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 811-3807
SunAmerica Money Market Funds, Inc.
(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: December 31
Date of reporting period: June 30, 2004
Item 1. Reports to Shareholders
SunAmerica Money Market Funds, Inc., Semiannual Report at June 30, 2004.
[GRAPHIC]
SunAmerica
THE RETIREMENT SPECIALIST
Money Market Funds
2004 SEMIANNUAL REPORT
[LOGO] AIG SunAmerica
Mutual Funds
Table of Contents
SHAREHOLDER LETTER................. 1
STATEMENT OF ASSETS AND LIABILITIES 2
STATEMENT OF OPERATIONS............ 3
STATEMENT OF CHANGES IN NET ASSETS. 4
FINANCIAL HIGHLIGHTS............... 5
PORTFOLIO OF INVESTMENTS........... 7
NOTES TO FINANCIAL STATEMENTS...... 11
DIRECTORS INFORMATION.............. 17
SPECIAL MEETING OF SHAREHOLDERS.... 18
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June 30, 2004 SEMIANNUAL REPORT
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Shareholder Letter
Dear Shareholders,
We are pleased to present to you our six-month review of the SunAmerica
Money Market Fund and SunAmerica Municipal Money Market Fund.
Over the semiannual period ended June 30, 2004, money market and municipal
money market yields rose slightly, in anticipation of an increase in the
federal funds rate. On June 30/th/, the Federal Open Market Committee (FOMC)
raised this key interest rate for the first time in four years, from a historic
47 year low of 1.00% to 1.25%.
This long anticipated increase was precipitated by two notable changes in
economic data: improvement in domestic employment numbers and a spike in
inflation. March payroll data showed stronger than expected increases in new
hires, as well as upward revisions for January and February jobs data. This
good news was offset by concerns over core inflation, which spiked upward over
the first half of 2004 from 1.1% to 1.7%. With vitality beginning to return to
the labor market and inflation on the rise, the Fed deemed there to be
sufficient impetus to raise interest rates for the first time since May 2000.
Although January and February were mainly uneventful months for money
markets, the approach of tax season brought yield increases for taxable and
non-taxable money market instruments alike. These gains began in March and
continued through June. While some of these increases were attributable to
expectations of the Fed raising rates, other yield increases were simply the
result of market activity.
SunAmerica's Money Market and Municipal Money Market Fund managers also
augmented Fund yields over the semiannual period through strategic response to
conditions then present in their respective financial markets. The SunAmerica
Money Market Fund achieved yield gains by exploiting apparent over-reactions to
the volatile economic data as well as the mispricing of aggressive FOMC rate
increases. Likewise, the SunAmerica Municipal Money Market Fund utilized the
steepened rate curve and pricing inefficiencies to add yield during the first
half of the calendar year. Both the Money Market Fund and the Municipal Money
Market Fund also reduced the weighted average maturity of securities held in
these Funds in order to capture higher yields as they became available.
Throughout the semiannual period, both Funds continued to remain invested in
the highest quality of taxable and non-taxable money fund securities. In doing
so the Funds maintained their chief objective of principal preservation,
followed by yield enhancement.
We thank you for your continued investment in our Funds.
Sincerely,
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Brian Wiese, Lead Hutch Bryan, Lead
Portfolio Manager Portfolio Manager
SunAmerica Money Market SunAmerica Municipal
Fund Money Market Fund
AIG SunAmerica Asset AIG Global Investment
Management Corp. Corp.
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An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Fund.
Past performance is no guarantee of future results.
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SunAmerica Money Market Funds
STATEMENT OF ASSETS AND LIABILITIES -- June 30, 2004 -- (unaudited)
Money Market Municipal Money
Fund Market Fund
-------------- ---------------
ASSETS:
Investment securities, at value*.................................. $1,687,387,008 $ 105,637,804
Cash.............................................................. 29,332 --
Receivables for --
Fund shares sold................................................ 17,691,100 3,518,377
Accrued interest................................................ 1,405,464 362,254
Prepaid expenses.................................................. 32,310 1,899
Due from investment advisor for expense reimbursements/fee waivers 7,882 882
Due from distributor for fee waivers.............................. 26,629 5,516
-------------- --------------
Total assets.................................................... 1,706,579,725 109,526,732
-------------- --------------
LIABILITIES:
Payables for --
Fund shares redeemed............................................ 6,946,831 2,671,493
Investment advisory and management fees......................... 653,168 30,504
Distribution and service maintenance fees....................... 257,113 15,136
Transfer agent fees and expenses................................ 351,549 24,867
Directors' fees................................................. 212,890 3,706
Other accrued expenses............................................ 80,543 35,328
-------------- --------------
Total liabilities............................................... 8,502,094 2,781,034
-------------- --------------
Net assets..................................................... $1,698,077,631 $ 106,745,698
============== ==============
NET ASSETS WERE COMPOSED OF:
Common stock, $.001 par value (10 billion shares authorized)...... $ 1,698,077 $ 106,745
Paid-in capital................................................... 1,696,280,689 106,638,372
-------------- --------------
1,697,978,766 106,745,117
Accumulated undistributed net investment income (loss)............ 98,865 581
-------------- --------------
Net assets..................................................... $1,698,077,631 $ 106,745,698
============== ==============
Class A:
Net assets........................................................ $1,614,152,668 $ 103,391,254
Shares outstanding................................................ 1,614,148,360 103,390,554
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge)...... $ 1.00 $ 1.00
============== ==============
Class B:
Net assets........................................................ $ 49,657,253 $ 3,215,941
Shares outstanding................................................ 49,657,486 3,215,920
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge)...... $ 1.00 $ 1.00
============== ==============
Class C+:
Net assets........................................................ $ 22,751,147 $ 138,503
Shares outstanding................................................ 22,752,126 138,509
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge)...... $ 1.00 $ 1.00
============== ==============
Class I:
Net assets........................................................ $ 11,516,563 $ --
Shares outstanding................................................ 11,518,828 --
Net asset value, offering and redemption price per share.......... $ 1.00 $ --
============== ==============
*Amortized cost of investments.................................... $1,687,387,008 $ 105,637,804
============== ==============
- --------
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares
See Notes to Financial Statements
2
SunAmerica Money Market Funds
STATEMENT OF OPERATIONS -- For the six months ended June 30, 2004 --
(unaudited)
Money Market Municipal Money
Fund Market Fund
------------ ---------------
INVESTMENT INCOME:
Income:
Interest........................................................................ $9,602,054 $ 578,411
Dividends....................................................................... -- 444
---------- ----------
Total investment income....................................................... 9,602,054 578,855
Expenses:
Investment advisory and management fees......................................... 3,966,996 192,096
Distribution and service fees:
Class A....................................................................... 1,231,967 79,837
Class B....................................................................... 216,277 14,295
Class C+...................................................................... 96,000 646
Transfer agent fees and expenses:
Class A....................................................................... 1,818,585 120,433
Class B....................................................................... 59,169 2,070
Class C+...................................................................... 27,861 2,086
Class I....................................................................... 12,651 --
Registration fees:
Class A....................................................................... 156 10,842
Class B....................................................................... 4,384 6,333
Class C+...................................................................... 4,253 5,170
Class I....................................................................... 4,875 --
Custodian fees.................................................................. 98,973 21,427
Audit and tax fees.............................................................. 19,903 20,794
Reports to shareholders......................................................... 331,236 8,679
Legal fees...................................................................... 10,172 1,413
Directors' fees and expenses.................................................... 35,614 2,186
Other expenses.................................................................. 16,205 1,355
---------- ----------
Total expenses before fee waivers, expense reimbursements and custody credits. 7,955,277 489,662
Fees waived and expenses reimbursed by investment advisor and distributor..... (214,365) (23,082)
Custody credits earned on cash balances....................................... (6,745) (1,315)
---------- ----------
Net expenses.................................................................. 7,734,167 465,265
---------- ----------
Net investment income (loss)..................................................... 1,867,887 113,590
---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.................. $1,867,887 $ 113,590
========== ==========
- --------
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares
See Notes to Financial Statements
3
SunAmerica Money Market Funds
STATEMENT OF CHANGES IN NET ASSETS
Money Market Municipal Money
Fund Market Fund
------------------------------ ------------------------------
For the For the
six months six months
ended For the year ended For the year
June 30, ended June 30, ended
2004 December 31, 2004 December 31,
(unaudited) 2003 (unaudited) 2003
-------------- -------------- -------------- --------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss).......... $ 1,867,887 $ 5,654,971 $ 113,590 $ 293,449
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations............. $ 1,867,887 $ 5,654,971 $ 113,590 $ 293,449
Dividends and distributions to
shareholders from:
Net investment income (Class A)....... (1,840,878) (5,587,357) (111,920) (288,875)
Net investment income (Class B)....... (7,311) (17,891) (1,598) (3,816)
Net investment income (Class C)+...... (3,247) (8,618) (72) (176)
Net investment income (Class I)....... (16,451) (39,889) -- --
-------------- -------------- -------------- --------------
Total dividends and distributions to
shareholders.......................... (1,867,887) (5,653,755) (113,590) (292,867)
-------------- -------------- -------------- --------------
Increase (decrease) in net assets from
capital share transactions (Note 5)... (20,980,867) (137,050,057) (10,482,421) 25,292,765
-------------- -------------- -------------- --------------
Total increase (decrease) in net assets. (20,980,867) (137,048,841) (10,482,421) 25,293,347
============== ============== ============== ==============
Net Assets:
Beginning of period..................... 1,719,058,498 1,856,107,339 117,228,119 91,934,772
-------------- -------------- -------------- --------------
End of period*.......................... $1,698,077,631 $1,719,058,498 $ 106,745,698 $ 117,228,119
============== ============== ============== ==============
*Includes accumulated undistributed net
investment income (loss).............. $ 98,865 $ 98,866 $ 581 $ 582
============== ============== ============== ==============
- --------
+ Effective February 23, 2004, Class II shares were
redesignated as Class C shares
See Notes to Financial Statements
4
SunAmerica Money Market Funds
FINANCIAL HIGHLIGHTS
MONEY MARKET FUND
-----------------
Ratio
Net Net of net
Asset Dividends Asset Net Assets Ratio of investment
Value Net from net Value end of expenses income to
beginning investment investment end of Total period to average average
Period Ended of period income(1) income period Return(2) (000's) net assets net assets
- -------------------- --------- ---------- ---------- ------ --------- ---------- ---------- ----------
Class A
- -
12/31/99............ $1.000 $0.044 $(0.044) $1.000 4.44% $ 881,223 0.95%(3) 4.36%(3)
12/31/00............ 1.000 0.054 (0.054) 1.000 5.57 971,137 0.95 5.47
12/31/01............ 1.000 0.034 (0.034) 1.000 3.45 1,087,329 0.93 4.04
12/31/02............ 1.000 0.010 (0.010) 1.000 1.04(7) 1,751,812 0.90 0.99
12/31/03............ 1.000 0.003 (0.003) 1.000 0.32 1,644,603 0.88 0.32
06/30/04(8)......... 1.000 0.001 (0.001) 1.000 0.11 1,614,153 0.89(6) 0.22(6)
Class B
- -
12/31/99............ $1.000 $0.035 $(0.035) $1.000 3.59% $ 35,103 1.75%(3) 3.53%(3)
12/31/00............ 1.000 0.046 (0.046) 1.000 4.72 24,090 1.76(5) 4.62(5)
12/31/01............ 1.000 0.025 (0.025) 1.000 2.57 55,066 1.75(5) 3.76(5)
12/31/02............ 1.000 0.003 (0.003) 1.000 0.28(7) 64,815 1.64(5) 0.26(5)
12/31/03............ 1.000 0.000 0.000 1.000 0.03 44,529 1.18(5) 0.03(5)
06/30/04(8)......... 1.000 0.000 0.000 1.000 0.02 49,657 1.09(5)(6) 0.03(5)(6)
Class C+
- -
12/31/99............ $1.000 $0.035 $(0.035) $1.000 3.57% $ 8,235 1.61% 3.59%
12/31/00............ 1.000 0.046 (0.046) 1.000 4.73 11,012 1.75(5) 4.67(5)
12/31/01............ 1.000 0.026 (0.026) 1.000 2.63 33,644 1.69(5) 3.51(5)
12/31/02............ 1.000 0.003 (0.003) 1.000 0.27(7) 30,285 1.66(5) 0.26(5)
12/31/03............ 1.000 0.000 0.000 1.000 0.03 20,290 1.18(5) 0.03(5)
06/30/04(8)......... 1.000 0.000 0.000 1.000 0.02 22,751 1.09(5)(6) 0.03(5)(6)
Class I
- -
11/16/01-12/31/01(4) $1.000 $0.002 $(0.002) $1.000 0.20% $ 8,336 0.80%(5)(6) 0.84%(5)(6)
12/31/02............ 1.000 0.011 (0.011) 1.000 1.13(7) 9,195 0.80(5) 1.12(5)
12/31/03............ 1.000 0.004 (0.004) 1.000 0.43 9,636 0.77(5) 0.43(5)
06/30/04(8)......... 1.000 0.002 (0.002) 1.000 0.16 11,517 0.80(5)(6) 0.32(5)(6)
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements.
(3)Net of transfer agent expense credits of:
12/31/99
--------
Class A 0.01%
Class B --
(4)Commencement of sales of respective class of shares
(5)Net of the following expense reimbursements (based on average net assets):
12/31/00 12/31/01 12/31/02 12/31/03 6/30/04(6)
-------- -------- -------- -------- ----------
Class B. -- -- 0.04% 0.51% 0.60%
Class C+ 0.18% 0.05% 0.04 0.53 0.63
Class I. -- 0.24 0.14 0.02 0.06
(6)Annualized
(7)The total return for each class was increased by less than 0.01% from gains
realized on the disposal of investments in violation of investment
restrictions.
(8)Unaudited
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares
See Notes to Financial Statements
5
SunAmerica Money Market Funds
FINANCIAL HIGHLIGHTS -- (continued)
MUNICIPAL MONEY MARKET FUND
---------------------------
Net Net Net Ratio of net
Asset Dividends Asset Assets Ratio of investment
Value Net from net Value end of expenses income to
beginning investment investment end of Total period to average average
Period Ended of period income(1) income period Return(2) (000's) net assets(5) net assets(5)
- ----------------------- --------- ---------- ---------- ------ --------- -------- ------------- -------------
Class A
-------
10/31/99(6)............ $1,000 $0.020 $(0.020) $1.000 2.18% $ 3,651 1.05% 2.18%
10/31/00(6)............ 1.000 0.030 (0.030) 1.000 3.06 4,452 0.97 3.03
10/31/01(6)............ 1.000 0.020 (0.020) 1.000 2.39 3,972 0.78 2.39
11/01/01-12/31/01(6)... 1.000 0.013 (0.013) 1.000 2.05 3,829 0.62(3) 1.71(3)
12/31/02............... 1.000 0.009 (0.009) 1.000 0.92 88,050 0.78 0.71
12/31/03............... 1.000 0.003 (0.003) 1.000 0.28 113,802 0.81 0.28
06/30/04(7)............ 1.000 0.001 (0.001) 1.000 0.11 103,391 0.84(3) 0.21(3)
Class B
- -
10/31/99(6)............ $1.000 $0.010 $(0.010) $1.000 1.42% $ 2,841 1.80% 1.42%
10/31/00(6)............ 1.000 0.030 (0.030) 1.000 2.48 2,777 1.54 2.44
10/31/01(6)............ 1.000 0.020 (0.020) 1.000 2.39 2,613 0.78 2.38
11/01/01-12/31/01(6)... 1.000 0.008 (0.008) 1.000 1.97 2,618 1.13(3) 1.27(3)
12/31/02............... 1.000 0.002 (0.002) 1.000 0.24 3,714 1.39 0.16
12/31/03............... 1.000 0.001 (0.001) 1.000 0.10 3,168 0.98 0.11
06/30/04(7)............ 1.000 0.001 (0.001) 1.000 0.05 3,216 0.96(3) 0.10(3)
Class C+
- -
08/10/00-10/31/00(4)(6) $1.000 $0.010 $(0.010) $1.000 0.71% $ 108 0.75%(3) 2.78%(3)
10/31/01(6)............ 1.000 0.020 (0.020) 1.000 2.40 136 0.78 2.33
11/01/01-12/31/01(6)... 1.000 0.008 (0.008) 1.000 1.97 195 1.15(3) 1.14(3)
12/31/02............... 1.000 0.002 (0.002) 1.000 0.24 170 1.39 0.19
12/31/03............... 1.000 0.001 (0.001) 1.000 0.10 258 1.00 0.11
06/30/04(7)............ 1.000 0.001 (0.001) 1.000 0.05 139 0.95(3) 0.10(3)
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements.
(3)Annualized
(4)Commencement of sales of respective class of shares
(5)Net of the following expense reimbursements (based on average net assets):
10/31/99 10/31/00 10/31/01 12/31/01(5) 12/31/02 12/31/03 06/30/04(3)
-------- -------- -------- ----------- -------- -------- -----------
Class A. 0.84% 0.47% 1.18% 2.51% 0.20% 0.03% 0.00%
Class B. 0.89 0.46 1.18 2.59 1.25 1.03 0.92
Class C+ -- 0.41(3) 1.18 7.84 9.68 7.45 10.52
(6)The financial information for the periods prior to November 16, 2001
reflects the financial information for the North American Municipal Money
Market Fund.
(7)Unaudited
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares
See Notes to Financial Statements
6
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2004 -- (unaudited)
Principal Value
Security Description Amount (Note 2)
CERTIFICATES OF DEPOSIT -- 4.1%
Wells Fargo Bank NA
1.09% due 07/07/04........................ $25,000,000 $25,000,000
1.12% due 07/12/04....................... 20,000,000 20,000,000
1.30% due 07/28/04....................... 25,000,000 25,000,000
-----------
Total Certificates of Deposit
(amortized cost $70,000,000)............. 70,000,000
-----------
COMMERCIAL PAPER -- 55.8%
Apreco, LLC (LOC-Citibank N.A.)
1.10% due 07/12/04*....................... 30,000,000 29,989,917
1.25% due 07/30/04*...................... 25,000,000 24,974,826
Barton Capital Corp. (LOC-Societe Generale)
1.09% due 07/19/04*....................... 25,000,000 24,986,375
Bear Stearns Co., Inc.
1.07% due 07/12/04........................ 25,000,000 24,991,826
1.10% due 07/06/04....................... 25,000,000 24,996,181
1.16% due 07/08/04....................... 20,000,000 19,995,489
CRC Funding, LLC
1.09% due 07/19/04*....................... 20,000,000 19,989,150
1.10 % due 07/15/04*..................... 25,000,000 24,989,305
CXC, LLC
1.08% due 07/08/04*....................... 20,000,000 19,995,800
1.10% due 07/16/04*...................... 25,000,000 24,988,542
Cancara Asset Securitization, Ltd.
1.25% due 08/23/04*....................... 22,206,000 22,165,135
Compass Securitization, LLC (LOC-Ambac)
1.11% due 07/07/04*....................... 20,000,000 19,996,300
1.26% due 07/23/04*...................... 25,000,000 24,980,750
Corporate Asset Funding Co., LLC
1.10% due 07/14/04*....................... 25,000,000 24,990,068
1.16% due 08/02/04*...................... 20,000,000 19,979,378
Delaware Funding Co., LLC (LOC-JP Morgan)
1.07% due 07/07/04*....................... 25,000,000 24,995,542
1.20% due 07/20/04*...................... 25,000,000 24,984,167
Edison Asset Securitization, LLC
(LOC-GE Capital Corp.)
1.07% due 07/22/04*....................... 25,000,000 24,984,396
1.10% due 07/16/04*...................... 25,000,000 24,988,542
1.10% due 08/02/04*...................... 20,000,000 19,980,444
Galaxy Funding, Inc.
1.16% due 08/06/04*....................... 25,000,000 24,971,000
1.17% due 08/16/04*...................... 25,000,000 24,962,625
General Electric Capital Corp.
1.12% due 07/16/04........................ 20,000,000 19,990,667
1.23% due 07/22/04....................... 30,000,000 29,978,475
Giro Funding U.S. Corp.
1.15% due 08/09/04*....................... 25,000,000 24,968,854
Govco, Inc.
1.08% due 07/12/04*....................... 25,000,000 24,991,750
1.09% due 07/21/04*...................... 25,000,000 24,984,861
Greyhawk Funding, LLC
1.07% due 07/12/04*....................... 25,000,000 24,991,826
1.09% due 07/23/04*...................... 25,000,000 24,983,347
1.10% due 07/22/04*...................... 20,000,000 19,987,167
Receivables Capital Corp.
(LOC-Bank of America N.A.)
1.08% due 07/07/04*....................... 25,000,000 24,995,500
Surrey Funding Corp. (LOC-Barclay Bank)
1.20% due 07/15/04*....................... 20,000,000 19,990,667
1.23% due 07/16/04*...................... 25,000,000 24,987,188
Principal Value
Security Description Amount (Note 2)
--------------------------------------------------------------------
Sydney Capital Corp.
1.07% due 07/01/04*....................... $27,800,000 $ 27,800,000
1.14% due 07/09/04*...................... 25,000,000 24,993,667
UBS Finance, LLC
1.42% due 07/01/04........................ 35,000,000 35,000,000
Windmill Funding Corp. (LOC-ABN AMRO)
1.05% due 07/01/04*....................... 26,000,000 26,000,000
1.07% due 07/12/04*...................... 26,000,000 25,991,499
1.15% due 08/09/04*...................... 20,000,000 19,975,083
------------
Total Commercial Paper
(amortized cost $946,486,309)............ 946,486,309
------------
GOVERNMENT OBLIGATIONS --1.4%
U. S. Treasury Bill
1.08% due 10/21/04
(amortized cost $22,922,720).............. 23,000,000 22,922,720
------------
GOVERNMENT AGENCIES -- 29.1%
Agency for International Development Panama
1.50% due 07/06/04+....................... 3,026,441 3,037,624
------------
Federal Farm Credit Bank
1.00% due 07/02/04....................... 25,000,000 24,999,976
------------
Federal Home Loan Bank
1.16% due 07/16/04....................... 25,000,000 24,987,917
1.22% due 07/25/04+...................... 25,000,000 24,999,264
1.26% due 04/08/05....................... 20,000,000 20,000,000
1.30% due 02/23/05....................... 20,000,000 20,000,000
1.30% due 04/11/05....................... 20,000,000 20,000,000
1.40% due 04/01/05....................... 20,000,000 20,000,000
1.46% due 03/01/05....................... 20,000,000 20,000,000
------------
149,987,181
------------
Federal Home Loan Mortgage Corp.
1.20% due 12/20/04....................... 25,000,000 24,856,667
1.22% due 07/21/04 +..................... 19,000,000 19,000,000
------------
43,856,667
------------
Federal National Mortgage Association
1.12% due 08/11/04................. 25,000,000 24,968,111
1.20% due 07/14/04+................ 30,000,000 30,000,000
1.20% due 12/01/04................. 20,000,000 19,898,000
1.30% due 08/20/04................. 20,000,000 19,963,889
1.33% due 02/23/05................. 20,000,000 20,000,000
1.34% due 03/04/05................. 20,000,000 20,000,000
1.35% due 09/10/04+................ 20,000,000 20,000,000
1.38% due 02/14/05................. 20,000,000 20,000,000
1.42% due 09/15/04................. 25,000,000 24,925,056
1.50% due 05/09/05................. 20,000,000 20,000,000
------------
219,755,056
------------
Student Loan Marketing Association
1.25% due 07/01/04+................ 23,000,000 23,000,000
1.44% due 07/07/04+................ 30,000,000 30,000,000
------------
53,000,000
------------
Total Government Agencies
(amortized cost $494,636,504)...... 494,636,504
------------
MEDIUM TERM NOTES -- 6.8%
Merrill Lynch & Co.
1.19% due 08/17/04+................ 20,000,000 20,000,000
7
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2004 -- (unaudited) (continued)
Principal Value
Security Description Amount (Note 2)
MEDIUM TERM NOTES (continued)
Merrill Lynch & Co.
1.29% due 07/30/04+.................... $30,000,000 $ 30,000,000
Sigma Finance, Inc.
1.23% due 07/21/04*+................... 25,000,000 24,997,475
Sigma Finance, Inc.
1.24% due 07/19/04*+................... 20,000,000 20,000,000
White Pine Finance, LLC
1.07% due 07/01/04*+................... 20,000,000 20,000,000
------------
Total Medium Term Notes
(amortized cost $114,997,475).......... 114,997,475
------------
TAXABLE MUNICIPAL MEDIUM TERM
NOTES -- 1.0%
Illinois Student Assistance Commission
1.37% due 07/07/04+.................... 10,000,000 10,000,000
Texas State Veterans Housing Series A-2
1.34% due 07/07/04+.................... 7,415,000 7,415,000
------------
Total Taxable Municipal Medium Term Notes
(amortized cost $17,415,000) .......... 17,415,000
------------
Principal Value
Security Description Amount (Note 2)
-----------------------------------------------------------------
REPURCHASE AGREEMENTS -- 1.2%
State Street Bank & Trust Co.
Joint Repurchase Agreement(1)....... $ 929,000 $ 929,000
UBS Warburg, LLC
Joint Repurchase Agreement(1)....... 20,000,000 20,000,000
--------------
Total Repurchase Agreements
(amortized cost $20,929,000)....... 20,929,000
--------------
TOTAL INVESTMENTS
(amortized cost $1,687,387,008**).. 99.4% 1,687,387,008
Assets in excess of other liabilities 0.6 10,690,623
----------- --------------
NET ASSETS........................... 100.0% $1,698,077,631
=========== ==============
- --------
* Securities exempt from registration under Rule 144A of securities Act of
1933. These securities may be sold in transactions exempt from registration,
normally to qualified institutional buyers. At June 30, 2004, the aggregate
value of these securities was $856,531,146, representing 50.4% of net assets.
** At June 30, 2004, the cost of securities for federal income tax purposes was
the same for book purposes.
+ Variable rate security; maturity date reflects the next reset date, rates
shown are rates in effect as of June 30, 2004
(1)See Note 2 for details of the Joint Repurchase Agreement
LOC-- Letter of Credit
Portfolio breakdown as a percentage of net assets (excluding Repurchase
Agreements) by industry
Government Agencies 30.5% Receivable Company 8.1%
Finance 15.3 Banking 6.2
Trade and Term Receivables 14.0 Loan Receivables 2.9
Trade Receivables 10.5 Municipalities 1.0
Securities Holding Company 9.7 ----
98.2%
====
See Notes to Financial Statements
8
SunAmerica Municipal Money Market Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2004 -- (unaudited)
Principal Value
Security Description Amount (Note 2)
SHORT-TERM INVESTMENTS -- 99.0%
Alabama -- 2.8%
Stevenson, Alabama Industrial Development
Board Environmental Improvement
(LOC-JP Morgan Chase Bank)
1.08% due 07/07/04+............................ $3,000,000 $ 3,000,000
-----------
Arizona -- 7.0%
Arizona Health Facilities Authority
1.06% due 07/07/04+............................ 500,000 500,000
Maricopa County, Arizona Industrial
Development Authority
(LOC-Harris Trust & Savings Bank)
1.19% due on 07/01/04+......................... 1,040,000 1,040,000
Maricopa County, Arizona Industrial
Development Authority, Series A
(LOC-Wells Fargo Bank N.A.)
1.20% due 07/01/04+............................ 1,510,000 1,510,000
Mesa, Arizona Industrial Development
Authority, Series B
1.04% due 07/07/04+............................ 4,430,000 4,430,000
-----------
7,480,000
-----------
District of Columbia -- 0.9%
District of Columbia Revenue
(LOC-Bank of America N.A.)
1.13% due 07/01/04+............................ 980,000 980,000
-----------
Florida -- 4.8%
Lakeland, Florida Energy System
1.08% due 07/07/04+............................ 2,000,000 2,000,000
Lakeland, Florida Energy System, Series A
1.08% due 07/07/04+............................ 3,100,000 3,100,000
-----------
5,100,000
-----------
Illinois -- 9.4%
Chicago, Illinois O'Hare International Airport,
Series B (LOC-Societe Generale)
1.09% due 07/07/04+............................ 845,000 845,000
Chicago, Illinois Park District, Series B
4.00% due 01/01/05............................. 600,000 608,605
Chicago, Illinois Waterworks
(LOC-Bank One N.A.)
1.03% due 07/07/04+............................ 500,000 500,000
Illinois Finance Authority
3.00% due 03/01/05............................. 2,305,000 2,328,977
Illinois Health Facilities Authority, Series A
1.04% due 07/07/04+............................ 3,500,000 3,500,000
Illinois Health Facilities Authority, Series B
1.11% due 07/01/04+............................ 100,000 100,000
Warren County, Illinois Revenue
(LOC-Wells Fargo Bank N.A.)
1.20% due 07/01/04+............................ 2,200,000 2,200,000
-----------
10,082,582
-----------
Iowa -- 1.2%
Iowa Finance Authority, Series F
(LOC-Wells Fargo Bank N.A.)
1.10% due 07/01/04+............................ 1,100,000 1,100,000
Principal Value
Security Description Amount (Note 2)
-----------------------------------------------------------------------
Iowa (continued)
Storm Lake, Iowa Higher Education Facilities
1.25% due 07/01/04+........................... $ 215,000 $ 215,000
-----------
1,315,000
-----------
Kansas -- 0.1%
Shawnee, Kansas Industrial Revenue
(LOC-JP Morgan Chase Bank)
1.12% due 07/01/04+........................... 100,000 100,000
-----------
Kentucky -- 4.7%
Breckinridge County, Kentucky Lease Program
(LOC-U.S. Bank N.A.)
1.06% due 07/07/04+........................... 1,820,000 1,820,233
Breckinridge County, Kentucky Lease Program,
Series A (LOC-U.S. Bank N.A.)
1.06% due 07/07/04+........................... 3,235,000 3,235,000
-----------
5,055,233
-----------
Massachusetts -- 2.8%
Massachusetts State Housing Finance Agency,
Series F
1.02% due 07/07/04+........................... 3,000,000 3,000,000
-----------
Michigan -- 18.5%
Detroit, Michigan Sewage Disposal System,
Series C-1
1.08% due 07/01/04+........................... 1,700,000 1,700,000
Detroit, Michigan Sewage Disposal System,
Series C-2
1.08% due 07/01/04+........................... 3,000,000 3,000,000
Michigan Municipal Bond Authority, Series B-1
2.00% due 08/20/04............................ 5,000,000 5,006,626
Michigan State Building Authority, Series II
2.00% due 10/15/04............................ 5,000,000 5,012,926
Michigan State Department of Treasury,
Series A
2.00% due 09/30/04............................ 5,000,000 5,012,641
-----------
19,732,193
-----------
Minnesota -- 4.2%
Minnesota State Higher Education
Coordinating Board, Series C
1.10% due 07/01/04+........................... 4,500,000 4,500,000
-----------
Missouri -- 1.1%
St Louis, Missouri Planned Industrial
Expansion Authority
(LOC-Bank of America N.A.)
1.12% due 07/01/04+........................... 1,200,000 1,200,000
-----------
Nebraska -- 1.4%
Douglas County, Nebraska Solid Waste
Disposal, Series A
(LOC-Wachovia Bank N.A.)
1.13% due 07/01/04+........................... 1,500,000 1,500,000
-----------
New York -- 5.5%
Long Island, New York Power Authority
Electrical System
(LOC-Bayerische Landesbank)
1.03% due 07/01/04+........................... 900,000 900,000
New York, New York City Transitional Financial
Authority, Series 1
1.08% due 07/01/04+........................... 800,000 800,000
9
SunAmerica Municipal Money Market Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2004 -- (unaudited) (continued)
Principal Value
Security Description Amount (Note 2)
SHORT-TERM INVESTMENTS (continued)
New York -- (continued)
New York, New York General Obligation,
Series A-6 (LOC-Helaba)
1.00% due 07/07/04+............................ $4,130,000 $4,130,000
----------
5,830,000
----------
North Carolina -- 5.4%
Charlotte, North Carolina Certificates of
Participation, Series B
1.13% due 07/01/04+............................ 4,700,000 4,700,000
Durham, North Carolina General Obligation
1.09% due 07/01/04+............................ 300,000 300,034
Mecklenburg County, North Carolina Certificates
of Participation
1.08% due 07/01/04+............................ 775,000 775,000
----------
5,775,034
----------
North Dakota -- 3.6%
North Dakota State Housing Finance Agency,
Series A
1.11% due 07/07/04+............................ 3,800,000 3,800,000
----------
Ohio -- 6.1%
Cleveland, Ohio Airport System, Series D
(LOC-WestLb AG)
1.10% due 07/07/04+............................ 2,965,000 2,965,000
Franklin County, Ohio Hospital, Series B
(LOC-Morgan Guaranty Trust)
1.07% due 07/01/04+............................ 3,545,000 3,545,000
----------
6,510,000
----------
Pennsylvania -- 4.5%
Delaware Valley, Pennsylvania Regional
Financial Authority, Series A
(LOC-Toronto-Dominion Bank)
1.08% due 07/07/04+............................ 300,000 300,000
Delaware Valley, Pennsylvania Regional
Financial Authority, Series C
(LOC-Toronto-Dominion Bank)
1.08% due 07/07/04+............................ 1,700,000 1,700,000
Pennsylvania State Turnpike Commission,
Series A
1.04% due 07/07/04+............................ 1,000,000 1,000,000
Philadelphia, Pennsylvania Authority for
Industrial Development
(LOC-GE Capital Corp.)
1.03% due 07/07/04+............................ 200,000 200,000
Temple University, Commonwealth System of
Higher Education, Pennsylvania
2.25% due 05/02/05............................. 1,600,000 1,612,937
----------
4,812,937
----------
South Dakota -- 1.1%
Lower Brule Sioux Tribe, South Dakota General
Obligation (LOC-Wells Fargo Bank N.A.)
1.10% due 07/01/04+............................ 1,150,000 1,150,000
----------
Principal Value
Security Description Amount (Note 2)
---------------------------------------------------------------------
Tennessee -- 0.2%
Metropolitan Government Nashville &
Davidson Counties Industrial
Development Board
(LOC-Bank of America N.A.)
1.10% due 07/01/04+....................... $ 200,000 $ 200,000
------------
Texas -- 8.0%
Gulf Coast Waste Disposal Authority,
Series A
(LOC-JP Morgan Chase Bank)
1.13% due 07/01/04+....................... 2,500,000 2,500,000
Northside, Texas Independent School
District, Series A
1.00% due 08/02/04+....................... 1,000,000 1,000,000
Texas State Research Division
2.00% due 08/31/04........................ 5,000,000 5,007,005
------------
8,507,005
------------
Utah -- 1.9%
Utah Transit Authority Sales Tax, Series B
(LOC-Bayerische Landesbank)
1.08% due 07/01/04+....................... 2,000,000 2,000,000
------------
Washington -- 1.4%
Port Seattle, Washington Industrial
Development Corp.
(LOC-Citibank N.A.)
1.12% due 07/07/04+....................... 1,500,000 1,500,000
------------
Wisconsin -- 1.9%
Wisconsin State Health & Educational
Facilities Authority
(LOC-U.S. Bank Trust N.A.)
1.08% due 07/01/04+....................... 2,000,000 2,000,000
------------
Wyoming -- 0.5%
Wyoming Community Development
Authority, Series A
1.08% due 07/01/04+....................... 500,000 500,000
------------
Registered Investment Companies -- 0.0%
SSGA Tax Free Money Market Fund -- Class A. 7,820 7,820
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $105,637,804*)....................... 99.0% 105,637,804
Assets in excess of other liabilities........ 1.0 1,107,894
---------- ------------
NET ASSETS................................... 100.0% $106,745,698
========== ============
- --------
+ Variable rate security; maturity date reflects next reset date, rates shown
are rates in effect as of June 30, 2004.
* At June 30, 2004, the cost of securities for federal income tax purposes was
the same for book purposes.
LOC-- Letter of Credit
See Notes to Financial Statements
10
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- June 30, 2004 -- (unaudited)
Note 1. Organization
SunAmerica Money Market Funds, Inc. (the "Corporation") is an open-end
diversified management investment company organized as a Maryland
Corporation. The Corporation consists of two investment funds (each, a
"Fund" and collectively, the "Funds"). Each Fund is a separate series with a
distinct investment objective. Each Fund is advised by AIG SunAmerica Asset
Management Corp. ("SAAMCo" or "Advisor"), an indirect wholly-owned
subsidiary of American International Group, Inc. ("AIG"). The investment
objective for each of the Funds is as follows:
The SunAmerica Money Market Fund ("Money Market Fund") seeks as high a level
of current income as is consistent with liquidity and stability of capital
through investment primarily in high quality money market instruments
selected principally on the basis of quality and yield.
The SunAmerica Municipal Money Market Fund ("Municipal Money Market Fund")
seeks as high a level of current income as is consistent with liquidity and
stability of capital and that is exempt from regular federal income taxation
through investments selected primarily on the basis of quality and yield and
under normal market conditions invests at least 80% of its assets in
municipal securities that are exempt from regular federal income tax.
The Money Market Fund currently offers four classes of shares: Class A,
Class B, Class C and Class I. The Municipal Money Market Fund currently
offers three classes of shares: Class A, Class B, and Class C. The classes
within the Funds are presented in the Statement of Assets and Liabilities.
The cost structure for each class is as follows:
Class A shares-- Class A shares are offered at net asset value per share
without any initial sales charge. Contingent deferred sales
charges ("CDSC") are imposed on Class A shares when shares
are sold within two years of purchase. A 1.00% CDSC is
imposed on shares sold within one year of original
purchase; a 0.50% CDSC is charged on shares sold after the
first year and within the second year after purchase.
Class B shares-- Class B shares are offered at net asset value per share,
without any initial sales charge. A declining contingent
deferred sales charge ("CDSC") may be imposed on
redemptions made within six years of purchase. Class B
shares will convert automatically to Class A shares on the
first business day of the month after eight years from the
issuance of such shares and at such time are no longer
subject to a distribution fee.
Class C shares-- Class C shares are offered at the net asset value per
share, without any initial sales charge. Certain
redemptions made within 12 months of the date of purchase
are subject to a contingent deferred sales charge.
Effective February 23, 2004, Class II shares were
redesignated as Class C shares.
Class I shares-- Class I shares are offered at net asset value per share
without any initial sales charge, exclusively to certain
institutions.
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions. Class A, Class B, and Class C shares of each Fund has
its own 12b-plan, which allows for distributions and account maintenance and
service fees.
Indemnifications: Under the Fund's organizational documents, its officers
and directors are indemnified against certain liability arising out of the
performance of their duties to the Funds. In addition, in the normal course
of business the Funds enter into contracts that contain a variety of
representations and warranties which provide general indemnifications. The
Fund's maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Funds that have not yet
occurred. However, the Funds expect the risk of loss to be remote.
Note 2. 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 its
financial statements:
11
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- June 30, 2004 -- (unaudited)
(continued)
Security Valuations: Portfolio securities are valued at amortized cost,
which approximates market value. The amortized cost method involves valuing
a security at its cost on the date of purchase and thereafter assuming a
constant amortization/accretion to maturity of any discount or premium.
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 mutual
funds. The Funds, along with other affiliated registered investment
companies, may 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 such repurchase agreements. The underlying collateral is
valued daily on a mark to market basis to ensure that the value, at the time
the agreement is entered into, is equal to at least 102% of the repurchase
price, including accrued interest. 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 June 30, 2004, the following Fund held an undivided interest in a
joint repurchase agreement with State Street Bank & Trust Co.:
Percentage Principal
Interest Amount
---------- ---------
Money Market Fund 1.01% $929,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
State Street Bank & Trust Co., dated June 30, 2004, bearing interest at a
rate of 1.20% per annum, with a principal amount of $92,212,000, a
repurchase price of $92,215,074, and a maturity date of July 1, 2004. The
repurchase agreement is collateralized by the following:
Interest Maturity
Type of Collateral Rate Date Principal Amount Market Value
- ------------------ -------- -------- ---------------- ------------
U.S. Treasury Bills 1.49% 11/12/04 $20,520,000 $20,400,738
U.S. Treasury Notes 3.38 11/15/08 74,325,000 73,674,656
In addition, at June 30, 2004, the following Fund held an undivided interest
in a joint repurchase agreement with UBS Warburg, LLC:
Percentage Principal
Interest Amount
---------- -----------
Money Market Fund 10.00% $20,000,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
UBS Warburg, LLC, dated June 30, 2004, bearing interest at a rate of 1.27%
per annum, with a principal amount of $200,000,000, a repurchase price of
$200,007,056, and a maturity date of July, 1, 2004. The repurchase agreement
is collateralized by the following:
Interest Maturity
Type of Collateral Rate Date Principal Amount Market Value
- ------------------ -------- -------- ---------------- ------------
U.S. Treasury Bonds 2.00% 01/15/14 $50,000,000 $50,988,500
U.S. Treasury Bonds 3.63 04/15/28 50,000,000 71,186,500
U.S. Treasury Bonds 3.88 04/15/29 55,979,000 81,988,523
12
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- June 30, 2004 -- (unaudited)
(continued)
Securities Transactions, Investment Income, Dividends and Distributions to
Shareholders: Security transactions are recorded on a trade date basis.
Interest income, including the accretion of discount and amortization of
premium, is accrued daily; dividend income is recorded on the ex-dividend
date. Realized gains and losses on sales of investments are calculated on
the identified cost basis.
Net investment income, other than class specific expenses, and realized and
unrealized gains and losses, are allocated daily to each class of shares
based upon the relative net asset value of outstanding shares (or the value
of the dividend-eligible shares, as appropriate) of each class of shares at
the beginning of the day (after adjusting for the current capital shares
activity of the respective class).
Expenses common to all Funds, not directly related to individual Funds, are
allocated among the 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 in the Statement
of Operations.
Dividends from net investment income, if any, are normally declared daily
and paid monthly. Capital gain distributions, if any, are paid 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. Net investment income (loss), net realized
gain (loss), and net assets are not affected by these reclassifications.
Note 3. Investment Advisory and Management Agreement, Distribution and Service
Agreement
The Funds have an Investment Advisory and Management Agreement (the
"Agreement") with SAAMCo. Under the Agreement, SAAMCo provides continuous
supervision of the Funds and administers its corporate affairs, subject to
general review by the Directors. In connection therewith, SAAMCo furnishes
the Funds with office facilities, maintains certain of its 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 payable to SAAMCo is computed daily
and payable monthly, at an annual rate of 0.50% on the first $600 million of
daily net assets, 0.45% on the next $900 million of the assets and 0.40% on
net assets over $1.5 billion for the Money Market Fund and 0.35% of average
daily net assets of the Municipal Money Market Fund.
The Municipal Money Market Fund is subadvised by AIG Global Investment Corp.
("AIGGIC"). AIGGIC is an indirectly wholly-owned subsidiary of AIG and
receives fees from SAAMCo at a rate of 0.25% of the Fund's first $200
million of net assets, 0.20% on the next $300 million and 0.15% on net
assets over $500 million.
SAAMCo contractually agreed to waive fees or reimburse expenses, if
necessary, at or below the following percentages of each Fund's average net
assets: Money Market Fund 0.80% for Class I, Municipal Money Market Fund
0.95% for Class A, and 1.70% for Class B and Class C. Also, SAAMCo has
agreed to voluntarily waive fees or reimburse additional expenses for the
period ended June 30, 2004, for the Municipal Money Market Fund at the
following percentages of the Fund's average net assets: 0.01% for Class B
and 0.03% for Class C. For the period ended June, 30, 2004, SAAMCo
reimbursed the Money Market Fund for expenses of $2,900 for Class I and for
the Municipal Money Market Fund $899, $3,036, and $7,028 for Class A, Class
B, and Class C, respectively.
The Funds have a distribution Agreement with AIG SunAmerica Capital
Services, Inc. ("SACS" or the "Distributor"), an affiliate of the Advisor.
The Funds have 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 Directors and approved
by its shareholders. Pursuant to such rule, the Directors and the
shareholders of each class of shares of the Funds have adopted Distribution
Plans hereinafter referred to as the
13
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- June 30, 2004 -- (unaudited)
(continued)
"Class A Plan," the "Class B Plan," and the "Class C Plan." In adopting the
Class A Plan, the Class B Plan, and the Class C Plan, the directors
determined that there was a reasonable likelihood that each such Plan would
benefit the Funds and the shareholders of the respective class. The sales
charge and distribution fees of the Class B shares and Class C shares will
not be used to subsidize the sale of Class A shares.
Under the Class B Plan and the Class C Plan, the Distributor receives
payments from the Funds at the annual rate of up to 0.75% of the average
daily net assets of the Fund's Class B and Class C shares, 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 include distribution 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 the Class B and Class C
Plans may exceed the Distributor's distribution costs as described above.
The Class A Plan does not provide for a distribution fee. The Distribution
Plans provide that each class of shares of the Funds may also pay the
Distributor an account maintenance and service fee of up to an annual rate
of 0.15% of the aggregate average daily net assets of such class of shares
for payments to broker-dealers for providing continuing account maintenance.
In this regard, some payments are used to compensate broker-dealers with
account maintenance and service fees in an amount up to 0.15% per year of
the assets maintained in the Funds by their customers. Accordingly, for the
period ended June 30, 2004, SACS received fees (see Statement of Operations)
based upon the aforementioned rates.
For the period ended June 30, 2004, SACS voluntarily reimbursed the Money
Market Fund for expenses of $143,790 and $67,675 for Class B and Class C,
respectively. For the Municipal Money Market Fund, expense reimbursements
were $11,605 and $514 for Class B and Class C, respectively.
SACS receives sales charges on each Fund's Class C shares, portions of which
are reallowed to affiliated broker-dealer and non-affiliated broker-dealers.
Effective February 23, 2004, the front-end sales charge for Class C is no
longer in effect. SACS also receives the proceeds of CDSC paid by investors
in connection with certain redemptions of each Fund's Class A, Class B and
Class C shares. SACS has advised the Funds for the period ended June 30,
2004, the proceeds received from sales (and paid out to affiliated and
non-affiliated broker-dealers) and redemptions are as follows:
Class A Class B
------------------------------------- -------------
Contingent
Sales Affiliated Non-affiliated Deferred
Fund Charges Broker-dealers Broker-dealers Sales Charges
- ---- ------- -------------- -------------- -------------
Money Market Fund..... $ -- $ -- $ -- $180,811
Municipal Money Market -- -- -- 287
Class C+ Class C+
------------------------------------- -------------
Contingent
Sales Affiliated Non-affiliated Deferred
Fund Charges Broker-dealers Broker-dealers Sales Charges
- ---- ------- -------------- -------------- -------------
Money Market Fund..... $6,870 $1,672 $5,198 $ 8,637
Municipal Money Market 12 11 1 42
- --------
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares
14
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- June 30, 2004 -- (unaudited)
(continued)
The Funds entered into a Service Agreement with AIG SunAmerica Fund
Services, Inc. ("SAFS"), an affiliate of the Advisor. 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
its shareholders. The Service Agreement permits the Funds to reimburse SAFS
for the costs incurred in providing such services, based upon an annual rate
of 0.22% of average daily net assets, which is approved annually by the
Directors. For the period ended June 30, 2004, the Funds incurred the
following expenses which are included in transfer agent fees and expenses in
the Statement of Operations to compensate SAFS pursuant to the terms of the
Service Agreement:
Payable at
Expenses June 30, 2004
---------- -------------
Money Market Fund Class A........... $1,809,383 $296,415
Money Market Fund Class B........... 52,937 9,212
Money Market Fund Class C+.......... 23,497 4,235
Money Market Fund Class I........... 11,471 2,044
Municipal Money Market Fund Class A. 117,259 18,569
Municipal Money Market Fund Class B. 3,499 580
Municipal Money Market Fund Class C+ 158 24
At June 30, 2004, The Variable Annuity and Life Insurance Company, an
indirect wholly-owned subsidiary of American International Group, Inc. owned
21% and 77% of the outstanding shares of Money Market Class I shares and
Municipal Money Market Fund Class B shares, respectively.
Note 4. Federal Income Taxes
The Funds intend to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and distribute all of
their taxable income, including any net realized gain on investments, to its
shareholders. Therefore, no federal tax provisions are required. Each Fund
is considered a separate entity for tax purposes.
All dividends paid by the Money Market Fund during the year ended December
31, 2003 were taxable to shareholders as ordinary dividends. Except for $414
for the year ended December 31, 2003, all dividends paid by the Municipal
Money Market Fund were exempt from Federal Income Taxes. Additionally for
the year ended December 31, 2003, on a tax basis, distributable earnings of
$322,099 and $4,646 for the Money Market Fund and the Municipal Money Market
Fund, respectively, are undistributed ordinary income. The tax basis
components of distributable earnings differ from the amounts reflected in
the Statement of Assets and Liabilities by temporary book/tax differences
primarily arising from cumulative pension expenses.
Note 5. Capital Share Transactions
Transactions in each class of shares of the Funds, all at $1.00 per share,
for the six months ended June 30, 2004 and for the prior year were as
follows:
Money Market Fund
-------------------------------------------------------------------------------------------
Class A Class B Class C+
------------------------------ --------------------------- --------------------------
For the For the For the
six months For the six months For the six months For the
ended year ended year ended year
June 30, ended June 30, ended June 30, ended
2004 December 31, 2004 December 31, 2004 December 31,
(unaudited) 2003 (unaudited) 2003 (unaudited) 2003
------------- --------------- ------------ ------------ ------------ ------------
Shares sold............ $ 552,949,632* $ 1,050,689,073** $ 36,115,450 $ 56,471,807 $ 22,502,383 $ 41,305,272
Reinvested dividends... 1,835,857 5,564,933 6,362 15,806 2,610 7,139
Shares redeemed........ (585,236,291) (1,163,463,818) (30,993,409)* (76,773,842)** (20,043,859) (51,307,759)
------------- --------------- ------------ ------------ ------------ ------------
Net increase (decrease) $ (30,450,802) $ (107,209,812) $ 5,128,403 $(20,286,229) $ 2,461,134 $ (9,995,348)
============= =============== ============ ============ ============ ============
-------------------------
Class I
------------------------
For the
six months
ended For the year
June 30, ended
2004 December 31,
(unaudited) 2003
----------- ------------
Shares sold............ $ 3,948,682 $ 7,049,963
Reinvested dividends... 16,356 39,889
Shares redeemed........ (2,084,640) (6,648,520)
----------- -----------
Net increase (decrease) $ 1,880,398 $ 441,332
=========== ===========
- --------
* Includes automatic conversion of Class B shares in the amount of $1,640,160
to Class A shares.
** Includes automatic conversion of Class B shares in the amount of $1,350,441
to Class A shares.
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares
15
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- June 30, 2004 -- (unaudited)
(continued)
Municipal Money Market Fund
---------------------------------------------------------------------------------
Class A Class B Class C(1)
--------------------------- ------------------------ -----------------------
For the For the For the
six months For the six months For the six months For the
ended year ended year ended year
June 30, ended June 30, ended June 30, ended
2004 December 31, 2004 December 31, 2004 December 31,
(unaudited) 2003 (unaudited) 2003 (unaudited) 2003
------------ ------------- ----------- ------------ ----------- ------------
Shares sold............ $ 63,205,868+ $ 175,185,271++ $ 256,096 $ 1,513,161 $ 297,006 $ 416,187
Reinvested dividends... 111,902 284,529 1,574 3,555 42 161
Shares redeemed........ (73,728,611) (149,718,411) (209,466)+ (2,063,313)++ (416,832) (328,375)
------------ ------------- --------- ----------- --------- ---------
Net increase (decrease) $(10,410,841) $ 25,751,389 $ 48,204 $ (546,597) $(119,784) $ 87,973
============ ============= ========= =========== ========= =========
- --------
+ Includes automatic conversion of Class B shares in the amount of $4,261 to
Class A shares.
++ Includes automatic conversion of Class B shares in the amount of $21,376 to
Class A shares.
(1)Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
Note 6. Directors' Retirement Plan
The Directors of the SunAmerica Money Market Funds, Inc. have adopted the
AIG SunAmerica Disinterested Trustees' and Directors' Retirement Plan (the
"Retirement Plan") effective January 1, 1993 for the unaffiliated Directors.
The Retirement Plan provides generally that if an unaffiliated Director who
has at least 10 years of consecutive service as a Disinterested Director of
any of the AIG SunAmerica mutual funds (an "Eligible Director") retires
after reaching age 60 but before age 70, or who has at least 5 years of
consecutive service after reaching age 65 but before age 70, or dies while a
Director, such person will be eligible to receive a retirement or death
benefit from each AIG SunAmerica mutual fund with respect to which he or she
is an Eligible Director. As of each birthday, prior to the 70th birthday,
but in no event for a period greater than 10 years, each Eligible Director
will be credited with an amount equal to 50% of his or her regular fees
(excluding committee fees) for services as a Disinterested Director of each
AIG SunAmerica mutual fund for the calendar year in which such birthday
occurs. In addition, an amount equal to 8.5% of any amounts credited under
the preceding clause during prior years, is added to each Eligible
Director's account until such Eligible Director reaches his or her 70th
birthday. An Eligible Director may receive benefits payable under the
Retirement Plan, at his or her election, either in one lump sum or in up to
fifteen annual installments. Any undistributed amounts shall continue to
accrue interest at 8.50%. As of June 30, 2004, the Money Market Fund and
Municipal Money Market Fund had accrued $229,237 and $4,809, respectively,
for the Retirement Plan, which is included in Directors' fees on the
Statement of Assets and Liabilities. For the period ended June 30, 2004, the
Money Market Fund and the Municipal Money Market Fund made payments in the
amount of $7,137 and $81, respectively. For the period ended June 30, 2004,
the Money Market Fund and the Municipal Money Market Fund expensed $13,141
and $826, respectively, for the Retirement Plan, which is included in
Directors' fees and expenses on the Statement of Operations.
Note 7. Commitments and Contingencies
Pursuant to exemptive relief granted by the Securities and Exchange
Commission, the Funds are permitted to participate in an inter-fund lending
program among investment companies advised by SunAmerica or an affiliate.
The inter-fund lending program allows the participating Funds to borrow
money from and loan money to each other for the temporary or emergency
purposes. An inter-fund 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 June 30, 2004, none of the Funds participated in the
program.
16
SunAmerica Money Market Funds
DIRECTORS INFORMATION -- June 30, 2004 -- (unaudited)
The following table contains basic information regarding the Directors that
oversee operations of the Funds and other investment companies within the Fund
Complex.
Number of
Position Term of Portfolios In
Name, Held With Office and Fund Complex
Address and SunAmerica Length of Principal Occupation(s) Overseen by Other Directorships
Date of Birth* Fund Time Served(4) During Past 5 Years Director(1) Held by Director(2)
- ----------------------- ---------- -------------- ----------------------------- ------------- --------------------------------
Jeffrey S. Burum(5) Director 2004- Founder and CEO of National 36 None
DOB: February 27, 1963 present Housing Development Corp.
S. James Coppersmith(5) Director 1987-2004 Retired. 41 Director of BJ's Wholesale
DOB: February 21, 1933 Club, Inc.; Director Boston
Stock Exchange.
Judith L. Craven Director 2001- Retired. 74 Director, A.G. Belo
DOB: October 6, 1945 present Corporation (1992 to
present); Director, Sysco
Corporation (1996 to
present); Director, Luby's, Inc.
(1998 to present).
William F. Devin Director 2001- Retired. 74 Member of the Board of
DOB: December 30, 1938 present Governors, Boston Stock
Exchange (1985-Present).
Samuel M. Eisenstat Chairman 1985- Attorney, solo practitioner. 46 Director of North European
DOB: March 7, 1940 of the present Oil Royalty Trust.
Board
Stephen J. Gutman Director 1984- Partner and Member of 46 None
DOB: May 10, 1943 present Managing Directors, Beau
Brummel-Soho LLC
(Licensing of menswear
specialty retailing and other
activities) (June 1988 to
present)
Peter A. Harbeck(3) Director 1994- President, CEO and Director, 83 None
DOB: January 23, 1954 present AIG SunAmerica Asset
Management Corp.
("SAAMCo.") (August 1995 to
present); Director, AIG
SunAmerica Capital Services,
Inc. ("SACS") (August 1993 to
present)
Sebastiano Sterpa(5) Director 1991-2004 Founder and Chairman of the 32 Director, Real Estate
DOB: July 18, 1929 Board of the Sterpa Group Business Service and
(Real Estate Investment and Countrywide Financial.
Management) (1962 to
present)
- --------
* The business address for each Director is the Harborside Financial Center,
3200 Plaza 5, Jersey City, NJ 07311-4992.
(1) The "Fund Complex" consists of all registered investment company portfolios
for which the Business Manager serves as investment advisor or business
manager. The "Fund Complex" includes the SunAmerica Equity Funds (9 funds),
SunAmerica Income Fund (6 funds), SunAmerica Money Market Funds (2 funds),
SunAmerica Senior Floating Rate Fund, Inc. (1 fund), SunAmerica Focused
Series, Inc. (15 portfolios), Anchor Series Trust (9 portfolios), Seasons
Series Trust (19 portfolios), SunAmerica Series Trust (32 portfolios),
VALIC Company I (22 portfolios), VALIC Company II (15 funds), and AIG
Series Trust (4 funds).
(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) Directors serve until their successors are duly elected and qualified,
subject to the Director's retirement plan discussed in Note 6 of the
financial statements.
(5) Effective on February 23, 2004, S. James Coppersmith and Sebastiano Sterpa
retired as directors and Jeffrey S. Burum began serving as director.
Additional information concerning the Directors is contained in the Statement
of Additional Information and is available without charge by calling (800)
858-8850.
17
SunAmerica Money Market Funds
SPECIAL MEETING OF SHAREHOLDERS -- June 30, 2004 -- (unaudited)
Proxy Voting Results
A special Meeting of Shareholders of SunAmerica Money Market Funds, Inc. was
held on January 30, 2004. The Funds voted in favor of adopting the following
proposals.
1. To elect as Directors/Trustees the following nominees:
Jeffrey S. Burum
Votes in favor...... 1,740,408,007
Votes withheld...... 9,609,959
Dr. Judith L. Craven
Votes in favor...... 1,740,141,624
Votes withheld...... 9,876,342
William F. Devin
Votes in favor...... 1,740,916,381
Votes withheld...... 9,101,585
Samuel M. Eisenstat
Votes in favor...... 1,740,381,009
Votes withheld...... 9,636,957
Stephen J. Gutman
Votes in favor...... 1,740,375,779
Votes withheld...... 9,642,186
Peter A. Harbeck
Votes in favor...... 1,740,391,918
Votes withheld...... 9,626,048
William J. Shea*
Votes in favor...... 1,740,401,603
Votes withheld...... 9,616,362
- --------
* William Shea never assumed his position on the Board of Directors.
18
SunAmerica Money Market Funds
If you would like additional information:
[_] Call FastFacts -- our 24-hour, automated account and fund information
hotline at 800-858-8850.
[_] Visit www.sunamericafunds.com for more up-to-date information.
Thank you for your continued support.
AIG SunAmerica Mutual Funds
19
[LOGO] AIG SunAmerica
Mutual Funds
AIG SunAmerica Asset Management Corp.
Harborside Financial Center
3200 Plaza 5
Jersey City, NJ 07311-4992
Directors/Trustees Investment Adviser DISCLOSURE OF QUARTERLY
Jeffrey S. Burum AIG SunAmerica Asset PORTFOLIO HOLDINGS
Judith L. Craven Management Corp. The Fund will be required
William F. Devin Harborside Financial to file its complete
Samuel M. Eisenstat Center schedule of portfolio
Stephen J. Gutman 3200 Plaza 5 holdings with the SEC for
Peter A. Harbeck Jersey City, NJ its first and third
07311-4992 fis-cal quarters on Form
Officers N-Q for fiscal quarters
Robert M. Zakem, Distributor ending after July 9,
President AIG SunAmerica Capital 2004. Once filed, the
Donna M. Handel, Services, Inc. Fund's Form N-Q will be
Treasurer Harborside Financial available without charge
J. Steven Neamtz, Vice Center on the SEC's website at
President 3200 Plaza 5 www.sec.gov. You can also
Brian Wiese, Vice Jersey City, NJ obtain copies of Form N-Q
President 07311-4992 by (i) visiting the SEC's
Abbe P. Stein, Vice Public Reference Room in
President Shareholder Servicing Washington, DC
and Assistant Secretary Agent (information on the
Joseph P. Kelly, AIG SunAmerica Fund operation of the Public
Secretary Services, Inc. Reference Room may be
Thomas Lynch, Assistant Harborside Financial ob-tained by calling
Secretary Center 1-800-SEC-0330; (ii)
Stacey V. Morrison, 3200 Plaza 5 sending your request and
Assistant Secretary Jersey City, NJ a duplicating fee to the
Gregory R. Kingston, 07311-4992 SEC's Public Reference
Vice President and Room, Washington DC
Assistant Treasurer Custodian and Transfer 20549-0102 or (iii)
Donald H. Guire, Agent sending your request
Assistant Treasurer State Street Bank and electroni-cally to
Trust Company publicinfo@sec.gov
P.O. Box 419572
Kansas City, MO This report is submitted
64141-6572 solely for the general
information of
VOTING PROXIES ON FUND shareholders of the Fund.
PORTFOLIO SECURITIES Distribution of this
A description of the report to persons other
policies and procedures than shareholders of
that the Fund uses to the Fund is authorized
determine how to vote only in connection with a
proxies relating to currently effective
securities held in the prospectus, setting forth
Fund's portfolio which is details of the Fund,
available in the Fund's which must precede or
Statement of Additional accompany this report.
Information, may be
obtained without charge The accompanying report
upon request, by calling has not been audited by
(800) 858-8850. This independent
information is also accountants and
available from the EDGAR accordingly no opinion
database on the has been expressed
Securities and Exchange thereon.
Commission's Internet
site at
http://www.sec.gov.
Distributed by:
AIG SunAmerica Capital Services, Inc.
MMSAN-6/04
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 9. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 10. 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 first fiscal
half-year that has materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over financial
reporting.
Item 11. Exhibits.
(a) (1) Not applicable.
(2) Certification pursuant to Rule 30a-2 under the Investment Company
Act of 1940 (17 CFR 270.30a-2) attached hereto as Exhibit 99.CERT.
(3) Not applicable.
(b) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 attached hereto as Exhibit 99.906.CERT.
1
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 Money Market Funds, Inc.
By: /s/ Robert M. Zakem
----------------------------------
Robert M. Zakem
President
Date: September 7, 2004
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: September 7, 2004
By: /s/ Donna M. Handel
----------------------------------
Donna M. Handel
Treasurer
Date: September 7, 2004