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)
Vincent M. Marra
Senior Vice President & Chief Operating Officer
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) 324-6464
Date of fiscal year end: December 31
Date of reporting period: December 31, 2004
Item 1. Reports to Stockholders
SunAmerica Money Market Funds, Inc., Annual Report at December 31, 2004.
[GRAPHIC]
SunAmerica
THE RETIREMENT SPECIALIST
Money Market Funds
2004 ANNUAL REPORT
[LOGO] AIG SunAmerica
Mutual Funds
December 31, 2004 ANNUAL REPORT
SUNAMERICA MONEY MARKET FUNDS
SunAmerica Money Market (SMAXX)
SunAmerica Municipal Money Market (NMAXX)
Table of Contents
PRESIDENT'S LETTER..................................... 1
MONEY MARKET FUNDS REVIEW.............................. 2
EXPENSE EXAMPLE........................................ 4
STATEMENT OF ASSETS AND LIABILITIES.................... 6
STATEMENT OF OPERATIONS................................ 7
STATEMENT OF CHANGES IN NET ASSETS..................... 8
FINANCIAL HIGHLIGHTS................................... 9
PORTFOLIO OF INVESTMENTS............................... 12
NOTES TO FINANCIAL STATEMENTS.......................... 18
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 25
DIRECTORS AND OFFICERS INFORMATION..................... 26
December 31, 2004 ANNUAL REPORT
President's Letter
Dear Shareholder,
We are pleased to present you with the annual report for the SunAmerica
Money Market Fund and the SunAmerica Municipal Money Market Fund.
Over the past twelve months these funds have been most notably affected by a
change in the direction of interest rates. This long anticipated increase was
precipitated by two notable changes in economic data: improvement in domestic
employment numbers and a spike in inflation. On June 30th, 2004, the Federal
Open Market Committee boosted the federal funds rate 25 basis points, the first
time the Fed had raised rates since May 2000. This was followed by four
additional 25 basis point hikes in August, September, November and December,
leading to a total 125 basis point rise in the fed funds rate by the end of
2004.
In response, both the SunAmerica Money Market Fund and the SunAmerica
Municipal Money Market Fund have reduced the weighted average maturity of
securities held in these Funds. This strategy has allowed the funds to capture
higher yields as they became available. Throughout the period, the Funds also
continued to invest in the highest quality money market instruments, in keeping
with their chief objective of principal preservation.
We thank you for your continued investment in our Funds.
Sincerely,
/s/ Peter A. Harbeck
Peter A. Harbeck,
President
AIG SunAmerica Asset Management Corp.
- --------
Past performance is no guarantee of future results.
SunAmerica Money Market Fund
Brian Wiese, Portfolio Manager
AIG SunAmerica Asset Management Corp.
When 2004 opened, the federal funds rate was at a multi-decade low of 1.00%.
At the time most market participants believed the Federal Reserve Bank would
remain on hold, and keep the fed funds rate at 1.00% for the foreseeable
future, or at least until it was clear that strong output growth would be
accompanied by robust job growth as well.
The employment picture improved dramatically in March, and set the tone for
short-term interest rates for the remainder of the year. Expectations were
drastically changed as both the timing and scope of Fed tightening was
re-priced into the market. The Federal Open Market Committee embarked on its
current tightening cycle at the end of June, when it raised interest rates by
25 basis points, the first increase in four years.
Policy makers have followed up the initial tightening with additional moves
of 25 basis points at each meeting, resulting in a total of 125 basis points of
tightening for the year. At year-end, the fed funds rate had increased to 2.25%.
Early in the second quarter we began to anticipate rising short-term
interest rates and structured the Fund accordingly. By reducing the Fund's
weighted average maturity, we were better positioned to take advantage of
rising short-term rates. By the close of the reporting period the SunAmerica
Money Market Fund's weighted average maturity was slightly shorter than the
Donoghue Average.*
In addition, the Fund held a significant position in asset-backed commercial
paper, which generally offer slightly higher yields than traditional commercial
paper of similar credit quality. To further protect the Fund from interest rate
volatility, we also purchased floating rate notes.
- --------
*Donoghue Average is an average of major money market fund yields that is
issued weekly in many newspapers for 7 and 30-day yields. Donoghue also tracks
the maturities of the securities in the portfolios. Portfolios with short
maturities are an indication that fund managers have the opinion that interest
rates are going to rise.
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.
2
SunAmerica Municipal Money Market Fund
Hutch Bryan, Portfolio Manager
AIG Global Investment Corp.
Geopolitical events, a recovery in the economy and an increase in short term
rates all contributed to the performance of the bond market over the course of
the past year.
The low rate environment experienced in 2003 carried over into the first
half of 2004 for the municipal money market. The SunAmerica Municipal Money
Market Fund's key weekly index, the Bond Market Association Municipal Swap
(BMA) Index, hovered around the 1.00% mark for the first half of the year. In
the second half of the year, the BMA Index began to rise as the large
three-month municipal reinvestment period of June, July, and August faded and
an improving economy made increases in the fed funds rate a reality.* In the
last week of December the BMA Index reset at a 1.99%, which was 1.04% above
where it had begun the year.
On June 30, the Federal Open Market Committee instituted a 25 basis point
hike in the fed funds rate -- the first increase since May 2000. This marked
the beginning of an incremental rate raising that led to an overall 125 basis
point rise in the fed fund rate by year-end. As the S&P 500 recovered from its
August lows and the stock market rallied through the second half of the year,
short-term municipal yields rose. During this period the Fund saw redemptions
consistent with a general trend of investors removing assets from money market
and bond funds and allocating to equities. Despite this trend, municipal money
market funds as a class saw assets rise to a record high of $319 billion during
2004 according to the December Municipal Advisor report from Municipal Market
Advisors.
During the year the Fund purchased fixed rate municipal notes that, provided
a greater level of yield and income than available from Variable Rate Demand
Note (VRDN) securities.
Our best example of a relative value purchase was the investment in
California Revenue Anticipation Warrants. We purchased these during February at
a spread of approximately 50 basis points or .5% cheaper in yield to comparable
structure California notes. We saw an opportunity to purchase the notes before
the vote on Proposition 58 on March 2/nd/ where the public endorsed Governor
Arnold Schwarzenegger's proposal to sell $15 billion in economic recovery
bonds. The passing of that measure significantly improved California's
short-term liquidity by removing any doubt regarding payment of these bonds and
other short-term obligations of the state, and a week later the bonds were
priced equivalent to other comparable structured notes.
Our purchases during the year tended toward well-recognized, liquid names
obtained from large issuances such as the Michigan State General Obligation
Notes. We first purchased this in January and another piece of the same name in
September to replace the maturing obligation. Other names purchased were
California State Revenue Anticipation Notes maturing in June of 2005,
Philadelphia Tax and Revenue Anticipation Notes also maturing in June of 2005,
and Illinois Finance Authority Revolving Fund bonds maturing in March of 2005.
By year-end our overall allocation between fixed rate and variable rate
securities had shifted from roughly 24% fixed coupon to just fewer than 13%.
The mix of variable rate securities in the Fund shifted slightly from higher
weights in healthcare, lease bonds and industrial development to a mix of more
industrial development, power and housing bonds. These sectors still represent
a more positive spread over the BMA index relative to others.
- --------
*The Bond Market Association Municipal Swap (BMA) Index, produced by Municipal
Market Data (MMD), is a 7-day high-grade market index comprised of tax-exempt
variable rate demand obligations (VRDOs) from MMD's extensive database.
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.
3
SunAmerica Money Market Funds
EXPENSE EXAMPLE -- December 31, 2004 -- (unaudited)
Disclosure of Portfolio Expenses in Shareholder Reports
As a shareholder of a Fund in the SunAmerica Money Market Funds, Inc. (the
"Corporation"), you may incur two types of costs: (1) transaction costs,
including sales charges on purchase payments, contingent deferred sales charges
and (2) ongoing costs, including management fees; distribution and service
fees; and other Fund expenses. This Example is intended to help you understand
your ongoing costs (in dollars) of investing in the Funds and to compare these
costs with the ongoing costs of investing in other mutual funds. The Example is
based on an investment of $1,000 invested at July 1, 2004 and held until
December 31, 2004.
Actual Expenses
The "Actual" section of the table provides information about actual account
values and actual expenses. You may use the information in these columns,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the column under the heading entitled "Expenses Paid During the Six
Months" to estimate the expenses you paid on your account during this period.
For shareholder accounts in classes other than Class I, the "Expenses Paid
During the Six Months" column does not include small account fees that may be
charged if your account balance is below $500 ($250 for retirement plan
accounts). In addition, the "Expenses Paid During the Six Months" column does
not include administrative fees that may apply to qualified retirement plan
accounts. See the Funds' prospectus and/or the retirement plan document for
full description of these fees. Had these fees been included, the "Expenses
Paid During the Six Months" column would have been higher and the "Ending
Account Value" column would have been lower.
Hypothetical Example for Comparison Purposes
The "Hypothetical" section of the table provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is
not the Fund's actual return. The hypothetical account values and expenses may
not be used to estimate the actual ending account balance or expenses you paid
for the period. You may use this information to compare the ongoing costs of
investing in the Portfolios of other funds. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of other funds. For shareholder accounts in classes other
than Class I, the "Expenses Paid During the Six Months" column does not include
small account fees that may be charged if your account balance is below $500
($250 for retirement plan accounts). In addition, the "Expenses Paid During the
Six Months" column does not include administrative fees that may apply to
qualified retirement plan accounts. See the Fund's prospectus and/or the
retirement plan document for full description of these fees. Had these fees
been included, the "Expenses Paid During the Six Months" column would have been
higher and the "Ending Account Value" column would have been lower.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, including sales
charges on purchase payments, contingent deferred sales charges, small account
fees and administrative fees, if applicable to your account. Please refer to
your Prospectus and/or qualified retirement plan document for more information.
Therefore, the "Hypothetical" example is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transaction costs and other fees were
included, your costs would have been higher.
4
SunAmerica Money Market Funds
EXPENSE EXAMPLE -- December 31, 2004 -- (unaudited) (continued)
Actual Hypothetical
------------------------------------------------ ----------------------------------------------------
Ending
Account Value Ending Account
Using Actual Expenses Paid Value using Expenses Paid
Beginning Return at During the Beginning a Hypothetical 5% During the
Account Value December 31, Six Months Ended Account Value Assumed Return at Six Months Ended
Fund at July 1, 2004 2004 December 31, 2004* at July 1, 2004 December 31, 2004 December 31, 2004*
- ---- --------------- ------------- ------------------ --------------- ----------------- ------------------
Money Market
Class A..... $1,000.00 $1,003.86 $4.53 $1,000.00 $1,020.61 $4.57
Class B #... $1,000.00 $1,000.52 $7.84 $1,000.00 $1,017.29 $7.91
Class C #... $1,000.00 $1,000.55 $7.79 $1,000.00 $1,017.34 $7.86
Class I #... $1,000.00 $1,004.21 $4.03 $1,000.00 $1,021.11 $4.06
Municipal Money
Market
Class A #... $1,000.00 $1,002.51 $4.49 $1,000.00 $1,020.72 $4.53
Class B #... $1,000.00 $1,000.51 $5.75 $1,000.00 $1,019.46 $5.80
Class C #... $1,000.00 $1,000.51 $6.50 $1,000.00 $1,018.70 $6.56
Expense
Ratio
as of
December 31,
Fund 2004*
- ---- ------------
Money Market
Class A..... 0.90%
Class B #... 1.56%
Class C #... 1.55%
Class I #... 0.80%
Municipal Money
Market
Class A #... 0.89%
Class B #... 1.14%
Class C #... 1.29%
- --------
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by the 184 days divided by
366 days. These ratios do not reflect transaction costs, including sales
charges on purchase payments, contingent deferred sales charges, small
account fees and administrative fees, if applicable to your account. Please
refer to your Prospectus and/or qualified retirement plan document for more
information.
# During the stated period, the investment adviser and distributor either
waived a portion or all of the fees and assumed a portion of or all expenses
for the Funds. As a result, if these fees and expenses had not been waived,
the "Actual/Hypothetical Ending Account Value" would have been lower and the
"Actual/Hypothetical Expenses Paid During the Period" and the "Expense
Ratios" would have been higher.
5
SunAmerica Money Market Funds
STATEMENT OF ASSETS AND LIABILITIES -- December 31, 2004
Money Market Municipal Money
Fund Market Fund
-------------- ---------------
ASSETS:
Short-term investment securities, at value (unaffiliated)*........ $1,641,674,505 $ 98,764,682
Repurchase agreements (cost equals market value).................. 31,046,000 --
-------------- --------------
Total Investments............................................... 1,672,720,505 98,764,682
-------------- --------------
Cash.............................................................. 487 --
Receivable for:
Fund shares sold................................................ 31,069,853 1,887,625
Dividends and interest.......................................... 1,575,352 328,631
Prepaid expenses and other assets................................. 14,066 741
Due from investment adviser for expense reimbursements/fee waivers 2,189 589
Due from distributor for fee waivers.............................. -- 194
-------------- --------------
Total Assets.................................................... 1,705,382,452 100,982,462
-------------- --------------
LIABILITIES:
Payable for:
Fund shares redeemed............................................ 2,057,449 2,770,071
Investment advisory and management fees......................... 657,482 29,154
Distribution and service maintenance fees....................... 250,846 12,953
Transfer agent fees and expenses................................ 347,941 22,662
Directors' fees and expenses.................................... 238,269 5,985
Other accrued expenses.......................................... 160,019 47,629
-------------- --------------
Total Liabilities............................................... 3,712,006 2,888,454
-------------- --------------
Net Assets..................................................... $1,701,670,446 $ 98,094,008
============== ==============
NET ASSETS REPRESENTED BY:
Common Stock, $.001 par value (10 billion shares authorized)...... $ 1,701,653 $ 98,093
Paid-in capital................................................... 1,699,869,927 97,995,334
-------------- --------------
1,701,571,580 98,093,427
Accumulated undistributed net investment income (loss)............ 98,866 581
-------------- --------------
Net Assets........................................................ $1,701,670,446 $ 98,094,008
============== ==============
Class A:
Net assets........................................................ $1,630,353,392 $ 97,373,881
Shares outstanding................................................ 1,630,337,106 97,373,174
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge)...... $ 1.00 $ 1.00
============== ==============
Class B:
Net assets........................................................ $ 42,437,477 $ 496,879
Shares outstanding ............................................... 42,436,095 496,819
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge)...... $ 1.00 $ 1.00
============== ==============
Class C+:
Net assets........................................................ $ 16,984,756 $ 223,248
Shares outstanding ............................................... 16,985,074 223,260
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge)...... $ 1.00 $ 1.00
============== ==============
Class I:
Net assets........................................................ $ 11,894,821 $ --
Shares outstanding................................................ 11,894,822 --
Net asset value, offering and redemption price per share.......... $ 1.00 $ --
============== ==============
*Amortized cost of short-term investment securities (unaffiliated) $1,641,674,505 $ 98,764,682
============== ==============
- --------
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares
See Notes to Financial Statements
6
SunAmerica Money Market Funds
STATEMENT OF OPERATIONS -- For the year ended December 31, 2004
Money Market Municipal Money
Fund Market Fund
------------ ---------------
INVESTMENT INCOME:
Interest (unaffiliated)....................... $23,866,717 $ 1,296,918
Dividends (unaffiliated)...................... -- 859
----------- -----------
Total investment income.................... 23,866,717 1,297,777
----------- -----------
EXPENSES:
Investment advisory and management fees...... 7,910,184 373,773
Distribution and service maintenance fees:
Class A.................................... 2,450,175 156,182
Class B.................................... 434,616 22,121
Class C+................................... 198,623 1,918
Transfer agent fees and expenses:
Class A.................................... 3,644,696 235,389
Class B.................................... 126,953 5,637
Class C+................................... 54,361 2,357
Class I.................................... 32,250 --
Registration fees:
Class A.................................... 387 18,242
Class B.................................... 9,347 9,213
Class C+................................... 9,572 9,849
Class I.................................... 9,055 --
Custodian fees............................... 278,689 56,628
Reports to shareholders...................... 595,246 14,185
Audit and tax fees........................... 37,947 39,183
Legal fees .................................. 44,431 6,986
Directors' fees and expenses................. 106,211 5,274
Other expenses............................... 48,923 9,344
----------- -----------
Total expenses before fee waivers,
expense reimbursements and custody
credits................................... 15,991,666 966,281
Fees waived and expenses reimbursed by
investment adviser and distributor (Note
3)........................................ (282,296) (31,784)
Custody credits earned on cash balances.... (8,296) (3,628)
----------- -----------
Net expenses............................... 15,701,074 930,869
----------- -----------
Net investment income (loss).................. 8,165,643 366,908
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS.................... $ 8,165,643 $ 366,908
=========== ===========
- --------
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares
See Notes to Financial Statements
7
SunAmerica Money Market Funds
STATEMENT OF CHANGES IN NET ASSETS
Municipal Money
Money Market Fund Market Fund
------------------------------ ------------------------------
For the For the For the For the
year ended year ended year ended year ended
December 31, December 31, December 31, December 31,
2004 2003 2004 2003
-------------- -------------- -------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss)................. $ 8,165,643 $ 5,654,971 $ 366,908 $ 293,449
-------------- -------------- -------------- --------------
Increase (decrease) in net assets resulting
from operations............................. $ 8,165,643 $ 5,654,971 $ 366,908 $ 293,449
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A).............. (8,054,333) (5,587,357) (364,223) (288,875)
Net investment income (Class B).............. (30,639) (17,891) (2,471) (3,816)
Net investment income (Class C)+............. (14,024) (8,618) (214) (176)
Net investment income (Class I).............. (66,647) (39,889) -- --
-------------- -------------- -------------- --------------
Total distributions to shareholders.......... (8,165,643) (5,653,755) (366,908) (292,867)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from capital share transactions
(Note 5).................................... (17,388,052) (137,050,057) (19,134,111) 25,292,765
-------------- -------------- -------------- --------------
Total increase (decrease) in net assets...... (17,388,052) (137,048,841) (19,134,111) 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*............................... $1,701,670,446 $1,719,058,498 $ 98,094,008 $ 117,228,119
============== ============== ============== ==============
*Includes accumulated undistributed net
investment income (loss).................... $ 98,866 $ 98,866 $ 581 $ 582
============== ============== ============== ==============
- --------
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares
See Notes to Financial Statements
8
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
- -
12/31/00............ $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(6) 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
12/31/04............ 1.000 0.005 (0.005) 1.000 0.50 1,630,353 0.90 0.49
Class B
- -
12/31/00............ $1.000 $0.046 $(0.046) $1.000 4.72% $ 24,090 1.76%(4) 4.62%(4)
12/31/01............ 1.000 0.025 (0.025) 1.000 2.57 55,066 1.75(4) 3.76(4)
12/31/02............ 1.000 0.003 (0.003) 1.000 0.28(6) 64,815 1.64(4) 0.26(4)
12/31/03............ 1.000 0.000 0.000 1.000 0.03 44,529 1.18(4) 0.03(4)
12/31/04............ 1.000 0.001 (0.001) 1.000 0.07 42,437 1.32(4) 0.06(4)
Class C+
- -
12/31/00............ $1.000 $0.046 $(0.046) $1.000 4.73% $ 11,012 1.75%(4) 4.67%(4)
12/31/01............ 1.000 0.026 (0.026) 1.000 2.63 33,644 1.69(4) 3.51(4)
12/31/02............ 1.000 0.003 (0.003) 1.000 0.27(6) 30,285 1.66(4) 0.26(4)
12/31/03............ 1.000 0.000 0.000 1.000 0.03 20,290 1.18(4) 0.03(4)
12/31/04............ 1.000 0.001 (0.001) 1.000 0.07 16,985 1.33(4) 0.06(4)
Class I
- -
11/16/01-12/31/01(3) $1.000 $0.002 $(0.002) $1.000 0.20% $ 8,336 0.80%(4)(5) 0.84%(4)(5)
12/31/02............ 1.000 0.011 (0.011) 1.000 1.13(6) 9,195 0.80(4) 1.12(4)
12/31/03............ 1.000 0.004 (0.004) 1.000 0.43 9,636 0.77(4) 0.43(4)
12/31/04............ 1.000 0.006 (0.006) 1.000 0.58 11,895 0.80(4) 0.59(4)
- --------
(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)Commencement of sales of respective class of shares
(4)Net of the following expense reimbursements/waivers (based on average net
assets):
12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
-------- -------- -------- -------- --------
Class B. -- % -- % 0.04% 0.51% 0.39%
Class C+ 0.18 0.05 0.04 0.53 0.39
Class I. -- 0.24 0.14 0.02 0.09
(5)Annualized
(6)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.
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares
See Notes to Financial Statements
9
SunAmerica Money Market Funds
FINANCIAL HIGHLIGHTS
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
-------
10/31/00(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
12/31/04............... 1.000 0.004 (0.004) 1.000 0.36 97,374 0.87 0.35
Class B
- -
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
12/31/04............... 1.000 0.001 (0.001) 1.000 0.10 497 1.02 0.10
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
12/31/04............... 1.000 0.001 (0.001) 1.000 0.10 223 1.18 0.10
- --------
(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/waivers (based on average net
assets):
10/31/00 10/31/01 12/31/01(3) 12/31/02 12/31/03 12/31/04
-------- -------- ----------- -------- -------- --------
Class A. 0.47% 1.18% 2.51% 0.20% 0.03% 0.00%
Class B. 0.46 1.18 2.59 1.25 1.03 0.87
Class C+ 0.41(3) 1.18 7.84 9.68 7.45 4.20
(6)The financial information for the periods prior to November 16, 2001
reflects the financial information for the North American Municipal Money
Market Fund.
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares
See Notes to Financial Statements
10
SunAmerica Money Market Fund
PORTFOLIO PROFILE -- December 31, 2004 -- (unaudited)
Industry Allocation*
Government Agencies.............. 20.4%
Finance.......................... 16.2
Trade and Term Receivables....... 16.1
Banking.......................... 11.5
Trade Receivables................ 10.9
Receivable Company............... 9.4
Securities Holding Company....... 7.6
Loan Receivables................. 3.8
Repurchase Agreements............ 1.8
Municipalities................... 0.6
----
98.3%
====
Weighted average days to maturity 31.7
Credit Quality Allocation @#
Government........... 20.7%
Repurchase Agreements 1.9
A-1.................. 77.4
-----
100.0%
=====
- --------
* Calculated as a percentage of net assets.
@ Source: Standard and Poors
# Calculated as a percentage of total debt issues.
11
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2004
Principal Value
Security Description Amount (Note 2)
CERTIFICATES OF DEPOSIT -- 8.5%
Citibank N.A.
2.06% due 01/25/05+.......................... $25,000,000 $ 25,000,000
First Tennessee Bank
2.27% due 01/28/05+......................... 20,000,000 20,000,000
2.33% due 01/18/05+......................... 25,000,000 25,000,000
HBOS Treasury Services
2.19% due 02/11/05+.......................... 25,000,000 25,000,000
Wells Fargo Bank N.A.
2.16% due 02/07/05.......................... 25,000,000 25,000,000
2.33% due 02/03/05+......................... 25,000,000 25,000,000
------------
Total Certificates of Deposit
(amortized cost $145,000,000)............... 145,000,000
------------
COMMERCIAL PAPER -- 61.1%
Apreco, LLC (LOC -- Citibank N.A.)
2.30% due 01/11/05*......................... 25,000,000 24,984,028
2.34% due 01/14/05*......................... 25,000,000 24,978,875
Amsterdam Funding Corp. (LOC -- ABN AMRO
Bank)
2.33% due 02/02/05*.......................... 25,000,000 24,948,222
Atlantis One Funding
2.19% due 02/09/05*......................... 25,000,000 24,940,687
BNP Paribas
2.26% due 01/07/05+......................... 25,000,000 25,000,000
Barton Capital, LLC (LOC -- Societe Generale)
2.31% due 02/08/05*......................... 25,000,000 24,939,042
Beta Finance, Inc.
2.30% due 01/08/05*+........................ 25,000,000 25,000,000
CRC Funding, LLC
2.36% due 02/10/05*......................... 25,000,000 24,934,444
2.36% due 02/11/05*......................... 25,000,000 24,932,805
CXC, LLC
2.00% due 01/14/05*......................... 15,000,000 14,989,167
Cancara Asset Securitization, Ltd.
2.10% due 01/27/05*......................... 20,000,000 19,969,667
2.27% due 02/18/05*......................... 25,000,000 24,924,333
Citigroup Global Markets Holdings, Inc.
2.34% due 02/04/05.......................... 27,000,000 26,940,330
Compass Securitization, LLC (LOC -- Ambac
Assurance Corp.)
2.35% due 01/25/05*......................... 25,000,000 24,960,833
CAFCO, LLC
2.03% due 01/18/05*......................... 25,000,000 24,976,035
2.24% due 02/10/05*......................... 25,000,000 24,937,778
Delaware Funding Corp., LLC (LOC -- JP Morgan)
2.20% due 01/13/05*......................... 25,000,000 24,981,667
2.35% due 01/18/05*......................... 25,000,000 24,972,257
Edison Asset Securitization, LLC
(LOC -- GE Capital Corp.)
2.00% due 01/13/05*......................... 15,000,000 14,990,000
2.13% due 02/02/05*......................... 26,000,000 25,950,773
2.20% due 02/08/05*......................... 25,000,000 24,941,944
Galaxy Funding, Inc.
2.04% due 01/24/05*......................... 25,000,000 24,967,417
2.23% due 02/10/05*......................... 25,000,000 24,938,055
General Electric Capital Corp.
2.26% due 02/15/05.......................... 25,000,000 24,929,375
2.32% due 01/31/05.......................... 25,000,000 24,951,667
Giro Funding U.S. Corp.
2.01% due 01/18/05*......................... 30,000,000 29,971,525
Goldman Sachs Group, Inc.
2.33% due 01/03/05*+........................ 25,000,000 25,000,000
Principal Value
Security Description Amount (Note 2)
---------------------------------------------------------------------
Govco, Inc.
2.01% due 01/18/05*..................... $15,000,000 $ 14,985,762
2.23% due 02/15/05*..................... 25,000,000 24,930,313
Greyhawk Funding, LLC
2.25% due 02/16/05*..................... 25,000,000 24,928,125
2.34% due 01/18/05*..................... 25,000,000 24,972,375
Old Line Funding, LLC
2.36% due 02/07/05+..................... 25,000,000 24,939,361
Preferred Receivables Funding
2.34% due 01/26/05*..................... 25,000,000 24,959,375
2.35% due 01/31/05*..................... 25,000,000 24,951,042
Sheffield Receivables (LOC -- Barclay Bank
Plc)
2.16% due 01/07/05*..................... 25,000,000 24,991,000
2.18% due 01/04/05*..................... 25,000,000 24,995,458
Surrey Funding Corp. (LOC -- Barclay Bank
Plc)
2.13% due 02/02/05*..................... 24,000,000 23,954,560
2.31% due 01/13/05*..................... 25,000,000 24,980,750
Sydney Capital Corp.
2.25% due 01/04/05*..................... 25,000,000 24,995,313
2.31% due 02/04/05*..................... 20,000,000 19,956,367
UBS Finance, LLC
2.39% due 01/04/05...................... 25,000,000 24,995,021
Windmill Funding Corp. (LOC -- ABN AMRO
Bank)
2.33% due 02/04/05*..................... 50,000,000 49,889,972
--------------
Total Commercial Paper
(amortized cost $1,040,375,720)......... 1,040,375,720
--------------
U.S. GOVERNMENT AGENCIES -- 20.4%
Agency for International Development
Panama:
2.74% due 01/04/05+..................... 2,888,876 2,899,056
--------------
Federal Home Loan Bank:
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
2.26% due 01/19/05...................... 17,500,000 17,480,225
2.34% due 01/25/05+..................... 25,000,000 24,999,718
--------------
142,479,943
--------------
Federal Home Loan Mortgage Corp.:
1.50% due 02/14/05+..................... 19,000,000 19,000,000
2.13% due 01/04/05...................... 10,000,000 9,998,225
2.27% due 01/28/05...................... 22,000,000 21,962,545
2.27% due 02/01/05...................... 20,000,000 19,960,906
--------------
70,921,676
--------------
Federal National Mortgage Association:
1.33% due 02/23/05...................... 20,000,000 20,000,000
1.34% due 03/04/05...................... 20,000,000 20,000,000
1.38% due 02/14/05...................... 20,000,000 20,000,000
1.50% due 05/09/05...................... 20,000,000 20,000,000
1.65% due 02/08/05+..................... 30,000,000 30,000,000
2.25% due 01/03/05+..................... 20,000,000 19,998,871
--------------
129,998,871
--------------
Total U.S. Government Agencies
(amortized cost $346,299,546)........... 346,299,546
--------------
12
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2004 -- (continued)
Principal Value
Security Description Amount (Note 2)
MEDIUM TERM NOTES -- 5.9%
Merrill Lynch & Co.
2.24% due 02/17/05+.................. $20,000,000 $ 20,000,000
Merrill Lynch & Co.
2.37% due 01/31/05+.................. 30,000,000 30,000,000
Sigma Finance, Inc.
2.36% due 01/21/05*+................. 25,000,000 24,999,239
White Pine Finance, LLC
2.37% due 01/18/05*+................. 25,000,000 25,000,000
--------------
Total Medium Term Notes
(amortized cost $99,999,239)........ 99,999,239
--------------
TAXABLE MUNICIPAL MEDIUM TERM
NOTES -- 0.6%
Illinois Student Assistance Commission
(LOC -- Bank of America)
2.51% due 01/05/05+
(amortized cost $10,000,000)......... 10,000,000 10,000,000
--------------
Total Short-Term Investment
Securities -- 96.5%
(amortized cost $1,641,674,505)..... 1,641,674,505
--------------
REPURCHASE AGREEMENTS -- 1.8%
State Street Bank & Trust Co.
Joint Repurchase Agreement(1)........ 46,000 46,000
UBS Securities, LLC
Joint Repurchase Agreement(1)........ 31,000,000 31,000,000
--------------
Total Repurchase Agreements
(amortized cost $31,046,000)........ 31,046,000
--------------
Value
Security Description (Note 2)
-----------------------------------------------------------
TOTAL INVESTMENTS
(amortized cost $1,672,720,505#)... 98.3% $1,672,720,505
Assets in excess of other liabilities 1.7 28,949,941
----- --------------
NET ASSETS........................... 100.0% $1,701,670,446
===== ==============
- --------
* 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. The Fund has no
rights to demand registration of these securities. At December 31,2004, the
aggregate value of these securities was $938,619,205 representing 55.2% of
net assets. Unless otherwise indicated, these securities are not considered
to be illiquid.
# At December 31, 2004, the cost of securities for federal income tax
purposes was the same for book purposes.
+ Variable rate security -- the rate reflected is as of December 31, 2004,
maturity date reflects next reset date.
(1) See Note 2 for details of the Joint Repurchase Agreement
LOC --Letter of credit
See Notes to Financial Statements
13
SunAmerica Municipal Money Market Fund
PORTFOLIO PROFILE -- December 31, 2004 -- (unaudited)
State Allocation*
Michigan......................... 10.0%
Pennsylvania..................... 9.8
Ohio............................. 6.6
Arizona.......................... 6.4
North Carolina................... 6.4
Illinois......................... 6.3
California....................... 5.7
South Carolina................... 5.0
Florida.......................... 4.7
Kentucky......................... 4.5
North Dakota..................... 3.8
Alabama.......................... 3.1
Colorado......................... 3.0
Missouri......................... 2.9
District of Columbia............. 2.7
Connecticut...................... 2.2
Kansas........................... 2.1
Wisconsin........................ 2.0
Georgia.......................... 1.8
New York......................... 1.8
Iowa............................. 1.7
Texas............................ 1.7
Nebraska......................... 1.5
Washington....................... 1.5
Delaware......................... 1.4
Utah............................. 0.7
Wyoming.......................... 0.7
Tennessee........................ 0.4
South Dakota..................... 0.2
Registered Investment Companies.. 0.1
-----
100.7%
=====
Weighted average days to maturity 36.7
Credit Quality Allocation @(1)
A-1...................... 97.1%
N/R...................... 2.8
Registered Investment Co. 0.1
-----
100.0%
=====
- --------
* Calculated as a percentage of net assets.
@ Source: Standard and Poors
(1)Calculated as a percentage of total debt issues.
14
SunAmerica Municipal Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2004
Principal Value
Security Description Amount (Note 2)
SHORT-TERM INVESTMENT SECURITIES -- 100.7%
Alabama -- 3.1%
Stevenson, Alabama Industrial Development
Board Environmental Improvement
(LOC -- JP Morgan Chase Bank)
2.03% due 01/05/05+............................. $3,000,000 $ 3,000,000
------------
Arizona -- 6.4%
Arizona Health Facilities Authority
2.00% due 01/05/05+............................. 935,000 935,000
Maricopa County, Arizona Industrial
Development Authority, Series A
(LOC -- Wells Fargo Bank N.A.)
2.09% due on 01/06/05+.......................... 1,510,000 1,510,000
Maricopa County, Arizona Industrial
Development Authority
(LOC -- Harris Trust & Savings Bank)
2.12% due 01/06/05+............................. 925,000 925,000
Mesa, Arizona Industrial Development
Authority, Series B
1.99% due 01/05/05+............................. 2,930,000 2,930,000
------------
6,300,000
------------
California -- 5.7%
California Housing Finance Agency, Series H
2.03% due 01/05/05+............................. 600,000 600,000
California State Revenue Anticipation Notes,
Series A
3.00% due 06/30/05.............................. 5,000,000 5,030,808
------------
5,630,808
------------
Colorado -- 3.0%
Colorado Springs, Colorado Revenue
(LOC -- Wells Fargo Bank N.A.)
2.09% due 01/06/05+............................. 1,495,000 1,495,000
Crystal Valley, Colorado Metropolitan District 1
(LOC -- Wells Fargo Bank N.A.)
1.99% due 01/06/05+............................. 600,000 600,000
Durango, Colorado Revenue
(LOC -- Wells Fargo Bank N.A.)
2.09% due 01/06/05+............................. 835,000 835,000
------------
2,930,000
------------
Connecticut -- 2.2%
Connecticut State Housing Finance Authority
2.02% due 01/06/05+............................. 2,200,000 2,200,000
------------
Delaware -- 1.4%
Delaware State Economic Development
Authority
2.00% due 01/06/05+............................. 100,000 100,000
Delaware State Economic Development
Authority
2.00% due 01/06/05+............................. 1,300,000 1,300,000
------------
1,400,000
------------
District of Columbia -- 2.7%
District of Columbia Revenue
(LOC -- Wachovia Bank N.A.)
1.99% due 01/06/05+............................. 2,610,000 2,610,000
------------
Principal Value
Security Description Amount (Note 2)
-------------------------------------------------------------------------
Florida -- 4.7%
Lakeland, Florida Energy Systems, Series A
1.88% due 01/05/05+............................ $2,600,000 $ 2,600,000
Lakeland, Florida Energy Systems
1.88% due 01/05/05+............................ 2,000,000 2,000,000
------------
4,600,000
------------
Georgia -- 1.8%
Fulton County, Georgia Development
Authority (LOC -- Wachovia Bank N.A.)
1.99% due 01/06/05+............................ 1,800,000 1,800,000
------------
Illinois -- 6.3%
Chicago, Illinois O'Hare International Airport,
Series B (LOC -- Societe Generale)
2.05% due 01/05/05+............................ 845,000 845,000
Chicago, Illinois Park District, Series B
4.00% due 01/01/05............................. 600,000 600,000
Chicago, Illinois Waterworks
(LOC -- Bank One N.A.)
2.00% due 01/05/05+............................ 500,000 500,000
Illinois Finance Authority
3.00% due 03/01/05............................. 2,305,000 2,310,822
Warren County, Illinois Revenue
(LOC -- Wells Fargo Bank N.A.)
2.09% due 01/06/05+............................ 1,955,000 1,955,000
------------
6,210,822
------------
Iowa -- 1.7%
Iowa Financial Authority, Series F
(LOC -- Wells Fargo Bank N.A.)
1.98% due 01/06/05+............................ 1,100,000 1,100,000
Iowa Finance Authority Childrens Services,
Series B (LOC -- Wells Fargo Bank N.A.)
2.09% due 01/06/05+............................ 400,000 400,000
Storm Lake, Iowa Higher Education Facilities
2.14% due 01/06/05+............................ 200,000 200,000
------------
1,700,000
------------
Kansas -- 2.1%
Shawnee, Kansas Industrial Revenue
(LOC -- JP Morgan Chase Bank)
2.00% due 01/03/05+............................ 2,050,000 2,050,000
------------
Kentucky -- 4.5%
Breckinridge County, Kentucky Lease
Program (LOC -- U.S. Bank N.A.)
2.00% due 01/05/05+............................ 1,220,000 1,220,000
Breckinridge County, Kentucky Lease
Program, Series A (LOC -- U.S. Bank N.A.)
2.00% due 01/05/05+............................ 3,215,000 3,215,000
------------
4,435,000
------------
Michigan -- 10.0%
Detroit, Michigan Sewage Disposal, Series C-1
1.95% due 01/06/05+............................ 1,700,000 1,700,000
Detroit, Michigan Sewage Disposal, Series C-2
1.95% due 01/06/05+............................ 3,000,000 3,000,000
Michigan State General Obligation Notes,
Series A
3.50% due 09/30/05+............................ 4,500,000 4,549,470
15
SunAmerica Municipal Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2004 -- (continued)
Principal Value
Security Description Amount (Note 2)
SHORT-TERM INVESTMENT SECURITIES (continued)
Michigan (continued)
Michigan State Strategic Funding Limited
Obligation (LOC -- Fifth Third Bank)
2.05% due 01/05/05+............................ $ 570,000 $ 570,000
----------
9,819,470
----------
Missouri -- 2.9%
Missouri Higher Education Student Loan
Authority, Series B
2.05% due 01/05/05+............................ 1,300,000 1,300,000
St Louis, Missouri Planned Industrial Expansion
Authority (LOC -- Bank of America N.A.)
2.05% due 01/05/05+............................ 1,500,000 1,500,000
----------
2,800,000
----------
Nebraska -- 1.5%
Douglas County, Nebraska Solid Waste
Disposal, Series A (LOC -- Wachovia Bank N.A.)
2.05% due 01/06/05+............................ 1,500,000 1,500,000
----------
New York -- 1.8%
New York City Trust for Cultural Resources
(LOC -- JP Morgan Chase Bank)
1.98% due 01/06/05+............................ 1,800,000 1,800,000
----------
North Carolina -- 6.4%
Charlotte, North Carolina Certificates of
Participation, Series B
2.05% due 01/06/05+............................ 4,000,000 4,000,000
Durham, North Carolina General Obligation
1.99% due 01/06/05+............................ 300,000 300,031
Greensboro, North Carolina Enterprise System,
Series B
2.00% due 01/06/05+............................ 900,000 900,000
Mecklenburg County, North Carolina Certificates
of Participation
2.00% due 01/06/05+............................ 800,000 800,000
Mecklenburg County, North Carolina Certificates
of Participation
2.05% due 01/06/05+............................ 250,000 250,000
----------
6,250,031
----------
North Dakota -- 3.8%
North Dakota State Housing Finance Agency,
Series A
2.01% due 01/05/05+............................ 3,700,000 3,700,000
----------
Ohio -- 6.6%
Cleveland, Ohio Airport System, Series D
(LOC -- WestLb AG)
2.01% due 01/05/05+............................ 2,965,000 2,965,000
Franklin County, Ohio Hospital, Series B
(LOC -- Citibank N.A.)
1.97% due 01/06/05+............................ 3,470,000 3,470,000
----------
6,435,000
----------
Pennsylvania -- 9.8%
Delaware Valley, Pennsylvania Regional
Financial Authority, Series A
(LOC -- Toronto -- Dominion Bank)
1.98% due 01/05/05+............................ 300,000 300,000
Principal Value
Security Description Amount (Note 2)
-----------------------------------------------------------------------
Pennsylvania (continued)
Delaware Valley, Pennsylvania Regional
Financial Authority, Series C
(LOC -- Toronto - Dominion Bank)
1.98% due 01/05/05+............................ $1,700,000 $1,700,000
Pennsylvania State Higher Education Assistance
Agency
1.93% due 01/05/05+............................ 1,400,000 1,400,000
Pennsylvania State Turnpike Commission,
Series A
2.00% due 01/05/05+............................ 1,000,000 1,000,000
Philadelphia, Pennsylvania Tax & Revenue
Anticipation Notes
3.00% due 06/30/05............................. 5,000,000 5,033,264
Philadelphia, Pennsylvania Authority for
Industrial Development
(LOC -- GE Capital Corp.)
1.95% due 01/05/05+............................ 200,000 200,000
----------
9,633,264
----------
South Carolina -- 5.0%
South Carolina Jobs Economic Development
Authority (LOC -- Bank of America N.A.)
2.05% due 01/05/05+............................ 1,800,000 1,800,000
Piedmont Municipal Power Agency Electric
Revenue, Series B-6
1.98% due 01/05/05+............................ 3,100,000 3,100,000
----------
4,900,000
----------
South Dakota -- 0.2%
Lower Brule Sioux Tribe, South Dakota General
Obligation Notes (LOC -- Wells Fargo Bank
N.A.)
1.99% due 01/06/05+............................ 135,000 135,000
----------
Tennessee -- 0.4%
Nashville & Davidson County, Tennessee
Industrial Development Board
(LOC -- Bank of America N.A.)
1.94% due 01/03/05+............................ 300,000 300,000
----------
Texas -- 1.7%
Brownsville, Texas Utility Systems, Series A
1.97% due 01/05/05+............................ 1,610,000 1,610,000
Gulf Coast Waste Disposal Authority, Series A
(LOC -- JP Morgan Chase Bank)
2.05% due 01/06/05+............................ 100,000 100,000
----------
1,710,000
----------
Utah -- 0.7%
Eagle Mountain, Utah Gas & Electric
Revenue (LOC -- BNP Paribas)
2.00% due 01/06/05+............................ 645,000 645,000
----------
Washington -- 1.5%
Port Seattle, Washington Industrial
Development (LOC -- Citibank N.A.)
2.02% due 01/05/05+............................ 1,500,000 1,500,000
----------
Wisconsin -- 2.0%
Wisconsin State Health & Educational Facilities
Authority (LOC -- U.S. Bank Trust N.A.)
1.98% due 01/06/05+............................ 2,000,000 2,000,000
----------
16
SunAmerica Municipal Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2004 -- (continued)
Principal Value
Security Description Amount (Note 2)
-----------------------------------------------------------------
SHORT-TERM INVESTMENT SECURITIES (continued)
Wyoming -- 0.7%
Wyoming Community Development Authority,
Series A
1.99% due 01/06/05+..................... $700,000 $ 700,000
-----------
Registered Investment Companies -- 0.1%
SSGA Tax Free Money Market -- Class A
1.31% due 01/03/05+..................... 70,287 70,287
-----------
TOTAL SHORT-TERM INVESTMENT SECURITIES
(amortized cost $98,764,682*)............ 100.7% 98,764,682
Liabilities in excess of other assets...... (0.7) (670,674)
-------- -----------
NET ASSETS................................. 100.0% $98,094,008
======== ===========
- --------
* At December 31, 2004, the cost of securities for federal income tax purposes
was the same for book purposes.
+ Variable rate security -- the rate reflected is as of December 31, 2004;
maturity date reflects next reset date.
LOC -- Letter of Credit
See Notes to Financial Statements
17
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2004
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 in high-quality money market
instruments 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 one year of original 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 of 1.00%.
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 payments except Class B and Class C shares are subject to
higher distribution fee rates.
Indemnifications: Under the Funds' 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
Funds' 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.
18
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2004 -- (continued)
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from these estimates. The
following is a summary of the significant accounting policies followed by
the Funds in the preparation of its financial statements:
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: The Funds, along with other affiliated registered
investments companies, pursuant to exemptive relief granted by the
Securities and Exchange Commission, may transfer uninvested cash balances
onto a single joint account, the daily aggregate balance of which is
invested in one or more repurchase agreements collateralized by the U.S.
Treasury or federal agency obligations. For repurchase agreements and joint
repurchase agreements, 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 December 31, 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 0.04% $46,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
State Street Bank & Trust Co., dated December 31, 2004, bearing interest at
a rate of 1.55% per annum, with a principal amount of $104,311,000, a
repurchase price of $104,324,474, and a maturity date of January 3, 2005.
The repurchase agreement is collateralized by the following:
Interest Maturity
Type of Collateral Rate Date Principal Amount Market Value
- ------------------ -------- -------- ---------------- ------------
U.S. Treasury Notes 1.50% 07/31/05 $40,800,000 $40,805,834
U.S. Treasury Notes 2.38 08/31/06 4,410,000 4,398,975
U.S. Treasury Notes 2.50 09/30/06 20,455,000 20,402,062
U.S. Treasury Notes 3.00 11/15/07 20,455,000 20,401,940
U.S. Treasury Notes 3.00 02/15/09 20,555,000 20,400,838
In addition, at December 31, 2004, the following Fund held an undivided
interest in a joint repurchase agreement with UBS Securities, LLC:
Percentage Principal
Interest Amount
---------- -----------
Money Market Fund 12.40% $31,000,000
19
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2004 -- (continued)
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
UBS Securities, LLC, dated December 31, 2004, bearing interest at a rate of
1.60% per annum, with a principal amount of $250,000,000, a repurchase price
of $250,033,333, and a maturity date of January 3, 2005. The repurchase
agreement is collateralized by the following:
Interest Maturity
Type of Collateral Rate Date Principal Amount Market Value
- ------------------ -------- -------- ---------------- ------------
U.S. Treasury Inflation Index Bonds 3.38% 04/15/32 $ 50,000,000 $ 71,187,500
U.S. Treasury Inflation Index Bonds 3.88 04/15/29 114,974,000 183,814,683
Securities Transactions, Investment Income, Dividends and Distributions to
Shareholders: Security transactions are recorded on a trade date basis.
Realized gains and losses on sales of investments are calculated on the
identified cost basis. Interest income, including the accretion of discount
and amortization of premium, is accrued daily; dividend income is recorded
on the ex-dividend date.
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 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 in
accordance with federal income tax regulations, which may differ from U.S.
generally accepted accounting principles. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within
the capital accounts at fiscal year end based on their federal tax-basis
treatment; temporary differences do not require reclassification. Net
investment income (loss), net realized gain (loss), and net assets are not
affected by these reclassifications.
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 Board of 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 has contractually agreed to waive fees or reimburse expenses, if
necessary, at or below the following percentages of each Fund's average net
assets.
20
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2004 -- (continued)
Fund Percentage
- ---- ----------
Money Market Class I............. 0.80%
Municipal Money Market Class A... 0.95
Municipal Money Market Class B... 1.70
Municipal Money Market Class C(1) 1.70
SAAMCo has voluntarily agreed to waive fees or reimburse expenses for the
period ended December 31, 2004 at the following percentages of each Fund's
average net assets.
Fund Percentage
- ---- ----------
Municipal Money Market Class A... 0.00%
Municipal Money Market Class B... 0.01
Municipal Money Market Class C(1) 0.01
For the period ended December 31, 2004, SAAMCo agreed to contractually and
voluntarily reimburse expenses as follows:
Fund
- ----
Money Market Class I............. $10,468
Municipal Money Market Class A... 1,475
Municipal Money Market Class B... 4,957
Municipal Money Market Class C(1) 7,869
The contractual expense waivers and fee reimbursements will continue
indefinitely, subject to termination by the Directors, including a majority
of the Independent Directors. The voluntary waivers and/or reimbursements
are expected to continue but may be terminated at any time. The exact amount
of the voluntary waivers and/or reimbursements may change on a day-to-day
basis.
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 "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, other than Class I, 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 December 31, 2004, SACS received fees (see
Statement of Operations) based upon the aforementioned rates.
- --------
(1) Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
21
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2004 -- (continued)
For the period ended December 31, 2004, SACS voluntarily reimbursed the
following expenses:
Fund
- ----
Money Market Class B............. $186,003
Money Market Class C(1).......... 85,825
Municipal Money Market Class B... 16,395
Municipal Money Market Class C(1) 1,088
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 contingent deferred
sales charges 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 December 31, 2004, the proceeds received from sales
redemptions (and paid out to affiliated and non-affiliated broker-dealers)
and redemptions are as follows:
Class A Class A Class B
------------------------------------- ------------- -------------
Contingent Contingent
Sales Affiliated Non-affiliated Deferred Deferred
Fund Charges Broker-dealers Broker-dealers Sales Charges Sales Charges
- ---- ------- -------------- -------------- ------------- -------------
Money Market.......... $ -- $ -- $ -- $10,000 $301,529
Municipal Money Market -- -- -- -- 4,993
Class C(1) Class C(1)
------------------------------------- ----------
Contingent
Deferred
Sales Affiliated Non-affiliated Sales
Fund Charges Broker-dealers Broker-dealers Charges
- ---- ------- -------------- -------------- ----------
Money Market.......... $6,870 $1,672 $5,198 $34,780
Municipal Money Market 12 11 1 19,681
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 December 31, 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
December 31,
Fund Expenses 2004
- ---- ---------- ------------
Money Market Class A............. $3,596,088 $299,090
Money Market Class B............. 106,308 8,027
Money Market Class C(1).......... 48,583 3,442
Money Market Class I............. 24,734 2,141
Municipal Money Market Class A... 229,233 18,191
Municipal Money Market Class B... 5,411 96
Municipal Money Market Class C(1) 469 38
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.
- --------
(1) Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
22
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2004 -- (continued)
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.
Distributable Earnings Tax Distributions
---------------------------------------- --------------------
For the year ended December 31, 2004
-------------------------------------------------------------
Long-term Gains/ Unrealized Long-Term
Ordinary Capital Loss Appreciation Ordinary Capital
Fund Income Carryover (Depreciation) Income Gains
- ---- -------- ---------------- -------------- ---------- ---------
Money Market.......... $347,345 $ -- $ -- $8,165,643 $ --
Municipal Money Market 30,469 -- -- 366,908 --
Tax Distributions
--------------------
For the year ended
December 31, 2003
--------------------
Long-Term
Ordinary Capital
Fund Income Gains
- ---- ---------- ---------
Money Market................................................... $322,099 --
Municipal Money Market......................................... 4,646 --
Under the current law, capital losses related to securities realized after
October 31 and prior to the Fund's fiscal year end may be deferred as
occurring the first day of the following year. For the fiscal year ended
December 31, 2004, the Funds elected to defer capital losses as follows:
Deferred Post-October
Fund Capital Loss
- ---- ---------------------
Money Market.......... $13,929
Municipal Money Market 16,250
As of December 31, 2004, for Federal income tax purposes, the Municipal
Money Market Fund had a capital loss carryforward of $8,072, which will
expire in the year 2012, which is available to offset future capital gains,
if any.
Note 5. Capital Share Transactions
Transactions in each class of shares of the Funds, all at $1.00 per share,
for the year ended December 31, 2004 and for the prior year were as follows:
Money Market Fund
-------------------------------------------------------------------------------------------
Class A Class B Class C(1)
-------------------------------- --------------------------- --------------------------
For the For the For the For the For the For the
year year year year year year
ended ended ended ended ended ended
December 31, December 31, December 31, December 31, December 31, December 31,
2004 2003 2004 2003 2004 2003
--------------- --------------- ------------ ------------ ------------ ------------
Shares sold............ $ 1,032,086,849+ $ 1,050,689,073@ $ 51,971,494 $ 56,471,807 $ 44,114,142 $ 41,305,272
Reinvested shares...... 8,038,526 5,564,933 27,583 15,806 12,541 7,139
Shares redeemed........ (1,054,375,452) (1,163,463,818) (54,090,452)+ (76,773,842)@ (47,431,940) (51,307,759)
--------------- --------------- ------------ ------------ ------------ ------------
Net increase (decrease) $ (14,250,077) $ (107,209,812) $ (2,091,375) $(20,286,229) $ (3,305,257) $ (9,995,348)
=============== =============== ============ ============ ============ ============
-------------------------
Class I
------------------------
For the For the
year year
ended ended
December 31, December 31,
2004 2003
------------ ------------
Shares sold............ $10,886,039 $ 7,049,963
Reinvested shares...... 66,605 39,889
Shares redeemed........ (8,693,987) (6,648,520)
----------- -----------
Net increase (decrease) $ 2,258,657 $ 441,332
=========== ===========
- --------
+ Includes automatic conversion of Class B shares in the amount of $2,916,293
to Class A shares.
@ Includes automatic conversion of Class B shares in the amount of $1,350,441
to Class A shares.
(1) Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
23
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2004 -- (continued)
Municipal Money Market Fund
----------------------------------------------------------------------------------
Class A Class B Class C(1)
---------------------------- ------------------------- ------------------------
For the For the For the For the For the For the
year year year year year year
ended ended ended ended ended ended
December 31, December 31, December 31, December 31, December 31, December 31,
2004 2003 2004 2003 2004 2003
------------- ------------- ------------ ------------ ------------ ------------
Shares sold............ $ 129,348,654# $ 175,185,271* $ 279,737 $ 1,513,161 $ 783,160 $ 416,187
Reinvested shares...... 364,275 284,529 2,416 3,555 170 161
Shares redeemed........ (146,141,140) (149,718,411) (2,953,009)# (2,063,313)* (818,374) (328,375)
------------- ------------- ----------- ----------- --------- ---------
Net increase (decrease) $ (16,428,211) $ 25,751,389 $(2,670,856) $ (546,597) $ (35,044) $ 87,973
============= ============= =========== =========== ========= =========
- --------
# Includes automatic conversion of Class B shares in the amount of $4,801 to
Class A shares.
* Includes automatic conversion of Class B shares in the amount of $21,376 to
Class A 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 8.50% of any amounts credited under
the preceding clause during prior years, is added to each Eligible
Director's account until such Eligible Director reaches his or her 70th
birthday. An Eligible Director may receive 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%.
The following amounts for the Retirement Plan Liabilities are included in
the Director fees and expense line on the Statement of Assets and
Liabilities and the amounts for the Retirement Plan Expenses are included in
the Director's fees and expenses line on the Statement of Operations.
Retirement Plan Retirement Plan
Fund Expense Payments
- ---- Retirement Plan Liability --------------- ---------------
As of December 31, 2004 For the year ended December 31, 2004
------------------------- ------------------------------------
Money Market.......... $234,550 $25,586 $14,269
Municipal Money Market 5,566 1,658 156
Note 7. Interfund Lending Agreement
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 SAAMCo 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 year ended December 31, 2004, none of the Funds participated in the
program.
- --------
(1) Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
24
SunAmerica Money Market Funds
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of SunAmerica Money Market Funds,
Inc.:
In our opinion, the accompanying statements of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of SunAmerica Money
Market Fund and SunAmerica Municipal Money Market Fund (constituting the two
funds in SunAmerica Money Market Funds, Inc., hereafter referred to as the
"Corporation") at December 31, 2004, the results of each of their operations
for the year then ended, the changes in each of their net assets for each of
the two years in the period then ended and the financial highlights for each of
the periods indicated, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Corporation's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with the
standards of Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 2004 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
Houston, Texas
February 15, 2005
25
SunAmerica Money Market Funds
DIRECTORS AND OFFICERS INFORMATION -- December 31, 2004 -- (unaudited)
The following table contains basic information regarding the Directors and
Officers that oversee operations of the Funds and other investment companies
within the Fund Complex.
Term of Number of
Position Office and Funds in Fund
Held With Length of Principal Complex Other
Name, Address SunAmerica Time Served Occupations During Overseen Directorships Held
and Date of Birth* Complex (4) Past 5 years by Director (1) by Director (2)
- -------------------- ---------- ----------- ------------------- --------------- -------------------
Jeffrey S. Burum Director 2004- Founder and CEO of 36 None
DOB: February 27, present National Housing
1963 Development Corp.
Judith L. Craven Director 2001- Retired 76 Director. A.G. Belo
DOB: October 6, 1945 present Corporation (1992
to present);
Director, Sysco
Corporation (1996
to present);
Director, Luby's
Inc. (1998 to
present); Director,
University of Texas
Board of Regents
(May 2001 to
present)
William F. Devin Director 2001- Retired 76 Member of the Board
DOB: December 30, present of Governors,
1938 Boston Stock
Exchange
(1985-Present);
Samuel M. Eisenstat Chairman 1985- Attorney, solo 46 Director of North
DOB: March 7, 1940 of the present practitioner; European
Board Oil Royalty Trust.
Stephen J. Gutman Director 1984- Partner and Member 46 None
DOB: May 10, 1943 present of Managing
Directors, Beau
Brummell--Soho
LLC (Licensing of
menswear
specialty retailing
and other
activities) June
1988-present
Peter A. Harbeck (3) Director 1994- President, CEO and 85 None
DOB: January 23, present Director,
1954 SAAMCo. (August
1995 to
present); Director,
AIG
SunAmerica Capital
Services, Inc.
("SACS") (August
1993 to present)
William J. Shea (5) Director 2004- President and CEO, 46 None
DOB: February 9, present Conseco,
1948 Inc. (Financial
Services)
(2001-2004);
Chairman of the
Board of Centennial
Technologies, Inc.
(1998 to 2001);
Vice Chairman, Bank
Boston Corporation
(1993-1998)
Vincent M. Marra President 2004- Senior Vice N/A N/A
DOB: May 28, 1950 present President and Chief
Operating Officer,
SAAMCo (February
2003 to Present);
Chief
Administrative
Officer and Chief
Financial Officer,
Carret & Co., LLC
(June 2002 to
February 2003);
President, Bowne
Digital Solutions
(1999 to May 2002)
Donna M. Handel Treasurer 2002- Assistant Treasurer N/A N/A
DOB: June 25, 1966 present (1993 to 2002);
Senior Vice
President, SAAMCo
(December 2004 to
Present); Vice
President, SAAMCo
(1997 to December
2004)
- --------
* The business address for each Director and Officer is the Harborside
Financial Center, 3200 Plaza 5, Jersey City, NJ 07311-4992.
(1) The "Fund Complex" consists of all registered investment company portfolios
for which SAAMCo serves as investment adviser or business manager. The
"Fund Complex" includes the SunAmerica Money Market Funds (2 funds),
SunAmerica Equity Funds (9 funds), SunAmerica Income Funds (6 funds),
SunAmerica Focused Series, Inc. (15 portfolios), Anchor Series Trust (9
portfolios), SunAmerica Senior Floating Rate Fund, Inc. (1 fund),
SunAmerica Series Trust (32 portfolios), VALIC Company I (24 portfolios),
VALIC Company II (15 funds), Seasons Series Trust (24 portfolios) and AIG
Series Trust (4 portfolios).
(2) Directorships of companies required to report to the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (i.e. "public
companies") or other investment companies registered under the Investment
Company Act of 1940.
(3) Interested Director, as defined within the Investment Company Act of 1940,
because he is an officer and a director of the advisor and a director of
the principal underwriter of, the Trust.
(4) Directors serve until their successors are duly elected and qualified,
subject to the Director's retirement plan as discussed in Note 6 of the
financial statements.
(5) Effective on November 30, 2004, William J. Shea began serving as a Director.
Additional information concerning the Directors and Officers is contained in
the Statement of Additional Information and is available without charge by
calling (800) 858-8850.
26
SunAmerica Money Market Funds
If you would like additional information:
[_] Call FastFacts -- our 24-hour, automated account and fund information
hotline at 800-654-4760.
[_] Visit www.sunamericafunds.com for more up-to-date information.
Thank you for your continued support.
AIG SunAmerica Mutual Funds
27
[LOGO] AIG Sun America
Mutual Funds
Harborside Financial Center
3200 Plaza 5
Jersey City, NJ 07311-4992
Directors/Trustees Investment Adviser DISCLOSURE OF QUARTERLY
Samuel M. Eisenstat AIG SunAmerica Asset PORTFOLIO HOLDINGS
Peter A. Harbeck Management Corp. The Fund is required to
Dr. Judith L. Craven Harborside Financial file its com-plete
William F. Devin Center schedule of portfolio
Stephen J. Gutman 3200 Plaza 5 holdings with the
Jeffrey S. Burum Jersey City, NJ Securities and Exchange
William J. Shea 07311-4992 Commission for its first
and third fiscal quarters
Officers Distributor on Form N-Q for fiscal
Vincent M. Marra, AIG SunAmerica Capital quar-ters ending after
President Services, Inc. July 9, 2004. Once filed,
Donna M. Handel, Harborside Financial the Fund's Form N-Q will
Treasurer Center be available without
J. Steven Neamtz, Vice 3200 Plaza 5 charge on the Secu-rities
President Jersey City, NJ and Exchange Commission's
Timothy P. Pettee, Vice 07311-4992 website at www.sec.gov.
President You can also obtain
Brian Wiese, Vice Shareholder Servicing copies of Form N-Q by (i)
President Agent visit-ing the Securities
Cynthia Gibbons, Vice AIG SunAmerica Fund and Exchange
President and Chief Services, Inc. Com-mission's Public
Compliance Officer Harborside Financial Reference Room in
Thomas Lynch, Assistant Center Washington, DC
Secretary 3200 Plaza 5 (information on the
Gregory R. Kingston, Jersey City, NJ operation of the Public
Vice President and 07311-4992 Reference Room may be
Assistant Treasurer obtained by calling
Donald H. Guire, Custodian and Transfer 1-800-SEC-0330); (ii)
Assistant Treasurer Agent sending your re-quest and
State Street Bank and a duplicating fee to the
Trust Company Securities and Exchange
P.O. Box 419572 Commission's Public
Kansas City, MO Reference Room,
64141-6572 Washington, DC 20549-0102
or (iii) sending your
VOTING PROXIES ON FUND request electronically to
PORTFOLIO SECURITIES publicinfo.sec.gov.
A description of the
policies and proce-dures This report is submitted
that the Fund uses to solely for the general
determine how to vote information of
proxies relating to shareholders of the Fund.
secu-rities held in the Distribution of this
Fund's portfolio which is report to persons other
available in the Fund's than shareholders of the
State-ment of Additional Fund is authorized only
Information, may be in connection with a
obtained without charge currently effective
upon re-quest, by calling prospectus, setting forth
(800) 858-8850. This details of the Fund,
information is also which must precede or
available from the EDGAR accompany this report.
database on the
Securities and Exchange
Commission's website at
http://www.sec.gov.
PROXY VOTING RECORD ON
SUNAMERICA MONEY MARKET
FUNDS
Information regarding how
SunAmerica Money Market
Funds voted proxies
relating to securities
held in SunAmerica Money
Market Funds during the
twelve month period ended
June 30, 2004 is
available without charge,
upon request, by calling
(800) 858-8850 or on the
Securities and Exchange
Commission's website at
www.sec.gov.
28
[LOGO] AIG SunAmerica
Mutual Funds
Distributed by:
AIG SunAmerica Capital Services, Inc.
MMANN-12/04
Item 2. Code of Ethics.
The SunAmerica Money Market Funds, Inc. (the "registrant") has 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. Effective December 2,
2004, the Code of Ethics has been amended to reflect Vincent M. Marra as
President, replacing Robert M. Zakem.
Item 3. Audit Committee Financial Expert.
Currently, the registrant does 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 registrant's financial statements, supervise the registrant's
preparation of its financial statements, and oversee the work of the
registrant's independent auditors.
Item 4. Principal Accountant Fees and Services.
(a)--(d) Aggregate fees billed to the registrant for the last two fiscal years
for professional services rendered by the registrant's principal
accountant were as follows:
2003 2004
------- -------
Audit Fees ................... $45,135 $45,290
Audit-Related Fees ........... $19,440 $15,266
Tax Fees ..................... $15,910 $15,800
All Other Fees ............... $ 0 $ 0
Audit Fees include amounts related to the audit of the registrant's annual
financial statements and services normally provided by the principal accountant
in connection with statutory and regulatory filings. Audit-Related Fees
principally include a SAS No. 100 review of the registrant's Semiannual
Shareholder Report. Tax Fees principally include tax compliance, tax advice, tax
planning and preparation of tax returns.
(e)
(1) The registrant's audit committee pre-approves all audit services
provided by the registrant's principal accountant for the registrant
and all non-audit services provided by the registrant's principal
accountant for the registrant, its investment adviser and any entity
controlling, controlled by, or under common control with the
investment adviser ("Adviser Affiliate") that provides ongoing
services to the registrant, if the engagement by the investment
adviser or Adviser Affiliate relates directly to the operations and
financial reporting of the registrant.
(2) No services included in (b) - (d) above were approved pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not Applicable.
(g) The aggregate fees billed for the most recent fiscal year and the preceding
fiscal year by the registrant's principal accountant for non-audit services
rendered to the registrant, its investment adviser, and Adviser Affiliate
that provides ongoing services to the registrant for 2004 and 2003 were
$1,817,631 and $636,504, respectively.
(h) Non-audit services rendered to the registrant's investment adviser and any
Adviser Affiliate that were not pre-approved pursuant to Paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X were considered by the
registrant's audit committee as to whether they were compatible with
maintaining the principal accountant's independence.
Item 5. Audit Committee of Listed Registrants
Not Applicable.
Item 6. Schedule of Investments.
Not Applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not Applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not Applicable.
Item 11. Controls and Procedures.
(a) An evaluation was performed within 90 days of the filing of this report,
under the supervision and with the participation of the registrant's
management, including the President and Treasurer, of the effectiveness of
the design and operation of the registrant's disclosure controls and
procedures. Based on that evaluation, the registrant's management,
including the President and Treasurer, concluded that the registrant's
disclosure controls and procedures are effective.
(b) There was no change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of
1940) that occurred during the second fiscal quarter of the period covered
by this report that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting.
Item 12. 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.
(2) Certification pursuant to Rule 30a-2(a) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(3) Not applicable.
(b) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
attached hereto as Exhibit 99.906.CERT.
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/ Vincent M. Marra
Vincent M. Marra
President
Date: March 11,2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Vincent M. Marra
Vincent M. Marra
President
Date: March 11,2005
By: /s/ Donna M. Handel
Donna M. Handel
Treasurer
Date: March 11,2005