UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-3807
---------------------------------------------
SunAmerica Money Market Funds, Inc
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Harborside Financial Center, 3200 Plaza 5 Jersey City, NJ 07311
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
John T. Genoy
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) 324-6414
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Date of fiscal year end: December 31
--------------------------
Date of reporting period: December 31, 2007
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Item 1. Reports to Stockholders
[PHOTO]
ANNUAL REPORT 2007
SUNAMERICA
Money Market Funds
[LOGO]
www.sunamericafunds.com
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December 31, 2007 ANNUAL REPORT
SUNAMERICA MONEY MARKET FUNDS, INC.
SunAmerica Money Market Fund (SMAXX)
SunAmerica Municipal Money Market Fund (NMAXX)
Table of Contents
SHAREHOLDERS' LETTER................................... 1
FUND REVIEWS........................................... 2
EXPENSE EXAMPLE........................................ 4
STATEMENT OF ASSETS AND LIABILITIES.................... 6
STATEMENT OF OPERATIONS................................ 7
STATEMENT OF CHANGES IN NET ASSETS..................... 8
FINANCIAL HIGHLIGHTS................................... 9
PORTFOLIO OF INVESTMENTS............................... 12
NOTES TO FINANCIAL STATEMENTS.......................... 18
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 26
APPROVAL OF ADVISORY AGREEMENTS........................ 27
DIRECTORS AND OFFICERS INFORMATION..................... 31
SHAREHOLDER TAX INFORMATION............................ 34
December 31, 2007 ANNUAL REPORT
Shareholders' Letter
Dear Shareholder:
We are pleased to present the annual report for the SunAmerica Money Market
Fund and the SunAmerica Municipal Money Market Fund. Included is a discussion
of the market conditions that have shaped the investment environment over the
fiscal year ended December 31, 2007.
The past year certainly was an interesting and challenging one in the
financial markets. Concerns over the state of the housing market and the
potential impact on the consumer along with price increases in food and energy
transitioned during the summer to worries about subprime mortgages. The fear of
a credit crunch weighed on investors who became risk-averse as the stock market
sold off in both August and November. In September, the Federal Reserve Open
Market Committee lowered the Federal Funds target rate for the first time in
2007 signaling concerns that the economy's prospects were then at least equal
with inflationary concerns. Unease about the housing market and the potential
dampening effect of constrained lenders continued through year-end with the
Federal Reserve continuing to ease. The Federal Funds rate ended the year at
4.25% -- 100 basis points lower than where it began the year.
Though the markets have posed challenges, we remain diligent in the
management of your assets and thank you for your continued investment in our
Funds.
Sincerely,
/s/ Peter A. Harbeck
Peter A. Harbeck
President and CEO
AIG SunAmerica Asset Management Corp.
- --------
Past performance is no guarantee of future results.
An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Fund.
1
SunAmerica Money Market Fund
Andrew Doulos, Portfolio Manager
AIG SunAmerica Asset Management Corp.
The SunAmerica Money Market Fund (Class A) returned 4.32%, compared to the
three-month T-Bill index which returned 4.40% in the annual period ended
December 31, 2007.
The first half of the year was relatively calm, with the Federal Open Market
Committee holding short-term interest rates steady at 5.25%. However, during
the summer the subprime mortgage crisis and ensuing impact on the credit
markets impacted all financial markets including money markets. Particularly
hard hit was asset-backed commercial paper, a favored investment in many money
market funds.
Prior to the onset of the credit crisis, we boosted our investments in
Treasuries. While this has had an adverse effect on the Fund's yield we
believed this was a prudent action to preserve capital during an uncertain time
in the financial markets.
In response to the crisis in both housing and credit, the Federal Reserve
held an unscheduled meeting in August, cutting the Discount Rate (the rate
charged to Banks directly borrowing from the Federal Reserve) to 5.75%, and
embarking on a series of Federal Funds rate cuts. The last 25 basis point
decrease in December, the third consecutive decrease, brought their target rate
to 4.25%.
These actions by the Federal Reserve impacted the Fund's performance. Yields
on money market securities decreased steadily throughout the period with
one-month Certificates of Deposit yielding approximately 4.40% at year end,
down from roughly 5.15% at the start of the year.
Given our outlook for continued decreases in the Federal Funds rate, we
continued to emphasize longer fixed-rate and floating-rate securities while
selectively purchasing short-dated securities when relative value opportunities
were discovered. The Fund maintained an average maturity of 38 days on
December 31, 2007.
- --------
An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Fund.
Past performance is no guarantee of future results.
Securities listed may or may not be a part of current portfolio construction.
2
SunAmerica Municipal Money Market Fund
J. Hutchison Bryan, Portfolio Manager
AIG Investments
The SunAmerica Municipal Money Market Fund (Class A) returned 2.84% for the
annual period ended December 31, 2007.
The economy and stock market faced a turbulent year. Concerns over the state
of the housing market and the potential impact on the consumer along with price
increases in commodities transitioned during the summer to worries about
subprime mortgage loans and securities backed by such instruments. The
apprehension about a credit crunch and reduced liquidity began to weigh on the
economy and the financial markets, and investors flocked to the safety of
Treasury bonds as the stock market sold off in both August and November. In
September, the Federal Reserve Open Market Committee lowered the Federal Funds
target rate for the first time in 2007, signaling concerns that the economy's
prospects were then at least equal with inflationary concerns. Unease about the
housing market and the potential dampening effect of constrained lenders
continued through year-end.
The relationship between, and levels of, shorter-term floating and
longer-term fixed-rate money market securities are the primary impact on the
Fund, depending upon the Fund's weighted average maturity. The portfolio
weighted average maturity ranged from a low of 5.6 days in October to a high of
27.9 days in November during the fiscal year.
In the first quarter, the Fund held the majority of its assets in variable
rate demand notes whose rates reset weekly. The Fund was diversified among
various sectors and states and held a small portion of fixed-maturity notes
which matured in the third quarter of 2007. The Fund maintained this profile in
the second quarter but increased its holdings of fixed-maturity notes, with the
longest maturity extending to April 2008.
In the third quarter, the municipal money market experienced a quarter
influenced by abrupt increases in short taxable rates, as concerns generated by
subprime mortgage exposure roiled the credit markets. During the quarter, the
Fund invested a larger portion of its assets in variable-rate securities, with
a weighting toward revenue-backed obligations in the transportation, housing,
water, sewer and healthcare sectors. Variable-rate revenue-backed obligations
typically reset at higher yields than general obligation securities. The Fund's
longest maturity was a fixed coupon note, maturing just over six months from
quarter end.
With the shift to a greater portion of assets invested in variable-rate
securities, the Fund did not fully participate in the rally of longer money
market maturities, but during August and September was able to benefit from the
increases in variable-rate security yields.
The Fund did not purchase longer-term securities until early in October and
again in November. After those extensions of the Fund's weighted average
maturity it was able to participate in the overall rally that took place in the
fourth quarter as both short-term fixed and floating rates declined. At the end
of the fiscal year, the longest maturity was a North Texas Tollway Authority
security: a fixed coupon note with a maturity date of November 19, 2008.
The Fund ended the year with a weighted average maturity of 16.6 days.
Variable rate demand obligations make up 90.9% of the Fund, with Revenue Notes
comprising 5.7% and general obligation notes/bonds at 3.4%. As of year end, our
largest sector exposures are in the housing (approx. 17%), general obligation
(approx. 17%) and education (approx. 15%) sectors with North Carolina (approx.
11%), Illinois (approx. 10%) and Michigan (approx. 8%) representing our three
largest State exposures.
- --------
An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Fund.
Past performance is no guarantee of future results.
Holdings and weightings are as of December 31, 2007 and are subject to change
after that date. The portfolio is actively managed and its holdings and
composition will differ over time.
3
SunAmerica Money Market Funds
EXPENSE EXAMPLE -- December 31, 2007 -- (unaudited)
Disclosure of Portfolio Expenses in Shareholder Reports
As a shareholder of a Fund in the SunAmerica Money Market Funds, Inc., you may
incur two types of costs: (1) transaction costs, including sales charges on
purchase payments and contingent deferred sales charges and (2) ongoing costs,
including management fees, distribution and service fees, and other Fund
expenses. This 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 July 1, 2007 and held until December 31,
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 December 31, 2007" to estimate the expenses you paid on your
account during this period. For shareholder accounts in classes other than
Class I, the "Expenses Paid During the Six Months Ended December 31, 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 December 31, 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 a
full description of these fees. Had these fees been included, the "Expenses
Paid During the Six Months Ended December 31, 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 Portfolios and other funds. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of other funds. For shareholder accounts in classes other
than Class I, the "Expenses Paid During the Six Months Ended December 31, 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 December 31, 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 a
full description of these fees. Had these fees been included, the "Expenses
Paid During the Six Months Ended December 31, 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, 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.
4
SunAmerica Money Market Funds
EXPENSE EXAMPLE -- December 31, 2007 -- (unaudited) (continued)
Actual Hypothetical
--------------------------------------------------- ---------------------------------
Ending Ending Account
Account Value Expenses Paid Value using
Beginning Using Actual During the Beginning a Hypothetical 5%
Account Value Returns at Six Months Ended Account Value Assumed Return at
at July 1, 2007 December 31, 2007 December 31, 2007 at July 1, 2007 December 31, 2007
--------------- ----------------- ----------------- --------------- -----------------
Money Market Fund
Class A................. $1,000.00 $1,020.46 $4.58 $1,000.00 $1,020.67
Class B................. $1,000.00 $1,016.23 $9.00 $1,000.00 $1,016.28
Class C ................ $1,000.00 $1,016.16 $8.94 $1,000.00 $1,016.33
Class I#................ $1,000.00 $1,021.03 $4.08 $1,000.00 $1,021.17
Municipal Money Market Fund
Class A#................ $1,000.00 $1,013.75 $4.21 $1,000.00 $1,021.02
Class B#................ $1,000.00 $1,009.51 $8.61 $1,000.00 $1,016.64
Class C#................ $1,000.00 $1,009.50 $8.61 $1,000.00 $1,016.64
------------------
Expense
Expenses Paid Ratio
During the as of
Six Months Ended December 31,
December 31, 2007 2007*
----------------- ------------
Money Market Fund
Class A................. $4.58 0.90%
Class B................. $9.00 1.77%
Class C ................ $8.94 1.76%
Class I#................ $4.08 0.80%
Municipal Money Market Fund
Class A#................ $4.23 0.83%
Class B#................ $8.64 1.70%
Class C#................ $8.64 1.70%
- --------
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 184 days divided by 365
days. These ratios do not reflect transaction costs, including sales charges
on purchase payments, contingent deferred sales charges, small account fees
and administrative fees, if applicable to your account. Please refer to your
Prospectus and/or your qualified retirement plan document for more
information.
# During the stated period, the investment adviser and distributor either
waived a portion of or all of the fees and assumed a portion of or all
expenses for the Funds. As a result, if these fees and expenses had not been
waived, the "Actual/Hypothetical Ending Account Value" would have been lower
and the "Actual/Hypothetical Expenses Paid During the Six Months Ended
December 31, 2007" and the "Expense Ratios" would have been higher.
5
SunAmerica Money Market Funds
STATEMENT OF ASSETS AND LIABILITIES -- December 31, 2007
Money Market Municipal Money
Fund Market Fund
--------------- ---------------
ASSETS:
Short-term investment securities, at value* (unaffiliated)........ $ 1,216,235,371 $ 154,039,354
Repurchase agreements (cost approximates market value)............ 50,533,000 --
--------------- ---------------
Total Investments............................................... $ 1,266,768,371 $ 154,039,354
--------------- ---------------
Cash.............................................................. 772 120,993
Receivable for:
Fund shares sold................................................ 1,138,119 133
Dividends and interest.......................................... 6,471,157 694,040
Prepaid expenses and other assets................................. 10,201 899
Due from investment adviser for expense reimbursements/fee waivers 114 --
--------------- ---------------
Total Assets.................................................... 1,274,388,734 154,855,419
--------------- ---------------
LIABILITIES:
Payable for:
Fund shares redeemed............................................ 416,464 2,137
Investment purchased............................................ 29,768,775 --
Investment advisory and management fees......................... 498,671 37,792
Distribution and service maintenance fees....................... 181,896 16,712
Transfer agent fees and expenses................................ 267,255 26,472
Dividends payable............................................... 68,438 1,973
Directors' fees and expenses.................................... 223,736 6,682
Other accrued expenses.......................................... 260,420 52,010
--------------- ---------------
Total Liabilities............................................... 31,685,655 143,778
--------------- ---------------
Net Assets..................................................... $ 1,242,703,079 $ 154,711,641
=============== ===============
NET ASSETS REPRESENTED BY:
Common stock, $.001 par value (10 billion shares authorized)...... $ 1,242,655 $ 154,711
Paid-in capital................................................... 1,241,317,223 154,556,350
--------------- ---------------
1,242,559,878 154,711,061
Accumulated undistributed net investment income (loss)............ 84,794 580
Accumulated realized gain (loss) on investment.................... 58,407 --
--------------- ---------------
Net Assets..................................................... $ 1,242,703,079 $ 154,711,641
=============== ===============
Class A:
Net assets........................................................ $ 1,182,788,518 $ 153,905,961
Shares outstanding................................................ 1,182,738,927 153,905,254
Net asset value and redemption price per share
(excluding any applicable contingent deferred sales charge)...... $ 1.00 $ 1.00
=============== ===============
Class B:
Net assets........................................................ $ 18,325,509 $ 188,853
Shares outstanding................................................ 18,325,334 188,794
Net asset value and redemption price per share
(excluding any applicable contingent deferred sales charge)...... $ 1.00 $ 1.00
=============== ===============
Class C:
Net assets........................................................ $ 23,046,111 $ 616,827
Shares outstanding................................................ 23,046,208 616,839
Net asset value and redemption price per share
(excluding any applicable contingent deferred sales charge)...... $ 1.00 $ 1.00
=============== ===============
Class I:
Net assets........................................................ $ 18,542,941 $ --
Shares outstanding................................................ 18,544,387 --
Net asset value and redemption price per share.................... $ 1.00 $ --
=============== ===============
*Amortized cost of short-term investment securities (unaffiliated) $ 1,216,235,371 $ 154,039,354
=============== ===============
See Notes to Financial Statements
6
SunAmerica Money Market Funds
STATEMENT OF OPERATIONS -- For the year ended December 31, 2007
Money Market Municipal Money
Fund Market Fund
------------ ---------------
INVESTMENT INCOME:
Interest (unaffiliated)........................................................... $ 74,692,015 $ 4,009,918
Dividends (unaffiliated).......................................................... -- 950
------------ ------------
Total investment income........................................................ 74,692,015 4,010,868
------------ ------------
EXPENSES:
Investment advisory and management fees........................................... 6,768,240 387,418
Distribution and service maintenance fees
Class A......................................................................... 2,083,890 164,787
Class B......................................................................... 186,258 3,100
Class C......................................................................... 171,463 4,396
Transfer agent fees and expenses
Class A......................................................................... 3,114,318 245,750
Class B......................................................................... 63,105 2,595
Class C......................................................................... 50,312 3,537
Class I......................................................................... 41,113 --
Registration fees
Class A......................................................................... 34,617 24,069
Class B......................................................................... 9,111 6,773
Class C......................................................................... 12,968 5,497
Class I......................................................................... 11,371 --
Custodian and accounting fees..................................................... 277,803 54,369
Reports to shareholders........................................................... 341,510 8,601
Audit and tax fees................................................................ 27,970 27,970
Legal fees........................................................................ 26,595 11,668
Directors' fees and expenses...................................................... 117,873 6,866
Other expenses.................................................................... 19,838 8,199
------------ ------------
Total expenses before fee waivers, expense reimbursements and custody credits.. 13,358,355 965,597
Fees waived and expenses reimbursed by investment adviser (Note 3)............. (6,583) (28,046)
Custody credits earned on cash balances........................................ (9,407) (14,405)
------------ ------------
Net expenses................................................................... 13,342,365 923,144
------------ ------------
Net investment income (loss)...................................................... 61,349,650 3,087,724
------------ ------------
Net realized gain (loss) on investment............................................ 58,407 --
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $ 61,408,057 $ 3,087,724
============ ============
See Notes to Financial Statements
7
SunAmerica Money Market Funds
STATEMENT OF CHANGES IN NET ASSETS
Money Market Fund Municipal Money Market Fund
-------------------------------- --------------------------------
For the year For the year For the year For the year
ended ended ended ended
December 31, December 31, December 31, December 31,
2007 2006 2007 2006
--------------- --------------- --------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)........... $ 61,349,650 $ 68,754,726 $ 3,087,724 $ 2,633,211
Net realized gain (loss) on investment. 58,407 -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets
resulting from operations.............. $ 61,408,057 $ 68,754,726 $ 3,087,724 $ 2,633,211
--------------- --------------- --------------- ---------------
Distributions to shareholders from:
Net investment income (Class A)........ $ (59,290,555) (66,523,360) (3,071,615) (2,614,881)
Net investment income (Class B)........ (700,009) (942,063) (6,716) (10,057)
Net investment income (Class C)........ (636,557) (615,060) (9,393) (8,273)
Net investment income (Class I)........ (723,986) (675,707) -- --
--------------- --------------- --------------- ---------------
Total distributions to shareholders..... (61,351,107) (68,756,190) (3,087,724) (2,633,211)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets
resulting from capital share
transactions (Note 5).................. (523,397,627) 119,460,172 52,958,700 14,852,635
--------------- --------------- --------------- ---------------
Total increase (decrease) in net assets. (523,340,677) 119,458,708 52,958,700 14,852,635
--------------- --------------- --------------- ---------------
NET ASSETS:
Beginning of year....................... 1,766,043,756 1,646,585,048 101,752,941 86,900,306
--------------- --------------- --------------- ---------------
End of year*............................ $ 1,242,703,079 $ 1,766,043,756 $ 154,711,641 $ 101,752,941
=============== =============== =============== ===============
*Includes accumulated undistributed net
investment income (loss)............... $ 84,794 $ 86,251 $ 580 $ 580
=============== =============== =============== ===============
See Notes to Financial Statements
8
SunAmerica Money Market Funds
FINANCIAL HIGHLIGHTS
MONEY MARKET FUND
-----------------
Net Net Ratio of net
Asset Dividends Asset Net Assets Ratio of investment
Value Net from net Value end of expenses income to
beginning investment investment end of Total period to average average
Period Ended of period income(1) income period Return(2) (000's) net assets net assets
- ------------ --------- ---------- ---------- ------ --------- ---------- ---------- ------------
Class A
- -
12/31/03 $1.000 $0.003 $(0.003) $1.000 0.32% $1,644,603 0.88% 0.32%
12/31/04 1.000 0.005 (0.005) 1.000 0.50 1,630,353 0.90 0.49
12/31/05 1.000 0.024 (0.024) 1.000 2.38 1,587,641 0.89 2.35
12/31/06 1.000 0.041 (0.041) 1.000 4.22 1,711,783 0.89 4.14
12/31/07 1.000 0.044 (0.044) 1.000 4.32 1,182,789 0.90 4.27
Class B
- -
12/31/03 $1.000 $0.000 $ 0.000 $1.000 0.03% $ 44,529 1.18%(3) 0.03%(3)
12/31/04 1.000 0.001 (0.001) 1.000 0.07 42,437 1.32(3) 0.06(3)
12/31/05 1.000 0.015 (0.015) 1.000 1.52 31,738 1.74 1.46
12/31/06 1.000 0.033 (0.033) 1.000 3.32 23,806 1.76 3.26
12/31/07 1.000 0.034 (0.034) 1.000 3.42 18,326 1.77 3.38
Class C+
- -
12/31/03 $1.000 $0.000 $ 0.000 $1.000 0.03% $ 20,290 1.18%(3) 0.03%(3)
12/31/04 1.000 0.001 (0.001) 1.000 0.07 16,985 1.33(3) 0.06(3)
12/31/05 1.000 0.015 (0.015) 1.000 1.54 13,497 1.71 1.59
12/31/06 1.000 0.033 (0.033) 1.000 3.33 12,399 1.74 3.31
12/31/07 1.000 0.033 (0.033) 1.000 3.43 23,046 1.76 3.34
Class I
- -
12/31/03 $1.000 $0.004 $(0.004) $1.000 0.43% $ 9,636 0.77%(3) 0.43%(3)
12/31/04 1.000 0.006 (0.006) 1.000 0.58 11,895 0.80(3) 0.59(3)
12/31/05 1.000 0.025 (0.025) 1.000 2.49 13,708 0.80(3) 2.49(3)
12/31/06 1.000 0.042 (0.042) 1.000 4.31 18,057 0.80(3) 4.26(3)
12/31/07 1.000 0.043 (0.043) 1.000 4.43 18,543 0.80(3) 4.32(3)
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load but does
include expense reimbursements.
(3)Net of the following expense reimbursements/waivers (based on average net
assets):
12/31/03 12/31/04 12/31/05 12/31/06 12/31/07
-------- -------- -------- -------- --------
Class B. 0.51% 0.39% -- % -- % -- %
Class C+ 0.53 0.39 -- -- --
Class I. 0.02 0.09 0.05 0.05 0.04
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
See Notes to Financial Statements
9
SunAmerica Money Market Funds
FINANCIAL HIGHLIGHTS -- (continued)
MUNICIPAL MONEY MARKET FUND
---------------------------
Net Net Net Ratio of net
Asset Dividends Asset Assets Ratio of investment
Value Net from net Value end of expenses income to
beginning investment investment end of Total period to average average
Period Ended of period income(1) income period Return(2) (000's) net assets(3) net assets(3)
- ------------ --------- ---------- ---------- ------ --------- -------- ------------- -------------
Class A
- -
12/31/03 $1.000 $0.003 $(0.003) $1.000 0.28% $113,802 0.81% 0.28%
12/31/04 1.000 0.004 (0.004) 1.000 0.36 97,374 0.87 0.35
12/31/05 1.000 0.016 (0.016) 1.000 1.62 84,817 0.81 1.58
12/31/06 1.000 0.027 (0.027) 1.000 2.69 101,083 0.78 2.68
12/31/07 1.000 0.027 (0.027) 1.000 2.84 153,906 0.83 2.80
Class B
- -
12/31/03 $1.000 $0.001 $(0.001) $1.000 0.10% $ 3,168 0.98% 0.11%
12/31/04 1.000 0.001 (0.001) 1.000 0.10 497 1.02 0.10
12/31/05 1.000 0.008 (0.008) 1.000 0.81 520 1.62 0.80
12/31/06 1.000 0.018 (0.018) 1.000 1.77 536 1.69 1.77
12/31/07 1.000 0.020 (0.020) 1.000 1.95 189 1.70 1.95
Class C+
- -
12/31/03 $1.000 $0.001 $(0.001) $1.000 0.10% $ 258 1.00% 0.11%
12/31/04 1.000 0.001 (0.001) 1.000 0.10 223 1.18 0.10
12/31/05 1.000 0.008 (0.008) 1.000 0.82 1,563 1.59 1.02
12/31/06 1.000 0.018 (0.018) 1.000 1.77 134 1.66 1.61
12/31/07 1.000 0.017 (0.017) 1.000 1.95 617 1.70 1.92
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load but does
include expense reimbursements.
(3)Net of the following expense reimbursements/waivers (based on average net
assets):
12/31/03 12/31/04 12/31/05 12/31/06 12/31/07
-------- -------- -------- -------- --------
Class A 0.03% 0.00% 0.04% 0.00% 0.01%
Class B 1.03 0.87 1.44 2.15 3.96
Class C+ 7.45 4.20 0.47 2.14 2.62
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares
See Notes to Financial Statements
10
SunAmerica Money Market Fund
PORTFOLIO PROFILE -- December 31, 2007 -- (unaudited)
Industry Allocation*
Sovereign Agency................. 27.2%
Commercial Banks................. 13.5
U.S. Government Securities....... 9.1
Money Center Banks............... 8.1
Finance-Mortgage Loan/Banker..... 7.5
Super-Regional Banks............. 5.1
Finance-Investment Banker/Broker. 5.1
Diversified Financial Services... 5.1
Foreign Bank..................... 5.0
Special Purpose Entity........... 5.0
Repurchase Agreement............. 4.0
Fiduciary Banks.................. 3.9
Finance.......................... 3.0
Finance--Consumer Loans.......... 0.3
-----
101.9%
=====
Weighted average days to maturity 38.3
Credit Quality Allocation @#
A-1......................... 96.0%
Not Rated................... 4.0
-----
100.0%
=====
- --------
* Calculated as a percentage of net assets
@ Source: Standard and Poors
# Calculated as a percentage of total debt issues
11
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2007
Principal Value
Security Description Amount (Note 2)
SHORT-TERM INVESTMENT SECURITIES -- 97.9%
CERTIFICATES OF DEPOSIT -- 17.7%
Bank of America Corp.
4.66% due 03/28/08............. $24,000,000 $ 24,000,000
Bank of Scotland PLC
4.75% due 02/29/08............. 15,000,000 15,000,000
Calyon NY
5.33% due 03/04/08+............ 32,000,000 32,000,269
Citibank NA
4.77% due 01/24/08............. 25,000,000 25,000,000
4.81% due 01/23/08............ 24,000,000 24,000,000
Fortis Bank
4.80% due 01/28/08+............ 5,100,000 5,099,511
5.31% due 02/19/08............ 25,500,000 25,500,167
Royal Bank of Canada
5.18% due 01/04/08+............ 19,000,000 18,999,014
Svenska Handelsbanken NY
5.10% due 01/22/08............. 24,000,000 24,002,188
UBS AG
5.05% due 03/20/08............. 25,000,000 24,995,975
Wachovia Bank NA
5.35% due 02/25/08............. 1,000,000 1,000,297
------------
Total Certificates of Deposit
(amortized cost $219,597,421). 219,597,421
------------
COMMERCIAL PAPER -- 24.2%
General Electric Capital Corp.
4.15% due 01/08/08............. 14,000,000 13,988,703
Goldman Sachs Group
3.75% due 01/02/08............. 22,000,000 21,997,708
5.25% due 01/07/08............ 15,000,000 14,986,875
Lloyds TSB Bank PLC
4.47% due 04/02/08............. 15,000,000 14,830,513
4.49% due 02/04/08............ 15,000,000 14,938,263
5.06% due 01/04/08+........... 15,000,000 15,000,012
Rabobank Nederland
4.75% due 01/30/08+............ 22,000,000 22,000,876
Rabobank USA Financial Corp.
4.35% due 01/03/08............. 28,000,000 27,993,233
Royal Bank Of Scotland PLC
4.40% due 01/07/08............. 22,000,000 21,983,867
Societe Generale
4.86% due 04/24/08............. 18,000,000 17,722,980
5.09% due 01/15/08............ 21,000,000 20,958,472
State Street Boston Corp.
4.25% due 01/03/08............. 15,000,000 14,996,458
4.25% due 01/04/08............ 15,000,000 14,994,687
4.35% due 01/15/08............ 19,000,000 18,967,858
UBS Finance Delaware LLC
4.38% due 01/03/08............. 25,000,000 24,993,917
Wells Fargo & Co.
4.25% due 01/07/08............. 20,000,000 19,984,850
------------
Total Commercial Paper
(amortized cost $300,339,272). 300,339,272
------------
MEDIUM TERM NOTES -- 12.1%
General Electric Capital Corp.
5.29% due 01/11/08+............ 21,000,000 21,004,282
HSBC Finance Corp.
5.04% due 02/11/08+............ 4,000,000 4,002,338
Principal Value
Security Description Amount (Note 2)
---------------------------------------------------------------
Merrill Lynch & Co., Inc.
4.89% due 01/22/08+................ $19,000,000 $ 19,000,000
5.17% due 01/15/08+............... 21,000,000 21,000,000
Morgan Stanley Dean Witter
5.33% due 01/18/08+................ 23,000,000 23,001,624
Royal Bank of Scotland PLC
4.37% due 03/06/08*+............... 18,000,000 18,004,065
SIV Portfolio LLC
5.20% due 01/07/08*+(2)(3)(4)...... 23,000,000 23,000,000
Wachovia Bank NA
5.20% due 10/03/08................. 2,500,000 2,495,780
Wells Fargo & Co.
5.19% due 03/10/08+................ 40,000 40,002
5.28% due 01/03/08+............... 19,000,000 19,000,000
--------------
Total Medium Term Notes
(amortized cost $150,548,091)..... 150,548,091
--------------
U.S. GOVERNMENT AGENCIES -- 34.8%
Agency for International Development
Panama
4.71% due 01/01/08+................ 2,063,483 2,068,652
Federal National Mtg. Assoc.
4.20% due 02/13/08................. 16,000,000 15,919,733
4.26% due 01/15/08................ 27,500,000 27,454,442
4.29% due 01/14/08................ 23,000,000 22,964,369
4.29% due 01/22/08................ 27,500,000 27,431,181
Federal Home Loan Bank
4.12% due 01/03/08................. 30,000,000 29,993,133
4.21% due 01/10/08................ 30,000,000 29,968,425
4.24% due 01/02/08................ 26,000,000 25,996,938
4.24% due 01/04/08................ 30,000,000 29,989,400
4.24% due 01/07/08................ 30,000,000 29,978,800
4.26% due 01/02/08................ 50,000,000 49,994,083
4.26% due 01/08/08................ 28,000,000 27,976,807
4.30% due 01/07/08................ 60,000,000 59,957,000
4.35% due 01/17/08................ 27,000,000 26,947,800
5.80% due 09/02/08................ 26,000,000 26,244,959
--------------
Total U.S. Government Agencies
(amortized cost $432,885,722)..... 432,885,722
--------------
U.S. GOVERNMENT TREASURIES -- 9.1%
United States Treasury Notes
2.63% due 05/15/08................. 11,000,000 10,942,854
3.13% due 09/15/08................ 25,000,000 24,852,964
4.13% due 08/15/08................ 25,000,000 24,998,507
4.38% due 01/31/08................ 10,000,000 10,003,150
4.63% due 02/29/08................ 25,000,000 25,018,437
4.88% due 04/30/08................ 5,000,000 5,012,081
4.88% due 05/31/08................ 12,000,000 12,036,872
--------------
Total U.S. Government Treasuries
(amortized cost $112,864,865)..... 112,864,865
--------------
Total Short Term Investment Securities -- 97.9%
(amortized cost $1,216,235,371)... 1,216,235,371
--------------
12
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2007 (continued)
Principal Value
Security Description Amount (Note 2)
REPURCHASE AGREEMENT -- 4.0%
UBS Securities, LLC Joint Repurchase
Agreement
(amortized cost $50,533,000)(1)..... $50,533,000 $ 50,533,000
--------------
TOTAL INVESTMENTS
(amortized cost $1,266,768,371)#... 101.9% 1,266,768,371
Liabilities in excess of other assets (1.9) (24,065,292)
----------- --------------
NET ASSETS........................... 100.0% $1,242,703,079
=========== ==============
- --------
* 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 December 31, 2007, the aggregate value
of these securities was $41,004,065 representing 3.3% of net assets. Unless
otherwise indicated these securities are not considered to be illiquid.
# At December 31, 2007, the cost of securities for federal income tax purposes
was the same for book purposes.
+ Variable Rate Security - the rate reflected is as of December 31, 2007,
maturity date reflects next reset date.
(1)See Note 2 for details of Joint Repurchase Agreements.
(2)Security in default
(3)On August 28, 2007, mark to market losses experienced in the investment
portfolio of SIV Portfolio, plc ("SIV Portfolio") (formerly Cheyne Finance
PLC), the issuer of the underlying notes held by SIV Portfolio LLC, the
issuer of the medium term notes (the "Notes") held by the Fund, triggered
the appointment of receivers (Deloitte & Touche LLP) (collectively, the
"Receiver"). On October 17, 2007, the Receiver determined that SIV Portfolio
was, or was about to become, unable to pay its debts as they came due and
that an insolvency event had occurred. As a result of this determination,
the Notes became immediately due and payable and are in default as a result
of non-payment. These events, which are based on published reports,
materially adversely affect the ability of SIV Portfolio to make interest
and principal payments due on the Notes. According to additional public
reports, as of February 14, 2008, the Receiver is in the process of
negotiating a refinancing of SIV Portfolio or a sale of its assets, however,
there can be no assurance that such a transaction will be consummated. Any
such transaction may impact the nature and amount of principal and interest
payable to the Fund.
(4)Illiquid Security
See Notes to Financial Statements
13
SunAmerica Municipal Money Market Fund
PORTFOLIO PROFILE -- December 31, 2007 -- (unaudited)
State Allocation*
North Carolina................... 10.8%
Illinois......................... 10.2
Michigan......................... 8.3
Indiana.......................... 8.2
Texas............................ 7.8
Colorado......................... 6.1
Florida.......................... 4.7
South Carolina................... 4.4
California....................... 4.2
Alaska........................... 3.3
Ohio............................. 3.2
Washington....................... 3.2
Wisconsin........................ 3.0
Pennsylvania..................... 2.5
Wyoming.......................... 2.3
Arizona.......................... 2.2
Alabama.......................... 1.9
Nevada........................... 1.9
Kentucky......................... 1.8
Delaware......................... 1.7
Louisiana........................ 1.6
Georgia.......................... 1.5
North Dakota..................... 1.5
Connecticut...................... 1.1
Iowa............................. 0.7
Tennessee........................ 0.6
Massachusetts.................... 0.5
Registered Investment Companies.. 0.4
----
99.6%
====
Weighted average days to maturity 16.6
Credit Quality Allocation @#
A-1......................... 87.0%
SP-1........................ 4.3
Not Rated+.................. 8.7
-----
100.0%
=====
* Calculated as a percentage of net assets
@ Source: Standard and Poors
# Calculated as a percentage of total debt issues
+ Represents debt issues that have either no rating, or rating is unavailable
from the data source.
14
SunAmerica Municipal Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2007
Principal Value
Security Description Amount (Note 2)
SHORT-TERM INVESTMENT SECURITIES -- 99.6%
Alabama -- 1.9%
Stevenson Alabama Industrial Development
Board Environmental Improvement Revenue
(LOC-JPMorgan Chase Bank)
3.55% due 01/02/08+...................... $3,000,000 $3,000,000
----------
Alaska -- 3.3%
Alaska Housing Finance Corp.
Series A
3.39% due 01/03/08+...................... 5,170,000 5,170,000
----------
Arizona -- 2.2%
Arizona Health Facilities Authority
3.33% due 01/02/08+...................... 1,200,000 1,200,000
Maricopa County, Arizona Industrial
Development Authority Multi Family
Housing Revenue
Series A
(LOC-Wells Fargo Bank N.A)
3.49% due 01/03/08+...................... 1,470,000 1,470,000
Maricopa County, Arizona Industrial
Development Revenue
(LOC-Harris Trust & Savings Bank)
3.55% due 01/03/08+...................... 715,000 715,000
----------
3,385,000
----------
California -- 4.2%
California Housing Finance Agency Revenue
Series J
3.65% due 01/02/08+...................... 1,090,000 1,090,000
California Housing Finance Agency Revenue
Series J
3.67% due 01/02/08+...................... 250,000 250,000
California Housing Finance Agency Revenue
Series U
3.65% due 01/02/08+...................... 145,000 145,000
State of California
4.00% due 06/30/08....................... 5,000,000 5,015,295
----------
6,500,295
----------
Colorado -- 6.1%
Colorado Housing & Finance Authority
Series SFM, Class 1-B-2
3.45% due 01/02/08+...................... 1,040,000 1,040,000
Colorado Housing & Finance Authority
Series SFM Class 1-C-2
3.45% due 01/02/08+...................... 3,800,000 3,800,000
Colorado Housing & Finance Authority
Series AA
3.55% due 01/02/08+...................... 1,200,000 1,200,000
Colorado Housing and Finance Authority
Series AA2
3.45% due 01/02/08+...................... 150,000 150,000
Colorado Housing & Finance Authority
Series AA3
3.45% due 01/02/08+...................... 1,265,000 1,265,000
Colorado Springs, Colorado Revenue
(LOC-Wells Fargo Bank N.A.)
3.52% due 01/03/08+...................... 1,325,000 1,325,000
Principal Value
Security Description Amount (Note 2)
-------------------------------------------------------------------------
Colorado (continued)
Durango, Colorado Revenue
(LOC-Wells Fargo Bank N.A.)
3.52% due 01/03/08+.............................. $ 660,000 $ 660,000
----------
9,440,000
----------
Connecticut -- 1.1%
State of Connecticut
Series 1
3.55% due 01/02/08+.............................. 1,695,000 1,695,000
----------
Delaware -- 1.7%
Delaware State Economic Development
Authority Revenue Bonds
3.48% due 01/03/08+.............................. 2,600,000 2,600,000
----------
Florida -- 4.7%
Collier County Health Facilities Authority
(LOC-Wachovia Bank N.A.)
3.48% due 01/03/08+.............................. 350,000 350,000
Dade County, Florida Water & Sewer System
Revenue
3.46% due 01/02/08+.............................. 3,340,000 3,340,000
Florida Gulf Coast University Financing Authority
Series B
(LOC-Wachovia Bank N.A.)
3.41% due 01/03/08+.............................. 2,820,000 2,820,000
Florida Keys Aqueduct Authority Revenue
3.47% due 01/02/08+.............................. 700,000 700,000
----------
7,210,000
----------
Georgia -- 1.5%
Gainsville & Hall County Hospital Authority
3.47% due 01/02/08+.............................. 2,325,000 2,325,000
----------
Illinois -- 10.2%
Chicago Illinois
Series F,
3.42% due 01/03/08+.............................. 4,000,000 4,000,000
Chicago O'Hare International Airport Revenue
Series B
(LOC-Societe Generale)
3.40% due 01/02/08+.............................. 845,000 845,000
Chicago O'Hare International Airport
Series C
3.47% due 01/02/08+.............................. 3,400,000 3,400,000
Chicago, Illinois Waterworks Revenue
(LOC-Bank One N.A.)
3.40% due 01/02/08+.............................. 500,000 500,000
Illinois Development Finance Authority Industrial
Revenue
(LOC-U.S. Bank N.A.)
3.53% due 01/02/08+.............................. 2,340,000 2,340,000
Jackson-Union Counties Regional Port District
Port Facilities Revenue
(LOC-Wachovia Bank N.A.)
3.33% due 01/02/08+.............................. 2,000,000 2,000,000
15
SunAmerica Municipal Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2007 (continued)
Principal Value
Security Description Amount (Note 2)
SHORT-TERM INVESTMENT SECURITIES (continued)
Illinois (continued)
State of Illinois
Series B
3.46% due 01/02/08+.......................... $2,625,000 $ 2,625,000
-----------
15,710,000
-----------
Indiana -- 8.2%
Indiana Educational Facilities Authority
3.48% due 01/02/08+.......................... 1,900,000 1,900,000
Indiana Health & Education Facilities Finance
Authority Revenue
(LOC-Bank of America N.A.)
3.47% due 01/02/08+.......................... 4,135,000 4,135,000
Indiana Health & Education Facilities Finance
Authority Revenue
Series A
3.47% due 01/02/08+.......................... 2,550,000 2,550,000
Marion, Indiana Economic Development
Revenue
(LOC-Bank of America N.A.)
3.48% due 01/02/08+.......................... 4,105,000 4,105,000
-----------
12,690,000
-----------
Iowa -- 0.7%
Iowa Finance Authority
Series F
3.48% due 01/03/08+.......................... 1,100,000 1,100,000
-----------
Kentucky -- 1.8%
Breckinridge County, Kentucky Lease
Program Revenue
Series A
(LOC-U.S. Bank N.A.)
3.39% due 01/02/08+.......................... 1,115,000 1,115,000
Breckinridge County, Kentucky Lease
Program Revenue
(LOC-U.S. Bank N.A.)
3.33% due 01/02/08+.......................... 1,640,000 1,640,000
-----------
2,755,000
-----------
Louisiana -- 1.6%
State of Louisiana
Series B
5.00% due 04/15/08+.......................... 2,500,000 2,536,388
-----------
Massachusetts -- 0.5%
University of Massachusetts Building
Authority Project Revenue
3.46% due 01/02/08+.......................... 745,000 745,000
-----------
Michigan -- 8.3%
Detroit Michigan Water Supply System
Series B
3.45% due 01/03/08+.......................... 420,000 420,000
Detroit Michigan Water Supply System
Series B
3.55% due 01/03/08+.......................... 2,200,000 2,200,000
Holt Michigan Public Schools
3.40% due 01/03/08+.......................... 4,000,000 4,000,000
Principal Value
Security Description Amount (Note 2)
---------------------------------------------------------------------
Michigan (continued)
Michigan State Housing Development Authority
Series A
3.55% due 01/02/08+......................... $2,150,000 $ 2,150,000
Michigan State Hospital Finance Authority
Series B
(LOC-Landesbank Hessen)
3.46% due 01/02/08+......................... 2,095,000 2,095,000
Michigan State Housing Development Authority
Series C
3.46% due 01/02/08+......................... 2,000,000 2,000,000
-----------
12,865,000
-----------
Nevada -- 1.9%
Clark County Nevada Airport Revenue
3.47% due 01/02/08+
(cost $3,000,000)........................... 3,000,000 3,000,000
-----------
North Carolina -- 10.8%
City of Charlotte North Carolina
Series B
3.48% due 01/03/08+......................... 2,400,000 2,400,000
City of Charlotte North Carolina
3.48% due 01/03/08+......................... 1,240,000 1,240,000
County of Guilford North Carolina
3.48% due 01/03/08+......................... 1,065,000 1,065,000
Durham, North Carolina Public Improvement
3.47% due 01/03/08+......................... 300,000 300,008
Mecklenburg County, North Carolina
Certificates of Participation
3.48% due 01/03/08+......................... 1,880,000 1,880,000
North Carolina Medical Care Commission
Health Care Facilities Revenue
3.46% due 01/02/08.......................... 1,765,000 1,765,000
North Carolina Medical Care Commission
Hospital Revenue
3.38% due 01/02/08+......................... 3,000,000 3,000,000
North Carolina Medical Care Commission
Hospital Revenue
Series B
3.42% due 01/02/08+......................... 100,000 100,000
State of North Carolina
Series D
3.44% due 01/02/08+......................... 1,825,000 1,825,000
University Of North Carolina Chapel Hill
Foundation Certificate of Participation
(LOC-Bank of America N.A.)
3.40% due 01/02/08+......................... 1,300,000 1,300,000
Wilmington, North Carolina
3.40% due 01/02/08+......................... 1,300,000 1,300,000
Winston Salem North Carolina Water And
Sewer Systems Revenue
Series C
3.48% due 01/02/08+......................... 590,000 590,000
-----------
16,765,008
-----------
North Dakota -- 1.5%
North Dakota State Housing Finance Agency
Revenue
Series A
3.54% due 01/02/08+......................... 2,325,000 2,325,000
-----------
16
SunAmerica Municipal Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2007 -- (continued)
Principal Value
Security Description Amount (Note 2)
SHORT-TERM INVESTMENT SECURITIES (continued)
Ohio -- 3.2%
Cleveland, Ohio Waterworks Revenue
Series L
3.45% due 01/03/08+.............................. $1,050,000 $1,050,000
Cleveland, Ohio Airport System Revenue
Class D
(LOC-West LB AG)
3.53% due 01/02/08+.............................. 2,650,000 2,650,000
County of Hamilton Ohio
Series B
(LOC-JPMorgan Chase Bank)
3.35% due 01/03/08+.............................. 750,000 750,000
Franklin County, Ohio Hospital Revenue
Series B
(LOC-Citibank N.A.)
3.45% due 01/03/08+.............................. 445,000 445,000
----------
4,895,000
----------
Pennsylvania -- 2.5%
Delaware Valley Pennsylvania Regional
Finance Authority
Series A
(LOC-Bayerische Landesbank)
3.45% due 01/02/08+.............................. 300,000 300,000
Delaware Valley Pennsylvania Regional
Finance Authority
Series C
(LOC-Bayerische Landesbank)
3.45% due 01/02/08+.............................. 1,700,000 1,700,000
Pennsylvania Turnpike Commission
Class A1
3.40% due 01/02/08+.............................. 1,000,000 1,000,000
Pennsylvania State Turnpike Commission
Series U
3.40% due 01/03/08+.............................. 900,000 900,000
----------
3,900,000
----------
South Carolina -- 4.4%
North Charleston S C Certificate Of Participation
3.17% due 01/02/08+.............................. 1,700,000 1,700,000
Piedmont Municipal Power Agency
Electric Revenue Series A
3.55% due 01/02/08+.............................. 800,000 800,000
Piedmont Municipal Power Agency,
Electric Revenue
Sub Series B-1
3.50% due 01/02/08+.............................. 1,755,000 1,755,000
Piedmont Municipal Power Agency
Electric Revenue Series B-3
3.50% due 01/02/08+.............................. 315,000 315,000
Piedmont Municipal Power Agency
Electric Revenue Sub Series B-4
3.55% due 01/02/08+.............................. 2,300,000 2,300,000
----------
6,870,000
----------
Tennessee -- 0.6%
Jackson Energy Authority
3.48% due 01/03/08+.............................. 850,000 850,000
----------
Principal Value
Security Description Amount (Note 2)
--------------------------------------------------------------------
Texas -- 7.8%
Aldine, Texas Independent School District
4.50% due 02/15/08....................... $2,800,000 $ 2,803,543
North Texas Tollway Authority Revenue
4.13% due 11/19/08....................... 2,500,000 2,500,000
San Antonio Education Facilities
Corporation Revenue
(LOC-JPMorgan Chase Bank)
3.48% due 01/02/08+...................... 5,300,000 5,300,000
Texas State University Systems
5.00% due 03/15/08....................... 1,435,000 1,444,422
------------
12,047,965
------------
Washington -- 3.2%
Port of Seattle, Washington Industrial
Development
(LOC-Citibank N.A.)
3.54% due 01/02/08+...................... 1,500,000 1,500,000
Washington State Housing Finance
Commission
(LOC-Bank of America N.A.)
3.19% due 01/03/08+...................... 3,400,000 3,400,000
------------
4,900,000
------------
Wisconsin -- 3.0%
Wisconsin Health & Educational Facilities
Authority Revenue
Series A
3.31% due 01/02/08+...................... 1,100,000 1,100,000
Wisconsin Health & Education Facilities
Authority Revenue
(LOC-JPMorgan Chase Bank)
3.41% due 01/03/08+...................... 3,500,000 3,500,000
------------
4,600,000
------------
Wyoming -- 2.3%
Wyoming Community Development Authority
3.40% due 01/03/08+...................... 3,265,000 3,265,000
Wyoming Community Development Authority
Series A
3.40% due 01/03/08+...................... 350,000 350,000
------------
3,615,000
------------
Registered Investment Company -- 0.4%
SSgA Tax Free Money Market Fund........... 544,698 544,698
------------
TOTAL SHORT-TERM INVESTMENT SECURITIES
(amortized cost $154,039,354)* ........... 99.6% 154,039,354
Other assets less liabilities............. 0.4 672,287
---------- ------------
NET ASSETS.................................. 100.0% $154,711,641
========== ============
- --------
* At December 31, 2007, the cost of securities for federal income tax
purpose was the same for book purposes.
+ Variable rate security - the rate reflected is as of December 31, 2007;
maturity date reflects next reset date.
LOC --Letter of Credit
See Notes to Financial Statements
17
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2007
Note 1. Organization
SunAmerica Money Market Funds, Inc. (the "Corporation") is an open-end
diversified management investment company organized as a Maryland
corporation. The Corporation consists of two investment funds (each, a
"Fund" and collectively, the "Funds"). Each Fund is a separate series with a
distinct investment objective. Each Fund is advised by AIG SunAmerica Asset
Management Corp. ("AIG SunAmerica" or "Adviser"), an indirect wholly-owned
subsidiary of American International Group, Inc. ("AIG"). The investment
objective for each of the Funds is as follows:
The SunAmerica Money Market Fund ("Money Market Fund") seeks as high a level
of current income as is consistent with liquidity and stability of capital
through investment primarily in high-quality money market instruments
selected principally on the basis of quality and yield.
The SunAmerica Municipal Money Market Fund ("Municipal Money Market Fund")
seeks as high a level of current income as is consistent with liquidity and
stability of capital and that is exempt from regular federal income taxation
through investments selected primarily in high-quality money market
instruments primarily on the basis of quality and yield, and under normal
market conditions, invests at least 80% of its assets in municipal
securities that are exempt from regular federal income tax.
The Money Market Fund currently offers four classes of shares: Class A,
Class B, Class C and Class I. The Municipal Money Market Fund currently
offers three classes of shares: Class A, Class B, and Class C. The classes
within the Funds are presented in the Statement of Assets and Liabilities.
The cost structure for each class is as follows:
Class A shares-- Class A shares are available with no front-end sales
charge. A 1.00% contingent deferred sales charge ("CDSC")
is imposed on shares sold within one year of original
purchase and a 0.50% CDSC is imposed on shares sold after
the first year and within the second year after purchase.
Class B shares-- Class B shares are offered at their net asset value per
share, without any front-end sales charge. However, there
is a declining contingent deferred sales charge ("CDSC") on
shares sold within six years of purchase. Class B shares
will convert automatically to Class A shares approximately
eight years after the purchase of such shares and at such
time are no longer subject to a distribution fee.
Class C shares-- Class C shares are offered at their net asset value per
share, without any front-end sales charge. However, there
is a contingent deferred sales charge of 1.00% on shares
sold within 12 months of purchase.
Class I shares-- Class I shares are offered at net asset value per share
without any sales charge, exclusively to certain
institutions.
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions, except as may otherwise be provided in the Funds'
registration statement. Class A, Class B, and Class C shares of each Fund
has its own 12b-1 plan.
Indemnifications: Under the Funds' organizational documents, its officers
and directors are indemnified against certain liability arising out of the
performance of their duties to the Funds. In addition, in the normal course
of business the Funds enter into contracts that contain the obligation to
indemnify others. The Funds' maximum exposure under these arrangements is
unknown. Currently, however, the Funds expect the risk of loss to be remote.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from these estimates. The
following is a summary of the significant accounting policies followed by
the Funds in the preparation of its financial statements:
18
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2007 -- (continued)
Pursuant to each 12b-1 plan, the Fund pays the Fund's distributor (the
"Distributor") an account maintenance fee with respect to Class A, B & C
shares and pursuant to the 12b-1 plan for the Class B and Class C shares,
the Fund also pays the Distributor a distribution fee with respect to the
Class B and C shares. The Class A shares do not pay a distribution fee.
Security Valuations: Portfolio securities are valued at amortized cost,
which approximates market value. The amortized cost method involves valuing
a security at its cost on the date of purchase and thereafter assuming a
constant amortization/accretion to maturity of any discount or premium. In
accordance with rule 2a-7 under the Investment Company Act of 1940, as
amended (the "1940 Act"), the Corporation's Board of Directors ("Board") has
adopted procedures intended to stabilize the Funds' net asset value per
share at $1.00. These procedures include the determination, at such
intervals as the Board deems appropriate and reasonable in light of current
market conditions, of the extent, if any, to which the Funds' market-based
net asset value per share deviates from the Fund's amortized cost per share.
For purposes of these market-based valuations, securities for which market
quotations are not readily available are fair valued, as determined pursuant
to procedures adopted in good faith by the Board.
Repurchase Agreements: The Funds, along with other affiliated registered
investments companies, pursuant to exemptive relief granted by the
Securities and Exchange Commission (the "Commission"), may transfer
uninvested cash balances onto a single joint account, the daily aggregate
balance of which is invested in one or more repurchase agreements
collateralized by U.S. Treasury or federal agency obligations. For
repurchase agreements and joint repurchase agreements, the Funds' custodian
takes possession of the collateral pledged for investments in such
repurchase agreements. The underlying collateral is valued daily on a mark
to market basis to ensure that the value, at the time the agreement is
entered into, is equal to at least 102% of the repurchase price, including
accrued interest. In the event of default of the obligation to repurchase, a
Fund has the right to liquidate the collateral and apply the proceeds in
satisfaction of the obligation. If the seller defaults and the value of the
collateral declines or if bankruptcy proceedings are commenced with respect
to the seller of the security, realization of the collateral by the Fund may
be delayed or limited.
At December 31, 2007, the following Funds held an undivided interest in a
joint repurchase agreement with UBS Securities, LLC:
Percentage Principal
Fund Interest Amount
---- ---------- -----------
Money Market Fund............. 20.21% $50,533,000
As of that date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
UBS Securities, LLC, dated December 31, 2007, bearing interest at a rate of
1.30% per annum, with a principal amount of $250,000,000, a repurchase price
of $250,018,056, and a maturity date of January 2, 2008. The repurchase
agreement is collateralized by the following:
Interest Maturity Principal Market
Type of Collateral Rate Date Amount Value
------------------ -------- -------- ------------ ------------
U.S. Treasury Inflation Index
Notes....................... 4.25% 01/15/10 $250,000,000 $255,000,900
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, including the accretion of
discount and amortization of premium, is accrued daily; dividend income is
recorded on the ex-dividend date.
Net investment income, other than class specific expenses, and realized and
unrealized gains and losses, are allocated daily to each class of shares
based upon the relative net asset value of outstanding shares (or the value
of the dividend-eligible shares, as appropriate) of each class of shares at
the beginning of the day (after adjusting for the current capital shares
activity of the respective class).
19
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 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 respects, expenses are charged to each Fund as
incurred on a specific identification basis. Interest earned on cash
balances held at the custodian are shown as custody credits in the Statement
of Operations.
Dividends from net investment income, if any, are normally declared daily
and paid monthly. Capital gain distributions, if any, are paid annually. The
Funds record dividends and distributions to their shareholders on the
ex-dividend date. The amount of dividends and distributions from net
investment income and net realized capital gains are determined in
accordance with federal income tax regulations, which may differ from U.S.
generally accepted accounting principles. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within
the capital accounts at fiscal year end based on their federal tax-basis
treatment; temporary differences do not require reclassification. Net
investment income (loss), net realized gain (loss), and net assets are not
affected by these reclassifications.
The Funds intend to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and distribute all of
their taxable income, including any net realized gain on investments, to its
shareholders. Therefore, no federal tax provisions are required. Each Fund
is considered a separate entity for tax purposes. The Fund files U.S.
federal and certain state income tax returns. With few exceptions, the Fund
is no longer subject to U.S. federal and state tax examinations by tax
authorities for tax years ending before 2004.
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. Management has evaluated the implications of FIN 48 and
determined there is no impact to 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 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 December 31, 2007, the
management of 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.
Note 3. Investment Advisory and Management Agreement, Distribution and Service
Agreement
The Funds have an Investment Advisory and Management Agreement (the
"Agreement") with AIG SunAmerica. Under the Agreement, AIG SunAmerica
provides continuous supervision of the Funds and administers its corporate
affairs, subject to general review by the Board. In connection therewith,
AIG SunAmerica furnishes the Funds with office facilities, maintains certain
of its books and records, and pays the salaries and expenses of all
personnel, including officers of the Funds who are employees of AIG
SunAmerica and its affiliates.
20
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2007 -- (continued)
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
---------------------------- ----------
Money Market Fund............. $0 - $600 million 0.50%
next $900 million 0.45%
(greater than) $ 1.5 billion 0.40%
Municipal Money Market Fund... (greater than) $0 0.35%
The Municipal Money Market Fund is 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 the following fees from AIG SunAmerica, based
upon the Fund's average daily net assets:
Sub-advisory
Assets Fees
--------------------------- ------------
Municipal Money Market Fund... $0 - $200 million 0.25%
next $300 million 0.20%
(greater than) $500 million 0.15%
AIG SunAmerica has contractually agreed to waive fees and/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 Board, including a majority of
the directors that are not deemed to be "interested persons" of the Funds as
defined by Section 2(a)(19) of the Investment Company Act of 1940 (the "1940
Act") ("Independent Directors").
Fund Percentage
---- ----------
Money Market Class I.............................. 0.80%
Municipal Money Market Class A.................... 0.95
Municipal Money Market Class B.................... 1.70
Municipal Money Market Class C.................... 1.70
The Funds may also voluntarily waive fees and/or reimburse expenses. The
voluntary waivers and/or reimbursements may be terminated at any time. The
exact amount of the voluntary waivers and/or reimbursements may change on a
day-to-day basis.
For the year ended December 31, 2007, pursuant to the contractual expense
limitations in the above table, AIG SunAmerica waived fees and/or reimbursed
expenses as follows:
Fund
----
Money Market Class I.............................. $ 6,583
Municipal Money Market Class A.................... 12,615
Municipal Money Market Class B.................... 4,193
Municipal Money Market Class C.................... 11,238
The Corporation, 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. The Funds have adopted a
Distribution Plan (the "Plan") on behalf of each class of shares other then
Class I 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," the "Class B Plan," and the "Class C Plan." In
adopting the Plans, the Board determined that there was a reasonable
likelihood that each such Plan would benefit the Funds and the shareholders
of the respective class. The sales charge and distribution fees of a
particular class will not be used to subsidize the sale of shares of any
other class.
21
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2007 -- (continued)
Both the Class B Plan and the Class C Plan provide that the Fund shall pay
the Distributor distribution fee at the annual rate of 0.75% of the average
daily net assets of the Fund's Class B and Class C shares, to compensate the
Distributor and certain securities firms for providing sales and promotional
activities for distributing that class of shares. The distribution costs for
which the Distributor may be compensated include distribution fees paid to
broker-dealers that have sold Fund shares, commissions, and other expenses
such as those incurred for sales literature, prospectus printing and
distribution, and compensation to wholesalers. It is possible that in any
given year the amount paid to the Distributor under the Class B and Class C
Plans may exceed the Distributor's distribution costs as described above.
The Class A Plan does not provide for a distribution fee. The Plans also
provide that each class of shares of the Funds, other than Class I, shall
pay the Distributor an account maintenance at the annual rate of up to 0.15%
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. In this regard, some payments are used to
compensate broker-dealers with account maintenance fees in an amount up to
0.15% per year of the assets maintained in the Funds by their customers.
Accordingly, for the year ended December 31, 2007, SACS received fees (see
Statement of Operations) based upon the aforementioned rates.
SACS receives the proceeds of contingent deferred sales charges paid by
investors in connection with certain redemptions of each Fund's Class A,
Class B and Class C shares. SACS has advised the Funds for the year ended
December 31, 2007, the proceeds received from redemptions are as follows:
Contingent Deferred Sales Charges
---------------------------------
Fund Class A Class B Class C
---- ------- ------- -------
Money Market....................... $-- $96,097 $8,737
Municipal Money Market............. -- 6,879 8
The Funds have 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 Fund. The Service Agreement, which permits the Funds
to compensate SAFS for services rendered based upon the annual rate of 0.22%
of average daily net assets, is approved annually by the Board. For the year
ended December 31, 2007, the Funds incurred the following expenses which are
included in transfer agent fees and expenses payable line 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:
Payable at
Fund Expenses December 31, 2007
---- ---------- -----------------
Money Market Fund Class A.......... $3,049,012 $228,968
Money Market Fund Class B.......... 40,920 5,503
Money Market Fund Class C.......... 41,357 4,307
Money Market Fund Class I.......... 36,831 3,985
Municipal Money Market Fund Class A 241,619 23,882
Municipal Money Market Fund Class B 734 87
Municipal Money Market Fund Class C 1,074 164
22
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2007 -- (continued)
Note 4. Federal Income Taxes
The following details the tax basis distributions as well as the components
of distributable earnings. The tax basis components of distributable
earnings differ from the amounts reflected in the Statement of Assets and
Liabilities by temporary book/tax differences primarily arising from
dividends payable and cumulative pension expenses.
Distributable Earnings Tax Distributions
----------------------------------------- --------------------------------
For the year ended December 31, 2007
--------------------------------------------------------------------------
Long-term Gains/ Unrealized Long-Term
Ordinary Capital Loss Appreciation Ordinary Capital
Fund Income Carryover (Depreciation) Income Gains Tax Exempt
- ---- -------- ---------------- -------------- ----------- --------- ----------
Money Market....................... $409,462 $-- $-- $61,351,107 $-- $ --
Municipal Money Market............. 33,589* (24,322) -- -- -- 3,087,724
- --------
* Tax exempt distributable earnings
Tax Distributions
------------------------------------
For the year ended December 31, 2006
------------------------------------
Ordinary Long-Term
Fund Income Capital Tax-Exempt
Money Market.................. $68,756,190 $-- $ --
Municipal Money Market........ -- -- 2,633,211
For Federal income tax purposes, the Funds indicated below have capital loss
carryforwards, which expire in the year indicated, as of December 31, 2007,
which are available to offset future capital gains, if any:
Capital Loss Carryforward
-------------------------
Fund 2012 2013
---- ------ -------
Money Market.................. $ -- $ --
Municipal Money Market........ 8,070 16,252
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 and treated as arising on the first day of the following
year. For fiscal year ended December 31, 2007, the Money Market Fund elected
to defer post October capital losses in the amount of $3,807.
Note 5. Capital Share Transactions
Transactions in each class of shares of the Funds, all at $1.00 per share,
for the year ended December 31, 2007 and for the prior year were as follows:
Money Market Fund
-------------------------------------------------------------------------------------------------
Class A Class B Class C
-------------------------------- --------------------------- --------------------------
For the For the For the For the For the For the
year year year year year year
ended ended ended ended ended ended
December 31, December 31, December 31, December 31, December 31, December 31,
2007 2006 2007 2006 2007 2006
--------------- --------------- ------------ ------------ ------------ ------------
Shares sold............ $ 843,066,044+ $ 1,067,246,832++ $ 13,577,268 $ 21,345,812 $ 35,861,962 $ 35,756,424
Reinvested dividends... 58,499,405 65,808,620 655,545 876,052 563,246 556,078
Shares redeemed........ (1,430,613,813) (1,008,912,573) (19,714,079)+ (30,154,351)++ (25,778,554) (37,411,117)
--------------- --------------- ------------ ------------ ------------ ------------
Net increase (decrease) $ (529,048,364) $ 124,142,878 $ (5,481,266) $ (7,932,487) $ 10,646,654 $ (1,098,616)
=============== =============== ============ ============ ============ ============
----------------------
Class I
-------------------------
For the For the
year year
ended ended
December 31, December 31,
2007 2006
------------ ------------
Shares sold............ $ 10,922,170 $10,490,556
Reinvested dividends... 723,464 672,568
Shares redeemed........ (11,160,285) (6,814,727)
------------ -----------
Net increase (decrease) $ 485,349 $ 4,348,397
============ ===========
- --------
+ Includes automatic conversion of Class B shares in the amount of $4,233,353
to Class A shares
++ Includes automatic conversion of Class B shares in the amount of $2,136,800
to Class A shares
23
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2007 -- (continued)
Municipal Money Market Fund
---------------------------------------------------------------------------------------
Class A Class B Class C
---------------------------- ------------------------- ---------------------------
For the For the For the For the For the For the
year year year year year year
ended ended ended ended ended ended
December 31, December 31, December 31, December 31, December 31, December 31,
2007 2006 2007 2006 2007 2006
------------- ------------- ------------ ------------ -------------- ------------
Shares sold............ $ 260,584,595# $ 253,437,415## $ 15,146 $ 421,681 $ 1,136,716 $ 535,044
Reinvested dividends... 3,066,154 2,607,633 6,688 10,009 8,590 3,913
Shares redeemed........ (210,828,100) (239,778,560) (368,544)# (416,224)## (662,545) (1,968,276)
------------- ------------- --------- ------------ -------------- -----------
Net increase (decrease) $ 52,822,649 $ 16,266,488 $(346,710) $ 15,466 $ 482,761 $(1,429,319)
============= ============= ========= ============ ============== ===========
- --------
# Includes automatic conversion of Class B shares in the amount of $69,768 to
Class A shares
## Includes automatic conversion of Class B shares in the amount of $25,660 to
Class A shares
Note 6. Directors' Retirement Plan
The Directors of the SunAmerica Money Market Funds, Inc. have adopted the
AIG SunAmerica Disinterested Trustees' and Directors' Retirement Plan (the
"Retirement Plan") effective January 1, 1993, as amended December 9, 2006,
for the unaffiliated Directors. The Retirement Plan provides generally that
an unaffiliated Director may become a participant ("Participant") in the
Retirement Plan if he or she has at least 10 years of consecutive service as
a Disinterested Director of any of the adopting AIG SunAmerica mutual funds
(the "Adopting Funds") or has attained the age of 60 while a Director and
completed five (5) consecutive years of service as a Director of any
Adopting Fund (an "Eligible Director"). Pursuant to the Retirement Plan, an
Eligible Director may receive benefits upon (i) his or her death or
disability while a Director or (ii) the termination of his or her tenure as
a Director, other than removal for cause from each of the Adopting Funds
with respect to which he or she is an Eligible Director.
As of each of the first 10 birthdays after becoming a Participant and on
which he or she is both a Director and Participant, each Eligible Director
will be credited with an amount equal to 50% of his or her regular fees
(excluding committee fees) for services as a Disinterested Director of each
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 Director'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 Director 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 Directors' fees and expenses line on the Statement of Assets and
Liabilities and the amounts for the Retirement Plan Expenses are included in
the Director's fees and expenses line on the Statement of Operations.
Retirement Plan Retirement Plan Retirement Plan
Liability Expense Payments
- --------------- --------------- ---------------
Fund As of December 31, 2007
---- -----------------------------------------------
Money Market Fund............. $262,455 $23,638 $13,765
Municipal Money Market Fund... 8,687 1,533 277
Note 7. Interfund Lending Agreement
Pursuant to exemptive relief granted by the Commission, 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 the 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 December 31,
2007, none of the Funds participated in the program.
24
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2007 -- (continued)
Note 8. Other Information
The matter related to AIG's settlement with 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. There
has been no adverse impact on the Funds or the Funds' shareholders.
25
SunAmerica Money Market Funds
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of SunAmerica Money Market Funds,
Inc:
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of SunAmerica Money
Market Fund and SunAmerica Municipal Money Market Fund (constituting SunAmerica
Money Market Funds, Inc., hereafter referred to as the "Funds") at December 31,
2007, the results of each of their operations for the year then ended, the
changes in each of their net assets for each of the three years in the period
then ended and the financial highlights for each of the periods indicated, in
conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Trust's
management; our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these financial
statements 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 are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audit, which included confirmation of
securities at December 31, 2007 by correspondence with the custodian and
brokers, provides a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Houston, Texas
February 27, 2008
26
SunAmerica Money Market Funds
APPROVAL OF ADVISORY AGREEMENT -- December 31, 2007 -- (unaudited)
Approval of the Investment Advisory and Management Agreement and Subadvisory
Agreement
The Board, including the Directors who are not interested persons of the
"Corporation" AIG SunAmerica or AIGGIC, approved the continuation of the
Investment Advisory and Management Agreement between the Corporation, on behalf
of the Funds, 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 SunAmerica Municipal Money Market Fund (the
"Municipal Money Market 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 the Disinterested Directors,
considered the following information:
Nature, Extent and Quality of Services Provided by the Adviser and Subadviser.
The Board, including the Disinterested Directors, 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 Directors 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 and/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 Funds' prospectus. Additionally, the Board considered
AIG SunAmerica's compliance and regulatory history, and noted that with respect
to AIG 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 Agreements were 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 Funds can rely
on these provisions. These provisions permit certain exemptions for
transactions with subadvisory affiliates.
/2 /Please see Note 8 to the Financial Statements contained in this Annual
Shareholder report for additional information regarding final resolution of
this matter.
27
SunAmerica Money Market Funds
APPROVAL OF ADVISORY AGREEMENT -- December 31, 2007 -- (unaudited)
(continued)
With respect to the Municipal Money Market 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 the
Municipal Money Market 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 Municipal Money Market
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 Municipal Money Market Fund as set forth in
the Funds' 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 Commission 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 fee and that the quality of services
continues to be high.
Investment Performance. The Board, including the Disinterested Directors, also
considered the investment performance of AIG SunAmerica with respect to both
Funds and AIGGIC with respect to the Municipal Money Market Fund. 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.
Specifically, the Board considered that the SunAmerica Money Market Fund (the
"Money Market Fund") and the Municipal Money Market Fund ranked in the third
and fourth quintile, respectively, of their respective Peer Groups during the
one-, two-, three- and four-year periods ended June 30, 2007.
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 result in improved performance with respect to the
SunAmerica Funds. The Board noted, however, that it would continue to monitor
the performance of the Funds on an ongoing basis and in connection with its
consideration of the advisory agreements.
Consideration of the Management Fees and Subadvisory Fee and the Cost of the
Services and Profits to be Realized by the Adviser, Subadviser and their
Affiliates from the Relationship with the Funds. The Board, including the
Disinterested Directors, 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.
28
SunAmerica Money Market Funds
APPROVAL OF ADVISORY AGREEMENT -- December 31, 2007 -- (unaudited)
(continued)
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 Class A, B and C
shares of the Municipal Money Market Fund and Class I shares of the Money
Market 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 did not consider services and
fees paid under investment advisory contracts that AIG SunAmerica has with
other registered investment companies or other types of clients with similar
investment strategies to the Funds since AIG SunAmerica informed the Board that
there were no such Funds or accounts.
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 fee, the Board received a
report prepared independently by Lipper. The report showed comparative fee
information of the Municipal Money Market Fund's Peer Group that the Directors
used as a guide to help assess the reasonableness of the subadvisory fee. The
Directors 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 Directors also considered that the subadvisory fee is paid
by AIG SunAmerica out of its management fee and not by the Municipal Money
Market Fund, 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 with
similar investment strategies to the Municipal Money Market Fund. The Board
noted that the subadvisory fee paid by AIG SunAmerica to AIGGIC was reasonable
as compared to fees AIGGIC receives for other mutual funds for which it serves
as adviser.
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 Service Agreement, Rule 12b-1 Plans and
Distribution Agreement. 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.
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 Municipal Money Market 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 Directors,
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
29
SunAmerica Money Market Funds
APPROVAL OF ADVISORY AGREEMENT -- December 31, 2007 -- (unaudited)
(continued)
SunAmerica as it adds labor and capital to expand the scale of operations. The
Board further noted that AIG SunAmerica has agreed to contractually cap the
total annual operating expenses of Class I of the Money Market Fund and Classes
A, B and C of the Municipal Money Market Fund, 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 structures were reasonable and that it
would continue to review fees in connection with the renewal of the Advisory
Agreement, including whether the implementation of 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 Municipal Money
Market Fund 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 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; however, they noted that
since the Funds generally do not engage in brokerage transactions, AIG
SunAmerica and AIGGIC typically would not receive soft dollar benefits in
return for allocating the Funds' brokerage transactions. The Board further
observed that when making purchases of new issues with fixed underwriting fees,
AIG SunAmerica or AIGGIC may designate the use of broker-dealers who have
agreed to provide certain statistical, research and other information.
Conclusion. After a full and complete discussion, the Board approved the
Advisory Agreement of the Funds and the Subadvisory Agreement with respect to
the Municipal Money Market 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 Directors, 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
Directors were also assisted by the advice of independent counsel in making
this determination.
30
SunAmerica Money Market Funds, Inc.
DIRECTORS AND OFFICERS INFORMATION -- December 31, 2007 -- (unaudited)
The following table contains basic information regarding the Directors and
Officers who oversee operations of the Funds and other investment companies
within the Fund Complex.
Number of
Term of Funds in
Position(s) Office and Fund Complex
Name, Address Held With Length of Principal Occupation(s) Overseen by Other Directorship(s)
and Date of Birth* the Fund Time Served(4) During Past 5 years Director(1) Held by Director(2)
- -------------------- ----------- -------------- ------------------------------ ------------ ----------------------------
Disinterested
Directors
Jeffrey S. Burum Director 2004- Founder, Chairman and 39 None
DOB: February 27, present CEO of Southern California
1963 Development Corp./National
Housing Development Corp
(1992 to present); Founder,
Owner and Partner of
Colonies Crossroads, Inc.
(2000 to present); Owner
and Managing Member of
Diversified Pacific
Development Group, LLC
(1998 to present).
Dr. Judith L. Craven Director 2001- Retired. 87 Director, Belo Corporation
DOB: October 6, 1945 present (1992 to present); Director,
Sysco Corporation (1996 to
present); Director, Luby's
Inc. (1998 to present).
William F. Devin Director 2001- Retired. 88 Member of the Board of
DOB: December 30, present Governors, Boston Stock
1938 Exchange (1985 to present).
Samuel M. Eisenstat Chairman 1985- Attorney, sole practitioner. 49 Director, North European Oil
DOB: March 7, 1940 of the present Royalty Trust.
Board
Stephen J. Gutman Director 1984- Senior Associate, Corcoran 49 None
DOB: May 10, 1943 present Group (Real Estate) (2003
to present); President and
Member of Managing
Directors, Beau Brummell --
Soho LLC (Licensing of
menswear specialty retailing
and other activities) (1988 to
present).
William J. Shea Director 2004- Managing Partner, DLB 49 Chairman of the Board,
DOB: February 9, present Capital, LLC (Private Equity) Royal and SunAlliance USA,
1948 (2006 to present); President Inc, (2005 to present);
and CEO, Conseco, Inc. Director, Boston Private
(Financial Services) (2001 to Financial Holdings (2004 to
2004); Chairman of the present).
Board of Centennial
Technologies, Inc. (1998 to
2001).
Interested Director
Peter A. Harbeck(3) Director 1994- President, CEO and 96 None
DOB: January 23, present Director, AIG SunAmerica,
1954 (1995 to present); Director,
AIG SunAmerica Capital
Services, Inc. ("SACS")
(1993 to present); President
and CEO, AIG Advisor
Group, Inc. (2004 to
present).
31
SunAmerica Money Market Funds, Inc.
DIRECTORS AND OFFICERS INFORMATION -- December 31, 2007 -- (unaudited)
Number of
Term of Funds in
Position(s) Office and Fund Complex
Name, Address Held With Length of Principal Occupation(s) Overseen by Other Directorship(s)
and Date of Birth* the Fund Time Served(4) During Past 5 years Director(1) Held by Director(2)
- ------------------- ----------- -------------- ----------------------------- ------------ ---------------------
Officers
John T. Genoy** President 2007- Chief Financial Officer, AIG- N/A N/A
DOB: November 8, present SunAmerica (2002 to
1968 present); Senior Vice
President, AIG SunAmerica
(2003 to present); Chief
Operating Officer, AIG
SunAmerica (2006 to
present).
Donna M. Handel Treasurer 2002- Senior Vice President, AIG- N/A N/A
DOB: June 25, 1966 present SunAmerica (2004 to
present); Vice President,
AIG SunAmerica (1997 to
2004).
Gregory N. Bressler Secretary 2005- Senior Vice President and N/A N/A
DOB: November 17, and Chief present General Counsel, AIG-
1966 Legal SunAmerica (2005 to
Officer present); Vice President and
Director of U.S. Asset
Management Compliance,
Goldman Sachs Asset
Management L.P. (2004 to
2005); Deputy General
Counsel, Credit Suisse
Asset Management (2002 to
2004); Counsel, Credit
Suisse Asset Management
(2000 to 2002).
Timothy Pettee Vice 2004- Chief Investment Officer, N/A N/A
DOB: April 7, 1958 President present AIG SunAmerica (2003 to
present); Executive Vice
President and Global
Director of Research
Schroder Investment
Management (2000 to
2002); Director of Research,
U.S. Trust Co. (1998 to
2000).
James Nichols Vice 2006- Director, President and N/A N/A
DOB: April 7, 1966 President present CEO, SACS (2006 to
present); Senior Vice
President, SACS (2002 to
2006); Vice President, AIG
SunAmerica (1995 to 2002).
- --------
** On December 10, 2007, John T. Genoy was elected President and Chief
Executive Officer of the Fund.
32
SunAmerica Money Market Funds, Inc.
DIRECTORS AND OFFICERS INFORMATION -- December 31, 2007 -- (unaudited)
Number of
Term of Funds in
Position(s) Office and Fund Complex
Name, Address Held With Length of Principal Occupation(s) Overseen by Other Directorship(s)
and Date of Birth* the Fund Time Served(4) During Past 5 years Director(1) Held by Director(2)
- -------------------- ----------- -------------- ---------------------------- ------------ ---------------------
Cynthia Gibbons Vice 2002- Vice President, AIG N/A N/A
DOB: December 6, President present SunAmerica (2002 to
1967 and Chief present); Securities
Compliance Compliance Manager,
Officer American General
("CCO") Investment Management
(2000 to 2002).
Gregory R. Kingston Vice 2002- Vice President, AIG N/A N/A
DOB: January 18, President present SunAmerica (2001 to
1966 and present); formerly, Vice
Assistant President, American
Treasurer General Investment
Management, L.P. (1999 to
2001).
Nori L. Gabert Vice 2002- Vice President and Deputy N/A N/A
DOB: August 15, 1953 President present General Counsel, AIG
and SunAmerica (2001 to
Assistant present); Vice President and
Secretary Secretary, VALIC Company
I and VALIC Company II
(2000 to present); formerly,
Associate General Counsel,
American General
Investment Management
(1997 to 2001).
Matthew J. Hackethal Anti-Money 2006- Chief Compliance Manager, N/A N/A
DOB: December 31, Laundering present AIG SunAmerica (2006 to
1971 Compliance present); Vice President,
Officer Credits Suisse Asset
Management (2001 to 2006);
CCO, Credit Suisse
Alternative Funds (2005 to
2006); CCO, Credit Suisse
Asset Management
Securities, Inc. (2004 to
2005).
- --------
* The business address for each Director and Officer is Harborside Financial
Center, 3200 Plaza 5, Jersey City, NJ 07311-4992.
(1) The term "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 adviser or an investment
adviser that is an affiliated person of the adviser. The "Fund Complex"
includes the Corporation (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 portfolios), Seasons Series Trust (24 portfolios) and
AIG Series Trust (3 portfolios), AIG Strategic Hedge Fund of Funds (1 fund)
and Brazos Mutual Funds (4 funds).
(2) Directorships of companies required to report to the Commission under the
Securities Exchange Act of 1934 (i.e. "public companies") or other
investment companies registered under the 1940 Act other than those listed
under this proceeding column.
(3) Mr. Harbeck is an "interested person" of the Funds, 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 Corporation.
(4) Directors serve until their successors are duly elected and qualified,
subject to the Directors' retirement plan as discussed in Note 6 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 Directors and Officers is contained in
the Statement of Additional Information and is available without charge by
calling (800) 858-8850.
33
SunAmerica Money Market Funds
SHAREHOLDER TAX INFORMATION -- (unaudited)
Certain tax information regarding the SunAmerica Money Market Funds is required
to be provided to shareholders based upon the Fund's income and distributions
for the taxable year ended December 31, 2007. The information necessary to
complete your income tax returns is included with your Form 1099-DIV mailed to
you in January 2008.
During the year ended December 31, 2007, 100% of the distributions paid by the
SunAmerica Municipal Money Market
Fund are exempt from federal income taxes.
34
SunAmerica Money Market Funds
If you would like additional information:
[_] Call FastFacts -- our 24-hour, automated account and fund information
hotline at 800-654-4760.
[_] Visit www.sunamericafunds.com for more up-to-date information.
Thank you for your continued support,
AIG SunAmerica Mutual Funds
35
[LOGO] AIG Sun America
Mutual Funds
Harborside Financial Center
3200 Plaza 5
Jersey City, NJ 07311-4992
Directors/Trustees VOTING PROXIES ON FUND most recent twelve month
Samuel M. Eisenstat PORTFOLIO SECURITIES period ended June 30 is
Peter A. Harbeck A description of the available, once filed
Dr. Judith L. Craven policies and proce-dures with the U.S. Securities
William F. Devin that the Fund uses to and Exchange Commission,
Stephen J. Gutman determine how to vote without charge, upon
Jeffrey S. Burum proxies relating to request, by calling (800)
William J. Shea secu-rities held in the 858-8850 or on the U.S.
Fund's portfolios which Secu-rities and Exchange
Officers is available in the Commission's website at
John T. Genoy, President Fund's State-ment of http://www.sec.gov.
and Chief Additional Information,
Executive Officer may be obtained without DISCLOSURE OF QUARTERLY
Donna M. Handel, charge upon re-quest, by PORTFOLIO HOLDINGS
Treasurer calling (800) 858-8850. The Fund is required to
James Nichols, Vice This information is also file its com-plete
President available from the EDGAR schedule of portfolio
Timothy Pettee, Vice database on the U.S. holdings with the U.S.
President Secu-rities and Exchange Securities and Exchange
Cynthia Gibbons, Vice Commission's website at Commission for its first
President and Chief http://www.sec.gov. and third fiscal quarters
Compliance Officer on Form N-Q. The Fund's
Gregory N. Bressler, DELIVERY OF SHAREHOLDER Forms N-Q are available
Chief Legal Officer DOCUMENTS on the U.S. Securities
and Secretary The Funds have adopted a and Exchange Commission's
Nori L. Gabert, Vice policy that allows them website at
President and to send only one copy of http://www.sec.gov. You
Assistant Secretary a Fund's prospectus, can also review and
Kathleen Fuentes, proxy material, annual obtain copies of the
Assistant Secretary report and semi-annual Forms N-Q at the U.S.
Richard J. Barton, report (the "shareholder Securities and Exchange
Assistant Secretary documents") to Commission's Public
Gregory R. Kingston, shareholders with Refer-ence Room in
Vice President and multiple accounts Washington, DC
Assistant Treasurer residing at the same (information on the
Diedre L. Shepherd, ''household." This operation of the Public
Assistant Treasurer practice is called Reference Room may be
Matthew J. Hackethal, householding and reduces ob-tained by calling
Anti-Money Laundering Fund expenses, which 1-800-SEC-0330).
Compliance Office benefits you and other
shareholders. Unless the This report is submitted
Investment Adviser Funds receive solely for the general
AIG SunAmerica Asset instructions to the information of
Management Corp. con-trary, you will only shareholders of the Fund.
Harborside Financial receive one copy of the Distribution of this
Center shareholder documents. report to persons other
3200 Plaza 5 The Funds will continue than shareholders of the
Jersey City, NJ to household the Fund is authorized only
07311-4992 share-holder documents in connection with a
indefinitely, until we currently effective
Distributor are instructed otherwise. prospectus, setting forth
AIG SunAmerica Capital If you do nor wish to details of the Fund,
Services, Inc. participate in which must precede or
Harborside Financial householding please accompany this report.
Center contact Shareholder
3200 Plaza 5 Services at (800)
Jersey City, NJ 858-8850 ext. 6010 or
07311-4992 send a written request
with your name, the name
Shareholder Servicing of your fund(s) and your
Agent account member(s) to AIG
AIG SunAmerica Fund SunAmerica Mutual Funds
Services, Inc. c/o BFDS, P.O. Box
Harborside Financial 219186, Kansas City MO,
Center 64121-9186. We will
3200 Plaza 5 resume individual
Jersey City, NJ mailings for your account
07311-4992 within thirty (30) days
of receipt of your
Custodian and Transfer request.
Agent
State Street Bank and PROXY VOTING RECORD ON
Trust Company SUNAMERICA MONEY MARKET
P.O. Box 419572 FUNDS
Kansas City, MO Information regarding how
64141-6572 SunAmer-ica Money Market
Funds voted proxies
relating to securities
held in SunAmer-ica Money
Market Funds during the
36
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
MMANN - 12/07
[LOGO] AIG
Sun America
Mutual Funds
live longer retire stronger/sm/
Item 2. Code of Ethics
The SunAmerica Money Market Funds, Inc. (the "registrant") has adopted
a Code of Ethics applicable to its Principal Executive and Principal
Accounting Officers pursuant to Section 406 of the Sarbanes-Oxley Act
of 2002.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Directors 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 ....................$ 48,662 $ 51,513
(b) Audit-Related Fees ............$ 0 $ 0
(c) Tax Fees ......................$ 16,086 $ 20,832
(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 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 ................$ 0 $ 0
(e)
(1) The registrant's audit committee pre-approves all audit services
provided by the registrant's principal accountant for the registrant
and all non-audit services provided by the registrant's principal
accountant for the registrant, its investment adviser and any entity
controlling, controlled by, or under common control with the investment
adviser ("Adviser Affiliate") that provides ongoing services to the
registrant, if the engagement by the investment adviser or Adviser
Affiliate relates directly to the operations and financial reporting of
the registrant. 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 Affiliate that provides ongoing services to the registrant
for 2007 and 2006 were 487,836 and $979,786, respectively.
(h) Non-audit services rendered to the registrant's investment adviser and
any Adviser Affiliate that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X were considered by the
registrant's audit committee as to whether they were compatible with
maintaining the principal accountant's independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
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 270.3a-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 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 Money Market Funds, Inc.
By: /s/ John T. Genoy
-------------------
John T. Genoy
President
Date: March 10, 2008
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/ John T. Genoy
-------------------
John T. Genoy
President
Date: March 10, 2008
By: /s/ Donna M. Handel
-------------------
Donna M. Handel
Treasurer
Date: March 10, 2008