/03, in the
principal amount of $300,000,000, repurchase price $300,008,000 due
10/01/03, collateralized by the following:
Type of Collateral Interest Rate Maturity Date Principal Amount Market Value
- ------------------ ------------- ------------- ---------------- ------------
U.S. Treasury Bonds 3.63% 4/15/2028 $ 15,709,000 $ 21,819,287
U.S. Treasury Bonds 3.88% 4/15/2029 200,000,000 285,732,884
Securities Transactions, Investment Income, Expenses, Dividends and
Distributions to Shareholders: Security transactions are recorded as of the
trade date. Realized gains and losses on sales of investments are calculated
on the identified cost basis. Interest income is recorded on the accrual
basis; dividend income is recorded on the ex-dividend date. Funds 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 gains earned
or repatriated. For financial statements purposes, the Funds amortize all
premiums and accrete all discounts on fixed income securities. Gains and
losses realized upon the sale of such securities are based on their
identified cost.
34
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
Net investment income, other than class-specific expenses, and realized and
unrealized gains and losses, is 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 Funds, not directly related to individual Funds, are
allocated among the Equity Funds based upon their relative net asset value
or other appropriate methods. In all other respects, expenses are charged to
each Fund as incurred on a specific identification basis. Interest earned on
cash balances held at the custodian are shown as custody credits on the
statement of operations.
Dividends from net investment income, if any, are paid annually, except for
Balanced Assets Fund, Focused Dividend Strategy Portfolio and Growth and
Income Fund, which pay quarterly. Capital gain distributions, if any, are
paid at least annually.
The Funds 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 accounting principles generally accepted in the United States of
America. 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. Each Fund intends to comply with the
requirements of the Internal Revenue Code, as amended, applicable to
regulated investment companies and to distribute all of their net income to
their shareholders. Therefore, no federal income tax or excise tax
provisions are required. Each Fund is considered a separate entity for tax
purposes.
Investment Securities Loaned: For the period ended September 30, 2003, the
Balanced Assets Fund participated in securities lending with qualified
brokers. In lending portfolio securities to brokers the Fund receives cash
as collateral against the loaned securities, which must be maintained at not
less than 102% of the market value of the loaned securities during the
period of the loan. The Fund may use the cash collateral received to invest
in short-term investments which earn interest income or to cover bank
overdrafts. Any interest earned from the investment of the collateral is
recorded by the Funds net of the portion of interest that is rebated to the
borrowing broker. If the amounts are used to cover bank overdrafts, the
broker rebates incurred are reflected as interest expense on the Statement
of Operations. As with other extensions of credit, should the borrower of
the securities fail financially, the Fund may bear the risk of delay in
recovery or may be subject to replacing the loaned securities by purchasing
them with the cash collateral held, which may be less than 100% of the
market value of such securities at the time of replacement. As of September
30, 2003, the Balanced Assets Fund did not have any securities on loan.
35
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
Foreign Currency Translation: The books and records of the Funds are
maintained in U.S. dollars. Assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of
such currencies against U.S. dollars on the date of valuation.
The Funds do 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
Funds do not isolate the effect of changes in foreign exchange rates from
the changes in the market prices of portfolio securities sold during the
period.
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 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 the Funds' 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
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 counterparties 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. There were no
forward currency contracts outstanding as of September 30, 2003.
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 Funds 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 Funds' activities in futures contracts are for hedging
purposes and are conducted through regulated exchanges which do not result
in counterparty credit risks. A Fund's participation in the futures market
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 Funds 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 Funds as unrealized appreciation or
depreciation. Futures contracts involve elements of risk in excess of the
36
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
amount reflected in the Statement of Assets and Liabilities. When a contract
is closed, the Funds 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 Fund for the purchase of a call or a put option is
included in the Fund'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 Fund writes a call or a put option, an amount equal to the
premium received by the Fund is included in the Fund'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 Fund has written either expires on its stipulated expiration date, or if
the Fund enters into a closing purchase transaction, the Fund realizes a
gain (or loss if the cost of a closing purchase transaction exceeds the
premium received when the option was written) without regard to any
unrealized gain or loss on the underlying security, and the liability
related to such options is extinguished. If a call option which the Fund has
written is exercised, the Fund 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 Fund has written
is exercised, the amount of the premium originally received reduces the cost
of the security which the Fund purchased upon exercise of the option.
Transactions in call and put options written during the period ended
September 30, 2003 for New Century Fund are summarized as follows:
Written Options
-------------------
Number of Premiums
Contracts Received
--------- ---------
Beginning of period.................................... (380) $(184,628)
Written................................................ (1,751) (681,926)
Closed................................................. 2,007 841,531
Expired................................................ 124 25,023
Exercised.............................................. -- --
------ ---------
End of the period...................................... -- $ --
====== =========
Note 4. Investment Advisory and Management Agreement, Distribution Agreement
and Service Agreement
The Trust, on behalf of each Fund, has an Investment Advisory and Management
Agreement (the "Agreement") with SAAMCo. Under the Agreement, SAAMCo
provides continuous supervision of a Fund's portfolio and administers its
corporate affairs, subject to general review by the Trustees. In connection
therewith, SAAMCo furnishes the Funds with office facilities, maintains
certain of the Funds' books and records, and pays the salaries and expenses
of all personnel, including officers of the Funds who are employees of
SAAMCo and its affiliates. The investment advisory and management fee paid
to SAAMCo with respect to each Fund is computed daily and payable monthly,
at an annual rate of .75% of a Fund's average daily net assets up to $350
million, .70% of the next $350 million, and .65% thereafter, except for the
Focused Dividend Strategy Fund and International Equity
37
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
Fund which pay at an annual rate of .35% and 1.00%, respectively, of the
Fund's average daily net assets. For the period ended September 30, 2003,
SAAMCo earned fees in the amounts stated on the Statement of Operations. The
International Equity Fund is subadvised by AIG Global Investment Corp.
("AIGGIC") pursuant to a subadvisory agreement with SAAMCo. AIGGIC is an
indirect wholly-owned subsidiary of AIG and an affiliate of SunAmerica.
AIGGIC receives an annual fee of .47% of the average daily net assets of the
Fund, which is paid by SAAMCo.
For the period ended September 30, 2003, SAAMCo has agreed to reimburse
expenses as follows:
Blue Chip Growth Fund Class I............... $59,487
Growth Opportunities Fund Class I........... 18,411
Growth Opportunities Fund Class X........... 2,387
New Century Fund Class II................... 14,370
New Century Fund Class I.................... 20,047
New Century Fund Class Z*................... 20,262
Growth and Income Fund Class Z*............. 19,555
Growth and Income Fund Class I.............. 42,818
Balanced Assets Fund Class I................ 8,578
Focused Dividend Strategy Portfolio Class A. 39,908
Focused Dividend Strategy Portfolio Class B. 54,288
Focused Dividend Strategy Portfolio Class II 56,045
International Equity Fund Class A........... 57,768
International Equity Fund Class B........... 31,823
International Equity Fund Class II.......... 41,788
International Equity Fund Class I........... 29,275
--------
* See Note 1.
The Trust, on behalf of each Fund, has a Distribution Agreement with AIG
SunAmerica Capital Services, Inc. ("SACS"), an affiliate of the Adviser.
Each Fund has adopted a Distribution Plan (the "Plan") in accordance with
the provisions of Rule 12b-1 under the 1940 Act. Rule 12b-1 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 trustees and approved by
its shareholders. Pursuant to such rule, the Trustees and the shareholders
of each class of shares of each Fund have adopted Distribution Plans
hereinafter referred to as the "Class A Plan", "Class B Plan" and "Class II
Plan". In adopting the Distribution Plans, the Trustees determined that
there was a reasonable likelihood that each such Plan would benefit the Fund
and the shareholders of the respective class.
Under the Class A Plan, Class B Plan and Class II Plan, the Distributor
receives payments from a Fund at an annual rate of up to 0.10%, 0.75% and
0.75%, respectively, of average daily net assets of such Fund's Class to
compensate the Distributor and certain securities firms for providing sales
and promotional activities for distributing that class of shares. The
distribution costs for which the Distributor may be compensated for include
38
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
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. The
Distribution Plans provide that each class of shares of each Fund 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 September 30, 2003, SACS
received fees (see Statement of Operations) based upon the aforementioned
rates.
In addition, SACS is paid a fee of 0.25% of average daily net assets of
Class I shares in connection with providing additional shareholder services
to Class I shareholders. For the period ended September 30, 2003, SACS
earned fees (see Statement of Operations) based upon the aforementioned
rates.
SACS receives sales charges on each Fund's Class A and Class II 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 Fund's Class A, Class B and Class II shares. SACS has
advised the Funds that for the period ended September 30, 2003, the proceeds
received from sales (and paid out to affiliated and non-affiliated
broker-dealers) and redemptions are as follows:
Class A Class B
----------------------------------- -------------
Non-
Affiliated affiliated Contingent
Broker- Broker- Deferred
Sales Charges dealers dealers Sales Charges
------------- ---------- ---------- -------------
Blue Chip Growth Fund.............. $ 76,426 $ 34,239 $ 32,232 $ 94,718
Growth Opportunities Fund.......... 134,798 62,586 53,665 116,327
New Century Fund................... 76,280 37,871 28,421 35,703
Growth and Income Fund............. 134,355 50,733 53,204 246,500
Balanced Assets Fund............... 395,349 252,313 89,664 158,964
Focused Dividend Strategy Portfolio 1,249,495 46,972 1,025,640 101,133
International Equity Fund.......... 80,774 12,503 44,173 52,382
Class II Class II
----------------------------------- -------------
Non-
Affiliated affiliated Contingent
Broker- Broker- Deferred
Sales Charges dealers dealers Sales Charges
------------- ---------- ---------- -------------
Blue Chip Growth Fund.............. $ 5,136 $ 1,647 $ 3,489 $ 1,875
Growth Opportunities Fund.......... 11,586 3,435 8,151 2,861
New Century Fund................... 1,026 461 565 959
Growth and Income Fund............. 19,262 4,111 15,151 8,282
Balanced Assets Fund............... 13,205 3,077 10,128 4,141
Focused Dividend Strategy Portfolio 318,945 8,632 310,313 13,972
International Equity Fund.......... 19,141 1,322 17,819 40,350
39
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
The Trust has entered into a Service Agreement with AIG SunAmerica Fund
Services, Inc. ("SAFS"), an affiliate of the Adviser. Under the Service
Agreement, SAFS performs certain shareholder account functions by assisting
the Funds' transfer agent in connection with the services that it offers to
the shareholders of the Funds. The Service Agreement, which permits the
Funds to compensate SAFS for services rendered based upon an annual rate of
0.22% of average daily net assets, is approved annually by the Trustees. For
the period ended September 30, 2003, the Funds incurred the following
expenses which are included in transfer agent fees payable in the Statement
of Asset and Liabilities and in transfer agent fees and expenses in the
Statement of Operations to compensate SAFS pursuant to the terms of the
Service Agreement.
Expenses Payable at September 30, 2003
- ------------------------------------------ ----------------------------------------
Fund Class A Class B Class II Class I Class X Class A Class B Class II Class I Class X
- ---- -------- -------- -------- ------- ------- ------- ------- -------- ------- -------
Blue Chip Growth Fund.............. $138,207 $ 67,731 $ 16,344 $39,469 $ -- $12,142 $ 5,693 $ 1,364 $3,670 $ --
Growth Opportunities Fund.......... 124,345 79,508 41,335 8,125 13,719 11,621 7,265 3,710 818 1,859
New Century Fund................... 172,267 43,546 4,821 8,653 -- 16,217 3,133 413 857 --
Growth & Income Fund............... 154,156 165,569 119,524 25,353 -- 13,127 12,645 9,362 2,378 --
Balanced Assets Fund............... 391,882 119,359 61,987 9,963 -- 32,274 8,772 4,760 835 --
Focused Dividend Strategy Portfolio 56,288 75,111 90,197 -- -- 8,429 8,678 12,557 -- --
International Equity Fund.......... 72,017 53,777 32,445 39,634 -- 5,422 4,576 2,717 3,744 --
As of September 30, 2003, the Variable Annuity Life Insurance Company
('VALIC') an indirectly wholly owned subsidiary of AIG, held more than five
percent of the outstanding shares of the following Funds' classes:
Fund VALIC
- ---- -----
Blue Chip Growth Fund Class I.................................... 13%
Growth Opportunities Fund Class I................................ 89
Growth and Income Fund Class I................................... 7
Balanced Asset Fund Class I...................................... 88
International Equity Fund Class A................................ 7
International Equity Fund Class B................................ 7
International Equity Fund Class I................................ 19
40
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
Note 5. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales and maturities of long-term
investments during the period ended September 30, 2003 were as follows:
Focused
Growth New Growth and Dividend International
Blue Chip Opportunities Century Income Balanced Strategy Equity
Growth Fund Fund Fund Fund Assets Fund Portfolio Fund
-------------- ------------- ------------ ------------ ------------ ------------ -------------
Purchases
(excluding U.S.
government
securities)........ $129,500,730 $213,351,955 $124,214,507 $253,648,330 $254,900,149 $121,802,528 $179,199,009
Sales and maturities
(excluding U.S.
government
securities)........ 138,221,647 241,051,062 128,830,023 309,749,378 254,763,797 19,750,455 194,226,325
Purchases of U.S.
government
securities......... -- -- -- -- 743,491,754 -- --
Sales and maturities
of U.S.
government
securities......... -- -- -- -- 760,040,218 -- --
Note 6. Federal Income Taxes
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:
Focused
Blue Chip Growth New Growth and Balanced Dividend International
Growth Opportunities Century Income Assets Strategy Equity
Fund Fund Fund Fund Fund Portfolio Fund
------------ ------------- ----------- ------------ ------------ ------------ -------------
Cost (tax basis) $117,394,957 $119,061,490 $91,235,821 $194,575,669 $247,231,724 $165,698,401 $81,534,459
============ ============ =========== ============ ============ ============ ===========
Appreciation.... $ 10,658,831 $ 13,727,137 $21,918,551 $ 13,506,646 $ 13,715,529 $ 8,883,036 $ 8,191,553
Depreciation.... (5,726,399) (2,806,080) (2,814,352) (9,210,112) (9,024,113) (12,457,301) (1,261,046)
------------ ------------ ----------- ------------ ------------ ------------ -----------
Net unrealized
appreciation
(depreciation). $ 4,932,432 $ 10,921,057 $19,104,199 $ 4,296,534 $ 4,691,416 $ (3,574,265) $ 6,930,507
============ ============ =========== ============ ============ ============ ===========
The following tables detail the tax basis distributions as well as the
components of distributable earnings. As of September 30, 2003, the tax
basis components of distributable earnings differ from the amounts reflected
in the Statement of Assets and Liabilities due to temporary book/tax
differences primarily arising from wash sales, post October losses, and
derivative transactions. Also included in the tables below are the capital
loss carryforwards.
41
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
The tax character of distributions paid during the period ended September
30, 2001, except for International Equity, which is for the period ended
October 31, 2001, were as follows:
Distributions paid from:
--------------------------------------------
Ordinary Net Long Term Total taxable
Income Capital Gains distributions paid
----------- ------------- ------------------
Blue Chip Growth Fund.............. $ 9,017,188 $ 18,912,812 $27,930,000
Growth Opportunities Fund.......... 13,549,022 17,540,978 31,090,000
New Century Fund................... 46,314,968 35,765,032 82,080,000
Growth and Income Fund............. 9,420,293 16,709,707 26,130,000
Balanced Assets Fund............... 4,708,313 50,694,900 55,403,213
Focused Dividend Strategy Portfolio 875,002 -- 875,002
International Equity Fund.......... -- 8,079,816 8,079,816
The tax character of distributions paid during the period ended September
30, 2002 were as follows:
Distributions paid from:
-------------------------------------------
Ordinary Net Long Term Total taxable
Income Capital Gains distributions paid
---------- ------------- ------------------
Blue Chip Growth Fund.............. $ -- $ -- $ --
Growth Opportunities Fund.......... -- -- --
New Century Fund................... -- -- --
Growth and Income Fund............. -- -- --
Balanced Assets Fund............... 4,483,373 -- 4,483,373
Focused Dividend Strategy Portfolio 720,017 -- 720,017
International Equity Fund.......... -- -- --
The tax character of distributions paid during the period ended September
30, 2003 were as follows:
Distributions paid from:
-------------------------------------------
Ordinary Net Long Term Total taxable
Income Capital Gains distributions paid
---------- ------------- ------------------
Blue Chip Growth Fund.............. $ -- $ -- $ --
Growth Opportunities Fund.......... -- -- --
New Century Fund................... -- -- --
Growth and Income Fund............. -- -- --
Balanced Assets Fund............... 2,088,794 -- 2,088,794
Focused Dividend Strategy Portfolio 2,527,986 -- 2,527,986
International Equity Fund.......... -- -- --
As of September 30, 2003 the components of accumulated earnings (deficit) on
a tax basis were as follows:
Undistributed Accumulated Unrealized
Ordinary Capital and Appreciation/
Income Other Losses (Depreciation)
------------- ------------- --------------
Blue Chip Growth Fund.............. $ -- $ (95,747,926) $ 4,932,432
Growth Opportunities Fund.......... -- (237,869,603) 10,921,057
New Century Fund................... -- (145,971,301) 19,104,199
Growth and Income Fund............. -- (94,689,968) 4,296,534
Balanced Assets Fund............... 137,892 (107,118,737) 4,691,416
Focused Dividend Strategy Portfolio 15,756 (19,903,717) (3,574,265)
International Equity Fund.......... 28,461 (71,403,293) 6,859,774
42
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
The following net realized capital loss carryforwards as of September 30,
2003 may be utilized to offset future capital gains:
Capital Loss
Carryforward Expiration Date
------------ ---------------
Blue Chip Growth Fund.............. $ 85,129,883 2008-2011
Growth Opportunities Fund.......... 233,236,278 2008-2011
New Century Fund................... 133,915,625 2009-2011
Growth and Income Fund............. 67,887,726 2007-2011
Balanced Assets Fund............... 90,905,916 2007-2011
Focused Dividend Strategy Portfolio 18,490,937 2009-2010
International Equity Fund.......... 67,799,230 2007-2011
Net capital and currency losses incurred after October 31 and within the
taxable year are deemed to arise on the first business day of the fund's
next taxable year. For the period ended September 30, 2003 the amount of
each fund's respective deferral is:
Post October Post October
Capital Loss Deferral Currency Loss Deferral
--------------------- ----------------------
Blue Chip Growth Fund.............. $10,618,043 $ --
Growth Opportunities Fund.......... 4,633,325 --
New Century Fund................... 12,055,676 --
Growth and Income Fund............. 26,802,242 --
Balanced Assets Fund............... 16,212,821 --
Focused Dividend Strategy Portfolio 1,412,780 --
International Equity Fund.......... 3,498,245 105,818
To the extent that these capital loss carryforwards are used to offset
future capital gains, it is probable that the gains so offset will not be
distributed.
As a result of reorganizations into some of these portfolios during the
period ended September 30, 2002 as discussed in Note 2, certain capital loss
carryforwards may be subject to limitations pursuant to applicable U.S.
federal income tax law. Therefore, it is possible not all of these capital
losses will be available for use.
43
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
Note 7. Capital Share Transactions
Transactions in capital shares of each class of each fund were as follows:
Blue Chip Growth Fund
--------------------------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------------- ----------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2003 September 30, 2002 September 30, 2003 September 30, 2002
------------------------ ------------------------ ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Shares
sold...... 667,646* $ 8,164,351* 2,209,045 $ 32,903,313 546,397 $ 6,073,302 567,170 $ 7,919,383
Shares
issued
by merger. -- -- 342,023 5,573,062 -- -- 1,314,944 19,715,764
Reinvested
dividends. -- -- -- -- -- -- -- --
Shares
redeemed.. (1,100,613) (13,344,907) (2,937,371) (42,702,504) (1,063,759)* (11,736,666)* (1,443,216) (18,965,425)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net
increase
(decrease) (432,967) $ (5,180,556) (386,303) $ (4,226,129) (517,362) $ (5,663,364) 438,898 $ 8,669,722
========== ============ ========== ============ ========== ============ ========== ============
Blue Chip Growth Fund
--------------------------------------------------------------------------------------------------------
Class II Class I
-------------------------------------------------- ----------------------------------------------------
For the period
For the For the For the November 16, 2001
year ended year ended year ended through
September 30, 2003 September 30, 2002 September 30, 2003 September 30, 2002+
------------------------ ------------------------ ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Shares
sold...... 212,883 $ 2,355,419 488,009 $ 6,981,255 624,237 $ 7,468,473 1,143,574 $ 16,403,922
Shares
issued
by merger. -- -- 531,651 7,964,115 -- -- 1,004,682 16,370,712
Reinvested
dividends. -- -- -- -- -- -- -- --
Shares
redeemed.. (354,083) (3,888,325) (728,565) (9,935,678) (519,967) (6,253,415) (749,911) (10,704,967)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net
increase
(decrease) (141,200) $ (1,532,906) 291,095 $ 5,009,692 104,270 $ 1,215,058 1,398,345 $ 22,069,667
========== ============ ========== ============ ========== ============ ========== ============
Growth Opportunities Fund
--------------------------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------------- ----------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2003 September 30, 2002 September 30, 2003 September 30, 2002
------------------------ ------------------------ ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Shares
sold...... 1,789,798@ $ 20,911,843@ 4,123,177 $ 64,909,821 1,129,240 $ 12,028,932 658,546 $ 10,068,238
Shares
issued
by merger. -- -- 323,130 5,847,322 -- -- 893,860 14,841,199
Reinvested
dividends. -- -- -- -- -- -- -- --
Shares
redeemed.. (2,237,193) (25,721,737) (5,272,472) (81,655,877) (1,652,186)@ (17,373,362)@ (1,781,217) (24,538,516)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net
increase
(decrease) (447,395) $ (4,809,894) (826,165) $(10,898,734) (522,946) $ (5,344,430) (228,811) $ 370,921
========== ============ ========== ============ ========== ============ ========== ============
- --------
+ Inception date of the Class was November 16, 2001 (See Note 2).
* Includes automatic conversion of 246,929 shares of Class B shares in the
amount of $2,761,911 to 224,890 shares of Class A shares in the amount of
$2,761,911.
@Includes automatic conversion of 162,597 shares of Class B shares in the
amount of $1,733,132 to 147,591 shares of Class A shares in the amount of
$1,733,132.
44
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
Growth Opportunities Fund
--------------------------------------------------------------------------------------------------------
Class II Class I
-------------------------------------------------- ----------------------------------------------------
For the period
For the For the For the November 16, 2001
year ended year ended year ended through
September 30, 2003 September 30, 2002 September 30, 2003 September 30, 2002+
------------------------ ------------------------ ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Shares sold............ 468,787 $ 4,976,058 699,556 $ 10,804,828 46,134 $ 542,776 364,651 $ 5,965,103
Shares issued by merger -- -- 514,704 8,538,850 -- -- 424,911 7,688,734
Reinvested dividends... -- -- -- -- -- -- -- --
Shares redeemed........ (796,853) (8,347,567) (1,525,094) (21,731,395) (32,299) (371,452) (484,210) (7,243,068)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net increase (decrease) (328,066) $ (3,371,509) (310,834) $ (2,387,717) 13,835 $ 171,324 305,352 $ 6,410,769
========== ============ ========== ============ ========== ============ ========== ============
Growth Opportunities Fund
--------------------------------------------------
Class X
--------------------------------------------------
For the period
For the March 19, 2002
year ended through
September 30, 2003 September 30, 2002++
------------------------ ------------------------
Shares Amount Shares Amount
---------- ------------ ---------- ------------
Shares sold............ 527,450 $ 6,247,340 250,660 $ 3,342,692
Reinvested dividends... -- -- -- --
Shares redeemed........ (35,347) (427,960) (1,726) (19,244)
---------- ------------ ---------- ------------
Net increase (decrease) 492,103 $ 5,819,380 248,934 $ 3,323,448
========== ============ ========== ============
New Century Fund
--------------------------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------------- ----------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2003 September 30, 2002 September 30, 2003 September 30, 2002
------------------------ ------------------------ ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Shares sold............ 1,352,573@ $ 16,310,269@ 3,121,849 $ 44,494,875 343,848 $ 3,680,626 636,691 $ 8,219,431
Reinvested dividends... -- -- -- -- -- -- -- --
Shares redeemed........ (1,636,627) (19,570,318) (4,159,460) (58,198,126) (1,308,484)@ (14,067,218)@ (1,635,537) (19,878,776)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net increase (decrease) (284,054) $ (3,260,049) (1,037,611) $(13,703,251) (964,636) $(10,386,592) (998,846) $(11,659,345)
========== ============ ========== ============ ========== ============ ========== ============
New Century Fund
--------------------------------------------------------------------------------------------------------
Class II Class Z#
-------------------------------------------------- ----------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2003 September 30, 2002 September 30, 2003 September 30, 2002
------------------------ ------------------------ ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Shares sold............ 52,648 $ 567,386 293,199 $ 3,726,776 7,199 $ 86,274 37,395 $ 558,550
Reinvested dividends... -- -- -- -- -- -- -- --
Shares redeemed........ (113,537) (1,196,408) (427,598) (5,364,269) (110,192) (1,310,376) (38,860) (576,422)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net increase (decrease) (60,889) $ (629,022) (134,399) $ (1,637,493) (102,993) $ (1,224,102) (1,465) $ (17,872)
========== ============ ========== ============ ========== ============ ========== ============
- --------
+ Inception date of the Class was November 16, 2001 (See Note 2).
++ Inception date of the Class was March 19, 2002.
# See Note 1.
@ Includes automatic conversion of 703,950 shares of Class B shares in the
amount of $7,667,059 to 630,746 shares of Class A shares in the amount of
$7,667,059.
45
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
New Century Fund
--------------------------------------------------
Class I
--------------------------------------------------
For the period
For the November 16, 2001
year ended through
September 30, 2003 September 30, 2002+
------------------------ ------------------------
Shares Amount Shares Amount
---------- ------------ ---------- ------------
Shares sold............ 146,603 $ 1,709,295 775,811 $ 10,894,673
Reinvested dividends... -- -- -- --
Shares redeemed........ (108,317) (1,267,459) (475,528) (6,728,425)
---------- ------------ ---------- ------------
Net increase (decrease) 38,286 $ 441,836 300,283 $ 4,166,248
========== ============ ========== ============
Growth and Income Fund
--------------------------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------------- ----------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2003 September 30, 2002 September 30, 2003 September 30, 2002
------------------------ ------------------------ ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Shares sold............ 1,683,730@ $ 16,391,477@ 2,073,219 $ 23,582,760 604,185 $ 5,578,360 993,721 $ 11,089,163
Shares issued by merger -- -- 3,372,884 41,456,992 -- -- 5,213,362 61,668,231
Reinvested dividends... -- -- -- -- -- -- -- --
Shares redeemed........ (2,785,695) (26,551,456) (4,213,760) (47,236,696) (3,370,139)@ (30,761,446)@ (5,841,390) (62,713,373)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net increase (decrease) (1,101,965) $(10,159,979) 1,232,343 $ 17,803,056 (2,765,954) $(25,183,086) 365,693 $ 10,044,021
========== ============ ========== ============ ========== ============ ========== ============
Growth and Income Fund
--------------------------------------------------------------------------------------------------------
Class II Class Z#
-------------------------------------------------- ----------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2003 September 30, 2002 September 30, 2003 September 30, 2002
------------------------ ------------------------ ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Shares sold............ 363,022 $ 3,318,644 480,079 $ 5,355,585 6,055 $ 58,677 16,406 $ 185,247
Shares issued by merger -- -- 8,160,101 96,338,378 -- -- -- --
Reinvested dividends... -- -- -- -- -- -- -- --
Shares redeemed........ (2,331,541) (21,041,757) (4,189,878) (45,281,773) (39,596) (377,391) (10,159) (119,330)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net increase (decrease) (1,968,519) $(17,723,113) 4,450,302 $ 56,412,190 (33,541) $ (318,714) 6,247 $ 65,917
========== ============ ========== ============ ========== ============ ========== ============
Growth and Income Fund
--------------------------------------------------
Class I
--------------------------------------------------
For the period
For the November 16, 2001
year ended through
September 30, 2003 September 30, 2002+
------------------------ ------------------------
Shares Amount Shares Amount
---------- ------------ ---------- ------------
Shares sold............ 533,327 $ 5,022,032 735,511 $ 8,032,714
Shares issued by merger -- -- 986,432 12,124,064
Reinvested dividends... -- -- -- --
Shares redeemed........ (382,061) (3,601,108) (609,426) (6,733,928)
---------- ------------ ---------- ------------
Net increase (decrease) 151,266 $ 1,420,924 1,112,517 $ 13,422,850
========== ============ ========== ============
- --------
+ Inception date of the Class was November 16, 2001 (See Note 2).
# See Note 1.
@Includes automatic conversion of 972,591 shares of Class B shares in the
amount of $9,107,456 to 926,892 shares of Class A shares in the amount of
$9,107,456.
46
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
Balanced Assets Fund
--------------------------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------------- ----------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2003 September 30, 2002 September 30, 2003 September 30, 2002
------------------------ ------------------------ ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Shares sold. 2,020,442* $ 24,213,183* 2,306,922 $ 30,817,176 582,863 $ 6,983,307 892,674 $ 11,953,997
Shares
issued by
merger..... -- -- 484,023 6,914,889 -- -- 771,908 10,984,990
Reinvested
dividends.. 137,761 1,658,350 229,227 3,004,729 14,987 176,868 51,566 677,527
Shares
redeemed... (3,661,431) (43,869,345) (4,782,634) (63,316,371) (2,257,809)* (26,844,252)* (3,461,561) (45,850,632)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net
increase
(decrease). (1,503,228) $(17,997,812) (1,762,462) $(22,579,577) (1,659,959) $(19,684,077) (1,745,413) $(22,234,118)
========== ============ ========== ============ ========== ============ ========== ============
Balanced Assets Fund
--------------------------------------------------------------------------------------------------------
Class II Class I
-------------------------------------------------- ----------------------------------------------------
For the period
For the For the For the November 16, 2001
year ended year ended year ended through
September 30, 2003 September 30, 2002 September 30, 2003 September 30, 2002+
------------------------ ------------------------ ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Shares sold. 193,805 $ 2,323,311 339,113 $ 4,539,180 38,539 $ 464,642 56,884 $ 762,114
Shares
issued by
merger..... -- -- 1,615,653 23,016,932 -- -- 347,599 4,966,023
Reinvested
dividends.. 7,634 90,206 24,302 317,979 4,178 50,394 5,794 75,701
Shares
redeemed... (838,430) (9,991,677) (1,116,939) (14,839,888) (53,657) (640,288) (32,300) (418,062)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net
increase
(decrease). (636,991) $ (7,578,160) 862,129 $ 13,034,203 (10,940) $ (125,252) 377,977 $ 5,385,776
========== ============ ========== ============ ========== ============ ========== ============
Focused Dividend Strategy Portfolio
--------------------------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------------- ----------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2003 September 30, 2002 September 30, 2003 September 30, 2002
------------------------ ------------------------ ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Shares sold. 4,137,543@ $ 43,248,430@ 849,153 $ 9,939,492 2,939,297 $ 30,620,040 672,262 $ 7,678,776
Reinvested
dividends.. 50,994 536,198 11,876 133,371 54,728 573,067 19,651 220,089
Shares
redeemed... (907,701) (9,512,999) (662,078) (7,607,615) (719,097)@ (7,433,983)@ (639,694) (7,180,243)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net
increase
(decrease). 3,280,836 $ 34,271,629 198,951 $ 2,465,248 2,274,928 $ 23,759,124 52,219 $ 718,622
========== ============ ========== ============ ========== ============ ========== ============
Focused Dividend Strategy Portfolio
--------------------------------------------------
Class II
--------------------------------------------------
For the For the
year ended year ended
September 30, 2003 September 30, 2002
------------------------ ------------------------
Shares Amount Shares Amount
---------- ------------ ---------- ------------
Shares sold. 5,206,591 $ 54,065,096 427,622 $ 4,900,208
Reinvested
dividends.. 60,521 634,436 21,621 242,156
Shares
redeemed... (853,166) (8,786,873) (522,926) (5,928,985)
---------- ------------ ---------- ------------
Net
increase
(decrease). 4,413,946 $ 45,912,659 (73,683) $ (786,621)
========== ============ ========== ============
- --------
+ Inception date of the Class was November 16, 2001 (See Note 2).
* Includes automatic conversion of 843,098 shares of Class B shares in the
amount of $10,050,519 to 839,286 shares of Class A shares in the amount of
$10,050,519.
@ Includes automatic conversion of 13,057 shares of Class B shares in the
amount of $147,446 to 12,997 shares of Class A shares in the amount of
$147,446.
47
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
International Equity Portfolio
------------------------------------------------------------------------------------
Class A
------------------------------------------------------------------------------------
For the year ended For the eleven months ended For the year ended
September 30, 2003 September 30, 2002 October 31, 2001
--------------------------- -------------------------- --------------------------
Shares Amount Shares Amount Shares Amount
----------- ------------- ----------- ------------- ----------- -------------
Shares sold............ 30,503,819* $ 227,514,952* 20,902,681 $ 181,185,349 49,794,994 $ 567,609,370
Shares issued by merger -- -- 1,748,199 15,894,877 -- --
Reinvested dividends... -- -- -- -- 240,533 3,066,855
Shares redeemed........ (31,630,035) (238,270,504) (20,985,189) (184,189,687) (50,684,223) (583,229,973)
----------- ------------- ----------- ------------- ----------- -------------
Net increase (decrease) (1,126,216) $ (10,755,552) 1,665,691 $ 12,890,539 (648,696) $ (12,553,748)
=========== ============= =========== ============= =========== =============
International Equity Portfolio
------------------------------------------------------------------------------------
Class B
------------------------------------------------------------------------------------
For the year ended For the eleven months ended For the year ended
September 30, 2003 September 30, 2002 October 31, 2001
--------------------------- -------------------------- --------------------------
Shares Amount Shares Amount Shares Amount
----------- ------------- ----------- ------------- ----------- -------------
Shares sold............ 389,373 $ 2,904,734 390,843 $ 3,362,451 1,104,700 $ 11,337,491
Shares issued by merger -- -- 2,098,856 18,406,382 -- --
Reinvested dividends... -- -- -- -- 275,789 3,430,710
Shares redeemed........ (1,208,986)* (8,867,590)* (1,819,454) (15,476,406) (1,732,719) (17,974,654)
----------- ------------- ----------- ------------- ----------- -------------
Net increase (decrease) (819,613) $ (5,962,856) 670,245 $ 6,292,427 (352,230) $ (3,206,453)
=========== ============= =========== ============= =========== =============
International Equity Portfolio
------------------------------------------------------------------------------------
Class II
------------------------------------------------------------------------------------
For the year ended For the eleven months ended For the year ended
September 30, 2003 September 30, 2002 October 31, 2001
--------------------------- -------------------------- --------------------------
Shares Amount Shares Amount Shares Amount
----------- ------------- ----------- ------------- ----------- -------------
Shares sold............ 1,468,920 $ 10,367,805 846,957 $ 7,116,750 4,344,907 $ 48,536,719
Shares issued by merger -- -- 1,643,118 14,408,431 -- --
Reinvested dividends... -- -- -- -- 120,124 1,494,400
Shares redeemed........ (1,938,357) (13,930,858) (1,757,988) (14,914,913) (4,400,387) (49,212,916)
----------- ------------- ----------- ------------- ----------- -------------
Net increase (decrease) (469,437) $ (3,563,053) 732,087 $ 6,610,268 64,644 $ 818,203
=========== ============= =========== ============= =========== =============
International Equity Portfolio
------------------------------------------------------------------------------------
Class Z Class I
--------------------------- ------------------------------------------------------
For the period For the period
November 1, 2000 through For the year ended November 16, 2001 through
January 1, 2001# September 30, 2003 September 30, 2002+
--------------------------- -------------------------- --------------------------
Shares Amount Shares Amount Shares Amount
----------- ------------- ----------- ------------- ----------- -------------
Shares sold............ 2,276 $ 30,764 2,122,992 $ 16,282,171 1,548,609 $ 13,494,659
Shares issued by merger -- -- -- -- 2,118,400 19,260,237
Reinvested dividends... 1,995 26,021 -- -- -- --
Shares redeemed........ (26,969) (347,119) (2,036,526) (15,779,996) (1,417,082) (12,478,693)
----------- ------------- ----------- ------------- ----------- -------------
Net increase (decrease) (22,698) $ (290,334) 86,466 $ 502,175 2,249,927 $ 20,276,203
=========== ============= =========== ============= =========== =============
- --------
#As of January 1, 2001, Class Z shares are no longer being offered for sale.
+Inception date of the Class was November 16, 2001 (See Note 2).
*Includes automatic conversion of 262,760 shares of Class B shares in the
amount of $1,918,130 to 250,009 shares of Class A shares in the amount of
$1,918,130.
48
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
Note 8. Commitments and Contingencies
The SunAmerica Family of Mutual Funds has established a $75 million
committed and $50 million uncommitted lines of credit with State Street Bank
and Trust Company, the Funds' custodian. Interest is currently payable at
the Federal Funds Rate plus 50 basis points on the committed line and State
Street Bank and Trust Company'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 committed line of credit which is
included in other expenses on the statement of operations. Borrowings under
the line of credit will commence when the respective Fund's cash shortfall
exceeds $100,000. For the period ended September 30, 2003, the following
Funds had borrowings:
Weighted
Days Interest Average Debt Average
Outstanding Charges Utilized Interest
----------- -------- ------------ --------
Blue Chip Growth Fund.............. 28 $ 1,226 $ 887,048 1.78%
Growth Opportunities Fund.......... 2 183 1,457,536 2.28%
New Century Fund................... 68 7,284 2,462,297 1.60%
Growth and Income Fund............. 86 11,391 2,802,253 1.72%
Balanced Assets Fund............... 4 906 5,434,172 1.50%
Focused Dividend Strategy Portfolio 7 329 952,805 1.78%
International Equity Fund.......... 50 1,853 801,405 1.65%
Pursuant to exemptive relief granted by the Securities and Exchange
Commission, the Funds 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 Funds to borrow money
from and loan money to each other for temporary or emergency purposes. An
interfund loan will be made under this facility only if the participating
Funds receive a more favorable interest rate than would otherwise be
available from a typical bank for a comparable transaction. For the period
ended September 30, 2003, none of the Funds participated in this program.
Note 9. Trustees Retirement Plan
The Trustees (and Directors) of the SunAmerica Equity Funds have adopted the
SunAmerica Disinterested Trustees' and Directors' Retirement Plan (the
"Retirement Plan") effective January 1, 1993 for the unaffiliated Trustees.
The Retirement Plan provides generally that if an unaffiliated Trustee who
has at least 10 years of consecutive service as a Disinterested Trustee of
any of the SunAmerica mutual funds (an "Eligible Trustee") retires after
reaching age 60 but before age 70 or dies while a Trustee, such person will
be eligible to receive a retirement or death benefit from each SunAmerica
mutual fund with respect to which he or she is an Eligible Trustee. As of
each birthday, prior to the 70th birthday, but in no event for a period
greater than 10 years, each Eligible Trustee will be credited with an amount
equal to 50% of his or her regular fees (excluding committee fees) for
services as a Disinterested Trustee of each SunAmerica mutual fund for the
calendar year in which such birthday occurs. In addition, an amount equal to
8.5% of any amounts credited under the preceding clause during
49
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2003 -- (continued)
prior years is added to each Eligible Trustee's account until such Eligible
Trustee reaches his or her 70th birthday. An Eligible Trustee 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. As of
September 30, 2003, Blue Chip Growth Fund, Growth Opportunities Fund, New
Century Fund, Growth and Income Fund, Balanced Assets Fund, Focused Dividend
Strategy Portfolio and International Equity Fund had accrued $30,614,
$24,148, $52,858, $36,124, $88,681, $10,363 and $16,687, respectively, for
the Retirement Plan, which is included in accrued expenses on the Statement
of Assets and Liabilities, and for the year ended September 30, 2003
expensed $4,204, $4,441, $3,741, $8,239, $9,617, $2,100 and $3,170,
respectively, for the retirement plan, which is included in Trustee's fees
and expenses on the Statement of Operations.
Note 10. Investment Concentration
Some of the Portfolios 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 your risk by
increasing the diversification of your investment, the value of your
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 primary risks of the International Equity Fund.
At September 30, 2003, the International Equity Fund had approximately 20%
of its net assets invested in equity securities of companies domiciled in
Japan.
Note 11. Subsequent Events
On October 30, 2003, the Board of Directors approved the reorganization of
the SunAmerica Style Select Series, Inc. SunAmerica Value Fund, the
Strategic Investment Series, Inc. SunAmerica Biotech/Health Fund and Tax
Managed Equity Fund into the newly created Funds in the SunAmerica Equity
Funds. In addition, the Board of Trustees approved the reorganization of the
SunAmerica Equity Funds Focused Dividend Strategy Portfolio into a newly
created portfolio of the SunAmerica Style Select Series, Inc., subject to
shareholder approval.
50
SunAmerica Equity Funds
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of SunAmerica Equity Funds
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of SunAmerica Balanced Assets Fund,
SunAmerica Blue Chip Growth Fund, Focused Dividend Strategy Portfolio,
SunAmerica Growth and Income Fund, SunAmerica Growth Opportunities Fund, and
SunAmerica New Century Fund as of September 30, 2003, and the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the
financial highlights for each of the four years in the period then ended.
Additionally, we have audited the accompanying statement of assets and
liabilities, including the portfolio of investments, of the SunAmerica
International Equity Fund as of September 30, 2003, the related statement of
operations, and the statements of changes in net assets and financial
highlights for each of the two years in the period then ended. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The financial
highlights for the period presented through September 30, 1999 for the
SunAmerica Balanced Assets Fund, SunAmerica Blue Chip Growth, Focused Dividend
Strategy Portfolio (formerly, the SunAmerica "Dogs" of Wall Street Fund)
SunAmerica Growth and Income Fund, SunAmerica Growth Opportunities Fund, and
SunAmerica New Century Fund were audited by other auditors whose report dated
November 10, 1999, expressed an unqualified opinion on those financial
highlights. The financial highlights for each of the periods presented through
October 31, 2001 for the SunAmerica International Equity Fund were audited by
other auditors whose report dated December 14, 2001, expressed an unqualified
opinion on those statements and financial highlights.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of September 30, 2003, by correspondence
with the custodian and brokers or by other appropriate auditing procedures
where replies from brokers were not received. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
SunAmerica Balanced Assets Fund, SunAmerica Blue Chip Growth Fund, Focused
Dividend Strategy Portfolio, SunAmerica Growth and Income Fund, SunAmerica
Growth Opportunities Fund, and SunAmerica New Century Fund, as of September 30,
2003, the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended, and the
financial highlights for each of the four years in the period then ended, in
conformity with accounting principles generally accepted in the United States.
Also in our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
the SunAmerica International Equity Fund as of September 30, 2003, the results
of its operations, and the changes in net assets and financial highlights for
each of the two years in the period then ended, in conformity with accounting
principles generally accepted in the United States.
/s/ Ernst & Young LLP
Houston, Texas
November 17, 2003
51
SunAmerica Equity Funds
TRUSTEE INFORMATION -- (unaudited)
The following table contains basic information regarding the Trustees that
oversee operations of the Portfolios and other investment companies within the
SunAmerica Mutual Funds complex.
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 Trustee(1) Trustee(2)
- -------------- ---------- ------------ ------------------------------- ------------- --------------------
S. James Coppersmith Trustee 1986-Present Retired. 45 Director, BJ's
DOB: February 21, 1933 Wholesale Club,
Inc.; Member of
Board of Governors
of the Boston Stock
Exchange.
Dr. Judith L. Craven Trustee 2001-Present Retired. 75 Director, A.G. Belo
DOB: October 6, 1945 Corporation (1992 to
present); Director,
Sysco Corporation
(1996 to present);
Director, Luby's,
Inc. (1998 to
present).
William F. Devin Trustee 2001-Present Retired. 75 Member of the Board
DOB: December 30, 1938 of Governors, Boston
Stock Exchange
(1985-Present).
Samuel M. Eisenstat Chairman 1986-Present Attorney, solo practitioner. 46 Director, North
DOB: March 7, 1940 of the European Oil
Board Royalty Trust.
Stephen J. Gutman Trustee 1986-Present Partner and Managing 46 None
DOB: May 10, 1943 Member of B.B. Associates
LLC (menswear specialty
retailing and other activities)
(June 1988 to present)
Peter A. Harbeck (3) Trustee 1995-Present President, CEO and Director, 83 None
DOB: January 23, 1954 SAAMCo. (August 1995 to
present); Director, AIG
SunAmerica Capital
Services, Inc. ("SACS")
(August 1993 to present).
52
SunAmerica Equity Funds
TRUSTEE INFORMATION -- (unaudited) (continued)
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 Trustee(1) Trustee(2)
- -------------- ---------- ------------ --------------------------- ------------- ---------------------
Sebastiano Sterpa Trustee 1993-Present Founder and Chairman of the 37 Director, Real Estate
DOB: July 18, 1929 Board of the Sterpa Group Business Service and
(real estate investment and Countrywide
management) (1962 to Financial.
present).
- --------
* The business address for each Trustee 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 (7 funds), SunAmerica Income Funds (6 funds),
SunAmerica Style Select Series, Inc. (15 portfolios), SunAmerica Strategic
Investment Series, Inc. (7 funds), Anchor Series Trust (8 portfolios),
SunAmerica Senior Floating Rate Fund, Inc. (1 fund), SunAmerica Series
Trust (33 portfolios), VALIC Company I (22 portfolios), VALIC Company II
(15 funds), Anchor Pathway Funds (7 Funds) and Seasons Series Trust (19
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 Trustee, as defined within the Investment Company Act of 1940.
(4) Trustees serve until their successors are duly elected and qualified,
subject to the Trustee's retirement plan as discussed in Note 9 of the
financial statements.
Additional information concerning the Trustees is contained in the Statement of
Additional Information and is available without charge by calling (800)
858-8850.
53
SunAmerica Equity Funds
SHAREHOLDER TAX INFORMATION -- (unaudited)
Certain tax information regarding the SunAmerica Equity Funds is required to be
provided to shareholders based upon each Fund's income and distributions for
the taxable year ended September 30, 2003. The information and distributions
reported herein may differ from the information and distributions taxable to
the shareholders for the calendar year ending December 31, 2003. The
information necessary to complete your income tax returns will be included with
your Form 1099-DIV which will be sent to you under separate cover in January
2004.
During the year ended September 30, 2003 the Funds paid the following dividends:
Net Net Net Qualifying % for the
Total Investment Short-Term Long-Term 70% Dividends
Dividends Income Capital Gains Capital Gains Received Deduction
- --------- ---------- ------------- ------------- --------------------
Blue Chip Growth Fund Class A............... $ -- $ -- $-- $-- -- %
Blue Chip Growth Fund Class B............... -- -- -- -- --
Blue Chip Growth Fund Class II.............. -- -- -- -- --
Blue Chip Growth Fund Class I............... -- -- -- -- --
Growth Opportunities Fund Class A........... -- -- -- -- --
Growth Opportunities Fund Class B........... -- -- -- -- --
Growth Opportunities Fund Class II.......... -- -- -- -- --
Growth Opportunities Fund Class I........... -- -- -- -- --
Growth Opportunities Fund Class X........... -- -- -- -- --
New Century Fund Class A.................... -- -- -- -- --
New Century Fund Class B.................... -- -- -- -- --
New Century Fund Class II................... -- -- -- -- --
New Century Fund Class I.................... -- -- -- -- --
New Century Fund Class Z.................... -- -- -- -- --
Growth and Income Fund Class A.............. -- -- -- -- --
Growth and Income Fund Class B.............. -- -- -- -- --
Growth and Income Fund Class II............. -- -- -- -- --
Growth and Income Fund Class I.............. -- -- -- -- --
Growth and Income Fund Class Z.............. -- -- -- -- --
Balanced Assets Fund Class A................ 0.12 0.12 -- -- 93.83
Balanced Assets Fund Class B................ 0.04 0.04 -- -- 93.83
Balanced Assets Fund Class II............... 0.04 0.04 -- -- 93.83
Balanced Assets Fund Class I................ 0.14 0.14 -- -- 93.83
Focused Dividend Strategy Portfolio Class A. 0.37 0.37 -- -- 99.92
Focused Dividend Strategy Portfolio Class B. 0.26 0.26 -- -- 99.92
Focused Dividend Strategy Portfolio Class II 0.26 0.26 -- -- 99.92
International Equity Fund Class A........... -- -- -- -- --
International Equity Fund Class B........... -- -- -- -- --
International Equity Fund Class II.......... -- -- -- -- --
International Equity Fund Class I........... -- -- -- -- --
54
SunAmerica Equity Funds
SHAREHOLDER TAX INFORMATION -- (unaudited) (continued)
The International Equity Fund makes an election under Internal Revenue Code
Section 853 to pass through foreign taxes paid by the Fund to its shareholders.
The total amount of foreign taxes passed through to the shareholders for the
fiscal year ended September 30, 2003 was $362,348. The gross foreign source
income for information reporting is $2,335,075.
For the fiscal year ended September 30, 2003, certain dividends paid by
Balanced Assets Fund and Focused Dividend Strategy Portfolio may be subject to
a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief
Reconciliation Act of 2003. Of the distributions paid during the fiscal year,
the following represents the maximum amount that may be considered qualified
dividend income:
Fund Amount
---- ----------
Balanced Assets Fund................................... $1,276,691
Focused Dividend Strategy Portfolio.................... 1,640,978
The information and distributions reported herein may differ from the
information and distributions reported to shareholders for the calendar year
ending December 31, 2003, which will be reported in conjunction with your 2003
Form 1099-DIV.
55
[LOGO]
AIG Sun America
Mutual Funds
Harborside Financial Center
3200 Plaza 5
Jersey City, NJ 07311-4992
Directors/Trustees Investment Adviser This report is submitted solely
Samuel M. Eisenstat AIG SunAmerica Asset Management Corp. for the general information of
Peter A. Harbeck Harborside Financial Center shareholders of the Funds.
S. James Coppersmith 3200 Plaza 5 Distribution of this report to
Dr. Judith L. Craven Jersey City, NJ 07311-4992 persons other than shareholders of
William F. Devin the Funds is authorized only in
Stephen J. Gutman Distributor connection with a currently
Sebastiano Sterpa AIG SunAmerica Capital Services, Inc. effective prospectus, setting
Harborside Financial Center forth details of the Funds, which
Officers 3200 Plaza 5 must precede or accompany this
Robert M. Zakem, President and Jersey City, NJ 07311-4992 report.
Secretary
Donna M. Handel, Treasurer Shareholder Servicing Agent
Donna Calder, Vice President AIG SunAmerica Fund Services, Inc.
Brian P. Clifford, Vice President Harborside Financial Center
Francis Gannon, Vice President 3200 Plaza 5
J. Steven Neamtz, Vice President Jersey City, NJ 07311-4992
Gregory R. Kingston, Vice President
and Assistant Treasurer Custodian and Transfer Agent
Abbe P. Stein, Vice President State Street Bank and Trust Company
and Assistant Secretary P.O. Box 419572
Joseph P. Kelly, Assistant Secretary Kansas City, MO 64141-6572
Thomas Lynch, Assistant Secretary
Stacey V. Morrison, Assistant Secretary
Laura E. Filippone, Assistant Treasurer
Kathryn A. Pearce, Assistant Treasurer
Distributed by:
AIG SunAmerica Capital Services, Inc.
EQANN-9/03
Item 2. Code of Ethics.
The SunAmerica Equity Funds have adopted a Code of Ethics applicable to its
Principal Executive and Principal Accounting Officers pursuant to Section 406 of
the Sarbanes-Oxley Act of 2002.
Item 3. Audit Committee Financial Expert.
Currently, the SunAmerica Equity Funds do not have an Audit Committee member
who possesses all of the attributes required to be an "audit committee financial
expert" as defined in instruction 2(b)of Item 3 of Form N-CSR. However, the
Board of Directors believes that each member of the Audit Committee has
substantial experience relating to the review of financial statements and the
operations of audit committees. Accordingly, the Board believes that the members
are qualified to evaluate the Fund's financial statements, supervise the Fund's
preparation of its financial statements, and oversee the work of the Fund's
independent auditors. The Board of Directors is currently seeking an individual
who will qualify as an audit committee financial expert.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not Appplicable.
Item 6. Reserved.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Reserved.
Item 9. 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)
that occurred during the Registrant's second fiscal half-year that has
materially affected, or is reasonably likely to materially affect, the
Registrant's internal control over financial reporting. However, a
situation was discovered at the registrant's transfer agent which
circumvented internal controls related to abandoned property procedures.
The registrant has worked with the transfer agent to develop corrective
actions to enhance the internal controls.
Item 10. Exhibits.
(a) (1) Code of Ethics applicable to its Principal Executive and Principal
Accounting Officers pursuant to Section 406 of the Sarbanes-Oxley Act of
2002 attached hereto as Exhibit 99.406.Code of Ethics.
(b) (1) Certification pursuant to Rule 30a-2 under the Investment Company Act
of 1940 (17 CFR 270.30a-2) attached hereto as Exhibit 99.CERT.
(2) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
attached hereto as Exhibit 99.906.CERT.
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 Equity Funds
By: /s/ Robert M. Zakem
Robert M. Zakem
President
Date: December 8, 2003
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/ Robert M. Zakem
Robert M. Zakem
President
Date: December 8, 2003
By: /s/ Donna M. Handel
Donna M. Handel
Treasurer
Date: December 8, 2003