UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-04801
---------------------------------------------
SunAmerica Equity Funds
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Harborside Financial Center, 3200 Plaza 5 Jersey City, NJ 07311
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Vincent M. Marra
Senior Vice President
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: September 30
--------------------------
Date of reporting period: September 30, 2007
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Item 1. Reports to Stockholders
[PHOTO]
ANNUAL REPORT 2007
AIG SUNAMERICA
Equity Funds
[LOGO]
www.sunamericafunds.com
live longer retire stronger/sm/
September 30, 2007 ANNUAL REPORT
SUNAMERICA EQUITY FUNDS
SunAmerica Blue Chip Growth Fund (SVLAX)
SunAmerica Growth Opportunities Fund (SGWAX)
SunAmerica New Century Fund (SEGAX)
SunAmerica Growth and Income Fund (SEIAX)
SunAmerica Balanced Assets Fund (SBAAX)
SunAmerica International Equity Fund (SIEAX)
SunAmerica Value Fund (SSVAX)
SunAmerica Disciplined Growth Fund* (TXMAX)
SunAmerica International Small-Cap Fund (SAESX)
* Effective May 15, 2007, the name of the SunAmerica Tax Managed Equity Fund
was changed to the SunAmerica Disciplined Growth Fund.
Table of Contents
SHAREHOLDER LETTER.......................................................... 2
EXPENSE EXAMPLE............................................................. 3
STATEMENT OF ASSETS AND LIABILITIES......................................... 6
STATEMENT OF OPERATIONS..................................................... 10
STATEMENT OF CHANGES IN NET ASSETS.......................................... 13
FINANCIAL HIGHLIGHTS........................................................ 18
PORTFOLIO OF INVESTMENTS.................................................... 27
NOTES TO FINANCIAL STATEMENTS............................................... 67
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM..................... 88
APPROVAL OF ADVISORY AGREEMENTS............................................. 89
TRUSTEE AND OFFICER INFORMATION............................................. 93
SHAREHOLDER TAX INFORMATION................................................. 96
COMPARISONS: FUNDS vs. INDEXES.............................................. 97
Shareholder Letter
Dear Shareholder:
Enclosed is the annual report for the SunAmerica Equity Funds for the fiscal
year ended September 30, 2007. The fiscal year was marked by many twists and
turns but ended up being a strong year for the equity markets. International
stocks led the way as the MSCI EAFE Index returned 24.86% over the annual
period while the Dow Jones Industrial Average (DJIA) returned over 21.62%. The
NASDAQ Composite and S&P 500 Index closely followed with returns of 19.62% and
16.44%, respectively.
During the first quarter of the fiscal year ended September 30, 2007, equity
markets were strong with the S&P 500 Index returning 6.99% and the MSCI EAFE
Index bringing a 10.35% quarterly return. Small-cap stocks continued their
multi-year trend of outperforming large-caps, and value outperformed growth.
As we entered 2007, the equity markets once again got off to a fast start but
were setback in February as the Chinese market corrected and concerns regarding
the U.S. housing market escalated. For the period ended March 31, 2007, the S&P
500 Index secured a mere 0.64% gain, while the MSCI EAFE Index returned 4.08%.
One important shift in market behavior occurred as growth stocks outperformed
value, and mid-cap stocks outpaced small-cap stocks.
A boom in private equity transactions, continued weakness in the U.S. housing
market and the collapse of a Wall Street hedge fund were three of the themes
that dominated the fiscal third quarter ended June 30, 2007. Against this
backdrop, equities produced strong returns as the S&P 500 Index returned 6.29%
and the NASDAQ Composite returned 8.94%. Growth stocks continued to outperform
value stocks during the quarter.
Despite a meltdown in the subprime mortgage market and the beginnings of a
credit crunch, the fourth fiscal quarter, ended September 30, 2007, ended with
the DJIA, S&P 500 Index and NASDAQ showing positive returns. With regard to
asset classes, results were mixed as the growth category outperformed value,
and large-cap indices outpaced small-cap indices.
A 50-basis point cut by the Federal Reserve in the Federal Funds rate at the
September meeting sparked a strong equity rally and repaired the declines of
the equity markets from earlier in the quarter. This cut in the Federal Funds
rate had been preceded by a 50-basis point cut in the discount rate (the rate
at which the Federal Reserve lends to banks). The Federal Reserve's actions
seemed to instill confidence in the market that the central bank would move
aggressively to ward off a recession.
It is a debatable point that the U.S. economy is heading into a recession;
however one thing appears clear: economic growth is slowing. An important
question is whether or not corporate earnings, which have clearly been
decelerating, can continue to grow.
At AIG SunAmerica, we continue to search for companies that can deliver
earnings in this more challenging environment. We look to identify
opportunities to grow capital while keeping a keen eye on risk. We employ a
combination of quantitative tools and strong fundamental research and believe
our approach will help us achieve our dual objective.
Thank you for your investment in the SunAmerica Equity Funds. If you have any
questions regarding our products, we invite you to contact your financial
adviser, speak with a Shareholder Services Representative at 800-858-8850 or
visit our website at www.sunamericafunds.com.
Sincerely,
The SunAmerica Equity Funds Investment Professionals
AIG SunAmerica Asset Management Corp. AIG Investments
- ---------------
John Massey Allison Larkin Hans Danielsson
Steve Neimeth Brendan Voege Robin Thorn
Paul Ma Ben Barrett
Jay Rushin Mike Beaulieu
Soraya Benitez Andy Sheridan
Sandra Salas Jay Merchant
Sarah Kallok Kara Murphy
- --------
Past performance is no guarantee of future results.
2
SunAmerica Equity Funds
EXPENSE EXAMPLE -- September 30, 2007 -- (unaudited)
Disclosure of Portfolio Expenses in Shareholder Reports
As a shareholder of a Fund in the SunAmerica Equity Funds (the "Trust"), you
may incur two types of costs: (1) transaction costs, including sales charges
(loads) on purchase payments, contingent deferred sales charges, redemption
fees (applicable to Class A of International Equity Fund and International
Small-Cap Fund only) and (2) ongoing costs, including management fees;
distribution and service fees; and other Fund expenses. The Example set forth
below 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 April 1, 2007 and held until September 30, 2007.
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 ended September 30, 2007" to estimate the expenses you paid on your
account during this period. For shareholder accounts in classes other than
Class I and Class Z the "Expenses Paid During the six months ended September
30, 2007" 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 ended September 30, 2007"
column does not include administrative fees that may apply to qualified
retirement plan accounts. See the Funds' prospectus and/or your retirement plan
documents for full description of these fees. Had these fees been included, the
"Expenses Paid During the six months ended September 30, 2007" column would
have been higher and the "Ending Account Value" would have been lower.
Hypothetical Example for Comparison Purposes
The "Hypothetical" section of the table provides information about hypothetical
account values and hypothetical expenses based on the 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 Funds and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder
reports of other funds. For shareholder accounts in classes other than Class I
and Class Z the "Expenses Paid During the six months ended September 30, 2007"
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 ended September 30, 2007" column does not
include administrative fees that may apply to qualified retirement plan
accounts. See the Funds' prospectus and/or your retirement plan document for
full description of these fees. Had these fees been included, the "Expenses
Paid During the six months ended September 30, 2007" column would have been
higher and the "Ending Account Value" would have been lower.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, including sales
charges on purchase payments, contingent deferred sales charges, redemption
fees (applicable to Class A of International Equity Fund and International
Small-Cap Fund only); small account fees and administrative fees, if applicable
to your account. Please refer to the Fund's prospectus and/or qualified
retirement plan document for more information. Therefore, the "Hypothetical"
example is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs and other fees were included, your costs would have
been higher.
3
SunAmerica Equity Funds
EXPENSE EXAMPLE -- September 30, 2007 -- (unaudited) (continued)
Actual Hypothetical
------------------------------------------ ------------------------------------------
Ending Account
Ending Account Expense Paid Value using Expense Paid
Value Using During the a Hypothetical During the Expense
Beginning Actual Six Months Beginning 5% Assumed Six Months Ratio
Account Value Return at Ended Account Value Return at Ended as of
at April 1, September 30, September 30, at April 1, September 30, September 30, September 30,
Fund 2007 2007 2007 2007 2007 2007 2007*
- ---- ------------- -------------- ------------- ------------- -------------- ------------- -------------
Blue Chip Growth Fund@
Class A#.................. $1,000.00 $1,130.28 $ 8.54 $1,000.00 $1,017.05 $ 8.09 1.60%
Class B#.................. $1,000.00 $1,126.11 $12.37 $1,000.00 $1,013.44 $11.71 2.32%
Class C#.................. $1,000.00 $1,124.91 $13.37 $1,000.00 $1,012.48 $12.66 2.51%
Class I#.................. $1,000.00 $1,132.22 $ 7.06 $1,000.00 $1,018.45 $ 6.68 1.32%
Growth Opportunities Fund@
Class A#.................. $1,000.00 $ 983.20 $ 7.86 $1,000.00 $1,017.15 $ 7.99 1.58%
Class B#.................. $1,000.00 $ 979.83 $11.27 $1,000.00 $1,013.69 $11.46 2.27%
Class C#.................. $1,000.00 $ 979.21 $11.71 $1,000.00 $1,013.24 $11.91 2.36%
Class I#.................. $1,000.00 $ 983.95 $ 6.61 $1,000.00 $1,018.40 $ 6.73 1.33%
New Century Fund@
Class A................... $1,000.00 $1,033.69 $ 7.95 $1,000.00 $1,017.25 $ 7.89 1.56%
Class B................... $1,000.00 $1,030.04 $11.65 $1,000.00 $1,013.59 $11.56 2.29%
Class C#.................. $1,000.00 $1,030.40 $10.89 $1,000.00 $1,014.34 $10.81 2.14%
Growth and Income Fund@
Class A#.................. $1,000.00 $1,112.04 $ 8.21 $1,000.00 $1,017.30 $ 7.84 1.55%
Class B#.................. $1,000.00 $1,108.21 $11.52 $1,000.00 $1,014.14 $11.01 2.18%
Class C#.................. $1,000.00 $1,109.12 $11.47 $1,000.00 $1,014.19 $10.96 2.17%
Class I#.................. $1,000.00 $1,112.97 $ 6.99 $1,000.00 $1,018.45 $ 6.68 1.32%
Balanced Assets Fund@
Class A#.................. $1,000.00 $1,070.73 $ 8.20 $1,000.00 $1,017.15 $ 7.99 1.58%
Class B#.................. $1,000.00 $1,067.67 $11.71 $1,000.00 $1,013.74 $11.41 2.26%
Class C#.................. $1,000.00 $1,067.53 $11.66 $1,000.00 $1,013.79 $11.36 2.25%
Class I#.................. $1,000.00 $1,072.57 $ 6.81 $1,000.00 $1,018.50 $ 6.63 1.31%
International Equity Fund
Class A#.................. $1,000.00 $1,118.01 $10.09 $1,000.00 $1,015.54 $ 9.60 1.90%
Class B#.................. $1,000.00 $1,114.20 $13.51 $1,000.00 $1,012.28 $12.86 2.55%
Class C#.................. $1,000.00 $1,114.34 $13.52 $1,000.00 $1,012.28 $12.86 2.55%
Class I#.................. $1,000.00 $1,118.21 $ 9.56 $1,000.00 $1,016.04 $ 9.10 1.80%
Value Fund@
Class A#.................. $1,000.00 $1,086.00 $ 8.52 $1,000.00 $1,016.90 $ 8.24 1.63%
Class B#.................. $1,000.00 $1,082.49 $11.90 $1,000.00 $1,013.64 $11.51 2.28%
Class C#.................. $1,000.00 $1,082.49 $11.90 $1,000.00 $1,013.64 $11.51 2.28%
Class I#.................. $1,000.00 $1,086.66 $ 8.00 $1,000.00 $1,017.40 $ 7.74 1.53%
Class Z#.................. $1,000.00 $1,089.14 $ 5.55 $1,000.00 $1,019.75 $ 5.37 1.06%
Disciplined Growth Fund@
Class A#.................. $1,000.00 $1,218.03 $ 8.06 $1,000.00 $1,017.80 $ 7.33 1.45%
Class B#.................. $1,000.00 $1,214.44 $11.66 $1,000.00 $1,014.54 $10.61 2.10%
Class C#.................. $1,000.00 $1,214.29 $11.66 $1,000.00 $1,014.54 $10.61 2.10%
International Small-Cap Fund
Class A#.................. $1,000.00 $1,059.00 $ 9.81 $1,000.00 $1,015.54 $ 9.60 1.90%
Class B#.................. $1,000.00 $1,055.51 $13.14 $1,000.00 $1,012.28 $12.86 2.55%
Class C#.................. $1,000.00 $1,055.51 $13.14 $1,000.00 $1,012.28 $12.86 2.55%
- --------
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 183 days divided by 365
days. These ratios do not reflect transaction costs, including sales charges
on purchase payments, contingent deferred sales charges, redemption fees
(applicable to Class A of International Equity Fund and International
Small-Cap Fund only), small account fees and administrative fees, if
applicable to your account. Please refer to your Prospectus and/or qualified
retirement plan document for more information.
# During the stated period, the investment adviser either waived a portion of
or all of the fees and assumed a portion of or all expenses for the Funds or
through recoupment provisions, recovered a portion of or all fees and
expenses waived or reimbursed in the previous two fiscal years. As a result,
if these fees and expenses had not been waived or assumed, the
"Actual/Hypothetical Ending Account Value" would have been lower and the
"Actual/Hypothetical Expenses Paid During the Six Months Ended September 30,
2007" and the "Expense Ratios" would have been higher. If these fees and
expenses had not been recouped, the "Actual/Hypothetical Ending Account
Value" would have been higher and the "Actual/Hypothetical Expenses Paid
During the Six Months Ended September 30, 2007" and "Expense Ratios" would
have been lower.
@ Through expense offset arrangements resulting from broker commission
recapture, a portion of the Fund's expenses have been reduced. Had the
expense reductions been applied, the Expense Example would have been as
follows:
4
SunAmerica Equity Funds
EXPENSE EXAMPLE -- September 30, 2007 -- (unaudited) (continued)
Actual Hypothetical
------------------------------------------ ------------------------------------------
Ending Account
Ending Account Expense Paid Value using Expense Paid
Value Using During the a Hypothetical During the Expense
Beginning Actual Six Months Beginning 5% Assumed Six Months Ratio
Account Value Return at Ended Account Value Return at Ended as of
at April 1, September 30, September 30, at April 1, September 30, September 30, September 30,
Fund 2007 2007 2007 2007 2007 2007 2007*
- ---- ------------- -------------- ------------- ------------- -------------- ------------- -------------
Blue Chip Growth Fund
Class A#............... $1,000.00 $1,130.28 $ 8.49 $1,000.00 $1,017.10 $ 8.04 1.59%
Class B#............... $1,000.00 $1,126.11 $12.31 $1,000.00 $1,013.49 $11.66 2.31%
Class C#............... $1,000.00 $1,124.91 $13.32 $1,000.00 $1,012.53 $12.61 2.50%
Class I#............... $1,000.00 $1,132.22 $ 7.00 $1,000.00 $1,018.50 $ 6.63 1.31%
Growth Opportunities Fund
Class A#............... $1,000.00 $ 983.20 $ 7.61 $1,000.00 $1,017.40 $ 7.74 1.53%
Class B#............... $1,000.00 $ 979.83 $10.97 $1,000.00 $1,013.99 $11.16 2.21%
Class C#............... $1,000.00 $ 979.21 $11.41 $1,000.00 $1,013.54 $11.61 2.30%
Class I#............... $1,000.00 $ 983.95 $ 6.32 $1,000.00 $1,018.70 $ 6.43 1.27%
New Century Fund
Class A................ $1,000.00 $1,033.69 $ 7.80 $1,000.00 $1,017.40 $ 7.74 1.53%
Class B................ $1,000.00 $1,030.04 $11.50 $1,000.00 $1,013.74 $11.41 2.26%
Class C#............... $1,000.00 $1,030.40 $10.79 $1,000.00 $1,014.44 $10.71 2.12%
Growth and Income Fund
Class A#............... $1,000.00 $1,112.04 $ 7.99 $1,000.00 $1,017.50 $ 7.64 1.51%
Class B#............... $1,000.00 $1,108.21 $11.31 $1,000.00 $1,014.34 $10.81 2.14%
Class C#............... $1,000.00 $1,109.12 $11.26 $1,000.00 $1,014.39 $10.76 2.13%
Class I#............... $1,000.00 $1,112.97 $ 6.78 $1,000.00 $1,018.65 $ 6.48 1.28%
Balanced Assets Fund
Class A#............... $1,000.00 $1,070.73 $ 8.20 $1,000.00 $1,017.15 $ 7.99 1.58%
Class B#............... $1,000.00 $1,067.67 $11.66 $1,000.00 $1,013.79 $11.36 2.25%
Class C#............... $1,000.00 $1,067.53 $11.61 $1,000.00 $1,013.84 $11.31 2.24%
Class I#............... $1,000.00 $1,072.57 $ 6.75 $1,000.00 $1,018.55 $ 6.58 1.30%
Value Fund
Class A#............... $1,000.00 $1,086.00 $ 8.42 $1,000.00 $1,017.00 $ 8.14 1.61%
Class B#............... $1,000.00 $1,082.49 $11.80 $1,000.00 $1,013.74 $11.41 2.26%
Class C#............... $1,000.00 $1,082.49 $11.80 $1,000.00 $1,013.74 $11.41 2.26%
Class I#............... $1,000.00 $1,086.66 $ 7.95 $1,000.00 $1,017.45 $ 7.69 1.52%
Class Z#............... $1,000.00 $1,089.14 $ 5.50 $1,000.00 $1,019.80 $ 5.32 1.05%
Disciplined Growth Fund
Class A#............... $1,000.00 $1,218.03 $ 7.84 $1,000.00 $1,018.00 $ 7.13 1.41%
Class B#............... $1,000.00 $1,214.44 $11.44 $1,000.00 $1,014.74 $10.40 2.06%
Class C#............... $1,000.00 $1,214.29 $11.43 $1,000.00 $1,014.74 $10.40 2.06%
5
SunAmerica Equity Funds
STATEMENT OF ASSETS AND LIABILITIES -- September 30, 2007
Blue Chip Growth New
Growth Opportunities Century
Fund Fund Fund
------------ ------------- -------------
ASSETS:
Long-term investment securities, at market value (unaffiliated)*.......... $ 69,627,872 $ 48,274,459 $ 85,790,618
Short-term investment securities, at market value (unaffiliated)*......... -- -- --
Repurchase agreements (cost approximates market value).................... 1,123,000 10,150,000 13,531,000
------------ ------------- -------------
Total investments....................................................... 70,750,872 58,424,459 99,321,618
------------ ------------- -------------
Cash...................................................................... 290 412 17,327
Foreign cash*............................................................. -- -- --
Receivable for:
Fund shares sold........................................................ 9,161 6,677 23,294
Dividends and interest.................................................. 26,832 24,294 83,598
Investments sold........................................................ 1,361,314 5,160,391 7,946,267
Prepaid expenses and other assets......................................... 5,784 31,497 8,818
Due from investment adviser for expense reimbursements/fee waivers........ 300 1,170 418
------------ ------------- -------------
Total assets.............................................................. 72,154,553 63,648,900 107,401,340
------------ ------------- -------------
LIABILITIES:
Payable for:
Fund shares redeemed.................................................... 45,932 173,790 110,619
Investments purchased................................................... 988,423 -- 1,975,000
Interest on securities sold short....................................... -- -- --
Investment advisory and management fees................................. 42,533 39,059 63,767
Distribution and service maintenance fees............................... 29,457 31,169 38,705
Transfer agent fees and expenses........................................ 29,553 27,203 36,737
Trustees' fees and expenses............................................. 29,219 25,332 49,662
Other accrued expenses.................................................. 82,029 101,552 92,667
Due to investment adviser from expense recoupment......................... -- -- --
Due to custodian.......................................................... -- -- --
Securities sold short, at market value#................................... -- -- --
------------ ------------- -------------
Total liabilities......................................................... 1,247,146 398,105 2,367,157
------------ ------------- -------------
Net Assets................................................................ $ 70,907,407 $ 63,250,795 $ 105,034,183
============ ============= =============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $.01 par value............................. $ 39,154 $ 34,424 $ 48,656
Paid-in capital........................................................... 127,683,951 256,242,157 210,377,954
------------ ------------- -------------
127,723,105 256,276,581 210,426,610
Accumulated undistributed net investment income (loss).................... (28,338) (24,866) (49,536)
Accumulated undistributed net realized gain (loss) on investments, futures
contracts, options contracts, securities sold short and foreign exchange
transactions............................................................. (68,097,696) (193,429,999) (105,900,967)
Unrealized appreciation (depreciation) on investments..................... 11,310,336 429,079 558,076
Unrealized foreign exchange gain (loss) on other assets and liabilities... -- -- --
Unrealized appreciation (depreciation) on securities sold short........... -- -- --
------------ ------------- -------------
Net Assets................................................................ $ 70,907,407 $ 63,250,795 $ 105,034,183
============ ============= =============
*Cost
Long-term investment securities (unaffiliated).......................... $ 58,317,536 $ 47,845,380 $ 85,232,542
============ ============= =============
Short-term investment securities (unaffiliated)......................... $ -- $ -- $ --
============ ============= =============
Foreign cash............................................................ $ -- $ -- $ --
============ ============= =============
#Proceeds from securities sold short...................................... $ -- $ -- $ --
============ ============= =============
Growth and Balanced
Income Assets
Fund Fund
------------ ------------
ASSETS:
Long-term investment securities, at market value (unaffiliated)*.......... $104,288,588 $149,194,938
Short-term investment securities, at market value (unaffiliated)*......... -- --
Repurchase agreements (cost approximates market value).................... 3,800,000 5,017,000
------------ ------------
Total investments....................................................... 108,088,588 154,211,938
------------ ------------
Cash...................................................................... 286 63,927
Foreign cash*............................................................. -- --
Receivable for:
Fund shares sold........................................................ 50,779 17,513
Dividends and interest.................................................. 100,811 610,911
Investments sold........................................................ 3,870,943 3,081,840
Prepaid expenses and other assets......................................... 8,922 8,071
Due from investment adviser for expense reimbursements/fee waivers........ 639 3,078
------------ ------------
Total assets.............................................................. 112,120,968 157,997,278
------------ ------------
LIABILITIES:
Payable for:
Fund shares redeemed.................................................... 98,038 250,078
Investments purchased................................................... 1,045,148 3,225,135
Interest on securities sold short....................................... -- 869
Investment advisory and management fees................................. 67,400 93,720
Distribution and service maintenance fees............................... 54,575 58,937
Transfer agent fees and expenses........................................ 42,419 56,643
Trustees' fees and expenses............................................. 39,432 78,728
Other accrued expenses.................................................. 75,684 123,066
Due to investment adviser from expense recoupment......................... -- --
Due to custodian.......................................................... -- --
Securities sold short, at market value#................................... -- 597,047
------------ ------------
Total liabilities......................................................... 1,422,696 4,484,223
------------ ------------
Net Assets................................................................ $110,698,272 $153,513,055
============ ============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $.01 par value............................. $ 71,601 $ 97,164
Paid-in capital........................................................... 134,934,292 209,203,252
------------ ------------
135,005,893 209,300,416
Accumulated undistributed net investment income (loss).................... 204,199 236,935
Accumulated undistributed net realized gain (loss) on investments, futures
contracts, options contracts, securities sold short and foreign exchange
transactions............................................................. (34,153,477) (69,026,832)
Unrealized appreciation (depreciation) on investments..................... 9,641,657 12,996,080
Unrealized foreign exchange gain (loss) on other assets and liabilities... -- --
Unrealized appreciation (depreciation) on securities sold short........... -- 6,456
------------ ------------
Net Assets................................................................ $110,698,272 $153,513,055
============ ============
*Cost
Long-term investment securities (unaffiliated).......................... $ 94,646,931 $136,198,858
============ ============
Short-term investment securities (unaffiliated)......................... $ -- $ --
============ ============
Foreign cash............................................................ $ -- $ --
============ ============
#Proceeds from securities sold short...................................... $ -- $ 603,503
============ ============
See Notes to Financial Statements
6
SunAmerica Equity Funds
STATEMENT OF ASSETS AND LIABILITIES -- September 30, 2007 -- (continued)
Blue Chip Growth New Growth and Balanced
Growth Opportunities Century Income Assets
Fund Fund Fund Fund Fund
----------- ------------- ----------- ----------- ------------
Class A (unlimited shares authorized):
Net assets.................................................. $51,961,305 $39,646,389 $88,534,522 $66,962,905 $124,256,604
Shares of beneficial interest issued and outstanding........ 2,772,219 2,053,597 4,007,967 4,215,801 7,862,910
Net asset value and redemption price per share.............. $ 18.74 $ 19.31 $ 22.09 $ 15.88 $ 15.80
Maximum sales charge (5.75% of offering price).............. 1.14 1.18 1.35 0.97 0.96
----------- ----------- ----------- ----------- ------------ -
Maximum offering price to public............................ $ 19.88 $ 20.49 $ 23.44 $ 16.85 $ 16.76
=========== =========== =========== =========== ============ =
Class B (unlimited shares authorized):
Net assets.................................................. $14,314,288 $15,229,103 $10,701,236 $19,562,062 $ 14,713,809
Shares of beneficial interest issued and outstanding........ 866,318 895,992 557,455 1,317,009 933,075
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge) $ 16.52 $ 17.00 $ 19.20 $ 14.85 $ 15.77
=========== =========== =========== =========== ============ =
Class C (unlimited shares authorized):
Net assets.................................................. $ 3,958,948 $ 8,229,981 $ 5,798,425 $23,850,525 $ 13,890,689
Shares of beneficial interest issued and outstanding........ 241,501 485,367 300,134 1,607,077 879,234
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge) $ 16.39 $ 16.96 $ 19.32 $ 14.84 $ 15.80
=========== =========== =========== =========== ============ =
Class I (unlimited shares authorized):
Net assets.................................................. $ 672,866 $ 145,322 $ -- $ 322,780 $ 651,953
Shares of beneficial interest issued and outstanding........ 35,392 7,406 -- 20,219 41,211
Net asset value, offering and redemption price per share.... $ 19.01 $ 19.62 $ -- $ 15.96 $ 15.82
=========== =========== =========== =========== ============ =
Class Z (unlimited shares authorized):
Net assets.................................................. $ -- $ -- $ -- $ -- $ --
Shares of beneficial interest issued and outstanding........ -- -- -- -- --
Net asset value, offering and redemption price per share.... $ -- $ -- $ -- $ -- $ --
=========== =========== =========== =========== ============ =
See Notes to Financial Statements
7
SunAmerica Equity Funds
STATEMENT OF ASSETS AND LIABILITIES -- September 30, 2007 -- (continued)
International
Equity
Fund
-------------
ASSETS:
Long-term investment securities, at market value (unaffiliated)*........................................ $128,317,856
Short-term investment securities, at market value (unaffiliated)*....................................... --
Repurchase agreements (cost approximates market value).................................................. 2,952,000
------------
Total investments..................................................................................... 131,269,856
------------
Cash.................................................................................................... 503
Foreign cash*........................................................................................... 151,836
Receivable for:
Fund shares sold...................................................................................... 143,633
Dividends and interest................................................................................ 323,014
Investments sold...................................................................................... 2,787,628
Prepaid expenses and other assets....................................................................... 1,831
Due from investment adviser for expense reimbursements/fee waivers...................................... --
------------
Total assets............................................................................................ 134,678,301
------------
LIABILITIES:
Payable for:
Fund shares redeemed.................................................................................. 153,722
Investments purchased................................................................................. 3,581,559
Interest on securities sold short..................................................................... --
Investment advisory and management fees............................................................... 101,319
Distribution and service maintenance fees............................................................. 58,718
Transfer agent fees and expenses...................................................................... 35,170
Trustees' fees and expenses........................................................................... 18,682
Other accrued expenses................................................................................ 111,856
Due to investment adviser from expense recoupment....................................................... 21,186
Due to custodian........................................................................................ --
Securities sold short, at market value#................................................................. --
------------
Total liabilities....................................................................................... 4,082,212
------------
Net Assets.............................................................................................. $130,596,089
============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $.01 par value........................................................... $ 67,692
Paid-in capital......................................................................................... 113,039,175
------------
113,106,867
Accumulated undistributed net investment income (loss).................................................. (125,271)
Accumulated undistributed net realized gain (loss) on investments, futures contracts, options contracts,
securities sold short and foreign exchange transactions................................................ (5,685,106)
Unrealized appreciation (depreciation) on investments................................................... 23,305,040
Unrealized foreign exchange gain (loss) on other assets and liabilities................................. (5,441)
Unrealized appreciation (depreciation) on securities sold short......................................... --
------------
Net Assets............................................................................................ $130,596,089
============
*Cost
Long-term investment securities (unaffiliated)........................................................ $105,012,816
============
Short-term investment securities (unaffiliated)....................................................... $ --
============
Foreign cash.......................................................................................... $ 147,981
============
# Proceeds from securities sold short................................................................... $ --
============
Value
Fund
------------
ASSETS:
Long-term investment securities, at market value (unaffiliated)*........................................ $215,107,719
Short-term investment securities, at market value (unaffiliated)*....................................... --
Repurchase agreements (cost approximates market value).................................................. 13,190,000
------------
Total investments..................................................................................... 228,297,719
------------
Cash.................................................................................................... 697
Foreign cash*........................................................................................... --
Receivable for:
Fund shares sold...................................................................................... 111,099
Dividends and interest................................................................................ 236,545
Investments sold...................................................................................... 2,416,575
Prepaid expenses and other assets....................................................................... 25,335
Due from investment adviser for expense reimbursements/fee waivers...................................... --
------------
Total assets............................................................................................ 231,087,970
------------
LIABILITIES:
Payable for:
Fund shares redeemed.................................................................................. 323,601
Investments purchased................................................................................. 3,377,399
Interest on securities sold short..................................................................... --
Investment advisory and management fees............................................................... 184,307
Distribution and service maintenance fees............................................................. 89,799
Transfer agent fees and expenses...................................................................... 62,778
Trustees' fees and expenses........................................................................... 33,719
Other accrued expenses................................................................................ 101,840
Due to investment adviser from expense recoupment....................................................... 22,508
Due to custodian........................................................................................ --
Securities sold short, at market value#................................................................. --
------------
Total liabilities....................................................................................... 4,195,951
------------
Net Assets.............................................................................................. $226,892,019
============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $.01 par value........................................................... $ 118,705
Paid-in capital......................................................................................... 176,703,419
------------
176,822,124
Accumulated undistributed net investment income (loss).................................................. 1,613,189
Accumulated undistributed net realized gain (loss) on investments, futures contracts, options contracts,
securities sold short and foreign exchange transactions................................................ 27,021,207
Unrealized appreciation (depreciation) on investments................................................... 21,435,499
Unrealized foreign exchange gain (loss) on other assets and liabilities................................. --
Unrealized appreciation (depreciation) on securities sold short......................................... --
------------
Net Assets............................................................................................ $226,892,019
============
*Cost
Long-term investment securities (unaffiliated)........................................................ $193,672,220
============
Short-term investment securities (unaffiliated)....................................................... $ --
============
Foreign cash.......................................................................................... $ --
============
# Proceeds from securities sold short................................................................... $ --
============
Disciplined
Growth
Fund@
------------
ASSETS:
Long-term investment securities, at market value (unaffiliated)*........................................ $ 60,358,998
Short-term investment securities, at market value (unaffiliated)*....................................... --
Repurchase agreements (cost approximates market value).................................................. 522,000
------------
Total investments..................................................................................... 60,880,998
------------
Cash.................................................................................................... --
Foreign cash*........................................................................................... 55,880
Receivable for:
Fund shares sold...................................................................................... 312,532
Dividends and interest................................................................................ 41,890
Investments sold...................................................................................... 1,212,371
Prepaid expenses and other assets....................................................................... 52,490
Due from investment adviser for expense reimbursements/fee waivers...................................... --
------------
Total assets............................................................................................ 62,556,161
------------
LIABILITIES:
Payable for:
Fund shares redeemed.................................................................................. 70,123
Investments purchased................................................................................. 1,920,300
Interest on securities sold short..................................................................... --
Investment advisory and management fees............................................................... 40,367
Distribution and service maintenance fees............................................................. 34,451
Transfer agent fees and expenses...................................................................... 14,269
Trustees' fees and expenses........................................................................... 11,056
Other accrued expenses................................................................................ 59,407
Due to investment adviser from expense recoupment....................................................... 12,956
Due to custodian........................................................................................ 16,288
Securities sold short, at market value#................................................................. --
------------
Total liabilities....................................................................................... 2,179,217
------------
Net Assets.............................................................................................. $ 60,376,944
============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $.01 par value........................................................... $ 35,556
Paid-in capital......................................................................................... 70,456,975
------------
70,492,531
Accumulated undistributed net investment income (loss).................................................. (9,070)
Accumulated undistributed net realized gain (loss) on investments, futures contracts, options contracts,
securities sold short and foreign exchange transactions................................................ (18,802,292)
Unrealized appreciation (depreciation) on investments................................................... 8,693,094
Unrealized foreign exchange gain (loss) on other assets and liabilities................................. 2,681
Unrealized appreciation (depreciation) on securities sold short......................................... --
------------
Net Assets............................................................................................ $ 60,376,944
============
*Cost
Long-term investment securities (unaffiliated)........................................................ $ 51,665,904
============
Short-term investment securities (unaffiliated)....................................................... $ --
============
Foreign cash.......................................................................................... $ 53,266
============
# Proceeds from securities sold short................................................................... $ --
============
International
Small-Cap
Fund
-------------
ASSETS:
Long-term investment securities, at market value (unaffiliated)*........................................ $35,718,643
Short-term investment securities, at market value (unaffiliated)*....................................... 1,284,000
Repurchase agreements (cost approximates market value).................................................. --
-----------
Total investments..................................................................................... 37,002,643
-----------
Cash.................................................................................................... 2,166
Foreign cash*........................................................................................... 456,100
Receivable for:
Fund shares sold...................................................................................... 45,596
Dividends and interest................................................................................ 67,434
Investments sold...................................................................................... 157,052
Prepaid expenses and other assets....................................................................... 1,446
Due from investment adviser for expense reimbursements/fee waivers...................................... 3,598
-----------
Total assets............................................................................................ 37,736,035
-----------
LIABILITIES:
Payable for:
Fund shares redeemed.................................................................................. 7,691
Investments purchased................................................................................. 218,784
Interest on securities sold short..................................................................... --
Investment advisory and management fees............................................................... 33,955
Distribution and service maintenance fees............................................................. 13,686
Transfer agent fees and expenses...................................................................... 9,947
Trustees' fees and expenses........................................................................... 952
Other accrued expenses................................................................................ 68,046
Due to investment adviser from expense recoupment....................................................... --
Due to custodian........................................................................................ --
Securities sold short, at market value#................................................................. --
-----------
Total liabilities....................................................................................... 353,061
-----------
Net Assets.............................................................................................. $37,382,974
===========
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $.01 par value........................................................... $ 26,742
Paid-in capital......................................................................................... 32,957,984
-----------
32,984,726
Accumulated undistributed net investment income (loss).................................................. (250)
Accumulated undistributed net realized gain (loss) on investments, futures contracts, options contracts,
securities sold short and foreign exchange transactions................................................ (93,570)
Unrealized appreciation (depreciation) on investments................................................... 4,484,214
Unrealized foreign exchange gain (loss) on other assets and liabilities................................. 7,854
Unrealized appreciation (depreciation) on securities sold short......................................... --
-----------
Net Assets............................................................................................ $37,382,974
===========
*Cost
Long-term investment securities (unaffiliated)........................................................ $31,234,429
===========
Short-term investment securities (unaffiliated)....................................................... $ 1,284,000
===========
Foreign cash.......................................................................................... $ 449,293
===========
# Proceeds from securities sold short................................................................... $ --
===========
- --------
@ See Note 1
See Notes to Financial Statements
8
SunAmerica Equity Funds
STATEMENT OF ASSETS AND LIABILITIES -- September 30,2007 --
(continued)
International Disciplined International
Equity Value Growth Small-Cap
Fund Fund Fund@ Fund
------------- ------------ ----------- -------------
Class A (unlimited shares authorized):
Net assets.................................................. $75,407,948 $126,787,511 $25,773,505 $30,845,317
Shares of beneficial interest issued and outstanding........ 3,808,504 6,562,962 1,478,173 2,203,057
Net asset value and redemption price per share.............. $ 19.80 $ 19.32 $ 17.44 $ 14.00
Maximum sales charge (5.75% of offering price).............. 1.21 1.18 1.06 0.85
----------- ------------ ----------- -----------
Maximum offering price to public............................ $ 21.01 $ 20.50 $ 18.50 $ 14.85
=========== ============ =========== ===========
Class B (unlimited shares authorized):
Net assets.................................................. $20,508,649 $ 39,355,021 $ 5,676,359 $ 1,181,050
Shares of beneficial interest issued and outstanding........ 1,111,961 2,157,559 340,991 85,081
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge) $ 18.44 $ 18.24 $ 16.65 $ 13.88
=========== ============ =========== ===========
Class C (unlimited shares authorized):
Net assets.................................................. $26,682,694 $ 26,071,162 $28,927,080 $ 5,356,607
Shares of beneficial interest issued and outstanding........ 1,448,187 1,429,512 1,736,422 386,017
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge) $ 18.42 $ 18.24 $ 16.66 $ 13.88
=========== ============ =========== ===========
Class I (unlimited shares authorized):
Net assets.................................................. $ 7,996,798 $ 33,930 $ -- $ --
Shares of beneficial interest issued and outstanding........ 400,586 1,757 -- --
Net asset value, offering and redemption price per share.... $ 19.96 $ 19.31 $ -- $ --
=========== ============ =========== ===========
Class Z (unlimited shares authorized):
Net assets.................................................. $ -- $ 34,644,395 $ -- $ --
Shares of beneficial interest issued and outstanding........ -- 1,718,743 -- --
Net asset value, offering and redemption price per share.... $ -- $ 20.16 $ -- $ --
=========== ============ =========== ===========
- --------
@ See Note 1
See Notes to Financial Statements
9
SunAmerica Equity Funds
STATEMENT OF OPERATIONS -- For the year ended September 30, 2007
Blue Chip Growth
Growth Opportunities
Fund Fund
----------- -------------
INVESTMENT INCOME:
Dividends (unaffiliated).......................................................................... $ 765,442 $ 216,672
Interest (unaffiliated)........................................................................... 81,843 358,661
----------- -----------
Total investment income*......................................................................... 847,285 575,333
----------- -----------
EXPENSES:
Investment advisory and management fees........................................................... 526,395 521,863
Distribution and service maintenance fees
Class A.......................................................................................... 172,476 138,628
Class B.......................................................................................... 160,897 202,518
Class C.......................................................................................... 41,792 95,115
Service fees Class I.............................................................................. 1,595 526
Transfer agent fees and expenses
Class A.......................................................................................... 136,703 112,096
Class B.......................................................................................... 53,949 63,646
Class C.......................................................................................... 13,666 29,242
Class I.......................................................................................... 1,187 750
Registration fees
Class A.......................................................................................... 18,321 17,556
Class B.......................................................................................... 13,462 12,973
Class C.......................................................................................... 12,129 12,767
Class I.......................................................................................... 11,801 11,673
Class Z.......................................................................................... -- --
Custodian and accounting fees..................................................................... 38,564 41,158
Reports to shareholders........................................................................... 34,077 16,013
Audit and tax fees................................................................................ 32,700 35,707
Legal fees........................................................................................ 13,831 16,720
Trustees' fees and expenses....................................................................... 5,512 5,644
Interest expense.................................................................................. 56 --
Other expenses.................................................................................... 17,899 20,980
----------- -----------
Total expenses before fee waivers, expense reimbursements, expense recoupments, custody credits
and fees paid indirectly........................................................................ 1,307,012 1,355,575
Net (fees waived and expenses reimbursed)/recouped by investment adviser (Note 4)................ (22,744) (15,696)
Custody credits earned on cash balances.......................................................... (394) (1,568)
Fees paid indirectly (Note 5).................................................................... (7,908) (33,696)
----------- -----------
Net expenses..................................................................................... 1,275,966 1,304,615
----------- -----------
Net investment income (loss)........................................................................ (428,681) (729,282)
----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on investments (unaffiliated)**............................................ 4,257,405 11,409,851
Net realized foreign exchange gain (loss) on other assets and liabilities........................... 217 --
Net realized gain (loss) on securities sold short................................................... -- --
----------- -----------
Net realized gain (loss) on investments and foreign currencies...................................... 4,257,622 11,409,851
----------- -----------
Change in unrealized appreciation (depreciation) on investments (unaffiliated)...................... 8,515,725 (1,842,299)
Change in unrealized foreign exchange gain (loss) on other assets and liabilities................... -- --
Change in unrealized appreciation (depreciation) on securities sold short........................... -- --
Change in accrued capital gains tax on unrealized appreciation (depreciation)....................... -- --
----------- -----------
Net unrealized gain (loss) on investments and foreign currencies.................................... 8,515,725 (1,842,299)
----------- -----------
Net realized and unrealized gain (loss) on investments and foreign currencies....................... 12,773,347 9,567,552
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................................... $12,344,666 $ 8,838,270
=========== ===========
- --------
*Net of foreign withholding taxes on interest and dividends of...................................... $ 2,692 $ --
=========== ===========
**Net of foreign withholding taxes on capital gains of.............................................. $ -- $ --
=========== ===========
New Growth and
Century Income
Fund Fund
----------- -----------
INVESTMENT INCOME:
Dividends (unaffiliated).......................................................................... $ 629,074 $ 2,144,345
Interest (unaffiliated)........................................................................... 710,693 128,115
----------- -----------
Total investment income*......................................................................... 1,339,767 2,272,460
----------- -----------
EXPENSES:
Investment advisory and management fees........................................................... 753,123 849,237
Distribution and service maintenance fees
Class A.......................................................................................... 300,107 224,001
Class B.......................................................................................... 103,665 235,381
Class C.......................................................................................... 43,049 253,771
Service fees Class I.............................................................................. -- 790
Transfer agent fees and expenses
Class A.......................................................................................... 228,959 175,664
Class B.......................................................................................... 31,910 67,255
Class C.......................................................................................... 14,141 67,837
Class I.......................................................................................... -- 560
Registration fees
Class A.......................................................................................... 23,868 18,146
Class B.......................................................................................... 11,505 14,627
Class C.......................................................................................... 11,699 14,067
Class I.......................................................................................... -- 11,768
Class Z.......................................................................................... -- --
Custodian and accounting fees..................................................................... 46,554 39,316
Reports to shareholders........................................................................... 36,689 36,085
Audit and tax fees................................................................................ 29,162 31,761
Legal fees........................................................................................ 17,845 11,578
Trustees' fees and expenses....................................................................... 6,715 8,714
Interest expense.................................................................................. -- 1,266
Other expenses.................................................................................... 15,485 17,624
----------- -----------
Total expenses before fee waivers, expense reimbursements, expense recoupments, custody credits
and fees paid indirectly........................................................................ 1,674,476 2,079,448
Net (fees waived and expenses reimbursed)/recouped by investment adviser (Note 4)................ (15,092) (26,424)
Custody credits earned on cash balances.......................................................... (2,512) (392)
Fees paid indirectly (Note 5).................................................................... (22,812) (22,522)
----------- -----------
Net expenses..................................................................................... 1,634,060 2,030,110
----------- -----------
Net investment income (loss)........................................................................ (294,293) 242,350
----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on investments (unaffiliated)**............................................ 18,717,898 15,197,392
Net realized foreign exchange gain (loss) on other assets and liabilities........................... (190) 530
Net realized gain (loss) on securities sold short................................................... -- --
----------- -----------
Net realized gain (loss) on investments and foreign currencies...................................... 18,717,708 15,197,922
----------- -----------
Change in unrealized appreciation (depreciation) on investments (unaffiliated)...................... (1,684,002) 3,277,428
Change in unrealized foreign exchange gain (loss) on other assets and liabilities................... -- --
Change in unrealized appreciation (depreciation) on securities sold short........................... -- --
Change in accrued capital gains tax on unrealized appreciation (depreciation)....................... -- --
----------- -----------
Net unrealized gain (loss) on investments and foreign currencies.................................... (1,684,002) 3,277,428
----------- -----------
Net realized and unrealized gain (loss) on investments and foreign currencies....................... 17,033,706 18,475,350
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................................... $16,739,413 $18,717,700
=========== ===========
- --------
*Net of foreign withholding taxes on interest and dividends of...................................... $ 8,522 $ 10,577
=========== ===========
**Net of foreign withholding taxes on capital gains of.............................................. $ -- $ --
=========== ===========
See Notes to Financial Statements
10
SunAmerica Equity Funds
STATEMENT OF OPERATIONS -- For the year ended September 30, 2007 --
(continued)
Balanced International
Assets Equity Value
Fund Fund Fund
----------- ------------- -----------
INVESTMENT INCOME:
Dividends (unaffiliated)............................................................ $ 1,858,363 $ 2,438,911 $ 5,584,711
Interest (unaffiliated)............................................................. 3,233,679 36,467 436,609
----------- ----------- -----------
Total investment income*........................................................... 5,092,042 2,475,378 6,021,320
----------- ----------- -----------
EXPENSES:
Investment advisory and management fees............................................. 1,190,430 1,226,399 2,338,256
Distribution and service maintenance fees
Class A............................................................................ 438,898 240,633 442,382
Class B............................................................................ 178,854 213,036 447,702
Class C............................................................................ 147,081 240,872 326,155
Service fees Class I................................................................ 1,828 21,242 120
Transfer agent fees and expenses
Class A............................................................................ 353,114 176,946 317,337
Class B............................................................................ 53,809 64,643 121,467
Class C............................................................................ 40,287 64,062 80,488
Class I............................................................................ 1,719 19,032 73
Registration fees
Class A............................................................................ 22,338 19,728 21,920
Class B............................................................................ 14,497 14,364 16,223
Class C............................................................................ 12,591 15,636 14,075
Class I............................................................................ 11,824 12,419 10,216
Class Z............................................................................ -- -- 13,583
Custodian and accounting fees....................................................... 111,810 158,688 60,182
Reports to shareholders............................................................. 66,972 39,233 49,548
Audit and tax fees.................................................................. 41,994 35,855 34,413
Legal fees.......................................................................... 14,370 12,827 14,105
Trustees' fees and expenses......................................................... 12,133 8,624 16,806
Interest expense.................................................................... 244 5,240 --
Other expenses...................................................................... 19,141 15,542 21,421
----------- ----------- -----------
Total expenses before fee waivers, expense reimbursements, expense recoupments,
custody credits and fees paid indirectly.......................................... 2,733,934 2,605,021 4,346,472
Net (fees waived and expenses reimbursed)/recouped by investment adviser (Note 4).. (44,098) 19,501 (203,086)
Custody credits earned on cash balances............................................ (1,024) (7,821) (55)
Fees paid indirectly (Note 5)...................................................... (12,237) -- (24,710)
----------- ----------- -----------
Net expenses....................................................................... 2,676,575 2,616,701 4,118,621
----------- ----------- -----------
Net investment income (loss).......................................................... 2,415,467 (141,323) 1,902,699
----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on investments (unaffiliated)**.............................. 9,996,465 13,579,220 30,253,126
Net realized foreign exchange gain (loss) on other assets and liabilities............. 513 (107,574) 1,418
Net realized gain (loss) on securities sold short..................................... 11,757 -- --
----------- ----------- -----------
Net realized gain (loss) on investments and foreign currencies........................ 10,008,735 13,471,646 30,254,544
----------- ----------- -----------
Change in unrealized appreciation (depreciation) on investments (unaffiliated)........ 6,125,753 13,668,414 1,556,544
Change in unrealized foreign exchange gain (loss) on other assets and liabilities..... -- (4,225) --
Change in unrealized appreciation (depreciation) on securities sold short............. 6,304 -- --
Change in accrued capital gains tax on unrealized appreciation (depreciation)......... -- -- --
----------- ----------- -----------
Net unrealized gain (loss) on investments and foreign currencies...................... 6,132,057 13,664,189 1,556,544
----------- ----------- -----------
Net realized and unrealized gain (loss) on investments and foreign currencies......... 16,140,792 27,135,835 31,811,088
----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $18,556,259 $26,994,512 $33,713,787
=========== =========== ===========
- --------
*Net of foreign withholding taxes on interest and dividends of........................ $ 6,758 $ 259,852 $ 23,594
=========== =========== ===========
**Net of foreign withholding taxes on capital gains of................................ $ -- $ 6 $ --
=========== =========== ===========
See Notes to Financial Statements
11
SunAmerica Equity Funds
STATEMENT OF OPERATIONS -- For the year ended September 30, 2007--
(continued)
Disciplined International
Growth Small-Cap
Fund@ Fund
----------- -------------
INVESTMENT INCOME:
Dividends (unaffiliated)............................................................ $ 546,884 $ 491,039
Interest (unaffiliated)............................................................. 58,531 19,811
----------- ----------
Total investment income*........................................................... 605,415 510,850
----------- ----------
EXPENSES:
Investment advisory and management fees............................................. 480,141 366,797
Distribution and service maintenance fees
Class A............................................................................ 78,614 94,610
Class B............................................................................ 71,215 8,453
Class C............................................................................ 269,047 40,188
Service fees Class I................................................................ -- --
Transfer agent fees and expenses
Class A............................................................................ 57,241 62,407
Class B............................................................................ 19,699 2,643
Class C............................................................................ 64,941 10,075
Class I............................................................................ -- --
Registration fees
Class A............................................................................ 23,232 14,498
Class B............................................................................ 14,275 13,737
Class C............................................................................ 20,357 14,154
Class I............................................................................ -- --
Class Z............................................................................ -- --
Custodian and accounting fees....................................................... 28,319 108,347
Reports to shareholders............................................................. -- 18,790
Audit and tax fees.................................................................. 37,533 39,244
Legal fees.......................................................................... 19,569 11,987
Trustees' fees and expenses......................................................... 4,279 2,063
Interest expense.................................................................... 19,732 --
Other expenses...................................................................... 23,607 927
----------- ----------
Total expenses before fee waivers, expense reimbursements, expense recoupments,
custody credits and fees paid indirectly.......................................... 1,231,801 808,920
Net (fees waived and expenses reimbursed)/recouped by investment adviser (Note 4).. (188,591) (170,983)
Custody credits earned on cash balances............................................ (2,975) (307)
Fees paid indirectly (Note 5)...................................................... (66,730) --
----------- ----------
Net expenses....................................................................... 973,505 637,630
----------- ----------
Net investment income (loss).......................................................... (368,090) (126,780)
----------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on investments (unaffiliated)**.............................. 10,473,517 1,248,744
Net realized foreign exchange gain (loss) on other assets and liabilities............. 13,786 (8,201)
Net realized gain (loss) on securities sold short..................................... -- --
----------- ----------
Net realized gain (loss) on investments and foreign currencies........................ 10,487,303 1,240,543
----------- ----------
Change in unrealized appreciation (depreciation) on investments (unaffiliated)........ 5,719,639 5,850,248
Change in unrealized foreign exchange gain (loss) on other assets and liabilities..... 2,821 11,152
Change in unrealized appreciation (depreciation) on securities sold short............. -- --
Change in accrued capital gains tax on unrealized appreciation (depreciation)......... -- 149
----------- ----------
Net unrealized gain (loss) on investments and foreign currencies...................... 5,722,460 5,861,549
----------- ----------
Net realized and unrealized gain (loss) on investments and foreign currencies......... 16,209,763 7,102,092
----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....................... $15,841,673 $6,975,312
=========== ==========
- --------
*Net of foreign withholding taxes on interest and dividends of........................ $ 16,532 $ 48,687
=========== ==========
**Net of foreign withholding taxes on capital gains of................................ $ -- $ --
=========== ==========
- --------
@ See Note 1
See Notes to Financial Statements
12
SunAmerica Equity Funds
STATEMENT OF CHANGES IN NET ASSETS
Blue Chip Growth Fund
--------------------------
For the year For the year
ended ended
September 30, September 30,
2007 2006
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss).......................................................... $ (428,681) $ (532,478)
Net realized gain (loss) on investments and foreign currencies........................ 4,257,622 5,198,168
Net unrealized gain (loss) on investments and foreign currencies...................... 8,515,725 (2,357,467)
------------ ------------
Net increase (decrease) in net assets resulting from operations......................... 12,344,666 2,308,223
------------ ------------
Distributions to shareholders from:
Net investment income (Class A)....................................................... -- --
Net investment income (Class B)....................................................... -- --
Net investment income (Class C)....................................................... -- --
Net investment income (Class I)....................................................... -- --
Net investment income (Class Z)....................................................... -- --
Net realized gain on securities (Class A)............................................. -- --
Net realized gain on securities (Class B)............................................. -- --
Net realized gain on securities (Class C)............................................. -- --
Net realized gain on securities (Class I)............................................. -- --
Net realized gain on securities (Class Z)............................................. -- --
------------ ------------
Total distributions to shareholders..................................................... -- --
------------ ------------
Net increase (decrease) in net assets resulting from capital share transactions (Note 8) (13,625,270) (16,165,295)
------------ ------------
Total increase (decrease) in net assets................................................. (1,280,604) (13,857,072)
NET ASSETS:
Beginning of period..................................................................... 72,188,011 86,045,083
------------ ------------
End of period+.......................................................................... $ 70,907,407 $ 72,188,011
============ ============
- --------
+Includes accumulated undistributed net investment income (loss)........................ $ (28,338) $ (29,423)
============ ============
Growth Opportunities Fund
--------------------------
For the year For the year
ended ended
September 30, September 30,
2007 2006
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss).......................................................... $ (729,282) $ (791,253)
Net realized gain (loss) on investments and foreign currencies........................ 11,409,851 13,948,650
Net unrealized gain (loss) on investments and foreign currencies...................... (1,842,299) (9,975,076)
------------ ------------
Net increase (decrease) in net assets resulting from operations......................... 8,838,270 3,182,321
------------ ------------
Distributions to shareholders from:
Net investment income (Class A)....................................................... -- --
Net investment income (Class B)....................................................... -- --
Net investment income (Class C)....................................................... -- --
Net investment income (Class I)....................................................... -- --
Net investment income (Class Z)....................................................... -- --
Net realized gain on securities (Class A)............................................. -- --
Net realized gain on securities (Class B)............................................. -- --
Net realized gain on securities (Class C)............................................. -- --
Net realized gain on securities (Class I)............................................. -- --
Net realized gain on securities (Class Z)............................................. -- --
------------ ------------
Total distributions to shareholders..................................................... -- --
------------ ------------
Net increase (decrease) in net assets resulting from capital share transactions (Note 8) (14,171,956) (20,760,692)
------------ ------------
Total increase (decrease) in net assets................................................. (5,333,686) (17,578,371)
NET ASSETS:
Beginning of period..................................................................... 68,584,481 86,162,852
------------ ------------
End of period+.......................................................................... $ 63,250,795 $ 68,584,481
============ ============
- --------
+Includes accumulated undistributed net investment income (loss)........................ $ 24,866 $ (25,397)
============ ============
See Notes to Financial Statements
13
SunAmerica Equity Funds
STATEMENT OF CHANGES IN NET ASSETS -- (continued)
New Century Fund
--------------------------
For the year For the year
ended ended
September 30, September 30,
2007 2006
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss).......................................................... $ (294,293) $ (439,624)
Net realized gain (loss) on investments and foreign currencies........................ 18,717,708 11,815,681
Net unrealized gain (loss) on investments and foreign currencies...................... (1,684,002) (8,389,295)
------------ ------------
Net increase (decrease) in net assets resulting from operations......................... 16,739,413 2,986,762
------------ ------------
Distributions to shareholders from:
Net investment income (Class A)....................................................... -- --
Net investment income (Class B)....................................................... -- --
Net investment income (Class C)....................................................... -- --
Net investment income (Class I)....................................................... --
Net investment income (Class Z)....................................................... -- --
Net realized gain on securities (Class A)............................................. -- --
Net realized gain on securities (Class B)............................................. -- --
Net realized gain on securities (Class C)............................................. -- --
Net realized gain on securities (Class I)............................................. --
Net realized gain on securities (Class Z)............................................. -- --
------------ ------------
Total distributions to shareholders..................................................... -- --
------------ ------------
Net increase (decrease) in net assets resulting from capital share transactions (Note 8) 3,329,307 (17,643,382)
------------ ------------
Total increase (decrease) in net assets................................................. 20,068,720 (14,656,620)
NET ASSETS:
Beginning of period..................................................................... 84,965,463 99,622,083
------------ ------------
End of period+.......................................................................... $105,034,183 $ 84,965,463
============ ============
- --------
+Includes accumulated undistributed net investment income (loss)........................ $ (49,536) $ (47,113)
============ ============
Growth and Income Fund
--------------------------
For the year For the year
ended ended
September 30, September 30,
2007 2006
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss).......................................................... $ 242,350 $ (32,741)
Net realized gain (loss) on investments and foreign currencies........................ 15,197,922 14,027,002
Net unrealized gain (loss) on investments and foreign currencies...................... 3,277,428 (4,359,123)
------------ ------------
Net increase (decrease) in net assets resulting from operations......................... 18,717,700 9,635,138
------------ ------------
Distributions to shareholders from:
Net investment income (Class A)....................................................... -- (99,245)
Net investment income (Class B)....................................................... -- --
Net investment income (Class C)....................................................... -- --
Net investment income (Class I)....................................................... -- (2,121)
Net investment income (Class Z)....................................................... -- --
Net realized gain on securities (Class A)............................................. -- --
Net realized gain on securities (Class B)............................................. -- --
Net realized gain on securities (Class C)............................................. -- --
Net realized gain on securities (Class I)............................................. -- --
Net realized gain on securities (Class Z)............................................. -- --
------------ ------------
Total distributions to shareholders..................................................... -- (101,366)
------------ ------------
Net increase (decrease) in net assets resulting from capital share transactions (Note 8) (24,101,118) (38,443,036)
------------ ------------
Total increase (decrease) in net assets................................................. (5,383,418) (28,909,264)
NET ASSETS:
Beginning of period..................................................................... 116,081,690 144,990,954
------------ ------------
End of period+.......................................................................... $110,698,272 $116,081,690
============ ============
- --------
+Includes accumulated undistributed net investment income (loss)........................ $ 204,199 $ (38,681)
============ ============
See Notes to Financial Statements
14
SunAmerica Equity Funds
STATEMENT OF CHANGES IN NET ASSETS -- (continued)
Balanced Assets Fund
--------------------------
For the year For the year
ended ended
September 30, September 30,
2007 2006
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss).......................................................... $ 2,415,467 $ 2,524,412
Net realized gain (loss) on investments and foreign currencies........................ 10,008,735 5,408,614
Net unrealized gain (loss) on investments and foreign currencies...................... 6,132,057 1,638,175
------------ ------------
Net increase (decrease) in net assets resulting from operations......................... 18,556,259 9,571,201
------------ ------------
Distributions to shareholders from:
Net investment income (Class A)....................................................... (1,990,178) (2,367,072)
Net investment income (Class B)....................................................... (133,492) (256,828)
Net investment income (Class C)....................................................... (113,780) (176,512)
Net investment income (Class I)....................................................... (13,500) (15,164)
Net investment income (Class Z)....................................................... -- --
Net realized gain on securities (Class A)............................................. -- --
Net realized gain on securities (Class B)............................................. -- --
Net realized gain on securities (Class C)............................................. -- --
Net realized gain on securities (Class I)............................................. -- --
Net realized gain on securities (Class Z)............................................. -- --
------------ ------------
Total distributions to shareholders..................................................... (2,250,950) (2,815,576)
------------ ------------
Net increase (decrease) in net assets resulting from capital share transactions (Note 8) (26,486,903) (35,679,423)
------------ ------------
Total increase (decrease) in net assets................................................. (10,181,594) (28,923,798)
NET ASSETS:
Beginning of period..................................................................... 163,694,649 192,618,447
------------ ------------
End of period+.......................................................................... $153,513,055 $163,694,649
============ ============
- --------
+Includes accumulated undistributed net investment income (loss)........................ $ 236,935 $ (88,894)
============ ============
International Equity Fund
--------------------------
For the year For the year
ended ended
September 30, September 30,
2007 2006
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss).......................................................... $ (141,323) $ (372,437)
Net realized gain (loss) on investments and foreign currencies........................ 13,471,646 22,221,354
Net unrealized gain (loss) on investments and foreign currencies...................... 13,664,189 (2,823,314)
------------ ------------
Net increase (decrease) in net assets resulting from operations......................... 26,994,512 19,025,603
------------ ------------
Distributions to shareholders from:
Net investment income (Class A)....................................................... -- --
Net investment income (Class B)....................................................... -- --
Net investment income (Class C)....................................................... -- --
Net investment income (Class I)....................................................... -- --
Net investment income (Class Z)....................................................... -- --
Net realized gain on securities (Class A)............................................. -- --
Net realized gain on securities (Class B)............................................. -- --
Net realized gain on securities (Class C)............................................. -- --
Net realized gain on securities (Class I)............................................. -- --
Net realized gain on securities (Class Z)............................................. -- --
------------ ------------
Total distributions to shareholders..................................................... -- --
------------ ------------
Net increase (decrease) in net assets resulting from capital share transactions (Note 8) (10,955,655) 8,501,813
------------ ------------
Total increase (decrease) in net assets................................................. 16,038,857 27,527,416
NET ASSETS:
Beginning of period..................................................................... 114,557,232 87,029,816
------------ ------------
End of period+.......................................................................... $130,596,089 $114,557,232
============ ============
- --------
+Includes accumulated undistributed net investment income (loss)........................ $ (125,271) $ (116,139)
============ ============
See Notes to Financial Statements
15
SunAmerica Equity Funds
STATEMENT OF CHANGES IN NET ASSETS -- (continued)
Value Fund
--------------------------
For the year For the year
ended ended
September 30, September 30,
2007 2006
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss).......................................................... $ 1,902,699 $ 1,551,527
Net realized gain (loss) on investments and foreign currencies........................ 30,254,544 22,506,011
Net unrealized gain (loss) on investments and foreign currencies...................... 1,556,544 1,434,818
------------ ------------
Net increase (decrease) in net assets resulting from operations......................... 33,713,787 25,492,356
------------ ------------
Distributions to shareholders from:
Net investment income (Class A)....................................................... (1,037,323) (937,019)
Net investment income (Class B)....................................................... (138,581) (80,387)
Net investment income (Class C)....................................................... (102,287) (58,523)
Net investment income (Class I)....................................................... (285) (27,586)
Net investment income (Class Z)....................................................... (294,735) (189,399)
Net realized gain on securities (Class A)............................................. (13,182,325) (8,311,112)
Net realized gain on securities (Class B)............................................. (5,278,693) (3,719,250)
Net realized gain on securities (Class C)............................................. (3,896,204) (2,707,693)
Net realized gain on securities (Class I)............................................. (3,186) (214,316)
Net realized gain on securities (Class Z)............................................. (2,693,654) (1,144,085)
------------ ------------
Total distributions to shareholders..................................................... (26,627,273) (17,389,370)
------------ ------------
Net increase (decrease) in net assets resulting from capital share transactions (Note 8) (5,899,264) (32,363,644)
------------ ------------
Total increase (decrease) in net assets................................................. 1,187,250 (24,260,658)
NET ASSETS:
Beginning of period..................................................................... 225,704,769 249,965,427
------------ ------------
End of period+.......................................................................... $226,892,019 $225,704,769
============ ============
- --------
+Includes accumulated undistributed net investment income (loss)........................ $ 1,613,189 $ 1,282,283
============ ============
See Notes to Financial Statements
16
SunAmerica Equity Funds
STATEMENT OF CHANGES IN NET ASSETS -- (continued)
Disciplined Growth Fund#
--------------------------
For the year For the year
ended ended
September 30, September 30,
2007 2006
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss).......................................................... $ (359,066) $ (247,089)
Net realized gain (loss) on investments and foreign currencies........................ 10,478,279 2,537,901
Net unrealized gain (loss) on investments and foreign currencies...................... 5,722,460 950,584
------------ -----------
Net increase (decrease) in net assets resulting from operations......................... 15,841,673 3,241,396
------------ -----------
Distributions to shareholders from:
Net investment income (Class A)....................................................... -- (51,047)
Net investment income (Class B)....................................................... -- (1,497)
Net investment income (Class C)....................................................... -- (1,412)
Net investment income (Class I)....................................................... -- --
Net investment income (Class Z)....................................................... -- --
Net realized gain on securities (Class A)............................................. -- --
Net realized gain on securities (Class B)............................................. -- --
Net realized gain on securities (Class C)............................................. -- --
Net realized gain on securities (Class I)............................................. -- --
Net realized gain on securities (Class Z)............................................. -- --
------------ -----------
Total distributions to shareholders..................................................... -- (53,956)
------------ -----------
Net increase (decrease) in net assets resulting from capital share transactions (Note 8) (14,243,867) 15,240,310
------------ -----------
Total increase (decrease) in net assets................................................. 1,597,806 18,427,750
NET ASSETS:
Beginning of period..................................................................... 58,779,138 40,351,388
------------ -----------
End of period+.......................................................................... $ 60,376,944 $58,779,138
============ ===========
- --------
+Includes accumulated undistributed net investment income (loss)........................ $ (9,070) $ (62,579)
============ ===========
International Small-Cap Fund
---------------------------
For the period
For the year May 2, 2006@
ended through
September 30, September 30,
2007 2006
------------- --------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss).......................................................... $ (126,780) $ (4,779)
Net realized gain (loss) on investments and foreign currencies........................ 1,240,543 (1,276,207)
Net unrealized gain (loss) on investments and foreign currencies...................... 5,861,549 (1,369,481)
----------- -----------
Net increase (decrease) in net assets resulting from operations......................... 6,975,312 (2,650,467)
----------- -----------
Distributions to shareholders from:
Net investment income (Class A)....................................................... -- --
Net investment income (Class B)....................................................... -- --
Net investment income (Class C)....................................................... -- --
Net investment income (Class I)....................................................... -- --
Net investment income (Class Z)....................................................... -- --
Net realized gain on securities (Class A)............................................. -- --
Net realized gain on securities (Class B)............................................. -- --
Net realized gain on securities (Class C)............................................. -- --
Net realized gain on securities (Class I)............................................. -- --
Net realized gain on securities (Class Z)............................................. -- --
----------- -----------
Total distributions to shareholders..................................................... -- --
----------- -----------
Net increase (decrease) in net assets resulting from capital share transactions (Note 8) 4,903,738 28,154,391
----------- -----------
Total increase (decrease) in net assets................................................. 11,879,050 25,503,924
NET ASSETS:
Beginning of period..................................................................... 25,503,924 --
----------- -----------
End of period+.......................................................................... $37,382,974 $25,503,924
=========== ===========
- --------
+Includes accumulated undistributed net investment income (loss)........................ $ (250) $ --
=========== ===========
# See Note 1
@ Commencement of operations
See Notes to Financial Statements
17
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS
BLUE CHIP GROWTH FUND
---------------------
Net gain
(loss) on
Net investments Distri- Net Net
Asset Net (both Dividends butions Asset Assets Ratio of
Value investment realized Total from from net from Total Value end of expenses
beginning income and investment investment capital distri- end of Total period to average
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets
- ------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- ------- ----------
Class A
- -
09/30/03 $11.15 $(0.06) $2.03 $1.97 $-- $-- $-- $13.12 17.67% $64,672 1.54%
09/30/04 13.12 (0.08) 1.05 0.97 -- -- -- 14.09 7.39 62,316 1.60
09/30/05 14.09 (0.01) 1.13 1.12 -- -- -- 15.21 7.95 56,755 1.59
09/30/06 15.21 (0.07) 0.55 0.48 -- -- -- 15.69 3.16 49,539 1.55(3)(4)
09/30/07 15.69 (0.07) 3.12 3.05 -- -- -- 18.74 19.44 51,961 1.60(3)(4)
Class B
- -
09/30/03 $10.20 $(0.14) $1.84 $1.70 $-- $-- $-- $11.90 16.67% $30,263 2.32%
09/30/04 11.90 (0.16) 0.96 0.80 -- -- -- 12.70 6.72 27,946 2.26
09/30/05 12.70 (0.11) 1.02 0.91 -- -- -- 13.61 7.17 22,558 2.32
09/30/06 13.61 (0.17) 0.50 0.33 -- -- -- 13.94 2.42 17,479 2.29(3)(4)
09/30/07 13.94 (0.17) 2.75 2.58 -- -- -- 16.52 18.51 14,314 2.36(3)(4)
Class C+
- -
09/30/03 $10.18 $(0.16) $1.85 $1.69 $-- $-- $-- $11.87 16.60% $ 7,286 2.44%
09/30/04 11.87 (0.18) 0.96 0.78 -- -- -- 12.65 6.57 6,458 2.37
09/30/05 12.65 (0.13) 1.01 0.88 -- -- -- 13.53 6.96 5,278 2.49
09/30/06 13.53 (0.17) 0.50 0.33 -- -- -- 13.86 2.44 4,528 2.30(3)(4)
09/30/07 13.86 (0.20) 2.73 2.53 -- -- -- 16.39 18.25 3,959 2.55(3)(4)
Class I
- -
09/30/03 $11.16 $(0.04) $2.04 $2.00 $-- $-- $-- $13.16 17.92% $19,778 1.33%(3)
09/30/04 13.16 (0.04) 1.05 1.01 -- -- -- 14.17 7.67 2,164 1.33(3)
09/30/05 14.17 0.03 1.14 1.17 -- -- -- 15.34 8.26 1,454 1.33(3)
09/30/06 15.34 (0.04) 0.57 0.53 -- -- -- 15.87 3.45 642 1.28(3)(4)
09/30/07 15.87 (0.02) 3.16 3.14 -- -- -- 19.01 19.79 673 1.32(3)(4)
Ratio
of net
investment
income (loss)
to average Portfolio
net assets Turnover
- ------------- ---------
(0.50)% 114%
(0.59) 145
(0.09) 120
(0.45)(3)(4) 154
(0.40)(3)(4) 72
(1.28)% 114%
(1.25) 145
(0.80) 120
(1.20)(3)(4) 154
(1.14)(3)(4) 72
(1.40)% 114%
(1.37) 145
(0.98) 120
(1.21)(3)(4) 154
(1.35)(3)(4) 72
(0.29)%(3) 114%
(0.26)(3) 145
0.22(3) 120
(0.22)(3)(4) 154
(0.11)(3)(4) 72
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements and expense reductions.
(3)Net of the following expense reimbursements/fee waivers (based on average
net assets):
09/30/03 09/30/04 09/30/05 09/30/06 09/30/07
-------- -------- -------- -------- --------
Blue Chip Growth Class A................ -- % -- % -- % 0.05% 0.01%
Blue Chip Growth Class B................ -- -- -- 0.05 0.02
Blue Chip Growth Class C+............... -- -- -- 0.05 0.02
Blue Chip Growth Class I................ 0.33 0.13 0.49 1.15 1.92
(4)Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied the ratio of expenses to average net
assets would have been lower and the ratio of net investment income to
average net assets would have been higher by:
09/30/06 09/30/07
-------- --------
Blue Chip Growth Class A................ 0.01% 0.01%
Blue Chip Growth Class B................ 0.01 0.01
Blue Chip Growth Class C+............... 0.01 0.01
Blue Chip Growth Class I................ 0.01 0.01
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
See Notes to Financial Statements
18
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
GROWTH OPPORTUNITIES FUND
-------------------------
Net gain
(loss) on
Net investments Distri- Net Net
Asset Net (both Dividends butions Asset Assets Ratio of
Value investment realized Total from from net from Total Value end of expenses
beginning income and investment investment capital distri- end of Total period to average
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets
- ------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- ------- ----------
Class A
- -
09/30/03 $ 9.99 $(0.13) $3.88 $ 3.75 $-- $-- $-- $13.74 37.54% $62,600 1.63%
09/30/04 13.74 (0.16) 0.07 (0.09) -- -- -- 13.65 (0.66)(3) 49,918 1.58
09/30/05 13.65 (0.17) 2.79 2.62 -- -- -- 16.27 19.19 44,641 1.65
09/30/06 16.27 (0.12) 0.89 0.77 -- -- -- 17.04 4.73 37,382 1.59(4)(5)
09/30/07 17.04 (0.14) 2.41 2.27 -- -- -- 19.31 13.32 39,646 1.62(4)(5)
Class B
- -
09/30/03 $ 9.11 $(0.20) $3.53 $ 3.33 $-- $-- $-- $12.44 36.55% $38,870 2.36%
09/30/04 12.44 (0.24) 0.07 (0.17) -- -- -- 12.27 (1.37)(3) 31,429 2.27
09/30/05 12.27 (0.25) 2.50 2.25 -- -- -- 14.52 18.34 27,673 2.32
09/30/06 14.52 (0.21) 0.79 0.58 -- -- -- 15.10 3.99 21,500 2.30(4)(5)
09/30/07 15.10 (0.25) 2.15 1.90 -- -- -- 17.00 12.58 15,229 2.31(4)(5)
Class C+
- -
09/30/03 $ 9.10 $(0.20) $3.53 $ 3.33 $-- $-- $-- $12.43 36.59% $19,808 2.33%
09/30/04 12.43 (0.24) 0.06 (0.18) -- -- -- 12.25 (1.45)(3) 14,599 2.29
09/30/05 12.25 (0.26) 2.51 2.25 -- -- -- 14.50 18.37 12,089 2.39
09/30/06 14.50 (0.21) 0.79 0.58 -- -- -- 15.08 4.00 9,281 2.28(4)(5)
09/30/07 15.08 (0.26) 2.14 1.88 -- -- -- 16.96 12.47 8,230 2.38(4)(5)
Class I
- -
09/30/03 $10.00 $(0.10) $3.90 $ 3.80 $-- $-- $-- $13.80 38.00% $ 4,404 1.33%(4)
09/30/04 13.80 (0.13) 0.08 (0.05) -- -- -- 13.75 (0.36)(3) 3,493 1.33(4)
09/30/05 13.75 (0.13) 2.82 2.69 -- -- -- 16.44 19.56 1,759 1.33(4)
09/30/06 16.44 (0.06) 0.88 0.82 -- -- -- 17.26 4.99 422 1.28(4)(5)
09/30/07 17.26 (0.06) 2.42 2.36 -- -- -- 19.62 13.67 145 1.32(4)(5)
Ratio
of net
investment
income (loss)
to average Portfolio
net assets Turnover
- ------------- ---------
(1.11)% 204%
(1.09) 170
(1.15) 86
(0.76)(4)(5) 278
(0.79)(4)(5) 321
(1.85)% 204%
(1.78) 170
(1.82) 86
(1.46)(4)(5) 278
(1.48)(4)(5) 321
(1.82)% 204%
(1.80) 170
(1.89) 86
(1.44)(4)(5) 278
(1.56)(4)(5) 321
(0.82)%(4) 204%
(0.85)(4) 170
(0.85)(4) 86
(0.35)(4)(5) 278
(0.34)(4)(5) 321
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements and expense reductions.
(3)The Fund's total return increased from a gain realized on the disposal of
investments in violation of investment restrictions on Class A 0.07%, Class
B 0.10%, Class C 0.10% and Class I 0.08%.
(4)Net of the following expense reimbursements/fee waivers (based on average
net assets):
09/30/03 09/30/04 09/30/05 09/30/06 09/30/07
-------- -------- -------- -------- --------
Growth Opportunities Class A............ -- % -- % -- % 0.05% 0.00%
Growth Opportunities Class B............ -- -- -- 0.05 0.01
Growth Opportunities Class C+........... -- -- -- 0.05 0.01
Growth Opportunities Class I............ 0.50 0.18 0.49 1.59 5.77
(5)Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied the ratio of expenses to average net
assets would have been lower and the ratio of net investment income to
average net assets would have been higher by:
09/30/06 09/30/07
-------- --------
Growth Opportunities Class A............ 0.04% 0.05%
Growth Opportunities Class B............ 0.04 0.05
Growth Opportunities Class C+........... 0.04 0.05
Growth Opportunities Class I............ 0.03 0.05
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
See Notes to Financial Statements
19
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
NEW CENTURY FUND
----------------
Net gain
(loss) on
Net investments Distri- Net Net
Asset Net (both Dividends butions Asset Assets Ratio of
Value investment realized Total from from net from Total Value end of expenses
beginning income and investment investment capital distri- end of Total period to average
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets
- ------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- ------- ----------
Class A
- -
09/30/03 $11.22 $(0.13) $2.35 $2.22 $-- $-- $-- $13.44 19.79% $85,685 1.57%
09/30/04 13.44 (0.17) 1.50 1.33 -- -- -- 14.77 9.90 80,872 1.57
09/30/05 14.77 (0.15) 3.38 3.23 -- -- -- 18.00 21.87 87,314 1.58
09/30/06 18.00 (0.07) 0.67 0.60 -- -- -- 18.60 3.33 75,682 1.55(4)
09/30/07 18.60 (0.04) 3.53 3.49 -- -- -- 22.09 18.76 88,535 1.55(4)
Class B
- -
09/30/03 $10.11 $(0.20) $2.12 $1.92 $-- $-- $-- $12.03 18.99% $16,078 2.28%
09/30/04 12.03 (0.25) 1.35 1.10 -- -- -- 13.13 9.14 11,415 2.29
09/30/05 13.13 (0.25) 3.00 2.75 -- -- -- 15.88 20.94 10,344 2.32
09/30/06 15.88 (0.19) 0.60 0.41 -- -- -- 16.29 2.58 7,528 2.29(4)
09/30/07 16.29 (0.18) 3.09 2.91 -- -- -- 19.20 17.86 10,701 2.31(4)
Class C+
- -
09/30/03 $10.09 $(0.18) $2.11 $1.93 $-- $-- $-- $12.02 19.13% $ 2,183 2.14%(3)
09/30/04 12.02 (0.22) 1.34 1.12 -- -- -- 13.14 9.32 2,180 2.10(3)
09/30/05 13.14 (0.22) 3.02 2.80 -- -- -- 15.94 21.31 1,964 2.14(3)
09/30/06 15.94 (0.16) 0.59 0.43 -- -- -- 16.37 2.70 1,756 2.14(3)(4)
09/30/07 16.37 (0.16) 3.11 2.95 -- -- -- 19.32 18.02 5,798 2.14(3)(4)
Ratio
of net
investment
income (loss)
to average Portfolio
net assets Turnover
- ------------- ---------
(1.08)% 123%
(1.20) 110
(0.89) 80
(0.39)(4) 235
(0.20)(4) 315
(1.77)% 123%
(1.91) 110
(1.64) 80
(1.14)(4) 235
(1.00)(4) 315
(1.63)%(3) 123%
(1.73)(3) 110
(1.45)(3) 80
(0.98)(3)(4) 235
(0.88)(3)(4) 315
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements and expense reductions.
(3)Net of the following expense reimbursements (based on average net assets):
09/30/03 09/30/04 09/30/05 09/30/06 09/30/07
-------- -------- -------- -------- --------
New Century Class C+.................... 0.66% 0.48% 0.66% 0.44% 0.35%
(4)Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied the ratio of expenses to average net
assets would have been lower and the ratio of net investment income to
average net assets would have been higher by:
09/30/06 09/30/07
-------- --------
New Century Class A..................... 0.01% 0.02%
New Century Class B..................... 0.01 0.02
New Century Class C..................... 0.01 0.03
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
See Notes to Financial Statements
20
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
GROWTH AND INCOME FUND
----------------------
Net gain
(loss) on
Net investments Distri- Net Net
Asset Net (both Dividends butions Asset Assets Ratio of
Value investment realized Total from from net from Total Value end of expenses
beginning income and investment investment capital distri- end of Total period to average
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets
- ------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- ------- ----------
Class A
- -
09/30/03 $ 8.87 $ 0.01 $1.31 $1.32 $ -- $-- $ -- $10.19 14.88% $70,826 1.50%
09/30/04 10.19 0.00 1.19 1.19 -- -- -- 11.38 11.68 69,069 1.50
09/30/05 11.38 0.10 1.03 1.13 (0.11) -- (0.11) 12.40 9.89 65,666 1.55
09/30/06 12.40 0.04 1.01 1.05 (0.02) -- (0.02) 13.43 8.47 61,872 1.54(3)(4)
09/30/07 13.43 0.07 2.38 2.45 -- -- -- 15.88 18.24 66,963 1.52(3)(4)
Class B
- -
09/30/03 $ 8.49 $(0.06) $1.26 $1.20 $ -- $-- $ -- $ 9.69 14.13% $66,378 2.16%
09/30/04 9.69 (0.07) 1.13 1.06 -- -- -- 10.75 10.94 54,199 2.17
09/30/05 10.75 0.02 0.97 0.99 -- -- -- 11.74 9.21 41,120 2.20
09/30/06 11.74 (0.05) 0.96 0.91 -- -- -- 12.65 7.75 27,100 2.22(3)(4)
09/30/07 12.65 (0.03) 2.23 2.20 -- -- -- 14.85 17.39 19,562 2.21(3)(4)
Class C+
- -
09/30/03 $ 8.48 $(0.06) $1.25 $1.19 $ -- $-- $ -- $ 9.67 14.03% $49,593 2.16%
09/30/04 9.67 (0.07) 1.13 1.06 -- -- -- 10.73 10.96 43,993 2.14
09/30/05 10.73 0.02 0.97 0.99 -- -- -- 11.72 9.23 37,448 2.18
09/30/06 11.72 (0.04) 0.95 0.91 -- -- -- 12.63 7.76 26,821 2.19(3)(4)
09/30/07 12.63 (0.02) 2.23 2.21 -- -- -- 14.84 17.50 23,851 2.19(3)(4)
Class I
- -
09/30/03 $ 8.88 $ 0.02 $1.31 $1.33 $ -- $-- $ -- $10.21 14.98% $12,899 1.32%(3)
09/30/04 10.21 0.02 1.18 1.20 -- -- -- 11.41 11.75 769 1.32(3)
09/30/05 11.41 0.12 1.04 1.16 (0.14) -- (0.14) 12.43 10.18 758 1.31(3)
09/30/06 12.43 0.07 1.01 1.08 (0.04) -- (0.04) 13.47 8.69 288 1.32(3)(4)
09/30/07 13.47 0.11 2.38 2.49 -- -- -- 15.96 18.49 323 1.31(3)(4)
Ratio
of net
investment
income (loss)
to average Portfolio
net assets Turnover
- ------------- ---------
0.06% 123%
0.01 139
0.78 79
0.31(3)(4) 152
0.49(3)(4) 164
(0.59)% 123%
(0.67) 139
0.16 79
(0.39)(3)(4) 152
(0.21)(3)(4) 164
(0.60)% 123%
(0.64) 139
0.17 79
(0.36)(3)(4) 152
(0.18)(3)(4) 164
0.23%(3) 123%
0.19(3) 139
1.00(3) 79
0.48(3)(4) 152
0.70(3)(4) 164
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements and expense reductions.
(3)Net of the following expense reimbursements/fee waivers (based on average
net assets):
09/30/03 09/30/04 09/30/05 09/30/06 09/30/07
-------- -------- -------- -------- --------
Growth and Income Class A............... -- % -- % -- % 0.00% 0.01%
Growth and Income Class B............... -- -- -- 0.00 0.01
Growth and Income Class C+.............. -- -- -- 0.00 0.01
Growth and Income Class I............... 0.37 0.14 0.96 2.23 3.72
(4)Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied the ratio of expenses to average net
assets would have been lower and the ratio of net investment income to
average net assets would have been higher by:
09/30/06 09/30/07
-------- --------
Growth and Income Class A............... 0.01% 0.02%
Growth and Income Class B............... 0.01 0.02
Growth and Income Class C+.............. 0.01 0.02
Growth and Income Class I............... 0.01 0.02
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
See Notes to Financial Statements
21
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
BALANCED ASSETS FUND
--------------------
Net gain
(loss) on
Net investments Distri- Net Net
Asset Net (both Dividends butions Asset Assets Ratio of
Value investment realized Total from from net from Total Value end of expenses
beginning income and investment investment capital distri- end of Total period to average
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets
- ------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- -------- ----------
Class A
- -
09/30/03 $11.79 $0.10 $0.68 $0.78 $(0.12) $-- $(0.12) $12.45 6.65% $175,324 1.49%
09/30/04 12.45 0.12 0.78 0.90 (0.16) -- (0.16) 13.19 7.27 160,269 1.50
09/30/05 13.19 0.21 0.56 0.77 (0.24) -- (0.24) 13.72 5.84 142,573 1.62
09/30/06 13.72 0.22 0.58 0.80 (0.25) -- (0.25) 14.27 5.90 127,313 1.52(3)(4)
09/30/07 14.27 0.25 1.52 1.77 (0.24) -- (0.24) 15.80 12.50 124,257 1.55(3)(4)
Class B
- -
09/30/03 $11.74 $0.03 $0.68 $0.71 $(0.04) $-- $(0.04) $12.41 6.07% $ 47,496 2.16%
09/30/04 12.41 0.03 0.77 0.80 (0.07) -- (0.07) 13.14 6.45 38,687 2.18
09/30/05 13.14 0.13 0.55 0.68 (0.15) -- (0.15) 13.67 5.16 30,002 2.27
09/30/06 13.67 0.13 0.58 0.71 (0.15) -- (0.15) 14.23 5.23 20,464 2.20(3)(4)
09/30/07 14.23 0.14 1.52 1.66 (0.12) -- (0.12) 15.77 11.70 14,714 2.28(3)(4)
Class C+
- -
09/30/03 $11.76 $0.03 $0.67 $0.70 $(0.04) $-- $(0.04) $12.42 5.97% $ 25,784 2.15%
09/30/04 12.42 0.03 0.78 0.81 (0.07) -- (0.07) 13.16 6.53 22,781 2.18
09/30/05 13.16 0.13 0.55 0.68 (0.15) -- (0.15) 13.69 5.15 19,298 2.26
09/30/06 13.69 0.13 0.58 0.71 (0.15) -- (0.15) 14.25 5.22 15,164 2.18(3)(4)
09/30/07 14.25 0.15 1.52 1.67 (0.12) -- (0.12) 15.80 11.75 13,891 2.26(3)(4)
Class I
- -
09/30/03 $11.79 $0.12 $0.69 $0.81 $(0.14) $-- $(0.14) $12.46 6.89% $ 4,574 1.33%(3)
09/30/04 12.46 0.16 0.77 0.93 (0.18) -- (0.18) 13.21 7.44 679 1.29(3)
09/30/05 13.21 0.25 0.55 0.80 (0.28) -- (0.28) 13.73 6.10 746 1.32(3)
09/30/06 13.73 0.26 0.59 0.85 (0.29) -- (0.29) 14.29 6.24 754 1.28(3)(4)
09/30/07 14.29 0.29 1.53 1.82 (0.29) -- (0.29) 15.82 12.81 652 1.31(3)(4)
-
Ratio
of net
investment
income (loss)
to average Portfolio
net assets Turnover
- ------------- --------- -
-
0.86% 409%
0.89 181
1.56 160
1.59(3)(4) 154
1.66(3)(4) 123
-
0.22% 409%
0.20 181
0.91 160
0.91(3)(4) 154
0.93(3)(4) 123
-
0.22% 409%
0.21 181
0.92 160
0.93(3)(4) 154
0.95(3)(4) 123
-
1.02%(3) 409%
1.10(3) 181
1.84(3) 160
1.84(3)(4) 154
1.90(3)(4) 123
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements and expense reductions.
(3)Net of the following expense reimbursements/fee waivers (based on average
net assets):
09/30/03 09/30/04 09/30/05 09/30/06 09/30/07
-------- -------- -------- -------- --------
Balanced Assets Class A................. -- % -- % -- % 0.05% 0.02%
Balanced Assets Class B................. -- -- -- 0.05 0.02
Balanced Assets Class C+................ -- -- -- 0.05 0.02
Balanced Assets Class I................. 0.19 0.24 1.47 1.38 1.71
(4)Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied the ratio of expenses to average net
assets would have been lower and the ratio of net investment income to
average net assets would have been higher by:
09/30/06 09/30/07
-------- --------
Balanced Assets Class A................. 0.00% 0.01%
Balanced Assets Class B................. 0.00 0.01
Balanced Assets Class C+................ 0.00 0.01
Balanced Assets Class I................. 0.00 0.01
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
See Notes to Financial Statements
22
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
INTERNATIONAL EQUITY FUND
-------------------------
Net gain
(loss) on
Net investments Distri- Net Net
Asset Net (both Dividends butions Asset Assets Ratio of
Value investment realized Total from from net from Total Value end of expenses
beginning income and investment investment capital distri- end of Total period to average
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets(3)
- ------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- ------- -------------
Class A
- -
09/30/03 $ 7.00 $ 0.03 $1.70 $1.73 $ -- $-- $ -- $ 8.73 24.71% $28,720 1.90%
09/30/04 8.73 0.01 1.46 1.47 0.00 -- 0.00 10.20 16.88 32,221 1.90
09/30/05 10.20 0.02 2.82 2.84 -- -- -- 13.04 27.84 43,527 1.90
09/30/06 13.04 (0.01) 2.81 2.80 -- -- -- 15.84 21.47 62,190 1.90
09/30/07 15.84 0.02 3.94 3.96 -- -- -- 19.80 25.00 75,408 1.90
Class B
- -
09/30/03 $ 6.73 $(0.03) $1.64 $1.61 $ -- $-- $ -- $ 8.34 23.92% $24,799 2.55%
09/30/04 8.34 (0.06) 1.41 1.35 -- -- -- 9.69 16.19 20,673 2.55
09/30/05 9.69 (0.06) 2.68 2.62 -- -- -- 12.31 27.04 19,546 2.55
09/30/06 12.31 (0.11) 2.65 2.54 -- -- -- 14.85 20.63 21,240 2.55
09/30/07 14.85 (0.10) 3.69 3.59 -- -- -- 18.44 24.18 20,509 2.55
Class C+
- -
09/30/03 $ 6.72 $(0.03) $1.64 $1.61 $ -- $-- $ -- $ 8.33 23.96% $14,787 2.55%
09/30/04 8.33 (0.06) 1.41 1.35 -- -- -- 9.68 16.21 15,798 2.55
09/30/05 9.68 (0.06) 2.67 2.61 -- -- -- 12.29 26.96 16,892 2.55
09/30/06 12.29 (0.11) 2.66 2.55 -- -- -- 14.84 20.75 21,646 2.55
09/30/07 14.84 (0.09) 3.67 3.58 -- -- -- 18.42 24.12 26,683 2.55
Class I
- -
09/30/03 $ 7.02 $ 0.03 $1.72 $1.75 $ -- $-- $ -- $ 8.77 24.93% $20,499 1.80%
09/30/04 8.77 (0.04) 1.53 1.49 (0.01) -- (0.01) 10.25 16.96 4,233 1.80
09/30/05 10.25 0.05 2.82 2.87 -- -- -- 13.12 28.00 7,065 1.80
09/30/06 13.12 0.00 2.84 2.84 -- -- -- 15.96 21.65 9,482 1.80
09/30/07 15.96 0.04 3.96 4.00 -- -- -- 19.96 25.06 7,997 1.80
Ratio
of net
investment
income (loss)
to average Portfolio
net assets(3) Turnover
- ------------- ---------
0.35% 209%
0.06 202
0.17 126
(0.09) 152
0.13 132
(0.41)% 209%
(0.62) 202
(0.51) 126
(0.80) 152
(0.59) 132
(0.38)% 209%
(0.60) 202
(0.49) 126
(0.76) 152
(0.52) 132
0.43% 209%
(0.34) 202
0.43 126
(0.01) 152
0.24 132
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements and expense reductions.
(3)Net of the following expense reimbursements (recoupments) (based on average
net assets):
09/30/03 09/30/04 09/30/05 09/30/06 09/30/07
-------- -------- -------- -------- --------
International Equity Class A............ 0.18% 0.10% 0.09% (0.04)% (0.05)%
International Equity Class B............ 0.13 0.11 0.17 0.02 0.04
International Equity Class C+........... 0.28 0.06 0.14 (0.01) (0.00)
International Equity Class I............ 0.16 0.12 0.14 0.00 0.04
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
See Notes to Financial Statements
23
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
VALUE FUND
----------
Net gain
(loss) on
Net investments Distri- Net Net
Asset Net (both Dividends butions Asset Assets
Value investment realized Total from from net from Total Value end of
beginning income and investment investment capital distri- end of Total period
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's)
- -------------------- --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- --------
Class A
- -
10/31/02 $15.10 $0.18 $ 0.07 $ 0.25 $(0.09) $(0.63) $(0.72) $14.63 1.44% $ 50,975
10/31/03 14.63 0.29 2.05 2.34 (0.18) (0.46) (0.64) 16.33 16.59 60,701
11/1/03-09/30/04(7) 16.33 0.32 1.86 2.18 (0.37) (0.45) (0.82) 17.69 13.79 91,769
09/30/05 17.69 0.17 2.22 2.39 (0.29) (1.78) (2.07) 18.01 14.06 130,754
09/30/06 18.01 0.15 1.89 2.04 (0.13) (1.17) (1.30) 18.75 12.02 121,729
09/30/07 18.75 0.18 2.59 2.77 (0.16) (2.04) (2.20) 19.32 15.80 126,788
Class B
- -
10/31/02 $14.56 $0.07 $ 0.07 $ 0.14 $(0.01) $(0.63) $(0.64) $14.06 0.74% $ 78,584
10/31/03 14.06 0.19 1.98 2.17 (0.08) (0.46) (0.54) 15.69 15.94 83,935
11/1/03-09/30/04(7) 15.69 0.24 1.75 1.99 (0.27) (0.45) (0.72) 16.96 13.09 68,492
09/30/05 16.96 0.07 2.11 2.18 (0.18) (1.78) (1.96) 17.18 13.34 57,704
09/30/06 17.18 0.04 1.80 1.84 (0.03) (1.17) (1.20) 17.82 11.29 47,100
09/30/07 17.82 0.05 2.46 2.51 (0.05) (2.04) (2.09) 18.24 15.07 39,355
Class C+
- -
10/31/02 $14.56 $0.07 $ 0.07 $ 0.14 $(0.01) $(0.63) $(0.64) $14.06 0.74% $ 18,504
10/31/03 14.06 0.18 1.99 2.17 (0.08) (0.46) (0.54) 15.69 15.94 23,208
11/1/03-09/30/04(7) 15.69 0.22 1.77 1.99 (0.27) (0.45) (0.72) 16.96 13.09 30,985
09/30/05 16.96 0.06 2.12 2.18 (0.18) (1.78) (1.96) 17.18 13.34 41,095
09/30/06 17.18 0.04 1.80 1.84 (0.03) (1.17) (1.20) 17.82 11.30 33,849
09/30/07 17.82 0.06 2.45 2.51 (0.05) (2.04) (2.09) 18.24 15.07 26,071
Class I
- -
11/16/01-10/31/02(5) $15.93 $0.19 $(0.77) $(0.58) $(0.09) $(0.63) $(0.72) $14.63 (3.83)% $ 4,726
10/31/03 14.63 0.30 2.05 2.35 (0.19) (0.46) (0.65) 16.33 16.72 6,629
11/1/03-09/30/04(7) 16.33 0.37 1.83 2.20 (0.40) (0.45) (0.85) 17.68 13.91 4,746
09/30/05 17.68 0.20 2.20 2.40 (0.30) (1.78) (2.08) 18.00 14.12 3,106
09/30/06 18.00 0.16 1.91 2.07 (0.15) (1.17) (1.32) 18.75 12.20 174
09/30/07 18.75 0.21 2.57 2.78 (0.18) (2.04) (2.22) 19.31 15.89 34
Class Z
- -
10/31/02 $15.43 $0.27 $ 0.06 $ 0.33 $(0.16) $(0.63) $(0.79) $14.97 1.98% $ 360
10/31/03 14.97 0.36 2.13 2.49 (0.25) (0.46) (0.71) 16.75 17.36 4,532
11/1/03-09/30/04(7) 16.75 0.41 1.92 2.33 (0.45) (0.45) (0.90) 18.18 14.37 7,370
09/30/05 18.18 0.27 2.30 2.57 (0.39) (1.78) (2.17) 18.58 14.77 17,307
09/30/06 18.58 0.26 1.95 2.21 (0.19) (1.17) (1.36) 19.43 12.64 22,853
09/30/07 19.43 0.29 2.70 2.99 (0.22) (2.04) (2.26) 20.16 16.48 34,644
Ratio
of net
Ratio of investment
expenses income (loss)
to average to average Portfolio
net assets(4) net assets(4) Turnover
- ------------- ------------- ---------
1.78% 1.15% 188%
1.78(6) 1.94(6) 138
1.73(3) 2.12(3) 204
1.63 1.00 82
1.63(6) 0.88(6) 140
1.63(6) 0.97(6) 143
2.43% 0.49% 188%
2.41(6) 1.32(6) 138
2.40(3) 1.58(3) 204
2.28 0.38 82
2.28(6) 0.23(6) 140
2.28(6) 0.31(6) 143
2.43% 0.49% 188%
2.43(6) 1.28(6) 138
2.41(3) 1.48(3) 204
2.28 0.36 82
2.28(6) 0.23(6) 140
2.28(6) 0.32(6) 143
1.68%(3) 1.26%(3) 188%
1.68(6) 2.02(6) 138
1.67(3) 2.31(3) 204
1.53 1.11 82
1.53(6) 0.90(6) 140
1.53(6) 1.05(6) 143
1.21% 1.69% 188%
1.21(6) 2.33(6) 138
1.19(3) 2.58(3) 204
1.06 1.54 82
1.06(6) 1.45(6) 140
1.06(6) 1.54(6) 143
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements and expense reductions.
(3)Annualized
(4)Net of the following expense reimbursements (recoupments) (based on average
net assets):
10/31/02 10/31/03 09/30/04(3) 09/30/05 09/30/06 09/30/07
-------- -------- ----------- -------- -------- --------
Value Class A........................... 0.01% (0.01)% 0.04% 0.08% 0.08% 0.07%
Value Class B........................... (0.02) (0.01) 0.02 0.14 0.10 0.11
Value Class C+.......................... 0.03 0.02 0.06 0.08 0.08 0.09
Value Class I........................... 0.19(3) -- 0.10 0.25 0.30 21.30
Value Class Z........................... 5.52 1.00 0.16 0.10 0.07 0.07
(5)Commencement of sale of respective class of shares.
(6)Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied the ratio of expenses to average net
assets would have been lower and the ratio of net investment income to
average net assets would have been higher by:
10/31/03 09/30/06 09/30/07
-------- -------- --------
Value Class A........................... 0.01% 0.01% 0.01%
Value Class B........................... 0.01 0.01 0.01
Value Class C+.......................... 0.01 0.01 0.01
Value Class I........................... 0.01 0.01 0.01
Value Class Z........................... 0.00 0.01 0.01
(7)The Fund changed its fiscal year end from October 31 to September 30.
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
See Notes to Financial Statements
24
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
DISCIPLINED GROWTH FUND@
------------------------
Net Gain
(loss) on
Net investments Distri- Net Net
Asset Net (both Dividends butions Asset Assets
Value investment realized Total from from net from Total Value end of
beginning income and investment investment capital distri- end of Total period
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's)
- -------------------- --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- -------
Class A
- -
10/31/02 $11.04 $ 0.01 $(2.05) $(2.04) $ -- $-- $ -- $ 9.00 (18.48)% $16,587
10/31/03 9.00 0.03 1.46 1.49 -- -- -- 10.49 16.56 14,877
11/01/03-09/30/04(3) 10.49 0.03 0.75 0.78 -- -- -- 11.27 7.44 13,562
09/30/05 11.27 0.09 0.53 0.62 (0.06) -- (0.06) 11.83 5.51 11,251
09/30/06 11.83 (0.01) 1.34 1.33 (0.06) -- (0.06) 13.10 11.25 22,554
09/30/07 13.10 (0.04) 4.38 4.34 -- -- -- 17.44 33.13(7) 25,774
Class B
- -
10/31/02 $10.85 $(0.06) $(2.00) $(2.06) $ -- $-- $ -- $ 8.79 (18.99)% $25,703
10/31/03 8.79 (0.03) 1.41 1.38 -- -- -- 10.17 15.70 22,694
11/01/03-09/30/04(3) 10.17 (0.04) 0.73 0.69 -- -- -- 10.86 6.78 19,669
09/30/05 10.86 0.01 0.52 0.53 -- -- -- 11.39 4.88 15,117
09/30/06 11.39 (0.10) 1.29 1.19 0.00 -- 0.00 12.58 10.46 9,299
09/30/07 12.58 (0.13) 4.20 4.07 -- -- -- 16.65 32.35(7) 5,676
Class C+
- -
10/31/02 $10.86 $(0.06) $(2.00) $(2.06) $ -- $-- $ -- $ 8.80 (18.97)% $26,430
10/31/03 8.80 (0.03) 1.42 1.39 -- -- -- 10.19 15.80 23,036
11/01/03-09/30/04(3) 10.19 (0.04) 0.73 0.69 -- -- -- 10.88 6.77 18,295
09/30/05 10.88 0.01 0.51 0.52 -- -- -- 11.40 4.78 13,983
09/30/06 11.40 (0.09) 1.29 1.20 0.00 -- 0.00 12.60 10.54 26,927
09/30/07 12.60 (0.13) 4.19 4.06 -- -- -- 16.66 32.22(7) 28,927
Ratio
of net
Ratio of investment
expenses income (loss)
to average to average Portfolio
net assets(5) net assets(5) Turnover
- ------------- ------------- ---------
1.45% 0.09% 16%
1.45 0.35 13
1.45(4) 0.25(4) 20
1.45 0.74 32
1.45(6) (0.02)(6) 999
1.45(6) (0.13)(6) 446
2.10% (0.56)% 16%
2.10 (0.30) 13
2.10(4) (0.40)(4) 20
2.10 0.09 32
2.10(6) (0.77)(6) 999
2.10(6) (0.75)(6) 446
2.10% (0.56)% 16%
2.10 (0.30) 13
2.10(4) (0.40)(4) 20
2.10 0.09 32
2.10(6) (0.68)(6) 999
2.10(6) (0.78)(6) 446
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements and expense reductions.
(3)The Fund changed its fiscal year end from October 31 to September 30.
(4)Annualized
(5)Net of the following expense reimbursements (based on average net assets):
10/31/02 10/31/03 09/30/04(4) 09/30/05 09/30/06 09/30/07
-------- -------- ----------- -------- -------- --------
Disciplined Growth Class A.............. 0.00% 0.26% 0.24% 0.38% 0.31% 0.34%
Disciplined Growth Class B.............. 0.20 0.23 0.25 0.35 0.37 0.45
Disciplined Growth Class C+............. 0.21 0.23 0.24 0.33 0.30 0.30
(6)Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied the ratio of expenses to average net
assets would have been lower and the ratio of net investment income to
average net assets would have been higher by:
09/30/06 09/30/07
-------- --------
Disciplined Growth Class A.............. 0.04% 0.11%
Disciplined Growth Class B.............. 0.02 0.14
Disciplined Growth Class C.............. 0.03 0.12
(7)Total Return for each class was increased by 0.38%, 0.40% and 0.40% for
Class A, Class B and Class C, respectively, from a reimbursement by an
affiliate. (See Note 4)
@ See Note 1
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
See Notes to Financial Statements
25
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
INTERNATIONAL SMALL-CAP FUND
----------------------------
Net gain
(loss) on
Net investments Distri- Net Net
Asset Net (both Dividends butions Asset Assets
Value investment realized Total from from net from Total Value end of
beginning income and investment investment capital distri- end of Total period
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's)
- -------------------- --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- -------
Class A
05/02/06-09/30/06(3) $12.50 $ 0.00 $(1.45) $(1.45) $-- $-- $-- $11.05 (11.60)% $21,557
09/30/07 11.05 (0.04) 2.99 2.95 -- -- -- 14.00 26.70 30,845
Class B
05/02/06-09/30/06(3) $12.50 $(0.04) $(1.44) $(1.48) $-- $-- $-- $11.02 (11.84)% $ 583
09/30/07 11.02 (0.11) 2.97 2.86 -- -- -- 13.88 25.95 1,181
Class C
05/02/06-09/30/06(3) $12.50 $(0.04) $(1.44) $(1.48) $-- $-- $-- $11.02 (11.84)% $ 3,363
09/30/07 11.02 (0.12) 2.98 2.86 -- -- -- 13.88 25.95 5,357
Ratio
of net
Ratio of investment
expenses income (loss)
to average to average Portfolio
net assets(5) net assets(5) Turnover
- ------------- ------------- ---------
1.90%(4) 0.08%(4) 55%
1.90 (0.30) 70
2.55%(4) (0.93)%(4) 55%
2.55 (0.89) 70
2.55%(4) (1.07)%(4) 55%
2.55 (0.94) 70
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements and expense reductions.
(3)Commencement of operations.
(4)Annualized
(5)Net of the following expense reimbursements (based on average net assets):
09/30/06(4) 09/30/07
----------- --------
International Small-Cap Class A......... 1.27% 0.45%
International Small-Cap Class B......... 12.63 2.10
International Small-Cap Class C......... 2.88 0.77
See Notes to Financial Statements
26
SunAmerica Blue Chip Growth Fund
PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited)
Industry Allocation*
Computers......................................... 6.4%
Diversified Manufacturing Operations.............. 5.9
Web Portals/ISP................................... 4.8
Oil-Field Services................................ 3.9
Electronic Components-Semiconductors.............. 3.7
Cosmetics & Toiletries............................ 3.3
Applications Software............................. 3.2
Medical-Biomedical/Gene........................... 3.2
Beverages-Non-alcoholic........................... 3.0
Medical-Drugs..................................... 3.0
Aerospace/Defense................................. 2.9
Electric Products-Misc............................ 2.9
Networking Products............................... 2.9
Finance-Investment Banker/Broker.................. 2.8
Medical Products.................................. 2.1
Retail-Drug Store................................. 2.1
Oil Companies-Integrated.......................... 2.0
Retail-Discount................................... 1.9
Aerospace/Defense-Equipment....................... 1.7
Instruments-Scientific............................ 1.7
Wireless Equipment................................ 1.7
E-Commerce/Services............................... 1.6
Medical-HMO....................................... 1.6
Repurchase Agreement.............................. 1.6
Finance-Credit Card............................... 1.5
Agricultural Chemicals............................ 1.3
Medical Instruments............................... 1.3
Computer Aided Design............................. 1.2
Enterprise Software/Service....................... 1.2
Finance-Other Services............................ 1.2
Telecom Equipment-Fiber Optics.................... 1.2
Therapeutics...................................... 1.2
Cable TV.......................................... 1.1
Cellular Telecom.................................. 1.1
Electronic Measurement Instruments................ 1.1
Banks-Fiduciary................................... 1.0
Coal.............................................. 1.0
Electronics-Military.............................. 1.0
Entertainment Software............................ 1.0
Medical-Generic Drugs............................. 1.0
Multimedia........................................ 1.0
Commercial Services............................... 0.9
Finance-Consumer Loans............................ 0.9
Machinery-General Industrial...................... 0.9
Diagnostic Kits................................... 0.8
Retail-Consumer Electronics....................... 0.8
Retail-Office Supplies............................ 0.8
Retail-Regional Department Stores................. 0.8
Retail-Restaurants................................ 0.8
X-Ray Equipment................................... 0.8
Computers-Memory Devices.......................... 0.5
Internet Infrastructure Software.................. 0.5
Machinery-Construction & Mining................... 0.5
Radio............................................. 0.5
Rental Auto/Equipment............................. 0.5
Retail-Apparel/Shoe............................... 0.5
----
99.8%
====
- --------
* Calculated as a percentage of net assets
27
SunAmerica Blue Chip Growth Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007
Value
Security Description Shares (Note 3)
--------------------------------------------------------------
COMMON STOCK -- 98.2%
Aerospace/Defense -- 2.9%
Boeing Co................................. 7,900 $ 829,421
Raytheon Co............................... 12,200 778,604
Spirit Aerosystems Holdings, Inc.,
Class A+................................. 11,700 455,598
----------
2,063,623
----------
Aerospace/Defense-Equipment -- 1.7%
United Technologies Corp.................. 14,700 1,183,056
----------
Agricultural Chemicals -- 1.3%
Monsanto Co............................... 10,800 925,992
----------
Applications Software -- 3.2%
Microsoft Corp............................ 76,200 2,244,852
----------
Banks-Fiduciary -- 1.0%
The Bank of New York Mellon Corp.......... 15,849 699,575
----------
Beverages-Non-alcoholic -- 3.0%
PepsiCo, Inc.............................. 28,700 2,102,562
----------
Cable TV -- 1.1%
Comcast Corp., Class A+................... 31,200 754,416
----------
Cellular Telecom -- 1.1%
NII Holdings, Inc.+....................... 9,600 788,640
----------
Coal -- 1.0%
Peabody Energy Corp....................... 15,100 722,837
----------
Commercial Services -- 0.9%
AerCap Holdings NV+....................... 25,200 627,228
----------
Computer Aided Design -- 1.2%
Autodesk, Inc.+........................... 17,028 850,889
----------
Computers -- 6.4%
Apple, Inc.+.............................. 10,900 1,673,586
Hewlett-Packard Co........................ 19,600 975,884
International Business Machines Corp...... 11,900 1,401,820
Research In Motion, Ltd.+................. 5,000 492,750
----------
4,544,040
----------
Computers-Memory Devices -- 0.5%
Network Appliance, Inc.+.................. 14,100 379,431
----------
Cosmetics & Toiletries -- 3.3%
Procter & Gamble Co....................... 33,000 2,321,220
----------
Diagnostic Kits -- 0.8%
Inverness Medical Innovations, Inc.+...... 10,000 553,200
----------
Diversified Manufacturing Operations -- 5.9%
Danaher Corp.............................. 13,400 1,108,314
Dover Corp................................ 15,200 774,440
General Electric Co....................... 56,300 2,330,820
----------
4,213,574
----------
E-Commerce/Services -- 1.6%
eBay, Inc.+............................... 29,600 1,154,992
----------
Electric Products-Misc. -- 2.9%
AMETEK, Inc............................... 25,504 1,102,283
Emerson Electric Co....................... 18,300 973,926
----------
2,076,209
----------
Value
Security Description Shares (Note 3)
--------------------------------------------------------------
Electronic Components-Semiconductors -- 3.7%
Broadcom Corp., Class A+.................. 15,700 $ 572,108
Intel Corp................................ 52,204 1,349,995
Texas Instruments, Inc.................... 19,500 713,505
----------
2,635,608
----------
Electronic Measurement Instruments -- 1.1%
Agilent Technologies, Inc.+............... 21,700 800,296
----------
Electronics-Military -- 1.0%
L-3 Communications Holdings, Inc.......... 7,200 735,408
----------
Enterprise Software/Service -- 1.2%
Oracle Corp.+............................. 41,000 887,650
----------
Entertainment Software -- 1.0%
Electronic Arts, Inc.+.................... 12,100 677,479
----------
Finance-Consumer Loans -- 0.9%
SLM Corp.................................. 12,200 605,974
----------
Finance-Credit Card -- 1.5%
American Express Co....................... 17,400 1,033,038
----------
Finance-Investment Banker/Broker -- 2.8%
Merrill Lynch & Co., Inc.................. 4,300 306,504
TD Ameritrade Holding Corp.+.............. 47,800 870,916
The Goldman Sachs Group, Inc.............. 3,800 823,612
----------
2,001,032
----------
Finance-Other Services -- 1.2%
CME Group, Inc............................ 900 528,615
NYMEX Holdings, Inc....................... 2,500 325,450
----------
854,065
----------
Instruments-Scientific -- 1.7%
Thermo Fisher Scientific, Inc.+........... 20,400 1,177,488
----------
Internet Infrastructure Software -- 0.5%
Akamai Technologies, Inc.+................ 11,500 330,395
----------
Machinery-Construction & Mining -- 0.5%
Caterpillar, Inc.......................... 4,400 345,092
----------
Machinery-General Industrial -- 0.9%
IDEX Corp................................. 17,131 623,397
----------
Medical Instruments -- 1.3%
Medtronic, Inc............................ 17,000 958,970
----------
Medical Products -- 2.1%
Johnson & Johnson......................... 22,800 1,497,960
----------
Medical-Biomedical/Gene -- 3.2%
Amgen, Inc.+.............................. 6,600 373,362
Celgene Corp.+............................ 8,400 599,004
Genentech, Inc.+.......................... 8,600 670,972
Genzyme Corp.+............................ 10,500 650,580
----------
2,293,918
----------
Medical-Drugs -- 3.0%
Abbott Laboratories....................... 8,200 439,684
Allergan, Inc............................. 5,200 335,244
Novartis AG ADR........................... 11,300 621,048
Schering-Plough Corp...................... 22,400 708,512
----------
2,104,488
----------
28
SunAmerica Blue Chip Growth Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Value
Security Description Shares (Note 3)
------------------------------------------------------------
COMMON STOCK (continued)
Medical-Generic Drugs -- 1.0%
Barr Pharmaceuticals, Inc.+............ 12,500 $ 711,375
-----------
Medical-HMO -- 1.6%
UnitedHealth Group, Inc................ 23,700 1,147,791
-----------
Multimedia -- 1.0%
News Corp., Class A.................... 31,279 687,825
-----------
Networking Products -- 2.9%
Cisco Systems, Inc.+................... 62,700 2,075,997
-----------
Oil Companies-Integrated -- 2.0%
Exxon Mobil Corp....................... 15,200 1,406,912
-----------
Oil-Field Services -- 3.9%
Halliburton Co......................... 24,700 948,480
Schlumberger, Ltd...................... 17,000 1,785,000
-----------
2,733,480
-----------
Radio -- 0.5%
XM Satellite Radio Holdings, Inc.,
Class A+.............................. 23,900 338,663
-----------
Rental Auto/Equipment -- 0.5%
RSC Holdings, Inc.+.................... 22,600 370,640
-----------
Retail-Apparel/Shoe -- 0.5%
American Eagle Outfitters, Inc......... 14,200 373,602
-----------
Retail-Consumer Electronics -- 0.8%
Best Buy Co., Inc...................... 12,400 570,648
-----------
Retail-Discount -- 1.9%
Target Corp............................ 11,000 699,270
Wal-Mart Stores, Inc................... 14,400 628,560
-----------
1,327,830
-----------
Retail-Drug Store -- 2.1%
CVS Caremark Corp...................... 38,302 1,517,908
-----------
Retail-Office Supplies -- 0.8%
Staples, Inc........................... 26,900 578,081
-----------
Retail-Regional Department Stores -- 0.8%
Kohl's Corp.+.......................... 10,000 573,300
-----------
Retail-Restaurants -- 0.8%
Starbucks Corp.+....................... 22,600 592,120
-----------
Telecom Equipment-Fiber Optics -- 1.2%
Corning, Inc........................... 33,600 828,240
-----------
Therapeutics -- 1.2%
Gilead Sciences, Inc.+................. 20,400 833,748
-----------
Web Portals/ISP -- 4.8%
Google, Inc., Class A+................. 3,950 2,240,717
Yahoo!, Inc.+.......................... 43,400 1,164,856
-----------
3,405,573
-----------
Wireless Equipment -- 1.7%
QUALCOMM, Inc.......................... 28,250 1,193,845
-----------
X-Ray Equipment -- 0.8%
Hologic, Inc.+......................... 9,700 591,700
-----------
Total Long-Term Investment Securities
(cost $58,317,536).................... 69,627,872
-----------
Principal Value
Security Description Amount (Note 3)
--------------------------------------------------------
REPURCHASE AGREEMENT -- 1.6%
State Street Bank & Trust Co.
Joint Repurchase Agreement(1)
(cost $1,123,000)............. $1,123,000 $ 1,123,000
-----------
TOTAL INVESTMENTS --
(cost $59,440,536)(2)......... 99.8% 70,750,872
Other assets less liabilities.... 0.2 156,535
---------- -----------
NET ASSETS -- 100.0% $70,907,407
========== ===========
- --------
+ Non-income producing security
(1) See Note 3 for details of Joint Repurchase Agreement.
(2) See Note 7 for cost of investments on a tax basis.
ADR --American Depository Receipt
See Notes to Financial Statements
29
SunAmerica Growth Opportunities Fund
PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited)
Industry Allocation*
Repurchase Agreement............................................................ 16.1%
Commercial Services-Finance..................................................... 6.4
Physical Therapy/Rehabilation Centers........................................... 5.5
Data Processing/Management...................................................... 4.9
Finance-Investment Banker/Broker................................................ 4.1
Printing-Commercial............................................................. 2.9
E-Commerce/Products............................................................. 2.8
Insurance-Multi-line............................................................ 2.7
Retail-Petroleum Products....................................................... 2.6
X-Ray Equipment................................................................. 2.6
Telecom Services................................................................ 2.4
Decision Support Software....................................................... 2.1
Electronic Components-Semiconductors............................................ 2.0
Computer Aided Design........................................................... 1.9
Power Converter/Supply Equipment................................................ 1.9
Commercial Services............................................................. 1.8
Dental Supplies & Equipment..................................................... 1.7
Machinery-General Industrial.................................................... 1.7
Retail-Discount................................................................. 1.7
Computer Graphics............................................................... 1.6
Real Estate Management/Services................................................. 1.6
Retail-Apparel/Shoe............................................................. 1.6
Oil Companies-Exploration & Production.......................................... 1.5
Wireless Equipment.............................................................. 1.5
Medical-HMO..................................................................... 1.4
Transport-Services.............................................................. 1.3
Internet Infrastructure Equipment............................................... 1.2
Retail-Convenience Store........................................................ 1.2
Semiconductor Equipment......................................................... 1.2
Diagnostic Equipment............................................................ 1.1
Veterinary Diagnostics.......................................................... 1.1
Human Resources................................................................. 1.0
Instruments-Scientific.......................................................... 1.0
Transactional Software.......................................................... 1.0
Retirement/Aged Care............................................................ 0.9
Casino Services................................................................. 0.8
Medical-Outpatient/Home Medical................................................. 0.7
Oil-Field Services.............................................................. 0.7
Retail-Catalog Shopping......................................................... 0.7
Finance-Consumer Loans.......................................................... 0.5
Internet Connectivity Services.................................................. 0.5
Internet Financial Services..................................................... 0.3
Rental Auto/Equipment........................................................... 0.2
----
92.4%
====
- --------
* Calculated as a percentage of net assets
30
SunAmerica Growth Opportunities Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007
Value
Security Description Shares (Note 3)
-----------------------------------------------------------
COMMON STOCK -- 76.3%
Casino Services -- 0.8%
Shuffle Master, Inc.+.................. 32,800 $ 490,360
----------
Commercial Services -- 1.8%
AerCap Holdings NV+.................... 46,500 1,157,385
----------
Commercial Services-Finance -- 6.4%
Euronet Worldwide, Inc.+............... 52,700 1,568,879
Global Cash Access, Inc.+.............. 40,200 425,718
Heartland Payment Systems, Inc......... 23,026 591,768
Jackson Hewitt Tax Service, Inc........ 51,900 1,451,124
----------
4,037,489
----------
Computer Aided Design -- 1.9%
Aspen Technology, Inc.+................ 84,700 1,212,904
----------
Computer Graphics -- 1.6%
Trident Microsystems, Inc.+............ 63,800 1,013,782
----------
Data Processing/Management -- 4.9%
Global Payments, Inc................... 31,600 1,397,352
MoneyGram International, Inc........... 74,800 1,689,732
----------
3,087,084
----------
Decision Support Software -- 2.1%
Cognos, Inc.+.......................... 32,700 1,358,031
----------
Dental Supplies & Equipment -- 1.7%
Sirona Dental Systems, Inc.+........... 31,200 1,112,904
----------
Diagnostic Equipment -- 1.1%
Home Diagnostics, Inc.+................ 71,200 682,096
----------
E-Commerce/Products -- 2.8%
NutriSystem, Inc.+..................... 38,600 1,809,954
----------
Electronic Components-Semiconductors --
2.0%
SiRF Technology Holdings, Inc.+........ 58,800 1,255,380
----------
Finance-Consumer Loans -- 0.5%
Nelnet, Inc., Class A.................. 19,400 353,856
----------
Finance-Investment Banker/Broker -- 4.1%
E*TRADE Financial Corp.+............... 110,800 1,447,048
MF Global, Ltd.+....................... 39,500 1,145,500
----------
2,592,548
----------
Human Resources -- 1.0%
Heidrick & Struggles International,
Inc.+................................ 17,600 641,520
----------
Instruments-Scientific -- 1.0%
FEI Co.+............................... 19,500 612,885
----------
Insurance-Multi-line -- 2.7%
HCC Insurance Holdings, Inc............ 59,900 1,715,536
----------
Internet Connectivity Services -- 0.5%
NDS Group PLC ADR+..................... 6,900 344,172
----------
Internet Financial Services -- 0.3%
Online Resources Corp.+................ 14,400 182,016
----------
Internet Infrastructure Equipment --
1.2%
Avocent Corp.+......................... 25,500 742,560
----------
Machinery-General Industrial -- 1.7%
Flow International Corp.+.............. 121,800 1,074,276
----------
Value
Security Description Shares (Note 3)
-----------------------------------------------------------------
Medical-HMO -- 1.4%
Magellan Health Services, Inc.+............. 21,600 $ 876,528
----------
Medical-Outpatient/Home Medical -- 0.7%
Radiation Therapy Services, Inc.+........... 20,400 424,728
----------
Oil Companies-Exploration & Production -- 1.5%
Unit Corp.+................................. 19,200 929,280
----------
Oil-Field Services -- 0.7%
TETRA Technologies, Inc.+................... 21,300 450,282
----------
Physical Therapy/Rehabilation Centers -- 5.5%
Healthsouth Corp.+.......................... 34,400 602,344
Psychiatric Solutions, Inc.+................ 72,700 2,855,656
----------
3,458,000
----------
Power Converter/Supply Equipment -- 1.9%
PowerSecure International, Inc.+............ 94,700 1,179,962
----------
Printing-Commercial -- 2.9%
Cenveo, Inc.+............................... 52,000 1,124,760
Consolidated Graphics, Inc.+................ 11,100 696,969
----------
1,821,729
----------
Real Estate Management/Services -- 1.6%
Grubb & Ellis Co.+.......................... 106,600 991,380
----------
Rental Auto/Equipment -- 0.2%
RSC Holdings, Inc.+......................... 9,200 150,880
----------
Retail-Apparel/Shoe -- 1.6%
Charlotte Russe Holding, Inc.+.............. 42,400 620,736
DSW, Inc., Class A+......................... 15,300 385,101
----------
1,005,837
----------
Retail-Catalog Shopping -- 0.7%
Coldwater Creek, Inc.+...................... 43,700 474,582
----------
Retail-Convenience Store -- 1.2%
The Pantry, Inc.+........................... 29,400 753,522
----------
Retail-Discount -- 1.7%
Citi Trends, Inc.+.......................... 49,300 1,072,768
----------
Retail-Petroleum Products -- 2.6%
World Fuel Services Corp.................... 40,500 1,652,805
----------
Retirement/Aged Care -- 0.9%
Five Star Quality Care, Inc.+............... 67,700 556,494
----------
Semiconductor Equipment -- 1.2%
Tessera Technologies, Inc.+................. 20,800 780,000
----------
Telecom Services -- 2.4%
NeuStar Inc.+............................... 31,600 1,083,564
Time Warner Telecom, Inc., Class A+......... 19,000 417,430
----------
1,500,994
----------
Transactional Software -- 1.0%
VeriFone Holdings, Inc.+.................... 14,300 633,919
----------
Transport-Services -- 1.3%
UTI Worldwide, Inc.......................... 35,100 806,598
----------
Veterinary Diagnostics -- 1.1%
Animal Health International, Inc.+.......... 61,700 686,721
----------
31
SunAmerica Growth Opportunities Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Shares/
Principal Value
Security Description Amount (Note 3)
--------------------------------------------------------------
COMMON STOCK (continued)
Wireless Equipment -- 1.5%
Radyne Corp.+...................... 87,800 $ 925,412
-----------
X-Ray Equipment -- 2.6%
Hologic, Inc.+..................... 27,300 1,665,300
-----------
Total Long-Term Investment Securities
(cost $47,845,380)................ 48,274,459
-----------
REPURCHASE AGREEMENT -- 16.1%
State Street Bank & Trust Co.
Joint Repurchase Agreement(1)
(cost $10,150,000)................ $10,150,000 10,150,000
-----------
TOTAL INVESTMENTS --
(cost $57,995,380)(2)............. 92.4% 58,424,459
Other assets less liabilities........ 7.6 4,826,336
----------- -----------
NET ASSETS -- 100.0% $63,250,795
=========== ===========
- --------
+ Non-income producing security
(1) See Note 3 for details of Joint Repurchase Agreement.
(2) See Note 7 for cost of investment on a tax basis.
ADR --American Depository Receipt
See Notes to Financial Statements
32
SunAmerica New Century Fund
PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited)
Industry Allocation*
Repurchase Agreement............................................................ 12.9%
Data Processing/Management...................................................... 7.5
Commercial Services-Finance..................................................... 6.8
Physical Therapy/Rehabilation Centers........................................... 5.4
Finance-Investment Banker/Broker................................................ 5.0
E-Commerce/Products............................................................. 2.8
Retail-Apparel/Shoe............................................................. 2.8
Insurance-Multi-line............................................................ 2.7
Retail-Petroleum Products....................................................... 2.6
X-Ray Equipment................................................................. 2.6
Commercial Services............................................................. 2.5
Oil Companies-Exploration & Production.......................................... 2.4
Telecom Services................................................................ 2.3
Retirement/Aged Care............................................................ 2.2
Decision Support Software....................................................... 2.1
Medical Products................................................................ 2.1
Retail-Restaurants.............................................................. 2.1
Computer Aided Design........................................................... 1.9
Electronic Components-Semiconductors............................................ 1.9
Medical-Generic Drugs........................................................... 1.8
Printing-Commercial............................................................. 1.8
Dental Supplies & Equipment..................................................... 1.7
Electric Products-Misc.......................................................... 1.7
Computer Graphics............................................................... 1.6
Cable TV........................................................................ 1.5
Real Estate Investment Trusts................................................... 1.5
Retail-Regional Department Stores............................................... 1.4
Medical-HMO..................................................................... 1.3
Transport-Services.............................................................. 1.3
Internet Infrastructure Software................................................ 1.2
Semiconductor Equipment......................................................... 1.2
Internet Infrastructure Equipment............................................... 1.1
Instruments-Scientific.......................................................... 1.0
Transactional Software.......................................................... 1.0
Retail-Office Supplies.......................................................... 0.8
Oil-Field Services.............................................................. 0.7
Retail-Catalog Shopping......................................................... 0.7
Internet Connectivity Services.................................................. 0.5
Rental Auto/Equipment........................................................... 0.2
----
94.6%
====
- --------
* Calculated as a percentage of net assets
33
SunAmerica New Century Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007
Value
Security Description Shares (Note 3)
---------------------------------------------------------------
COMMON STOCK -- 81.7%
Cable TV -- 1.5%
Time Warner Cable, Inc.+.................. 47,100 $1,544,880
----------
Commercial Services -- 2.5%
AerCap Holdings NV+....................... 75,400 1,876,706
Iron Mountain, Inc.+...................... 25,100 765,048
----------
2,641,754
----------
Commercial Services-Finance -- 6.8%
Euronet Worldwide, Inc.+.................. 86,800 2,584,036
Jackson Hewitt Tax Service, Inc........... 84,000 2,348,640
Moody's Corp.............................. 43,100 2,172,240
----------
7,104,916
----------
Computer Aided Design -- 1.9%
Aspen Technology, Inc.+................... 139,300 1,994,776
----------
Computer Graphics -- 1.6%
Trident Microsystems, Inc.+............... 104,700 1,663,683
----------
Data Processing/Management -- 7.5%
Fiserv, Inc.+............................. 54,200 2,756,612
Global Payments, Inc...................... 53,100 2,348,082
MoneyGram International, Inc.............. 121,300 2,740,167
----------
7,844,861
----------
Decision Support Software -- 2.1%
Cognos, Inc.+............................. 52,900 2,196,937
----------
Dental Supplies & Equipment -- 1.7%
Sirona Dental Systems, Inc.+.............. 50,600 1,804,902
----------
E-Commerce/Products -- 2.8%
NutriSystem, Inc.+........................ 62,900 2,949,381
----------
Electric Products-Misc. -- 1.7%
Molex, Inc................................ 65,800 1,771,994
----------
Electronic Components-Semiconductors -- 1.9%
SiRF Technology Holdings, Inc.+........... 93,400 1,994,090
----------
Finance-Investment Banker/Broker -- 5.0%
E*TRADE Financial Corp.+.................. 179,800 2,348,188
MF Global, Ltd.+.......................... 65,300 1,893,700
TD Ameritrade Holding Corp.+.............. 56,600 1,031,252
----------
5,273,140
----------
Instruments-Scientific -- 1.0%
FEI Co.+.................................. 32,300 1,015,189
----------
Insurance-Multi-line -- 2.7%
HCC Insurance Holdings, Inc............... 97,500 2,792,400
----------
Internet Connectivity Services -- 0.5%
NDS Group PLC ADR+........................ 10,900 543,692
----------
Internet Infrastructure Equipment -- 1.1%
Avocent Corp.+............................ 40,900 1,191,008
----------
Internet Infrastructure Software -- 1.2%
Akamai Technologies, Inc.+................ 42,800 1,229,644
----------
Medical Products -- 2.1%
Varian Medical Systems, Inc.+............. 53,200 2,228,548
----------
Medical-Generic Drugs -- 1.8%
Barr Pharmaceuticals, Inc.+............... 33,100 1,883,721
----------
Value
Security Description Shares (Note 3)
-----------------------------------------------------------------
Medical-HMO -- 1.3%
Magellan Health Services, Inc.+............ 33,900 $ 1,375,662
-----------
Oil Companies-Exploration & Production -- 2.4%
Southwestern Energy Co.+................... 24,300 1,016,955
Unit Corp.+................................ 31,100 1,505,240
-----------
2,522,195
-----------
Oil-Field Services -- 0.7%
TETRA Technologies, Inc.+.................. 34,700 733,558
-----------
Physical Therapy/Rehabilation Centers -- 5.4%
Healthsouth Corp.+......................... 61,200 1,071,612
Psychiatric Solutions, Inc.+............... 117,600 4,619,328
-----------
5,690,940
-----------
Printing-Commercial -- 1.8%
Cenveo, Inc.+.............................. 86,400 1,868,832
-----------
Real Estate Investment Trusts -- 1.5%
Public Storage, Inc........................ 19,600 1,541,540
-----------
Rental Auto/Equipment -- 0.2%
RSC Holdings, Inc.+........................ 15,100 247,640
-----------
Retail-Apparel/Shoe -- 2.8%
American Eagle Outfitters, Inc............. 87,900 2,312,649
DSW, Inc., Class A+........................ 26,000 654,420
-----------
2,967,069
-----------
Retail-Catalog Shopping -- 0.7%
Coldwater Creek, Inc.+..................... 69,600 755,856
-----------
Retail-Office Supplies -- 0.8%
Office Depot, Inc.+........................ 39,600 816,552
-----------
Retail-Petroleum Products -- 2.6%
World Fuel Services Corp................... 65,700 2,681,217
-----------
Retail-Regional Department Stores -- 1.4%
Kohl's Corp.+.............................. 26,100 1,496,313
-----------
Retail-Restaurants -- 2.1%
Starbucks Corp.+........................... 86,100 2,255,820
-----------
Retirement/Aged Care -- 2.2%
Brookdale Senior Living, Inc............... 57,800 2,301,018
-----------
Semiconductor Equipment -- 1.2%
Tessera Technologies, Inc.+................ 34,400 1,290,000
-----------
Telecom Services -- 2.3%
NeuStar Inc................................ 52,000 1,783,080
Time Warner Telecom, Inc., Class A+........ 30,800 676,676
-----------
2,459,756
-----------
Transactional Software -- 1.0%
VeriFone Holdings, Inc.+................... 23,600 1,046,188
-----------
Transport-Services -- 1.3%
UTI Worldwide, Inc......................... 57,700 1,325,946
-----------
X-Ray Equipment -- 2.6%
Hologic, Inc.+............................. 45,000 2,745,000
-----------
Total Long-Term Investment Securities
(cost $85,232,542)........................ 85,790,618
-----------
34
SunAmerica New Century Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value
Security Description Amount (Note 3)
----------------------------------------------------------
REPURCHASE AGREEMENT -- 12.9%
State Street Bank & Trust Co.
Joint Repurchase Agreement(1)
(cost $13,531,000)............ $13,531,000 $ 13,531,000
------------
TOTAL INVESTMENTS --
(cost $98,763,542)(2)......... 94.6% 99,321,618
Other assets less liabilities.... 5.4 5,712,565
----------- ------------
NET ASSETS -- 100.0% $105,034,183
=========== ============
- --------
+ Non-income producing security
(1) See Note 3 for details of Joint Repurchase Agreement.
(2) See Note 7 for cost of investments on a tax basis.
ADR --American Depository Receipt
See Notes to Financial Statements
35
SunAmerica Growth and Income Fund
PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited)
Industry Allocation*
Oil Companies-Integrated........................................................ 7.7%
Finance-Investment Banker/Broker................................................ 7.2
Diversified Manufacturing Operations............................................ 5.2
Banks-Super Regional............................................................ 4.0
Medical-Drugs................................................................... 3.9
Oil-Field Services.............................................................. 3.8
Repurchase Agreement............................................................ 3.4
Telephone-Integrated............................................................ 3.3
Electric-Integrated............................................................. 3.0
Electronic Components-Semiconductors............................................ 2.9
Aerospace/Defense-Equipment..................................................... 2.3
Computers....................................................................... 2.2
Medical Products................................................................ 2.0
Retail-Apparel/Shoe............................................................. 2.0
Retail-Regional Department Stores............................................... 1.9
Investment Management/Advisor Services.......................................... 1.7
Medical Instruments............................................................. 1.7
Networking Products............................................................. 1.7
Telecom Services................................................................ 1.7
Aerospace/Defense............................................................... 1.6
Cosmetics & Toiletries.......................................................... 1.6
Finance-Mortgage Loan/Banker.................................................... 1.6
Food-Wholesale/Distribution..................................................... 1.6
Medical-Generic Drugs........................................................... 1.6
Medical-HMO..................................................................... 1.6
Retail-Drug Store............................................................... 1.6
Applications Software........................................................... 1.5
Food-Misc....................................................................... 1.5
Medical-Biomedical/Gene......................................................... 1.5
Telecom Equipment-Fiber Optics.................................................. 1.5
Apparel Manufacturers........................................................... 1.4
Cable TV........................................................................ 1.4
Finance-Credit Card............................................................. 1.4
Food-Confectionery.............................................................. 1.4
Insurance-Property/Casualty..................................................... 1.4
Multimedia...................................................................... 1.4
Transport-Services.............................................................. 1.4
Beverages-Non-alcoholic......................................................... 1.3
Tobacco......................................................................... 1.3
Enterprise Software/Service..................................................... 1.2
Web Portals/ISP................................................................. 1.2
Paper & Related Products........................................................ 1.1
Semiconductor Equipment......................................................... 1.0
Wireless Equipment.............................................................. 1.0
Metal-Aluminum.................................................................. 0.9
----
97.6%
====
- --------
* Calculated as a percentage of net assets
36
SunAmerica Growth and Income Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007
Value
Security Description Shares (Note 3)
---------------------------------------------------------------
COMMON STOCK -- 94.2%
Aerospace/Defense -- 1.6%
General Dynamics Corp..................... 20,900 $1,765,423
----------
Aerospace/Defense-Equipment -- 2.3%
United Technologies Corp.................. 31,100 2,502,928
----------
Apparel Manufacturer -- 1.4%
Phillips-Van Heusen....................... 29,800 1,563,904
----------
Applications Software -- 1.5%
Microsoft Corp............................ 57,300 1,688,058
----------
Banks-Super Regional -- 4.0%
Bank of America Corp...................... 44,800 2,252,096
Wachovia Corp............................. 42,600 2,136,390
----------
4,388,486
----------
Beverages-Non-alcoholic -- 1.3%
PepsiCo, Inc.............................. 19,400 1,421,244
----------
Cable TV -- 1.4%
Comcast Corp., Class A+................... 62,800 1,518,504
----------
Computers -- 2.2%
Apple, Inc.+.............................. 7,700 1,182,258
International Business Machines Corp...... 10,700 1,260,460
----------
2,442,718
----------
Cosmetics & Toiletries -- 1.6%
Procter & Gamble Co....................... 25,700 1,807,738
----------
Diversified Manufacturing Operations -- 5.2%
3M Co..................................... 17,600 1,647,008
General Electric Co....................... 73,000 3,022,200
Textron, Inc.............................. 17,400 1,082,454
----------
5,751,662
----------
Electric-Integrated -- 3.0%
Duke Energy Corp.......................... 89,400 1,670,886
Southern Co............................... 44,700 1,621,716
----------
3,292,602
----------
Electronic Components-Semiconductors -- 2.9%
Intel Corp................................ 80,100 2,071,386
Texas Instruments, Inc.................... 29,800 1,090,382
----------
3,161,768
----------
Enterprise Software/Service -- 1.2%
Oracle Corp.+............................. 61,000 1,320,650
----------
Finance-Credit Card -- 1.4%
American Express Co....................... 26,600 1,579,242
----------
Finance-Investment Banker/Broker -- 7.2%
Citigroup, Inc............................ 52,500 2,450,175
JPMorgan Chase & Co....................... 33,600 1,539,552
Merrill Lynch & Co., Inc.................. 29,500 2,102,760
TD Ameritrade Holding Corp.+.............. 104,200 1,898,524
----------
7,991,011
----------
Finance-Mortgage Loan/Banker -- 1.6%
Fannie Mae................................ 29,700 1,806,057
----------
Food-Confectionery -- 1.4%
The Hershey Co............................ 32,800 1,522,248
----------
Value
Security Description Shares (Note 3)
----------------------------------------------------------------
Food-Misc. -- 1.5%
Kraft Foods, Inc., Class A.................. 49,900 $1,722,049
----------
Food-Wholesale/Distribution -- 1.6%
Sysco Corp.................................. 48,600 1,729,674
----------
Insurance-Property/Casualty -- 1.4%
Chubb Corp.................................. 29,800 1,598,472
----------
Investment Management/Advisor Services -- 1.7%
Invesco PLC ADR............................. 70,400 1,921,920
----------
Medical Instruments -- 1.7%
Medtronic, Inc.............................. 32,700 1,844,607
----------
Medical Products -- 2.0%
Johnson & Johnson........................... 33,000 2,168,100
----------
Medical-Biomedical/Gene -- 1.5%
Genzyme Corp.+.............................. 26,400 1,635,744
----------
Medical-Drugs -- 3.9%
Merck & Co., Inc............................ 30,400 1,571,376
Pfizer, Inc................................. 62,050 1,515,882
Schering-Plough Corp........................ 37,500 1,186,125
----------
4,273,383
----------
Medical-Generic Drugs -- 1.6%
Barr Pharmaceuticals, Inc.+................. 31,100 1,769,901
----------
Medical-HMO -- 1.6%
WellPoint, Inc.+............................ 22,500 1,775,700
----------
Metal-Aluminum -- 0.9%
Alcoa, Inc.................................. 26,300 1,028,856
----------
Multimedia -- 1.4%
News Corp., Class A......................... 70,900 1,559,091
----------
Networking Products -- 1.7%
Cisco Systems, Inc.+........................ 57,500 1,903,825
----------
Oil Companies-Integrated -- 7.7%
Chevron Corp................................ 23,800 2,227,204
ConocoPhillips.............................. 37,100 3,256,267
Exxon Mobil Corp............................ 32,400 2,998,944
----------
8,482,415
----------
Oil-Field Services -- 3.8%
Halliburton Co.............................. 64,200 2,465,280
Schlumberger, Ltd........................... 16,800 1,764,000
----------
4,229,280
----------
Paper & Related Products -- 1.1%
International Paper Co...................... 34,800 1,248,276
----------
Retail-Apparel/Shoe -- 2.0%
American Eagle Outfitters, Inc.............. 82,600 2,173,206
----------
Retail-Drug Store -- 1.6%
CVS Caremark Corp........................... 45,000 1,783,350
----------
Retail-Regional Department Stores -- 1.9%
Kohl's Corp.+............................... 37,000 2,121,210
----------
Semiconductor Equipment -- 1.0%
Applied Materials, Inc...................... 54,200 1,121,940
----------
37
SunAmerica Growth and Income Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Shares/
Principal Value
Security Description Amount (Note 3)
- --------------------------------------------------------------------------------------------------------
COMMON STOCK (continued)
Telecom Equipment-Fiber Optics -- 1.5%
Corning, Inc................................................................... 68,000 $ 1,676,200
------------
Telecom Services -- 1.7%
Time Warner Telecom, Inc., Class A+............................................ 86,100 1,891,617
------------
Telephone-Integrated -- 3.3%
AT&T, Inc...................................................................... 40,400 1,709,324
Verizon Communications, Inc.................................................... 44,300 1,961,604
------------
3,670,928
------------
Tobacco -- 1.3%
Altria Group, Inc.............................................................. 21,000 1,460,130
------------
Transport-Services -- 1.4%
United Parcel Service, Inc., Class B........................................... 21,200 1,592,120
------------
Web Portals/ISP -- 1.2%
Google, Inc., Class A+......................................................... 2,300 1,304,721
------------
Wireless Equipment -- 1.0%
QUALCOMM, Inc.................................................................. 25,500 1,077,630
------------
Total Long-Term Investment Securities
(cost $94,646,931)........................................................... 104,288,588
------------
REPURCHASE AGREEMENT -- 3.4%
State Street Bank & Trust Co. Joint Repurchase Agreement(1) (cost $3,800,000).. $3,800,000 3,800,000
------------
TOTAL INVESTMENTS --
(cost $98,446,931)(2)........................................................ 97.6% 108,088,588
Other assets less liabilities................................................... 2.4 2,609,684
---------- ------------
NET ASSETS -- 100.0% $110,698,272
========== ============
- --------
+ Non-income producing security
(1) See Note 3 for details of Joint Repurchase Agreement.
(2) See Note 7 for cost of investments on a tax basis.
ADR --American Depository Receipt
See Notes to Financial Statements
38
SunAmerica Balanced Assets Fund
PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited)
Industry Allocation*
Diversified Financial Services........ 5.7%
Finance-Investment Banker/Broker...... 5.4
Oil Companies-Integrated.............. 5.2
Federal Home Loan Mtg. Corp........... 5.0
Diversified Manufacturing Operations.. 3.5
Repurchase Agreements................. 3.3
Banks-Super Regional.................. 3.0
Telephone-Integrated.................. 3.0
Electric-Integrated................... 2.9
Computers............................. 2.8
Medical-Drugs......................... 2.6
Federal National Mtg. Assoc........... 2.5
Sovereign............................. 1.9
Cosmetics & Toiletries................ 1.8
Electronic Components-Semiconductors.. 1.8
Web Portals/ISP....................... 1.8
Electric Products-Misc................ 1.7
Medical Products...................... 1.6
Aerospace/Defense..................... 1.6
Applications Software................. 1.5
Finance-Credit Card................... 1.5
Oil-Field Services.................... 1.5
Aerospace/Defense-Equipment........... 1.4
Retail-Drug Store..................... 1.4
Multimedia............................ 1.3
Medical-Biomedical/Gene............... 1.2
Special Purpose Entities.............. 1.2
Banks-Fiduciary....................... 1.1
Beverages-Non-alcoholic............... 1.1
Cable TV.............................. 1.1
Networking Products................... 1.1
Banks-Commercial...................... 0.9
Finance-Mortgage Loan/Banker.......... 0.9
Insurance-Multi-line.................. 0.9
Cellular Telecom...................... 0.7
Insurance-Property/Casualty........... 0.7
Retail-Apparel/Shoe................... 0.7
Retail-Discount....................... 0.7
Retail-Regional Department Stores..... 0.7
Agricultural Chemicals................ 0.6
Brewery............................... 0.6
E-Commerce/Services................... 0.6
Food-Misc............................. 0.6
Government National Mtg. Assoc........ 0.6
Instruments-Scientific................ 0.6
Medical-HMO........................... 0.6
Non-Hazardous Waste Disposal.......... 0.6
Savings & Loans/Thrifts............... 0.6
Wireless Equipment.................... 0.6
Enterprise Software/Service........... 0.5
Medical Instruments................... 0.5
Oil Companies-Exploration & Production 0.5
Pipelines............................. 0.5
Tobacco............................... 0.5
Coal.................................. 0.4
Computer Aided Design................. 0.4
Electronic Measurement Instruments.... 0.4
Electronics-Military.................. 0.4
Finance-Other Services................ 0.4
Medical-Generic Drugs................. 0.4
Metal-Aluminum........................ 0.4%
Paper & Related Products.............. 0.4
Real Estate Investment Trusts......... 0.4
Telecom Equipment-Fiber Optics........ 0.4
Therapeutics.......................... 0.4
Banks-Money Center.................... 0.3
Commercial Services................... 0.3
Diagnostic Kits....................... 0.3
Entertainment Software................ 0.3
Finance-Consumer Loans................ 0.3
Machinery-General Industrial.......... 0.3
Radio................................. 0.3
Rental Auto/Equipment................. 0.3
Retail-Consumer Electronics........... 0.3
Retail-Office Supplies................ 0.3
Retail-Restaurants.................... 0.3
Telecom Services...................... 0.3
Transport-Air Freight................. 0.3
Transport-Rail........................ 0.3
X-Ray Equipment....................... 0.3
Computers-Memory Devices.............. 0.2
Containers-Paper/Plastic.............. 0.2
Finance-Auto Loans.................... 0.2
Independent Power Producers........... 0.2
Internet Infrastructure Software...... 0.2
Machinery-Construction & Mining....... 0.2
Medical-Hospitals..................... 0.2
Office Automation & Equipment......... 0.2
Steel-Producers....................... 0.2
Airlines.............................. 0.1
Auto-Cars/Light Trucks................ 0.1
Broadcast Services/Program............ 0.1
Building Products-Cement.............. 0.1
Building-Residential/Commercial....... 0.1
Chemicals-Diversified................. 0.1
Chemicals-Specialty................... 0.1
Commercial Services-Finance........... 0.1
Computer Services..................... 0.1
Diversified Operations................ 0.1
Electric-Generation................... 0.1
Finance-Commercial.................... 0.1
Food-Retail........................... 0.1
Gas-Distribution...................... 0.1
Insurance Brokers..................... 0.1
Insurance-Life/Health................. 0.1
Investment Companies.................. 0.1
Investment Management/Advisor Services 0.1
Metal-Diversified..................... 0.1
Metal Processors & Fabrication........ 0.1
Oil Refining & Marketing.............. 0.1
Real Estate Operations & Development.. 0.1
Satellite Telecom..................... 0.1
Television............................ 0.1
Transport-Marine...................... 0.1
Transport-Services.................... 0.1
-----
100.5%
=====
- --------
* Calculated as a percentage of net assets
39
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007
Value
Security Description Shares (Note 3)
---------------------------------------------------------------
COMMON STOCK -- 66.1%
Aerospace/Defense -- 1.6%
Boeing Co................................... 6,200 $ 650,938
General Dynamics Corp....................... 9,000 760,230
Raytheon Co................................. 9,600 612,672
Spirit Aerosystems Holdings, Inc., Class A+. 9,200 358,248
----------
2,382,088
----------
Aerospace/Defense-Equipment -- 1.3%
United Technologies Corp.................... 25,200 2,028,096
----------
Agricultural Chemicals -- 0.5%
Monsanto Co................................. 8,500 728,790
----------
Applications Software -- 1.5%
Microsoft Corp.............................. 76,478 2,253,042
----------
Banks-Fiduciary -- 1.1%
The Bank of New York Mellon Corp............ 39,716 1,753,064
----------
Banks-Super Regional -- 2.6%
Bank of America Corp........................ 39,688 1,995,116
Wachovia Corp............................... 19,700 987,955
Wells Fargo & Co............................ 28,200 1,004,484
----------
3,987,555
----------
Beverages-Non-alcoholic -- 1.1%
PepsiCo, Inc................................ 22,700 1,663,002
----------
Brewery -- 0.5%
Anheuser-Busch Cos., Inc.................... 15,000 749,850
----------
Cable TV -- 0.9%
Comcast Corp., Class A+..................... 59,800 1,445,964
----------
Cellular Telecom -- 0.4%
NII Holdings, Inc.+......................... 7,500 616,125
----------
Coal -- 0.4%
Peabody Energy Corp......................... 11,900 569,653
----------
Commercial Services -- 0.3%
AerCap Holdings NV+......................... 19,900 495,311
----------
Computer Aided Design -- 0.4%
Autodesk, Inc.+............................. 13,444 671,797
----------
Computers -- 2.7%
Apple, Inc.+................................ 8,600 1,320,444
Hewlett-Packard Co.......................... 15,500 771,745
International Business Machines Corp........ 14,000 1,649,200
Research In Motion, Ltd.+................... 3,900 384,345
----------
4,125,734
----------
Computers-Memory Devices -- 0.2%
Network Appliance, Inc.+.................... 11,100 298,701
----------
Cosmetics & Toiletries -- 1.8%
Procter & Gamble Co......................... 40,400 2,841,736
----------
Diagnostic Kits -- 0.3%
Inverness Medical Innovations, Inc.+........ 7,900 437,028
----------
Diversified Manufacturing Operations -- 3.4%
Danaher Corp................................ 10,500 868,455
Dover Corp.................................. 12,090 615,985
General Electric Co......................... 90,400 3,742,560
----------
5,227,000
----------
Value
Security Description Shares (Note 3)
--------------------------------------------------------------
E-Commerce/Services -- 0.6%
eBay, Inc.+............................... 23,400 $ 913,068
----------
Electric Products-Misc. -- 1.7%
AMETEK, Inc............................... 20,234 874,513
Emerson Electric Co....................... 31,800 1,692,396
----------
2,566,909
----------
Electric-Integrated -- 1.9%
Duke Energy Corp.......................... 39,300 734,517
FPL Group, Inc............................ 12,000 730,560
Southern Co............................... 19,600 711,088
Xcel Energy, Inc.......................... 33,500 721,590
----------
2,897,755
----------
Electronic Components-Semiconductors -- 1.7%
Broadcom Corp., Class A+.................. 12,400 451,856
Intel Corp................................ 63,900 1,652,454
Texas Instruments, Inc.................... 15,200 556,168
----------
2,660,478
----------
Electronic Measurement Instruments -- 0.4%
Agilent Technologies, Inc.+............... 16,900 623,272
----------
Electronics-Military -- 0.4%
L-3 Communications Holdings, Inc.......... 5,700 582,198
----------
Enterprise Software/Service -- 0.5%
Oracle Corp.+............................. 32,300 699,295
----------
Entertainment Software -- 0.3%
Electronic Arts, Inc.+.................... 9,500 531,905
----------
Finance-Consumer Loans -- 0.3%
SLM Corp.................................. 9,600 476,832
----------
Finance-Credit Card -- 1.4%
American Express Co....................... 36,400 2,161,068
----------
Finance-Investment Banker/Broker -- 4.9%
Citigroup, Inc............................ 38,088 1,777,567
JPMorgan Chase & Co....................... 29,400 1,347,108
Merrill Lynch & Co., Inc.................. 19,500 1,389,960
Morgan Stanley............................ 15,000 945,000
TD Ameritrade Holding Corp.+.............. 75,400 1,373,788
The Goldman Sachs Group, Inc.............. 2,984 646,752
----------
7,480,175
----------
Finance-Mortgage Loan/Banker -- 0.6%
Fannie Mae................................ 14,200 863,502
----------
Finance-Other Services -- 0.4%
CME Group, Inc............................ 700 411,145
NYMEX Holdings, Inc....................... 2,000 260,360
----------
671,505
----------
Food-Misc. -- 0.6%
Kraft Foods, Inc., Class A................ 28,928 998,305
----------
Independent Power Producer -- 0.0%
Mirant Corp.+............................. 186 7,566
----------
Instruments-Scientific -- 0.6%
Thermo Fisher Scientific, Inc.+........... 16,100 929,292
----------
Insurance-Multi-line -- 0.6%
MetLife, Inc.............................. 14,100 983,193
----------
40
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Value
Security Description Shares (Note 3)
---------------------------------------------------------------
COMMON STOCK (continued)
Insurance-Property/Casualty -- 0.6%
Chubb Corp.................................. 17,600 $ 944,064
----------
Internet Infrastructure Software -- 0.2%
Akamai Technologies, Inc.+.................. 9,000 258,570
----------
Machinery-Construction & Mining -- 0.2%
Caterpillar, Inc............................ 3,400 266,662
----------
Machinery-General Industrial -- 0.3%
IDEX Corp................................... 13,558 493,376
----------
Medical Instruments -- 0.5%
Medtronic, Inc.............................. 13,500 761,535
----------
Medical Products -- 1.6%
Johnson & Johnson........................... 37,700 2,476,890
----------
Medical-Biomedical/Gene -- 1.2%
Amgen, Inc.+................................ 5,200 294,164
Celgene Corp.+.............................. 6,600 470,646
Genentech, Inc.+............................ 6,800 530,536
Genzyme Corp.+.............................. 8,300 514,268
----------
1,809,614
----------
Medical-Drugs -- 2.3%
Abbott Laboratories......................... 6,500 348,530
Allergan, Inc............................... 4,100 264,327
Merck & Co., Inc............................ 13,700 708,153
Novartis AG ADR............................. 8,900 489,144
Pfizer, Inc................................. 49,314 1,204,741
Schering-Plough Corp........................ 17,700 559,851
----------
3,574,746
----------
Medical-Generic Drugs -- 0.4%
Barr Pharmaceuticals, Inc.+................. 9,900 563,409
----------
Medical-HMO -- 0.6%
UnitedHealth Group, Inc..................... 18,800 910,484
----------
Metal-Aluminum -- 0.3%
Alcoa, Inc.................................. 10,800 422,496
----------
Multimedia -- 0.8%
News Corp., Class A......................... 57,714 1,269,131
----------
Networking Products -- 1.1%
Cisco Systems, Inc.+........................ 49,600 1,642,256
----------
Non-Hazardous Waste Disposal -- 0.5%
Waste Management, Inc....................... 20,700 781,218
----------
Oil Companies-Integrated -- 5.1%
Chevron Corp................................ 22,128 2,070,738
ConocoPhillips.............................. 16,900 1,483,313
Exxon Mobil Corp............................ 33,600 3,110,016
Marathon Oil Corp........................... 20,400 1,163,208
----------
7,827,275
----------
Oil-Field Services -- 1.4%
Halliburton Co.............................. 19,300 741,120
Schlumberger, Ltd........................... 13,400 1,407,000
----------
2,148,120
----------
Paper & Related Products -- 0.3%
International Paper Co...................... 14,900 534,463
----------
Radio -- 0.2%
XM Satellite Radio Holdings, Inc., Class A+. 18,900 267,813
----------
Value
Security Description Shares (Note 3)
-------------------------------------------------------------
Rental Auto/Equipment -- 0.2%
RSC Holdings, Inc.+.................... 17,900 $ 293,560
------------
Retail-Apparel/Shoe -- 0.7%
American Eagle Outfitters, Inc......... 39,600 1,041,876
------------
Retail-Consumer Electronics -- 0.3%
Best Buy Co., Inc...................... 9,700 446,394
------------
Retail-Discount -- 0.7%
Target Corp............................ 8,700 553,059
Wal-Mart Stores, Inc................... 11,400 497,610
------------
1,050,669
------------
Retail-Drug Store -- 1.3%
CVS Caremark Corp...................... 48,761 1,932,398
------------
Retail-Office Supplies -- 0.3%
Staples, Inc........................... 21,300 457,737
------------
Retail-Regional Department Stores -- 0.7%
Kohl's Corp.+.......................... 19,800 1,135,134
------------
Retail-Restaurants -- 0.3%
Starbucks Corp.+....................... 17,800 466,360
------------
Telecom Equipment-Fiber Optics -- 0.4%
Corning, Inc........................... 26,400 650,760
------------
Telephone-Integrated -- 2.1%
AT&T, Inc.............................. 40,535 1,715,036
Verizon Communications, Inc............ 32,600 1,443,528
------------
3,158,564
------------
Therapeutics -- 0.4%
Gilead Sciences, Inc.+................. 16,200 662,094
------------
Tobacco -- 0.5%
Altria Group, Inc...................... 10,300 716,159
------------
Web Portals/ISP -- 1.8%
Google, Inc., Class A+................. 3,150 1,786,901
Yahoo!, Inc.+.......................... 34,600 928,664
------------
2,715,565
------------
Wireless Equipment -- 0.6%
QUALCOMM, Inc.......................... 22,350 944,511
------------
X-Ray Equipment -- 0.3%
Hologic, Inc.+......................... 7,700 469,700
------------
Total Common Stock
(cost $87,842,248).................... 101,414,457
------------
PREFERRED STOCK -- 0.6%
Banks-Money Center -- 0.1%
Santander Finance Preferred SA
5.87%*(1)............................. 8,400 173,250
------------
Banks-Super Regional -- 0.1%
Wachovia Capital Trust IX
6.38%................................. 3,100 71,517
------------
Diversified Financial Services -- 0.2%
General Electric Capital Corp.
8.00%(2).............................. 14,000 322,700
------------
Finance-Mortgage Loan/Banker -- 0.0%
Freddie Mac 6.55%...................... 2,338 58,707
------------
41
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Shares/
Principal Value
Security Description Amount (Note 3)
----------------------------------------------------------------------
PREFERRED STOCK (continued)
Special Purpose Entity -- 0.1%
Structured Repackaged Asset-Backed Trust
Securities, 4.92%(1)............................. 9,200 $186,852
--------
Telephone-Integrated -- 0.1%
AT&T, Inc. 6.38%.................................. 4,400 104,808
--------
Total Preferred Stock
(cost $1,022,444)................................ 917,834
--------
ASSET BACKED SECURITIES -- 5.3%
Diversified Financial Services -- 5.3%
Banc of America Funding Corp.,
Series 2007-C, Class 5A1
5.37% due 05/20/36(3)(4)......................... $347,186 345,282
Banc of America Funding Corp.,
Series 2006-J, Class 2A1
5.89% due 01/20/47(3)(4)......................... 338,324 342,978
Bear Stearns Commercial Mtg. Securities, Inc.,
Series 2007-PW15, Class A2
5.21% due 02/11/44(5)............................ 165,000 163,758
Bear Stearns Commercial Mtg. Securities, Inc.,
Series 2006-PW12, Class G
5.75% due 09/11/38(4)(5)......................... 58,000 48,792
Bear Stearns Commercial Mtg. Securities, Inc.,
Series 2007-PW15, Class H
5.93% due 02/11/44*(4)(5)........................ 375,000 279,057
Bear Stearns Commercial Mtg. Securities, Inc.,
Series 2006-PW12, Class F
5.93% due 09/11/38*(4)(5)........................ 340,000 300,519
Chase Mtg. Finance Corp.
Series 2007-A2, Class 1A1
4.56% due 07/25/37(3)(4)......................... 436,314 433,802
Commercial Mtg. Pass Through Certs.,
Series 2004-LB2A, Class A3
4.22% due 03/10/39(5)............................ 674,000 660,073
Countrywide Asset-Backed Certs.
Series 2006-S4, Class A3
5.80% due 10/25/36(4)............................ 920,000 907,761
Countrywide Asset-Backed Certs.,
Series 2006-S6, Class A3
5.66% due 03/25/34(4)............................ 928,000 910,409
J.P. Morgan Chase Commercial Mtg.
Securities Corp.,
Series 2006-CB16, Class E
5.84% due 05/12/45*(4)(5)........................ 230,000 208,396
LB-UBS Commercial Mtg. Trust,
Series 2007-C6, Class AM
6.11% due 07/17/40(4)(5)......................... 515,000 524,311
LB-UBS Commercial Mtg. Trust,
Series 2007-C6, Class B
6.45% due 07/17/40(4)(5)......................... 400,000 397,645
Merrill Lynch Mtg. Investors Trust,
Series 2004-A1, Class 3A
4.84% due 02/25/34(3)(4)......................... 301,821 299,028
Merrill Lynch/ Countrywide Commercial Mtg. Trust,
Series 2007-5, Class H
6.12% due 08/25/48............................... 210,000 160,187
Principal Value
Security Description Amount (Note 3)
----------------------------------------------------------------
Diversified Financial Services (continued)
Morgan Stanley Capital I,
Series 2006-IQ12, Class D
5.53% due 12/15/43(4)(5)................. $250,000 $ 233,605
Ocwen Advance Receivables Backed Notes,
Series 2006-1A
5.34% due 11/24/15*(6)................... 350,000 297,500
Providian Master Note Trust
Series 2006-C1A, Class C1
6.16% due 03/16/15*(1)................... 550,000 527,829
Wachovia Bank Commercial Mtg. Trust,
Series 2006-WL7A, Class F
5.95% due 09/15/21*(1)(5)................ 515,000 506,896
Wells Fargo Mtg. Backed Securities Trust,
Series 2006-AR17, Class A2
5.84% due 10/25/36(1)(3)................. 440,192 444,474
Wells Fargo Mtg. Backed Securities Trust,
Series 2006-AR12, Class 2A1
6.10% due 09/25/36(3)(4)................. 221,309 223,976
----------
Total Asset Backed Securities
(cost $8,552,417)........................ 8,216,278
----------
CORPORATE BONDS & NOTES -- 11.4%
Aerospace/Defense-Equipment -- 0.1%
United Technologies Corp.
Senior Notes
6.10% due 05/15/12....................... 84,000 87,516
----------
Agricultural Chemicals -- 0.1%
Mosaic Global Holdings, Inc.
Debentures
7.38% due 08/01/18....................... 10,000 9,700
Terra Capital, Inc.
Company Guar. Notes
7.00% due 02/01/17....................... 25,000 24,375
The Mosaic Co.
Senior Notes
7.38% due 12/01/14*...................... 45,000 47,250
----------
81,325
----------
Airlines -- 0.1%
American Airlines, Inc.
Pass Through Certs.
Series 2001-1, Class A-2
6.82% due 05/23/11....................... 70,000 68,250
Northwest Airlines, Inc.
Pass Through Certs.
Series 2002-1 Class G2
6.26% due 11/20/21....................... 43,025 42,434
----------
110,684
----------
Auto-Cars/Light Trucks -- 0.1%
DaimlerChrysler NA Holding Corp.
Company Guar. Notes
6.05% due 03/13/09(1).................... 60,000 59,606
Ford Motor Co.
Debentures
6.38% due 02/01/29....................... 70,000 51,450
42
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------
CORPORATE BONDS & NOTES (continued)
Auto-Cars/Light Trucks (continued)
General Motors Corp.
Debentures
8.25% due 07/15/23.............. $ 40,000 $ 35,000
General Motors Corp.
Senior Bonds
8.38% due 07/15/33.............. 58,000 50,823
--------
196,879
--------
Banks-Commercial -- 0.6%
American Express Centurion Bank
Notes
6.00% due 09/13/17.............. 35,000 34,824
Colonial Bank NA
Sub. Notes
6.38% due 12/01/15.............. 70,000 69,151
Compass Bank
Notes
5.50% due 04/01/20.............. 110,000 105,114
Compass Bank
Sub. Notes
6.40% due 10/01/17.............. 80,000 79,527
First Maryland Capital II
Company Guar. Notes
6.21% due 02/01/27(1)........... 196,000 182,299
Popular North America, Inc.
Company Guar. Notes
5.65% due 04/15/09.............. 90,000 90,713
Silicon Valley Bank
Senior Notes
5.70% due 06/01/12.............. 100,000 99,787
SouthTrust Bank
Sub. Notes
4.75% due 03/01/13.............. 120,000 117,437
SouthTrust Corp.
Sub. Notes
5.80% due 06/15/14.............. 55,000 55,047
Union Bank of California NA
Sub. Notes
5.95% due 05/11/16.............. 120,000 119,116
US Bank NA
Notes
3.90% due 08/15/08.............. 38,000 37,419
--------
990,434
--------
Banks-Super Regional -- 0.3%
Capital One Financial Corp.
Senior Notes
5.70% due 09/15/11.............. 242,000 242,402
Capital One Financial Corp.
Senior Notes
6.75% due 09/15/17.............. 72,000 73,723
JPMorgan Chase Bank NA
Sub. Notes
6.00% due 10/01/17.............. 100,000 100,969
--------
417,094
--------
Brewery -- 0.1%
Anheuser-Busch Cos., Inc.
Bonds
6.00% due 11/01/41.............. 136,000 129,568
--------
Principal Value
Security Description Amount (Note 3)
-----------------------------------------------------------
Broadcast Services/Program -- 0.0%
Nexstar Finance, Inc.
Senior Sub. Notes
7.00% due 01/15/14.................... $ 35,000 $ 33,600
--------
Building Products-Air & Heating -- 0.0%
American Standard, Inc.
Company Guar. Notes
7.38% due 02/01/08.................... 51,000 51,242
--------
Building-Residential/Commercial -- 0.1%
Centex Corp.
Senior Notes
5.45% due 08/15/12.................... 60,000 54,782
D.R. Horton, Inc.
Company Guar. Notes
5.00% due 01/15/09.................... 41,000 39,431
--------
94,213
--------
Cable TV -- 0.2%
Cablevision Systems Corp.
Senior Notes
8.00% due 04/15/12.................... 20,000 19,400
CCH I LLC
Company Guar. Notes
11.00% due 10/01/15................... 28,000 28,700
CCH II LLC/CCH II Capital Corp.
Company Guar. Notes
10.25% due 10/01/13................... 85,000 88,613
Comcast Corp.
Company Guar. Notes
5.85% due 11/15/15.................... 50,000 49,586
Comcast Corp.
Company Guar. Notes
5.88% due 02/15/18.................... 100,000 98,364
--------
284,663
--------
Casino Hotels -- 0.0%
MGM Mirage, Inc.
Senior Notes
5.88% due 02/27/14.................... 35,000 32,244
Turning Stone Resort Casino Enterprise
Senior Notes
9.13% due 09/15/14*................... 30,000 31,050
--------
63,294
--------
Cellular Telecom -- 0.2%
American Cellular Corp.
Senior Notes
10.00% due 08/01/11................... 16,000 16,720
Centennial Communications Corp.
Senior Notes
11.11% due 01/01/13(1)................ 100,000 103,000
Cricket Communications, Inc.
Company Guar. Notes
9.38% due 11/01/14.................... 25,000 25,375
MetroPCS Wireless, Inc.
Senior Notes
9.25% due 11/01/14*................... 25,000 25,500
43
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value
Security Description Amount (Note 3)
----------------------------------------------------------
CORPORATE BONDS & NOTES (continued)
Cellular Telecom (continued)
Nextel Communications, Inc.
Company Guar. Notes
5.95% due 03/15/14................... $100,000 $ 95,471
Rural Cellular Corp.
Senior Sub. Notes
8.62% due 06/01/13*(1)............... 15,000 15,375
Rural Cellular Corp.
Senior Notes
11.11% due 11/01/12(1)............... 5,000 5,100
--------
286,541
--------
Chemicals-Diversified -- 0.1%
EI Du Pont de Nemours & Co.
Senior Notes
4.88% due 04/30/14................... 38,000 36,543
Lyondell Chemical Co.
Company Guar. Notes
8.00% due 09/15/14................... 35,000 38,500
Rohm & Haas Co.
Notes
6.00% due 09/15/17................... 45,000 45,131
--------
120,174
--------
Chemicals-Specialty -- 0.1%
Huntsman International LLC
Company Guar. Notes
7.88% due 11/15/14................... 55,000 58,575
Momentive Performance Materials, Inc.
Senior Sub. Notes
11.50% due 12/01/16*................. 85,000 84,150
--------
142,725
--------
Commercial Services-Finance -- 0.1%
The Western Union Co.
Senior Notes
5.40% due 11/17/11................... 161,000 160,696
--------
Computer Services -- 0.1%
Compucom Systems, Inc.
Senior Sub. Notes
12.50% due 10/01/15*................. 30,000 29,250
Computer Sciences Corp.
Notes
3.50% due 04/15/08................... 65,000 64,139
--------
93,389
--------
Computers -- 0.1%
International Business Machines Corp.
Senior Notes
5.70% due 09/14/17................... 100,000 100,524
--------
Containers-Paper/Plastic -- 0.2%
Jefferson Smurfit Corp.
Company Guar. Notes
8.25% due 10/01/12................... 30,000 30,075
Principal Value
Security Description Amount (Note 3)
--------------------------------------------------------------
Containers-Paper/Plastic (continued)
Pliant Corp.
Company Guar. Notes
11.13% due 09/01/09...................... $ 82,000 $ 73,800
Smurfit-Stone Container Enterprises, Inc.
Senior Notes
8.00% due 03/15/17....................... 175,000 171,937
--------
275,812
--------
Direct Marketing -- 0.0%
Affinity Group, Inc.
Senior Sub. Notes
9.00% due 02/15/12....................... 45,000 45,900
--------
Diversified Financial Services -- 0.1%
AXA Financial, Inc.
Senior Notes
6.50% due 04/01/08....................... 55,000 55,305
General Electric Capital Corp.
Senior Notes
5.63% due 09/15/17....................... 44,000 43,988
--------
99,293
--------
Diversified Operations -- 0.0%
Capmark Financial Group, Inc.
Company Guar. Notes
5.88% due 05/10/12*...................... 50,000 45,536
--------
Electric-Generation -- 0.1%
Bruce Mansfield Unit Trust
Pass Through Certs.
6.85% due 06/01/34....................... 110,000 110,262
The AES Corp.
Senior Notes
8.88% due 02/15/11....................... 85,000 88,719
--------
198,981
--------
Electric-Integrated -- 0.9%
Centerpoint Energy, Inc.
Senior Notes
5.88% due 06/01/08....................... 140,000 139,866
Commonwealth Edison Co.
1st Mtg. Bonds
5.90% due 03/15/36....................... 110,000 102,997
Commonwealth Edison Co.
1st Mtg. Bonds
5.95% due 08/15/16....................... 50,000 49,829
Commonwealth Edison Co.
1st Mtg. Notes
6.15% due 09/15/17....................... 44,000 44,262
Dominion Resources, Inc.
Senior Notes
5.69% due 05/15/08(2).................... 132,000 132,058
Dominion Resources, Inc.
Jr. Sub. Notes
6.30% due 09/30/11(7).................... 109,000 107,992
Duke Energy Indiana, Inc.
Debentures
5.00% due 09/15/13....................... 60,000 57,673
44
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value
Security Description Amount (Note 3)
-----------------------------------------------------------------
CORPORATE BONDS & NOTES (continued)
Electric-Integrated (continued)
Entergy Louisiana LLC
1st Mtg. Bonds
5.83% due 11/01/10....................... $195,000 $ 195,401
Mackinaw Power LLC
Secured Notes
6.30% due 10/31/23*...................... 110,000 112,559
Mirant Americas Generation LLC
Senior Notes
8.30% due 05/01/11....................... 30,000 30,300
Mirant Mid-Atlantic LLC
Pass Through Certs.
Series B
9.13% due 06/30/17....................... 40,254 44,581
Nisource Finance Corp.
Company Guar. Notes
5.25% due 09/15/17....................... 43,000 39,909
Pepco Holdings, Inc.
Senior Notes
6.45% due 08/15/12....................... 55,000 57,278
PSEG Power LLC
Company Guar. Notes
7.75% due 04/15/11....................... 65,000 69,600
Puget Sound Energy, Inc.
Senior Notes
5.20% due 10/01/15....................... 212,000 202,881
Southern Energy, Inc.
Notes
7.90% due 07/15/09+(6)(8)(9)............. 150,000 0
----------
1,387,186
----------
Electronic Components-Semiconductors -- 0.1%
Freescale Semiconductor, Inc.
Senior Sub. Notes
10.13% due 12/15/16...................... 50,000 46,500
National Semiconductor Corp.
Senior Notes
6.60% due 06/15/17....................... 100,000 102,433
----------
148,933
----------
Electronics-Military -- 0.0%
L-3 Communications Corp.
Company Guar. Notes
6.38% due 10/15/15....................... 40,000 39,300
----------
Finance-Auto Loans -- 0.2%
Ford Motor Credit Co. LLC
Notes
7.38% due 10/28/09....................... 140,000 137,278
General Motors Acceptance Corp.
Notes
6.88% due 09/15/11....................... 140,000 133,233
General Motors Acceptance Corp.
Notes
6.88% due 08/28/12....................... 8,000 7,504
----------
278,015
----------
Finance-Commercial -- 0.1%
Transamerica Finance Corp.
Senior Notes
6.40% due 09/15/08....................... 75,000 75,750
----------
Principal Value
Security Description Amount (Note 3)
-----------------------------------------------------------
Finance-Consumer Loans -- 0.0%
John Deere Capital Corp.
Debentures
5.10% due 01/15/13................... $ 72,000 $ 70,896
--------
Finance-Credit Card -- 0.1%
Capital One Bank
Senior Sub. Notes
6.50% due 06/13/13................... 82,000 83,112
--------
Finance-Investment Banker/Broker -- 0.5%
Citigroup, Inc.
Senior Notes
5.88% due 05/29/37................... 45,000 43,377
JP Morgan Chase & Co.
Senior Notes
5.38% due 01/15/14................... 120,000 119,201
Lehman Brothers Holdings, Inc.
Sub. Notes
6.50% due 07/19/17................... 50,000 50,672
Lehman Brothers Holdings, Inc.
Sub. Notes
6.88% due 07/17/37................... 90,000 89,278
Lehman Brothers Holdings, Inc.
Senior Notes
7.00% due 09/27/27................... 54,000 55,290
Morgan Stanley
Senior Notes
5.75% due 08/31/12................... 100,000 100,169
The Bear Stearns Cos., Inc.
Senior Notes
6.40% due 10/02/17................... 180,000 179,200
The Goldman Sachs Group, Inc.
Sub. Notes
6.75% due 10/01/37................... 81,000 81,520
--------
718,707
--------
Finance-Mortgage Loan/Banker -- 0.3%
Countrywide Financial Corp.
Company Guar. Notes
5.80% due 06/07/12................... 27,000 25,307
Countrywide Financial Corp.
Sub. Notes
6.25% due 05/15/16................... 100,000 90,496
Residential Capital LLC
Senior Notes
6.50% due 06/01/12................... 162,000 131,220
Residential Capital LLC
Company Guar. Notes
6.50% due 04/17/13................... 60,000 48,450
Residential Capital LLC
Company Guar. Notes
6.88% due 06/30/15................... 250,000 201,875
--------
497,348
--------
Food-Retail -- 0.0%
The Kroger Co.
Company Guar. Notes
6.40% due 08/15/17................... 23,000 23,453
--------
45
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value
Security Description Amount (Note 3)
-----------------------------------------------------------------
CORPORATE BONDS & NOTES (continued)
Funeral Services & Related Items -- 0.0%
Service Corp. International
Senior Notes
6.75% due 04/01/16......................... $ 30,000 $ 29,062
--------
Home Furnishings -- 0.0%
Simmons Co.
Company Guar. Notes
7.88% due 01/15/14......................... 25,000 24,000
Simmons Co.
Senior Disc. Notes
10.00% due 12/15/14(2)..................... 21,000 16,747
--------
40,747
--------
Hotel/Motel -- 0.0%
Starwood Hotels & Resorts Worldwide, Inc.
Senior Notes
6.25% due 02/15/13......................... 45,000 45,164
--------
Independent Power Producers -- 0.2%
Calpine Corp.
Sec. Notes
8.75% due 07/15/13*(10).................... 175,000 190,750
NRG Energy, Inc.
Company Guar. Notes
7.38% due 02/01/16......................... 90,000 90,225
--------
280,975
--------
Insurance Brokers -- 0.1%
Marsh & McLennan Cos., Inc.
Senior Notes
5.15% due 09/15/10......................... 60,000 59,790
Marsh & McLennan Cos., Inc.
Senior Notes
7.13% due 06/15/09......................... 40,000 41,354
--------
101,144
--------
Insurance-Life/Health -- 0.1%
Americo Life, Inc.
Notes
7.88% due 05/01/13*........................ 134,000 136,853
Monumental Global Funding II
Notes
5.65% due 07/14/11*........................ 66,000 67,562
--------
204,415
--------
Insurance-Property/Casualty -- 0.1%
The Travelers Cos., Inc.
Senior Notes
6.25% due 06/15/37......................... 90,000 86,814
W.R. Berkley Corp.
Senior Sub. Notes
6.25% due 02/15/37......................... 3,000 2,771
--------
89,585
--------
Investment Management/Advisor Services -- 0.1%
LVB Acquisition Merger Sub, Inc.
Senior Notes
10.38% due 10/15/17*....................... 40,000 38,650
Principal Value
Security Description Amount (Note 3)
---------------------------------------------------------------------
Investment Management/Advisor Services (continued)
LVB Acquisition Merger Sub, Inc.
Senior Sub. Notes
11.63% due 10/15/17*........................... $ 50,000 $ 48,500
--------
87,150
--------
Machinery-Farming -- 0.0%
Case Corp.
Notes
7.25% due 01/15/16............................. 50,000 51,750
--------
Medical-Drugs -- 0.2%
American Home Products Corp.
Notes
6.95% due 03/15/11............................. 123,000 128,910
Schering-Plough Corp
Senior Notes
6.00% due 09/15/17............................. 100,000 100,449
Wyeth
Bonds
5.50% due 02/01/14............................. 126,000 125,295
--------
354,654
--------
Medical-HMO -- 0.0%
Coventry Health Care, Inc.
Senior Notes
5.95% due 03/15/17............................. 47,000 45,451
WellPoint, Inc.
Notes
3.75% due 12/14/07............................. 6,620 6,596
--------
52,047
--------
Medical-Hospitals -- 0.2%
Community Health Systems, Inc.
Senior Notes
8.88% due 07/15/15*............................ 80,000 82,200
HCA, Inc.
Senior Notes
6.25% due 02/15/13............................. 55,000 48,675
HCA, Inc.
Sec. Notes
9.13% due 11/15/14*............................ 25,000 26,375
HCA, Inc.
Sec. Notes
9.25% due 11/15/16*............................ 140,000 148,750
--------
306,000
--------
Metal Processors & Fabrication -- 0.1%
Commercial Metals Co.
Senior Notes
6.50% due 07/15/17............................. 87,000 90,305
Timken Co.
Notes
5.75% due 02/15/10............................. 96,000 97,404
--------
187,709
--------
Metal-Aluminum -- 0.1%
Alcoa, Inc.
Notes
6.00% due 01/15/12............................. 60,000 61,194
46
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value
Security Description Amount (Note 3)
-----------------------------------------------------------------
CORPORATE BONDS & NOTES (continued)
Metal-Aluminum (continued)
Alcoa, Inc.
Bonds
6.50% due 06/15/18......................... $141,000 $145,033
--------
206,227
--------
Metal-Diversified -- 0.1%
Freeport-McMoRan Copper & Gold, Inc.
Senior Notes
8.38% due 04/01/17......................... 65,000 71,012
--------
Mining -- 0.0%
Newmont Mining Corp.
Company Guar. Notes
5.88% due 04/01/35......................... 60,000 52,865
--------
Multimedia -- 0.4%
Belo Corp.
Senior Notes
6.75% due 05/30/13......................... 60,000 61,538
Cox Enterprises, Inc.
Notes
7.88% due 09/15/10*........................ 205,000 219,328
News America, Inc.
Company Guar. Bonds
7.30% due 04/30/28......................... 80,000 83,546
Time Warner Entertainment Co. LP
Senior Notes
8.38% due 07/15/33......................... 156,000 182,927
Viacom, Inc.
Senior Notes
6.88% due 04/30/36......................... 50,000 49,792
--------
597,131
--------
Non-Hazardous Waste Disposal -- 0.1%
Waste Management, Inc.
Company Guar. Notes
6.88% due 05/15/09......................... 56,000 57,882
Waste Management, Inc.
Company Guar. Notes
7.75% due 05/15/32......................... 60,000 67,382
--------
125,264
--------
Office Automation & Equipment -- 0.2%
IKON Office Solutions, Inc.
Senior Notes
7.75% due 09/15/15......................... 40,000 40,200
Pitney Bowes, Inc.
Notes
5.25% due 01/15/37......................... 194,000 186,123
Pitney Bowes, Inc.
Notes
5.75% due 09/15/17......................... 85,000 85,123
--------
311,446
--------
Oil Companies-Exploration & Production -- 0.4%
Anadarko Petroleum Corp.
Senior Notes
5.95% due 09/15/16......................... 120,000 118,849
Principal Value
Security Description Amount (Note 3)
---------------------------------------------------------------------
Oil Companies-Exploration & Production (continued)
Apache Corp.
Senior Notes
6.25% due 04/15/12............................. $200,000 $208,216
Chesapeake Energy Corp.
Company Guar. Notes
7.50% due 09/15/13............................. 175,000 179,813
Sabine Pass LNG LP
Secured Notes
7.50% due 11/30/16............................. 75,000 73,875
--------
580,753
--------
Oil Companies-Integrated -- 0.1%
Hess Corp.
Bonds
7.88% due 10/01/29............................. 80,000 91,953
Marathon Oil Corp.
Notes
6.60% due 10/01/37............................. 69,000 70,549
--------
162,502
--------
Oil Refining & Marketing -- 0.1%
The Premcor Refining Group, Inc.
Company Guar. Notes
6.75% due 05/01/14............................. 180,000 187,619
--------
Oil-Field Services -- 0.1%
Allis-Chalmers Energy, Inc.
Company Guar. Notes
9.00% due 01/15/14............................. 15,000 15,112
Weatherford International, Inc.
Company Guar. Notes
6.80% due 06/15/37*............................ 90,000 92,439
--------
107,551
--------
Paper & Related Products -- 0.1%
Bowater, Inc.
Notes
6.50% due 06/15/13............................. 75,000 54,750
Georgia-Pacific Corp.
Company Guar. Notes
7.00% due 01/15/15*............................ 30,000 29,250
Georgia-Pacific Corp.
Company Guar. Notes
7.13% due 01/15/17*............................ 10,000 9,675
--------
93,675
--------
Physicians Practice Management -- 0.0%
US Oncology, Inc.
Senior Sub. Notes
10.75% due 08/15/14............................ 10,000 10,325
--------
Pipelines -- 0.3%
CenterPoint Energy Resources Corp.
Notes
7.75% due 02/15/11............................. 130,000 138,181
Copano Energy LLC
Company Guar. Notes
8.13% due 03/01/16............................. 95,000 96,663
47
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value
Security Description Amount (Note 3)
----------------------------------------------------------
CORPORATE BONDS & NOTES (continued)
Pipelines (continued)
Duke Energy Field Services LLC
Notes
6.88% due 02/01/11................... $ 60,000 $ 62,256
Dynegy-Roseton Danskammer
Pass Through Certs.
Series B
7.67% due 11/08/16................... 45,000 45,225
ONEOK Partners LP
Company Guar. Notes
6.85% due 10/15/37................... 74,000 74,582
Williams Cos., Inc.
Senior Notes
7.88% due 09/01/21................... 90,000 97,875
--------
514,782
--------
Publishing-Newspapers -- 0.0%
Knight Ridder, Inc.
Debentures
6.88% due 03/15/29................... 70,000 56,880
--------
Publishing-Periodicals -- 0.0%
The Reader's Digest Association, Inc.
Senior Sub. Notes
9.00% due 02/15/17*.................. 25,000 22,500
--------
Radio -- 0.1%
Chancellor Media Corp.
Company Guar. Notes
8.00% due 11/01/08................... 182,000 184,953
--------
Real Estate Investment Trusts -- 0.4%
AvalonBay Communities, Inc.
Senior Notes
5.75% due 09/15/16................... 110,000 106,887
Health Care Property Investors, Inc.
Senior Notes
5.65% due 12/15/13................... 100,000 96,596
Liberty Property LP
Senior Notes
5.63% due 10/01/17................... 45,000 44,916
New Plan Excel Realty Trust
Senior Notes
4.50% due 02/01/11................... 110,000 107,730
PPF Funding, Inc.,
Bonds
5.35% due 04/15/12*.................. 60,000 59,480
Reckson Operating Partnership LP
Senior Notes
6.00% due 03/31/16................... 35,000 33,256
Simon Property Group LP
Notes
5.38% due 08/28/08................... 40,000 39,768
Vornado Realty LP
Notes
4.50% due 08/15/09................... 60,000 59,065
--------
547,698
--------
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------------
Recycling -- 0.0%
Aleris International, Inc.
Company Guar. Notes
9.00% due 12/15/14..................... $ 45,000 $ 41,625
Aleris International, Inc.
Senior Sub. Notes
10.00% due 12/15/16.................... 20,000 17,700
--------
59,325
--------
Rental Auto/Equipment -- 0.1%
ERAC USA Finance Co.
Notes
7.35% due 06/15/08*.................... 150,000 151,636
United Rentals North America, Inc.
Senior Sub. Notes
7.75% due 11/15/13..................... 40,000 41,200
--------
192,836
--------
Research & Development -- 0.0%
Alion Science and Technology Corp.
Company Guar. Notes
10.25% due 02/01/15.................... 55,000 49,912
--------
Retail-Drug Store -- 0.1%
CVS Caremark Corp.
Senior Notes
6.25% due 06/01/27..................... 100,000 96,912
CVS Lease Pass Through Trust
Pass Through Certs.
6.04% due 12/10/28*.................... 118,037 114,653
--------
211,565
--------
Retail-Regional Department Stores -- 0.0%
JC Penney Corp., Inc.
Senior Notes
5.75% due 02/15/18..................... 14,000 13,440
--------
Retail-Restaurants -- 0.0%
NPC International, Inc.
Company Guar. Notes
9.50% due 05/01/14..................... 35,000 31,850
--------
Savings & Loans/Thrifts -- 0.6%
Independence Community Bank Corp.
Sub. Notes
3.50% due 06/20/13(7).................. 64,000 62,977
Sovereign Bancorp, Inc.
Senior Notes
4.80% due 09/01/10..................... 206,000 201,258
Washington Mutual Bank
Sub. Notes
5.13% due 01/15/15..................... 210,000 195,594
Washington Mutual Bank
Sub. Notes
5.50% due 01/15/13..................... 138,000 132,999
Washington Mutual Preferred Funding III
Bonds
6.90% due 06/12/12*(7)................. 100,000 102,448
Washington Mutual, Inc.
Senior Notes
5.50% due 08/24/11..................... 150,000 148,087
48
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value
Security Description Amount (Note 3)
---------------------------------------------------------------
CORPORATE BONDS & NOTES (continued)
Savings & Loans/Thrifts (continued)
Western Financial Bank
Senior Debentures
9.63% due 05/15/12........................ $126,000 $135,259
--------
978,622
--------
Special Purpose Entities -- 0.5%
BAE Systems Holdings, Inc.
Notes
5.20% due 08/15/15*....................... 175,000 166,787
Capital One Capital IV
Company Guar. Bonds
6.75% due 02/17/37........................ 65,000 57,964
Consolidated Communications Illinois/Texas
Holdings, Inc.
Senior Notes
9.75% due 04/01/12........................ 159,000 160,590
Cyrus Reinsurance Holdings SPC
Senior Notes
6.36% due 09/01/08*(6)(7)................. 76,000 74,480
KAR Holdings, Inc.
Senior Notes
9.36% due 05/01/14*(1).................... 25,000 23,938
Norbord Delaware GP I
Company Guar. Notes
6.45% due 02/15/17*....................... 49,000 44,567
Pricoa Global Funding I
Notes
5.30% due 09/27/13*....................... 110,000 110,558
Principal Life Global Funding I
Sec. Notes
5.25% due 01/15/13*....................... 100,000 99,727
--------
738,611
--------
Steel-Producers -- 0.2%
International Steel Group, Inc.
Senior Notes
6.50% due 04/15/14........................ 130,000 129,080
Reliance Steel & Aluminum Co.
Company Guar. Notes
6.85% due 11/15/36........................ 60,000 58,590
United States Steel Corp.
Senior Notes
6.05% due 06/01/17........................ 55,000 52,631
United States Steel Corp.
Senior Notes
6.65% due 06/01/37........................ 48,000 44,283
--------
284,584
--------
Telecom Services -- 0.1%
Bellsouth Telecommunications, Inc.
Debentures
7.00% due 12/01/95........................ 104,000 105,673
Qwest Corp.
Senior Notes
7.50% due 10/01/14........................ 65,000 67,600
--------
173,273
--------
Principal Value
Security Description Amount (Note 3)
----------------------------------------------------------
Telephone-Integrated -- 0.5%
AT&T Corp.
Senior Notes
7.30% due 11/15/11................... $ 63,000 $ 67,680
BellSouth Corp.
Senior Notes
6.00% due 10/15/11................... 200,000 204,896
Citizens Communications Co.
Senior Notes
7.13% due 03/15/19................... 25,000 24,625
GTE Northwest, Inc.
Debentures
5.55% due 10/15/08................... 70,000 70,165
Level 3 Financing, Inc.
Company Guar. Notes
9.25% due 11/01/14................... 20,000 19,700
New England Telephone & Telegraph Co.
Debentures
7.88% due 11/15/29................... 80,000 88,890
Sprint Capital Corp.
Company Guar. Notes
6.88% due 11/15/28................... 120,000 115,812
Verizon New York, Inc.
Debentures
6.88% due 04/01/12................... 102,000 107,447
--------
699,215
--------
Television -- 0.1%
Paxson Communication Corp.
Senior Notes
11.61% due 01/15/13*(1).............. 55,000 56,100
Young Broadcasting, Inc.
Company Guar. Notes
10.00% due 03/01/11.................. 25,000 23,062
--------
79,162
--------
Transport-Air Freight -- 0.3%
Atlas Air, Inc.
Pass Through Certs.
Series 1991-1, Class B
7.63% due 01/02/15................... 366,911 421,948
--------
Transport-Rail -- 0.2%
BNSF Funding Trust I
Company Guar. Bonds
6.61% due 01/15/26(7)................ 130,000 117,274
CSX Corp.
Senior Notes
6.25% due 03/15/18................... 90,000 90,473
Union Pacific Corp.
Notes
3.88% due 02/15/09................... 18,000 17,630
--------
225,377
--------
Transport-Services -- 0.1%
FedEx Corp.
Company Guar. Notes
5.50% due 08/15/09................... 55,000 55,615
49
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value
Security Description Amount (Note 3)
-------------------------------------------------------------
CORPORATE BONDS & NOTES (continued)
Transport-Services (continued)
PHI, Inc.
Company Guar. Notes
7.13% due 04/15/13.................. $ 75,000 $ 72,000
Ryder System, Inc.
Notes
5.85% due 03/01/14.................. 32,000 32,257
-----------
159,872
-----------
Travel Service -- 0.0%
Travelport LLC
Company Guar. Notes
10.25% due 09/01/14(1).............. 25,000 25,000
-----------
Total Corporate Bonds & Notes
(cost $17,436,446).................. 17,440,960
-----------
FOREIGN CORPORATE BONDS & NOTES -- 3.8%
Banks-Commercial -- 0.3%
Banco Continental de Panama SA
Notes
6.63% due 12/01/10*................. 35,000 35,700
Caisse Nationale des Caisses
d'Epargne et de Prevoyance
Notes
4.93% due 12/30/09(1)(12)........... 109,000 87,472
Credit Agricole SA
Jr. Sub. Notes
6.64% due 05/31/17*(1)(12).......... 111,000 103,557
HSBC Holdings PLC
Sub. Notes
6.50% due 09/15/37.................. 100,000 100,653
Royal Bank of Scotland Group PLC
Bonds
6.99% due 10/29/17*(7).............. 100,000 101,871
Societe Generale
Sub. Notes
5.92% due 04/05/07*(1)(12).......... 65,000 61,575
-----------
490,828
-----------
Banks-Money Center -- 0.2%
HBOS Capital Funding LP
Bank Guar. Bonds
6.85% due 03/23/09(12).............. 200,000 190,500
Mizuho Financial Group Cayman, Ltd.
Bank Guar. Bonds
8.38% due 04/27/09(12).............. 145,000 151,029
National Westminster Bank PLC
Sub. Notes
7.75% due 10/16/07(7)............... 55,000 55,104
-----------
396,633
-----------
Broadcast Services/Program -- 0.1%
Grupo Televisa SA
Senior Notes
6.63% due 03/18/25.................. 139,000 141,258
-----------
Principal Value
Security Description Amount (Note 3)
---------------------------------------------------------------
Building Products-Cement -- 0.1%
C8 Capital SPV, Ltd.
Notes
6.64% due 12/31/14*(7)................... $221,000 $214,803
--------
Cellular Telecom -- 0.1%
America Movil SA de CV
Bonds
6.38% due 03/01/35....................... 112,000 109,958
--------
Cruise Lines -- 0.0%
Royal Caribbean Cruises, Ltd.
Senior Notes
7.00% due 06/15/13....................... 70,000 69,611
--------
Diversified Financial Services -- 0.1%
CIT Group Funding Co. of Canada
Company Guar. Notes
5.20% due 06/01/15....................... 103,000 93,522
--------
Diversified Manufacturing Operations -- 0.1%
Tyco International Group SA
Company Guar. Notes
6.00% due 11/15/13....................... 120,000 121,130
--------
Diversified Operations -- 0.1%
Hutchison Whampoa Finance, Ltd.
Company Guar. Notes
7.50% due 08/01/27*...................... 140,000 156,332
--------
Electric-Integrated -- 0.1%
Empresa Nacional de Electricidad SA
Bonds
7.33% due 02/01/37....................... 84,000 88,807
Enel Finance International SA
Company Guar. Notes
6.25% due 09/15/17*...................... 30,000 30,111
Enel Finance International SA
Company Guar. Notes
6.80% due 09/15/37*...................... 105,000 106,919
--------
225,837
--------
Electronic Components-Misc. -- 0.0%
NXP BV / NXP Funding LLC
Company Guar. Notes
9.50% due 10/15/15....................... 10,000 9,325
--------
Finance-Other Services -- 0.0%
Lukoil International Finance BV
Company Guar. Notes
6.36% due 06/07/17*...................... 72,000 69,120
--------
Food-Retail -- 0.1%
Delhaize Group
Notes
6.50% due 06/15/17*...................... 90,000 90,768
--------
Gas-Distribution -- 0.1%
Nakilat, Inc.
Sec. Notes
6.07% due 12/31/33*...................... 85,000 82,014
--------
50
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value
Security Description Amount (Note 3)
-----------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (continued)
Insurance-Multi-line -- 0.3%
Aegon NV
Sub. Bonds
5.86% due 07/15/14(1)(12).................. $156,000 $121,680
AXA SA
Sub. Notes
6.38% due 12/14/36*(7)..................... 85,000 76,639
ING Groep NV
Bonds
5.78% due 12/08/15(7)...................... 225,000 212,589
--------
410,908
--------
Investment Companies -- 0.1%
Canadian Oil Sands, Ltd.
Notes
5.80% due 08/15/13*........................ 124,000 122,905
--------
Medical-Drugs -- 0.1%
Angiotech Pharmaceuticals, Inc.
Company Guar. Notes
7.75% due 04/01/14......................... 55,000 50,325
Angiotech Pharmaceuticals, Inc.
Company Guar. Notes
9.11% due 12/01/13(1)...................... 15,000 15,375
AstraZeneca PLC
Notes
6.45% due 09/15/37......................... 99,000 102,650
Elan Finance PLC
Company Guar. Bonds
7.75% due 11/15/11......................... 70,000 68,600
--------
236,950
--------
Metal-Aluminum -- 0.0%
Alcan, Inc.
Notes
6.13% due 12/15/33......................... 75,000 72,020
--------
Metal-Diversified -- 0.0%
Inco, Ltd.
Bonds
7.20% due 09/15/32......................... 71,000 73,861
--------
Multimedia -- 0.1%
The Thomson Corp.
Notes
5.70% due 10/01/14......................... 90,000 89,239
--------
Oil Companies-Exploration & Production -- 0.1%
Nexen, Inc.
Bonds
6.40% due 05/15/37......................... 100,000 97,175
--------
Paper & Related Products -- 0.0%
Abitibi-Consolidated, Inc.
Notes
8.55% due 08/01/10......................... 45,000 37,125
--------
Pipelines -- 0.2%
Enbridge, Inc.
Bonds
5.80% due 06/15/14......................... 183,000 182,390
Principal Value
Security Description Amount (Note 3)
---------------------------------------------------------------
Pipelines (continued)
Kinder Morgan Finance Co. ULC
Company Guar. Notes
5.70% due 01/05/16....................... $105,000 $ 95,439
--------
277,829
--------
Real Estate Operations & Development -- 0.1%
Brascan Corp.
Notes
8.13% due 12/15/08....................... 157,000 163,018
--------
Satellite Telecom -- 0.1%
Intelsat Bermuda, Ltd.
Company Guar. Notes
8.89% due 01/15/15(1).................... 65,000 65,650
Intelsat Intermediate Holding Co., Ltd.
Senior Notes
9.25% due 02/01/15(2).................... 25,000 20,562
Intelsat, Ltd.
Senior Notes
6.50% due 11/01/13....................... 40,000 30,400
--------
116,612
--------
Special Purpose Entities -- 0.6%
Aries Vermoegensverwaltungs GmbH
Bonds
9.60% due 10/25/14*...................... 250,000 313,125
Hybrid Capital Funding I LP
Sub. Notes
8.00% due 06/30/11(12)................... 286,000 264,431
Rio Tinto Finance USA, Ltd.
Notes
2.63% due 09/30/08....................... 55,000 53,856
SMFG Preferred Capital, Ltd.
Sub. Bonds
6.08% due 01/25/17*(1)(12)............... 121,000 111,887
SovRisc BV
Notes
4.63% due 10/31/08*...................... 133,000 133,117
--------
876,416
--------
Telecom Services -- 0.2%
Telenet Group Holdings NV
Notes
11.50% due 06/15/14*(2).................. 26,000 25,740
TELUS Corp.
Notes
8.00% due 06/01/11....................... 238,000 257,568
--------
283,308
--------
Telephone-Integrated -- 0.3%
British Telecommunications PLC
Bonds
8.63% due 12/15/30....................... 140,000 185,388
Telecom Italia Capital SA
Company Guar. Bonds
5.25% due 10/01/15....................... 55,000 52,213
51
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value
Security Description Amount (Note 3)
----------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (continued)
Telephone-Integrated (continued)
Telecom Italia Capital SA
Company Guar. Bonds
6.20% due 07/18/11................ $115,000 $ 117,840
Telefonica Emisiones SAU
Company Guar. Notes
6.22% due 07/03/17................ 82,000 82,838
----------
438,279
----------
Transport-Marine -- 0.1%
DP World, Ltd.
Bonds
6.85% due 07/02/37*............... 121,000 120,180
----------
Transport-Rail -- 0.1%
Canadian National Railway Co.
Notes
6.38% due 10/15/11................ 130,000 134,931
Canadian National Railway Co.
Debentures
6.38% due 11/15/37................ 64,000 64,769
----------
199,700
----------
Total Foreign Corporate Bonds & Notes
(cost $6,076,373)................. 5,886,664
----------
FOREIGN GOVERNMENT AGENCIES -- 1.9%
Sovereign -- 1.9%
Federal Republic of Brazil
Notes
8.00% due 01/15/18................ 200,000 223,200
Federal Republic of Brazil
Bonds
10.50% due 07/14/14............... 205,000 259,325
Republic of Argentina
Bonds
5.39% due 08/03/12(1)............. 230,000 130,410
Republic of Argentina
Notes
8.28% due 12/31/33................ 371,506 337,142
Republic of Turkey
Notes
9.00% due 06/30/11................ 190,000 208,525
Republic of Turkey
Senior Notes
11.88% due 01/15/30............... 380,000 589,950
Republic of Venezuela
Notes
8.50% due 10/08/14................ 100,000 100,250
Republic of Venezuela
Bonds
9.25% due 09/15/27................ 500,000 517,500
Russian Federation
Bonds
7.50% due 03/31/30(2)............. 348,250 392,791
Russian Federation
Bonds
7.50% due 03/31/30*(2)............ 124,375 138,989
----------
Total Foreign Government Agencies
(cost $2,724,975)................. 2,898,082
----------
Principal Value
Security Description Amount (Note 3)
---------------------------------------------------------------
U.S. GOVERNMENT AGENCIES -- 8.1%
Federal Home Loan Mtg. Corp. -- 5.0%
5.00% due 05/01/34................... $ 823,349 $ 787,450
5.00% due 06/01/34................... 1,459,563 1,395,926
5.00% due 11/01/35................... 984,967 941,104
5.00% due 11/01/36................... 33,426 31,894
5.50% due 07/01/34................... 520,091 510,324
5.70% due 08/01/36(1)................ 1,303,423 1,306,655
5.80% due 01/01/37(1)................ 247,410 249,172
5.81% due 01/01/37(1)................ 443,472 443,768
5.98% due 10/01/36(1)................ 613,244 613,871
6.00% due 12/01/33................... 94,754 95,287
6.00% due October TBA................ 625,000 625,586
6.50% due 03/01/36................... 283,914 289,061
6.50% due 05/01/36................... 8,997 9,160
7.00% due 04/01/32................... 156,723 162,478
Federal Home Loan Mtg. Corp.
REMIC
Series 3349, Class HB
5.50% due 06/15/31(3)................. 232,000 231,361
------------
7,693,097
------------
Federal National Mtg. Assoc. -- 2.5%
5.00% due 08/01/18................... 164,618 161,816
5.00% due October TBA................ 130,000 123,988
5.50% due 12/01/33................... 937,494 920,886
5.50% due 02/01/36(1)................ 315,953 317,350
5.50% due 11/01/36................... 493,170 483,144
6.00% due 06/01/17................... 260,133 264,158
6.00% due 12/01/33................... 86,848 87,287
6.00% due 11/01/36................... 980,342 973,867
6.50% due 09/01/10................... 65,895 67,071
6.50% due 09/01/32................... 276,011 282,680
6.50% due 07/01/36................... 118,385 120,558
------------
3,802,805
------------
Government National Mtg. Assoc. -- 0.6%
5.50% due 05/15/33................... 460,176 454,399
5.50% due 12/15/33................... 339,661 335,397
7.50% due 01/15/32................... 128,645 134,965
------------
924,761
------------
Total U.S. Government Agencies
(cost $12,543,955).................. 12,420,663
------------
Total Long-Term Investment Securities
(cost $136,198,858)................. 149,194,938
------------
52
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value
Security Description Amount (Note 3)
-------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 3.3%
Agreement with State Street Bank & Trust Co.,
bearing interest at 2.50%, dated 09/28/07,
to be repurchased 10/01/07 in the amount
of $1,394,290 and collateralized by
$1,455,000 of Federal National Mtg. Assoc.
Bonds, bearing interest at 5.20%, due
03/05/19 and having an approximate value
of $1,423,685................................ $1,394,000 $ 1,394,000
State Street Bank & Trust Co.
Joint Repurchase Agreement (11).............. 3,623,000 3,623,000
------------
Total Repurchase Agreements
(cost $5,017,000)............................ 5,017,000
------------
TOTAL INVESTMENTS
(cost $141,215,858)(13)...................... 100.5% 154,211,938
Liabilities in excess of other assets........... (0.5) (698,883)
---------- ------------
NET ASSETS 100.0% $153,513,055
========== ============
Bonds & Notes Sold Short -- (0.4%)
U.S. Government Agencies -- (0.4%)
Federal Home Loan Mtg. Corp.
5.00% due October TBA
(Proceeds $603,503).......................... $ (626,000) $ (597,047)
========== ============
- --------
+ Non-income producing security
* Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. The Fund has no
right to demand registration of these securities. At September 30, 2007,
the aggregate value of these securities was $6,896,675 representing 4.5%
of net assets. Unless otherwise indicated these securities are not
considered to be illiquid.
(1) Floating rate security where the rate fluctuates. The rate moves up or
down at each reset date. The rate reflected is as of September 30, 2007.
(2) "Step-up" security where the rate increases ("steps-up") at a
predetermined rate. Rate shown reflects the increased rate.
(3) Collateralized Mortgage Obligation
(4) Variable Rate Security -- the rate reflected is as of September 30, 2007,
maturity date reflects the stated maturity date.
(5) Commercial Mortgage Backed Security
(6) Fair valued security; see Note 3
(7) Variable Rate Security -- the rate reflected is as of September 30, 2007,
maturity date reflects next reset date.
(8) Illiquid security
(9) To the extent permitted by the Statement of Additional Information, the
Balanced Assets Fund may invest in restricted securities. The Fund has no
right to demand registration of these securities. The securities are
valued pursuant to Note 3. Restricted securities held by a Fund may not be
sold except in exempt transactions or in a public offering registered
under the Securities Act of 1933. The risk of investing in such securities
is generally greater than the risk of investing in the securities of
widely held, publicly traded companies. Lack of a secondary market and
resale restrictions may result in the inability of a Fund to sell a
security at a fair price and may substantially delay the sale of the
security. In addition, these securities may exhibit greater price
volatility than securities for which secondary markets exist. As of
September 30, 2007, the Balanced Assets Fund held the following restricted
securities:
Market
Value
Acquisition Principal Acquisition Market Per Par % of
Name Date Amount Cost Value Amount Net Assets
---- ----------- --------- ----------- ------ ------- ----------
Southern Energy
7.90% due
07/15/09...... 01/10/2006 150,000 $0 $0 $0 0.00%
(10) Company has filed Chapter 11 bankruptcy protection.
(11) See Note 3 for details of Joint Repurchase Agreement.
(12) Perpetual maturity -- maturity date reflects the next call date.
(13) See Note 7 for cost of investments on a tax basis.
ADR -- AmericanDepository Receipt
TBA -- Securitiespurchased on a forward commitment basis with an approximate
principal amount and no definite maturity date. The actual
principal and maturity date will be determined upon settlement
date.
See Notes to Financial Statements
53
SunAmerica International Equity Fund
PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited)
Industry Allocation*
Banks-Commercial................................................................ 7.1%
Insurance-Multi-line............................................................ 5.5
Medical-Drugs................................................................... 4.4
Oil-Field Services.............................................................. 4.1
Steel-Producers................................................................. 3.6
Auto-Cars/Light Trucks.......................................................... 3.5
Medical Products................................................................ 3.2
Soap & Cleaning Preparation..................................................... 3.0
Electronic Components-Misc...................................................... 2.9
Food-Misc....................................................................... 2.7
Cellular Telecom................................................................ 2.4
Chemicals-Diversified........................................................... 2.4
Electric-Integrated............................................................. 2.4
Tobacco......................................................................... 2.4
Building-Heavy Construction..................................................... 2.3
Coal............................................................................ 2.3
Index Fund-Mid Cap.............................................................. 2.3
Repurchase Agreement............................................................ 2.3
Telephone-Integrated............................................................ 2.1
Diversified Minerals............................................................ 1.9
Oil Companies-Integrated........................................................ 1.8
Hotels/Motels................................................................... 1.7
Enterprise Software/Service..................................................... 1.6
Building & Construction-Misc.................................................... 1.5
Circuit Boards.................................................................. 1.5
Diversified Manufacturing Operations............................................ 1.5
Machinery-Construction & Mining................................................. 1.5
Chemicals-Other................................................................. 1.4
Satellite Telecom............................................................... 1.4
Machinery-General Industrial.................................................... 1.3
Metal-Diversified............................................................... 1.3
Miscellaneous Manufacturing..................................................... 1.3
Diversified Financial Services.................................................. 1.2
Import/Export................................................................... 1.1
Medical-Generic Drugs........................................................... 1.1
Rubber-Tires.................................................................... 1.1
E-Commerce/Products............................................................. 1.0
Food-Retail..................................................................... 1.0
Gas-Distribution................................................................ 1.0
Insurance-Life/Health........................................................... 1.0
Insurance-Property/Casualty..................................................... 1.0
Toys............................................................................ 1.0
Agricultural Chemicals.......................................................... 0.9
Auto/Truck Parts & Equipment-Original........................................... 0.9
Building-Residential/Commercial................................................. 0.9
Electric Products-Misc.......................................................... 0.9
Water........................................................................... 0.9
Engineering/R&D Services........................................................ 0.8
Office Automation & Equipment................................................... 0.8
Cable TV........................................................................ 0.7
Real Estate Operations & Development............................................ 0.7
Machine Tools & Related Products................................................ 0.6
Transport-Marine................................................................ 0.6
Building Products-Cement........................................................ 0.4
Lighting Products & Systems..................................................... 0.3
-----
100.5%
=====
- --------
* Calculated as a percentage of net assets
Country Allocation*
Japan........................................................................... 16.1%
Germany......................................................................... 14.0
France.......................................................................... 11.0
United Kingdom.................................................................. 9.9
Australia....................................................................... 5.6
Switzerland..................................................................... 5.3
Italy........................................................................... 4.4
Norway.......................................................................... 4.4
South Korea..................................................................... 3.6
Greece.......................................................................... 2.5
Cayman Islands.................................................................. 2.3
China........................................................................... 2.3
Mexico.......................................................................... 2.3
United States................................................................... 2.3
Brazil.......................................................................... 1.7
South Africa.................................................................... 1.7
Belgium......................................................................... 1.6
Russia.......................................................................... 1.6
Singapore....................................................................... 1.3
Taiwan.......................................................................... 1.2
Israel.......................................................................... 1.1
Hong Kong....................................................................... 1.0
Egypt........................................................................... 0.9
Malaysia........................................................................ 0.9
Sweden.......................................................................... 0.8
New Zealand..................................................................... 0.5
Bermuda......................................................................... 0.2
-----
100.5%
=====
54
SunAmerica International Equity Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007
Value
Security Description Shares (Note 3)
---------------------------------------------------------------------
COMMON STOCK -- 93.6%
Australia -- 5.6%
BHP Billiton, Ltd............................... 39,300 $ 1,553,586
Boart Longyear Group+........................... 472,100 997,025
CSL, Ltd........................................ 22,000 2,094,678
QBE Insurance Group, Ltd........................ 45,200 1,355,658
Woolworths, Ltd................................. 47,680 1,256,996
-----------
7,257,943
-----------
Belgium -- 1.6%
KBC Groep NV.................................... 15,300 2,104,907
-----------
Bermuda -- 0.2%
Peace Mark Holdings, Ltd........................ 164,000 244,718
-----------
Brazil -- 1.0%
B2W Companhia Global do Varejo.................. 28,000 1,321,331
-----------
Cayman Islands -- 2.3%
Hengan International Group Co., Ltd............. 184,000 694,688
Kingboard Chemical Holdings, Ltd................ 291,000 1,849,200
Neo-Neon Holdings, Ltd.......................... 328,000 430,366
-----------
2,974,254
-----------
China -- 2.3%
China Coal Energy Co............................ 996,400 2,960,803
-----------
Egypt -- 0.9%
Orascom Construction Industries................. 6,700 1,133,975
-----------
France -- 8.7%
Accor SA........................................ 24,500 2,175,101
AXA SA.......................................... 44,894 2,008,840
Compagnie Generale des Etablissements Michelin,
Class B........................................ 11,200 1,505,712
Electricite de France........................... 13,200 1,395,691
Renault SA...................................... 14,900 2,159,085
Vinci SA........................................ 27,100 2,117,263
-----------
11,361,692
-----------
Germany -- 12.4%
Allianz SE...................................... 15,000 3,504,628
Bayer AG........................................ 30,900 2,459,532
E.ON AG......................................... 4,500 831,999
GEA Group AG+................................... 40,100 1,410,645
MAN AG.......................................... 11,700 1,702,563
Merck KGaA...................................... 18,776 2,265,049
SAP AG.......................................... 34,600 2,025,319
Siemens AG...................................... 14,400 1,979,857
-----------
16,179,592
-----------
Greece -- 2.5%
Hellenic Telecommunications Organization SA..... 26,200 971,357
National Bank of Greece SA...................... 36,500 2,326,508
-----------
3,297,865
-----------
Hong Kong -- 1.0%
Hong Kong & China Gas Co., Ltd.................. 533,500 1,244,903
Peregrine Investments Holdings, Ltd.+(1)(2)..... 91,000 0
-----------
1,244,903
-----------
Israel -- 1.1%
Teva Pharmaceutical Industries, Ltd. ADR........ 31,500 1,400,805
-----------
Value
Security Description Shares (Note 3)
-----------------------------------------------------------
Italy -- 4.4%
Saipem SpA............................ 83,400 $ 3,558,212
UniCredito Italiano SpA............... 262,500 2,245,871
-----------
5,804,083
-----------
Japan -- 16.1%
Canon, Inc............................ 18,300 998,921
Daiichi Sankyo Co., Ltd............... 49,300 1,480,738
FANUC, Ltd............................ 21,900 2,232,612
Ibiden Co., Ltd....................... 22,700 1,911,017
Japan Tobacco, Inc.................... 560 3,076,307
JFE Holdings, Inc..................... 22,700 1,608,654
Komatsu, Ltd.......................... 58,500 1,965,873
Mitsui & Co., Ltd..................... 57,000 1,384,495
Mori Seiki Co., Ltd................... 29,000 749,837
Nintendo Co., Ltd..................... 2,500 1,301,528
Sumitomo Mitsui Financial Group, Inc.. 115 896,052
Tokyo Electric Power Co., Inc......... 38,600 974,535
Toyota Motor Corp..................... 40,600 2,396,448
-----------
20,977,017
-----------
Malaysia -- 0.9%
UMW Holdings Bhd...................... 291,800 1,207,448
-----------
Mexico -- 2.3%
Axtel SAB de CV+...................... 249,400 1,909,709
Desarrolladora Homex SAB de CV ADR+... 20,900 1,159,950
-----------
3,069,659
-----------
New Zealand -- 0.5%
Nufarm, Ltd........................... 59,500 708,012
-----------
Norway -- 4.4%
DNB NOR ASA........................... 97,700 1,498,686
Norsk Hydro ASA....................... 54,400 2,366,205
Petroleum Geo-Services ASA............ 65,400 1,886,334
-----------
5,751,225
-----------
Russia -- 1.6%
Mechel ADR............................ 41,100 2,096,100
-----------
Singapore -- 1.3%
CapitaLand, Ltd....................... 172,000 943,655
Cosco Corp. Singapore, Ltd............ 192,700 771,838
-----------
1,715,493
-----------
South Africa -- 1.7%
Murray & Roberts Holdings, Ltd........ 62,400 813,909
Pretoria Portland Cement Co., Ltd..... 68,653 476,335
Tiger Brands, Ltd..................... 36,500 963,454
-----------
2,253,698
-----------
South Korea -- 3.6%
Daelim Industrial Co.................. 4,800 888,986
Hyundai Steel Co...................... 12,100 1,020,673
LG Electronics, Inc................... 12,700 1,186,462
Shinhan Financial Group Co., Ltd...... 24,400 1,594,318
-----------
4,690,439
-----------
Sweden -- 0.8%
Boliden AB............................ 46,200 983,993
-----------
55
SunAmerica International Equity Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Value
Security Description Shares (Note 3)
----------------------------------------------------------
COMMON STOCK (continued)
Switzerland -- 5.3%
Nestle SA.......................... 5,800 $ 2,605,454
Nobel Biocare Holding AG........... 5,200 1,408,031
Syngenta AG........................ 5,700 1,228,860
Zurich Financial Services AG....... 5,800 1,739,875
------------
6,982,220
------------
Taiwan -- 1.2%
AU Optronics Corp. ADR............. 94,035 1,591,072
------------
United Kingdom -- 9.9%
Friends Provident PLC.............. 379,000 1,333,745
Inmarsat PLC....................... 197,740 1,839,808
Pennon Group PLC................... 95,300 1,183,551
Reckitt Benckiser PLC.............. 30,700 1,803,965
Rio Tinto PLC...................... 7,300 631,485
Royal Bank of Scotland Group PLC... 19,300 207,311
Smith & Nephew PLC................. 156,700 1,915,632
Vodafone Group PLC................. 859,800 3,104,898
Xstrata PLC........................ 13,900 922,573
------------
12,942,968
------------
United States -- 0.0%
SoftBrands, Inc.+.................. 40 76
------------
Total Common Stock
(cost $99,075,707)................ 122,256,291
------------
PREFERRED STOCK -- 2.3%
Brazil -- 0.7%
NET Servicos de Comunicacao SA..... 53,700 880,645
------------
Germany -- 1.6%
Henkel KGaA........................ 42,300 2,176,865
------------
Total Preferred Stock
(cost $2,957,460)................. 3,057,510
------------
EXCHANGE TRADED FUNDS -- 2.3%
France -- 2.3%
streetTRACKS MSCI Europe+
(cost $2,979,649)................. 14,500 3,004,055
------------
Total Long-Term Investment Securities
(cost $105,012,816)............... 128,317,856
------------
Principal Value
Security Description Amount (Note 3)
-------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 2.3%
Agreement with State Street Bank & Trust Co.,
bearing interest at 2.50%, dated 09/28/07,
to be repurchased 10/01/07 in the amount
of $2,952,615 and collateralized by Federal
Home Loan Mtg. Notes, bearing interest at
5.20% due 03/15/19 and having an
approximate value of $3,013,712
(cost $2,952,000)............................ $2,952,000 $ 2,952,000
------------
TOTAL INVESTMENTS --
(cost $107,964,816)(3)....................... 100.5% 131,269,856
Liabilities in excess of other assets........... (0.5) (673,767)
---------- ------------
NET ASSETS -- 100.0% $130,596,089
========== ============
- --------
+ Non-income producing security
(1) Fair valued security. See Note 3
(2) Illiquid security
(3) See Note 7 for cost of investments on a tax basis.
ADR --American Depository Receipt
See Notes to Financial Statements
56
SunAmerica Value Fund
PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited)
Industry Allocation*
Oil Companies-Integrated.............................................. 13.7%
Finance-Investment Banker/Broker...................................... 12.1
Banks-Super Regional.................................................. 8.1
Telephone-Integrated.................................................. 6.5
Electric-Integrated................................................... 5.9
Repurchase Agreement.................................................. 5.8
Diversified Manufacturing Operations.................................. 3.9
Medical-Drugs......................................................... 3.9
Finance-Credit Card................................................... 2.8
Medical Products...................................................... 2.6
Banks-Fiduciary....................................................... 2.3
Aerospace/Defense-Equipment........................................... 2.2
Cosmetics & Toiletries................................................ 2.1
Food-Misc............................................................. 2.0
Insurance-Multi-line.................................................. 2.0
Electric Products-Misc................................................ 1.9
Insurance-Property/Casualty........................................... 1.9
Finance-Mortgage Loan/Banker.......................................... 1.8
Cable TV.............................................................. 1.7
Aerospace/Defense..................................................... 1.6
Non-Hazardous Waste Disposal.......................................... 1.6
Brewery............................................................... 1.5
Multimedia............................................................ 1.5
Retail-Apparel/Shoe................................................... 1.5
Retail-Drug Store..................................................... 1.5
Tobacco............................................................... 1.5
Retail-Regional Department Stores..................................... 1.4
Electronic Components-Semiconductors.................................. 1.2
Computers............................................................. 1.1
Paper & Related Products.............................................. 1.1
Applications Software................................................. 1.0
Metal-Aluminum........................................................ 0.9
-----
100.6%
=====
- --------
* Calculated as a percentage of net assets
57
SunAmerica Value Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007
Value
Security Description Shares (Note 3)
----------------------------------------------------------------
COMMON STOCK -- 94.8%
Aerospace/Defense -- 1.6%
General Dynamics Corp..................... 41,900 $ 3,539,293
-----------
Aerospace/Defense-Equipment -- 2.2%
United Technologies Corp.................. 62,800 5,054,144
-----------
Applications Software -- 1.0%
Microsoft Corp............................ 75,200 2,215,392
-----------
Banks-Fiduciary -- 2.3%
The Bank of New York Mellon Corp.......... 120,283 5,309,292
-----------
Banks-Super Regional -- 8.1%
Bank of America Corp...................... 186,400 9,370,328
Wachovia Corp............................. 91,300 4,578,695
Wells Fargo & Co.......................... 125,000 4,452,500
-----------
18,401,523
-----------
Brewery -- 1.5%
Anheuser-Busch Cos., Inc.................. 69,500 3,474,305
-----------
Cable TV -- 1.7%
Comcast Corp., Class A+................... 163,100 3,943,758
-----------
Computers -- 1.1%
International Business Machines Corp...... 21,500 2,532,700
-----------
Cosmetics & Toiletries -- 2.1%
Procter & Gamble Co....................... 65,900 4,635,406
-----------
Diversified Manufacturing Operations -- 3.9%
General Electric Co....................... 212,000 8,776,800
-----------
Electric Products-Misc. -- 1.9%
Emerson Electric Co....................... 81,200 4,321,464
-----------
Electric-Integrated -- 5.9%
Duke Energy Corp.......................... 182,300 3,407,187
FPL Group, Inc............................ 55,600 3,384,928
Southern Co............................... 90,900 3,297,852
Xcel Energy, Inc.......................... 155,100 3,340,854
-----------
13,430,821
-----------
Electronic Components-Semiconductors -- 1.2%
Intel Corp................................ 106,500 2,754,090
-----------
Finance-Credit Card -- 2.8%
American Express Co....................... 105,300 6,251,661
-----------
Finance-Investment Banker/Broker -- 12.1%
Citigroup, Inc............................ 178,100 8,311,927
JPMorgan Chase & Co....................... 136,100 6,236,102
Merrill Lynch & Co., Inc.................. 74,700 5,324,616
Morgan Stanley............................ 69,400 4,372,200
TD Ameritrade Holding Corp.+.............. 173,900 3,168,458
-----------
27,413,303
-----------
Finance-Mortgage Loan/Banker -- 1.8%
Fannie Mae................................ 65,800 4,001,298
-----------
Food-Misc. -- 2.0%
Kraft Foods, Inc., Class A................ 134,257 4,633,209
-----------
Insurance-Multi-line -- 2.0%
MetLife, Inc.............................. 65,400 4,560,342
-----------
Insurance-Property/Casualty -- 1.9%
Chubb Corp................................ 81,400 4,366,296
-----------
Shares/
Principal Value
Security Description Amount (Note 3)
--------------------------------------------------------------------
Medical Products -- 2.6%
Johnson & Johnson...................... 91,000 $ 5,978,700
------------
Medical-Drugs -- 3.9%
Merck & Co., Inc....................... 63,600 3,287,484
Pfizer, Inc............................ 230,200 5,623,786
------------
8,911,270
------------
Metal-Aluminum -- 0.9%
Alcoa, Inc............................. 50,500 1,975,560
------------
Multimedia -- 1.5%
News Corp., Class A.................... 152,900 3,362,271
------------
Non-Hazardous Waste Disposal -- 1.6%
Waste Management, Inc.................. 96,600 3,645,684
------------
Oil Companies-Integrated -- 13.7%
Chevron Corp........................... 102,800 9,620,024
ConocoPhillips......................... 78,300 6,872,391
Exxon Mobil Corp....................... 99,000 9,163,440
Marathon Oil Corp...................... 94,400 5,382,688
------------
31,038,543
------------
Paper & Related Products -- 1.1%
International Paper Co................. 67,900 2,435,573
------------
Retail-Apparel/Shoe -- 1.5%
American Eagle Outfitters, Inc......... 131,400 3,457,134
------------
Retail-Drug Store -- 1.5%
CVS Caremark Corp...................... 85,800 3,400,254
------------
Retail-Regional Department Stores -- 1.4%
Kohl's Corp.+.......................... 55,700 3,193,281
------------
Telephone-Integrated -- 6.5%
AT&T, Inc.............................. 190,750 8,070,632
Verizon Communications, Inc............ 151,000 6,686,280
------------
14,756,912
------------
Tobacco -- 1.5%
Altria Group, Inc...................... 48,000 3,337,440
------------
Total Long-Term Investment Securities
(cost $193,672,220)................... 215,107,719
------------
REPURCHASE AGREEMENT -- 5.8%
State Street Bank & Trust Co.
Joint Repurchase Agreement(1)
(cost $13,190,000).................... $13,190,000 13,190,000
------------
TOTAL INVESTMENTS --
(cost $206,862,220)(2)................ 100.6% 228,297,719
Liabilities in excess of other assets.... (0.6) (1,405,700)
----------- ------------
NET ASSETS -- 100.0% $226,892,019
=========== ============
- --------
+ Non-income producing security
(1) See Note 3 for details of Joint Repurchase Agreement.
(2) See Note 7 for cost of investments on a tax basis.
See Notes to Financial Statements
58
SunAmerica Disciplined Growth Fund@
PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited)
Industry Allocation*
Electronic Components-Semiconductors.................................. 8.0%
Medical-Biomedical/Gene............................................... 7.4
Aerospace/Defense-Equipment........................................... 6.1
Computers............................................................. 5.7
Casino Hotels......................................................... 4.7
Food-Misc............................................................. 3.8
Metal Processors & Fabrication........................................ 3.7
Aerospace/Defense..................................................... 3.1
Data Processing/Management............................................ 3.1
Medical-Drugs......................................................... 2.8
Transport-Marine...................................................... 2.8
X-Ray Equipment....................................................... 2.7
Internet Security..................................................... 2.6
Engineering/R&D Services.............................................. 2.5
Electronic Measurement Instruments.................................... 2.4
Energy-Alternate Sources.............................................. 2.4
Oil Field Machinery & Equipment....................................... 2.3
Beverages-Non-alcoholic............................................... 2.1
Oil-Field Services.................................................... 2.1
Cosmetics & Toiletries................................................ 2.0
Oil Companies-Integrated.............................................. 2.0
Banks-Super Regional.................................................. 1.8
Diversified Manufacturing Operations.................................. 1.7
Tobacco............................................................... 1.6
Retail-Regional Department Stores..................................... 1.5
Diversified Minerals.................................................. 1.3
Metal-Diversified..................................................... 1.3
Diagnostic Kits....................................................... 1.2
Insurance-Multi-line.................................................. 1.2
Metal-Copper.......................................................... 1.1
Networking Products................................................... 1.0
Telephone-Integrated.................................................. 1.0
Web Portals/ISP....................................................... 1.0
Advanced Materials.................................................... 0.9
Computers-Integrated Systems.......................................... 0.9
Finance-Other Services................................................ 0.9
Multimedia............................................................ 0.9
Oil Refining & Marketing.............................................. 0.9
Optical Supplies...................................................... 0.9
Real Estate Investment Trusts......................................... 0.9
Repurchase Agreement.................................................. 0.9
Finance-Investment Banker/Broker...................................... 0.8
Finance-Mortgage Loan/Banker.......................................... 0.8
Specified Purpose Acquisitions........................................ 0.7
Web Hosting/Design.................................................... 0.5
Cable TV.............................................................. 0.4
Retail-Apparel/Shoe................................................... 0.3
Software Tools........................................................ 0.1
-----
100.8%
=====
- --------
* Calculated as a percentage of net assets
@ See Note 1
59
SunAmerica Disciplined Growth Fund@
PORTFOLIO OF INVESTMENTS -- September 30, 2007
Value
Security Description Shares (Note 3)
---------------------------------------------------------------
COMMON STOCK -- 100.0%
Advanced Materials -- 0.9%
Hexcel Corp.+............................. 24,000 $ 545,040
----------
Aerospace/Defense -- 3.1%
Raytheon Co............................... 19,800 1,263,636
Rockwell Collins, Inc..................... 8,600 628,144
----------
1,891,780
----------
Aerospace/Defense-Equipment -- 6.1%
Alliant Techsystems, Inc.+................ 20,600 2,251,580
BE Aerospace, Inc.+....................... 18,000 747,540
Triumph Group, Inc........................ 8,100 661,851
----------
3,660,971
----------
Banks-Super Regional -- 1.8%
Bank of America Corp...................... 22,000 1,105,940
----------
Beverages-Non-alcoholic -- 2.1%
PepsiCo, Inc.............................. 17,000 1,245,420
----------
Cable TV -- 0.4%
Comcast Corp., Class A+................... 10,700 258,726
----------
Casino Hotels -- 4.7%
Las Vegas Sands Corp.+.................... 11,200 1,494,304
MGM Mirage, Inc.+......................... 10,000 894,400
Wynn Resorts, Ltd......................... 2,900 456,924
----------
2,845,628
----------
Computers -- 5.7%
Apple, Inc.+.............................. 9,300 1,427,922
Hewlett-Packard Co........................ 25,000 1,244,750
International Business Machines Corp...... 6,300 742,140
----------
3,414,812
----------
Computers-Integrated Systems -- 0.9%
Riverbed Technology, Inc.+................ 13,000 525,070
----------
Cosmetics & Toiletries -- 2.0%
Procter & Gamble Co....................... 16,800 1,181,712
----------
Data Processing/Management -- 3.1%
NAVTEQ Corp.+............................. 24,000 1,871,280
----------
Diagnostic Kits -- 1.2%
Inverness Medical Innovations, Inc.+...... 13,000 719,160
----------
Diversified Manufacturing Operations -- 1.7%
Roper Industries, Inc..................... 15,500 1,015,250
----------
Diversified Minerals -- 1.3%
Cia Vale do Rio Doce ADR.................. 24,000 814,320
----------
Electronic Components-Semiconductors -- 8.0%
Advanced Analogic Technologies, Inc.+..... 146,500 1,558,760
Intel Corp................................ 28,000 724,080
Microsemi Corp.+.......................... 24,000 669,120
ON Semiconductor Corp.+................... 98,000 1,230,880
SiRF Technology Holdings, Inc.+........... 30,000 640,500
----------
4,823,340
----------
Electronic Measurement Instruments -- 2.4%
Garmin, Ltd............................... 12,100 1,444,740
----------
Value
Security Description Shares (Note 3)
----------------------------------------------------------
Energy-Alternate Sources -- 2.4%
Sunpower Corp., Class A+.............. 17,400 $1,441,068
----------
Engineering/R&D Services -- 2.5%
ABB, Ltd. ADR......................... 28,500 747,555
Fluor Corp............................ 5,200 748,696
----------
1,496,251
----------
Finance-Investment Banker/Broker -- 0.8%
Merrill Lynch & Co., Inc.............. 6,900 491,832
----------
Finance-Mortgage Loan/Banker -- 0.8%
Fannie Mae............................ 8,300 504,723
----------
Finance-Other Services -- 0.9%
NYMEX Holdings, Inc................... 4,400 572,792
----------
Food-Misc. -- 3.8%
Kellogg Co............................ 19,900 1,114,400
Kraft Foods, Inc., Class A............ 34,000 1,173,340
----------
2,287,740
----------
Insurance-Multi-line -- 1.2%
MetLife, Inc.......................... 10,000 697,300
----------
Internet Security -- 2.6%
Blue Coat Systems, Inc.+.............. 19,800 1,559,448
----------
Medical-Biomedical/Gene -- 7.4%
Genzyme Corp.+........................ 9,300 576,228
Medivation, Inc.+..................... 30,000 601,500
Omrix Biopharmaceuticals, Inc.+....... 57,100 2,016,201
Sangamo Biosciences, Inc.+............ 90,000 1,269,900
----------
4,463,829
----------
Medical-Drugs -- 2.8%
Acadia Pharmaceuticals, Inc.+......... 35,000 526,750
Elan Corp. PLC ADR+................... 22,000 462,880
Gentium SpA ADR+...................... 6,000 137,820
Novartis AG ADR....................... 10,200 560,592
----------
1,688,042
----------
Metal Processors & Fabrication -- 3.7%
Dynamic Materials Corp................ 16,000 766,240
Precision Castparts Corp.............. 9,900 1,465,002
----------
2,231,242
----------
Metal-Copper -- 1.1%
Southern Copper Corp.................. 5,300 656,299
----------
Metal-Diversified -- 1.3%
Freeport-McMoRan Copper & Gold, Inc... 7,400 776,186
----------
Multimedia -- 0.9%
News Corp., Class A................... 25,000 549,750
----------
Networking Products -- 1.0%
Atheros Communications, Inc.+......... 20,000 599,400
----------
Oil Companies-Integrated -- 2.0%
Exxon Mobil Corp...................... 12,800 1,184,768
----------
Oil Field Machinery & Equipment -- 2.3%
National-Oilwell Varco, Inc.+......... 9,600 1,387,200
----------
60
SunAmerica Disciplined Growth Fund@
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Shares/
Principal Value
Security Description Amount (Note 3)
--------------------------------------------------------------
COMMON STOCK (continued)
Oil Refining & Marketing -- 0.9%
Valero Energy Corp..................... 7,900 $ 530,722
-----------
Oil-Field Services -- 2.1%
Schlumberger, Ltd...................... 12,000 1,260,000
-----------
Optical Supplies -- 0.9%
Alcon, Inc............................. 4,000 575,680
-----------
Real Estate Investment Trusts -- 0.9%
Annaly Mortgage Management, Inc........ 36,000 573,480
-----------
Retail-Apparel/Shoe -- 0.3%
J Crew Group, Inc.+.................... 5,000 207,500
-----------
Retail-Regional Department Stores -- 1.5%
Kohl's Corp.+.......................... 16,000 917,280
-----------
Software Tools -- 0.1%
VMware, Inc. Class A+.................. 900 76,500
-----------
Specified Purpose Acquisitions -- 0.7%
Star Maritime Acquisition Corp.+....... 30,000 420,300
-----------
Telephone-Integrated -- 1.0%
AT&T, Inc.............................. 15,000 634,650
-----------
Tobacco -- 1.6%
Altria Group, Inc...................... 14,000 973,420
-----------
Transport-Marine -- 2.8%
DryShips, Inc.......................... 18,600 1,689,810
-----------
Web Hosting/Design -- 0.5%
NIC, Inc............................... 40,000 277,600
-----------
Web Portals/ISP -- 1.0%
Google, Inc., Class A+................. 1,100 623,997
-----------
X-Ray Equipment -- 2.7%
Hologic, Inc.+......................... 27,000 1,647,000
-----------
Total Long-Term Investment Securities
(cost $51,665,904)................... 60,358,998
-----------
REPURCHASE AGREEMENT -- 0.9%
State Street Bank & Trust Co,. Joint
Repurchase Agreement(1) (cost
$522,000)............................ $522,000 522,000
-----------
TOTAL INVESTMENTS --
(cost $52,187,904)(2)................ 100.8% 60,880,998
Liabilities in excess of other assets... (0.8) (504,054)
-------- -----------
NET ASSETS -- 100.0% $60,376,944
======== ===========
- --------
@ See Note 1
+ Non-income producing security
(1) See Note 3 for details of Joint Repurchase Agreement.
(2) See Note 7 for cost of investments on a tax basis.
ADR --American Depository Receipt
See Notes to Financial Statements
61
SunAmerica International Small-Cap Fund
PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited)
Industry Allocation*
Building & Construction Products-Misc................................. 5.5%
Time Deposits......................................................... 3.4
Diversified Manufacturing Operations.................................. 3.3
Finance-Other Services................................................ 2.9
Auto/Truck Parts & Equipment-Original................................. 2.7
Machinery-General Industrial.......................................... 2.5
Computers-Integrated Systems.......................................... 2.4
Distribution/Wholesale................................................ 2.3
Miscellaneous Manufacturing........................................... 2.3
Apparel Manufacturers................................................. 2.1
Electronic Components-Misc............................................ 2.1
Machinery-Electrical.................................................. 1.9
Machinery-Material Handling........................................... 1.9
Rubber-Tires.......................................................... 1.9
Medical-Biomedical/Gene............................................... 1.8
Medical-Drugs......................................................... 1.8
Banks-Commercial...................................................... 1.6
Chemicals-Specialty................................................... 1.5
Agricultural Chemicals................................................ 1.4
Machinery-Construction & Mining....................................... 1.4
Rental Auto/Equipment................................................. 1.4
Retail-Apparel/Shoe................................................... 1.4
Retail-Misc./Diversified.............................................. 1.4
Chemicals-Diversified................................................. 1.3
Gambling (Non-Hotel).................................................. 1.3
Engineering/R&D Services.............................................. 1.2
Investment Management/Advisor Services................................ 1.2
Retail-Consumer Electronics........................................... 1.2
Brewery............................................................... 1.1
Building & Construction-Misc.......................................... 1.1
Oil Refining & Marketing.............................................. 1.1
Computers............................................................. 1.0
Office Automation & Equipment......................................... 1.0
Applications Software................................................. 0.9
Audio/Video Products.................................................. 0.9
Electric-Integrated................................................... 0.9
Electronic Components-Semiconductors.................................. 0.9
Energy-Alternate Sources.............................................. 0.9
Industrial Audio & Video Products..................................... 0.9
Oil Field Machinery & Equipment....................................... 0.9
Retail-Discount....................................................... 0.9
Retail-Restaurants.................................................... 0.9
Water................................................................. 0.9
Coatings/Paint........................................................ 0.8
Direct Marketing...................................................... 0.8
E-Commerce/Services................................................... 0.8
Enterprise Software/Service........................................... 0.8
Finance-Investment Banker/Broker...................................... 0.8
Footwear & Related Apparel............................................ 0.8
Medical Products...................................................... 0.8
Environmental Monitoring & Detection.................................. 0.7
Networking Products................................................... 0.7
Appliances............................................................ 0.6
Auto-Cars/Light Trucks................................................ 0.6
Fisheries............................................................. 0.6
Hotels/Motels......................................................... 0.6
Medical Imaging Systems............................................... 0.6
Medical Instruments................................................... 0.6
Medical-Hospitals..................................................... 0.6
Real Estate Operations & Development.................................. 0.6
Resorts/Theme Parks................................................... 0.6%
Retail-Automobile..................................................... 0.6
Veterinary Products................................................... 0.6
Beverages-Non-alcoholic............................................... 0.5
Electric-Generation................................................... 0.5
Electronics-Military.................................................. 0.5
Entertainment Software................................................ 0.5
Environmental Consulting & Engineering................................ 0.5
Shipbuilding.......................................................... 0.5
Travel Services....................................................... 0.5
Web Portals/ISP....................................................... 0.5
Beverages-Wine/Spirits................................................ 0.4
Building-Maintance & Services......................................... 0.4
Commerce.............................................................. 0.4
Consulting Services................................................... 0.4
Motion Pictures & Services............................................ 0.4
Retail-Sporting Goods................................................. 0.4
Telecommunication Equipment........................................... 0.4
Textile-Products...................................................... 0.4
Transport-Marine...................................................... 0.4
Transport-Truck....................................................... 0.4
Warehousing & Harbor Transportation Services.......................... 0.4
Decision Support Software............................................. 0.3
Finance-Leasing Companies............................................. 0.3
Internet Content-Information/News..................................... 0.3
Machinery-Print Trade................................................. 0.3
Medical-Wholesale Drug Distribution................................... 0.3
Metal Processors & Fabrication........................................ 0.3
Oil-Field Services.................................................... 0.3
Protection/Safety..................................................... 0.3
Retail-Regional Department Stores..................................... 0.3
Advertising Sales..................................................... 0.2
Cellular Telecom...................................................... 0.2
Computers-Periphery Equipment......................................... 0.2
E-Services/Consulting................................................. 0.2
Electronic Connectors................................................. 0.2
Electronic Parts Distribution......................................... 0.2
Food-Misc............................................................. 0.2
Human Resources....................................................... 0.2
Internet Content-Entertainment........................................ 0.2
Printing-Commercial................................................... 0.2
Retail-Drug Store..................................................... 0.2
Textile-Apparel....................................................... 0.2
Batteries/Battery Systems............................................. 0.1
Coal.................................................................. 0.1
Cosmetics & Toiletries................................................ 0.1
Schools............................................................... 0.1
Television............................................................ 0.1
----
99.0%
====
- --------
* Calculated as a percentage of net assets
62
SunAmerica International Small-Cap Fund
PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited) (continued)
Country Allocation*
Japan........................................................................... 28.2%
Germany......................................................................... 12.6
Denmark......................................................................... 5.6
United Kingdom.................................................................. 5.6
Sweden.......................................................................... 5.2
France.......................................................................... 5.0
Finland......................................................................... 4.5
Switzerland..................................................................... 3.5
United States................................................................... 3.4
Australia....................................................................... 2.7
China........................................................................... 2.5
Cayman Islands.................................................................. 2.2
South Korea..................................................................... 2.2
Greece.......................................................................... 1.8
Singapore....................................................................... 1.8
Taiwan.......................................................................... 1.7
Italy........................................................................... 1.6
Bermuda......................................................................... 1.4
Austria......................................................................... 1.2
Ireland......................................................................... 1.2
Netherlands..................................................................... 1.1
Belgium......................................................................... 0.9
Norway.......................................................................... 0.9
Malaysia........................................................................ 0.8
Spain........................................................................... 0.6
Philippines..................................................................... 0.4
Indonesia....................................................................... 0.3
Thailand........................................................................ 0.1
----
99.0%
====
- --------
* Calculated as a percentage of net assets
63
SunAmerica International Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007
Value
Security Description Shares (Note 3)
-------------------------------------------------------------------------
COMMON STOCK -- 92.6%
Australia -- 2.7%
Bradken, Ltd....................................... 26,826 $ 252,799
IBT Education, Ltd................................. 29,128 51,564
JB Hi-Fi, Ltd...................................... 36,632 468,403
MacArthur Coal, Ltd................................ 5,782 34,888
Tassal Group, Ltd.................................. 73,726 222,431
----------
1,030,085
----------
Austria -- 1.2%
Andritz AG......................................... 6,450 445,613
----------
Belgium -- 0.9%
EVS Broadcast Equipment SA......................... 3,265 326,366
----------
Bermuda -- 1.4%
Global Sources, Ltd.+.............................. 6,300 139,671
IT, Ltd............................................ 682,000 156,159
Sino Techfibre, Ltd................................ 172,000 160,943
TPV Technology, Ltd................................ 90,000 64,601
----------
521,374
----------
Cayman Islands -- 2.2%
AAC Acoustic Technologies Holdings, Inc.+.......... 90,000 111,026
Anta Sports Products, Ltd.+........................ 134,000 145,827
Hans Energy Co., Ltd.+............................. 1,208,000 108,775
Shenzhou International Group Holdings, Ltd......... 153,000 72,428
SINA Corp.+........................................ 4,000 191,400
The9 Ltd. ADR+..................................... 5,600 193,144
----------
822,600
----------
China -- 2.5%
China BlueChemical, Ltd............................ 808,000 534,242
Shanghai Jin Jiang International Hotels Group Co.,
Ltd............................................... 428,000 210,866
Travelsky Technology, Ltd.......................... 177,000 189,663
----------
934,771
----------
Denmark -- 5.6%
Bang & Olufsen A/S, Class B........................ 3,105 350,418
FLSmidth & Co. A/S................................. 7,124 757,655
Genmab A/S+........................................ 3,579 222,494
NKT Holding A/S.................................... 3,195 358,130
Royal UNIBREW A/S.................................. 3,020 392,815
----------
2,081,512
----------
Finland -- 4.5%
KCI Konecranes Oyj................................. 9,581 385,406
Lassila & Tikanoja Oyj............................. 6,117 197,391
Nokian Renkaat Oyj................................. 13,140 514,517
Oriola-KD Oyj...................................... 11,785 55,456
Ramirent Oyj....................................... 24,142 522,920
----------
1,675,690
----------
France -- 5.0%
Guerbet............................................ 1,057 235,309
IMS International Metal Service SA................. 4,489 188,192
Ingenico SA........................................ 8,236 239,110
Laurent-Perrier.................................... 943 154,637
Neopost SA......................................... 2,657 374,783
Sechilienne SA..................................... 4,256 336,821
Value
Security Description Shares (Note 3)
--------------------------------------------------------------------
France (continued)
Teleperformance.................................. 2,163 $ 84,295
Velcan Energy+................................... 795 44,325
Virbac SA........................................ 2,320 205,406
----------
1,862,878
----------
Germany -- 9.6%
AWD Holding AG................................... 11,320 378,201
Bauer AG......................................... 3,447 225,610
ElringKlinger AG................................. 4,347 492,789
Fielmann AG...................................... 7,587 505,990
Kloeckner & Co. AG............................... 9,647 666,760
Pfleiderer AG.................................... 3,689 85,480
Rational AG...................................... 1,063 204,510
Software AG...................................... 3,273 307,284
Symrise AG+...................................... 14,528 385,321
Wincor Nixdorf AG................................ 3,960 327,512
----------
3,579,457
----------
Greece -- 1.8%
Athens Stock Exchange SA......................... 20,748 665,676
----------
Indonesia -- 0.3%
PT United Tractors............................... 124,000 111,186
----------
Ireland -- 1.2%
Kingspan Group PLC (Ireland)..................... 15,549 341,450
Norkom Group PLC+................................ 36,550 92,250
----------
433,700
----------
Italy -- 1.6%
ASM SpA.......................................... 46,680 288,552
Digital Multimedia Technologies SpA+............. 2,190 143,057
Piccolo Credito Valtellinese Scarl............... 617 8,781
Tod's SpA........................................ 1,890 158,711
----------
599,101
----------
Japan -- 28.2%
Amano Corp....................................... 7,400 89,484
Asahi Soft Drinks Co, Ltd........................ 12,500 188,264
Chugoku Marine Paints, Ltd....................... 22,000 285,187
Daiichi Chuo Kisen Kaisha........................ 12,000 116,902
Dena Co., Ltd.................................... 44 194,211
Digital Garage, Inc.+............................ 64 64,075
Disco Corp....................................... 2,700 150,673
Don Quijote Co, Ltd.............................. 17,000 351,500
en-japan, Inc.................................... 29 118,409
EPS Co., Ltd..................................... 32 104,192
Exedy Corp....................................... 8,600 268,036
Fujimi, Inc...................................... 5,800 119,166
Glory, Ltd....................................... 2,400 76,263
Harmonic Drive Systems, Inc...................... 17 76,960
HIS Co., Ltd..................................... 9,600 180,525
Hisamitsu Pharmaceutical Co., Inc................ 5,900 160,258
Hitachi Systems & Services, Ltd.................. 6,300 123,406
Imagineer Co., Ltd............................... 3,000 60,854
Intelligence, Ltd................................ 39 58,739
Iriso Electronics Co., Ltd....................... 2,900 70,692
Japan Aviation Electronics Industry, Ltd......... 13,000 203,604
64
SunAmerica International Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Value
Security Description Shares (Note 3)
--------------------------------------------------------------------
COMMON STOCK (continued)
Japan (continued)
Japan Steel Works, Ltd........................... 19,000 $ 315,440
Kaga Electronics Co., Ltd........................ 4,300 66,635
Kakaku.com, Inc.................................. 50 127,976
Kenedix, Inc..................................... 49 85,318
Kitz Corp........................................ 12,000 109,067
Koito Manufacturing Co., Ltd..................... 12,000 146,363
Kyoritsu Maintenance Co., Ltd.................... 7,800 141,584
La Parler Co., Ltd............................... 67 47,072
Land Business Co., Ltd........................... 11 8,715
Lintec Corp...................................... 8,600 168,833
Mani, Inc........................................ 1,500 71,170
MCJ Co., Ltd..................................... 58 20,627
Miraca Holdings, Inc............................. 5,100 115,662
Miraial Co., Ltd................................. 2,000 99,769
Mitsubishi UFJ Lease & Finance Co., Ltd.......... 3,380 112,112
Modec, Inc....................................... 7,800 282,488
Moshi Moshi Hotline, Inc......................... 5,950 292,152
Nabtesco Corp.................................... 20,000 326,296
Nichias Corp..................................... 24,000 245,088
Nihon Dempa Kogyo Co., Ltd....................... 3,100 193,236
Nishimatsuya Chain Co., Ltd...................... 12,000 152,213
Nissha Printing Co, Ltd.......................... 2,600 75,602
NPC, Inc......................................... 1,600 42,485
Obic Co, Ltd..................................... 1,130 219,182
Okasan Holdings, Inc............................. 22,000 127,750
Otsuka Corp...................................... 2,900 284,534
Resort Solution Co., Ltd......................... 2,000 8,114
ResortTrust, Inc................................. 11,100 236,273
Rohto Pharmaceutical Co., Ltd.................... 10,000 117,529
Saint Marc Holdings Co., Ltd..................... 2,300 88,504
Sankyu, Inc...................................... 29,000 166,883
Sasebo Heavy Industries Co., Ltd................. 29,000 198,442
Sato Corp........................................ 5,900 110,177
Secom Techno Service Co., Ltd.................... 3,000 97,158
Star Micronics Co., Ltd.......................... 12,200 378,113
Sugi Pharmacy Co., Ltd........................... 2,500 60,941
Sumco Techxiv Corp............................... 800 45,479
Sysmex Corp...................................... 5,900 227,545
Taiyo Ink Manufacturing Co., Ltd................. 5,100 147,408
Takeei Corp...................................... 200 10,813
Teikoku Piston Ring Co., Ltd..................... 12,200 109,929
Telepark Corp.................................... 58 62,108
The Kagoshima Bank, Ltd.......................... 12,000 85,666
Toho Pharmaceutical Co., Ltd..................... 6,500 111,762
Toshiba Machine Co., Ltd......................... 12,000 89,427
Toyo Tanso Co., Ltd.............................. 3,150 317,838
Tsumura & Co..................................... 6,700 119,283
Unicharm Petcare Corp............................ 2,000 88,974
Union Tool Co.................................... 3,900 168,406
USS Co, Ltd...................................... 3,290 216,249
Works Applications Co., Ltd...................... 157 136,272
Xebio Co., Ltd................................... 5,600 136,508
Yamaguchi Financial Group, Inc................... 6,000 62,682
-----------
10,537,252
-----------
Value
Security Description Shares (Note 3)
----------------------------------------------------------------
Malaysia -- 0.8%
Muhibbah Engineering Bhd.................... 47,300 $ 127,706
Sarawak Energy Bhd.......................... 241,800 166,759
----------
294,465
----------
Netherlands -- 1.1%
Aalberts Industries NV...................... 18,184 433,541
----------
Norway -- 0.9%
Sevan Marine ASA+........................... 31,715 330,901
----------
Philippines -- 0.4%
Chemrez Technologies, Inc................... 107,000 9,857
International Container Term Services, Inc.. 185,600 150,375
----------
160,232
----------
Singapore -- 1.8%
Ho Bee Investment, Ltd...................... 154,000 225,998
Inter-Roller Engineering, Ltd............... 166,000 93,867
Raffles Medical Group, Ltd.................. 206,800 210,211
United Test and Assembly Center, Ltd.+...... 185,000 146,954
----------
677,030
----------
South Korea -- 2.2%
CJ Internet Corp............................ 5,940 147,007
Hyundai DSF Co., Ltd........................ 6,970 119,568
Jinsung T.E.C............................... 9,548 129,887
JVM Co., Ltd................................ 2,683 158,013
Nexen Tire Corp............................. 3,550 172,807
STX Pan Ocean Co., Ltd.+.................... 13,230 35,634
The Basic House Co., Ltd.................... 8,420 72,129
----------
835,045
----------
Spain -- 0.6%
Mecalux SA+................................. 4,848 219,903
----------
Sweden -- 5.2%
Intrum Justitia AB.......................... 25,863 402,347
JM AB....................................... 14,516 350,280
Lindab International AB..................... 17,889 488,581
Munters AB.................................. 19,140 276,225
RaySearch Laboratories AB+.................. 6,530 204,692
RNB Retail and Brands AB.................... 18,951 236,737
----------
1,958,862
----------
Switzerland -- 3.5%
Banque Cantonale Vaudoise................... 347 155,729
Basilea Pharmaceutica AG+................... 1,433 326,787
Compagne Financiere Tradition............... 1,025 198,969
Gurit Holding AG............................ 198 209,352
Speedel Holding AG+......................... 826 108,407
Vontobel Holding AG......................... 5,993 307,050
----------
1,306,294
----------
Taiwan -- 1.7%
CyberTAN Technology, Inc.................... 70,720 251,372
Everlight Electronics Co., Ltd.............. 37,077 161,896
Sanyang Industrial Co., Ltd................. 302,000 237,361
----------
650,629
----------
65
SunAmerica International Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Shares/
Principal Value
Security Description Amount (Note 3)
-------------------------------------------------------------
COMMON STOCK (continued)
Thailand -- 0.1%
BEC World PCL....................... 29,400 $ 19,900
-----------
United Kingdom -- 5.6%
Cookson Group PLC................... 29,156 455,153
Detica Group PLC.................... 22,998 146,338
IG Group Holdings PLC............... 62,265 482,505
Luminar PLC......................... 19,696 242,191
Northumbrian Water Group PLC........ 47,897 333,925
Tanfield Group PLC+................. 119,638 423,468
-----------
2,083,580
-----------
Total Common Stock
(cost $30,337,632)................. 34,597,643
-----------
PREFERRED STOCK -- 3.0%
Germany -- 3.0%
Fuchs Petrolub AG................... 4,574 422,122
Hugo Boss AG
7.49%.............................. 10,303 698,878
-----------
Total Preferred Stock
(cost $896,797).................... 1,121,000
-----------
Total Long-Term Investment Securities
(cost $31,234,429)................. 35,718,643
-----------
SHORT-TERM INVESTMENT SECURITIES -- 3.4%
Time Deposits -- 3.4%
Euro Time Deposit with State Street
Bank & Trust Co.
2.40% due 10/01/07
(cost $1,284,000).................. $1,284,000 1,284,000
-----------
TOTAL INVESTMENTS --
(cost $32,518,429)(1).............. 99.0% 37,002,643
Other assets less liabilities......... 1.0 380,331
---------- -----------
NET ASSETS -- 100.0% $37,382,974
========== ===========
- --------
+ Non-income producing security
(1) See Note 7 for cost of investments on a tax basis.
ADR --American Depository Receipt
See Notes to Financial Statements
66
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007
Note 1. Organization
SunAmerica Equity Funds is registered under the Investment Company Act of
1940, as amended, (the "1940 Act") as an open-end management investment
company and was organized as a Massachusetts business trust (the "Trust" or
"Equity Funds") on June 16, 1986. It currently consists of nine different
funds (each, a "Fund" and collectively, the "Funds"). Each Fund is a
separate series of the Trust with a distinct objective and/or strategy. Each
Fund is advised and/or managed by AIG SunAmerica Asset Management Corp. (the
"Adviser" or "AIG SunAmerica"), an indirect wholly-owned subsidiary of
American International Group, Inc. ("AIG"). An investor may invest in one or
more of the following Funds: SunAmerica Blue Chip Growth Fund ("Blue Chip
Growth Fund"), SunAmerica Growth Opportunities Fund ("Growth Opportunities
Fund"), SunAmerica New Century Fund ("New Century Fund"), SunAmerica Growth
and Income Fund ("Growth and Income Fund"), SunAmerica Balanced Assets Fund
("Balanced Assets Fund"), SunAmerica International Equity Fund
("International Equity Fund"), SunAmerica Value Fund ("Value Fund"),
SunAmerica Disciplined Growth Fund ("Disciplined Growth Fund") and
SunAmerica International Small-Cap Fund ("International Small-Cap Fund").
The Funds are considered to be separate entities for financial and tax
reporting purposes.
On May 15, 2007, the name of the SunAmerica Tax Managed Equity Fund was
changed to the SunAmerica Disciplined Growth Fund.
The investment objective and principal investment techniques for each of the
Funds is as follows:
Blue Chip Growth Fund seeks capital appreciation, by primarily investing in
equity securities of Blue Chip companies that demonstrate the potential for
capital appreciation. At least 80% of the Fund's net assets plus any
borrowing for investment purposes will be invested in such securities.
Growth Opportunities Fund seeks capital appreciation by primarily investing
in equity securities that demonstrate the potential for capital
appreciation, issued generally by small-cap companies.
New Century Fund seeks capital appreciation by investing in equity
securities that demonstrate the potential for capital appreciation, without
regard to market capitalization.
Growth and Income Fund seeks capital appreciation and current income by
investing in equity securities issued by companies of any size, that pay
dividends, demonstrate the potential for capital appreciation and/or are
believed to be undervalued in the market.
Balanced Assets Fund seeks capital appreciation and conservation of
principal through active trading partly in equity securities that
demonstrate the potential for capital appreciation issued by companies with
market capitalization of over $1.5 billion and partly in investment-grade
fixed income securities.
International Equity Fund seeks capital appreciation by investing in equity
securities and other securities with equity characteristics of non-U.S.
issuers located in a number of different countries other than the U.S. and
selected without regard to market capitalization. At least 80% of the Fund's
net assets plus any borrowing for investment purposes will be invested in
such securities.
Value Fund seeks long-term growth of capital through active trading of
equity securities selected on the basis of value criteria, issued by
companies of any market capitalization.
Disciplined Growth Fund seeks capital appreciation by investing in equity
securities that demonstrate the potential for capital appreciation, without
regard to market capitalization.
International Small-Cap Fund seeks long-term capital appreciation by
investing in equity and equity-related securities of small-capitalization
companies throughout the world including emerging market countries,
excluding the U.S. Under normal circumstances, at least 80% of the Fund's
net assets, plus any borrowings for investment purposes will be invested in
such securities.
The Blue Chip Growth Fund, Growth Opportunities Fund, New Century Fund,
Growth and Income Fund, Balanced Assets Fund, Disciplined Growth Fund and
International Small-Cap Fund are organized as "diversified" funds within the
meaning of the 1940 Act. The International Equity Fund and Value Fund are
organized as "non-diversified" funds.
67
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
Each Fund offers multiple classes of shares. The classes within each Fund
are presented in the Statement of Assets and Liabilities. The cost structure
for each class is as follows:
Class A shares are offered at net asset value per share plus an initial
sales charge. Additionally, purchases of Class A shares in excess of
$1,000,000 will be purchased at net asset value but will be subject to a
contingent deferred sales charge on redemptions made within two years of
purchase. With respect to Class A shares of the International Equity Fund
and International Small-Cap Fund, a redemption fee of 2% will be assessed on
the proceeds of any redemption of shares that were purchased within ninety
(90) days prior to the date of such redemption. An exchange fee of 2% will
be assessed on the amount of any exchange of Class A shares of the
International Equity Fund and International Small-Cap Fund that were
purchased within ninety (90) days prior to the date of such exchange.
Class B shares are offered without an initial sales charge, although a
declining contingent sales charge may be imposed on redemptions made within
six years of purchase. Class B shares of each Fund convert automatically to
Class A shares approximately eight years after purchase of such Class B
shares and at such time will be subject to the lower distribution fee
applicable to Class A shares.
Class C shares are offered at net asset value per share without an initial
sales charge, although may be subject to a contingent deferred sales charge
on redemptions made within 12 months of purchase. Certain Class C shares of
particular Funds issued in connection with particular reorganizations or
mergers will convert automatically to Class A shares approximately ten years
after purchase and at such time will be subject to the lower distribution
fee applicable to Class A shares.
Class I and Class Z shares are offered at net asset value per share. These
classes are offered exclusively to participants in certain employee benefit
plans and other programs.
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions, except as may otherwise be provided in the Trust's
registration statement. Class A, Class B and Class C shares each make
distribution and account maintenance fee payments under the distribution
plans pursuant to Rule 12b-1 under the 1940 Act, except that Class B and
Class C shares are subject to higher distribution fee rates. Class I shares
and Class Z shares have not adopted 12b-1 plans and make no payments
thereunder, however, Class I shares pay a service fee to the Funds'
distributor for providing administrative and shareholder services.
Indemnifications: Under the Trust's organizational documents, its officers
and trustees are indemnified against certain liability arising out of the
performance of their duties to the Trust. In addition, in the normal course
of business the Trust enters into contracts that contain the obligation to
indemnify others. The Trust's maximum exposure under these arrangements is
unknown. Currently, however, the Trust expects the risk of loss to be remote.
Note 2. Fund Merger
Pursuant to a plan of reorganization, all the assets and liabilities of
SunAmerica Biotech/Health Fund ("Biotech/Health Fund") were transferred in a
tax-free exchange to the New Century Fund, in exchange for shares of New
Century Fund. The details of the reorganization, which was consummated on
March 19, 2007, are set forth below.
Class A, Class B, and Class C shares of Biotech/Health Fund were exchanged
tax-free for Class A, Class B, and Class C shares of New Century Fund,
respectively.
Net assets and unrealized appreciation (depreciation) as of the merger date
were as follows:
Net assets of the Biotech/Health Fund prior to merger............. $ 21,294,588
Net assets of the New Century Fund prior to merger................ $ 88,216,005
------------
Aggregate net assets of the New Century Fund following acquisition $109,510,593
------------
Unrealized appreciation (depreciation) in the Biotech/Health Fund. $ 397,826
68
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
Note 3. Significant Accounting Policies
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from these estimates. The
following is a summary of the significant accounting policies followed by
the Trust in the preparation of their financial statements:
Security Valuations: Stocks are generally valued based upon closing sales
prices reported on recognized securities exchanges. Stocks listed on the
NASDAQ are valued using the NASDAQ Official Closing Price ("NOCP").
Generally, the NOCP will be the last sale price unless the reported trade
for the stock is outside the range of the bid/ask price. In such cases, the
NOCP will be normalized to the nearer of the bid or ask price. For listed
securities having no sales reported and for unlisted securities, such
securities will be valued based upon the last reported bid price.
As of the close of regular trading on the New York Stock Exchange ("NYSE"),
securities traded primarily on security exchanges outside the United States
are valued at the last sale price on such exchanges on the day of valuation,
or if there is no sale on the day of valuation, at the last-reported bid
price. If a security's price is available from more than one exchange, a
portfolio uses the exchange that is the primary market for the security.
However, depending on the foreign market, closing prices may be up to 15
hours old when they are used to price a Fund's shares, and the Fund may
determine that certain closing prices are unreliable. This determination
will be based on review of a number of factors, including developments in
foreign markets, the performance of U.S. securities markets, and the
performance of instruments trading in U.S. markets that represent foreign
securities and baskets of foreign securities. If a Fund determines that
closing prices do not reflect the fair value of the securities, the Fund
will adjust the previous closing prices in accordance with pricing
procedures approved by the Board of Trustees (the "Board") to reflect what
it believes to be the fair value of the securities as of the close of
regular trading on the NYSE. The Funds may also fair value securities in
other situations, for example, when a particular foreign market is closed
but a Fund is open. For foreign equity securities, the Funds use an outside
pricing service to provide it with closing market prices and information
used for adjusting those prices.
Non-convertible bonds and debentures, other long-term debt securities, and
short term debt securities with maturities in excess of 60 days, are valued
at bid prices obtained for the day of valuation from a bond pricing service,
when such prices are available. If a vendor quote is unavailable the
securities may be priced at the mean of two independent quotes obtained from
brokers. Securities for which market quotations are not readily available
are valued as determined pursuant to procedures adopted in good faith by the
Board.
Short-term securities with 60 days or less to maturity are amortized to
maturity based on their cost to the Fund if acquired within 60 days of
maturity or, if already held by the Fund on the 60th day, are amortized to
maturity based on the value determined on the 61st day.
Securities for which market quotations are not readily available or where a
development/significant event occurs that may significantly impact the value
of the security, are fair valued, as determined pursuant to procedures
adopted in good faith by the Board.
New Accounting Pronouncements: On July 13, 2006, the Financial Accounting
Standards Board (FASB) released FASB Interpretation No. 48 "Accounting for
Uncertainty in Income Taxes" ("FIN 48"). FIN 48 provides guidance for how
uncertain tax positions should be recognized, measured, presented and
disclosed in the financial statements. FIN 48 requires the evaluation of tax
positions taken or expected to be taken in the course of preparing the
Fund's tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority.
Adoption of FIN 48 is required for fiscal years beginning after December 15,
2006 and is to be applied to all open tax years as of the effective date.
However, Registered Investment Companies are not required to implement FIN
48 until their last net asset value calculation in the first required
financial statement reporting period for fiscal years beginning after
December 15, 2006. At this time, management does not anticipate the adoption
of FIN 48 to have a material impact on the financial statements.
In September 2006, the FASB issued Statement on Financial Accounting
Standards No. 157, "Fair Value Measurements" ("FAS 157"). This standard
clarifies the definition of fair value for financial reporting, establishes
a framework for measuring fair value
69
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
and requires additional disclosures about the use of fair value
measurements. FAS 157 is effective for financial statements issued for
fiscal years beginning after November 15, 2007 and interim periods within
those fiscal years. As of September 30, 2007, the Funds do not believe the
adoption of FAS 157 will impact the amounts reported in the financial
statements, however, additional disclosures will be required about the
inputs used to develop the measurements of fair value.
Repurchase Agreements: The Funds, along with other affiliated registered
investment companies, pursuant to exemptive relief granted by the Securities
and Exchange Commission ("SEC"), may transfer uninvested cash balances into
a single joint account, the daily aggregate balance of which is invested in
one or more repurchase agreements collateralized by U.S. Treasury or federal
agency obligations. For repurchase agreements and joint repurchase
agreements, the Funds' custodian takes possession of the collateral pledged
for investments in repurchase agreements ("repo" or collectively "repos").
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 September 30, 2007, the following Funds held an undivided interest in
a joint repurchase agreement with State Street Bank & Trust Co.:
Percentage Principal
Fund Interest Amount
- ---- ---------- -----------
Blue Chip Growth.... 0.55% $ 1,123,000
Growth Opportunities 4.97 10,150,000
New Century......... 6.62 13,531,000
Growth & Income..... 1.86 3,800,000
Balanced Assets..... 1.77 3,623,000
Value............... 6.45 13,190,000
Disciplined Growth.. 0.26 522,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
State Street Bank & Trust Co., dated September 28, 2007, bearing interest at
a rate of 3.70% per annum, with a principal amount of $204,370,000, a
repurchase price of $204,433,014 and a maturity date of October 1, 2007. The
repurchase agreement is collateralized by the following:
Maturity Principal
Type of Collateral Interest Rate Date Amount Market Value
- ------------------ ------------- -------- ------------ ------------
U.S. Treasury Bonds 6.25% 08/15/23 $ 75,100,000 $ 86,834,375
U.S. Treasury Notes 4.63 02/29/08 19,100,000 19,195,500
U.S. Treasury Bills 4.07 03/13/08 1,270,000 1,246,187
U.S. Treasury Notes 3.75 05/15/08 100,035,000 101,186,903
Securities Transactions, Investment Income, Expenses, Dividends and
Distributions to Shareholders: Security transactions are recorded on a trade
date basis. Realized gains and losses on sales of investments are calculated
on the identified cost basis. Interest income is accrued daily except when
collection is not expected. Dividend income is recorded on the ex-dividend
date except for certain dividends from foreign securities, which are
recorded as soon as the Fund is informed after the ex-dividend date. Funds
which earn foreign income and capital gains may be subject to foreign
withholding taxes and capital gains taxes at various rates. Under applicable
foreign law, a withholding of tax may be imposed on interest, dividends, and
capital gains at various rates. For financial statements purposes, the Funds
amortize all premiums and accrete all discounts on fixed income securities.
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 of each class
of shares at the beginning of the day (after adjusting for the current
capital shares activity of the respective class).
70
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
Expenses common to all Funds, not directly related to individual Funds, are
allocated among the Funds based upon their relative net asset value or other
appropriate methods. In all other respects, expenses are charged to each
Fund as incurred on a specific identification basis. Interest earned on cash
balances held at the custodian are shown as custody credits on the Statement
of Operations.
Dividends from net investment income, if any, are paid annually, except for
the Balanced Assets Fund and Growth and Income Fund, which pay quarterly.
Capital gain distributions, if any, are paid at least annually. The Balanced
Assets Fund and Growth and Income Fund reserve the right to declare and pay
dividends less frequently than disclosed above, provided that net realized
capital gains and net investment income, if any, are paid annually.
The Funds record dividends and distributions to their shareholders on the
ex-dividend date. The amount of dividends and distributions from net
investment income and net realized capital gains are determined and
presented in accordance with federal income tax regulations, which may
differ from 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.
Each Fund intends to comply with the requirements of the Internal Revenue
Code, as amended, applicable to regulated investment companies and
distribute all of its 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.
Foreign Currency Translation: The books and records of the Funds are
maintained in U.S. dollars. Assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of
such currencies against U.S. dollars on the date of valuation. The Funds do
not isolate that portion of the results of operations arising as a result of
changes in the foreign exchange rates from the changes in the market prices
of securities held at the end of the period. Similarly, the Funds do not
isolate the effect of changes in foreign exchange rates from the changes in
the market prices of portfolio securities sold during the period. Realized
foreign exchange gains and losses on other assets and liabilities and change
in unrealized foreign exchange gains and losses on other assets and
liabilities include foreign exchange gains and losses from currency gains or
losses between the trade and settlement dates of securities transactions,
the difference between the amounts of interest, dividends and foreign
withholding taxes recorded on the Funds' books and the U.S. dollar
equivalent amounts actually received or paid and changes in the unrealized
foreign exchange gains and losses relating to other assets and liabilities
arising as a result of changes in the exchange rate.
Forward Foreign Currency Contracts: Certain funds may enter into forward
foreign currency contracts ("forward contracts") to attempt to protect
securities and related receivables and payables against changes in future
foreign exchange rates or to enhance return. A forward contract is an
agreement between two parties to buy or sell currency at a set price on a
future date. The market value of the contract will fluctuate with changes in
currency exchange rates. The contract is marked to market daily using the
forward rate and the change in market value is recorded by the Fund as
unrealized gain or loss. On settlement date, the Fund records realized
foreign exchange gains or losses when the contract is closed equal to the
difference between the value of the contract at the time it was opened and
the value at the time it was closed. Risks may arise upon entering into
these contracts from the potential inability of counterparties to meet the
terms of their contracts and from unanticipated movements in the value of a
foreign currency relative to the U.S. dollar. Forward contracts involve
elements of risk in excess of the amounts reflected in the Statement of
Assets and Liabilities. The Fund bears the risk of an unfavorable change in
the foreign exchange rate underlying the forward contract.
Futures Contracts: A futures contract is an agreement between two parties to
buy and sell a financial instrument at a set price on a future date. Upon
entering into a futures transaction, a Fund will be required to segregate an
initial margin payment of cash or other liquid securities with the Futures
Commission Merchant ("the broker"). The Funds' activities in futures
contracts are used primarily for hedging purposes and from time to time for
income enhancement. Futures contracts are conducted through regulated
exchanges that minimize counter-party credit risks. A Funds' participation
in the futures markets involves certain risks, including imperfect
correlation between movements in the price of futures contracts and
movements in the price of the securities hedged or used for cover. Pursuant
to a contract, the Funds agree to receive from or pay to the broker an
amount of cash equal to
71
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
the daily fluctuation in value of the contract. Such receipts or payments
are known as "variation margin" and are recorded by the Funds as unrealized
appreciation or depreciation. Futures contracts involve elements of risk in
excess of the amount reflected in the Statement of Assets and Liabilities.
When a contract is closed, the Funds record a realized gain or loss equal to
the difference between the value of the contract at the time it was opened
and the value at the time it was closed.
Options: An option is a contract conveying a right to buy or sell a
financial instrument at a specified price during a stipulated period. The
premium paid by a Fund for the purchase of a call or a put option is
included in the Fund's Statement of Assets and Liabilities as an investment
and subsequently marked to market to reflect the current market value of the
option.
When a Fund writes a call or a put option, an amount equal to the premium
received by the Fund is included in the Fund's Statement of Assets and
Liabilities as a liability and is subsequently marked to market to reflect
the current market value of the option written. If an option which the Fund
has written either expires on its stipulated expiration date, or if the Fund
enters into a closing purchase transaction, the Fund realizes a gain (or
loss if the cost of a closing purchase transaction exceeds the premium
received when the option was written) without regard to any unrealized gain
or loss on the underlying security, and the liability related to such
options is extinguished. If a call option which the Fund has written is
exercised, the Fund realizes a capital gain or loss from the sale of the
underlying security and the proceeds from such sale are increased by the
premium originally received. If a put option which the Fund has written is
exercised, the amount of the premium originally received reduces the cost of
the security which the Fund purchased upon exercise of the option.
There were no transactions in call and put options written during the year
ended September 30, 2007.
Mortgage-Backed Dollar Rolls: During the year ended September 30, 2007, the
Balanced Assets Fund entered into dollar rolls using "to be announced"
("TBA") mortgage-backed securities ("TBA Rolls"). The Fund's policy is to
record the components of TBA Rolls as purchase/sale transactions. Any
difference between the purchase and sale price is recorded as a realized
gain or loss on the date the transaction is entered into. The Balanced
Assets Fund had TBA Rolls outstanding at period end, which are included in
receivable for investments sold and payable for investments purchased in the
Statement of Assets and Liabilities. Dollar roll transactions involve the
risk that the market value of the securities held by the Fund may decline
below the price of the securities that the Fund has sold but is obligated to
repurchase under the agreement. In the event that the buyer of securities in
a dollar roll transaction files bankruptcy or becomes insolvent, the Fund's
use of the proceeds from the sale of the securities may be restricted
pending a determination by the other party, or its trustee or receiver,
whether to enforce the Fund's obligation to repurchase the securities. The
return earned by the Fund with the proceeds of the dollar roll transaction
may not exceed transaction costs.
Short Sales: All funds may engage in "short sales against the box". A short
sale is against the box to the extent that the Fund contemporaneously owns,
or has the right to obtain without payment, securities identical to those
sold short. In addition, the Disciplined Growth Fund, Value Fund,
International Equity Fund and International Small-Cap Fund may sell a
security it does not own in anticipation of a decline in the market value of
that security ("short sales"). To complete such a transaction, the Fund must
borrow the security to make delivery to the buyer. The Fund then is
obligated to replace the security borrowed by purchasing it at market price
at the time of replacement. The price at such time may be more or less than
the price at which the security was sold by the Fund. Until the security is
replaced, the Fund is required to pay to the lender any dividends or
interest that accrues during the period of the loan. To borrow the security,
the Fund may be required to pay a premium, which would increase the cost of
the security sold. The proceeds of the short sale will be retained by the
broker, to the extent necessary to meet margin requirements, until the short
position is closed out. Until the Fund replaces a borrowed security, the
Fund will maintain daily a segregated account, containing cash or liquid
securities, at such a level that (i) the amount deposited in the account
plus the amount deposited with the broker as collateral will equal the
current value of the security sold short and (ii) the amount deposited in
the segregated account plus the amount deposited with the broker as
collateral will not be less than the market value of the security at the
time it was sold short. Liabilities for securities sold short are reported
at market value in the financial statements. Such liabilities are subject to
off balance sheet risk to the extent of any future increases in market value
of the securities sold short. The ultimate liability for securities sold
short could exceed the liabilities recorded in the Statement of Assets and
Liabilities. The Fund bears the risk of potential inability of the broker to
meet their obligation to perform. During the year ended September 30, 2007,
Growth Opportunities Fund and Disciplined Growth Fund engaged in short sales.
72
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
Note 4. Investment Advisory and Management Agreement, Distribution Agreement
and Service Agreement
The Trust, on behalf of each Fund, has an Investment Advisory and Management
Agreement (the "Agreement") with AIG SunAmerica. Under the Agreement, AIG
SunAmerica provides continuous supervision of a Fund's portfolio and
administers its corporate affairs, subject to general review by the
Trustees. In connection therewith, AIG SunAmerica furnishes the Funds with
office facilities, maintains certain of the Funds' books and records, and
pays the salaries and expenses of all personnel, including officers of the
Funds who are employees of AIG SunAmerica and its affiliates.
The Funds pay AIG SunAmerica a monthly investment advisory and management
fee calculated daily at the following annual percentages of each Fund's
average daily net assets:
Management
Assets Fees
--------------------------- ----------
Blue Chip Growth Fund*...... $0 - $350 million 0.75%
(greater than) $350 million 0.70
(greater than) $700 million 0.65
Growth Opportunities Fund*.. $0 - $350 million 0.75
(greater than) $350 million 0.70
(greater than) $700 million 0.65
New Century Fund............ $0 - $350 million 0.75
(greater than) $350 million 0.70
(greater than) $700 million 0.65
Growth and Income Fund+..... $0 - $350 million 0.75
(greater than) $350 million 0.70
(greater than) $700 million 0.65
Balanced Assets Fund*....... $0 - $350 million 0.75
(greater than) $350 million 0.70
(greater than) $700 million 0.65
International Equity Fund... (greater than) $0 1.00
Value Fund.................. $0 - $750 million 1.00
(greater than) $750 million 0.95
(greater than) $1.5 billion 0.90
Disciplined Growth Fund..... (greater than) $0 0.85
International Small-Cap Fund (greater than) $0 1.15
- --------
* On August 29, 2006, AIG SunAmerica agreed to the continuation of a 0.05%
waiver of the investment advisory fees for the Blue Chip Growth Fund, Growth
Opportunities Fund and Balanced Assets Fund. Effective September 1, 2006,
AIG SunAmerica agreed to, until further notice, an additional 0.02% waiver
of the investment advisory fee for these funds. Effective October 1, 2006,
AIG SunAmerica agreed to, until further notice, reduce the waiver of the
investment advisory fee for the funds to 0.02%. Effective January 1, 2007,
AIG SunAmerica removed the 0.02% waiver from the Growth Opportunities Fund.
Effective July 1, 2007 AIG SunAmerica removed the 0.02% waiver from the Blue
Chip Growth Fund. For the year ended September 30, 2007, the amount of
investment advisory fees waived were $10,571, $3,580 and $31,745,
respectively. These amounts are reflected in the Statement of Operations.
+ Effective September 1, 2006, AIG SunAmerica agreed, until further notice, to
waive 0.05% of the investment advisory fees for the Growth and Income Fund.
Effective January 1, 2007, AIG SunAmerica removed the 0.05% waiver from the
Growth and Income Fund. For the year ended September 30, 2007, the amount of
investment advisory fees waived were $14,698. These amounts are reflected in
the Statement of Operations.
For the year ended September 30, 2007, AIG SunAmerica earned fees in the
amounts stated in the Statement of Operations.
The International Equity Fund and International Small-Cap Fund are
subadvised by AIG Global Investment Corp. ("AIGGIC") pursuant to a
subadvisory agreement with AIG SunAmerica. AIGGIC is an indirect
wholly-owned subsidiary of AIG and an affiliate of AIG SunAmerica. AIGGIC
receives an annual fee of 0.47% of average daily net assets for the
International Equity Fund and 0.60% of average daily net assets for the
International Small-Cap Fund, which is paid by AIG SunAmerica. For the year
ended September 30, 2007, AIGGIC waived 0.05% of the fee paid by AIG
SunAmerica for the International Small-Cap Fund.
AIG SunAmerica has contractually agreed to waive fees or reimburse expenses
to the extent necessary to cap the Funds' annual fund operating expenses at
the following percentages of each Fund's average net assets. The contractual
expense waivers and fee reimbursements will continue indefinitely subject to
termination by the Trustees, including a majority of the trustees who are
not deemed to be "interested persons" of the Trust, as defined by Section
2(a)(19) of the 1940 Act ("Disinterested Trustees").
73
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
Fund Percentage
- ---- ----------
Blue Chip Growth Class I....... 1.33%
Growth Opportunities Class I... 1.33
Growth and Income Class I...... 1.32
Balanced Assets Class I........ 1.33
International Equity Class A... 1.90
International Equity Class B... 2.55
International Equity Class C... 2.55
International Equity Class I... 1.80
Value Class A.................. 1.63
Value Class B.................. 2.28
Value Class C.................. 2.28
Value Class I.................. 1.53
Value Class Z.................. 1.06
Disciplined Growth Class A..... 1.45
Disciplined Growth Class B..... 2.10
Disciplined Growth Class C..... 2.10
International Small-Cap Class A 1.90
International Small-Cap Class B 2.55
International Small-Cap Class C 2.55
Further, AIG SunAmerica is voluntarily waiving fees and/or reimbursing
expenses, if necessary, so that the total net expense ratio for the
following classes do not exceed the amounts set forth below. The voluntary
fee waivers and/or expense reimbursements may be terminated at any time at
the option of AIG SunAmerica.
Fund Percentage
- ---- ----------
New Century Class C 2.14%
For the International Equity Fund, Value Fund, Disciplined Growth Fund, and
International Small-Cap Fund, any voluntary or contractual waivers and/or
reimbursements made by AIG SunAmerica are subject to recoupment from the
Funds within the following two years of making such waivers or
reimbursements, provided that the Funds are able to effect such payment to
AIG SunAmerica and remain in compliance with the foregoing expense
limitations.
For the year ending September 30, 2007, pursuant to the contractual and
voluntary expense limitations in the above tables AIG SunAmerica has waived
or reimbursed expenses as follows:
Blue Chip Growth Class I....... $ 12,173
Growth Opportunities Class I... 12,116
New Century Fund Class C....... 15,092
Growth & Income Class I........ 11,726
Balanced Assets Class I........ 12,353
International Equity Class A... --
International Equity Class B... 8,561
International Equity Class C... --
International Equity Class I... 3,344
Value Fund Class A............. 91,558
Value Fund Class B............. 49,989
Value Fund Class C............. 30,639
Value Fund Class I............. 10,196
Value Fund Class Z............. 20,704
Disciplined Growth Class A..... 76,239
Disciplined Growth Class B..... 32,330
Disciplined Growth Class C..... 80,022
International Small-Cap Class A 122,407
International Small-Cap Class B 17,711
International Small-Cap Class C 30,865
74
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
For the period ended September 30, 2007, the amounts recouped by the Adviser
are as follows:
International Equity Class A $31,232
International Equity Class B --
International Equity Class C 174
International Equity Class I --
At September 30, 2007, the amount of expenses previously waived and/or
reimbursed by AIG SunAmerica during the prior two years that remain subject
to recoupment are as follows:
Class
Other Specific
Expenses Expenses
Reimbursed Reimbursed
- - ---------- ----------
International Equity Class A........ $ -- $ 11,143
International Equity Class B........ -- 15,048
International Equity Class C........ -- 6,806
International Equity Class I........ -- 5,330
Value Fund Class A.................. 80,383 118,282
Value Fund Class B.................. 31,952 70,292
Value Fund Class C.................. 22,045 40,980
Value Fund Class I.................. 997 16,929
Value Fund Class Z.................. 14,723 28,846
Disciplined Growth Class A.......... 13,918 115,181
Disciplined Growth Class B.......... 11,934 73,217
Disciplined Growth Class C.......... 16,977 125,502
International Small-Cap Fund Class A 139,263 90,199
International Small-Cap Fund Class B 2,961 34,927
International Small-Cap Fund Class C 14,352 48,423
The Trust, on behalf of each Fund, has entered into a Distribution Agreement
with AIG SunAmerica Capital Services, Inc. ("SACS" or the "Distributor"), an
affiliate of the Adviser. Each Fund has adopted a Distribution Plan on
behalf of each class of shares (other than Class I and Class Z shares) (each
a "Plan" and collectively, the "Plans") in accordance with the provisions of
Rule 12b-1 under the 1940 Act, hereinafter referred to as the "Class A
Plan," "Class B Plan" and "Class C Plan." In adopting the Plans, the
Trustees determined that there was a reasonable likelihood that each such
Plan would benefit the Fund and the shareholders of the respective class.
The sales charge and distribution fees of a particular class will not be
used to subsidize the sale of shares of any other class.
Under the Class A Plan, Class B Plan and Class C Plan, the Distributor
receives a distribution fee from a Fund at an annual rate of 0.10%, 0.75%
and 0.75%, respectively, of the average daily net assets of the Fund's Class
A, 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 fees paid to broker-dealers that have
sold Fund shares, commissions and other expenses such as those incurred for
sales literature, prospectus printing and distribution and compensation to
wholesalers. It is possible that in any given year the amount paid to the
Distributor under each Class' Plan may exceed the Distributor's distribution
costs as described above. The Plans provide that the Class A, Class B and
Class C shares of each Fund will pay the Distributor an account maintenance
fee up to an annual rate of 0.25% of the aggregate average daily net assets
of such class of shares for payments to compensate the Distributor and
certain securities firms for account maintenance activities. Accordingly,
for the year ended September 30, 2007, SACS received fees (see Statement of
Operations) based upon the aforementioned rates.
In addition, SACS is paid a fee of 0.25% of average daily net assets of
Class I shares in connection with providing administrative and shareholder
services to Class I shareholders. For the year ended September 30, 2007,
SACS earned fees (see Statement of Operations) based upon the aforementioned
rates.
75
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
SACS receives sales charges on each Fund's Class A shares, portions of which
are reallocated to affiliated broker-dealers and non-affiliated
broker-dealers. SACS also receives the proceeds of contingent deferred sales
charges paid by investors in connection with certain redemptions of each
Fund's Class A, Class B and Class C shares. SACS has advised the Funds that
for the year ended September 30, 2007, the proceeds received from sales (and
paid out to affiliated and non-affiliated broker-dealers) and redemptions
are as follows:
Class A Class B Class C
---------------------------------------------------- ------------- -------------
Contingent Contingent Contingent
Sales Affiliated Non-affiliated Deferred Deferred Deferred
Fund Charges Broker-dealers Broker-dealers Sales Charges Sales Charges Sales Charges
- ---- -------- -------------- -------------- ------------- ------------- -------------
Blue Chip Growth....... $ 27,152 $11,566 $11,337 $ 9 $21,445 $ 350
Growth Opportunities... 36,133 17,002 13,996 -- 22,272 503
New Century............ 51,483 23,818 19,286 601 20,740 373
Growth & Income........ 65,369 30,078 26,136 31 30,323 987
Balanced Assets........ 150,159 89,910 39,739 576 28,689 15,417
International Equity... 99,776 26,765 55,217 204 24,229 1,878
Value.................. 127,716 44,950 58,235 404 59,657 1,550
Disciplined Growth..... 56,059 27,259 18,391 60 6,646 11,314
International Small-Cap 69,677 21,444 41,181 -- 429 439
The Trust has entered into a Service Agreement with AIG SunAmerica Fund
Services, Inc. ("SAFS"), an affiliate of the Adviser. Under the Service
Agreement, SAFS performs certain shareholder account functions by assisting
the Funds' transfer agent in connection with the services that it offers to
the shareholders of the Funds. Pursuant to the Service Agreement, the Funds
(except for Class Z shares of the Funds) pay a fee to SAFS for services
rendered based upon an annual rate of 0.22% of average daily net assets. No
portion of this fee is paid or reimbursed by the Class Z shares, however,
Class Z shares pay all direct transfer agency fees and out-of-pocket
expenses relating to Class Z shares. For the year ended September 30, 2007,
the Funds incurred the following expenses which are included in transfer
agent fees payable in the Statement of Asset and Liabilities and in transfer
agent fees and expenses in the Statement of Operations to compensate SAFS
pursuant to the terms of the Service Agreement.
Expense Payable At September 30, 2007
-------------------------------- -------------------------------
Fund Class A Class B Class C Class I Class A Class B Class C Class I
- ---- -------- ------- ------- ------- ------- ------- ------- -------
Blue Chip Growth....... $105,300 $33,094 $ 8,711 $ 1,404 $ 8,221 $1,920 $ 538 $ 119
Growth Opportunities... 83,861 42,096 20,062 463 5,827 2,092 1,220 26
New Century............ 182,830 22,171 9,249 -- 13,169 1,683 897 --
Growth and Income...... 135,449 50,378 55,009 695 9,783 3,148 4,013 59
Balanced Assets........ 254,455 37,281 31,948 1,608 13,283 2,039 2,413 121
International Equity... 148,458 45,798 52,234 18,693 11,770 3,130 4,252 1,365
Value.................. 274,790 97,556 71,251 105 21,115 6,776 4,461 6
Disciplined Growth..... 49,184 15,571 59,150 -- 4,317 981 4,989 --
International Small-Cap 59,469 1,860 8,841 -- 5,362 203 931 --
At September 30, 2007, AIG SunAmerica, Inc. an affiliated company of the
Adviser, owned 17.5% of the total outstanding shares of International Equity.
On July 9, 2007, the Adviser made the following payment to the Fund set
forth below, which represents the net difference between amounts realized by
the Fund upon the disposition of AIG stock that converted from American
General Corp. stock upon the acquisition of American General Corp. by AIG,
and amounts the Fund would have realized had the Fund's predecessor sold
such stock on the date that the Adviser became affiliated with American
General Corp., based on the closing price with respect to such date (August
29, 2001).
Fund Amount
- ---- --------
Disciplined Growth Fund $191,815
76
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
Note 5. Expense Reductions
Through expense offset arrangements resulting from broker commission
recapture, a portion of the expenses of the Funds set forth below have been
reduced. For the year ended September 30, 2007, the amount of expense
reductions received by each Fund, used to offset the Fund's non-affiliated
expenses were as follows:
Total Expense
Fund Reductions
- ---- -------------
Blue Chip Growth.... $ 7,908
Growth Opportunities 33,696
New Century......... 22,812
Growth and Income... 22,522
Balanced Assets..... 12,237
Value............... 24,710
Disciplined Growth.. 66,730
Note 6. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales and maturities of long-term
investments during the year ended September 30, 2007, were as follows:
Blue Chip Growth New Growth and Balanced
Growth Opportunities Century Income Assets
Fund Fund Fund Fund Fund
------------- ------------- ------------ ------------- ------------
Purchases (excluding U.S. government securities)........... $ 49,562,257 $196,201,618 $270,671,943 $180,376,596 $164,499,079
Sales and maturities (excluding U.S. government securities) 62,471,852 214,287,423 287,818,537 207,172,154 181,862,864
Purchases of U.S. government securities.................... -- -- -- -- 26,252,964
Sales and maturities of U.S. government securities......... -- -- -- -- 36,305,046
International Disciplined International
Equity Value Growth Small-Cap
Fund Fund Fund Fund
------------- ------------- ------------ -------------
Purchases (excluding U.S. government securities)........... $160,962,023 $320,905,939 $248,281,140 $ 26,479,954
Sales and maturities (excluding U.S. government securities) 174,133,436 352,408,193 260,957,005 21,892,234
Purchases of U.S. government securities.................... -- -- -- --
Sales and maturities of U.S. government securities......... -- -- -- --
77
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
Note 7. Federal Income Taxes
The amounts of aggregate unrealized gain (loss) and the cost of investment
securities for federal income tax purposes, including short-term securities
and repurchase agreements, were as follows at September 30, 2007:
Blue Chip Growth New Growth and Balanced
Growth Opportunities Century Income Assets
Fund Fund Fund Fund Fund
------------- ------------- ----------- ------------- ------------
Cost (tax basis).......................... $ 59,968,979 $ 58,382,340 $99,170,396 $99,042,612 $141,825,305
============ ============ =========== =========== ============
Appreciation.............................. 12,267,364 3,039,157 4,743,237 10,925,335 15,307,019
Depreciation.............................. (1,485,471) (2,997,038) (4,592,015) (1,879,359) (2,920,386)
------------ ------------ ----------- ----------- ------------
Net unrealized appreciation (depreciation) $ 10,781,893 $ 42,119 $ 151,222 $ 9,045,976 $ 12,386,633
============ ============ =========== =========== ============
International Disciplined International
Equity Value Growth Small-Cap
Fund Fund Fund Fund
------------- ------------- ----------- -------------
Cost (tax basis).......................... $108,035,552 $207,386,064 $52,379,191 $32,624,746
============ ============ =========== ===========
Appreciation.............................. 24,664,419 23,641,124 9,046,268 6,387,129
Depreciation.............................. (1,430,115) (2,729,469) (544,461) (2,009,232)
------------ ------------ ----------- -----------
Net unrealized appreciation (depreciation) $ 23,234,304 $ 20,911,655 $ 8,501,807 $ 4,377,897
============ ============ =========== ===========
The following details the tax basis of distributions as well as the
components of distributable earnings. The tax character of distributions
paid may differ from the character of distributions shown on the Statement
of Changes in Net Assets due to short-term capital gains being treated as
ordinary income for tax purposes. The tax basis components of distributable
earnings differ from the amounts reflected in the Statement of Assets and
Liabilities due to temporary book/tax differences primarily arising from
wash sales, post October losses and derivative transactions.
Distributable Earnings Tax Distributions
----------------------------------------- ----------------------
For the year ended September 30, 2007
----------------------------------------------------------------
Long-term
Gains/ Capital Unrealized Long-Term
Ordinary Loss Appreciation Ordinary Capital
Fund Income Carryover (Depreciation) Income Gains
- ---- ----------- -------------- -------------- ---------- -----------
Blue Chip Growth....... $ -- $ (52,435,231) $10,781,893 $ -- $ --
Growth Opportunities... -- (173,866,796) 42,119 -- --
New Century............ -- (75,049,480) 151,222 -- --
Growth and Income...... 242,352 (33,557,797) 9,045,976 -- --
Balanced Assets........ 412,431 (68,456,727) 12,393,089 2,250,950 --
International Equity... -- 8,141,350 23,228,863 -- --
Value.................. 17,252,045 11,938,455 20,911,655 9,883,623 16,743,650
Disciplined Growth..... -- (18,611,005) 8,504,488 -- --
International Small-Cap 5,925 6,822 4,385,751 -- --
78
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
Tax Distributions
----------------------
For year ended
September 30, 2006
----------------------
Long-Term
Ordinary Capital
Fund Income Gains
- ---- ----------- ----------
Blue Chip Growth....... $ -- $ --
Growth Opportunities... -- --
New Century............ -- --
Growth and Income...... 101,366 --
Balanced Assets........ 2,815,576 --
International Equity... -- --
Value.................. 14,799,743 2,589,627
Disciplined Growth..... 53,956 --
International Small-Cap -- --
For the year ended September 30, 2007, the reclassifications arising from
book/tax differences resulted in increases (decreases) that were primarily
due to net investment losses, treatment of foreign currency, tax treatments
of certain debt obligations, principal paydown adjustments and capital loss
carryforwards resulting from the merger of the SunAmerica Biotech/Health
Fund and the New Century Fund to the components of net assets as follows:
Accumulated Accumulated
Undistributed Net Undistributed
Investment Net Realized Capital Paid-
Fund Income (Loss) Gain (Loss) in
- ---- ----------------- ------------- -------------
Blue Chip Growth....... $429,766 $ (217) $ (429,549)
Growth Opportunities... 729,813 -- (729,813)
New Century............ 291,870 (31,042,626) 30,750,756
Growth and Income...... 530 (530) --
Balanced Assets........ 161,312 (161,312) --
International Equity... 132,191 2,835 (135,026)
Value.................. 1,418 (1,418) --
Disciplined Growth..... 421,599 (13,786) (407,813)
International Small-Cap 126,530 (126,530) --
For Federal income tax purposes, the Funds indicated below have capital loss
carryforwards, which expire in the year indicated, as of September 30, 2007,
which are available to offset future capital gains, if any:
Capital Loss Carryforward
-------------------------------------------------------------------------
Fund 2008 2009 2010 2011 2012 2013 2014
- ---- ----------- ----------- ------------ ----------- ---------- -------- ----
Blue Chip Growth*...... $15,134,022 $ -- $ 10,374,287 $42,060,944 $ -- $ -- $--
Growth Opportunities*.. 6,398,027 151,316 121,180,899 65,312,802 -- -- --
New Century*........... 12,315,199 17,583,650 39,244,108 36,351,156 -- -- --
Growth and Income...... -- -- -- 27,835,407 5,722,390 -- --
Balanced Assets........ -- -- 8,896,612 55,685,563 3,874,552 -- --
International Equity*.. 13,755,719 -- -- -- -- -- --
Value.................. -- -- -- -- -- -- --
Disciplined Growth..... -- -- 13,578,150 4,260,050 594,906 177,899 --
International Small-Cap -- -- -- -- -- -- --
- --------
* The capital loss carryforwards include realized capital losses from the
acquisition of other funds. These losses may be subject to annual limitation
imposed by the Internal Revenue Code. Therefore, it is possible that not all
of these capital losses will be available for use.
79
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
The Funds indicated below, utilized capital loss carryforwards, which offset
net taxable gains realized in the year ended September 30, 2007.
Capital Loss
Carryforward
Fund Utilized
- ---- ------------
Blue Chip Growth....... $ 4,529,567
Growth Opportunities... 11,657,513
New Century............ 18,768,373
Growth and Income...... 14,900,525
Balanced Assets........ 10,059,461
International Equity... 5,232,853
Value.................. --
Disciplined Growth..... 10,300,713
International Small-Cap 1,191,758
Under the current law, capital losses related to securities and foreign
currency 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 September 30, 2007, the Funds elected to defer capital
losses as follows:
Deferred Deferred
Post- Post-
October October
Capital Currency
Fund Loss Loss
- ---- -------- --------
New Century......... $-- $ 190
International Equity -- 107,024
Note 8. Capital Share Transactions
Transactions in capital shares of each class of each fund were as follows:
Blue Chip Growth Fund
--------------------------------------------------------------------------------------------
Class A Class B
---------------------------------------------- --------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006
---------------------- ---------------------- --------------------- ---------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ------------ -------- ------------ -------- ----------- -------- -----------
Shares sold (1)(2)(3)(4) 272,319 $ 4,717,820 286,191 $ 4,393,307 61,910 $ 927,860 107,187 $ 1,479,959
Reinvested dividends.... -- -- -- -- -- -- -- --
Shares redeemed (1)(2).. (656,693) (11,104,067) (861,719) (13,297,858) (449,635) (6,803,173) (511,064) (7,023,069)
-------- ------------ -------- ------------ -------- ----------- -------- -----------
Net increase (decrease). (384,374) $ (6,386,247) (575,528) $ (8,904,551) (387,725) $(5,875,313) (403,877) $(5,543,110)
======== ============ ======== ============ ======== =========== ======== ===========
- --------
(1)For the year ended September 30, 2007, includes automatic conversion of
205,245 shares of Class B shares in the amount of $3,153,549 to 181,415
shares of Class A shares in the amount of $3,153,549.
(2)For the year ended September 30, 2006, includes automatic conversion of
140,669 shares of Class B shares in the amount of $1,929,214 to 125,387
shares of Class A shares in the amount of $1,929,214.
(3)For the year ended September 30, 2007, includes automatic conversion of
17,217 shares of Class C shares in the amount of $262,954 to 15,124 shares
of Class A shares in the amount of $262,954.
(4)For the year ended September 30, 2006, includes automatic conversion of
13,646 shares of Class C shares in the amount of $184,614 to 12,078 shares
of Class A shares in the amount of $184,614.
80
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
Blue Chip Growth Fund
---------------------------------------------------------------------------------------------
Class C Class I
---------------------------------------------- ---------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006
---------------------- ---------------------- ---------------------- ---------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ------------ -------- ------------ -------- ------------ -------- -----------
Shares sold............. 18,808 $ 279,270 42,327 $ 583,163 6,566 $ 112,457 10,100 $ 157,155
Reinvested dividends.... -- -- -- -- -- -- -- --
Shares redeemed (3)(4).. (104,067) (1,557,478) (105,697) (1,448,494) (11,604) (197,959) (64,498) (1,009,458)
-------- ------------ -------- ------------ -------- ------------ -------- -----------
Net increase (decrease). (85,259) $ (1,278,208) (63,370) $ (865,331) (5,038) $ (85,502) (54,398) $ (852,303)
======== ============ ======== ============ ======== ============ ======== ===========
Growth Opportunities Fund
---------------------------------------------------------------------------------------------
Class A Class B
---------------------------------------------- ---------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006
---------------------- ---------------------- ---------------------- ---------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ------------ -------- ------------ -------- ------------ -------- -----------
Shares sold (5)(6)(7)(8) 467,598 $ 9,161,091 308,492 $ 5,164,212 57,020 $ 971,620 76,853 $ 1,138,934
Reinvested dividends.... -- -- -- -- -- -- -- --
Shares redeemed (5)(6).. (607,841) (11,673,643) (858,318) (14,201,135) (584,520) (10,064,774) (558,658) (8,294,844)
-------- ------------ -------- ------------ -------- ------------ -------- -----------
Net increase (decrease). (140,243) $ (2,512,552) (549,826) $ (9,036,923) (527,500) $ (9,093,154) (481,805) $(7,155,910)
======== ============ ======== ============ ======== ============ ======== ===========
Growth Opportunities Fund
---------------------------------------------------------------------------------------------
Class C Class I
---------------------------------------------- ---------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006
---------------------- ---------------------- ---------------------- ---------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ------------ -------- ------------ -------- ------------ -------- -----------
Shares sold............. 73,251 $ 1,243,056 35,295 $ 519,835 900 $ 17,303 6,157 $ 104,273
Reinvested dividends.... -- -- -- -- -- -- -- --
Shares redeemed (7)(8).. (203,387) (3,485,346) (253,692) (3,730,537) (17,924) (341,263) (88,753) (1,461,430)
-------- ------------ -------- ------------ -------- ------------ -------- -----------
Net increase (decrease). (130,136) $ (2,242,290) (218,397) $ (3,210,702) (17,024) $ (323,960) (82,596) $(1,357,157)
======== ============ ======== ============ ======== ============ ======== ===========
- --------
(3)For the year ended September 30, 2007, includes automatic conversion of
17,217 shares of Class C shares in the amount of $262,954 to 15,124 shares
of Class A shares in the amount of $262,954.
(4)For the year ended September 30, 2006, includes automatic conversion of
13,646 shares of Class C shares in the amount of $184,614 to 12,078 shares
of Class A shares in the amount of $184,614.
(5)For the year ended September 30, 2007, includes automatic conversion of
277,289 shares of Class B shares in the amount of $4,814,621 to 244,697
shares of Class A shares in the amount of $4,814,621.
(6)For the year ended September 30, 2006, includes automatic conversion of
89,673 shares of Class B shares in the amount of $1,335,833 to 79,800 shares
of Class A shares in the amount of $1,335,833.
(7)For the year ended September 30, 2007, includes automatic conversion of
15,202 shares of Class C shares in the amount of $266,305 to 13,404 shares
of Class A shares in the amount of $266,305.
(8)For the year ended September 30, 2006, includes automatic conversion of
14,961 shares of Class C shares in the amount of $217,480 to 13,265 shares
of Class A shares in the amount of $217,480.
81
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
New Century Fund
----------------------------------------------------------------------------------------------
Class A Class B
------------------------------------------------ --------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006
---------------------- ------------------------ --------------------- ---------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ------------ ---------- ------------ -------- ----------- -------- -----------
Shares sold (1)(2)(3).... 349,824 $ 7,584,889 251,417 $ 4,619,033 41,725 $ 1,374,288 52,369 $ 849,797
Shares issued in merger + 456,997 9,556,448 -- -- 378,511 6,906,165 -- --
Shares redeemed (1)(2)... (867,696) (20,403,970) (1,032,640) (18,939,346) (324,871) (6,113,256) (241,463) (3,911,556)
-------- ------------ ---------- ------------ -------- ----------- -------- -----------
Net increase (decrease).. (60,875) $ (3,262,633) (781,223) $(14,320,313) 95,365 $ 2,167,197 (189,094) $(3,061,759)
======== ============ ========== ============ ======== =========== ======== ===========
New Century Fund
------------------------------------------------
Class C
------------------------------------------------
For the For the
year ended year ended
September 30, 2007 September 30, 2006
---------------------- ------------------------
Shares Amount Shares Amount
-------- ------------ ---------- ------------
Shares sold.............. 30,355 $ 1,513,139 18,023 $ 288,668
Shares issued in merger + 263,342 4,832,027 -- --
Shares redeemed (3)...... (100,822) (1,920,423) (33,993) (549,978)
-------- ------------ ---------- ------------
Net increase (decrease).. 192,875 $ 4,424,743 (15,970) $ (261,310)
======== ============ ========== ============
- --------
(1)For the year ended September 30, 2007, includes automatic conversion of
165,359 shares of Class B shares in the amount of $3,144,259 to 144,044
shares of Class A shares in the amount of $3,144,259.
(2)For the year ended September 30, 2006, includes automatic conversion of
94,711 shares of Class B shares in the amount of $1,533,530 to 83,219 shares
of Class A shares in the amount of $1,533,530.
(3)For the year ended September 30, 2007, includes automatic conversion of 79
shares of Class C shares in the amount of $1,590 to 69 shares of Class A
shares in the amount of $1,590.
+ See Note 2.
Growth and Income Fund
----------------------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------------- ------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006
------------------------ ------------------------ ---------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ -------- ------------ ---------- ------------
Shares sold (1)(2)(3)(4) 1,024,726 $ 15,049,599 1,037,304 $ 13,187,347 88,044 $ 1,200,393 138,475 $ 1,670,363
Reinvested dividends.... -- -- 7,291 92,385 -- -- -- --
Shares redeemed (1)(2).. (1,415,515) (20,646,675) (1,733,300) (22,055,189) (913,913) (12,582,078) (1,498,815) (18,023,263)
---------- ------------ ---------- ------------ -------- ------------ ---------- ------------
Net increase (decrease). (390,789) $ (5,597,076) (688,705) $ (8,775,457) (825,869) $(11,381,685) (1,360,340) $(16,352,900)
========== ============ ========== ============ ======== ============ ========== ============
- --------
(1)For the year ended September 30, 2007, includes automatic conversion of
465,198 shares of Class B shares in the amount of $6,461,560 to 436,352
shares of Class A shares in the amount of $6,461,560.
(2)For the year ended September 30, 2006, includes automatic conversion of
569,345 shares of Class B shares in the amount of $6,846,288 to 537,783
shares of Class A shares in the amount of $6,846,288.
(3)For the year ended September 30, 2007, includes automatic conversion of
102,570 shares of Class C shares in the amount of $1,439,849 to 96,087
shares of Class A shares in the amount of $1,439,849.
(4)For the year ended September 30, 2006, includes automatic conversion of
257,374 shares of Class C shares in the amount of $3,090,506 to 244,371
shares of Class A shares in the amount of $3,090,506.
82
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
Growth and Income Fund
-------------------------------------------------------------------------------------------------
Class C Class I
-------------------------------------------------- ---------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006
------------------------ ------------------------ --------------------- ----------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ -------- ----------- -------- ------------
Shares sold............. 69,560 $ 943,742 50,775 $ 607,720 3,981 $ 57,853 4,901 $ 62,493
Reinvested dividends.... -- -- -- -- -- -- 167 2,121
Shares redeemed (3)(4).. (585,816) (8,047,218) (1,122,450) (13,426,842) (5,169) (76,734) (44,644) (560,171)
---------- ------------ ---------- ------------ -------- ----------- -------- ------------
Net increase (decrease). (516,256) $ (7,103,476) (1,071,675) $(12,819,122) (1,188) $ (18,881) (39,576) $ (495,557)
========== ============ ========== ============ ======== =========== ======== ============
Balanced Assets Fund
-------------------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------------- ---------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006
------------------------ ------------------------ --------------------- ----------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ -------- ----------- -------- ------------
Shares sold (5)(6)(7)(8) 659,237 $ 9,995,580 740,185 $ 10,265,397 82,301 $ 1,239,592 103,140 $ 1,423,304
Reinvested dividends.... 122,714 1,865,233 160,938 2,242,794 7,877 119,339 16,817 233,746
Shares redeemed (5)(6).. (1,840,180) (27,750,445) (2,374,864) (32,919,295) (595,400) (8,989,165) (876,652) (12,118,388)
---------- ------------ ---------- ------------ -------- ----------- -------- ------------
Net increase (decrease). (1,058,229) $(15,889,632) (1,473,741) $(20,411,104) (505,222) $(7,630,234) (756,695) $(10,461,338)
========== ============ ========== ============ ======== =========== ======== ============
Balanced Assets Fund
-------------------------------------------------------------------------------------------------
Class C Class I
-------------------------------------------------- ---------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006
------------------------ ------------------------ --------------------- ----------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ -------- ----------- -------- ------------
Shares sold............. 37,806 $ 565,546 59,887 $ 822,679 2,467 $ 37,069 3,998 $ 55,500
Reinvested dividends.... 6,854 104,202 11,763 163,790 886 13,500 1,087 15,163
Shares redeemed (7)(8).. (229,341) (3,460,624) (417,497) (5,771,742) (14,882) (226,730) (6,630) (92,371)
---------- ------------ ---------- ------------ -------- ----------- -------- ------------
Net increase (decrease). (184,681) $ (2,790,876) (345,847) $ (4,785,273) (11,529) $ (176,161) (1,545) $ (21,708)
========== ============ ========== ============ ======== =========== ======== ============
- --------
(3)For the year ended September 30, 2007, includes automatic conversion of
102,570 shares of Class C shares in the amount of $1,439,849 to 96,087
shares of Class A shares in the amount of $1,439,849.
(4)For the year ended September 30, 2006, includes automatic conversion of
257,374 shares of Class C shares in the amount of $3,090,506 to 244,371
shares of Class A shares in the amount of $3,090,506.
(5)For the year ended September 30, 2007, includes automatic conversion of
312,489 shares of Class B shares in the amount of $4,744,038 to 311,322
shares of Class A shares in the amount of $4,744,038.
(6)For the year ended September 30, 2006, includes automatic conversion of
289,554 shares of Class B shares in the amount of $4,003,645 to 288,356
shares of Class A shares in the amount of $4,003,645.
(7)For the year ended September 30, 2007, includes automatic conversion of
9,120 shares of Class C shares in the amount of $137,980 to 9,106 shares of
Class A shares in the amount of $137,980.
(8)For the year ended September 30, 2006, includes automatic conversion of
29,174 shares of Class C shares in the amount of $403,247 to 29,117 shares
of Class A shares in the amount of $403,247.
83
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
International Equity Fund
------------------------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------------- --------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006
------------------------ ------------------------ ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Shares sold (1)(2)(3)(4). 1,360,169 $ 24,122,022 1,792,340 $ 26,707,517 234,766 $ 3,887,709 422,480 $ 5,960,828
Reinvested dividends..... -- -- -- -- -- -- -- --
Shares redeemed (1)(2)... (1,476,609) (26,115,354) (1,204,676) (17,947,877) (552,783) (9,228,788) (580,769) (8,067,772)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net increase (decrease).. (116,440) $ (1,993,332) 587,664 $ 8,759,640 (318,017) $ (5,341,079) (158,289) $ (2,106,944)
========== ============ ========== ============ ========== ============ ========== ============
International Equity Fund
------------------------------------------------------------------------------------------------------
Class C Class I
-------------------------------------------------- --------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006
------------------------ ------------------------ ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Shares sold.............. 340,641 $ 5,685,742 499,169 $ 6,840,120 140,027 $ 2,462,907 318,984 $ 4,744,366
Reinvested dividends..... -- -- -- -- -- -- -- --
Shares redeemed
(3)(4)(5)(6)............ (351,299) (5,862,416) (414,380) (5,730,063) (333,525) (5,907,477) (263,235) (4,005,306)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net increase (decrease).. (10,658) $ (176,674) 84,789 $ 1,110,057 (193,498) $ (3,444,570) 55,749 $ 739,060
========== ============ ========== ============ ========== ============ ========== ============
Value Fund
------------------------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------------- --------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006
------------------------ ------------------------ ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Shares sold (7)(8)(9)(10) 1,330,412 $ 24,650,750 1,120,447 $ 19,761,774 305,011 $ 5,377,534 249,089 $ 4,201,032
Reinvested dividends..... 704,045 12,539,044 470,358 8,066,638 284,619 4,810,045 205,229 3,363,708
Shares redeemed (7)(8)... (1,963,578) (36,336,366) (2,359,246) (41,370,087) (1,074,442) (18,893,815) (1,169,879) (19,607,142)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net increase (decrease).. 70,879 $ 853,428 (768,441) $(13,541,675) (484,812) $ (8,706,236) (715,561) $(12,042,402)
========== ============ ========== ============ ========== ============ ========== ============
- --------
(1)For the year ended September 30, 2007, includes automatic conversion of
276,480 shares of Class B shares in the amount of $4,654,844 to 258,279
shares of Class A shares in the amount of $4,654,844.
(2)For the year ended September 30, 2006, includes automatic conversion of
213,551 shares of Class B shares in the amount of $2,955,239 to 200,881
shares of Class A shares in the amount of $2,955,239.
(3)For the year ended September 30, 2007, includes automatic conversion of
35,187 shares of Class C shares in the amount of $594,960 to 32,839 shares
of Class A shares in the amount of $594,960.
(4)For the year ended September 30, 2006, includes automatic conversion of
62,893 shares of Class C shares in the amount of $842,371 to 59,154 shares
of Class A shares in the amount of $824,371.
(5)For the year ended September 30, 2007, net of redemption fees of $2,583,
$771, $904, and $320 for Class A, Class B, Class C and Class I shares,
respectively.
(6)For the year ended September 30, 2006, net of redemption fees of $3,190,
$1,102, $1,103 and $501 for Class A, Class B, Class C and Class I shares,
respectively.
(7)For the year ended September 30, 2007, includes automatic conversion of
559,465 shares of Class B shares in the amount of $9,849,109 to 529,830
shares of Class A shares in the amount of $9,849,109.
(8)For the year ended September 30, 2006, includes automatic conversion of
414,287 shares of Class B shares in the amount of $6,940,648 to 395,001
shares of Class A shares in the amount of $6,940,648.
(9)For the year ended September 30, 2007, includes automatic conversion of
7,899 shares of Class C shares in the amount of $138,746 to 7,473 shares of
Class A shares in the amount of $138,746.
(10)For the year ended September 30, 2006, includes automatic conversion of
3,114 shares of Class C shares in the amount of $38,164 to 3,019 shares of
Class A shares in the amount of $38,164.
84
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
Value Fund
----------------------------------------------------------------------------------------
Class C Class I
---------------------------------------------- ----------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006
---------------------- ---------------------- ----------------- ---------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ------------ -------- ------------ ------ --------- -------- -----------
Shares sold............ 234,527 $ 4,126,128 220,948 $ 3,715,419 654 $ 12,289 42,694 $ 745,901
Reinvested dividends... 198,577 3,355,958 147,920 2,422,937 199 3,531 14,121 241,900
Shares redeemed (9)(10) (902,862) (15,771,477) (861,447) (14,432,704) (8,370) (162,102) (220,088) (3,918,465)
-------- ------------ -------- ------------ ------ --------- -------- -----------
Net increase (decrease) (469,758) $ (8,289,391) (492,579) $ (8,294,348) (7,517) $(146,282) (163,273) $(2,930,664)
======== ============ ======== ============ ====== ========= ======== ===========
Value Fund
----------------------------------------------
Class Z
----------------------------------------------
For the For the
year ended year ended
September 30, 2007 September 30, 2006
---------------------- ----------------------
Shares Amount Shares Amount
-------- ------------ -------- ------------
Shares sold............ 509,315 $ 9,851,572 327,401 $ 5,980,931
Reinvested dividends... 161,535 2,988,389 75,381 1,333,483
Shares redeemed........ (128,127) (2,450,744) (158,366) (2,868,969)
-------- ------------ -------- ------------
Net increase (decrease) 542,723 $ 10,389,217 244,416 $ 4,445,445
======== ============ ======== ============
- --------
(9)For the year ended September 30, 2007, includes automatic conversion of
7,899 shares of Class C shares in the amount of $138,746 to 7,473 shares of
Class A shares in the amount of $138,746.
(10)For the year ended September 30, 2006, includes automatic conversion of
3,114 shares of Class C shares in the amount of $38,164 to 3,019 shares of
Class A shares in the amount of $38,164.
Disciplined Growth Fund#
--------------------------------------------------------------------------------------------
Class A Class B
---------------------------------------------- --------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006
---------------------- ---------------------- --------------------- ---------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ------------ --------- ----------- -------- ----------- -------- -----------
Shares sold (1)(2)..... 532,983 $ 7,889,774 1,402,693 $18,992,948 24,300 $ 356,197 78,337 $ 1,037,524
Reinvested dividends... -- -- 3,627 44,146 -- -- 109 1,276
Shares redeemed (1)(2). (776,777) (11,139,424) (635,487) (8,323,021) (422,344) (5,886,295) (666,910) (8,467,051)
-------- ------------ --------- ----------- -------- ----------- -------- -----------
Net increase (decrease) (243,794) $ (3,249,650) 770,833 $10,714,073 (398,044) $(5,530,098) (588,464) $(7,428,251)
======== ============ ========= =========== ======== =========== ======== ===========
Disciplined Growth Fund#
----------------------------------------------
Class C
----------------------------------------------
For the For the
year ended year ended
September 30, 2007 September 30, 2006
---------------------- ----------------------
Shares Amount Shares Amount
-------- ------------ --------- -----------
Shares sold............ 158,305 $ 2,312,884 1,260,574 $16,302,699
Reinvested dividends... -- -- 105 1,242
Shares redeemed........ (559,493) (7,777,003) (349,343) (4,349,453)
-------- ------------ --------- -----------
Net increase (decrease) (401,188) $ (5,464,119) 911,336 $11,954,488
======== ============ ========= ===========
- --------
(1)For the year ended September 30, 2007, includes automatic conversion of
285,157 shares of Class B shares in the amount of $3,980,961 to 273,229
shares of Class A shares in the amount of $3,980,961.
(2)For the year ended September 30, 2006, includes automatic conversion of
239,315 shares of Class B shares in the amount of $3,094,224 to 230,195
shares of Class A shares in the amount of $3,094,224.
# See Note 1
85
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
International Small-Cap Fund
------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------- --------------------------------------
For the For the
For the period May 2, 2006@ For the period May 2, 2006@
year ended through year ended through
September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006
-------------------- ---------------------- ------------------ ------------------
Shares Amount Shares Amount Shares Amount Shares Amount
------- ----------- --------- ----------- ------- --------- ------ --------
Shares sold............ 335,947 $ 4,376,150 1,979,431 $24,347,088 43,182 $ 571,843 53,478 $612,219
Reinvested dividends... -- -- -- -- -- -- -- --
Shares redeemed (1)(2). (83,528) (1,082,480) (28,793) (311,514) (11,022) (145,437) (557) (6,051)
------- ----------- --------- ----------- ------- --------- ------ --------
Net increase (decrease) 252,419 $ 3,293,670 1,950,638 $24,035,574 32,160 $ 426,406 52,921 $606,168
======= =========== ========= =========== ======= ========= ====== ========
International Small-Cap Fund
--------------------------------------------
Class C
--------------------------------------------
For the
For the period May 2, 2006@
year ended through
September 30, 2007 September 30, 2006
-------------------- ----------------------
Shares Amount Shares Amount
------- ----------- --------- -----------
Shares sold............ 152,986 $ 2,062,450 313,677 $ 3,605,692
Reinvested dividends... -- -- -- --
Shares redeemed (1).... (72,183) (878,788) (8,463) (93,043)
------- ----------- --------- -----------
Net increase (decrease) 80,803 $ 1,183,662 305,214 $ 3,512,649
======= =========== ========= ===========
- --------
(1)For the year ended September 30, 2007, net of redemption fees of $1,504,
$47, and $218 for Class A, Class B, and Class C shares, respectively.
(2)For the year ended September 30, 2007, includes automatic conversion of
6,170 shares of Class B shares in the amount of $82,165 to 6,131 shares of
Class A shares in the amount of $82,165.
@ Commencement of operations
Note 9. Line of Credit
The AIG SunAmerica Family of Mutual Funds has established a $75 million
committed and $50 million uncommitted lines of credit with State Street Bank
and Trust Company, the Funds' custodian. Interest is currently payable at
the Federal Funds Rate plus 50 basis points on the committed line and State
Street Bank and Trust Company's discretionary bid rate on the uncommitted
line of credit. There is also a commitment fee of 10 basis points per annum
on the daily unused portion of the committed line of credit which is
included in other expenses on the Statement of Operations. Borrowings under
the line of credit will commence when the respective Fund's cash shortfall
exceeds $100,000. For the year ended September 30, 2007, the following Funds
had borrowings:
Weighted
Days Interest Average Debt Average
Fund Outstanding Charges Utilized Interest
- ---- ----------- -------- ------------ --------
Blue Chip Growth.... 1 $ 56 $ 346,258 5.81%
Growth and Income... 14 1,266 558,120 5.83
Balanced Assets..... 8 244 190,065 5.77
International Equity 49 5,240 666,585 5.78
Disciplined Growth.. 111 19,732 1,111,675 5.77
At September 30, 2007, there were no borrowings outstanding.
Note 10. Interfund Lending Agreement
Pursuant to exemptive relief granted by the SEC, the Funds are permitted to
participate in an interfund lending program among investment companies
advised by AIG SunAmerica or an affiliate. The interfund lending program
allows the participating Funds to borrow money from and loan money to each
other for temporary or emergency purposes. An interfund loan will be made
under this facility only if the participating Funds receive a more favorable
interest rate than would otherwise be available from a typical bank for a
comparable transaction. For the year ended September 30, 2007, none of the
Funds participated in this program.
86
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
Note 11. Trustees Retirement Plan
The Trustees of the SunAmerica Equity Funds have adopted the AIG SunAmerica
Disinterested Trustees' and Directors' Retirement Plan (the "Retirement
Plan") effective January 1, 1993, as amended December 9, 2006, for the
unaffiliated Trustees. The Retirement Plan provides generally that an
unaffiliated Trustee may become a participant ("Participant") in the
Retirement Plan if he or she has at least 10 years of consecutive service as
a Disinterested Trustee of any of the adopting AIG SunAmerica mutual funds
(the "Adopting Funds") or has attained the age of 60 while a Trustee and
completed five (5) consecutive years of service as a Trustee of any Adopting
Fund (an "Eligible Trustee"). Pursuant to the Retirement Plan, an Eligible
Trustee may receive benefits upon (i) his or her death or disability while a
Trustee or (ii) the termination of his or her tenure as a Trustee, other
than removal for cause from each of the Adopting Funds with respect to which
he or she is an Eligible Trustee.
As of each of the first 10 birthdays after becoming a Participant and on
which he or she is both a Trustee and Participant, each Eligible Trustee
will be credited with an amount equal to 50% of his or her regular fees
(excluding committee fees) for services as a Disinterested Trustee of each
Adopting 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 statement during prior years is added to each Eligible Trustee's
account. The rights of any Participant to benefits under the Retirement Plan
shall be an unsecured claim against the assets of the Adopting Funds. An
Eligible Trustee may receive any benefits payable under the Retirement Plan,
at his or her election, either in one lump sum or in up to 15 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 Trustee fees and expenses payable line on the Statement of Assets and
Liabilities and the amounts for the Retirement Plan Expenses are included in
the Trustees' fees and expenses line on the Statement of Operations.
Retirement Plan Retirement Plan Retirement Plan
Liability Expense Payments
--------------- --------------- ---------------
Fund As of September 30, 2007
- ---- -----------------------------------------------
Blue Chip Growth.............. $28,288 $1,062 $2,147
Growth Opportunities.......... 24,322 1,058 1,589
New Century................... 49,259 1,283 3,418
Growth and Income............. 38,051 1,722 2,250
Balanced Assets............... 77,064 2,395 6,236
International Equity.......... 18,248 1,636 1,153
Value......................... 32,260 3,386 1,836
Disciplined Growth............ 10,751 760 546
International Small-Cap Equity 250 250 --
Note 12. Investment Concentration
Some of the Funds may invest internationally, including in "emerging market"
countries. These securities may be denominated in currencies other than U.S.
dollars. While investing internationally may reduce your risk by increasing
the diversification of your investment, the value of your investment may be
affected by fluctuating currency values, changing local and regional
economic, political and social conditions, and greater market volatility. In
addition, foreign securities may not be as liquid as domestic securities.
These risks are primary risks of the International Equity Fund and
International Small-Cap Fund. At September 30, 2007, the International
Equity Fund and International Small-Cap Fund had approximately 16% and 28%,
respectively, of their net assets invested in equity securities of companies
domiciled in Japan.
Note 13. Other Information
The matter related to AIG's settlement with the Securities and Exchange
Commission (the "Commission") and other governmental authorities that was
reported in recent shareholder reports has been resolved. With respect to
such matter, in September 2007, the Commission issued a permanent exemptive
order (the "Order") pursuant to Section 9(c) of the 1940 Act, to AIG and
certain affiliated persons of AIG, including AIG SunAmerica, AIGGIC and
SACS. The Order permits each entity to continue to provide advisory or
distribution services to the Funds, as applicable. There has been no adverse
impact to the Funds or the Funds' shareholders.
87
SunAmerica Equity Funds
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees of SunAmerica Equity Funds
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of SunAmerica Balanced Assets Fund,
SunAmerica Blue Chip Growth Fund, SunAmerica Growth and Income Fund, SunAmerica
Growth Opportunities Fund, SunAmerica International Equity Fund, and SunAmerica
New Century Fund as of September 30, 2007, and the related statements of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights
for each of the five years in the period then ended. Additionally, we have
audited the accompanying statements of assets and liabilities, including the
portfolios of investments, of SunAmerica Value Fund, and SunAmerica Disciplined
Growth Fund (formerly the SunAmerica Tax Managed Equity Fund) as of September
30, 2007, and the related statements of operations, the statements of changes
in net assets for each of the two years in the period then ended, and financial
highlights for each of the four years in the period then ended. Additionally,
we have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of the SunAmerica International Small-Cap Fund as
of September 30, 2007, and the related statement of operations for the year
then ended, the statements of changes in net assets for each of the two years
in the period then ended, and financial highlights for each of the two years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Funds' management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audits. The financial highlights for the each of the periods presented through
October 31, 2003 for the SunAmerica Value Fund and SunAmerica Disciplined
Growth Fund were audited by other auditors whose report dated December 17,
2003, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with the standards of the 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 and financial highlights are free of material
misstatement. We were not engaged to perform an audit of the Funds' internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Funds' internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. Our procedures included
confirmation of securities owned as of September 30, 2007, by correspondence
with the custodian and brokers or by other appropriate auditing procedures
where replies from brokers were not received. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
SunAmerica Balanced Assets Fund, SunAmerica Blue Chip Growth Fund, SunAmerica
Growth and Income Fund, SunAmerica Growth Opportunities Fund, SunAmerica
International Equity Fund, and SunAmerica New Century Fund, as of September 30,
2007, the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended, in
conformity with U.S. generally accepted accounting principles. Also in our
opinion, the financial statements and financial highlights referred to above
present fairly, in all material respects, the financial position of the
SunAmerica Value Fund and SunAmerica Disciplined Growth Fund as of September
30, 2007, the results of their operations, the changes in their net assets for
each of the two years in the period then ended, and the financial highlights
for each of the four years in the period then ended, in conformity with U.S.
generally accepted accounting principles. Also in our opinion, the financial
statements and financial highlights referred to above present fairly, in all
material respects, the financial position of the SunAmerica International
Small-Cap Fund as of September 30, 2007, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and financial highlights for
each of the two years in the period then ended, in conformity with U.S.
generally accepted accounting principles.
Houston, Texas
November 21, 2007 [LOGO] Ernst & Young LLP
88
SunAmerica Equity Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2007 -- (unaudited)
Approval of the Investment Advisory and Management Agreement and Subadvisory
Agreement
The Board, including the Disinterested Trustees who are not interested persons
of SunAmerica Equity Funds (the "Trust") or its separate series (each a "Fund"
and collectively, the "Funds"), AIG SunAmerica or AIGGIC, approved the
continuation of the Investment Advisory and Management Agreement between the
Fund and AIG SunAmerica (the "Advisory Agreement") for a one-year period ending
August 31, 2008 at a meeting held on August 27, 2007. At this same meeting, the
Board also approved the continuation of the Subadvisory Agreement, as
amended,/1/ between AIG SunAmerica and AIGGIC (the "Subadvisory Agreement")
with respect to the International Equity Fund and the International Small-Cap
Fund for a one-year period ending August 31, 2008.
In accordance with Section 15(c) of the 1940 Act, the Board requested and the
Adviser provided materials relating to the Board's consideration of whether to
approve the continuation of the Advisory Agreement and Subadvisory Agreement.
In determining whether to approve the continuation of the Advisory Agreement
and Subadvisory Agreement, the Board, including Disinterested Trustees,
considered the following information:
Nature, Extent and Quality of Services Provided by the Adviser and Subadviser.
The Board, including the Disinterested Trustees, considered the nature, quality
and extent of services to be provided by AIG SunAmerica and AIGGIC. The Board
noted that the services include acting as investment manager and adviser to the
Funds, managing the daily business affairs of the Funds, and obtaining and
evaluating economic, statistical and financial information to formulate and
implement investment policies. Additionally, the Board observed that AIG
SunAmerica would provide office space, accounting, legal, and compliance,
clerical and administrative services and has authorized any of its officers and
employees, if elected, to serve as officers or trustees of the Funds without
compensation. Finally, the Board noted that AIG SunAmerica is responsible for
monitoring and reviewing the activities of affiliated and unaffiliated
third-party service providers, including AIGGIC.
In connection with the services provided by AIG SunAmerica, the Board analyzed
the structure and duties of AIG SunAmerica's fund administration, accounting,
legal and compliance departments and concluded that they were adequate to meet
the needs of the Funds. The Board also reviewed the personnel responsible for
providing advisory services to the Funds and other key personnel of AIG
SunAmerica and concluded, based on their experience and interaction with AIG
SunAmerica, that: (i) AIG SunAmerica is able to retain quality portfolio
managers and other personnel; (ii) AIG SunAmerica exhibited a high level of
diligence and attention to detail in carrying out its advisory responsibilities
under the Advisory Agreement; (iii) AIG SunAmerica had been responsive to
requests of the Board; and (iv) AIG SunAmerica had kept the Board apprised of
developments relating to the Funds and the industry in general. The Board
concluded that the nature and extent of services provided under the Advisory
Agreement were reasonable and appropriate in relation to the management fee and
that the quality of services continues to be high.
The Board also considered AIG SunAmerica's reputation and long-standing
relationship with the Funds and considered the benefit to shareholders of
investing in funds that are part of a family of funds offering a variety of
types of mutual funds and shareholder services. The Board considered AIG
SunAmerica's experience in providing management and investment advisory and
administrative services to advisory clients and noted that as of July 31, 2007,
AIG SunAmerica managed, advised an/or administered approximately $56.2 billion
in assets. The Board also considered AIG SunAmerica's code of ethics, and that
it has developed internal procedures, adopted by the Board, for monitoring
compliance with the investment objectives, policies and restrictions of the
Funds as set forth in the Fund's prospectus. Additionally, the Board considered
AIG SunAmerica's compliance and regulatory history, and noted that with respect
to AIG's settlement with the Commission and other governmental authorities, AIG
SunAmerica applied for a permanent exemptive order granting relief from the
provisions of Section 9(a) of the 1940 Act./2/
- --------
/1/ The Subadvisory Agreement was amended in order to comply with the
requirements of the exemptive rules relating to subadvisory affiliates
(Rules 17a-10, 10f-3, 12d3-1 and 17e-1 under the 1940 Act) so that the
Fund can rely on these provisions. These provisions permit certain
exemptions for transactions with subadvisory affiliates.
/2/ Please see Note 13 to the Financial Statements contained in this annual
report for additional information regarding final resolution of this
matter.
89
SunAmerica Equity Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2007 -- (unaudited)
(continued)
With respect to the International Equity Fund and the International Small-Cap
Fund, for which AIG SunAmerica has delegated daily investment management
responsibilities to AIGGIC, the Board also considered the nature, quality and
extent of subadvisory services provided by AIGGIC. The Board observed that
AIGGIC is responsible for providing investment management services, including
investment research, advice and supervision, and determining which securities
will be purchased or sold by each of the International Equity Fund and
International Small-Cap Fund. The Board reviewed AIGGIC's history, structure,
size, visibility and resources, which are needed to attract and retain highly
qualified investment professionals. The Board reviewed the personnel that are
responsible for providing subadvisory services to the International Equity Fund
and International Small-Cap Fund and concluded, based on their experience with
AIGGIC, that: (i) AIGGIC is able to retain high quality portfolio managers and
other investment personnel; (ii) AIGGIC exhibited a high level of diligence and
attention to detail in carrying out its responsibilities under the Subadvisory
Agreement; and (iii) AIGGIC had been responsive to requests of the Board and of
AIG SunAmerica. The Board considered that AIGGIC has developed internal
policies and procedures for monitoring compliance with the investment
objectives, policies and restrictions of the International Equity Fund and the
International Small-Cap Fund as set forth in the Prospectus. The Board also
considered AIGGIC's code of ethics, compliance and regulatory history, and
noted that AIGGIC also applied for a permanent exemptive order from the
provisions of Section 9(a) of the 1940 Act with respect to AIG's settlement
with the SEC and other governmental authorities./1/ The Board concluded that
the nature and extent of services to be provided by AIGGIC under the
Subadvisory Agreement were reasonable and appropriate in relation to the
subadvisory fees and that the quality of services continues to be high.
Investment Performance. The Board, including the Disinterested Trustees, also
considered the investment performance of AIG SunAmerica and AIGGIC with respect
to the Funds. In connection with its review, the Board received and reviewed
information regarding the investment performance of the Funds as compared to
each Fund's peer group ("Peer Group") and/or peer universe ("Peer Universe") as
determined by Lipper, Inc. ("Lipper") and to an appropriate index or
combination of indices. The Board also noted that it regularly reviews the
performance of the Funds throughout the year.
In preparation for the August 27, 2007 meeting, the Board was provided with
reports independently prepared by Lipper. Based on the Lipper reports, the
Board reviewed each Fund's annualized total returns for the prior one-, two-,
three-, four-, five- and ten-year periods ended June 30, 2007. The Board also
received a report prepared by AIG SunAmerica that detailed the Funds'
performance for the three- and six-month periods ended June 30, 2007.
Specifically, the Board considered that the SunAmerica Disciplined Growth Fund
and SunAmerica International Equity Fund each ranked in the fifth quintile of
its respective Peer Group during the one-year period ended June 30, 2007 but
had also ranked in the first and third quintile for the prior three-year
period, and in the first and second quintile for the prior five-year period,
respectively. With respect to the SunAmerica Disciplined Growth Fund, the Board
noted the recent change to its investment goal, principal investment strategy
and principal investment techniques and considered that the Fund's performance
has improved since these changes were implemented noting that the Fund ranked
in the third quintile and outperformed its index for the prior three-month
period. Additionally, the Board considered that while SunAmerica International
Small-Cap Fund has ranked in the fourth quintile for the prior one-year period,
it has demonstrated improved performance over shorter periods noting that the
Fund ranked in the third quintile and outperformed its index for the prior
three-month period.
The Board further considered that the SunAmerica Growth Opportunities Fund had
demonstrated improved performance and ranked in the first quintile of its Peer
Group for the prior one-year period and that the SunAmerica Balanced Assets
Fund had improved performance during each of the one-, two- and three-year
periods and ranked in the third quintile for such periods. With respect to the
SunAmerica New Century Fund and SunAmerica Growth Opportunities Fund the Board
observed that both Funds ranked in the third quintile for the three- and
five-year periods, but that the SunAmerica New Century Fund ranked in the first
quintile and the SunAmerica Growth Opportunities Fund in the second quintile
for the prior one-year periods. Additionally, the Board observed that the
SunAmerica Value Fund ranked in the third quintile for the prior one- and
three-year periods but that it provided strong returns over the prior five- and
ten-year periods. With respect to the SunAmerica Blue Chip Growth Fund, the
Board observed that its performance had improved as compared to its three- and
five-year periods and that it ranked in the second quintile for the prior
one-year period.
The Board acknowledged AIG SunAmerica's commitment to enhance the Investments
Department, including the addition of new analysts and changes to portfolio
managers where necessary in prior years and noted that these measures have
appeared to generally
90
SunAmerica Equity Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2007 -- (unaudited)
(continued)
result in improved performance. The Board noted, however, that certain Funds
continued to underperform and that the Board would continue to monitor
performance on an on going basis and in connection with its consideration of
the advisory agreements.
Consideration of the Management Fees and Subadvisory Fees and the Cost of the
Services and Profits to be Realized by the Adviser, Subadvisers and their
Affiliates from the Relationship with the Funds. The Board, including the
Disinterested Trustees, received and reviewed information regarding the fees to
be paid by the Funds to AIG SunAmerica pursuant to the Advisory Agreement and
the fees paid by AIG SunAmerica to AIGGIC pursuant to the Subadvisory
Agreement. The Board examined this information in order to determine the
reasonableness of the fees in light of the nature and quality of services to be
provided and any potential additional benefits to be received by AIG
SunAmerica, AIGGIC or their affiliates in connection with providing such
services to the Funds.
To assist in analyzing the reasonableness of the management fee for each of the
Funds, the Board received reports independently prepared by Lipper. The reports
showed comparative fee information for each Fund's Peer Group and/or Peer
Universe. In considering the reasonableness of the management fee to be paid by
each Fund to AIG SunAmerica, the Board reviewed a number of expense
comparisons, including: (i) contractual and actual advisory fees; and (ii)
actual total operating expenses. In considering each Fund's total operating
expenses, the Board analyzed the level of fee waivers and expense
reimbursements and the net expense caps contractually agreed upon by AIG
SunAmerica with respect to each class of the SunAmerica International Equity
Fund, SunAmerica Value Fund, SunAmerica Disciplined Growth Fund and SunAmerica
International Small-Cap Fund, as well as the Class I shares of the SunAmerica
Blue Chip Growth Fund, SunAmerica Growth Opportunities Fund, SunAmerica Growth
and Income Fund and SunAmerica Balanced Assets Fund. The Board compared each
Fund's net expense ratio to those of other funds within its Peer Group and/or
Peer Universe as a guide to help assess the reasonableness of the Fund's
management fee. The Board acknowledged that it was difficult to make precise
comparisons with other funds in the Peer Groups and Peer Universes since the
exact nature of services provided under the various fund agreements is often
not apparent. The Board noted, however, that the comparative fee information
provided by Lipper as a whole was useful in assessing whether AIG SunAmerica
was providing services at a cost that was competitive with other, similar
funds. The Board also considered advisory fees received by AIG SunAmerica with
respect to other mutual funds and accounts with similar investment strategies
to the Funds. The Board noted the advisory fee paid by the Funds were
reasonable as compared to the fees AIG SunAmerica was receiving from other
mutual funds and accounts for which it serves as adviser or subadviser.
The Board also received and reviewed information regarding the fees paid by AIG
SunAmerica to AIGGIC pursuant to the Subadvisory Agreement. To assist in
analyzing the reasonableness of the subadvisory fees, the Board received a
report prepared independently by Lipper. The report showed comparative fee
information of each Fund's Peer Group that the Trustees used as a guide to help
assess the reasonableness of the subadvisory fees. The Trustees noted that Peer
Group information as a whole was useful in assessing whether AIGGIC was
providing services at a cost that was competitive with other similar funds. The
Trustees also considered that the subadvisory fees are paid by AIG SunAmerica
out of its management fee and not by the Funds, and that subadvisory fees may
vary widely within a Peer Group for various reasons, including market pricing
demands, existing relationships, experience and success, and individual client
needs. The Board further considered the amount of subadvisory fees paid out by
AIG SunAmerica and the amount of the management fees which it retained. The
Board also considered advisory fees received by AIGGIC with respect to other
mutual funds and accounts with similar investment strategies to the SunAmerica
International Equity Fund and SunAmerica International Small-Cap Fund. The
Board noted that the subadvisory fees paid by AIG SunAmerica to AIGGIC were
reasonable as compared to fees AIGGIC receives for other mutual funds and
accounts for which it serves as adviser or subadviser.
In addition, the Board received and reviewed financial statements relating to
AIG SunAmerica's financial condition and profitability with respect to the
services it provided the Funds and considered how profit margins could affect
AIG SunAmerica's ability to attract and retain high quality investment
professionals and other key personnel. The Board was also provided with a
profitability analysis that detailed the revenues earned and the expenses
incurred by AIG SunAmerica and its affiliates that provide services to the
Funds. In particular, the Board considered the profitability of AIG SunAmerica
under the Advisory Agreement, and considered the profitability of AIG
SunAmerica's affiliates under the Rule 12b-1 Plans, Service Agreements, and
Administrative and Shareholder Agreements. Additionally, the Board considered
whether AIG SunAmerica, AIGGIC and its affiliates received any indirect
benefits from the relationship with the Funds. Specifically, the Board observed
that AIG Federal Savings Bank, an affiliate of AIG SunAmerica and AIGGIC,
serves as custodian with respect to certain shareholder retirement accounts
that are administered by AIG SunAmerica and receives a fee payable by the
qualifying shareholders.
91
SunAmerica Equity Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2007 -- (unaudited)
(continued)
The Board also reviewed AIGGIC's financial statements and considered whether
AIGGIC had the financial resources necessary to attract and retain high quality
investment management personnel and to continue to provide the high quality of
services that it had provided to the International Equity Fund and
International Small-Cap Fund to date.
The Board concluded that AIG SunAmerica and AIGGIC had the financial resources
necessary to perform their obligations under the Advisory Agreement and
Subadvisory Agreement and to continue to provide the Funds with the high
quality services that they had provided in the past. The Board also concluded
that the management fee and subadvisory fees were reasonable in light of the
factors discussed above.
Economies of Scale. The Board, including the Disinterested Trustees, considered
whether the shareholders would benefit from economies of scale and whether
there was potential for future realization of economies with respect to the
Funds. The Board considered that the Funds in the AIG SunAmerica complex share
common resources and, as a result, an increase in the overall size of the
complex could permit each fund to incur lower expenses than they otherwise
would achieve as stand-alone entities. The Board also considered the
anticipated efficiencies in the processes of AIG SunAmerica as it adds labor
and capital to expand the scale of operations. The Board also took into account
that the SunAmerica Blue Chip Growth Fund, SunAmerica Growth Opportunities
Fund, SunAmerica New Century Fund, SunAmerica Balanced Assets Fund, SunAmerica
Growth and Income Fund, and SunAmerica Value Fund had management fee
arrangements that included breakpoints that will adjust the fee downward as the
size of the Fund increases, thereby allowing the shareholders to potentially
participate in any economies of scale. The Board further noted that, with the
exception of the New Century Fund, AIG SunAmerica has agreed to contractually
cap the total annual operating expenses of one or more classes of the Funds, at
certain levels. The Board observed that those expense caps benefited
shareholders by keeping total fees down even in the absence of breakpoints or
economies of scale. The Board concluded that the Funds' management fee
structure was reasonable and that it would continue to review fees in
connection with the renewal of the Advisory Agreement, including whether the
implementation of additional breakpoints would be appropriate in the future due
to an increase in asset size or otherwise.
The Board did not review specific information regarding whether there have been
economies of scale with respect to AIGGIC's management of the Funds because it
regards that information as less relevant at the subadviser level. Rather, the
Board considered information regarding economies of scale in the context of the
renewal of the Advisory Agreement.
Other Factors. In consideration of the Advisory Agreement and Subadvisory
Agreement, the Board also received information regarding AIG SunAmerica's and
AIGGIC's brokerage and soft dollar practices. The Board considered that AIG
SunAmerica and AIGGIC are responsible for decisions to buy and sell securities
for the portfolios they manage, selection of broker-dealers and negotiation of
commission rates. The Board noted that they receive reports from AIG SunAmerica
and from an independent third party which included information on brokerage
commissions and execution throughout the year and that commissions paid had
generally been reasonable and the quality of brokerage execution had generally
been high. The Board also considered the benefits AIG SunAmerica and AIGGIC
derive from their soft dollar arrangements, including arrangement under which
brokers provide brokerage and/or research services to AIG SunAmerica and/or
AIGGIC in return for allocating brokerage.
Conclusion. After a full and complete discussion, the Board approved the
Advisory Agreement and the Subadvisory Agreement with respect to International
Equity Fund and International Small-Cap Fund, each for a one-year period ending
August 31, 2008. Based upon their evaluation of all these factors in their
totality, the Board, including the Disinterested Trustees, was satisfied that
the terms of the Advisory Agreement and Subadvisory Agreement were fair and
reasonable and in the best interests of the Funds and the Funds' shareholders.
In arriving at a decision to approve the Advisory Agreement and Subadvisory
Agreement, the Board did not identify any single factor or group of factors as
all-important or controlling, but considered all factors together. The
Disinterested Trustees were also assisted by the advice of independent counsel
in making this determination.
92
SunAmerica Equity Funds
TRUSTEE AND OFFICER INFORMATION -- September 30, 2007 -- (unaudited)
The following table contains information regarding the Trustees and Officers
that oversee operations of the Funds and other investment companies within the
Fund complex.
Number of
Position Term of Portfolios in
Name, Held With Office and Fund Complex
Address and SunAmerica Length of Principal Occupations Overseen by Other Directorships
Date of Birth* Complex Time Served(4) During Past 5 Years Trustee(1) Held by Trustee(2)
- ---------------------- ---------- -------------- ----------------------------- ------------- -----------------------------
Disinterested Trustees
Jeffrey S. Burum Trustee 2004-Present Founder and CEO of 42 None
DOB: February 27, 1963 Sourthern California
Development Corporation/
National Housing
Development Corporation
(1992 to present); Founder,
Owner and Partner of
Colonies Crossroads, Inc.
(1999 to present); Owner and
Managing Member of
Diversified Pacific
Development Group LLC
(1998 to present).
Dr. Judith L. Craven Trustee 2001-Present Retired. 89 Director, Belo Corp. (1992 to
DOB: October 6, 1945 present); Director, Sysco
Corp. (1996 to present);
Director, Luby's, Inc. (1998
to present): Director,
University of Texas Board of
Regents (2001-present).
William F. Devin Trustee 2001-Present Retired. 90 Director, Boston Options
DOB: December 30, 1938 Exchange (1985-present).
Samuel M. Eisenstat Chairman 1986-Present Attorney, solo practitioner. 51 Director, North European Oil
DOB: March 7, 1940 of the Royalty Trust.
Board
Stephen J. Gutman Trustee 1986-Present Senior Associate, Corcoran 51 None
DOB: May 10, 1943 Group (Real Estate) (2003 to
present); President and
Member of Managing
Directors, Beau Brummell-
Soho LLC (licensing of
menswear specialty retailing
and other activities) (June
1988 to present).
William J. Shea Trustee 2004-Present Managing Partner, DLB 51 Director, Boston Private
DOB: February 9, 1948 Capital, LLC (Private Equity) Financial Holdings (October
(2006-Present) President and 2004 to present).
CEO, Conseco, Inc. (Financial
Services) (2001-2004);
Chairman of the Board of
Centennial Technologies, Inc.
(1998 to 2001).
Interested Trustee
Peter A. Harbeck(3) Trustee 1995-Present President, CEO and Director, 98 None
DOB: January 23, 1954 AIG SunAmerica. (August
1995 to present); Director,
SACS (August 1993 to
present) President and CEO,
AIG Advisor Group, Inc.
(June 2004 to present).
93
SunAmerica Equity Funds
TRUSTEE AND OFFICER INFORMATION -- September 30, 2007 -- (unaudited)
(continued)
Number of
Position Term of Portfolios in
Name, Held With Office and Fund Complex
Address and SunAmerica Length of Principal Occupations Overseen by Other Directorships
Date of Birth* Complex Time Served(4) During Past 5 Years Trustee(1) Held by Trustee(2)
- ---------------------- ---------- -------------- ----------------------------- ------------- -------------------
Officers
Vincent M. Marra President 2004-Present Senior Vice President, AIG N/A N/A
DOB: May 28, 1950 SunAmerica (February 2003
to present); Chief
Administrative Officer, Chief
Operating Officer and Chief
Financial Officer, Carret &
Co. LLC (June 2002 to
February 2003); President
and Chief Operating Officer,
Bowne Digital Solutions
(1999 to May 2002).
Donna M. Handel Treasurer 2002-Present Senior Vice President, AIG N/A N/A
DOB: June 25, 1966 SunAmerica (December 2004
to present); Vice President,
AIG SunAmerica (1997 to
December 2004).
Gregory N. Bressler Secretary September Senior Vice President and N/A N/A
DOB: November 17, 1966 and Chief 2005 to General Counsel, AIG
Legal Present SunAmerica (June 2005 to
Officer present); Vice President and
Director of U.S. Asset
Management Compliance,
Goldman Sachs Asset
Management L.P. (June 2004
to June 2005); Deputy
General Counsel, Credit
Suisse Asset Management
LLC (June 2002 to June
2004); Counsel, Credit Suisse
Asset Management LLC
(January 2000 to June 2002).
James Nichols Vice 2006-present Director, President and CEO, N/A N/A
DOB: April 7, 1966 President SACS (July 2006 to present);
Senior Vice President, SACS
(March 2002 to July 2006);
Vice President, AIG
SunAmerica (1995 to March
2002).
Cynthia Gibbons Chief 2005-present Vice President, AIG N/A N/A
DOB: December 6, 1967 Compliance SunAmerica (August 2002 to
Officer present); Securities
Compliance Manager,
American General
Investment Management,
(June 2000 to August 2002).
94
SunAmerica Equity Funds
TRUSTEE AND OFFICER INFORMATION -- September 30, 2007 -- (unaudited)
(continued)
Number of
Position Term of Portfolios in
Name, Held With Office and Fund Complex
Address and SunAmerica Length of Principal Occupations Overseen by Other Directorships
Date of Birth* Complex Time Served(4) During Past 5 Years Trustee(1) Held by Trustee(2)
- ---------------------- ---------- -------------- --------------------------------- ------------- -------------------
Nori L. Gabert Vice 2005-present Vice President and Deputy N/A N/A
DOB: August 15, 1953 President General Counsel, AIG
and SunAmerica (2001 to present);
Assistant Vice President and Secretary,
Secretary VALIC Company I and
VALIC Company II (2000 to
present); Formerly, Associate
General Counsel, American
General Corporation,
(1997 to 2001).
Timothy Pettee Vice 2004- Chief Investment Officer, AIG N/A N/A
DOB: April 7, 1958 President present SunAmerica (2003-present);
Executive Vice President and
Global Director of Research
Schroder Investment
Management (2000-2002);
Director of Research U.S.
Trust Co. (1998-2000).
Gregory R. Kingston Vice 2002-present Vice President, AIG N/A N/A
DOB: January 18, 1966 President SunAmerica (2001-present);
and Formerly, Vice President,
Assistant American General Investment
Treasurer Management, L.P.
(1999-2001)
Matthew J. Hackethal Anti- 2006-present CCO, AIG SunAmerica (2006 to N/A N/A
DOB: December 31, 1971 Money present); Vice President, Credits
Laundering Suisse Asset Management (2001
Compliance to 2006); CCO, Credit Suisse
Officer Alternative Funds (2005 to
2006); CCO, Credit Suisse Asset
Management Securities, Inc.
(2004 to 2005)
- --------
* The business address for each Trustee is the Harborside Financial Center,
3200 Plaza 5, Jersey City, NJ 07311-4992.
(1) The "Fund Complex" means two or more registered investment companies that
hold themselves out to investors as related companies for purposes of
investment services or have a common investment advisor that is an
affiliated person of the Advisor. The "Fund Complex" includes the
SunAmerica Money Market Funds (2 funds), SunAmerica Equity Funds (9 funds),
SunAmerica Income Funds (5 funds), SunAmerica Focused Series, Inc. (18
portfolios), SunAmerica Focused Alpha Growth Fund, Inc. (1 fund),
SunAmerica Focused Alpha Large-Cap Fund, Inc. (1 fund), Anchor Series Trust
(9 portfolios), SunAmerica Senior Floating Rate Fund, Inc. (1 fund),
SunAmerica Series Trust (35 portfolios), VALIC Company I (32 portfolios),
VALIC Company II (15 funds), Seasons Series Trust (24 portfolios) and AIG
Series Trust (5 portfolios). AIG Strategic Hedge Fund of Funds (1 fund) and
Brazos Mutual Funds (4 funds).
(2) Directorships of companies required to report to the SEC under the
Securities Exchange Act of 1934 (i.e. "public companies") or other
investment companies registered under the 1940 Act.
(3) Interested Trustee, as defined within the 1940 Act, because he is an
officer and a director of the Adviser and a director of the principal
underwriter of the Trust.
(4) Trustees serve until their successors are duly elected and qualified,
subject to the Trustee's Retirement Plan as discussed in Note 11 of the
financial statements. Each officer will hold office for an indefinite term,
until the date he or she resigns or retires or until his/her successor is
duly elected and qualifies.
Additional information concerning the Trustees is contained in the Statement of
Additional Information which is available, without charge, by calling (800)
858-8850.
95
SunAmerica Equity Funds
SHAREHOLDERS TAX INFORMATION -- (unaudited)
Certain tax information regarding the SunAmerica Equity Funds is required to be
provided to the shareholders based upon each Fund's income and distributions
for the taxable year ended September 30, 2007. The information and
distributions reported herein may differ from the information and distributions
taxable to the shareholders for the calendar year ending December 31, 2007. The
information necessary to complete your tax returns will be included with your
Form 1099-DIV to be received under separate cover in January 2008.
During the year ended September 30, 2007, the Portfolios paid the following
long-term capital gains dividends along with the percentage of ordinary income
dividends that qualified for the 70% dividends received deduction for
corporations:
Net Net Net Long- Qualifying % for the
Total Investment Short-term Term 70% Dividends
Fund Dividends Income Capital Gains* Capital Gains Received Deductions
- ---- --------- ---------- -------------- ------------- --------------------
Blue Chip Growth Class A....... $ -- $ -- $ -- $ -- -- %
Blue Chip Growth Class B....... -- -- -- -- --
Blue Chip Growth Class C....... -- -- -- -- --
Blue Chip Growth Class I....... -- -- -- -- --
Growth Opportunities Class A... -- -- -- -- --
Growth Opportunities Class B... -- -- -- -- --
Growth Opportunities Class C... -- -- -- -- --
Growth Opportunities Class I... -- -- -- -- --
New Century Class A............ -- -- -- -- --
New Century Class B............ -- -- -- -- --
New Century Class C............ -- -- -- -- --
Growth and Income Class A...... -- -- -- -- --
Growth and Income Class B...... -- -- -- -- --
Growth and Income Class C...... -- -- -- -- --
Growth and Income Class I...... -- -- -- -- --
Balanced Assets Class A........ 0.24 0.24 -- -- 68.65
Balanced Assets Class B........ 0.12 0.12 -- -- 68.65
Balanced Assets Class C........ 0.12 0.12 -- -- 68.65
Balanced Assets Class I........ 0.29 0.29 -- -- 68.65
International Equity Class A... -- -- -- -- --
International Equity Class B... -- -- -- -- --
International Equity Class C... -- -- -- -- --
International Equity Class I... -- -- -- -- --
Value Class A.................. 2.20 0.16 0.68 1.36 60.02
Value Class B.................. 2.09 0.05 0.68 1.36 60.02
Value Class C.................. 2.09 0.05 0.68 1.36 60.02
Value Class I.................. 2.22 0.18 0.68 1.36 60.02
Value Class Z.................. 2.26 0.22 0.68 1.36 60.02
Disciplined Growth Class A..... -- -- -- -- --
Disciplined Growth Class B..... -- -- -- -- --
Disciplined Growth Class C..... -- -- -- -- --
International Small-Cap Class A -- -- -- -- --
International Small-Cap Class B -- -- -- -- --
International Small-Cap Class C -- -- -- -- --
- --------
* Short-term capital gains are treated as ordinary income for tax purposes.
The International Equity Fund and International Small-Cap Fund intend to make
an election under Internal Revenue Code Section 853 to pass through foreign
taxes paid by the Fund to its shareholders. The total amount of foreign taxes
passed through to the shareholders for the fiscal year ended September 30, 2007
was $242,623 and $43,120, respectively. The gross foreign source income for the
information reporting is $2,128,037 and $396,793, respectively
For the year ended September 30, 2007, certain dividends paid by the following
funds may be subject to a maximum tax rate of 15%, as provided by the Jobs and
Growth Tax Relief Reconciliation Act of 2003. Of the distributions paid during
the fiscal year, the following represents the maximum amount that may be
considered qualified dividend income:
Fund Income
---- ----------
Balanced Assets $2,250,950
Value.......... 9,883,623
96
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited)
As required by the Securities and Exchange Commission, the following graphs
compare the performance of a $10,000 investment in the SunAmerica Equity Funds'
portfolios to a similar investment in an index. Please note that "inception",
as used herein, reflects the date on which a specific class of shares commenced
operations. It is important to note that the SunAmerica Equity Funds are
professionally managed mutual funds, while the indices are not available for
investment and are unmanaged. The comparison is shown for illustrative purposes
only. The graphs present the performance of the largest class of that
particular Fund. The performance of the other classes will vary based upon the
difference in sales charges and fees assessed to shareholders of that class.
97
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
SunAmerica Blue Chip Growth Fund
For the annual period ended September 30, 2007, the SunAmerica Blue Chip Growth
Fund Class A returned 19.44% (before maximum sales charge), outperforming its
Russell 1000 Growth Index* benchmark, which returned 19.35% during the period.
Most of the major equity indices registered positive gains for the annual
period, led higher by growth stocks. In terms of industry groups, Energy (4.59%
weight) was the top-performing group in the Russell 1000 Growth Index,
appreciating 49.49%, followed by Materials (3.25% weight) which returned
46.19%. On the other hand, two of the largest constituents in the Russell 1000
Growth Index, Consumer Discretionary (15.38% weight) and Healthcare (17.04%
weight) increased a more modest 8.91% and 10.87%, respectively. Information
Technology, the index's largest component (24.31% weight), returned 25.59% for
the annual period.
With respect to stock sector weightings versus the portfolio's benchmark, the
combination of stock selection in the Industrial, Energy, Healthcare and
Information Technology groups, as well as a Consumer Discretionary underweight,
assisted performance. Conversely, factors that hindered results included
security selection in the Consumer Discretionary and Consumer Staples sectors,
overweight exposure to the Financial group, and a Materials underweight.
Top-performing investments for the quarter included several technology
companies including Apple Inc., Cisco Systems, Google Inc. Class A, and
International Business Machines Corp. Schlumberger Ltd., an oil services
company, was another top contributor. Portfolio detractors included Motorola
Inc., a provider of integrated telecommunications solutions; Amgen Inc., a
developer of human therapeutics to fight hematology, cancer and infection
diseases; Wesco International Inc., a distributor of electrical products;
Cooper Cos., a manufacturer of specialty healthcare products; and Network
Appliance, a provider of unified storage solutions for data-intensive
enterprises.
- --------
Past performance is no guarantee of future results.
* The Russell 1000 Growth Index measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values. The Russell 1000 Index is a comprehensive large-cap index measuring
the performance of the largest 1,000 U.S. incorporated companies. Indices are
not managed and an investor cannot invest directly into an index.
Securities listed may or may not be a part of current Portfolio construction.
98
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in Blue Chip Growth Fund Class A
shares would have increased to $13,717. The same amount invested in securities
mirroring the performance of the S&P 500 Index and the Russell 1000 Growth
Index would be valued at $18,893 and $14,894, respectively.
[CHART]
Blue Chip Russell 1000
Growth Class A/#/ S&P 500 Index Growth Index
----------------- ------------- ------------
9/30/1997 $ 9,427 $10,000 $10,000
10/31/1997 9,175 9,666 9,630
11/30/1997 9,315 10,114 10,039
12/31/1997 9,491 10,287 10,152
1/31/1998 9,486 10,401 10,455
2/28/1998 10,252 11,150 11,242
3/31/1998 10,779 11,721 11,690
4/30/1998 11,029 11,839 11,852
5/31/1998 10,731 11,636 11,516
6/30/1998 11,216 12,108 12,221
7/31/1998 11,242 11,979 12,140
8/31/1998 9,177 10,250 10,318
9/30/1998 9,906 10,906 11,111
10/31/1998 10,508 11,792 12,004
11/30/1998 11,200 12,507 12,917
12/31/1998 12,169 13,227 14,081
1/31/1999 13,095 13,780 14,908
2/28/1999 12,552 13,352 14,227
3/31/1999 13,244 13,886 14,976
4/30/1999 13,501 14,424 14,996
5/31/1999 13,015 14,084 14,535
6/30/1999 13,930 14,865 15,553
7/31/1999 13,552 14,402 15,059
8/31/1999 13,627 14,330 15,305
9/30/1999 13,501 13,938 14,983
10/31/1999 14,496 14,819 16,115
11/30/1999 15,376 15,121 16,984
12/31/1999 17,610 16,011 18,751
1/31/2000 16,959 15,207 17,871
2/29/2000 18,042 14,919 18,745
3/31/2000 18,863 16,378 20,087
4/30/2000 17,454 15,886 19,131
5/31/2000 16,414 15,560 18,168
6/30/2000 17,629 15,943 19,544
7/31/2000 17,335 15,694 18,729
8/31/2000 19,364 16,669 20,425
9/30/2000 18,180 15,789 18,493
10/31/2000 16,783 15,722 17,618
11/30/2000 14,804 14,483 15,021
12/31/2000 15,064 14,553 14,546
1/31/2001 15,261 15,070 15,551
2/28/2001 13,548 13,696 12,911
3/31/2001 12,597 12,828 11,506
4/30/2001 13,585 13,825 12,961
5/31/2001 13,548 13,918 12,770
6/30/2001 13,124 13,579 12,474
7/31/2001 12,809 13,445 12,163
8/31/2001 11,865 12,604 11,168
9/30/2001 10,504 11,586 10,053
10/31/2001 10,848 11,807 10,581
11/30/2001 11,967 12,712 11,597
12/31/2001 11,931 12,824 11,575
1/31/2002 11,462 12,637 11,371
2/28/2002 11,082 12,393 10,899
3/31/2002 11,528 12,859 11,276
4/30/2002 10,796 12,079 10,355
5/31/2002 10,540 11,990 10,105
6/30/2002 9,698 11,136 9,170
7/31/2002 8,981 10,268 8,666
8/31/2002 8,952 10,336 8,692
9/30/2002 8,161 9,212 7,790
10/31/2002 8,725 10,023 8,505
11/30/2002 9,164 10,613 8,967
12/31/2002 8,439 9,990 8,348
1/31/2003 8,264 9,728 8,145
2/28/2003 8,227 9,582 8,108
3/31/2003 8,300 9,675 8,258
4/30/2003 8,901 10,472 8,869
5/31/2003 9,303 11,023 9,312
6/30/2003 9,376 11,164 9,440
7/31/2003 9,618 11,361 9,675
8/31/2003 9,830 11,582 9,915
9/30/2003 9,603 11,459 9,809
10/31/2003 10,321 12,107 10,360
11/30/2003 10,372 12,213 10,469
12/31/2003 10,635 12,853 10,831
1/31/2004 10,774 13,089 11,052
2/29/2004 10,855 13,271 11,122
3/31/2004 10,650 13,071 10,916
4/30/2004 10,474 12,866 10,789
5/31/2004 10,599 13,043 10,990
6/30/2004 10,774 13,296 11,127
7/31/2004 10,196 12,856 10,498
8/31/2004 10,130 12,908 10,447
9/30/2004 10,313 13,048 10,546
10/31/2004 10,452 13,247 10,710
11/30/2004 10,789 13,783 11,079
12/31/2004 11,148 14,252 11,513
1/31/2005 10,789 13,905 11,129
2/28/2005 10,833 14,197 11,248
3/31/2005 10,643 13,946 11,043
4/30/2005 10,350 13,681 10,832
5/31/2005 10,862 14,116 11,357
6/30/2005 10,767 14,137 11,315
7/31/2005 11,272 14,662 11,868
8/31/2005 11,111 14,528 11,715
9/30/2005 11,133 14,646 11,769
10/31/2005 10,987 14,402 11,654
11/30/2005 11,440 14,946 12,157
12/31/2005 11,331 14,951 12,119
1/31/2006 11,550 15,347 12,332
2/28/2006 11,440 15,389 12,312
3/31/2006 11,572 15,580 12,494
4/30/2006 11,521 15,790 12,477
5/31/2006 11,140 15,335 12,054
6/30/2006 11,031 15,356 12,007
7/31/2006 10,891 15,451 11,778
8/31/2006 11,206 15,818 12,145
9/30/2006 11,484 16,226 12,479
10/31/2006 11,806 16,755 12,918
11/30/2006 11,953 17,073 13,174
12/31/2006 11,997 17,313 13,219
1/31/2007 12,304 17,575 13,559
2/28/2007 12,041 17,231 13,304
3/31/2007 12,136 17,424 13,376
4/30/2007 12,736 18,195 14,006
5/31/2007 13,182 18,830 14,509
6/30/2007 13,036 18,518 14,293
7/31/2007 12,795 17,943 14,071
8/31/2007 13,036 18,212 14,296
9/30/2007 13,717 18,893 14,894
Class A Class B Class C++ Class I
------------------ ------------------ ------------------ ------------------
Blue Average Average Average Average
Chip Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
Growth Fund Return Return+ Return Return+ Return Return+ Return Return+
- ---------------- ------- ---------- ------- ---------- ------- ---------- ------- ----------
1 Year Return 12.55% 19.44% 14.51% 18.51% 17.25% 18.25% 19.79% 19.79%
- --------------------------------------------------------------------------------------------
5 Year Return 9.64% 68.07% 9.85% 61.96% 9.99% 61.00% 11.24% 70.34%
- --------------------------------------------------------------------------------------------
10 Year Return 3.21% 45.51% 3.19% 36.87% N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------
Since Inception* 6.75% 164.43% 8.47% 526.01% (0.24)% (2.04)% 2.66% 16.63%
- --------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would have been lower.
* Inception date: Class A: 10/08/93; Class B: 03/13/85; Class C: 02/02/99;
Class I: 11/16/01.
# For the purposes of the graph and the accompanying table, it has been
assumed that the maximum sales charge, of 5.75% of offering price, was
deducted from the initial $10,000 investment in the Fund.
++ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
For the 12 month period ended September 30, 2007, the SunAmerica Blue Chip
Growth Class A returned 12.55% compared to 19.35% for the Russell 1000 Growth
Index and 16.44% for the S&P 500 Index. (The performance data and graph do not
reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.)
- --------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C 1.00% CDSC. The fund's daily net asset
values are not guaranteed and shares are not insured by the FDIC, the Federal
Reserve Board or any other agency. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may
be higher or lower than the original cost. Current performance may be higher or
lower than that shown. Performance as of the most recent month end is available
at www.sunamericafunds.com
99
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
SunAmerica Growth Opportunities Fund
For the annual period ended September 30, 2007, the SunAmerica Growth
Opportunities Fund Class A returned 13.32% (before maximum sales charge),
trailing its benchmark, the Russell 2000 Growth Index*, which returned 18.94%.
The Fund also trailed its previous benchmark, the Russell Midcap Growth
Index**, which returned 21.22%.
The fiscal year began on a promising note, as small-cap stocks outperformed
their large-cap counterparts during the Fund's first fiscal quarter, ended
December 31, 2006. The market rally was sustained during the second fiscal
quarter in anticipation of moderate economic activity and a more benign Federal
Reserve. However, the subprime market continued to deteriorate, and fears of a
weakening economy increased volatility near the end of the second quarter.
After a brief sell-off in the early spring, stocks regained positive momentum
as solid employment, profits, and capital spending trends as well as record
mergers and acquisitions announcements propelled the equity markets higher. As
the third quarter drew to a close, however, inflation fears resurfaced as did
concerns about the continued deterioration in the subprime market.
The final quarter of the annual period was extremely volatile. Simultaneous to
the weakness in the housing market and the uncertainty that hangs over the job
market and American consumer spending, traditional inflationary indicators
continue to simmer. Oil broke the $80 level and gold and agricultural commodity
prices continued their upward trend. Despite a meltdown in the sub-prime
mortgage market and an ensuing liquidity crisis, the markets regained its
footing after the Federal Reserve lowered the Federal Funds rate by 50-basis
points, to conclude the year with broad-based gains.
Our investment approach remains focused on fundamental research and stock
selection as the team conducts extensive research to identify companies with
solid growth potential and reasonable valuations. While this strategy proved
successful during the majority of the annual period, our focus on growth at
reasonable valuation investing was not rewarded as much as we had hoped during
the fourth quarter.
With respect to stock sector weightings versus the portfolio's benchmark, the
combination of: security selection in the Industrials, Information Technology,
Energy and Material groups; Industrials overweight; and underweight exposure to
the Consumer Discretionary and Information Technology groups, positively
impacted returns.
Stock selection in Consumer Discretionary and Healthcare groups detracted the
most from portfolio performance, particularly retailing and healthcare
equipment/services companies. Results were further hindered by overweight
exposure to the Financials group, the worst performing industry in the Russell
2000 Growth Index.
Ceradyne Inc., NutriSystem Inc., Dynamic Materials Corp., NeuStar Inc. Class A,
and Psychiatric Solutions Inc. were among the top contributing securities
during the period. Stocks which detracted from performance included E*Trade
Financial Corp., Trump Entertainment Resorts Inc., American Reprographics Co.,
Allot Communications Ltd., and Children's Place Retail Stores Inc.
- --------
Past performance is no guarantee of future results.
* The Russell 2000 Growth Index measures the performance of those Russell 2000
companies with higher price-to-book ratios and higher forecasted growth
values. Indices are not managed and an investor cannot invest directly into
an index.
** The Russell Midcap Growth Index measures the performance of those Russell
Midcap companies with higher price-to-book ratios and higher forecasted
growth values. The stocks are also members of the Russell 1000 Growth Index.
Indices are not managed and an investor cannot invest directly into an index.
The Fund has replaced the benchmark used for the prior fiscal year (the Russell
Midcap Growth Index) with the Russell 2000 Growth Index, which management
believes represents a better approximation of performance.
Securities listed may or may not be a part of current Portfolio construction.
100
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in Growth Opportunities Fund Class A
shares would have increased to $14,545. The same amount invested in securities
mirroring the performance of the Russell 2000 Growth Index and the Russell
Midcap Growth Index would be valued at $14,312 and $20,557, respectively.
[CHART]
Growth Opportunities Russell Mid-Cap Russell 2000
Class A/#/ Growth Index Growth Index
---------- --------------- --------------
9/30/1997 $ 9,425 $10,000 $10,000
10/31/1997 8,960 9,499 9,399
11/30/1997 8,955 9,599 9,175
12/31/1997 9,174 9,725 9,180
1/31/1998 8,812 9,550 9,058
2/28/1998 9,436 10,448 9,858
3/31/1998 9,992 10,886 10,271
4/30/1998 10,209 11,034 10,334
5/31/1998 9,636 10,580 9,583
6/30/1998 10,059 10,879 9,681
7/31/1998 9,837 10,413 8,873
8/31/1998 7,922 8,426 6,825
9/30/1998 9,029 9,063 7,517
10/31/1998 9,068 9,730 7,909
11/30/1998 10,209 10,387 8,522
12/31/1998 11,298 11,462 9,293
1/31/1999 12,507 11,806 9,711
2/28/1999 11,459 11,229 8,823
3/31/1999 12,745 11,854 9,137
4/30/1999 12,965 12,394 9,944
5/31/1999 12,536 12,235 9,960
6/30/1999 13,358 13,089 10,485
7/31/1999 13,447 12,672 10,160
8/31/1999 13,525 12,541 9,780
9/30/1999 13,763 12,434 9,969
10/31/1999 15,132 13,395 10,224
11/30/1999 16,870 14,782 11,305
12/31/1999 21,357 17,342 13,298
1/31/2000 21,310 17,338 13,174
2/29/2000 28,836 20,983 16,239
3/31/2000 26,675 21,005 14,532
4/30/2000 24,132 18,966 13,065
5/31/2000 22,046 17,584 11,921
6/30/2000 26,204 19,449 13,461
7/31/2000 24,261 18,218 12,307
8/31/2000 28,481 20,965 13,602
9/30/2000 27,806 19,940 12,926
10/31/2000 25,550 18,575 11,877
11/30/2000 19,265 14,539 9,721
12/31/2000 20,812 15,304 10,315
1/31/2001 20,834 16,179 11,150
2/28/2001 17,083 13,380 9,622
3/31/2001 15,328 11,465 8,747
4/30/2001 16,812 13,376 9,818
5/31/2001 16,435 13,314 10,045
6/30/2001 15,659 13,321 10,319
7/31/2001 14,311 12,422 9,439
8/31/2001 13,053 11,522 8,849
9/30/2001 11,615 9,618 7,422
10/31/2001 12,360 10,629 8,136
11/30/2001 13,581 11,773 8,815
12/31/2001 13,927 12,220 9,363
1/31/2002 13,671 11,824 9,030
2/28/2002 12,202 11,153 8,446
3/31/2002 13,498 12,005 9,180
4/30/2002 12,157 11,369 8,981
5/31/2002 11,283 11,030 8,456
6/30/2002 9,845 9,813 7,739
7/31/2002 8,368 8,859 6,550
8/31/2002 7,984 8,828 6,547
9/30/2002 7,517 8,127 6,074
10/31/2002 8,218 8,756 6,381
11/30/2002 8,948 9,442 7,014
12/31/2002 8,067 8,871 6,530
1/31/2003 7,992 8,784 6,352
2/28/2003 8,052 8,708 6,183
3/31/2003 8,263 8,870 6,277
4/30/2003 8,813 9,474 6,871
5/31/2003 9,754 10,386 7,645
6/30/2003 9,754 10,534 7,792
7/31/2003 9,935 10,910 8,381
8/31/2003 10,560 11,511 8,832
9/30/2003 10,349 11,288 8,608
10/31/2003 10,892 12,197 9,352
11/30/2003 11,148 12,524 9,657
12/31/2003 11,268 12,661 9,700
1/31/2004 11,607 13,079 10,209
2/29/2004 11,713 13,298 10,193
3/31/2004 11,682 13,273 10,241
4/30/2004 10,997 12,898 9,727
5/31/2004 11,080 13,202 9,920
6/30/2004 11,389 13,412 10,251
7/31/2004 10,327 12,524 9,330
8/31/2004 9,943 12,370 9,130
9/30/2004 10,289 12,831 9,634
10/31/2004 10,477 13,267 9,869
11/30/2004 11,215 13,952 10,703
12/31/2004 11,554 14,620 11,087
1/31/2005 11,328 14,229 10,588
2/28/2005 11,615 14,589 10,733
3/31/2005 11,298 14,376 10,331
4/30/2005 10,726 13,807 9,673
5/31/2005 11,200 14,598 10,355
6/30/2005 11,449 14,869 10,690
7/31/2005 11,946 15,737 11,437
8/31/2005 12,089 15,641 11,276
9/30/2005 12,255 15,843 11,365
10/31/2005 11,841 15,377 10,945
11/30/2005 12,247 16,211 11,565
12/31/2005 12,255 16,389 11,548
1/31/2006 12,910 17,371 12,662
2/28/2006 12,827 17,157 12,594
3/31/2006 13,347 17,636 13,206
4/30/2006 13,445 17,711 13,168
5/31/2006 12,880 16,877 12,241
6/30/2006 12,488 16,808 12,249
7/31/2006 12,044 16,206 11,613
8/31/2006 12,519 16,579 11,953
9/30/2006 12,835 16,958 12,034
10/31/2006 13,468 17,609 12,813
11/30/2006 14,063 18,300 13,120
12/31/2006 14,146 18,136 13,089
1/31/2007 14,477 18,796 13,332
2/28/2007 14,718 18,755 13,290
3/31/2007 14,793 18,854 13,413
4/30/2007 15,087 19,681 13,765
5/31/2007 15,908 20,480 14,391
6/30/2007 15,712 20,125 14,310
7/31/2007 14,492 19,674 13,567
8/31/2007 14,439 19,781 13,908
9/30/2007 14,545 20,557 14,312
Class A Class B Class C++ Class I
------------------ ------------------ ------------------ ------------------
Growth Average Average Average Average
Opportunities Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
Fund Return Return+ Return Return+ Return Return+ Return Return+
- ---------------- ------- ---------- ------- ---------- ------- ---------- ------- ----------
1 Year Return 6.80% 13.32% 8.58% 12.58% 11.47% 12.47% 13.67% 13.67%
- --------------------------------------------------------------------------------------------
5 Year Return 12.77% 93.49% 13.04% 86.61% 13.26% 86.37% 14.43% 96.20%
- --------------------------------------------------------------------------------------------
10 Year Return 3.82% 54.32% 3.83% 45.66% N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------
Since Inception* 8.74% 499.54% 6.23% 133.04% 1.09% 9.85% 1.39% 8.46%
- --------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would have been lower.
* Inception date: Class A: 01/28/87; Class B: 10/04/93; Class C: 02/02/99;
Class I: 11/16/01
# For the purposes of the graph and the accompanying table, it has been
assumed that the maximum sales charge, of 5.75% of offering price, was
deducted from the initial $10,000 investment in the Fund.
++ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
For the 12 month period ended September 30, 2007, the SunAmerica Growth
Opportunities Class A returned 6.80% compared to 18.94% for the Russell 2000
Growth Index and 21.22% for the Russell Midcap Growth Index. (The performance
data and graph do not reflect the deduction of taxes that a shareholder would
pay on fund distributions or the redemption of fund shares.)
The Fund has replaced the benchmark used in the Line Graph for the prior fiscal
year (the Russell Midcap Growth Index) with the Russell 2000 Growth Index,
which management believes represents a better approximation of performance.
- --------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C 1.00% CDSC. The fund's daily net asset
values are not guaranteed and shares are not insured by the FDIC, the Federal
Reserve Board or any other agency. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may
be higher or lower than the original cost. Current performance may be higher or
lower than that shown. Performance as of the most recent month end is available
at www.sunamericafunds.com
101
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
SunAmerica New Century Fund
For the annual period ended September 30, 2007, the SunAmerica New Century Fund
Class A returned 18.76% (before maximum sales charge), trailing its benchmark,
the Russell Midcap Growth Index*, which returned 21.22%. The Fund also slightly
trailed its previous benchmark, the Russell 3000 Growth Index**, which returned
19.31%.
For the majority of the annual period, several macroeconomic factors greatly
influenced the investment environment including steady corporate spending and
profit growth. At the same time, core inflation, a key indicator monitored by
the Federal Reserve, remained stable. Record merger and acquisitions
announcements also propelled the equity markets higher.
The final quarter of the annual period, however, was especially challenging due
to continued weakness in the housing market and traditional inflationary
indicators became worrisome as oil broke the $80 level and gold and
agricultural commodity prices continued their upward trend. Despite a meltdown
in the sub-prime mortgage market and an ensuing liquidity crisis, the market
regained its footing after the Federal Reserve lowered the Federal Funds rate
by 50 basis points, to conclude the year with broad-based gains. Overall, the
mid-cap growth category was the best performing domestic equity asset class
during the annual period. Energy (6.60% weight) was the top-performing sector
in the Russell Midcap Growth Index with a return of 49.72%, while the Consumer
Staples sector (4.27% weight) was the principal laggard, returning 10.82%.
Our investment approach remains focused on fundamental research and stock
selection as the team conducts extensive research to identify companies with
solid growth potential and reasonable valuations. While this strategy proved
successful during the majority of the annual period, our focus on growth at
reasonable valuation investing was not rewarded as much as we had hoped during
the fourth quarter.
A leading contributor to overall Fund performance during the annual period was
security selection in the Information Technology, Industrials, Healthcare,
Telecom Services and Materials groups. Overweight exposure to the Industrials
and Healthcare groups assisted performance as did an Information Technology
underweight. These gains were limited, however, by stock selection in the
Consumer Discretionary and Financials sectors as well as underweight exposure
to both the Materials and Energy groups.
The following holdings contributed to performance: Ceradyne Inc.; NutriSystem
Inc.; Alliance Data Systems Corp.; NeuStar Inc. Class A; and Psychiatric
Solutions Inc. Individual portfolio holdings which detracted from performance
included E*Trade Financial Corp., Office Depot Inc., American Reprographics
Co., Children's Place Retail Stores Inc., and Health Management Associates Inc.
Class A.
- --------
Past performance is no guarantee of future results.
* The Russell Midcap Growth Index measures the performance of those Russell
Midcap companies with higher price-to-book ratios and higher forecasted
growth values. The stocks are also members of the Russell 1000 Growth Index.
Indices are not managed and an investor cannot invest directly into an index.
** The Russell 3000 Growth Index measures the performance of those Russell 3000
Index companies with higher price-to-book ratios and higher forecasted
growth values. Russell 3000 Index consists of the 3,000 largest U.S.
companies based on total market capitalization. Indices are not managed and
an investor cannot invest directly into an index.
The Fund has replaced the benchmark used for the prior fiscal year (the Russell
3000 Growth Index) with the Russell Midcap Growth Index, which management
believes represents a better approximation of performance.
Securities listed may or may not be a part of current Portfolio construction.
102
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in New Century Fund Class A shares
would have increased to $14,099. The same amount invested in securities
mirroring the performance of the Russell Midcap Growth Index and Russell 3000
Growth Index would be valued at $20,557 and $14,764, respectively.
[CHART]
New Century Russell Mid-Cap Russell 3000
Class A/#/ Growth Index Growth Index
------------- ----------------- -------------
9/30/1997 $ 9,426 $10,000 $10,000
10/31/1997 8,543 9,499 9,606
11/30/1997 8,266 9,599 9,948
12/31/1997 8,332 9,725 10,049
1/31/1998 7,928 9,550 10,308
2/28/1998 8,524 10,448 11,096
3/31/1998 8,931 10,886 11,540
4/30/1998 8,909 11,034 11,691
5/31/1998 8,346 10,580 11,311
6/30/1998 8,839 10,879 11,952
7/31/1998 8,343 10,413 11,792
8/31/1998 6,729 8,426 9,944
9/30/1998 7,069 9,063 10,726
10/31/1998 7,362 9,730 11,565
11/30/1998 8,217 10,387 12,446
12/31/1998 9,390 11,462 13,568
1/31/1999 10,481 11,806 14,351
2/28/1999 9,548 11,229 13,647
3/31/1999 10,915 11,854 14,350
4/30/1999 11,295 12,394 14,454
5/31/1999 10,619 12,235 14,045
6/30/1999 11,263 13,089 15,010
7/31/1999 10,651 12,672 14,533
8/31/1999 10,718 12,541 14,714
9/30/1999 10,817 12,434 14,445
10/31/1999 11,437 13,395 15,486
11/30/1999 13,384 14,782 16,374
12/31/1999 17,331 17,342 18,158
1/31/2000 16,736 17,338 17,355
2/29/2000 21,374 20,983 18,440
3/31/2000 18,635 21,005 19,482
4/30/2000 16,746 18,966 18,480
5/31/2000 15,497 17,584 17,503
6/30/2000 18,635 19,449 18,891
7/31/2000 16,786 18,218 18,046
8/31/2000 19,303 20,965 19,697
9/30/2000 18,685 19,940 17,893
10/31/2000 16,482 18,575 17,004
11/30/2000 13,616 14,539 14,459
12/31/2000 14,111 15,304 14,087
1/31/2001 13,735 16,179 15,072
2/28/2001 11,877 13,380 12,548
3/31/2001 10,926 11,465 11,199
4/30/2001 11,948 13,376 12,612
5/31/2001 11,916 13,314 12,462
6/30/2001 11,667 13,321 12,222
7/31/2001 10,875 12,422 11,865
8/31/2001 9,976 11,522 10,909
9/30/2001 8,431 9,618 9,775
10/31/2001 8,814 10,629 10,315
11/30/2001 9,414 11,773 11,297
12/31/2001 9,605 12,220 11,323
1/31/2002 9,369 11,824 11,109
2/28/2002 8,903 11,153 10,630
3/31/2002 9,420 12,005 11,035
4/30/2002 9,165 11,369 10,180
5/31/2002 8,910 11,030 9,908
6/30/2002 8,316 9,813 8,997
7/31/2002 7,480 8,859 8,441
8/31/2002 7,493 8,828 8,464
9/30/2002 7,161 8,127 7,603
10/31/2002 7,301 8,756 8,280
11/30/2002 7,576 9,442 8,753
12/31/2002 7,244 8,871 8,148
1/31/2003 7,110 8,784 7,949
2/28/2003 6,982 8,708 7,901
3/31/2003 7,040 8,870 8,047
4/30/2003 7,512 9,474 8,652
5/31/2003 8,074 10,386 9,119
6/30/2003 8,201 10,534 9,248
7/31/2003 8,463 10,910 9,510
8/31/2003 8,903 11,511 9,766
9/30/2003 8,578 11,288 9,651
10/31/2003 9,229 12,197 10,215
11/30/2003 9,248 12,524 10,339
12/31/2003 9,261 12,661 10,672
1/31/2004 9,395 13,079 10,916
2/29/2004 9,420 13,298 10,979
3/31/2004 9,433 13,273 10,794
4/30/2004 9,108 12,898 10,636
5/31/2004 9,344 13,202 10,836
6/30/2004 9,695 13,412 10,988
7/31/2004 9,146 12,524 10,337
8/31/2004 8,935 12,370 10,272
9/30/2004 9,427 12,831 10,406
10/31/2004 9,739 13,267 10,576
11/30/2004 10,371 13,952 10,984
12/31/2004 10,697 14,620 11,411
1/31/2005 10,588 14,229 11,019
2/28/2005 10,907 14,589 11,139
3/31/2005 10,684 14,376 10,918
4/30/2005 10,193 13,807 10,669
5/31/2005 10,882 14,598 11,204
6/30/2005 11,067 14,869 11,196
7/31/2005 11,654 15,737 11,764
8/31/2005 11,501 15,641 11,611
9/30/2005 11,488 15,843 11,668
10/31/2005 11,118 15,377 11,527
11/30/2005 11,571 16,211 12,037
12/31/2005 11,520 16,389 12,001
1/31/2006 12,082 17,371 12,295
2/28/2006 12,075 17,157 12,271
3/31/2006 12,414 17,636 12,490
4/30/2006 12,516 17,711 12,471
5/31/2006 11,941 16,877 12,005
6/30/2006 11,648 16,808 11,963
7/31/2006 11,226 16,206 11,700
8/31/2006 11,584 16,579 12,064
9/30/2006 11,871 16,958 12,374
10/31/2006 12,363 17,609 12,839
11/30/2006 12,784 18,300 13,099
12/31/2006 12,994 18,136 13,137
1/31/2007 13,441 18,796 13,466
2/28/2007 13,569 18,755 13,230
3/31/2007 13,639 18,854 13,306
4/30/2007 14,156 19,681 13,910
5/31/2007 14,915 20,480 14,421
6/30/2007 14,660 20,125 14,217
7/31/2007 13,626 19,674 13,952
8/31/2007 13,811 19,781 14,185
9/30/2007 14,099 20,557 14,764
Class A Class B Class C++
------------------ ------------------ ------------------
New Average Average Average
Century Annual Cumulative Annual Cumulative Annual Cumulative
Fund Return Return+ Return Return+ Return Return+
- ---------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return 11.96% 18.76% 13.86% 17.86% 17.02% 18.02%
- -------------------------------------------------------------------------
5 Year Return 13.17% 96.88% 13.43% 89.81% 13.87% 91.48%
- -------------------------------------------------------------------------
10 Year Return 3.49% 49.56% 3.55% 41.74% N/A N/A
- -------------------------------------------------------------------------
Since Inception* 9.80% 632.42% 7.77% 185.37% 5.26% 64.06%
- -------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would have been lower.
* Inception date: Class A: 01/28/87; Class B: 09/24/93; Class C: 02/02/98.
# For the purposes of the graph and the accompanying table, it has been
assumed that the maximum sales charge, of 5.75% of offering price, was
deducted from the initial $10,000 investment in the Fund.
++ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
For the 12 month period ended September 30, 2007, the SunAmerica New Century
Class A returned 11.96% compared to 21.22% for the Russell Midcap Growth Index
and 19.31% for the Russell 3000 Growth Index. (The performance data and graph
do not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.)
The Fund has replaced the benchmark used in the Line Graph for the prior fiscal
year (the Russell 3000 Growth Index) with the Russell Midcap Growth Index,
which management believes represents a better approximation of performance.
- --------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C 1.00% CDSC. The fund's daily net asset
values are not guaranteed and shares are not insured by the FDIC, the Federal
Reserve Board or any other agency. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may
be higher or lower than the original cost. Current performance may be higher or
lower than that shown. Performance as of the most recent month end is available
at www.sunamericafunds.com
103
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
SunAmerica Growth and Income Fund
For the annual period ended September 30, 2007, the SunAmerica Growth and
Income Fund Class A returned 18.24% (before maximum sales charge),
outperforming its benchmark, the S&P 500 Index*, which returned 16.44%.
Overall, U.S. equities finished the annual period on a strong note as the Dow
Jones Industrial Average (DJIA)** approached another record close in the final
week of the Fund's fiscal year. The combination of strong corporate earnings,
and the possibility of another round of interest rate cuts lifted the stock
market higher. During the 12-month period, growth outperformed its value
counterpart across the capitalization spectrum. In terms of industry groups,
all ten S&P 500 sectors posted positive returns, led by the Energy (9.74%
weight) and Materials (3.15% weight) sectors, which returned 44.30% and 36.28%,
respectively. On the other hand, Financials, the index's top constituent
(21.37% weight) and Consumer Discretionary (11.36% weight), were the principal
laggards, returning 1.96% and 5.82%, respectively.
The Fund focuses its investment selection on companies of any size that
demonstrate the potential for capital appreciation and are believed to be
undervalued in the market. To a large extent, performance was driven by stock
selection in the Industrials group, particularly capital goods companies.
Overweight exposure and security selection in both the Energy and Telecom
Services groups also positively impacted returns. Additionally, a Consumer
Discretionary underweight was also beneficial. Alternatively, stock selection
in the Consumer Staples and Consumer Discretionary sectors hindered results.
Three integrated oil producers, ExxonMobil Corp., ConocoPhillips, and Chevron
Corp. were the top-performing holdings in the portfolio during the annual
period, as increased demand for oil produced higher revenues at each company.
Schlumberger Ltd., an energy service company, and Cisco Systems Inc., a
developer of computer networking products, also delivered strong results.
Investments in Motorola Inc., Constellation Brands Inc. Class A, Comcast Corp.
Class A, Amgen Inc. and Time Warner Cable Inc. were a drag on performance
during the period.
- --------
Past performance is no guarantee of future results.
* The S&P 500 Index is the Standard & Poor's 500 Composite Stock Price Index, a
widely recognized, unmanaged index of common stock prices. Indices are not
managed and an investor cannot invest directly into an index.
** The Dow Jones Industrial Average (DJIA) is one of several stock market
indices created by Wall Street Journal editor and Dow Jones & Company
founder Charles Dow. The average consists of 30 of the largest and most
widely held public companies in the United States. Indices are not managed
and an investor cannot invest directly into an index.
Securities listed may or may not be a part of current Portfolio construction.
104
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in Growth and Income Fund Class A
shares would have increased to $14,556. The same amount invested in securities
mirroring the performance of the S&P 500 Index would be valued at $18,893.
[CHART]
Growth & Income Class A/#/ S&P 500 Index
-------------------------- --------------
9/30/1997 $ 9,425 $10,000
10/31/1997 9,194 9,666
11/30/1997 9,601 10,114
12/31/1997 9,807 10,287
1/31/1998 9,838 10,401
2/28/1998 10,483 11,150
3/31/1998 10,980 11,721
4/30/1998 11,011 11,839
5/31/1998 10,786 11,636
6/30/1998 11,167 12,108
7/31/1998 11,058 11,979
8/31/1998 9,286 10,250
9/30/1998 9,947 10,906
10/31/1998 10,537 11,792
11/30/1998 11,167 12,507
12/31/1998 12,098 13,227
1/31/1999 12,837 13,780
2/28/1999 12,371 13,352
3/31/1999 13,006 13,886
4/30/1999 13,279 14,424
5/31/1999 12,805 14,084
6/30/1999 13,608 14,865
7/31/1999 13,311 14,402
8/31/1999 13,198 14,330
9/30/1999 13,038 13,938
10/31/1999 13,897 14,819
11/30/1999 14,467 15,121
12/31/1999 16,126 16,011
1/31/2000 15,543 15,207
2/29/2000 16,109 14,919
3/31/2000 17,033 16,378
4/30/2000 15,834 15,886
5/31/2000 15,077 15,560
6/30/2000 16,034 15,943
7/31/2000 15,759 15,694
8/31/2000 17,565 16,669
9/30/2000 16,641 15,789
10/31/2000 15,685 15,722
11/30/2000 13,971 14,483
12/31/2000 14,375 14,553
1/31/2001 14,456 15,070
2/28/2001 13,114 13,696
3/31/2001 12,243 12,828
4/30/2001 13,132 13,825
5/31/2001 13,069 13,918
6/30/2001 12,534 13,579
7/31/2001 12,262 13,445
8/31/2001 11,355 12,604
9/30/2001 10,076 11,586
10/31/2001 10,230 11,807
11/30/2001 11,200 12,712
12/31/2001 11,273 12,824
1/31/2002 10,738 12,637
2/28/2002 10,575 12,393
3/31/2002 11,046 12,859
4/30/2002 10,493 12,079
5/31/2002 10,366 11,990
6/30/2002 9,650 11,136
7/31/2002 8,833 10,268
8/31/2002 8,960 10,336
9/30/2002 8,044 9,212
10/31/2002 8,579 10,023
11/30/2002 9,006 10,613
12/31/2002 8,398 9,990
1/31/2003 8,126 9,728
2/28/2003 8,044 9,582
3/31/2003 8,090 9,675
4/30/2003 8,616 10,472
5/31/2003 8,988 11,023
6/30/2003 9,042 11,164
7/31/2003 9,251 11,361
8/31/2003 9,414 11,582
9/30/2003 9,242 11,459
10/31/2003 9,885 12,107
11/30/2003 9,976 12,213
12/31/2003 10,303 12,853
1/31/2004 10,402 13,089
2/29/2004 10,557 13,271
3/31/2004 10,366 13,071
4/30/2004 10,158 12,866
5/31/2004 10,221 13,043
6/30/2004 10,384 13,296
7/31/2004 10,139 12,856
8/31/2004 10,148 12,908
9/30/2004 10,321 13,048
10/31/2004 10,511 13,247
11/30/2004 10,937 13,783
12/31/2004 11,319 14,252
1/31/2005 11,101 13,905
2/28/2005 11,310 14,197
3/31/2005 11,137 13,946
4/30/2005 10,919 13,681
5/31/2005 11,219 14,116
6/30/2005 11,146 14,137
7/31/2005 11,401 14,662
8/31/2005 11,310 14,528
9/30/2005 11,342 14,646
10/31/2005 11,122 14,402
11/30/2005 11,443 14,946
12/31/2005 11,396 14,951
1/31/2006 11,579 15,347
2/28/2006 11,689 15,389
3/31/2006 11,799 15,580
4/30/2006 12,028 15,790
5/31/2006 11,735 15,335
6/30/2006 11,698 15,356
7/31/2006 11,762 15,451
8/31/2006 12,019 15,818
9/30/2006 12,303 16,226
10/31/2006 12,697 16,755
11/30/2006 12,871 17,073
12/31/2006 13,072 17,313
1/31/2007 13,265 17,575
2/28/2007 12,935 17,231
3/31/2007 13,081 17,424
4/30/2007 13,686 18,195
5/31/2007 14,162 18,830
6/30/2007 13,997 18,518
7/31/2007 13,704 17,943
8/31/2007 14,098 18,212
9/30/2007 14,556 18,893
Class A Class B Class C++ Class I
------------------ ------------------ ------------------ ------------------
Growth Average Average Average Average
and Income Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
Fund Return Return+ Return Return+ Return Return+ Return Return+
- ---------------- ------- ---------- ------- ---------- ------- ---------- ------- ----------
1 Year Return 11.44% 18.24% 13.39% 17.39% 16.50% 17.50% 18.49% 18.49%
- --------------------------------------------------------------------------------------------
5 Year Return 11.27% 80.95% 11.59% 75.03% 11.87% 75.21% 12.78% 82.44%
- --------------------------------------------------------------------------------------------
10 Year Return 3.83% 54.44% 3.91% 46.78% N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------
Since Inception* 9.09% 236.10% 9.19% 220.35% 3.24% 36.10% 4.82% 31.82%
- --------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would have been lower.
* Inception date: Class A: 07/01/94; Class B: 07/06/94; Class C: 02/02/98;
Class I: 11/16/01.
# For the purposes of the graph and the accompanying table, it has been
assumed that the maximum sales charge, of 5.75% of offering price, was
deducted from the initial $10,000 investment in the Fund.
++ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
For the 12 month period ended September 30, 2007, the SunAmerica Growth and
Income Class A returned 11.44% compared to 16.44% for the S&P 500 Index. (The
performance data and graph do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.)
- --------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C 1.00% CDSC. The fund's daily net asset
values are not guaranteed and shares are not insured by the FDIC, the Federal
Reserve Board or any other agency. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may
be higher or lower than the original cost. Current performance may be higher or
lower than that shown. Performance as of the most recent month end is available
at www.sunamericafunds.com
105
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
SunAmerica Balanced Assets Fund
For the annual period ended September 30, 2007, the SunAmerica Balanced Assets
Fund Class A returned 12.50% (before maximum sales charge). At the end of the
fiscal period, the Fund held 69% of its total long-term portfolio in equities
and 31% in fixed-income securities. The Fund's equity benchmark, the S&P 500
Index*, returned 16.44%, whereas its fixed-income benchmark, the Lehman
Brothers Aggregate Bond Index**, returned 5.14% for the same period. A balanced
fund is designed to cushion risk and provide a return somewhere between that of
its fixed-income and equity benchmarks.
The Fund's equity holdings were aided by outstanding security selection in the
Industrials group, particularly capital goods and commercial service and supply
companies. Stock selection in the Financials, Telecom Services, Energy and
Information Technology groups also had a positive impact on results, as did a
Consumer Discretionary underweight. On the other hand, stock selection in the
Consumer Discretionary and Consumer Staples groups and an underweight in the
energy sector were detractors from relative performance.
Several Energy companies led the list of top-performing equity holdings,
including ExxonMobil Corp., Chevron Corp., and ConocoPhillips. Apple Inc. and
General Electric Co. were other top contributors. The positions which detracted
most significantly from the Fund's performance included Motorola Inc.,
Constellation Brands Inc. Class A, Amgen Inc., Wesco International Inc., and
Pfizer Inc.
Market conditions continued to play a role in the performance of the
fixed-income portion of the Fund versus its relevant benchmark. In particular,
the Fund's exposure to BBB-rated credit in the second half of the fiscal year
was a cause for underperformance versus the benchmark in the credit sector. The
decision on the part of the Federal Open Market Committee (FOMC) to cut the
Federal Funds rate by 50-basis points at the September 18th meeting, provided
much needed liquidity to a market that was reeling from the fall-out in the
U.S. subprime mortgage market.
Sector selection also played a role in the performance of the Fund versus its
benchmark. Specifically, an overweight in financial and industrial credit
sectors contributed to the Fund's underperformance.
Security selection is a primary driver of the Fund's returns. Each fixed-income
asset class is managed from a bottom-up perspective which places a high degree
of weight on the manager's ability to select the best-performing securities
available. Top-performing securities for the year included Calpine secured
debt, Republic of Turkey and Atlas Air secured notes. Poor performers included
Bear Stearns, Residential Capital and Republic of Argentina.
- --------
Past performance is no guarantee of future results.
* The S&P 500 Index is the Standard & Poor's 500 Composite Stock Price Index, a
widely recognized, unmanaged index of common stock prices. Indices are not
managed and an investor cannot invest directly into an index.
** The Lehman Brothers Aggregate Bond Index represents securities that are U.S.
domestic, taxable and dollar denominated. The index covers components for
government and corporate securities, mortgage pass-through securities and
asset-backed securities. Indices are not managed and an investor cannot
invest directly into an index.
Securities listed may or may not be a part of current Portfolio construction.
106
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in Balanced Assets Fund Class A
shares would have increased to $13,600. The same amount invested in securities
mirroring the performance of the Lehman Brothers Aggregate Bond Index and the
S&P 500 Index would be valued at $17,849 and $18,893, respectively.
[CHART]
Balanced Assets Lehman Bros.Aggregate
Class A/#/ Bond Index S&P 500 Index
----------- ---------- -------------
9/30/1997 $ 9,424 $10,000 $10,000
10/31/1997 9,327 10,145 9,666
11/30/1997 9,480 10,192 10,114
12/31/1997 9,653 10,295 10,287
1/31/1998 9,675 10,426 10,401
2/28/1998 10,194 10,418 11,150
3/31/1998 10,564 10,453 11,721
4/30/1998 10,750 10,508 11,839
5/31/1998 10,615 10,608 11,636
6/30/1998 10,955 10,698 12,108
7/31/1998 10,955 10,720 11,979
8/31/1998 9,698 10,895 10,250
9/30/1998 10,302 11,150 10,906
10/31/1998 10,691 11,091 11,792
11/30/1998 11,228 11,154 12,507
12/31/1998 11,907 11,188 13,227
1/31/1999 12,471 11,267 13,780
2/28/1999 12,043 11,070 13,352
3/31/1999 12,558 11,131 13,886
4/30/1999 12,763 11,166 14,424
5/31/1999 12,341 11,068 14,084
6/30/1999 12,935 11,033 14,865
7/31/1999 12,667 10,986 14,402
8/31/1999 12,698 10,981 14,330
9/30/1999 12,580 11,108 13,938
10/31/1999 13,155 11,149 14,819
11/30/1999 13,437 11,148 15,121
12/31/1999 14,488 11,095 16,011
1/31/2000 14,067 11,058 15,207
2/29/2000 14,371 11,192 14,919
3/31/2000 15,117 11,340 16,378
4/30/2000 14,287 11,307 15,886
5/31/2000 13,789 11,301 15,560
6/30/2000 14,452 11,536 15,943
7/31/2000 14,390 11,641 15,694
8/31/2000 15,415 11,810 16,669
9/30/2000 14,554 11,884 15,789
10/31/2000 13,832 11,963 15,722
11/30/2000 12,839 12,159 14,483
12/31/2000 13,089 12,385 14,553
1/31/2001 13,245 12,587 15,070
2/28/2001 12,302 12,696 13,696
3/31/2001 11,707 12,760 12,828
4/30/2001 12,184 12,706 13,825
5/31/2001 12,153 12,783 13,918
6/30/2001 11,915 12,831 13,579
7/31/2001 11,781 13,119 13,445
8/31/2001 11,193 13,269 12,604
9/30/2001 10,428 13,423 11,586
10/31/2001 10,767 13,704 11,807
11/30/2001 11,310 13,515 12,712
12/31/2001 11,218 13,429 12,824
1/31/2002 10,973 13,538 12,637
2/28/2002 10,815 13,669 12,393
3/31/2002 10,931 13,441 12,859
4/30/2002 10,638 13,702 12,079
5/31/2002 10,503 13,818 11,990
6/30/2002 10,118 13,938 11,136
7/31/2002 9,760 14,106 10,268
8/31/2002 9,872 14,344 10,336
9/30/2002 9,422 14,577 9,212
10/31/2002 9,558 14,510 10,023
11/30/2002 9,758 14,506 10,613
12/31/2002 9,422 14,806 9,990
1/31/2003 9,230 14,819 9,728
2/28/2003 9,222 15,024 9,582
3/31/2003 9,231 15,012 9,675
4/30/2003 9,650 15,136 10,472
5/31/2003 9,955 15,418 11,023
6/30/2003 9,972 15,388 11,164
7/31/2003 9,931 14,870 11,361
8/31/2003 10,060 14,969 11,582
9/30/2003 10,048 15,365 11,459
10/31/2003 10,460 15,222 12,107
11/30/2003 10,508 15,258 12,213
12/31/2003 10,756 15,414 12,853
1/31/2004 10,854 15,538 13,089
2/29/2004 10,975 15,706 13,271
3/31/2004 10,864 15,824 13,071
4/30/2004 10,637 15,412 12,866
5/31/2004 10,670 15,350 13,043
6/30/2004 10,838 15,437 13,296
7/31/2004 10,594 15,590 12,856
8/31/2004 10,651 15,887 12,908
9/30/2004 10,779 15,930 13,048
10/31/2004 10,893 16,064 13,247
11/30/2004 11,097 15,936 13,783
12/31/2004 11,385 16,082 14,252
1/31/2005 11,237 16,183 13,905
2/28/2005 11,328 16,088 14,197
3/31/2005 11,121 16,005 13,946
4/30/2005 11,005 16,222 13,681
5/31/2005 11,220 16,397 14,116
6/30/2005 11,211 16,487 14,137
7/31/2005 11,435 16,337 14,662
8/31/2005 11,402 16,546 14,528
9/30/2005 11,408 16,376 14,646
10/31/2005 11,241 16,246 14,402
11/30/2005 11,507 16,318 14,946
12/31/2005 11,500 16,473 14,951
1/31/2006 11,659 16,474 15,347
2/28/2006 11,676 16,529 15,389
3/31/2006 11,712 16,367 15,580
4/30/2006 11,763 16,337 15,790
5/31/2006 11,544 16,319 15,335
6/30/2006 11,528 16,354 15,356
7/31/2006 11,629 16,575 15,451
8/31/2006 11,856 16,829 15,818
9/30/2006 12,081 16,977 16,226
10/31/2006 12,343 17,089 16,755
11/30/2006 12,496 17,287 17,073
12/31/2006 12,591 17,187 17,313
1/31/2007 12,735 17,180 17,575
2/28/2007 12,608 17,445 17,231
3/31/2007 12,694 17,445 17,424
4/30/2007 13,086 17,539 18,195
5/31/2007 13,368 17,406 18,830
6/30/2007 13,212 17,355 18,518
7/31/2007 12,980 17,500 17,943
8/31/2007 13,169 17,714 18,212
9/30/2007 13,600 17,849 18,893
Class A Class B Class C++ Class I
------------------ ------------------ ------------------ ------------------
Balanced Average Average Average Average
Assets Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
Fund Return Return+ Return Return+ Return Return+ Return Return+
- ---------------- ------- ---------- ------- ---------- ------- ---------- ------- ----------
1 Year Return 6.04% 12.50% 7.70% 11.70% 10.75% 11.75% 12.81% 12.81%
- --------------------------------------------------------------------------------------------
5 Year Return 6.35% 44.34% 6.59% 39.56% 6.90% 39.58% 7.86% 46.01%
- --------------------------------------------------------------------------------------------
10 Year Return 3.12% 44.31% 3.15% 36.35% N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------
Since Inception* 6.08% 142.70% 8.70% 562.23% 0.40% 3.52% 3.51% 22.39%
- --------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would have been lower.
* Inception date: Class A: 09/24/93; Class B: 01/29/85; Class C: 02/02/99;
Class I: 11/16/01.
# For the purposes of the graph and the accompanying table, it has been
assumed that the maximum sales charge, of 5.75% of offering price, was
deducted from the initial $10,000 investment in the Fund.
++ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
For the 12 month period ended September 30, 2007, the SunAmerica Balanced
Assets Class A returned 6.04% compared to 16.44% for the S&P 500 Index and
5.14% for the Lehman Bros. Aggregate Bond Index. (The performance data and
graph do not reflect the deduction of taxes that a shareholder would pay on
fund distributions or the redemption of fund shares.)
- --------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. The fund's daily net asset
values are not guaranteed and shares are not insured by the FDIC, the Federal
Reserve Board or any other agency. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may
be higher or lower than the original cost. Current performance may be higher or
lower than that shown. Performance as of the most recent month end is available
at www.sunamericafunds.com
107
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
SunAmerica International Equity Fund
The SunAmerica International Equity Fund Class A returned 25.00% (before
maximum sales charge) for the annual period ended September 30, 2007. The Fund
lagged its current benchmark, the MSCI AC World ex U.S. Daily Total Return Net
Index*, which returned 31.06% for the annual period. The Fund's previous
benchmark, the MSCI EAFE Daily Total Return Net Index**, returned 24.86% during
the annual period, which ended September 30, 2007. On March 31, 2007, the
Fund's benchmark changed from the MSCI EAFE Daily Total Return Net Index to the
MSCI AC World ex U.S. Daily Total Return Net Index, as the Fund began
incorporating emerging market securities into its investments.
The last 12 months have witnessed an extension of the current bull market and,
on balance, a continuation of benign macro- and firm-level economic conditions
- -- strong corporate profits, supportive historical market valuations,
relatively tame inflationary pressures, and strong global growth. International
stocks, particularly those with costs and revenues derived in emerging and
resource-intensive markets, performed better than developed markets. Of course,
large, globally-diversified companies with sales in the faster-growing markets
also performed well. An upsurge in leveraged merger and acquisitions activity
in Europe and the United States also fueled the bullish environment. The fiscal
year witnessed two share sell-offs touched off by different causes. The first,
which occurred in later February/March, came over worries of a slowdown in the
booming Chinese economy. The second more serious bout of volatility, which
occurred from mid-July through mid-August, came as the result of worries about
the weakening U.S. economy and credit markets (i.e., the subprime crisis). The
U.S. Federal Reserve responded to the second sell-off by suspending its hawkish
tone and cutting both the benchmark Federal Funds rate and the discount rate it
charges banks -- the former by a surprising 50 basis points. In addition, the
U.S. Federal Reserve and other central banks added liquidity to the financial
system through open market actions. These actions alleviated some of the
worries about continued growth and the markets regained their record levels.
In addition to, and intertwined with, conditions in international stock
markets, the other major economic news of the last fiscal year relates to
commodity prices and exchange rates. Commodities and metals prices remained
firm, driven by strong demand from booming emerging markets and, in some cases,
worries about sufficient levels of future supply. Among other commodities,
corn, soy, wheat, gold, and copper all reached or were very near all-time
highs. Crude oil averaged near $70 a barrel and as of this writing is currently
above $80. As for exchange rates, the hallmark of this past fiscal year was the
significant depreciation of the U.S. dollar vs. the currencies of most of its
major trading partners (the Euro, British pound sterling, and Brazilian real
among others).
Although our investment focus is on fundamental research and stock selection,
the markets did affect Fund performance. The increased volatility that occurred
during the periods discussed above hurt some of our investments in higher beta
and riskier regions, such as emerging markets.
Although the Fund's Class A shares showed a strong return of 25.00%, it
underperformed its benchmark in the fiscal year. Among the stock selection
detractors from performance were the Japanese financial services conglomerate
Sumitomo Mitsui and the DRAM chip manufacturer Elpida Memory. Television
Francaise was the biggest disappointment in France. Our overweight in the
healthcare sector and underweight in the materials sector, on average over the
fiscal year, were the largest detractors from performance in terms of sector
selection. Our allocation country selection was slightly negative and the
largest detractors were France, Italy, Finland, and Japan.
Stocks that contributed to the Fund's strong performance were Italian oil-field
and deep-sea platform service company Saipem and China Coal Energy. In
addition, our allocation to the industrial sector contributed positively to
Fund performance. The largest contributors to Fund performance on a country
allocation basis were Germany, the United Kingdom, Norway and China.
- --------
Past performance is no guarantee of future results.
Investing internationally involves special risks, such as currency
fluctuations, and economic and political instability. Diversification does not
insure against market loss.
* The Morgan Stanley Capital International (MSCI) All Country (AC) World ex
U.S. Daily Total Return Net Index is a market capitalization-weighted index
designed to measure equity market performance in 47 global developed and
emerging markets, excluding the U.S. Indices are not managed and an investor
cannot invest directly into an index.
** The MSCI EAFE (Europe, Australia, Far East) Index is a free float-adjusted
market capitalization index that is designed to measure developed market
equity performance, excluding the U.S. & Canada. Indices are not managed and
an investor cannot invest directly into an index.
Securities listed may or may not be a part of current Portfolio construction.
108
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in International Equity Fund Class A
shares would have increased to $15,288. The same amount invested in securities
mirroring the performance of the MSCI All Country World ex-U.S. Daily Total
Return Net Index and the MSCI EAFE Index would be valued at $24,055 and
$21,527, respectively.
[CHART]
MSCI All Country World
International Equity ex-U.S. Daily Total
Class A/#/ MSCI EAFE Index Return Net Index
-------------------- --------------- ----------------------
9/30/1997 $ 9,424 $10,000 $10,000
10/31/1997 8,653 9,231 9,149
11/30/1997 8,521 9,137 9,034
12/31/1997 8,482 9,217 9,138
1/31/1998 8,680 9,638 9,412
2/28/1998 9,112 10,257 10,040
3/31/1998 9,572 10,573 10,387
4/30/1998 9,777 10,656 10,461
5/31/1998 9,770 10,605 10,271
6/30/1998 9,685 10,685 10,233
7/31/1998 9,819 10,793 10,330
8/31/1998 8,454 9,456 8,873
9/30/1998 8,100 9,166 8,686
10/31/1998 8,645 10,122 9,595
11/30/1998 9,069 10,640 10,111
12/31/1998 9,354 11,060 10,456
1/31/1999 9,375 11,027 10,436
2/28/1999 9,048 10,765 10,195
3/31/1999 9,283 11,214 10,704
4/30/1999 9,588 11,668 11,243
5/31/1999 9,148 11,067 10,732
6/30/1999 9,560 11,499 11,235
7/31/1999 9,744 11,841 11,492
8/31/1999 9,737 11,884 11,535
9/30/1999 9,737 12,004 11,613
10/31/1999 10,128 12,453 12,035
11/30/1999 10,909 12,886 12,510
12/31/1999 12,493 14,042 13,696
1/31/2000 11,768 13,150 12,942
2/29/2000 12,663 13,504 13,287
3/31/2000 12,479 14,028 13,802
4/30/2000 11,605 13,289 13,038
5/31/2000 11,271 12,965 12,721
6/30/2000 11,733 13,472 13,265
7/31/2000 11,392 12,907 12,736
8/31/2000 11,640 13,019 12,895
9/30/2000 10,831 12,385 12,179
10/31/2000 10,256 12,093 11,784
11/30/2000 9,687 11,639 11,249
12/31/2000 9,988 12,053 11,627
1/31/2001 9,949 12,047 11,801
2/28/2001 9,123 11,143 10,867
3/31/2001 8,320 10,401 10,099
4/30/2001 8,830 11,123 10,785
5/31/2001 8,490 10,731 10,488
6/30/2001 8,166 10,292 10,085
7/31/2001 7,927 10,105 9,861
8/31/2001 7,672 9,849 9,616
9/30/2001 6,738 8,851 8,596
10/31/2001 6,854 9,078 8,837
11/30/2001 6,900 9,412 9,241
12/31/2001 7,001 9,468 9,360
1/31/2002 6,823 8,965 8,959
2/28/2002 6,931 9,028 9,024
3/31/2002 7,217 9,517 9,514
4/30/2002 7,224 9,580 9,576
5/31/2002 7,309 9,701 9,680
6/30/2002 7,031 9,315 9,262
7/31/2002 6,283 8,395 8,359
8/31/2002 6,159 8,376 8,360
9/30/2002 5,403 7,477 7,474
10/31/2002 5,688 7,878 7,875
11/30/2002 5,928 8,236 8,254
12/31/2002 5,735 7,959 7,987
1/31/2003 5,573 7,627 7,707
2/28/2003 5,503 7,452 7,550
3/31/2003 5,395 7,305 7,404
4/30/2003 5,827 8,021 8,117
5/31/2003 6,144 8,507 8,634
6/30/2003 6,298 8,713 8,873
7/31/2003 6,491 8,924 9,110
8/31/2003 6,676 9,139 9,381
9/30/2003 6,738 9,421 9,644
10/31/2003 7,178 10,008 10,269
11/30/2003 7,286 10,231 10,493
12/31/2003 7,868 11,030 11,294
1/31/2004 7,906 11,186 11,476
2/29/2004 7,937 11,444 11,767
3/31/2004 8,022 11,509 11,840
4/30/2004 7,767 11,248 11,472
5/31/2004 7,744 11,286 11,508
6/30/2004 7,937 11,534 11,758
7/31/2004 7,628 11,159 11,415
8/31/2004 7,698 11,209 11,506
9/30/2004 7,876 11,501 11,876
10/31/2004 8,177 11,894 12,289
11/30/2004 8,686 12,706 13,142
12/31/2004 9,095 13,263 13,707
1/31/2005 8,949 13,020 13,471
2/28/2005 9,373 13,583 14,135
3/31/2005 9,103 13,242 13,752
4/30/2005 8,972 12,930 13,412
5/31/2005 8,980 12,936 13,496
6/30/2005 9,103 13,108 13,750
7/31/2005 9,435 13,510 14,258
8/31/2005 9,814 13,851 14,623
9/30/2005 10,068 14,468 15,377
10/31/2005 9,821 14,046 14,817
11/30/2005 10,122 14,389 15,315
12/31/2005 10,887 15,059 16,052
1/31/2006 11,690 15,983 17,171
2/28/2006 11,497 15,948 17,122
3/31/2006 11,890 16,474 17,619
4/30/2006 12,609 17,260 18,528
5/31/2006 12,122 16,590 17,674
6/30/2006 11,945 16,589 17,656
7/31/2006 12,029 16,753 17,837
8/31/2006 12,292 17,214 18,342
9/30/2006 12,238 17,240 18,354
10/31/2006 12,585 17,911 19,101
11/30/2006 12,933 18,446 19,795
12/31/2006 13,273 19,025 20,412
1/31/2007 13,373 19,154 20,488
2/28/2007 13,334 19,309 20,613
3/31/2007 13,674 19,801 21,194
4/30/2007 14,114 20,680 22,177
5/31/2007 14,408 21,043 22,785
6/30/2007 14,593 21,069 22,979
7/31/2007 14,400 20,758 22,913
8/31/2007 14,238 20,434 22,561
9/30/2007 15,288 21,527 24,055
Class A Class B Class C ++ Class I
------------------ ------------------ ------------------ ------------------
International Average Average Average Average
Equity Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
Fund Return Return+ Return Return+ Return Return+ Return Return+
- ---------------- ------- ---------- ------- ---------- ------- ---------- ------- ----------
1 Year Return 17.79% 25.00% 20.18% 24.18% 23.12% 24.12% 25.06% 25.06%
- --------------------------------------------------------------------------------------------
5 Year Return 21.66% 182.96% 22.17% 174.15% 22.32% 173.85% 23.24% 184.28%
- --------------------------------------------------------------------------------------------
10 Year Return 4.34% 62.23% 4.44% 54.41% 4.29% 52.25% N/A N/A
- --------------------------------------------------------------------------------------------
Since Inception* 4.78% 76.12% 4.86% 67.42% 4.73% 63.00% 14.37% 119.86%
- --------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would have been lower.
* Inception date Class A and Class B: 11/19/96; Class C: 03/06/97; Class I:
11/16/01.
# For the purposes of the graph and the accompanying table, it has been
assumed that the maximum sales charge, of 5.75% of offering price, was
deducted from the initial $10,000 investment in the Fund.
++ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
For the 12 month period ended September 30, 2007, the SunAmerica International
Equity Class A returned 17.79% compared to 31.06% for the MSCI All Country
World ex U.S. Daily Total Return Net Index and 24.86% for the MSCI EAFE Daily
Total Return Net Index. (The performance data and graph do not reflect the
deduction of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares.)
The Fund has replaced the benchmark used in the Line Graph for the prior fiscal
year (the MSCI EAFE Index) with the MSCI ACWI Index, which management believes
represents a better approximation of performance.
- --------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. The fund's daily net asset
values are not guaranteed and shares are not insured by the FDIC, the Federal
Reserve Board or any other agency. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may
be higher or lower than the original cost. Current performance may be higher or
lower than that shown. Performance as of the most recent month end is available
at www.sunamericafunds.com
109
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
SunAmerica Value Fund
For the annual period ended September 30, 2007, the SunAmerica Value Fund
Class A returned 15.80% (before maximum sales charge), outperforming its
benchmark, the Russell 1000 Value Index*, which returned 14.45%; it also
outperformed its previous benchmark, the Russell 3000 Value Index**, which
returned 13.73%.
Equity prices trended higher over the course of the annual period as growth
stocks outperformed their value counterparts across the capitalization
spectrum. While mid-cap stocks outperformed, the large-cap indices also posted
strong results. The combination of steady commodity prices, strong corporate
earnings, and the possibility of another round of interest rate cuts lifted the
stock market higher. However, the final quarter of the annual period was
extremely volatile due to the increasing concerns about a slowing growth for
the U.S. economy. There were also worries that the Federal Reserve might not
reduce rates enough to offset weakness in the housing and mortgage markets,
which were causing much of the economic weakness. In addition to these issues,
inflation continued to haunt investors as energy prices continued to rise. Poor
equity returns in the first two months of the final quarter of the annual
period were offset by a strong rally in September as the Federal Reserve cut
rates and investors began to focus on the low valuations of equities.
In terms of industry groups, all ten Russell 1000 Value sectors generated
positive returns. The Energy (13.44% weight) and Materials (3.87% weight)
sectors paced the rally, advancing 42.43% and 31.89%, respectively. On the
other hand, Financials, the index's top constituent (35.02% weight) was the
principal laggard, returning 0.26%, followed by the Healthcare group (7.09%
weight), appreciating 5.82%.
The primary driver of the Fund's absolute and relative performance against its
benchmark was the stock selection in the Financial, Energy and Telecom Services
groups. Underweight exposure to the Financial and Consumer Discretionary
sectors boosted returns, as did an Energy sector overweight. Gains were offset,
however, by stock selection in the Consumer Staples, Consumer Discretionary and
Healthcare categories, as well as a Utilities underweight.
In terms of individual stock holdings, several Energy and Telecom Services
companies headed the list of top-performing holdings during the annual period:
ExxonMobil Corp., Chevron Corp., ConocoPhillips, AT&T, and Verizon
Communications Inc. On the other hand, investments in Motorola Inc.,
Constellation Brands Inc. Class A, Pfizer Inc., Comcast Corp. Class A, and
Wachovia Corp. hindered results.
- --------
Past performance is no guarantee of future results.
* The Russell 1000 Value Index measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth values.
Indices are not managed and an investor cannot invest directly into an index.
** The Russell 3000 Value Index measures the performance of those Russell 3000
Index companies with lower price-to-book ratios and lower forecasted growth
values. The Russell 3000 Index consists of the 3,000 largest U.S. companies
based on total market capitalization. Indices are not managed and an
investor cannot invest directly into an index.
The Fund has replaced the benchmark used for the prior fiscal year (the Russell
3000 Value Index) with the Russell 1000 Value Index, which management believes
represents a better approximation of performance.
Securities listed may or may not be a part of current Portfolio construction.
110
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in Value Fund Class A shares would
have increased to $20,654. The same amount invested in securities mirroring the
performance of the Russell 1000 Value Index and the Russell 3000 Value Index
would be valued at $23,249 and $23,320, respectively.
[CHART]
Russell 3000 Russell 1000
Value Class A/#@/ Value Index Value Index
----------------- -------------- -------------
9/30/1997 $ 9,427 $10,000 $10,000
10/31/1997 9,034 9,721 9,721
11/30/1997 9,158 10,119 10,150
12/31/1997 9,288 10,419 10,447
1/31/1998 9,095 10,267 10,299
2/28/1998 9,777 10,952 10,992
3/31/1998 10,150 11,600 11,665
4/30/1998 10,249 11,675 11,743
5/31/1998 9,847 11,479 11,568
6/30/1998 9,783 11,606 11,717
7/31/1998 9,404 11,339 11,510
8/31/1998 7,709 9,644 9,797
9/30/1998 7,965 10,196 10,359
10/31/1998 8,734 10,946 11,162
11/30/1998 9,089 11,438 11,682
12/31/1998 9,293 11,825 12,079
1/31/1999 9,282 11,891 12,176
2/28/1999 9,066 11,674 12,004
3/31/1999 9,323 11,891 12,253
4/30/1999 10,039 13,000 13,397
5/31/1999 10,051 12,895 13,250
6/30/1999 10,465 13,276 13,634
7/31/1999 10,121 12,893 13,235
8/31/1999 9,806 12,415 12,744
9/30/1999 9,433 11,995 12,299
10/31/1999 9,789 12,618 13,006
11/30/1999 9,864 12,530 12,905
12/31/1999 10,138 12,612 12,967
1/31/2000 9,838 12,206 12,544
2/29/2000 9,619 11,410 11,612
3/31/2000 10,535 12,701 13,029
4/30/2000 10,425 12,569 12,877
5/31/2000 10,535 12,679 13,013
6/30/2000 10,382 12,163 12,418
7/31/2000 10,266 12,332 12,574
8/31/2000 10,980 13,009 13,273
9/30/2000 10,693 13,116 13,395
10/31/2000 10,852 13,414 13,724
11/30/2000 10,474 12,931 13,214
12/31/2000 11,177 13,625 13,877
1/31/2001 11,431 13,699 13,930
2/28/2001 10,950 13,343 13,543
3/31/2001 10,524 12,889 13,064
4/30/2001 11,039 13,519 13,705
5/31/2001 11,328 13,826 14,013
6/30/2001 11,266 13,579 13,701
7/31/2001 11,328 13,531 13,673
8/31/2001 11,074 13,023 13,125
9/30/2001 10,366 12,069 12,201
10/31/2001 10,373 11,994 12,096
11/30/2001 11,032 12,702 12,799
12/31/2001 11,436 13,035 13,101
1/31/2002 11,314 12,955 13,000
2/28/2002 11,421 12,980 13,021
3/31/2002 11,824 13,620 13,637
4/30/2002 11,565 13,225 13,169
5/31/2002 11,680 13,251 13,235
6/30/2002 11,234 12,527 12,475
7/31/2002 10,616 11,311 11,316
8/31/2002 10,709 11,387 11,401
9/30/2002 9,983 10,152 10,133
10/31/2002 10,522 10,861 10,884
11/30/2002 11,004 11,558 11,570
12/31/2002 10,750 11,056 11,067
1/31/2003 10,465 10,785 10,799
2/28/2003 10,225 10,493 10,511
3/31/2003 10,285 10,517 10,529
4/30/2003 11,006 11,447 11,456
5/31/2003 11,674 12,216 12,195
6/30/2003 11,667 12,373 12,348
7/31/2003 11,727 12,588 12,531
8/31/2003 11,952 12,805 12,727
9/30/2003 11,900 12,679 12,603
10/31/2003 12,268 13,474 13,374
11/30/2003 12,441 13,683 13,555
12/31/2003 13,241 14,499 14,391
1/31/2004 13,257 14,773 14,644
2/29/2004 13,526 15,087 14,958
3/31/2004 13,407 14,981 14,827
4/30/2004 13,407 14,583 14,464
5/31/2004 13,399 14,733 14,612
6/30/2004 13,746 15,113 14,957
7/31/2004 13,565 14,859 14,746
8/31/2004 13,707 15,065 14,956
9/30/2004 13,960 15,328 15,188
10/31/2004 14,212 15,581 15,441
11/30/2004 14,835 16,419 16,221
12/31/2004 15,321 16,955 16,764
1/31/2005 15,136 16,623 16,467
2/28/2005 15,516 17,156 17,012
3/31/2005 15,419 16,910 16,779
4/30/2005 15,162 16,560 16,479
5/31/2005 15,436 17,008 16,875
6/30/2005 15,498 17,242 17,060
7/31/2005 15,816 17,783 17,554
8/31/2005 15,746 17,676 17,477
9/30/2005 15,922 17,900 17,723
10/31/2005 15,578 17,445 17,272
11/30/2005 16,037 18,028 17,837
12/31/2005 15,971 18,117 17,947
1/31/2006 16,304 18,890 18,644
2/28/2006 16,437 18,995 18,758
3/31/2006 16,580 19,311 19,012
4/30/2006 16,970 19,761 19,495
5/31/2006 16,590 19,233 19,002
6/30/2006 16,713 19,366 19,124
7/31/2006 17,151 19,768 19,589
8/31/2006 17,389 20,122 19,917
9/30/2006 17,836 20,505 20,314
10/31/2006 18,359 21,210 20,979
11/30/2006 18,606 21,705 21,458
12/31/2006 19,061 22,165 21,939
1/31/2007 19,179 22,452 22,220
2/28/2007 18,762 22,109 21,873
3/31/2007 19,018 22,444 22,212
4/30/2007 19,799 23,219 23,032
5/31/2007 20,536 24,058 23,863
6/30/2007 20,194 23,496 23,306
7/31/2007 19,574 22,332 22,228
8/31/2007 20,045 22,599 22,477
9/30/2007 20,654 23,320 23,249
Class A Class B Class C++ Class I Class Z
------------------ ------------------ ------------------ ------------------ ------------------
Average Average Average Average Average
Value Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
Fund Return Return+ Return Return+ Return Return+ Return Return+ Return Return+
- ---------------- ------- ---------- ------- ---------- ------- ---------- ------- ---------- ------- ----------
1 Year Return 9.16% 15.80% 11.07% 15.07% 14.07% 15.07% 15.89% 15.89% 16.48% 16.48%
- ---------------------------------------------------------------------------------------------------------------
5 Year Return 14.28% 106.89% 14.70% 100.54% 14.92% 100.43% 15.78% 108.06% 16.33% 113.07%
- ---------------------------------------------------------------------------------------------------------------
10 Year Return 7.52% 119.09% 7.61% 108.23% 7.47% 105.45% N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------
Since Inception* 9.85% 194.28% 9.93% 179.58% 9.18% 153.03% 11.55% 89.83% 8.25% 112.32%
- ---------------------------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would have been lower.
* Inception date: Class A and Class B: 11/19/96; Class C: 03/06/97; Class I:
11/16/01; Class Z: 04/03/98.
# For the purposes of the graph and the accompanying table, it has been
assumed that the maximum sales charge, of 5.75% of offering price, was
deducted from the initial $10,000 investment in the Fund.
++ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
For the 12 month period ended September 30, 2007, the SunAmerica Value Class A
returned 9.16% compared to 14.45% for the Russell 1000 Value Index and 13.73%
for the Russell 3000 Value Index. (The performance data and graph do not
reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.)
The Fund has replaced the benchmark used in the Line Graph for the prior fiscal
year (the Russell 3000 Value Index) with the Russell 1000 Value Index, which
management believes represents a better approximation of performance.
- --------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. The fund's daily net asset
values are not guaranteed and shares are not insured by the FDIC, the Federal
Reserve Board or any other agency. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may
be higher or lower than the original cost. Current performance may be higher or
lower than that shown. Performance as of the most recent month end is available
at www.sunamericafunds.com
111
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
SunAmerica Disciplined Growth Fund
For the annual period ended September 30, 2007, the SunAmerica Disciplined
Growth Fund Class A returned 33.13% (before maximum sales charge),
outperforming its benchmark, the S&P 500 Index*, which returned 16.44%.
During the course of the annual period, the Fund changed its name from the
SunAmerica Tax Managed Equity Fund to the SunAmerica Disciplined Growth Fund.
Stock selection is focused on growth-oriented equities of all capitalization
ranges. The Fund will utilize growth, valuation, and behavioral factors in
regard to stock selection and portfolio construction.
Although equity market conditions were challenging during the fiscal period
ended September 30, 2007, U.S. stock indices concluded another year with solid
results. Growth stocks led the market higher and the S&P 500 Index finished the
period at near record levels.
Several macroeconomic factors greatly influenced the investment environment
during the fiscal year, including steady corporate spending and profit growth.
At the same time, core inflation, a key indicator monitored by the Federal
Reserve, remained stable. Companies that do business overseas benefited from
strong international economic growth trends and a weakening dollar. While the
deteriorating housing market and sub-prime mortgage problems created liquidity
concerns in the U.S. credit markets, a reduction in the Federal Funds rate by
50-basis points, to 4.75%, seemed to instill confidence and prompted a
significant equity rally. This reduction in the Federal Funds rate and ensuing
equity rally allowed most domestic stock indices to finish the annual period on
a positive note.
The Fund's absolute performance and relative outperformance of its benchmark
was primarily due to the combination of overweight exposure and stock selection
in the Information Technology space, especially in the Hardware/Equipment
sub-sector. Security selection in Industrials and Materials was also additive,
as was an underweight in the Financial sector. Conversely, stock selection in
the Financial, Consumer Staples and Healthcare groups was a drag on performance
as were Energy and Utility underweights.
Blue Coat Systems Inc., Apple Inc., NAVTEQ Corp., Precision Castparts Corp.,
and Alliant Techsystems Inc. were the top contributors during the period.
Knight Capital Group Inc. Class A, AerCap Holdings N.V., Polycom Inc., Comcast
Corp. Class A and Noven Pharmaceuticals were the leading detractors from
performance.
- --------
Past performance is no guarantee of future results.
* The S&P 500 Index is the Standard & Poor's 500 Composite Stock Price Index, a
widely recognized, unmanaged index of common stock prices. Indices are not
managed and an investor cannot invest directly into an index.
Securities listed may or may not be a part of current Portfolio construction.
112
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
Since the Fund's inception on March 1, 1999, $10,000 invested in Disciplined
Growth Fund Class A shares would be valued at $13,274. The same amount invested
in securities mirroring the performance of the S&P 500 Index would be valued at
$14,150.
[CHART]
Disciplined Growth
Class A/#/ S&P 500 Index
-------------------- -------------
3/1/1999 $ 9,427 $10,000
3/31/1999 9,842 10,400
4/30/1999 10,324 10,803
5/31/1999 10,091 10,548
6/30/1999 10,581 11,133
7/31/1999 10,204 10,786
8/31/1999 10,068 10,732
9/30/1999 9,759 10,439
10/31/1999 10,294 11,099
11/30/1999 10,535 11,325
12/31/1999 10,950 11,991
1/31/2000 10,716 11,389
2/29/2000 10,626 11,173
3/31/2000 11,561 12,267
4/30/2000 10,943 11,897
5/31/2000 10,596 11,653
6/30/2000 10,837 11,941
7/31/2000 10,837 11,754
8/31/2000 11,471 12,484
9/30/2000 10,965 11,825
10/31/2000 10,965 11,775
11/30/2000 10,113 10,847
12/31/2000 10,128 10,900
1/31/2001 10,475 11,286
2/28/2001 9,472 10,257
3/31/2001 8,824 9,608
4/30/2001 9,517 10,354
5/31/2001 9,608 10,424
6/30/2001 9,382 10,170
7/31/2001 9,306 10,070
8/31/2001 8,786 9,439
9/30/2001 8,183 8,677
10/31/2001 8,326 8,843
11/30/2001 8,974 9,521
12/31/2001 9,035 9,604
1/31/2002 8,733 9,464
2/28/2002 8,529 9,282
3/31/2002 8,876 9,631
4/30/2002 8,198 9,047
5/31/2002 8,190 8,980
6/30/2002 7,609 8,340
7/31/2002 7,006 7,690
8/31/2002 7,081 7,741
9/30/2002 6,282 6,900
10/31/2002 6,787 7,507
11/30/2002 7,142 7,949
12/31/2002 6,742 7,482
1/31/2003 6,531 7,286
2/28/2003 6,440 7,177
3/31/2003 6,478 7,246
4/30/2003 7,014 7,843
5/31/2003 7,315 8,256
6/30/2003 7,376 8,361
7/31/2003 7,481 8,508
8/31/2003 7,579 8,674
9/30/2003 7,489 8,582
10/31/2003 7,911 9,067
11/30/2003 7,979 9,147
12/31/2003 8,416 9,627
1/31/2004 8,514 9,803
2/29/2004 8,620 9,939
3/31/2004 8,499 9,789
4/30/2004 8,371 9,636
5/31/2004 8,439 9,768
6/30/2004 8,590 9,958
7/31/2004 8,348 9,629
8/31/2004 8,424 9,667
9/30/2004 8,499 9,772
10/31/2004 8,567 9,921
11/30/2004 8,846 10,323
12/31/2004 9,112 10,674
1/31/2005 8,877 10,414
2/28/2005 9,013 10,633
3/31/2005 8,854 10,445
4/30/2005 8,657 10,247
5/31/2005 8,861 10,572
6/30/2005 8,824 10,588
7/31/2005 9,036 10,981
8/31/2005 8,907 10,881
9/30/2005 8,968 10,969
10/31/2005 8,778 10,786
11/30/2005 9,043 11,194
12/31/2005 9,260 11,198
1/31/2006 10,799 11,494
2/28/2006 10,273 11,525
3/31/2006 10,662 11,669
4/30/2006 11,073 11,826
5/31/2006 10,372 11,485
6/30/2006 10,342 11,501
7/31/2006 9,946 11,572
8/31/2006 10,060 11,847
9/30/2006 9,976 12,152
10/31/2006 10,220 12,548
11/30/2006 10,700 12,787
12/31/2006 10,722 12,966
1/31/2007 10,913 13,162
2/28/2007 10,738 12,905
3/31/2007 10,898 13,049
4/30/2007 11,141 13,627
5/31/2007 11,614 14,103
6/30/2007 11,614 13,869
7/31/2007 11,614 13,439
8/31/2007 12,375 13,640
9/30/2007 13,274 14,150
Class A Class B Class C++
------------------ ------------------ ------------------
Disciplined Average Average Average
Growth Annual Cumulative Annual Cumulative Annual Cumulative
Fund Return Return+ Return Return+ Return Return+
- ---------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return 25.47% 33.13% 28.35% 32.35% 31.22% 32.22%
- -------------------------------------------------------------------------
5 Year Return 14.77% 111.30% 15.19% 104.82% 15.40% 104.69%
- -------------------------------------------------------------------------
Since Inception* 3.35% 40.81% 3.43% 33.52% 3.40% 33.29%
- -------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would have been lower.
* Inception date: Class A, Class B and Class C: 03/01/99
# For the purposes of the graph and the accompanying table, it has been
assumed that the maximum sales charge, of 5.75% of offering price, was
deducted from the initial $10,000 investment in the Fund.
++ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
For the 12 month period ended September 30, 2007, the SunAmerica Disciplined
Growth Fund Class A returned 25.47% compared to 16.44% for the S&P 500 Index.
(The performance data and graph do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.)
Performance information that includes a period prior to May 15, 2007 reflects
management of the Fund for such period in accordance with the investment goals
and principal investment strategies and techniques ("policies") of the Fund as
a tax managed fund. Accordingly, any such performance information may not
reflect (or may only partially reflect) the management of the Fund in
accordance with its current investment goals and policies, depending on the
period shown.
- --------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. The fund's daily net asset
values are not guaranteed and shares are not insured by the FDIC, the Federal
Reserve Board or any other agency. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may
be higher or lower than the original cost. Current performance may be higher or
lower than that shown. Performance as of the most recent month end is available
at www.sunamericafunds.com
113
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
SunAmerica International Small-Cap Fund
The SunAmerica International Small-Cap Fund Class A returned 26.70% (before
maximum sales charge) for the annual period ended September 30, 2007. The Fund
outperformed its benchmark, the MSCI EAFE Small Cap Index*, which returned
19.10% for the annual period.
Global equity markets over the last 12 months have continued to rise strongly
despite the occasional wobble. Small-cap stocks in Europe and Asia rose by
42.7% and 34.5%, respectively; whereas in Japan, small-cap stocks fell by
nearly 17%, in U.S. dollar terms. The poor performance can be attributed to a
combination of negative earnings surprises, thin liquidity and of course,
continual concerns about the pace of global economic growth.
In the first calendar quarter of 2007, markets rallied strongly but sold off in
the final week of February when the Chinese government made hawkish statements
regarding the potential cooling of their local equity market. The markets
reflected concerns several times over the last 18 months about the state of the
U.S. economy. The emergence of losses in the U.S. subprime mortgage market in
the Fund's third fiscal quarter forced the U.S. Federal Reserve to cut interest
rates in order to help restore confidence in the market.
Stock selection was the primary source of the portfolio's outperformance over
its benchmark, with consumer discretionary, financial and industrial sectors
providing the strongest contribution. Consumer staples, healthcare and
telecommunication services were the only sectors where stock selection
detracted from performance.
JB Hi-Fi, an electronics retailer in Australia and New Zealand, and Hugo Boss,
the German based fashion company, were among the strongest contributors in the
consumer discretionary sector. Hellenic Exchanges, a Greek-based holding
company of financial market exchanges and Elringklinger, a German-based
manufacturer of automobile spare parts, were strong contributors within the
financial and industrial sectors, respectively. Japan-based Culture Convenience
Club, UK-based Wolfson Microelectronics and Japan-based Park 24 were among the
strongest detractors to performance.
- --------
Past performance is no guarantee of future results.
Investing internationally involves special risks, such as currency
fluctuations, and economic and political instability. Diversification does not
insure against market loss.
* The MSCI EAFE Small Cap Index is a free-float adjusted market capitalization
index. It consists of 21 developed market country indices in Europe,
Australasia and the Far East. Price indices measure market price performance
only, dividends are not considered in price indices. Indices are not managed
and an investor cannot invest directly into an index.
Securities listed may or may not be a part of current Portfolio construction.
114
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
Since inception, $10,000 invested in International Small-Cap Class A shares
would be valued at $10,558. The same amount invested in securities mirroring
the performance of the MSCI EAFE Small-Cap Index would be valued at $10,887.
[CHART]
International MSCI EAFE Small-Cap
Small-Cap Class A/#/ Index
-------------------- -------------------
5/01/2006 $ 9,427 $10,000
5/31/2006 8,650 9,309
6/30/2006 8,431 9,104
7/31/2006 8,213 8,858
8/31/2006 8,311 9,106
9/30/2006 8,333 9,141
10/31/2006 8,673 9,476
11/30/2006 8,959 9,883
12/31/2006 9,336 10,211
1/31/2007 9,578 10,425
2/28/2007 9,608 10,599
3/31/2007 9,970 10,937
4/30/2007 10,294 11,342
5/31/2007 10,558 11,424
6/30/2007 10,596 11,399
7/31/2007 10,603 11,354
8/31/2007 10,181 10,768
9/30/2007 10,558 10,887
Class A Class B Class C
------------------ ------------------ ------------------
International Average Average Average
Small-Cap Annual Cumulative Annual Cumulative Annual Cumulative
Fund Return Return+ Return Return+ Return Return+
- ---------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return 19.45% 26.70% 21.95% 25.95% 24.95% 25.95%
- -------------------------------------------------------------------------
Since Inception* 3.91% 12.00% 4.92% 11.04% 7.62% 10.96%
- -------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would have been lower.
* Inception date: Class A, Class B and Class C: 05/02/06.
# For the purposes of the graph and the accompanying table, it has been
assumed that the maximum sales charge, of 5.75% of offering price, was
deducted from the initial $10,000 investment in the Fund.
For the 12 month period ended September 30, 2007, the SunAmerica International
Small-Cap Fund Class A returned 19.45% compared to 19.10% for the MSCI EAFE
Small-Cap Index. (The performance data and graph do not reflect the deduction
of taxes that a shareholder would pay on fund distributions or the redemption
of fund shares.)
- --------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. The fund's daily net asset
values are not guaranteed and shares are not insured by the FDIC, the Federal
Reserve Board or any other agency. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may
be higher or lower than the original cost. Current performance may be higher or
lower than that shown. Performance as of the most recent month end is available
at www.sunamericafunds.com
115
[LOGO] AIG Sun America
Mutual Funds
Harborside Financial Center
3200 Plaza 5
Jersey City, NJ 07311-4992
Trustees Shareholder Servicing This report is submitted
Samuel M. Eisenstat Agent solely for the general
Peter A. Harbeck AIG SunAmerica Fund information of
Dr. Judith L. Craven Services, Inc. shareholders of the
William F. Devin Harborside Financial Funds. Distribution of
Stephen J. Gutman Center this report to persons
Jeffrey S. Burum 3200 Plaza 5 other than shareholders
William J. Shea Jersey City, NJ of the Funds is
07311-4992 authorized only in
Officers con-nection with a
Vincent M. Marra, Custodian and Transfer currently effective
President and Chief Agent pro-spectus, setting
Executive Officer State Street Bank and forth details of the
Donna M. Handel, Trust Company Funds, which must precede
Treasurer P.O. Box 5607 or accom-pany this report.
Timothy P. Pettee, Vice Boston, MA 02110
President DELIVERY OF SHAREHOLDER
James Nichols, Vice VOTING PROXIES ON TRUST DOCUMENTS
President PORTFOLIO SECURITIES The Funds have adopted a
Cynthia Gibbons, Vice A description of the policy that allows them
President and Chief policies and procedures to send only one copy of
Compliance Officer that the Trust uses to a Fund's prospectus,
Gregory N. Bressler, determine how to vote proxy material, annual
Chief Legal Officer proxies relating to report and semi-annual
and Secretary securities held in a report (the "shareholder
Gregory R. Kingston, Fund's portfolio which is documents") to
Vice President and available in the Trust's shareholders with
Assistant Treasurer Statement of Additional multiple accounts
Kathleen Fuentes, Information, may be residing at the same
Assistant Secretary obtained without charge "household." This
Nori L. Gabert, Vice upon request, by calling practice is called
President and (800) 858-8850. This householding and reduces
Assistant Secretary in-formation is also Fund expenses, which
Matthew Hackethal, available from the EDGAR benefits you and other
Anti-Money Laundering database on the U.S. shareholders. Unless the
Compliance Officer Securities and Ex-change Funds receive
John E. Smith Jr., Commission's website at instructions to the
Assistant Treasurer http://www.sec.gov. con-trary, you will only
receive one copy of the
Investment Adviser PROXY VOTING RECORD ON shareholder documents.
AIG SunAmerica Asset SUNAMERICA EQUITY FUNDS The Funds will continue
Management Corp. Information regarding how to household the
Harborside Financial SunAmerica Equity Funds share-holder documents
Center voted proxies relating to indefinitely, until we
3200 Plaza 5 securities held in are instructed otherwise.
Jersey City, NJ SunAmerica Equity Funds If you do not wish to
07311-4992 during the most recent participate in
twelve month period ended householding, please
Distributor June 30 is available, contact Shareholder
AIG SunAmerica Capital once filed with the U.S. Services at (800)
Services, Inc. Securities and Exchange 858-8850 ext. 6010 or
Harborside Financial Commission, without send a written request
Center charge, upon request, by with your name, the name
3200 Plaza 5 calling (800) 858-8850 or of your fund(s) and your
Jersey City, NJ on the U.S. Securities account number(s) to AIG
07311-4992 and Exchange Commission's SunAmerica Mutual Funds
website at c/o BFDS, P.O. Box
http://www.sec.gov. 219186, Kansas City MO,
64121-9186. We will
DISCLOSURE OF QUARTERLY resume individual
PORTFOLIO HOLDINGS mailings for your account
The Trust is required to within thirty (30) days
file its complete of receipt of your
schedule of portfolio request.
holdings with the U.S.
Securities and Exchange
Commission for its first
and third fiscal quarters
on Form N-Q. The Trust's
Forms N-Q are available
on the U.S. Securities
and Exchange Commission's
website at
http://www.sec.gov. You
can also review and
obtain copies of the
Forms N-Q at the U.S.
Securities and Exchange
Com-mission's Public
Reference Room in
Wash-ington, DC
(information on the
operation of Public
Reference Room may be
obtained by calling
1-800-SEC-0330).
116
Distributed by:
AIG SunAmerica Capital Services, Inc.
Investors should carefully consider the investment objectives, risks, charges
and expenses of any mutual fund before investing. This and other important
information is contained in the prospectus, which can be obtained from your
financial adviser or from the AIG SunAmerica Sales Desk at 800-858-8850, ext.
6003. Read the prospectus carefully before investing.
www.sunamericafunds.com
EQANN - 9/07
[LOGO]
[LOGO]
Item 2. Code of Ethics
The SunAmerica Equity Funds (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.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Trustees has determined that William J. Shea,
the Chairman of the registrant's Audit Committee, qualifies as an audit
committee financial expert, as defined in the instructions to Item
3(a) of Form N-CSR. Mr. Shea is considered to be "independent" for
purposes of Item 3(a)(2) of Form N-CSR.
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:
2006 2007
(a) Audit Fees ....................$ 241,000 $ 234,410
(b) Audit-Related Fees ............$ 0 $ 0
(c) Tax Fees ......................$ 71,550 $ 81,000
(d) 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. Tax Fees principally include tax compliance, tax advice, tax
planning and preparation of tax returns.
Aggregate fees billed to the investment adviser and Adviser Affiliates
(as defined below in Item 4(e)) that are required to be pre-approved
pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X for
the last two fiscal years for professional services rendered by the
registrant's principal accountant were as follows:
2006 2007
(b) Audit-Related Fees ............$ 0 $ 0
(c) Tax Fees ......................$ 0 $ 0
(d) All Other Fees ................$ 1,768,468 $ 1,927,000
All other fees include amounts related to a SAS 70 Report on the
Processing of Transactions by Service Organizations.
(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 Affiliates") 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. The audit committee has not
presently established any pre-approval policies and procedures that
permit the pre-approval of the above services other than by the full
audit committee. Certain de minimis exceptions are allowed for non-
audit services in accordance with Rule 2-01(c)(7)(i)(C) of Regulation
S-X as set forth in the registrant's audit committee charter.
(2) No services included in (b)-(d) above in connection with fees
billed to the registrant or the investment adviser or Adviser
Affiliates 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 Affiliates that provides ongoing services to the registrant
for 2007 and 2006 were $1,927,000 and $1,856,118, respectively.
(h) Non-audit services rendered to the registrant's investment adviser and
any Adviser Affiliate that provides ongoing services to the registrant
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.
Included in Item 1 to the Form.
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.
There were no material changes to the procedures by which shareholders
may recommend nominees to the registrant's Board of Trustees that were
implemented after the registrant last provided disclosure in response
to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by 22(b)(15)) of Schedule 14A (17 CFR 240.14a-
101), or this Item 10.
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 as defined under Rule 30a-3(c) under
the Investment Company Act of 1940 (17 CFR 270.30a-3(c)). Based on
that evaluation, the registrant's management, including the President
and Treasurer, concluded that the registrant's disclosure controls and
procedures are effective.
(b) There was no change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act
of 1940 (17 CFR 270.30a-3(d))) that occurred during the registrant's
last fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal contro1 over financial reporting.
Item 12. Exhibits.
(a) (1) Code of Ethics applicable to its Principal Executive and
Principle Accounting Officers pursuant to Section 406 of the
Sarbanes-Oxley Act of 2002 attached hereto as Exhibit 99.406.
Code of Ethics.
(2) Certifications 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 Rule 30a-2(b) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) and Section 906 of the Sarbanes-
Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SunAmerica Equity Funds
By: /s/ Vincent M. Marra
-------------------
Vincent M. Marra
President
Date: December 7, 2006
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: December 7, 2006
By: /s/ Donna M. Handel
-------------------
Donna M. Handel
Treasurer
Date: December 7, 2006